10-Q 1 f10q0316_mysizeinc.htm QUARTERLY REPORT

U. S. Securities and Exchange Commission

Washington, D. C. 20549

FORM 10-Q

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2106

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File No. 001-37370

MY SIZE, INC.

(Name of Registrant in its Charter)

Delaware
(State of Other Jurisdiction of incorporation or organization)		(I.R.S. Employer I.D. No.)

Yisrash Meshek 76, Israel, 7683800

(Address of Principal Executive Offices)

Issuer’s Telephone Number: +972 72 3331002

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.) Yes ☒ No ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One)

Large accelerated filer ☐

Accelerated filer ☐

Non-accelerated filer ☐

Smaller reporting company ☒

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the Registrant’s classes of common stock, as of the latest practicable date:

May 23, 2016

Common Voting Stock: 15,313,793

MY SIZE, INC.

INDEX TO FORM 10-Q FILING

FOR THE THREE MONTHS ENDED MARCH 31, 2016

TABLE OF CONTENTS

		PAGE
PART I - FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements (Unaudited)	2
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Comprehensive Income (Loss)	4
	Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficiency)	5-6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8 -19
Item 2.	Management Discussion & Analysis of Financial Condition and Results of Operations	20
Item 4.	Controls and Procedures

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults Upon Senior Securities	33
Item 4.	Mining Safety Disclosures	33
Item 5	Other information	33
Item 6.	Exhibits	33

CERTIFICATIONS

31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.
32.1	Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.
32.2	Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.

PART I

FINANCIAL INFORMATION

The accompanying interim consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q. Therefore, they do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles. Except as disclosed herein, there has been no material change in the information disclosed in the notes to the consolidated financial statements included in the Company's Form 10-K filed on March 29, 2016. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the three months ended March 31, 2016 are not necessarily indicative of the results that can be expected for the year ending December 31, 2016.

MY SIZE INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2016

U.S. DOLLARS IN THOUSANDS

INDEX

	Page

Condensed Consolidated Balance Sheets	3

Condensed Consolidated Statements of Comprehensive Income (Loss)	4

Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficiency)	5-6

Condensed Consolidated Statements of Cash Flows	7

Notes to Condensed Consolidated Financial Statements	8 - 19

MY SIZE INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands (except share data) (Unaudited)

	March 31,			December 31,
	2016			2015

ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	425		$	919
Other receivables and prepaid expenses		144			124
Investment in marketable securities		1,012			1,808
Put Options – DIMN shares		989			764
Restricted cash		64			62

Total current assets		2,634			3,677

PROPERTY AND EQUIPMENT, NET		72			61

Total assets	$	2,706		$	3,738

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

CURRENT LIABILITIES:
Short-term convertible loans	$	3,930		$	3,470
Accounts payable		215			141
Other accounts payables		62			52
Derivative liabilities - embedded conversion options		14			1,239
Warrants to purchase common stock		9			1,449
Deferred revenue		10			-

Total current liabilities		4,240			6,351

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIENCY):
Capital stock -
Common stock of $ 0.001 par value - Authorized: 50,000,000 shares; Issued and outstanding: 15,313,793		15			15
Additional paid-in capital		5,844			4,853
Available for sale reserve		-			(67	)
Accumulated other comprehensive loss		(194	)		(104	)
Accumulated deficit		(7,199	)		(7,310	)

Total stockholders' equity (deficiency)		(1,534	)		(2,613	)

Total liabilities and stockholders' equity (deficiency)	$	2,706		$	3,738

The accompanying notes are an integral part of the consolidated financial statements.

MY SIZE INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

U.S. dollars in thousands (except share data and per share data) (Unaudited)

	Three-Months Ended March 31,
	2016			2015

Operating expenses:
Research and development	$	177		$	36
Marketing, General and administrative		326			306

Total operating expenses		503			342

Operating loss		(503	)		(342	)

Financial income (expense), net		614			(22	)

Net income (loss)	$	111		$	(364	)

Other comprehensive income (loss):
Gain on available for sale securities		67			-

Foreign currency translation differences		(90	)		(7	)

Total comprehensive income (loss)	$	88		$	(371	)

Basic earnings (loss) per share		0.01			(0.02	)
Diluted loss per share		0.05			(0.02	)

Basic weighted average number shares outstanding		15,313,793			15,313,793
Diluted weighted average number shares outstanding		15,492,659			15,313,793

The accompanying notes are an integral part of the consolidated financial statements.

MY SIZE INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY)

U.S. dollars in thousands (except share data) (Unaudited)

	Common stock				Additional paid-in			Available for sale			Accumulated other comprehensive			Accumulated			Total stockholders' equity
	Number		Amount		capital			reserve			income (loss)			Deficit			(deficiency)

Balance as of January 1, 2016		15,313,793	$	15	$	4,853		$	(67	)	$	(104	)	$	(7,310	)	$	(2,613	)

Total comprehensive gain		-		-		-			-			(90	)		111			21
Stock-based compensation related to options granted to consultants		-		-		(50	)		-			-			-			(50	)
Gain on marketable securities		-		-		-			67			-			-			67
Warrants reclassified to equity as a result of amended exercise price currency		-		-		1,041			-			-			-			1,041
Balance as of March 31, 2016		15,313,793	$	15	$	5,844		$	-		$	(194	)	$	(7,199	)	$	(1,534	)

The accompanying notes are an integral part of the consolidated financial statements.

MY SIZE INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY)

U.S. dollars in thousands (except share data) (Unaudited)

	Common stock				Additional paid-in		Accumulated other comprehensive			Accumulated			Total stockholders' equity
	Number		Amount		capital		income (loss)			Deficit			(deficiency)

Balance as of January 1, 2015		15,313,793	$	15	$	4,455	$	(119	)	$	(3,873	)	$	478

Stock-based compensation related to options granted to consultants		-		-		95		-			-			95
Total comprehensive loss		-		-		-		(7	)		(364	)		(371	)
Balance as of March 31, 2015		15,313,793	$	15	$	4,550	$	(126	)	$	(4,237	)	$	202

The accompanying notes are an integral part of the consolidated financial statements.

MY SIZE INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands (Unaudited)

	Three-Months Ended March 31,
	2016			2015
Cash flows from operating activities:

Net income (loss)	$	111		$	(364	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation		5			1
Valuation of warrants and derivatives		(614	)		-
Accrued interest on loans		-			2
Valuation of warrant to purchase Common stock		-			22
Stock based compensation		(50	)		96
Decrease (increase) in other receivables and prepaid expenses		(15	)		35
Increase (decrease) in accounts payable		56			(29	)
Increase in deferred revenue		10			-
Increase in other accounts payable		18			18

Net cash used in operating activities		(479	)		(219	)

Cash flows from investing activities:

Purchase of property and equipment		(13	)		(9	)

Net cash used in investing activities		(13	)		(9	)

Cash flows from financing activities:

Issuance of Common stock, net		-			-

Net cash provided by financing activities		-			-

Effect of exchange rate changes on cash and cash equivalents		(2	)		(9	)

Decrease in cash and cash equivalents		(494	)		(237	)
Cash and cash equivalents at the beginning of the period		919			645

Cash and cash equivalents at the end of the period	$	425		$	408

Non cash transactions
Warrants reclassified to equity as a result of amended exercise price currency	$	1,041		$	-

The accompanying notes are an integral part of the consolidated financial statements.

