0001213900-17-005341.txt : 20170516 0001213900-17-005341.hdr.sgml : 20170516 20170516104413 ACCESSION NUMBER: 0001213900-17-005341 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 42 CONFORMED PERIOD OF REPORT: 20170331 FILED AS OF DATE: 20170516 DATE AS OF CHANGE: 20170516 FILER: COMPANY DATA: COMPANY CONFORMED NAME: My Size, Inc. CENTRAL INDEX KEY: 0001211805 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-37370 FILM NUMBER: 17847506 BUSINESS ADDRESS: STREET 1: 3 ARAVA ST. CITY: AIRPORT CITY STATE: L3 ZIP: 7010000 BUSINESS PHONE: 972-36009030 MAIL ADDRESS: STREET 1: 3 ARAVA ST. CITY: AIRPORT CITY STATE: L3 ZIP: 7010000 FORMER COMPANY: FORMER CONFORMED NAME: Mysize Inc. DATE OF NAME CHANGE: 20150317 FORMER COMPANY: FORMER CONFORMED NAME: TOPSPIN MEDICAL INC DATE OF NAME CHANGE: 20021226 10-Q 1 f10q0317_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, 2017

 

☐ 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.

(Exact name of registrant as specified in its charter)

 

Delaware   51-0394637

(State or other jurisdiction of
incorporation or organization)

  (I.R.S. Employer
I.D. No.)

 

3 Arava St., pob 1026, Airport City, Israel, 7010000

(Address of principal executive offices)

  

+972-3-600-9030

Registrant’s telephone number, including area code:

 

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, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐  Accelerated filer
Non-accelerated filer ☐  (Do not check if a smaller reporting company) Smaller reporting company
    Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   

 

APPLICABLE ONLY TO CORPORATE ISSUERS:

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 17,605,359 shares of common stock, par value $0.001 as of May 16, 2017.

 

 

 

 

MY SIZE, INC.

INDEX TO FORM 10-Q FILING

FOR THE THREE MONTHS ENDED MARCH 31, 2017

 

TABLE OF CONTENTS

 

    PAGE
PART I - FINANCIAL INFORMATION  
     
Item 1. Condensed Consolidated Financial Statements (Unaudited) 1
  Condensed Consolidated Balance Sheets 3
  Condensed Consolidated Statements of Comprehensive Income (Loss) 4
  Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficiency) 5
  Condensed Consolidated Statements of Cash Flows 7
  Notes to Condensed Consolidated Financial Statements 8
Item 2. Management Discussion & Analysis of Financial Condition and Results of Operations 19
Item 3. Quantitative and Qualitative Disclosure About Market Risk 22
Item 4. Controls and Procedures 22
   
PART II - OTHER INFORMATION  
     
Item 1. Legal Proceedings 23
Item 1A. Risk Factors 26
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 26
Item 3. Defaults Upon Senior Securities 26
Item 4. Mining Safety Disclosures 26
Item 5 Other information 26
Item 6. Exhibits 26

 

 

PART I

FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

 

 

My Size Inc. and Subsidiaries

 

Condensed Interim

Consolidated

Financial Statements

As of March 31, 2017

 

U.S. Dollars in Thousands

 

 1 
 

 

My Size Inc.

 

Condensed Interim Consolidated Financial Statements as of March 31, 2017 (Unaudited)

 

Contents

 

  Page
   
Condensed Consolidated Balance Sheets 3
   
Condensed consolidated Statements of Comprehensive Income (Loss) 4
   
Condensed Consolidated Statements of Stockholders’ Equity (Deficiency) 5-6
   
Condensed Consolidated Statements of Cash flows 7
   
Notes to Condensed Consolidated Financial Statements 8-18

 

 2 
 

 

My Size Inc.

 

Condensed Consolidated Balance Sheets

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

  

   March 31   December 31 
   2017   2016 
   (Unaudited)   (Audited) 
   $ thousands   $ thousands 
Assets        
Curent Assets:        
Cash and cash equivalents   359    34 
Other receivables and prepaid expenses   1,619    1,401 
Restricted cash   66    62 
Total current assets   2,044    1,497 
           
Investment in marketable securities   362    579 
Property and equipment, net   75    74 
    437    653 
           
Total assets   2,481    2,150 
           
Liabilities and stockholders’ equity          
Current liabilities          
Trade payable   188    229 
Accounts payable   431    316 
Derivative liabilities   78    80 
Warrants to purchase common stock   168    - 
           
Total current liabilities   865    625 
           
COMMITMENTS AND CONTINGENCIES          
Stockholders’ equity (Deficiency):          
Capital stock -          
Common stock of $ 0.001 par value -
Authorized: 50,000,000 shares; Issued and outstanding: 17,605,359 and 17,405,359 respectively
   17    17 
Additional paid-in capital   14,744    13,347 
Available for sale reserve   -    (93)
Accumulated other comprehensive loss   (107)   (102)
Accumulated deficit   (13,038)   (11,644)
           
Total stockholders’ equity   1,616    1,525 
Total liabilities and stockholders’ equity   2,481    2,150 

 

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

 

 3 
 

 

My Size Inc.

