My Size(MYSZ) - 2023 Q4 - Annual Report

Financial Performance - Revenues for the year ended December 31, 2023, amounted to $6,996,000, an increase of 57.0% compared to $4,459,000 for the year ended December 31, 2022, primarily due to increased sales from Orgad and Naiz Fit [244]. - Cost of revenues for 2023 was $4,265,000, up from $3,825,000 in 2022, including a $643,000 inventory markdown due to a fire at Orgad's warehouse [246]. - The operating loss for 2023 was $6,741,000, a decrease of $1,369,000 or 16.9% compared to an operating loss of $8,110,000 in 2022 [251]. - Financial income for 2023 was $99,000, a significant improvement from financial expenses of $236,000 in 2022 [252]. - Net loss decreased to $6,380,000 in 2023 from $8,310,000 in 2022, reflecting a reduction in financial expenses [253]. Expenses - Research and development expenses decreased by $727,000, or approximately 42.7%, to $974,000 in 2023 compared to $1,701,000 in 2022, mainly due to reduced headcount [247]. - Sales and marketing expenses increased by $713,000, or 22.7%, to $3,856,000 in 2023, driven by higher Amazon fees offset by reduced salary expenses [248]. - General and administrative expenses rose by $71,000, or 1.8%, to $3,971,000 in 2023, primarily due to increased professional expenses [249]. - A goodwill impairment charge of $671,000 was recorded in 2023, with no impairment recorded in 2022 [250]. - An impairment charge of $671,000 was recorded for the SaaS Solutions reporting unit due to carrying value exceeding fair value [272]. Cash Flow and Financing - Cash, cash equivalents, and restricted cash as of December 31, 2023, were $2,264,000, down from $2,363,000 in 2022 [255]. - Net cash used in operating activities improved to $6,106,000 in 2023 from $7,290,000 in 2022 [256]. - Net cash provided by financing activities was $6,134,000 in 2023, compared to negative cash flow of $67,000 in 2022, driven by public and private offerings [258]. - The company completed a registered direct and concurrent private placement offering in January 2023, raising approximately $3 million [255]. - A warrant repricing transaction in August 2023 generated gross proceeds of approximately $4.2 million [255]. Future Outlook - The company anticipates continued losses and negative cash flows, with existing cash expected to be insufficient for operations beyond 12 months [259]. - The company faces challenges in raising additional capital due to current market conditions and geopolitical factors, which may adversely affect operations [260]. Acquisitions and Strategic Focus - The acquisition of Orgad involved a cash consideration of up to $1,000,000 and an equity consideration of 111,682 shares, with earn-out payments based on operating profit for 2022 and 2023 [227]. - The acquisition of Naiz included a cash consideration of up to $2,050,000 and an equity consideration of 240,000 shares, representing not more than 19.9% of the outstanding shares [233]. - The company is focused on commercializing Naiz Fit technology to enhance online shopping experiences and reduce return rates [222].