MY SIZE INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data and per share data) (Unaudited)

NOTE 1:- GENERAL

	a.	My Size Inc. (the "Company"), was incorporated and commenced operations in September 1999, as Topspin Medical Inc. ("Topspin"), a private company registered in the State of Delaware, U.S. Topspin was engaged, through its Israeli subsidiary, in research and development in the field of cardiology and urology.

		During 2008, in light of the Company's cash flow situation, the Company discontinued its above operations and soon after dismissed all of its employees.

		During 2011, the Company acquired all of the outstanding stock of Metamorefix Ltd. ("Metamorefix"), a privately-held company incorporated on January 31, 2007, and engaged in developing solutions for tissue restoration, particularly skin tissue restoration, for no consideration.

		In January 2013, the Company sold its subsidiary, Metamorefix, for consideration of $ 180 in cash (net of $ 30 transaction costs) and future royalties of 5% from Metamorfix product sales for a period of 7 years. In addition, the Company waived a loan in the amount of $ 208 (NIS 803 thousand) given to Metamorfix during 2012. The Company recorded a gain of $ 317 in the year ended December 31, 2013 as result of this sale.

		Following the sale, Metamorefix's results of operations and statement of financial position balances are disclosed as a discontinued operation, including the resulting gain from the sale.

		From September 1, 2005 the Company is traded on the Tel Aviv Stock Exchange.

		In December 2013, the Company changed its name from Topspin Medical Inc. to Knowledgetree Ventures Inc. and on February 16, 2014 the Company changed its name to My Size Inc.

In February 2014, the Company established a wholly-owned subsidiary, My Size (Israel) 2014 Ltd., a company registered in Israel, engaged in the development of the Venture described below.

On January 9, 2014, the Company's General Meeting approved an engagement with one of the Company’s investors (the "Seller") for the purchase of rights in a Venture. The Venture is a development of an application which assists the consumer to accurately take the measurements of his own body using a mobile device in order to fit clothing in the best way possible without the need to try them on.

In return for purchasing the Venture, the Company shall undertake to pay the Seller 18% of the Company’s operating profit, direct or indirect, connected to the Venture for a period of 7 years starting from the end of the Ventures development period. As part of the agreement, the Seller received an option to buy back the Venture, for consideration which will reflect the market fair value at that time, on the occurrence of the following events: a) If a motion has been filed to liquidate the Company; b) If 7 years after signing the agreement, the Company’s total accumulated revenues, direct or indirect, from the Venture or the commercialization of the patent will be lower than 3.6 million NIS.

In Such an event, seller may repurchase the property being sold at a market price to be determined by an external and independent valuation consultant, who shall be chosen by agreement by the parties, and the audit committee shall conduct the negotiations on behalf of the company to determine the identity of the consultant. In the absence of agreement on the identity of the consultant, the consultant shall be appointed by the president of the Institute of Certified Public Accountants in Israel. If one of the parties appeals against the valuation, with the company's decision to appeal being made by the audit committee of the company, the parties shall approach another agreed consultant from one of the four large accounting firms in Israel (and in the absence of agreement he shall be chosen by the president of the Institute of Certified Public Accountants) and an average shall be taken of the two valuations which are received. The parties shall bear the consultants' fees and all the expenses of the valuation in equal shares.

MY SIZE INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data and per share data) (Unaudited)

NOTE 1:- GENERAL (Cont.)

During the period ended March 31, 2016, the Company continues to incur losses from operations and negative cash flows from operating activities amounting to $ 503 and $ 479, respectively. These conditions raise substantial doubts about the Company’s ability to continue as a going concern. The Company’s ability to continue to operate is dependent upon raising additional funds to finance its activities. The Company raised sufficient funds to meet its expected obligations for the next twelve months and therefore has alleviated the conditions which raised doubt about the Company’s ability to continue as a going concern.

The Company operates in one reportable segment and all of its long-lived assets are located in Israel.

The accompanying unaudited condensed consolidated financial statements included herein have been prepared by the Company in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”). The unaudited condensed consolidated financial statements are comprised of the financial statements of the Company and its subsidiaries collectively referred to as the Company. In management's opinion, the interim financial data presented includes all adjustments necessary for a fair presentation. All intercompany accounts and transactions have been eliminated. Certain information required by U.S. generally accepted accounting principles has been condensed or omitted in accordance with rules and regulations of the SEC. Operating results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for any future period or for the year ending December 31, 2016.

These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and the notes thereto for the year ended December 31, 2015.

The preparation of the unaudited condensed consolidated financial statements requires management to make estimates and assumptions relating to reporting of the assets and liabilities and the disclosure of contingent assets and liabilities to prepare these condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period in conformity with U.S. generally accepted accounting principles. Actual results could differ from these estimates.

MY SIZE INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data and per share data) (Unaudited)

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP").

Use of estimates:

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Financial statements in U.S. dollars:

The presentation currency of the financial statements is the U.S. dollar.

The majority of the Company and its subsidiaries expenses are denominated in New Israeli Shekel ("NIS"). Therefore, the Company's management believes that the currency of the primary economic environment in which the operations of the Company and its subsidiaries are conducted is the NIS and thus its functional currency. The financial statements are translated as follows:

Assets and liabilities at the end of each reporting period (including comparative data) are translated at the closing rate at the end of the reporting period.

Income and expenses for each period included in profit or loss (including comparative data) are translated at average exchange rates for the relevant periods; however, if exchange rates fluctuate significantly, income and expenses are translated at the exchange rates at the date of the transactions.

Stock capital, capital reserves and other changes in capital are translated at the exchange rate prevailing at the date of incurrence.

Retained earnings are translated based on the opening balance translated at the exchange rate at that date and other relevant transactions (such as dividend) during the period are translated as described in 2) and 3) above.

All resulting translation adjustments are recognized as a separate component of accumulated other comprehensive loss in equity.

Principles of consolidation:

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation.

Cash equivalents:

Cash equivalents are short-term highly liquid investments that are readily convertible to cash with original maturities of three months or less at the date acquired.

MY SIZE INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data and per share data) (Unaudited)

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Property and equipment:

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets, at the following annual rates:

			%

	Computers and peripheral equipment		33
	Office furniture and equipment		7
	Leasehold improvements		Over the term of the lease or the useful life of the improvements, whichever is shorter

Impairment of long-lived assets:

The Company's property and equipment are reviewed for impairment in accordance with ASC 360, "Property Plant and Equipment", whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less selling costs. During the periods ended March 31, 2015 and December 31, 2015, no impairment losses have been identified.

Severance pay:

The Company's liability for severance pay is covered by Section 14 of the Severance Pay Law ("Section 14"). Under Section 14, employees are entitled to have monthly deposits, at a rate of 8.33% of their monthly salary, made on their behalf to their insurance funds. Payments in accordance with Section 14 release the Company from the liability for any future severance payments in respect of those employees. As a result, the Company does not recognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in the Company's balance sheet. These contributions for compensation represent defined contribution plans.

Research and development costs:

Research and development costs are charged to the statement of operations, as incurred.

Income taxes:

The Company accounts for income taxes in accordance with ASC 740, "Income Taxes". This Statement prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value. As of March 31, 2016 and December 31, 2015, a full valuation allowance was provided by the Company.

The Company implements a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% (cumulative basis) likely to be realized upon ultimate settlement. The Company believes that its tax positions are all highly certain of being upheld upon examination. As such, as of March 31, 2016 and December 31, 2015 the Company has not recorded a liability for uncertain tax positions.