 

Condensed Consolidated Statements of Comprehensive Loss

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

 

   Three months ended
March 31
   Year ended 
   2017   2016   December 31 
   (Unaudited)   (Unaudited)   2016 
   $ thousands   $ thousands   $ thousands 
Operating expenses            
Research and development   207    177    727 
Marketing, General and administrative   879    326    1,859 
                
Total operating expenses   1,086    503    2,586 
Operating loss   (1,086)   (503)   (2,586)
Financial (expense) income, net   (308)   614    (1,748)
                
Net (loss) income from continuing operations   (1,394)   111    (4,334)
                
Other comprehensive (loss) income:               
                
Gain (loss) on available for sale securities   93    67    (24)
Foreign currency translation differences   (5)   (90)   2 
                
Total comprehensive (loss) income   (1,306)   88    (4,356)
                
Basic (loss) earnings per share   (0.08)   0.01    (0.27)
Diluted (loss) earnings per share   (0.08)   0.05    (0.27)
Basic weighted average number shares outstanding   17,525,359    15,313,793    16,345,499 
                
Diluted weighted average number of shares outstanding   17,525,359    15,492,659    16,345,499 

 

The accompanying notes are an integral part of the interim financial statements

 

 4 
 

 

My Size Inc.

 

Condensed Consolidated Statements Shareholders’ Equity (Unaudited)

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

 

   Common stock   Additional paid-in   Available for sale   Foreign
currency
   Accumulated   Total
Stockholders’
 
   Number   Amount   capital   reserve   transaction   Deficit   equity 
                             
Balance as of January 1, 2017   17,405,359    17    13,347    (93)   (102)   (11,644)   1,525 
                                    
Total comprehensive loss   -    -    -    93    (5)   (1,394)   (1,306)
Stock-based compensation related to                                   
options granted to consultants   -    -    997    -    -    -    997 
Receipts on account of shares and New investments   200,000    (*)   400    -    -    -    400 
Balance as of March 31, 2017   17,605,359    17    14,744    -    (107)   (13,038)   1,616 

 

(*) Represent an amount less than $1.

 

The accompanying notes are an integral part of the interim financial statements

 

 5 
 

 

My Size Inc.

 

Condensed Consolidated Statements of Changes in Shareholders’ Equity (Deficiency)

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

 

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

 

   Common stock   Additional paid-in   Available for   Foreign
currency
   Accumulated   Total
Stockholders’ equity
 
   Number   Amount   capital   sale   transaction   Deficit   (deficiency) 
                             
Balance as of December 31, 2015  15,313,793   15   4,855   (69)   (104)   (7,310)   (2,613) 
                                    
Stock-based compensation related to options granted - to consultants   -    -    (23)   -    -    -    (23)
Total comprehensive loss   -    -    -    (24)   2    (4,334)   (4,356)
Convertible loans converted to equity   2,091,566    2    7,528    -    -    -    7,530 
Warrants reclassified to equity as a result of  amended exercise price currency   -    -    987    -    -    -    987 
                                    
Balance as of December 31, 2016   17,405,359    17    13,347    (93)   (102)   (11,644)   1,525 

 

The accompanying notes are an integral part of the interim financial statements

 

 6 
 

 

My Size Inc.

 

Condensed Interim Consolidated Statements of Cash Flows

 

   Three-Months Ended
March 31,
   Year ended
December
 
   2017   2016   2016 
   $ thousands
(Unaudited)
  

$ thousands

(Unaudited)

  

$ thousands

 (Audited) 

 
             
Cash flows from operating activities:            
             
Net income (loss)   (1,394)   111    (4,334)
Adjustments to reconcile net income (loss) to net cash used in operating activities:               
Depreciation   7    5    24 
Amortization of warrant, convertible loans and Derivative   (29)   (614)   (182)
Revaluation PUT Option   -    -    776 
Revaluation investment in marketable securities   340    -    1,233 
Stock based compensation   39    (50)   (23)
Decrease (increase) in receivables and prepaid expenses   (8)   (15)   (27)
Increase (decrease) in embedded derivative   (6)   -    80 
Increase (decrease) in trade payable   (54)   56    86 
Increase in other accounts payable   93    28    208 
                
Net cash used in operating activities   (1,012)   (479)   (2,159)
                
