My Size(MYSZ) - 2025 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION This part covers the unaudited interim financial statements and management's discussion and analysis of financial condition and results of operations Item 1. Condensed Consolidated Interim Financial Statements (Unaudited) This section presents the unaudited condensed consolidated interim financial statements for My Size, Inc. and its subsidiaries as of June 30, 2025, including balance sheets, statements of comprehensive loss, changes in stockholders' equity, and cash flows, along with accompanying notes detailing significant accounting policies, business combinations, and other financial disclosures Condensed Consolidated Interim Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' equity as of June 30, 2025, and December 31, 2024 | Metric (U.S. dollars in thousands) | June 30, 2025 | December 31, 2024 | Change (2025 vs 2024) | | :------------------------------- | :------------ | :---------------- | :-------------------- | | Total Assets | 9,862 | 10,059 | (197) | | Total Current Assets | 8,413 | 9,072 | (659) | | Cash and cash equivalents | 4,282 | 4,880 | (598) | | Inventory | 2,901 | 2,796 | 105 | | Account receivables | 398 | 278 | 120 | | Intangible assets | 1,195 | 750 | 445 | | Goodwill | 142 | 133 | 9 | | Total Liabilities | 2,448 | 3,150 | (702) | | Total Current Liabilities | 2,161 | 2,996 | (835) | | Trade payables | 914 | 2,084 | (1,170) | | Total Stockholders' Equity | 7,414 | 6,909 | 505 | Condensed Consolidated Interim Statements of Comprehensive Loss This section outlines the company's revenues, expenses, and net loss for the three and six months ended June 30, 2025 and 2024 | Metric (U.S. dollars in thousands) | Six-Months Ended June 30, 2025 | Six-Months Ended June 30, 2024 | Change (YoY) | Three-Months Ended June 30, 2025 | Three-Months Ended June 30, 2024 | Change (YoY) | | :------------------------------- | :----------------------------- | :----------------------------- | :----------- | :------------------------------- | :----------------------------- | :----------- | | Revenues | 3,485 | 4,963 | (1,478) | 2,006 | 1,979 | 27 |\ | Cost of revenues | (1,941) | (2,783) | 842 | (882) | (995) | 113 |\ | Gross profit | 1,544 | 2,180 | (636) | 1,124 | 984 | 140 |\ | Total operating expenses | (3,190) | (4,128) | 938 | (1,710) | (1,861) | 151 |\ | Operating loss | (1,646) | (1,948) | 302 | (586) | (877) | 291 |\ | Financial income (expenses), net | 136 | (32) | 168 | 136 | (87) | 223 |\ | Net loss | (1,510) | (1,980) | 470 | (450) | (964) | 514 |\ | Basic and diluted loss per share | (0.58) | (3.06) | 2.48 | (0.15) | (1.28) | 1.13 | Condensed Consolidated Interim Statements of Changes in Stockholders' Equity This section details the changes in the company's stockholders' equity, including common stock, additional paid-in capital, and accumulated deficit, for the six months ended June 30, 2025 | Metric (U.S. dollars in thousands) | Balance as of Jan 1, 2025 | Stock-based compensation | Issuance of shares (net) | Total comprehensive loss | Balance as of June 30, 2025 | | :------------------------------- | :------------------------ | :----------------------- | :----------------------- | :----------------------- | :-------------------------- | | Common stock (Number) | 2,040,159 | 10,000 | 1,052,917 | - | 3,103,076 |\ | Common stock (Amount) | 2 | -* | 1 | - | 3 |\ | Additional paid-in capital | 71,608 | 68 | 1,986 | - | 73,662 |\ | Accumulated other comprehensive loss | (825) | - | - | (40) | (865) |\ | Accumulated deficit | (63,876) | - | - | (1,510) | (65,386) |\ | Total stockholders' equity | 6,909 | 68 | 1,987 | (1,550) | 7,414 | - Total stockholders' equity increased from $6,909 thousand at January 1, 2025, to $7,414 thousand at June 30, 2025, primarily due to the issuance of shares for $1,987 thousand, partially offset by a total comprehensive loss of $1,550 thousand[16] Condensed Consolidated Interim Statements of Cash Flows This section presents the cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 | Cash Flow Activity (U.S. dollars in thousands) | Six-Months Ended June 30, 2025 | Six-Months Ended June 30, 2024 | Change (YoY) | | :--------------------------------------------- | :----------------------------- | :----------------------------- | :----------- | | Net cash used in operating activities | (2,306) | (2,076) | (230) |\ | Net cash provided by (used in) investing activities | (54) | 60 | (114) |\ | Net cash provided by financing activities | 1,890 | 2,961 | (1,071) |\ | Effect of exchange rate fluctuations | (128) | 66 | (194) |\ | Increase (decrease) in cash, cash equivalents and restricted cash | (598) | 1,011 | (1,609) |\ | Cash, cash equivalents and restricted cash at end of period | 4,282 | 3,275 | 1,007 | - Net cash used in operating activities increased by $230 thousand, from $2,076 thousand in H1 2024 to $2,306 thousand in H1 2025, mainly due to an increase in inventory and accounts receivable, partially offset by a decrease in net loss[21][134] Notes to Condensed Consolidated Interim Financial Statements This section provides detailed explanations of the significant accounting policies, business combinations, financial instruments, and other disclosures supporting the interim financial statements - Note 1 - General: My Size, Inc. develops AI-driven measurement technologies for apparel e-commerce, operates an omnichannel e-commerce platform (Orgad), and recently acquired a resale platform (Percentil) in May 2025. The company has an accumulated deficit of $65,386 thousand and expects continued losses, raising substantial doubt about its ability to continue as a going concern for more than 12 months without additional financing. Geopolitical conflicts in Israel and Ukraine have had an immaterial effect on operations, with the Russian subsidiary expected to be closed[23][24][31][32][34][36] - Note 2 - Significant Accounting Policies: The company adopted new revenue recognition policies for its resale platform, distinguishing between consignment revenue (net basis, recognized upon buyer purchase) and product revenue (gross basis, recognized upon transfer of control). An impairment charge of $144 thousand was recorded for goodwill related to the Fashion and equipment e-commerce segment due to sustained decreases in share price and declining operating results[12][40][41][44][45] - Note 3 - Financial Instruments: The company holds investments in marketable securities (MYCB shares) valued at fair value (Level 2 assets due to sales restrictions). A gain of $7 thousand was recognized for marketable securities in the six months ended June 30, 2025[52][53][54][56] - Note 4 - Stock Based Compensation: Total stock-based compensation expense for employees decreased to $68 thousand for the six months ended June 30, 2025, from $220 thousand in the prior year. The company repriced options for certain employees, officers, and directors on June 4, 2025, reducing exercise prices to $1.28 per share and accelerating vesting for a former CFO, resulting in one-time expenses of $23 thousand[57][62][63][64] - Note 5 - Contingencies and Commitments: The company is involved in a legal complaint regarding a fire at Orgad's warehouse in January 2023, with the plaintiff seeking approximately $510 thousand. The company estimates its liability at approximately $51 thousand[69] - Note 6 - Business Combination (Percentil Acquisition): On May 9, 2025, the company acquired the Percentil production unit (a resale platform) for a total consideration of approximately $679 thousand, consisting of a $45 thousand cash payment and assumption of liabilities. The acquisition included warehouse infrastructure, proprietary systems, inventory, and the transfer of 17 former employees. New Percentil contributed $168 thousand in revenues from May 9 to June 30, 2025[70][71][72][75][109][110] - Note 7 - Goodwill: A goodwill impairment charge of $144 thousand was recorded for the Fashion and equipment e-commerce platform segment for the quarter ended June 30, 2025, due to sustained decreases in share price and declining operating results. Goodwill is now allocated to the Resale platform ($142 thousand) as of June 30, 2025[40][78][79][80][81] - Note 8 - Operating Segments: The company operates in three segments: (i) fashion and equipment e-commerce platform (Orgad), (ii) SaaS based innovative artificial intelligence driven measurement solutions (My Size Israel, Naiz), and (iii) resale platform for apparel (New Percentil)[83] Segment Revenues and Loss (Six Months Ended June 30, 2025) | Segment (U.S. dollars in thousands) | Revenues from external customers | Cost of revenues | Research and development expenses | Sales and marketing Salaries | Other Segment Items | Segment loss | | :---------------------------------- | :------------------------------- | :--------------- | :-------------------------------- | :--------------------------- | :------------------ | :----------- | | Fashion and equipment e-commerce platform | 2,968 | (1,816) | - | (68) | (1,405) | (1,042) |\ | SaaS Solutions | 349 | (15) | (205) | (127) | (494) | (492) |\ | Resale Platform | 168 | (110) | (19) | - | (151) | (112) |\ | Total | 3,485 | (1,941) | (224) | (195) | (2,050) | (1,646) | - Note 9 - Significant events during the reporting period: The company entered into an At The Market Offering Agreement in January 2025, selling 1,052,917 shares for net proceeds of approximately $1,987 thousand as of June 30, 2025[95] - Note 10 - Events subsequent to the balance sheet date: On July 21, 2025, the company established Ten Peacks Ltd., a new Israeli subsidiary focused on marketing and distribution of global apparel and shoe brands in Israel. Additionally, 153,783 shares were sold under the ATM Offering Agreement for approximately $218 thousand after June 30, 2025[96] Item 2. Management's Discussion & Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and results of operations for the periods ended June 30, 2025, highlighting key financial performance metrics, liquidity, and capital resources. The company continues to face substantial doubt about its ability to continue as a going concern due to ongoing losses and negative cash flows, necessitating additional capital - Overview: My Size, Inc. operates an omnichannel e-commerce platform and provides AI-driven SaaS measurement solutions (Naiz Fit) and recently acquired a resale platform (New Percentil). The company focuses on commercializing Naiz Fit technology to improve sizing accuracy, reduce returns, and increase conversion rates for fashion e-commerce[104][105][106][107] - New Percentil Acquisition: On May 9, 2025, the company acquired the Percentil production unit, including warehouse infrastructure, proprietary quality control and picking systems, an AI-powered pricing engine, and 17 former employees, for approximately $679 thousand[108][109][110] - Macroeconomic and Geopolitical Environment: The company monitors global economic downturns, foreign currency volatility, inflation, trade controls, and geopolitical conflicts. While current conflicts (Russia-Ukraine, Middle East) have not materially impacted operations, the company remains vigilant[112][113][114][115] Key Financial Results (Six and Three Months Ended June 30) | Metric (U.S. dollars in thousands) | Six-Months Ended June 30, 2025 | Six-Months Ended June 30, 2024 | Change (YoY) | Three-Months Ended June 30, 2025 | Three-Months Ended June 30, 2024 | Change (YoY) | | :------------------------------- | :----------------------------- | :----------------------------- | :----------- | :------------------------------- | :----------------------------- | :----------- | | Revenues | 3,485 | 4,963 | (1,478) | 2,006 | 1,979 | 27 |\ | Cost of revenues | (1,941) | (2,783) | 842 | (882) | (995) | 113 |\ | Gross profit | 1,544 | 2,180 | (636) | 1,124 | 984 | 140 |\ | Operating expenses | (3,190) | (4,128) | 938 | (1,710) | (1,861) | 151 |\ | Operating loss | (1,646) | (1,948) | 302 | (586) | (877) | 291 |\ | Financial income (expenses), net | 136 | (32) | 168 | 136 | (87) | 223 |\ | Net loss | (1,510) | (1,980) | 470 | (450) | (964) | 514 |\ | Basic and diluted loss per share | (0.58) | (3.06) | 2.48 | (0.15) | (1.28) | 1.13 | - Revenue Trends: Revenues for the six months ended June 30, 2025, decreased by $1,478 thousand (29.8%) YoY, primarily due to a decrease in Orgad sales. However, revenues for the three months ended June 30, 2025, increased by $27 thousand (1.4%) YoY, mainly due to the inclusion of New Percentil[119][120] - Cost of Revenues: Decreased by $842 thousand (30.2%) for the six months and $113 thousand (11.4%) for the three months ended June 30, 2025, primarily due to a transition to Fulfillment by Amazon shipping and warehousing[121][122] - Operating Expenses: Total operating expenses decreased by $938 thousand (22.7%) for the six months and $151 thousand (8.1%) for the three months ended June 30, 2025, driven by reduced headcount, consultant expenses, and lower Amazon fees[123][124][125][126][127][128] - Operating Loss: Decreased by $302 thousand (15.5%) for the