MY SIZE INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data and per share data) (Unaudited)

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Accounting for stock-based compensation:

The Company accounts for stock-based compensation in accordance with ASC 718, "Compensation-Stock Compensation" ("ASC 718") which requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company's consolidated statements of operations.

The Company recognizes compensation expenses for the value of its awards granted based on the accelerated method over the requisite service period of each of the awards, net of estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

The Company selected the Binomial option pricing model ("the Binomial model") as the most appropriate fair value method for its stock-options awards. The Binomial model requires a number of assumptions, of which the most significant are the suboptimal exercise factor and expected stock price volatility. The suboptimal exercise factor is estimated based on employees' historical option exercise behavior.

The suboptimal exercise factor is the ratio by which the stock price must increase over the exercise price before employees are expected to exercise their stock options.

The expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative of expected future trends.

The expected option term represents the period that the Company's stock options are expected to be outstanding. The Company currently uses a simplified method until sufficient historical exercise data will support using expected life assumptions. The risk-free interest rate is based on the yield from Israel treasury zero-coupon bonds with an equivalent term.

The Company has historically not paid dividends and has no foreseeable plans to pay dividends.

The Company applies ASC 505-50, "Equity-Based Payments to Non-Employees" with respect to options and warrants issued to non-employees.

Fair value of financial instruments:

ASC 820, "Fair Value Measurements and Disclosures", defines fair value as the price that would be received to sell an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date.

In determining fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

MY SIZE INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data and per share data) (Unaudited)

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

	Level 1 -	Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.

	Level 2 -	Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

	Level 3 -	Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The carrying amounts of cash and cash equivalents, other accounts receivable, short-term loan, accounts payable and other accounts payable approximate their fair value due to the short-term maturities of such instruments.

March 31, 2016
Fair value hierarchy
	Level 1	Level 2	Level 3
Financial assets

Investment in marketable securities	1,012	-	-

Put Options – DIMN shares	-	989	-

March 31, 2016
Fair value hierarchy
	Level 1	Level 2	Level 3
Financial liabilities

Warrants	-	9	-

Derivative liabilities - embedded conversion options	-	14	-

MY SIZE INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data and per share data) (Unaudited)

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)

December 31, 2015
Fair value hierarchy
	Level 1		Level 2		Level 3
Financial assets

Investment in marketable securities		1,808		-		-

Put Options – DIMN shares		-		764		-

December 31, 2015
Fair value hierarchy
	Level 1	Level 2	Level 3
Financial liabilities

Warrants	-	1,449	-

Derivative liabilities embedded conversion options	-	1,239	-

Convertible promissory notes:

The Company applies ASC 470-20, "Debt with Conversion and Other Options" ("ASC 470-20"). Under the guidelines of ASC 470-20, the Company measures and recognizes the beneficial conversion feature on the commitment date. The beneficial conversion feature is measured by allocating a portion of the proceeds equal to the intrinsic value of the feature to additional paid-in-capital. The intrinsic value of the feature is calculated on the commitment date using the conversion price. This intrinsic value is limited to the portion of the proceeds allocated to the convertible debt.

The Company applied ASC 470-20 and ASC 815 to the Convertible promissory notes (see Note 4a).

Basic and diluted net income (loss) per share:

Basic net income (loss) per share is computed based on the weighted average number of Common stock outstanding during each year. Diluted net income per share is computed based on the weighted average number of Common stock outstanding during each year plus dilutive potential equivalent Common stock considered outstanding during the year, in accordance with ASC 260, "Earnings per Share". For the three months ended March 31, 2016 all outstanding options and warrants have been excluded from the calculation of the diluted net loss per share since their effect was anti-dilutive.

Concentrations of credit risk:

Financial instruments that potentially subject the Company and its subsidiaries to concentrations of credit risk consist principally of cash and cash equivalents.

Cash and cash equivalents are invested in major banks in Israel. Such deposits in Israel may be in excess of insured limits and are not insured in other jurisdictions. Management believes that the financial institutions that hold the Company's investments are financially sound and, accordingly, minimal credit risk exists with respect to these investments.

MY SIZE INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data and per share data) (Unaudited)

NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)

The Company and its subsidiaries have no off-balance-sheet concentration of credit risk such as foreign exchange contracts, option contracts or other foreign hedging arrangements.

Impact of recently issued accounting standard not yet adopted:

In August 2014, the FASB issued Accounting Standards Update No. 2014-15, "Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern" ("ASU 2014-15"). ASU 2014-15 requires management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity's ability to continue as a going concern for a period of one year after the date that the financial statements are issued. If such conditions or events exist, an entity should disclose that there is substantial doubt about the entity's ability to continue as a going concern for a period of one year after the date that the financial statements are issued. Disclosure should include the principal conditions or events that raise substantial doubt, management's evaluation of the significance of those conditions or events in relation to the entity's ability to meet its obligations, and management's plans that are intended to mitigate those conditions or events. ASU 2014-15 will be effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early adoption is permitted.

NOTE 3:- STOCK BASED COMPENSATION

The stock based expense recognized in the financial statements for services received from employees and non-employees is shown in the following table:

	Three-Months Ended March 31,
	2016			2015

Marketing	$	(50	)	$	96

	$	(50	)	$	96

MY SIZE INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data and per share data) (Unaudited)

NOTE 4:- CONTINGENCIES AND COMMITMENTS

On December 27, 2015, the Company received a new claim. The defendants are the Company itself, all the members of the Board of Directors, Mrs. Shoshana Zigdon, a shareholder and related party in the Company, as well as two additional defendants who are not among the members of the Board of Directors of the Company, and are not shareholders. The cause of the claim is that the plaintiff alleges that the Company violated its obligation to register the shares for trade with the Stock Exchange, causing a total of 2,622,500 NIS damage. The plaintiff seeks relief against the defendants through financial compensation at the rate of the aforementioned alleged damage; additional compensation of 400,000 NIS due to mental anguish; and if and to the extent that until the time the plaintiff can sell its shares on the Stock Exchange (hereinafter: "the exercise date "), the rate of a Company share will rise above the amount of 20.98 NIS (hereinafter: "the base rate"), an additional amount at the rate of the difference between the base rate and the highest rate of a Company share between the time the claim was submitted and the exercise date; and also court costs and attorney's fees of the plaintiff.

It is more likely than not that the Company will be required to register the shares. However, this assessment may change after the parties present their arguments to the court. In addition, at this stage of the proceedings, the Company is unable to quantify and assess the risk inherent in the claim for financial relief.

On May 17, 2012, the Company signed an agreement for a convertible loan with a third party (hereinafter the "Investor"). In accordance with the loan agreement, the Company received a total of NIS 200 thousand with the signing of the loan agreement and was to receive an additional amount of NIS 100 thousand at the end of a period not exceeding 21 days, during which the investor would perform due diligence on the Company. In addition, the agreement was for additional investments up to a total of NIS 2 million.

Under the agreement, the investor were entitled to convert the loan amounts granted to the Company into common shares of the Company with US $ 0.001 par value each, at a price per share equal to the amount of NIS 0.97. If the loans were not converted into the Company shares, the loan was to be repaid one year after the date of the loan agreement plus annual interest of 10%.

On February 18, 2015, the Company received a claim in a summary judgement for the investor’s demand of payment of the loan amount of NIS 200 thousand, which was granted to the Company on May 17, 2012, plus interest of 10% annually as from 20 May 2012 until payment of the debt, which as of the date of filing of the claim was NIS 258 thousand. The company denies the allegations stated in the request and is reviewing the possibilities, including the filing of reply to the court in accordance with law.