Cash flows from investing activities:               
                
Purchase of property and equipment   (3)   (13)   (36)
                
Net cash used in investing activities   (3)   (13)   (36)
                
Cash flows from financing activities:               
Payment for a loan   -    -    (25)
Payment from guarantees   1,149    -    - 
Proceeds from Issuing shares, warrants and convertible loans   200    -    1,339 
                
Net cash provided by financing activities   1,349    -    1,314 
                
Effect of exchange rate changes on cash and cash equivalents   (9)   (2)   (4)
                
(Decrease) Increase in cash and cash equivalents   325    (494)   (885)
Cash and cash equivalents at the beginning of the period   34    919    919 
                
Cash and cash equivalents at the end of the period   359    425    34 
                
Non cash transactions               
Warrants reclassified to equity as a result of amended exercise price currency   -    1,041    - 
Warrants reclassified to equity as a result of amended exercise price currency   -    -    987 
Conversion of loan to equity   -    -    4,846 
Non cash share base payments   958    -    - 

  

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

 

 7 
 

 

My Size Inc.

 

Notes to Condensed Consolidated Financial Statements

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

 

Note 1 – General

 

  a. My Size Inc. (the “Company”) developed a unique measurement technology based on sophisticated algorithms with broad applications in a variety of areas, from the apparel e-commerce market to Do It Yourself (DIY) smartphone & tablet apps. The technology is driven by several patent-pending algorithms which are able to calculate and record measurements in a variety of novel ways.
     
  b. Since inception, the Company has incurred losses and negative cash flows from operations and the accumulated loss has reached $13 million. The Company has financed its operations mainly through fundraising from private investors.

As of March 31, 2017, the Company entered into fund raising agreements in a total sum of $8,015 out of which the sum of $4,596 and $1,410 was received in cash and marketable securities, respectively. The marketable securities are shares of common stock of Diamante minerals Inc (“DIMN”), which are presented in the Company’s balance sheet as a financial asset available for sale.

 

As of the date of the report, the Company has $1,514 and $495 in guaranteed notes and checks, respectively. The guarantee has been provided by an ungraded financial institution. Subsequent to March 31, 2017, the sum of $550 and $40 of the guarantee notes and the checks respectively have been redeemed in cash.

 

For the purpose of financing its operating activities in the foreseeable future, the Company relies on the collection of existing cash commitments from investors, the sale of marketable securities and raising additional funds. However, there is no certainty regarding the Company’s ability to collect committed funds, obtain additional  funding or sell the DIMN shares that it holds. The Company estimates that the committed investments will be adequate to fund its operations through the 12 months following the approval date of the financial statements. Failure to obtain the additional funds as mentioned above will require the Company to curtail operations.

 

However, If all the committed funds are not collected or not replaced by additional funding,  there is a significant doubt regarding the Company's ability to continue its operation as a going concern. The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should the Company fail to operate as a going concern.

 

Note 2 - Significant Accounting Policies

 

a.Unaudited condensed consolidated financial statements:

 

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, 2017 are not necessarily indicative of the results that may be expected for any future period or for the year ending December 31, 2017.

 

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, 2016.

 

b.Use of estimates:

 

The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates.

 

 8 
 

 

My Size Inc.

 

Notes to Condensed Consolidated Financial Statements

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

 

Note 2 - Significant Accounting Policies (cont’d)

 

c.Impact of recently issued accounting standard not yet adopted:

 

In January 2016, the FASB issued Accounting Standards Update No. 2016-01 (ASU 2016-01) “Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 amends various aspects of the recognition, measurement, presentation, and disclosure for financial instruments. With respect to our consolidated financial statements, the most significant impact relates to the recognition and measurement for equity investments. Additionally, ASU 2016-01 will impact the disclosure and presentation of financial assets and liabilities. ASU 2016-01 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2017. Early adoption by public entities is permitted only for certain provisions. The Company is examining the effects of the update on the financial statements with no plans for early adoption.

 

In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (ASU 2016-02) which amends the FASB Accounting Standards Codification and created Topic 842, “Leases.” Under Topic 842, lessees are required to recognize assets and liabilities on the balance sheet for most leases and provides for enhanced disclosures. Leases will continue to be classified as either finance or operating. ASU 2016-02 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2018. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Full retrospective application is prohibited and early adoption by public entities is permitted. The Company is examining the possibility of early adoption of the update and the anticipated effects of its adoption on the financial statements.

  

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments, which significantly changes the way entities recognize impairment of many financial assets by requiring immediate recognition of estimated credit losses expected to occur over their remaining life. This ASU is effective for annual and interim periods in fiscal years beginning after December 15, 2019. Early adoption is permitted for annual and interim periods in fiscal years beginning after December 15, 2018. The impact of adopting the new standard on the net income is not expected to be material.