six months and $290 thousand (33.1%) for the three months ended June 30, 2025, reflecting improved expense management[129] - Net Loss: Decreased by $470 thousand (23.7%) for the six months and $514 thousand (53.3%) for the three months ended June 30, 2025, primarily due to the aforementioned reasons and a shift from financial expenses to financial income[130][131] - Liquidity and Capital Resources: Cash and cash equivalents decreased to $4,282 thousand as of June 30, 2025, from $4,880 thousand at December 31, 2024. The company used $2,306 thousand in operating activities and raised $1,987 thousand (net) from share issuance through an At The Market Offering Agreement. Management believes existing cash is insufficient for more than 12 months, indicating substantial doubt about going concern[132][133][134][135][136] Item 3. Quantitative and Qualitative Disclosure About Market Risk This item is not required for a smaller reporting company, and therefore, no specific disclosures regarding quantitative and qualitative market risk are provided - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[144] Item 4. Controls and Procedures Management, under the supervision of the CEO and CFO, evaluated the effectiveness of the company's disclosure controls and procedures as of June 30, 2025, concluding they were effective. No material changes in internal control over financial reporting occurred during the quarter - Disclosure controls and procedures were evaluated as effective as of June 30, 2025, by the CEO and CFO[146] - No material changes in internal control over financial reporting occurred during the most recent fiscal quarter[148] PART II - OTHER INFORMATION This part includes disclosures on legal proceedings, risk factors, unregistered sales of equity, defaults, mine safety, and other information Item 1. Legal Proceedings The company is involved in a legal complaint filed in July 2024 by Shimon Shukron, seeking approximately $510 thousand for damages caused by a fire at Orgad's warehouse in January 2023. The company estimates its potential liability at approximately $51 thousand - A legal complaint was filed seeking approximately $510 thousand for damages from a fire at Orgad's warehouse in January 2023[152] - The company estimates the claim's success for only a nominal sum of approximately $51 thousand[152] Item 1A. Risk Factors The company's operations are significantly exposed to political, economic, and military conditions in Israel, including ongoing conflicts and regional instability, which could adversely affect its business, financial condition, and ability to raise capital. While current operations have not been materially affected, the risk of escalation and economic boycotts persists - Operations are subject to political, economic, and military conditions in Israel, including ongoing conflicts and regional instability[154][155][156] - Hostilities involving Israel, such as the conflict with Hamas and recent strikes with Iran, could adversely affect business conditions, financial results, and capital raising efforts[155][156] - While current operations have not been adversely affected, the intensity and duration of conflicts are unpredictable, and commercial insurance does not cover war-related losses[158][159] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities or use of proceeds to report during the period - No unregistered sales of equity securities were reported[163] Item 3. Defaults Upon Senior Securities There were no defaults upon senior securities to report during the period - No defaults upon senior securities were reported[164] Item 4. Mine Safety Disclosures This item is not applicable to the company - Mine safety disclosures are not applicable to the company[165] Item 5. Other information No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025 - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during the quarter[166] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications from the Principal Executive Officer and Principal Financial Officer, and Inline XBRL documents - The report includes certifications from the Principal Executive Officer and Principal Financial Officer (Exhibits 31.1, 31.2, 32.1, 32.2)[167] - Inline XBRL documents (Instance, Schema, Calculation, Definition, Label, Presentation Linkbase) and the Cover Page Interactive Data File are filed as exhibits[167]