The assessment of the Company's legal advisors is that there is a reasonable chance that the claim will end in a compromise.

The financial statements as of March 31, 2016 include a provision for the loan at its original amount including accrued interest.

On September 10, 2015, the Company reported a claim that has been filed against it by its shareholders for not registering the shares underlying the Metamorefix transaction for trade on the TASE. Also, on September 10, 2015, the Company reported two letters of counterclaim that have been filed by it in the United States.

On November 6, 2015, the Company reported another letter of claim filed by it with the Tel-Aviv District Court. A pre-trial hearing was scheduled for January 11, 2016. At this stage management cannot estimate the possible result of the claim.

On January 16, 2014, the Company received from the legal counsel of one of its shareholders a demand letter for the payment of about 1.4 million US Dollars as compensation for alleged breaches by several parties including the Company and its previous controlling shareholder (who is not the current controlling shareholder of the Company) of an allotment agreement between the Company and its previous controlling shareholder and shareholders of Metamorefix. The execution of the allotment agreement was completed in December 2011 and thereafter, in January 2013, the entire share capital of Metamorefix was sold by the Company .

A response letter was sent by the Company which stated that the Company did not consider itself as a party to the allegations which were raised in said letter and that in any event all such allegations were denied by it. The Company did not make an allowance in the reports in connection with said demand.

MY SIZE INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data and per share data) (Unaudited)

NOTE 4:- CONTINGENCIES AND COMMITMENTS (Cont.)

On or about the time it embarked on its internet venture the Company entered into an agreement with suppliers and consultants according to which out of an indebtedness in a total sum of 1,358 thousand NIS (before VAT) the Company would pay 473 thousand NIS until December 31, 2013. The remaining balance of the indebtedness in the sum of 885 thousand NIS (before VAT) would be waived. In January, 2014, the suppliers and the consultants signed an extension agreement in which they agreed to extend the term of payment by an additional 60 day period. Over the course of 2014 most of the above payments to the creditors were paid in a total sum of about 469 thousand NIS (before VAT) and an indebtedness in the sum of 881 thousand NIS (before VAT) was waived (out of which the sum of 732 thousand NIS was registered as other income in the loss report and the balance was applied against the principal of a transaction with controlling shareholders.

On November 14, 2014, the Company entered into a cooperation agreement for a period of six months with IN SITU S.A. (hereinafter respectively: the "Agreement" and "IN SITU") the owner of the rights in the fashion brand-name TRUCCO, which includes women's fashion, belts and footwear and which is marketed and sold all over the world by IN SITU through a chain of stores and sale points as well as through TRUCCO's website (hereinafter: the "Website"). According to the Agreement IN SITU and the Company will cooperate in a bid to integrate the Company's measurement technology (hereinafter: the "Platform") in IN SITU's computerized data system and any other system which would enable to use the Platform on the Website as well as in the store and sale points for the examination of the Platform's efficiency in relation to IN SITU's sales and customers' satisfaction. The Company undertook that not later than within six months from the date of execution of the Agreement, the Platform would be completed and operable, namely, that the integration between the data systems of the parties would be completed and the end-customer would be able to take his measurements and purchase a befitting product using the Platform. Should the Company fail to fulfill its undertakings under the Agreement to grant the license and/or fully integrate the Platform within six months from the date of execution of the Agreement, the Company shall compensate IN SITU in the sum of 60 thousand Euros. As a result of the extended timetable there is an understanding between the parties to continue the cooperation.

On November 10, 2013, the Company's board of directors approved to bring before the general meeting an engagement with one of the investors (as specified in paragraph 1D below) for the acquisition of rights in a venture for the accumulation of physical data of human beings by portable electronic devices for the purpose of locating, based on the accumulated data, articles of clothing in internet apparel stores, which will fit the person whose measurements were accumulated.

In consideration for the acquisition of the venture the Company will undertake to pay the seller 18% the Company's operational profit arising directly or indirectly from the venture during a period of seven years from the termination of the development period of the venture. In addition the Seller received an option for a buy-back of the venture upon the occurrence of any one or more of the following: (a) if an application was filed for the liquidation of the Company or for the appointment of a receiver for the Company's assets or any material part thereof or for the imposition of a lien on a material part of the Company's assets, which were not revoked within 60 days from the date they were so filed; (b) if by the end of seven years from the execution date of the agreement the entire aggregate income of the Company arising directly or indirectly from the venture or from the commercialization of the patent was lower than 3.6 million NIS. According to the Company's evaluation the value is negligible. The buy-back option is valid for 90 days from the occurrence of either one of the above events. The agreed consideration was determined based on a valuation which was prepared by an independent assessor.

The Agreement was approved by the general meeting on January 9, 2014.

MY SIZE INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data and per share data) (Unaudited)

NOTE 5:- SIGNIFICANT EVENTS DURING THE REPORTING PERIOD

On January 25,2016 the the warrants granted to all of the investors since February 2015 were amended. The exercise price of the warrants was changed from $4.50 USD to 18 NIS so that the exercise price is the same as the functional currency of the Company. This amendment of the exercise price to NIS changes the accounting for the warrants in accordance with ASC 470 and the warrants are recorded as additional paid-in-capital. When the warrant exercise price was in US dollars, which is not the Company’s functional currency, the accounting rules required the Company to record the warrant option as a liability.

In November, 2015 the Company entered into collaboration agreement with Israel's largest private courier under which the parties will collaborate to develop an application based on the company's technology, which will allow the end customer to measure the size of packages intended for shipment using the app. The collaboration agreement is for a period of six months which may be extended by agreement of both parties or terminated by either party with prior notice of 14 days.

On March 16, 2016, the Company announced that it has completed the initial development of the app on Android and iOS devices. The app has the ability to scan three-dimensional, photo and obtain data on the time and location of the user. It should be clarified that this is not the final version of the application and that the Company and the shipping company continue to collaborate for further development and application suitability.

On March 4, 2016 the Company entered into a collaboration agreement and license with LSY International, Inc., a private company incorporated in the United States and which, among other things, sells luxury clothes made of fur, cashmere, alpaca, and berling under the brand name
"Yudovsky".

Under the agreement, the parties will cooperate for the purpose of integrting the company's measurement technology and computerized information systems of LSY. The agreement stipulates that the integration of these technologies, will be completed within four months from the date of the agreement.

According to the agreement the Company shall be entitled to a total of 7.5% of every sale by LSY, and LSY company will pay a monthly sum of US $ 2.5 for maintenance fees and services that the company will provide.

As the Company successfully completes integration of the technology into LSY’s systems and subject to the limitations set forth in the agreement, the Company will grant to LSY exclusive license to use the technology in the field of luxury clothing made of: fur, cashmere, alpaca and burling. The exclusive license will be awarded to LSY as long as the company will have a minimal income from the agreement as follows:

1) Minimum income of US $ 1 million at the end of the first period of 24 months from the effective date, and

2) Minimum income of $ 5 million at the end of each subsequent year.

Under the agreement, LSY will pay the Company $100 in fees for establishment and implementation of technology systems as follows:

1) $ 10 upon signing the agreement.

2) $30 upon start of implementation.

3) $20 upon completion of implementation.

4) $40 upon completion of testing and monitoring implementation.

As of the reporting date the Company received $10 in accordance with the terms of the agreement, which was recorded as deferred revenue until the fulfillment of conditions for revenue recognition.