 

 9 
 

 

My Size Inc.

 

Notes to Condensed Consolidated Financial Statements

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

 

Note 3 - Financial Instruments

 

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.

 

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 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 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.

 

The Company holds shares in a publicly-traded company - Diamante minerals Inc which are classified as available-for-sale equity securities. The marketable securities have readily determinable fair market values that are calculated based on the share price in the measurement date and ranked as Level 1 assets.

 

     March 31, 2017 
     Fair value hierarchy 
     Level 1   Level 2   Level 3 
  Financial assets            
                  
  Investment in marketable securities (*)   362    -    - 

 

 10 
 

 

My Size Inc.

 

Notes to Condensed Consolidated Financial Statements

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

 

Note 3 - Financial Instruments (cont’d)

 

     March 31, 2017 
     Fair value hierarchy 
     Level 1   Level 2   Level 3 
  Financial liabilities            
               
  Warrants to purchase common stock (*)   -    168    - 
  Derivative liabilities (**)   -    78    - 

  

(*) see note 6.

(**) see note 4a.

 

     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    - 

 

     December 31, 2016 
     Fair value hierarchy 
     Level 1   Level 2   Level 3 
  Financial assets            
                  
  Investment in marketable securities (***)   579    -    - 

 

     December 31, 2016 
     Fair value hierarchy 
     Level 1   Level 2   Level 3 
  Financial liabilities            
                  
  Derivative liabilities   -    80    - 

 

(***) At March 31, 2017, gross unrecognized loss, recognized loss and fair value (based on quoted market prices) of these securities were $(93), $340 and $362, respectively (At December 31, 2016, $24, $1,233 and $579, respectively)

 

 11 
 

 

My Size Inc.

 

Notes to Condensed Consolidated Financial Statements

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

 

Note 4 - Stock Based Compensation

 

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

 

     Three months ended
March 31
   Year ended
December 31,
 
     2017   2016   2016 
               
  Marketing, General and Administrative   39    (50)   (23)
                  
      39    (50)   (23)

 

  a.

In December 2016, the Company entered into a consulting agreement with a consultant (the “Consultant”) for the rendering of providing services in connection with marketing strategies, micro and macro-economic issues and for the promotion of the Company's marketing, business, products and operations through smartphone applications. The agreement is for a period of 18 months commencing from October 2016.

 

In consideration for the services the Company will issue to the Consultant 25,000 shares of common stock of the Company which will be transferred in five installments of 4,150 each and a sixth installment of 4,250 shares each quarter. In addition, the company will issue to the Consultant stock options for the acquisition of the Company shares, exercisable not later than March 31, 2018 at an exercise price of NIS18 per share.

In addition, the Company undertook to pay the balance of the consideration for the sale of the shares by the Consultant up to the sum of NIS500,000. If the consideration for the sale of the shares falls below 90% of the shares' price on the stock exchange on the date of their sale, the Company shall pay the Consultant the difference. The company may decide at its own discretion whether to make such payment in cash or shares.

 

On March 21, 2017, the general meeting adopted a resolution for the approval of a capital remuneration plan for consultants. The approval was required for the issue of the shares of common stock of the Company and the stock options.

During 2017, costs in the sum of $12 ($90 during 2016) were recorded by the Company and an undertaking to pay the balance of the consideration was recognized in the sum of $78 ($80 during 2016) according to the fair value of the undertaking. The issue of the shares of common stock of the Company and stock options was subject to the receipt of all required regulatory approvals. As of the date of the financial report, the shares and options have not yet been issued.

 

  b.

In December 2016, the Company engaged with an external consultant (the “Consultant”) to provide services in marketing strategy and public relations, including potential investors relations. For such consulting services, the Company shall issue to the Consultant options to purchase 2,000,000 shares of common stock at variable exercise prices ranging from $3.50 to $9.00 per share and exercisable for periods ranging from 12 month (or 6 months from filing date of registration statement) to 36 months. The issuance of the options under the agreement is subject to the receipt of all the approvals required by the laws applicable to the Company, including stock exchange approvals and the approval of a meeting of its shareholders to adopt an equity incentive plan for consultants. The equity incentive plan for consultants was approved by the shareholders on March 21, 2017, and such options have not yet been issued. The expenses were recognized for the proportion of the time in the sum of $26 according to the fair value of the undertaking. The balance of the consideration for the rest of the expenses in accordance with the fair value was recognized in trade receivables for the sum of $958.

 

On May 16, 2017, subsequent to the reporting period, the Company and the Consultant signed an amendment to the agreement for making the adjustment to the strike prices so prices ranging from $1.50 to $5.00 per share.