MY SIZE INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands (except share data and per share data) (Unaudited)

NOTE 6:- SUBSEQUENT EVENTS

On May 16, 2016, the Company appointed a trustee with respect to investment funds of $3.45 million according to investor agreements signed in December 2015 and February 2016. The trustee is required to transfer the funds to the Company on demand of the company.

In May, 2016 the Company signed amendments to convertible loan agreements totaling US $ 7.35 million to extend the maturity dates to March 31, 2018. The original maturity date of the convertible loans was March, 2016.

On May 19, 2016, the Company signed an addendum to the investment of 15 April 2015, in which the investor is obligated to transfer additional US publicly traded shares to the Company so that the value of these shares plus 3,616,667 shares of DIAMANTE MINERALS INC, which were transferred to the company on 11 August 2015, will be $ 2 million.

In May 2016 the Board of Directors approved the Company's offers with private investors for convertible loan agreements whereby the investors will provide a loan for a total amount of $1,055, which does not bear interest, and which is convertible into common shares of the Company. The loans are convertible into 301,426 shares until March 31, 2018 at an exercise price of $3.50 per share. In addition, the Company will issue non-negotiable warrants convertible into 301,426 ordinary shares of the Company until March 31, 2018 at an exercise price of NIS 18 per share.

Pro-forma equity

The following proforma consolidated balance sheet is based on the March 31, 2016 balance sheet with adjustments for additional convertible loan investments in the amount of $4,505 and the automatic conversion of the convertible loans to equity upon listing on a national securities exchange in the United States.

Assets	$	7,210

Liabilities		392

Stockholders' equity		6,818

Total liabilities and stockholders' equity	$	7,210

The effect on equity of conversion of the convertible loans is an increase of $8,352. This amount includes the $3,848 convertible loan liability as of March 31, 2016 and additional new investments of $4,505.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion along with our financial statements and the related notes included in this prospectus. The following discussion contains forward-looking statements that are subject to risks, uncertainties and assumptions, including those discussed under “Risk Factors.”. Our actual results, performance and achievements may differ materially from those expressed in, or implied by, these forward-looking statements. See “Special Note About Forward-Looking Statements.” We have prepared our financial statements in accordance with U.S. generally accepted accounting principles issued by the FASB, as issued by the IASB.

Three months Ended March 31, 2016 Compared to Three months Ended March 31, 2016

Research and Development Expenses

Our research and development expenses for the Three-Months Ended March 31, 2016 amounted to USD 177K compared to USD 36K for the Three-Months Ended March 31 2015. The increase primarily results from increased subcontractors expenses due to new engagement with client.

Marketing, General and Administrative Expenses

Our marketing, general and administrative expenses for the Three -Months Ended March 31, 2016 amounted to USD 326K compared to USD 306K for the Three -Months Ended March 31, 2015.

Operating loss

The net loss of the Three-Months Ended March 31, 2016 amounted to USD 503K compared to USD 342K for the Three-Months Ended March 31, 2015.

The net loss of the Three-Months Ended March 31, 2016 include non-cash expenses (share based compensation) in the amount of USD 50K, irregular legal expenses in the amount of USD 37K and expenses related to the listing in USA and in UK in the amount of USD 45K.

Financial income and expense, net

Our financial income for the Three-Months Ended March 31, 2016 amounted to USD 614K compared to financial expense of USD 22K for the Three-Months Ended March 31, 2015. The increase in financial income compared to last year is due primarily to valuation of the warrants.

Net Loss from continuing operations

As a result of the foregoing research and development, marketing general and administrative expenses, and valuation of options, our net gain for the Three-Months Ended March 31, 2016 was USD 111K, compared to our net loss for the Three-Months Ended March 31, 2015 of USD 364K. The main reason for the change is the financial income mainly derived from the valuation of warrants.

Liquidity and Capital Resources

Since our inception, we have funded our operations primarily through private offerings of our equity securities in Israel.

As of March 31, 2016, we had cash and cash equivalents of USD 425K as compared to USD 919K as of March 31, 2015. The decrease in cash balances is due to cash used for operating activities during the period.

We had negative cash flow from operating activities of USD 479K for the Three-Months Ended March 31, 2016, compared with negative cash flow from operating activities of USD 219K for the Three-Months Ended March 31, 2015.

We had negative cash flow from investing activities of USD 13K for the Three-Months Ended March 31, 2016, compared with negative cash flow from investing activities of USD 9K for the Three-Months Ended March 31, 2015. The negative cash flow for represents purchase of equipment.

We have not recorded any financing activities for the Three-Months Ended March 31, 2016 and for the same period last year.

Application of Critical Accounting Policies and Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we have prepared in accordance with U.S. generally accepted accounting principles issued by the FASB. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. Actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are more fully described in the notes to our financial statements appearing elsewhere in this prospectus, we believe that the accounting policies discussed below are critical to our financial results and to the understanding of our past and future performance, as these policies relate to the more significant areas involving management’s estimates and assumptions. We consider an accounting estimate to be critical if: (1) it requires us to make assumptions because information was not available at the time or it included matters that were highly uncertain at the time we were making our estimate; and (2) changes in the estimate could have a material impact on our financial condition or results of operations.

Research and development expenses

Research expenses are recognized as expenses when incurred. Costs incurred on development projects are recognized as intangible assets as of the date as of which it can be established that it is probable that future economic benefits attributable to the asset will flow to us considering its commercial feasibility. This is generally the case when regulatory approval for commercialization is achieved and costs can be measured reliably. Given the current stage of the development of our products, no development expenditures have yet been capitalized. Intellectual property-related costs for patents are part of the expenditure for the research and development projects. Therefore, registration costs for patents are expensed when incurred as long as the research and development project concerned does not meet the criteria for capitalization.

Equity-based compensation

The suboptimal exercise factor is the ratio by which the stock price must increase over the exercise price before employees are expected to exercise their stock options.

The expected volatility of the share prices reflects the assumption that the historical volatility of the share prices is reasonably indicative of expected future trends.

The expected option term represents the period that the Company's stock options are expected to be outstanding. The Company currently uses simplified method until sufficient historical exercise data will support using expected life assumptions. The risk-free interest rate is based on the yield from Israel treasury zero-coupon bonds with an equivalent term.

The Company has historically not paid dividends and has no foreseeable plans to pay dividends.

The Company applies ASC 505-50, "Equity-Based Payments to Non-Employees" with respect to options and warrants issued to non-employees.

If any of the assumptions used in the binomial model change significantly, equity-based compensation for future awards may differ materially compared with the awards granted previously.

Convertible promissory notes:

The Company applied ASC 470-20 and ASC 815 to the Convertible promissory notes.

Selected Financial Data update numbers

The following table sets forth our selected consolidated financial data for the periods and as of the dates indicated. You should read the following selected consolidated financial data in conjunction with our audited consolidated financial statements and the related notes thereto included elsewhere in this Registration Statement on Form 10 and “—Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

	Three-Months Ended March 31,
	2016			2015

Operating expenses:
Research and development	$	177		$	36
Marketing, General and administrative		326			306

Total operating expenses		503			342

Operating loss		(503	)		(342	)

Financial income (expense), net		614			(22	)
Net income (loss) from continuing operations	$	111		$	(364	)

Other comprehensive income (loss):
Gain on available for sale securities		67			-
Foreign currency translation differences		(90	)		(7	)

Total comprehensive income (loss)	$	88		$	(371	)

Basic earnings (loss) per share	$	0.01		$	(0.02	)

Diluted earnings (loss) per share	$	(0.05	)	$	(0.02	)

Basic weighted average number shares outstanding		15,313,798			15,313,798
Diluted weighted average number shares outstanding		15,492,659			15,313,798

	March 31, 2016			March 31, 2015
Statement of financial position
Cash and cash equivalents		425			919
Other accounts receivable		144			124
Investment in marketable securities		1,012			1,808
Put Options		989			764
Restricted cash		64			62
Property and equipment, net		72			61
Total assets		2,706			3,738

Short-term convertible loans		3,930			3,470
Accounts payable		215			141
Other accounts payables		62			52
Derivative liabilities - embedded conversion options		14			1,239
Warrants		9			1,449
Deferred revenue		10			-
Total liabilities		4,240			6,351
Total shareholders’ deficiency		(1,534	)		(2,613	)
Total liabilities and shareholders’ deficiency		2,706			3,738

PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The assessment of the Company's legal advisors is that there is a reasonable chance that the claim will end in a compromise.