  

 12 
 

 

My Size Inc.

 

Notes to Condensed Consolidated Financial Statements

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

 

Note 5 - Contingencies and Commitments 

 

  a.

On December 27, 2015, the Company received a legal complaint. The defendants are the Company, all the members of the Board of Directors, Mrs. Shoshana Zigdon, a shareholder and related party of the Company, as well as two additional defendants who are not shareholders, officers or directors of the Company. The plaintiff alleges that the Company violated its obligation to register his shares for trade with the Tel Aviv 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 Tel Aviv Stock Exchange ("the exercise date "), if the rate of a Company shares rises above the amount of 20.98 NIS ("the base rate"), an additional amount at the rate of the difference between the base rate and the highest rate of the Company's shares between the time the claim was submitted and the exercise date; and also court costs and attorney's fees of the plaintiff.

 

All pre-trial preliminary proceedings as well as submission of all evidentiary affidavits and expert opinions by both parties have been completed.

 

Pursuant to the Court's recommendation, the case was referred to mediation by the honorable Judge (Rtd.) Hilla Gerstel, former president of the Central District Court. The mediation is going on and the next mediation session is scheduled for June 5, 2017.

 

The Company estimates, based on the opinion of its legal counsel that the risk of acceptance of the remedy requested by the plaintiff in his claim, namely, that the Company was obligated to remove the restriction which was imposed on the shares and register plaintiff's shares for trade on the stock exchange, exceeds the chance of its dismissal. This remedy, as such, does not constitute any financial exposure to the Company. However, the company believes, based on the opinion of its legal counsel, that assuming the plaintiff's claim for the main relief, i.e. the removal of the restriction from and the registration of his shares on the stock exchange, will be accepted by the court, it appears that prima face the risk that the court will also rule that the plaintiff is entitled to financial compensation for the alleged delay in registering his shares, exceeds the chance that such financial compensation will not be awarded.

 

According to the expert opinion submitted to the court by the plaintiff, the plaintiff's expert calculates the approximate damage allegedly caused to the plaintiff between 3-3.6 million NIS assuming the shares will be registered by December 31, 2016, and additional compensation for each additional month subsequently. According to the Company's expert opinion submitted to the court, the Company's expert asserts that the plaintiff's expert opinion is erroneous and in his opinion and assuming the plaintiff's claim will be accepted by the court, than the estimated damage caused to the plaintiff as a result of a 4-5 years delay in registering his shares is estimated at approximately NIS 234,000 (plus interest and CPI differences) if it will be ruled that the restriction from plaintiff's shares should have been removed within six months as of the purchase date thereof and at approximately NIS 130,000 if it will be ruled that the restriction from plaintiff's shares should have been removed within twelve months as of the purchase day thereof. It should be noted that all experts' calculations are based on the share market price, and consequently any changes in the share price at the time a judgement will be rendered by the court, could increase or decrease the Company's exposure, respectively. 

 

 13 
 

 

My Size Inc.

 

Notes to Condensed Consolidated Financial Statements

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

 

Note 5 - Contingencies and Commitments (cont’d)

 

At this stage, the time for the submission of an expert opinion on behalf of the Company for the calculation of the damage has not arrived and the appropriate method of calculating the loss based on the circumstances in this case has not been determined.

 

  b. 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 200,000 with the signing of the loan agreement and was to receive an additional amount of NIS 100,000 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 2,000,000.

 

Under the agreement, the investor was 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 200,000, which was granted to the Company on May 17, 2012, plus interest of 10% annually as from May 20, 2012 until payment of the debt, which as of the date of filing of the claim was NIS 258,000.

 

On June 13, 2016, a settlement agreement was entered into between the parties according to which in consideration for the final and conclusive annulment of all claims and/or demands raised by the plaintiff against the Company in the framework of the law suit, the Company would pay the plaintiff the sum of NIS 250,000 forthwith by wire transfer of about NIS 95,000 and by the forfeiture of the sum of about NIS 155,000 which had been deposited with the court. An additional amount of NIS 50,000 would be paid within twelve months from the approval of the settlement agreement by the court or on the closing date of a public offering of Company shares, pursuant to its terms, on a stock exchange in the United States, the earlier of. As of the date on which the financial statements were signed the payment has not yet occurred.