The financial statements as of March 31, 2016 include a provision for the loan at its original amount including accrued interest.

The Agreement was approved by the general meeting on January 9, 2014.

ITEM 1A. RISK FACTORS

An investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors and the other information in this registration statement before investing in our common stock. Our business and results of operations could be seriously harmed by any of the following risks. The risks set out below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. If any of the following events occur, our business, financial condition and results of operations could be materially adversely affected. In such case, the value and trading price of our common stock could decline, and you may lose all or part of your investment.

Risks Related to Our Company and Our Business

Changes in economic conditions, including continuing effects from the recent recession, could materially affect our business, financial condition and results of operations.

Because our customers are retailers, we, together with the rest of the retail industry, depend upon consumer discretionary spending. The recent recession, coupled with high unemployment rates, reduced home values, increases in home foreclosures, investment losses, personal bankruptcies and reduced access to credit and reduced consumer confidence, has impacted consumers’ ability and willingness to spend discretionary dollars. Economic conditions may remain volatile and may continue to repress consumer confidence and discretionary spending for the near term.

Damage to our reputation or lack of acceptance of our brand in existing and new markets could negatively impact our business, financial condition and results of operations.

We believe we are building a strong reputation for the quality of our technology, and we must protect and grow the value of our brand to continue to be successful in the future. Any incident that erodes consumer affinity for our brand could significantly reduce its value and damage our business. If guests perceive or experience a reduction in quality, or in any way believe we failed to deliver a consistently positive experience, our brand value could suffer and our business may be adversely affected.

In addition, our ability to successfully develop new retailers in new markets may be adversely affected by a lack of awareness or acceptance of our brand in these new markets. To the extent that we are unable to foster name recognition and affinity for our brand in new markets, our growth may be significantly delayed or impaired.

As a result, adverse economic conditions in any of these areas could have a material adverse effect on our overall results of operations. In recent years, certain of these states have been more negatively impacted by the housing decline, high unemployment rates and the overall economic crisis than other geographic areas. In addition, given our geographic concentration, negative publicity regarding any of our retailers in these areas could have a material adverse effect on our business and operations, as could other regional occurrences such as local strikes, terrorist attacks, increases in energy prices, adverse weather conditions, hurricanes, droughts or other natural or man-made disasters.

In particular, adverse weather conditions can impact guest traffic at our retailers, and, in more severe cases, cause temporary retail closures, sometimes for prolonged periods. Our business is subject to seasonal fluctuations, with retail sales typically higher during certain months, such as December. Adverse weather conditions during our most favorable months or periods may exacerbate the effect of adverse weather on guest traffic and may cause fluctuations in our operating results from quarter-to-quarter within a fiscal year.

We might not be able to market our products.

We expend significant resources in our marketing efforts, using a variety of media, including social media venues. We expect to continue to conduct brand awareness programs and guest initiatives to attract and retain guests. These initiatives may not be successful, resulting in expenses incurred without the benefit of higher revenues. Additionally, some of our competitors have greater financial resources, which enable them to purchase significantly more advertising than we are able to purchase. Should our competitors increase spending on advertising and promotions or our advertising funds decrease for any reason, or should our advertising and promotions be less effective than our competitors, there could be a material adverse effect on our results of operations and financial condition.

Our business operations and future development could be significantly disrupted if we lose key members of our management team.

The success of our business continues to depend to a significant degree upon the continued contributions of our senior officers and key employees, both individually and as a group. Our future performance will be substantially dependent in particular on our ability to retain and motivate our Chief Executive Officer, and certain of our other senior executive officers. We currently do not have an employment agreement in place with these officers. The loss of the services of our CEO, senior officers or other key employees could have a material adverse effect on our business and plans for future development. We have no reason to believe that we will lose the services of any of these individuals in the foreseeable future; however, we currently have no effective replacement for any of these individuals due to their experience, reputation in the industry and special role in our operations. We also do not maintain any key man life insurance policies for any of our employees.

Our growth may strain our infrastructure and resources, which could slow our development of new retailers and adversely affect our ability to manage our existing retailers.

Our future growth may strain our retail management systems and resources, financial controls and information systems. Those demands on our infrastructure and resources may also adversely affect our ability to manage our existing retailers. If we fail to continue to improve our infrastructure or to manage other factors necessary for us to meet our expansion objectives, our operating results could be materially and adversely affected. Likewise, if sales decline, we may be unable to reduce our infrastructure quickly enough to prevent sales deleveraging, which would adversely affect our profitability.

Retailers have been the target of class-actions and other litigation alleging, among other things, violations of federal and state law.

Our customers are subject to a variety of lawsuits, administrative proceedings and claims that arise in the ordinary course of our business. In recent years, a number of retail companies have been subject to claims by guests, employees and others regarding issues such as safety, personal injury and premises liability, employment-related claims, harassment, discrimination, disability and other operational issues common to the retail industry. A number of these lawsuits have resulted in the payment of substantial damages by the defendants. We carry insurance programs with specific retention levels, for a significant portion of our risks and associated liabilities with respect to workers’ compensation, general liability, employer’s liability, health benefits and other insurable risks. The policy is limited to $3 million. Regardless of whether any claims against us are valid or whether we are ultimately determined to be liable, we could also be adversely affected by negative publicity, litigation costs resulting from the defense of these claims and the diversion of time and resources from our operations.

Our insurance policies may not provide adequate levels of coverage against all claims, and fluctuating insurance requirements and costs could negatively impact our profitability.

We believe our insurance coverage is customary for businesses of our size and type. However, there are types of losses we may incur that cannot be insured against or that we believe are not commercially reasonable to insure. These losses, if they occur, could have a material and adverse effect on our business and results of operations. In addition, the cost of workers’ compensation insurance, general liability insurance and directors and officers’ liability insurance fluctuates based on our historical trends, market conditions and availability. Additionally, health insurance costs in general have risen significantly over the past few years and are expected to continue to increase. These increases, as well as recently-enacted federal legislation requiring employers to provide specified levels of health insurance to all employees, could have a negative impact on our profitability, and there can be no assurance that we will be able to successfully offset the effect of such increases with plan modifications and cost control measures, additional operating efficiencies or the pass-through of such increased costs to our guests.

We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect our business.

Our ability to implement our business plan successfully depends in part on our ability to further build brand recognition using our trademarks, service marks and other proprietary intellectual property, including our names and logos and the unique ambiance of our retailers. We plan to register a number of our trademarks. We cannot assure you that our trademark applications will be approved. Third parties may also oppose our trademark applications, or otherwise challenge our use of the trademarks. In the event that our trademarks are successfully challenged, we could be forced to rebrand our goods and services, which could result in loss of brand recognition, and could require us to devote resources to advertising and marketing new brands.

If our efforts to register, maintain and protect our intellectual property are inadequate, or if any third party misappropriates, dilutes or infringes on our intellectual property, the value of our brands may be harmed, which could have a material adverse effect on our business and might prevent our brands from achieving or maintaining market acceptance. We may also face the risk of claims that we have infringed third parties’ intellectual property rights. If third parties claim that we infringe upon their intellectual property rights, our operating profits could be adversely affected. Any claims of intellectual property infringement, even those without merit, could be expensive and time consuming to defend, require us to rebrand our services, if feasible, divert management’s attention and resources or require us to enter into royalty or licensing agreements in order to obtain the right to use a third party’s intellectual property.

Any royalty or licensing agreements, if required, may not be available to us on acceptable terms or at all. A successful claim of infringement against us could result in our being required to pay significant damages, enter into costly license or royalty agreements, or stop the sale of certain products or services, any of which could have a negative impact on our operating profits and harm our future prospects.

Information technology system failures or breaches of our network security could interrupt our operations and adversely affect our business.

We will rely on our computer systems and network infrastructure across our operations. Our operations depend upon our ability to protect our computer equipment and systems against damage from physical theft, fire, power loss, telecommunications failure or other catastrophic events, as well as from internal and external security breaches, viruses, worms and other disruptive problems. Any damage or failure of our computer systems or network infrastructure that causes an interruption in our operations could have a material adverse effect on our business and subject us to litigation or actions by regulatory authorities. Although we employ both internal resources and external consultants to conduct auditing and testing for weaknesses in our systems, controls, firewalls and encryption and intend to maintain and upgrade our security technology and operational procedures to prevent such damage, breaches or other disruptive problems, there can be no assurance that these security measures will be successful.

We will incur increased costs and obligations as a result of being a public company in the United States

We will incur significant legal, accounting and other expenses that we were not required to incur in the recent past. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time consuming and costly. We estimate that we will incur additional incremental costs per year associated with being a publicly-traded company; however, it is possible that our actual incremental costs of being a publicly-traded company will be higher than we currently estimate. In estimating these costs, we took into account expenses related to insurance, legal, accounting and compliance activities.

Furthermore, the need to establish the corporate infrastructure demanded of a public company may divert management’s attention from implementing our growth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make, changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a publicly traded company. However, the measures we take may not be sufficient to satisfy our obligations as a publicly traded company.

Federal, state and local or Israeli tax rules may adversely impact our results of operations and financial position.

We are subject to federal, state and local taxes in the U.S., as well as local taxes in Israel in respect to our operations in Israel. Although we believe our tax estimates are reasonable, if the Internal Revenue Service (“IRS”) or other taxing authority disagrees with the positions we have taken on our tax returns, we could face additional tax liability, including interest and penalties. If material, payment of such additional amounts upon final adjudication of any disputes could have a material impact on our results of operations and financial position. In addition, complying with new tax rules, laws or regulations could impact our financial condition, and increases to federal or state statutory tax rates and other changes in tax laws, rules or regulations may increase our effective tax rate. Any increase in our effective tax rate could have a material impact on our financial results.

We may require additional capital to finance our operations in the future, but that capital may not be available when it is needed and could be dilutive to existing stockholders.

We may require additional capital for future operations. We plan to finance anticipated ongoing expenses and capital requirements with funds generated from the following sources:

●	cash provided by operating activities;

●	available cash and cash investments; and

●	capital raised through debt and equity offerings.

Current conditions in the capital markets are such that traditional sources of capital may not be available to us when needed or may be available only on unfavorable terms. Our ability to raise additional capital, if needed, will depend on conditions in the capital markets, economic conditions and a number of other factors, many of which are outside our control, and on our financial performance. Accordingly, we cannot assure you that we will be able to successfully raise additional capital at all or on terms that are acceptable to us. If we cannot raise additional capital when needed, it may have a material adverse effect on our liquidity, financial condition, results of operations and prospects. Further, if we raise capital by issuing stock, the holdings of our existing stockholders will be diluted.

If we raise capital by issuing debt securities, such debt securities would rank senior to our common stock upon our bankruptcy or liquidation. In addition, we may raise capital by issuing equity securities that may be senior to our common stock for the purposes of dividend and liquidating distributions, which may adversely affect the market price of our common stock. Finally, upon bankruptcy or liquidation, holders of our debt securities and shares of preferred stock and lenders with respect to other borrowings will receive a distribution of our available assets prior to the holders of our common stock. Additional equity offerings may dilute the holdings of our existing stockholders or reduce the market price of our common stock, or both.

Our business is dependent upon continued market acceptance by consumers.

We are substantially dependent on continued market acceptance of our products by customers, and such customers are dependent upon regulatory and legislative forces. We cannot predict the future growth rate and size of this market.

If we are able to expand our operations, we may be unable to successfully manage our future growth.

Since inception, we have been planning for the expansion of our brand. Any such growth could place increased strain on our management, operational, financial and other resources, and we will need to train, motivate, and manage employees, as well as attract management, sales, finance and accounting, international, technical, and other professionals. In addition, we will need to expand the scope of our infrastructure and our physical resources. Any failure to expand these areas and implement appropriate procedures and controls in an efficient manner and at a pace consistent with our business objectives could have a material adverse effect on our business and results of operations.

Any future litigation could have a material adverse impact on our results of operations, financial condition and liquidity.

From time to time we may be subject to litigation, including potential stockholder derivative actions. Risks associated with legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. To date have obtained directors and officers liability (“D&O”) insurance to cover some of the risk exposure for our directors and officers. Such insurance generally pays the expenses (including amounts paid to plaintiffs, fines, and expenses including attorneys’ fees) of officers and directors who are the subject of a lawsuit as a result of their service to the Company. There can be no assurance that we will be able to continue to maintain this insurance at reasonable rates or at all, or in amounts adequate to cover such expenses should such a lawsuit occur. While neither Delaware law nor our Certificate of Incorporation or bylaws require us to indemnify or advance expenses to our officers and directors involved in such a legal action, we expect that we would do so to the extent permitted by Delaware law. Without D&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to the Company could have a material adverse effect on our financial condition, results of operations and liquidity.

Our prior operating results may not be indicative of our future results.

You should not consider prior operating results to be indicative of our future operating results. The timing and amount of future revenues will depend almost entirely on our ability to open new retailers while maintaining consistency in our existing retail. Our future operating results will depend upon many other factors, including:

-	the level of product and price competition,

-	our success in expanding our business network and managing our growth,

-	the ability to hire qualified employees, and

-	the timing of such hiring and our ability to control costs.

Requirements associated with being a reporting public company will require significant company resources and management attention.

Once the registration statement is effective by the SEC, we will be subject to the reporting requirements of the Exchange Act and the other rules and regulations of the SEC relating to public companies. We are working with independent legal, accounting and financial advisors to identify those areas in which changes should be made to our financial and management control systems to manage our growth and our obligations as an SEC reporting company. These areas include corporate governance, internal control, internal audit, disclosure controls and procedures and financial reporting and accounting systems. We have made, and will continue to make, changes in these and other areas, including our internal control over financial reporting. However, we cannot assure you that these and other measures we may take will be sufficient to allow us to satisfy our obligations as an SEC reporting company on a timely basis.

In addition, compliance with reporting and other requirements applicable to SEC reporting companies will create additional costs for us, will require the time and attention of management and will require the hiring of additional personnel and legal, audit and other professionals. We cannot predict or estimate the amount of the additional costs we may incur, the timing of such costs or the impact that our management’s attention to these matters will have on our business.