 

  c. On September 9, 2015, fourteen shareholders filed a complaint against the Company and its CEO Mr. Ronen Luzon, alleging that in accordance with agreements signed between plaintiffs and the Company, the plaintiffs are entitled to register their shares for sale with the stock market, while the Company allegedly breached its obligation and refrained from doing its duty to register the plaintiffs' shares.  The plaintiffs seek declaratory remedy that they are entitled to register their shares and also request the right to split their remedies so they will also be able subsequently to claim from the defendants compensation for any financial damage causes by the Company's failure to register their shares, including damage due to any decrease in the shares' price during the period the shares should have been registered. On November 5, 2015, the Company filed its defense and a counter claim against the plaintiffs and against two additional defendants (who are not plaintiffs) Mr. Asher Shmuelevitch and Mr. Eitan Nahum. In its counter claim, the Company allege that the agreements by force of which the counter defendants hold their shares are defunct, based on fraud, as the counter defendants never paid and never intended to pay the agreed consideration for their shares. The Company further alleges the Mr. Shmuelevitch used his position as a director and controlling shareholder of the Company to knowingly cause the Company to enter such defunct agreements. The Company moved the court to dismiss the complaint against it, declare that all agreements with the counter defendants are null and void and that the shares should be returned to the Company. Additionally, the Company seeks financial compensation from the counter defendants for financial damage caused as a result of their actions. For the purpose of the trial charge only, the Company capped the requested compensation against counter defendants at NIS 10 million. All preliminary proceedings and hearing of all evidence by the court have been completed and the case awaits the court's judgement.

 

 14 
 

 

My Size Inc.

 

Notes to Condensed Consolidated Financial Statements

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

 

Note 5 - Contingencies and Commitments (cont’d)

 

  d. On January 16, 2014, the Company received a demand letter from one of its shareholders for the payment of about $1.4 million 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 the 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.

 

  e. 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 cooperation.

 

f.On January 9, 2014, the Company’s general meeting approved an engagement with one of the investors (as specified in paragraph 1b above) 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 NIS 3.6 million. According to the Company’s evaluation, the current 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.

 

 15 
 

 

My Size Inc.

 

Notes to Condensed Consolidated Financial Statements

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

 

Note 5 - Contingencies and Commitments (cont’d)

 

  g. In November, 2015, the Company entered a collaboration agreement with one of the Israel’s largest private couriers (“Katz”) 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 and to receive details about the cost of sending the package, based on its size. The collaboration agreement is for a period of up to six months, which may be extended by agreement of both parties or terminated by either party with prior notice of 14 days.

 

On July 4, 2016, the Company announced that it completed integration of the first app (beta) that it developed in the said affiliation in the Katz’ systems.

 

The application uses the Company’s exclusive measuring algorithm and enables measuring the package’s volume by moving the smart phone over the package. This information, and the package’s barcode scan, picture and location,are sent to the information servers of the Katz company and help in its pricing.

 

On November 7, 2016, the Company announced the launch of KatzID app, which is an application that enables customers to quickly and easily measure the size of a package and calculate the exact shipping cost. KatzID also provides shipping companies accurate logistic data to better manage the process of shipping packages before the packages reach their distribution centers. The Company is currently carrying out a pilot to implement KatzID with Katz. According to the last agreement with Katz , by the end of 2017 the commercial terms will be discussed , depends on the activity during the pilot.

 

 

  h. On March 4, 2016, the Company entered a collaboration and license agreement 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 shearling under the brand name
“Yudovsky”.

 

Under the agreement, the parties will cooperate for the purpose of integrating 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 the agreement was signed. The complexity in achieving the correct matching between the fur coat and the Human body is still in an experiment stage.

 

The Parties are in a continues contact and decided to delay the completion of the integration.

Upon completion of the integration, a 60-day technology testing period will begin, after which, subject to the fulfillment of the technological conditions, the agreement will take effect.

 

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 $ 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 shearling. 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 $ 1,000 at the end of the first period of 24 months from the effective date, and

 

2) Minimum income of $ 5,000 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 balance upon completion of testing and monitoring implementation and the agreement taking effect.

 

 16 
 

 

My Size Inc.

 

Notes to Condensed Consolidated Financial Statements

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

 

Note 5 - Contingencies and Commitments (cont’d)

 

As of the reporting date, the Company received a total of $10 in accordance with the said terms of the agreement, which was recorded as deferred revenue in the framework of the payables section and credit balances until the fulfillment of conditions for revenue recognition.

 

 

i.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

On April 20, 2017, the Company received a communication from the Israeli Postal Service (the “Israeli Post”) terminating its relationship and ceasing further discussions.

 

Previously, on April 18, 2017, the Company announced it had entered into a cooperation agreement with Israel Post which was mischaracterized by the Company as a definitive agreement. The Company and the Israeli Post had exchanged letters under which it was agreed to enter into a non-exclusive pilot program, pursuant to which the Israeli Post would decide whether it would enter negotiations with the company regarding the purchase of the product and under which commercial terms.


On April 20, 2017, the Company issued a corrective press release explaining that while the Company had submitted a proposal to the Israel Post, which was initially received favorably, the parties had not entered into or signed any formal or definitive agreement, and did not expect to enter into a formal or definitive agreement with respect to the pilot program or new services until the completion of the development and trial periods.

 

The Israel Post expressed its discontent with the release of inaccurate information, and has elected to cease communication with the Company.

  j.

On May 3, 2017, Lightcom (Israel) Ltd., an Israeli company, alleging that it is a shareholder of the Company, filed a motion with the Tel Aviv District Court (Financial Division) to approve an action against the Company as a shareholders’ class action. The subject matter of the action appears to be an immediate report filed by the Company on April 19, 2017. The Court ordered the Company to respond to the motion by August 2, 2017 (“the Application”).

 

On May 7 2017, the Company was served with the application.

 

The Application alleges, inter alia, that the Company's report of April 19, 2017 regarding its engagement with the Israeli Post was false and misleading, and that as a result thereof financial damages have been incurred by two purported classes of shareholders: (i) any shareholder who sold Company's shares as of April 20, 2017 and until April 27, 2017, with respect to damage directly caused by such sale and (ii) any shareholder which held shares on April 20, 2017 and subsequent to April 27, 2017 with respect to damage caused by permanent adverse effect to the shares' value. The alleged financial damage caused to members of both classes is estimated at NIS 18.8 million.

 

The Company reviewed the Application initially with its legal counsel. At this preliminary stage, the Company believes that there is no direct causal connection between the Company's report which is the subject matter of the Application and the alleged damages caused to either class of purported plaintiffs and that in any case there appears to be no correlation between the alleged scope of damages and the merits of the alleged case.
 

The Company's is reviewing its rights to file a third party claim (notice) against third parties the unlawful acts or omissions of which may have had an adverse effect on the Company's share price and may have contributed to any alleged damage which may have been caused to any of the classes of alleged plaintiffs. The Company will respond to the Application in the time frame ordered by the Court.

 

Note 6 - Significant Events During the Reporting Period

 

  a.

In February 2017, the Board of Directors approved agreements with investors that provided an investment for a total amount of $200 in exchange for 200,000 shares of common stock of the Company and non-negotiable warrants exercisable into 250,000 shares of common stock of the Company until November 22, 2017 at an exercise price of $3.50 per share.

 

On the date of its receipt of the investment, the amount was attributed to options to Company shares – measured according to the fair value on the measurement date. There was no attribute to the share issuance due to the fair value of the options. The options were recorded as a liability and was recognized for the reporting date in the sum of $168 according to the fair value of the undertaking.

 

 17 
 

 

My Size Inc.

 

Notes to Condensed Consolidated Financial Statements

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

 

Note 7 - Subsequent Events

 

    Pro-forma equity

 

As described in Note 1b, as of March 31, 2017 the Company entered into fund raising agreements in a total sum of $8,015 out of which the sum of $4,596 and $1,410 was received in cash and marketable securities, respectively.

 

As the date of this report the Company has $1,514 and $495 in guaranteed notes and checks. Subsequent to March 31, 2017, the sum of $550 and $40 of the guarantee notes and the checks, respectively, have been redeemed in cash.

 

The following proforma consolidated balance sheet is based on the March 31, 2017 balance sheet with adjustments for receipt of $1,419 from the remaining guarantee notes and checks from investors for stock subscribed for but not yet issued.

 

  Assets  $3,900 
        
  Liabilities   865 
  Stockholders’ equity   3,035 
  Total liabilities and stockholders’ equity  $3,900 

 

The effect on equity and on the assets of collecting the money from the bank guarantees and the checks is an increase of $1,419. As a result of the foregoing, the Company’s stockholder’s equity, on a pro forma basis, is $3,035 as of March 31, 2017.

 

 18 
 

 

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 report. The following discussion contains forward-looking statements that are subject to risks, uncertainties and assumptions, including those discussed under “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2016. Our actual results, performance and achievements may differ materially from those expressed in, or implied by, these forward-looking statements.

 

Results of Operations

 

From inception through March 31, 2017, we have sustained an accumulated deficit of approximately $13 million. From inception through March 31, 2017, we have not generated any revenue from operations and expect to incur additional losses to perform further research and development activities and do not currently have any commercial products. Our product development efforts are thus in their early stages and we cannot make estimates of the costs or the time they will take to complete.