Our management controls a large block of our common stock that will allow them to control us.

As of the date of this prospectus, members of our management team and affiliates beneficially own approximately 11.47% of our outstanding common stock. As such, management owns approximately 11.47% of our voting power. As a result, management will have the ability to control substantially all matters submitted to our stockholders for approval including:

a)	election of our board of directors;

b)	removal of any of our directors;

c)	amendment of our Certificate of Incorporation or bylaws; and

d)	adoption of measures that could delay or prevent a change in control or impede a merger, takeover or other business combination involving us.

In addition, management’s stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price.

Any additional investors will own a minority percentage of our common stock and will have minority voting rights.

Risks Related to the Common Stock

Our stock price is likely to be extremely volatile and our common stock is not listed on a stock exchange; as a result, stockholders may not be able to resell their shares at or above the price paid for them.

The market price of our common stock is likely to be extremely volatile and could be subject to significant fluctuations due to changes in sentiment in the market regarding our operations or business prospects, among other factors. Further, our common stock is not currently quoted or listed for trading anywhere except the Tel Aviv Stock Exchange. An active public market for our common stock does not currently exist, and even if it does someday exist, it may not be sustained. Therefore, stockholders may not be able to sell their shares at or above the price they paid for them.

Among the factors that could affect our stock price are:

●	industry trends and the business success of our customers;

●	actual or anticipated fluctuations in our quarterly financial and operating results that vary from the expectations of our management or of securities analysts and investors;

●	our failure to meet the expectations of the investment community and changes in investment community recommendations or estimates of our future operating results;

●	announcements of strategic developments, acquisitions, dispositions, financings, product developments and other materials events by us or our competitors;

●	regulatory and legislative developments concerning our technology;

●	litigation;

●	general market conditions;

●	other domestic and international macroeconomic factors unrelated to our performance; and

●	additions or departures of key personnel.

Sales by our stockholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of our common stock.

A substantial portion of our total outstanding shares of common stock may be sold into the market at any time. While most of these shares are held by our principal stockholder, who is also an executive officer, and we believe that such holder has no current intention to sell a significant number of shares of our stock, if he were to decide to sell large amounts of stock over a short period of time (presuming such sales were permitted, given his affiliate status) such sales could cause the market price of our common stock to drop significantly, even if our business is doing well.

Further, the market price of our common stock could decline as a result of the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and price that we deem appropriate.

Our preferred stock may have rights senior to those of our common stock which could adversely affect holders of common stock.

Although no preferred stock has been issued, Delaware law, and our Certificate of Incorporation give our Board of Directors the authority to issue additional series of preferred stock without a vote or action by our stockholders. The Board also has the authority to determine the terms of preferred stock, including price, preferences and voting rights. The rights granted to holders of preferred stock in the future may adversely affect the rights of holders of our common stock. Any such authorized class of preferred stock may have a liquidation preference – a pre-set distribution in the event of a liquidation – that would reduce the amount available for distribution to holders of common stock or superior dividend rights that would reduce the amount of dividends that could be distributed to common stockholders. In addition, an authorized class of preferred stock may have voting rights that are superior to the voting right of the holders of our common stock. Currently the Company has no issued or outstanding preferred stock.

We are an smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to such companies, our common stock may be less attractive to investors.

We are a smaller reporting company, (i.e. a company with less than $75 million of its voting equity held by affiliates). , and we are eligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies We have elected to adopt these reduced disclosure requirements. We cannot predict if investors will find our common stock less attractive as a result of our taking advantage of these exemptions. If some investors find our common stock less attractive as a result of our choices, there may be a less active trading market for our common stock and our stock price may be more volatile. There is currently no active market for our common stock.

We do not expect to pay any cash dividends in the foreseeable future.

We intend to retain our future earnings, if any, in order to reinvest in the development and growth of our business and, therefore, do not intend to pay dividends on our common stock for the foreseeable future. Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, and such other factors as our board of directors deems relevant. Accordingly, you may need to sell your shares of our common stock to realize a return on your investment, and you may not be able to sell your shares at or above the price you paid for them.

We can sell additional shares of common stock without consulting stockholders and without offering shares to existing stockholders, which would result in dilution of stockholders’ interests in MY SIZE, INC. and could depress our stock price.

Our Certificate of Incorporation authorizes 50,000,000 shares of common stock, of which 15,313,793 are currently outstanding, and our Board of Directors is authorized to issue additional shares of our common stock and preferred stock. Although our Board of Directors intends to utilize its reasonable business judgment to fulfill its fiduciary obligations to our then existing stockholders in connection with any future issuance of our capital stock, the future issuance of additional shares of our common stock or preferred stock convertible into common stock would cause immediate, and potentially substantial, dilution to our existing stockholders, which could also have a material effect on the market value of the shares.

Further, our shares do not have preemptive rights, which means we can sell shares of our common stock to other persons without offering purchasers in this offering the right to purchase their proportionate share of such offered shares. Therefore, any additional sales of stock by us could dilute your ownership interest in our Company.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS SECURITIES

No activity during this period.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

There were no defaults upon senior securities during the period ended March 31, 2016.

ITEM 4. MINING SAFETY DISCLOSURES

N/A

ITEM 5. OTHER INFORMATION

On May 18 2016 the company nominated and appointed Mr. Or Kles CPA MBA to hold the office of chief financial officer (CFO) of the company. Mr. Kles replaced Mr. Uri Ben Or as the company's CFO. Below Please find a summary of Mr. Kles resume and his contract info.

Mr. Kles is a CPA with a broad, diverse financial background, and a proven track record in driving forward finance related efforts. In recent years, Or has been seeing through planning, budgeting, forecasting, tax, and auditing processes. Or holds an MBA and a BA in Business Management and Accounting (specializing in financing). During the 5 years prior to his employment by the Company, served at the financial department of Shikun and binui- Solel boneh infrastructure LTD and as an associate at KPMG.

Position

Name

Age

Compensation

Member of Committees

Bio

CFO

Or Kles

33
(February 9, 1983)

Received 8,400 USD (32,500 NIS gross) in 2016 compensation

Mr. Kles is a CPA with a broad, diverse financial background, and a proven track record in driving forward finance related efforts.

In recent years, Or has been seeing through planning, budgeting, forecasting, tax, and auditing processes. Or holds an MBA and a BA in Business Management and Accounting (specializing in financing).

During the 5 years prior to his employment by the Company, served at the financial department of Shikun and binui- Solel bonhe infrastructure LTD and as an associate at KPMG

ITEM 6. EXHIBITS

Exhibits filed herein for March 31, 2016.

Exhibits

Exhibit Number		Description of Exhibits
31.1		Certification of Principal Executive Officer pursuant to 18 U.S.C Section 1350, as adopted Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Principal Financial Officer pursuant to 18 U.S.C Section 1350, as adopted Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Principal Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Principal Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Schema
101.CAL		XBRL Taxonomy Calculation Linkbase
101.DEF		XBRL Taxonomy Definition Linkbase
101.LAB		XBRL Taxonomy Label Linkbase
101.PRE		XBRL Taxonomy Presentation Linkbase

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Registrant	My Size, Inc.

Date: May 23, 2016	By:	/s/ Ronen Luzon
		Ronen Luzon
		Chief Executive Officer (Principal Executive Officer) Secretary Treasurer

Registrant	My Size, Inc.

Date: May 23, 2016	By:	/s/ Or Kles
		Or Kles
		Chief Financial Officer (Principal Financial Officer)