 

Three months Ended March 31, 2017 Compared to Three months Ended March 31, 2016

 

Research and Development Expenses

 

Our research and development expenses for the three months ended March 31, 2017 amounted to $207,000 compared to $177,000 for the three months ended March 31, 2016. The increase between the corresponding period primarily results from increased subcontractors expenses and the increased expenses associated with the hiring of new employees

 

Marketing, General and Administrative Expenses

 

Our marketing, general and administrative expenses for the three months ended March 31, 2017 amounted to $879,000 compared to $326,000 for the three months ended March 31, 2016. The increase between the corresponding period in expenses derives mainly from share based payments, increases in public relations and investor relations expenses which were not significant in the corresponding period and from increased salaries expenses associated with the hiring of new employees

 

Financial income and expense, net

 

Our financial expenses for the three months ended March 31, 2017 amounted to $308,000 compared to financial income of $614,000 for the three months ended March 31, 2016. The expenses in the reporting period are mainly from revaluation of investment in marketable securities, compared to income from revaluation of the components of the financial package in the corresponding period. 

 

Net Loss from continuing operations

 

As a result of the foregoing research and development, marketing general and administrative expenses, and financial expenses, our net loss from continuing operations for the three months ended March 31, 2017 was $1,394,000, compared to our net income from continuing operations for the three months ended March 31, 2016 of $111,000. The main reasons for the change between the corresponding periods is the expenses derives mainly from share based payments, increases in public relations and investor relations expenses, which were not significant in the corresponding period, and from increased salaries expenses associated with the hiring of new employees. The financial expenses mainly from expense revaluation of investment in marketable securities, compared to income from revaluation of the components of the financial package in the corresponding period.

 

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, 2017, we had cash and cash equivalents of $359,000 as compared to $34,000 as of December 31, 2016. The increase in cash balances is due to collecting cash from the guarantees offset by cash used for operating activities during the period.

 

We had negative cash flow from operating activities of $1,012,000 for the three months ended March 31, 2017, compared with negative cash flow from operating activities of $479,000 for the three months ended March 31, 2016.

 

 19 
 

 

The increase in cash used in operating activities derives from increased payments to service providers and Company employees. The Company has expenses not in the ordinary course of business mainly from the registration of patents, the listing of our common stock on Nasdaq, Investor relations and Public relations services and legal expenses associated with lawsuits involving the Company.

 

As of March 31, 2017, the Company entered into fund raising agreements in a total sum of $8,015 out of which the sum of $4,596 and $1,410 was received in cash and marketable securities, respectively. The marketable securities are shares of common stock of Diamante minerals Inc (“DIMN”), which are presented in the Company’s balance sheet as a financial asset available for sale.

 

As of the date of the report, the Company has $1,514 and $495 in guarantee notes and checks, respectively. The guarantee has been provided by an ungraded financial institution. Subsequent to March 31, 2017, the sum of $550 and $40 of the guaranteed notes and the checks, respectively, have been redeemed in cash.

 

For the purpose of financing its operating activities in the foreseeable future, the Company relies on the collection of existing cash commitments from investors, the sale of marketable securities and raising additional funds. However, there is no certainty regarding the Company’s ability to collect committed funds, obtain additional  funding or sell the DIMN shares that it holds. The Company estimates that the committed investments will be adequate to fund its operations through the 12 months following the approval date of the financial statements. Failure to obtain the additional funds as mentioned above will require the Company to curtail operations.

 

However, If all the committed funds are not collected or not replaced by additional funding,  there is a significant doubt regarding the Company's ability to continue its operation as a going concern. The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should the Company fail to operate as a going concern.

 

A downturn in the United States stock and debt markets could make it more difficult to obtain financing through the issuance of equity or debt securities. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force us to seek alternative financing. Further, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our shares of common stock or the debt securities may cause us to be subject to restrictive covenants. Even if we are able to raise the funds required, it is possible that we could incur unexpected costs and expenses, fail to collect significant amounts owed to us, or experience unexpected cash requirements that would force us to seek additional financing. If additional financing is not available or is not available on acceptable terms, we will have to curtail our operations.

 

Off-Balance Sheet Arrangements

 

We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivative instruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest in an unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.

 

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. 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 report, 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.

 

 20 
 

 

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 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 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 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.

 

 21 
 

 

Item 3. Quantitative and Qualitative Disclosure About Market Risk.

 

 Not required for a smaller reporting company.

 

Item 4. Controls and Procedures.

 

Disclosure Controls and Procedures

 

We carried out an evaluation required by the Securities Exchange Act of 1934, as amended (the “Exchange Act”), under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act, as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and to provide reasonable assurance that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

 

Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives as specified above. Management does not expect, however, that our disclosure controls and procedures will prevent or detect all error and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.

 

Changes in Internal Controls

 

During the most recent fiscal quarter, there has not occurred any change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

  

 22 
 

 

Part II – Other Information

 

Item 1. Legal Proceedings.

  

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

 

We are not currently a party to any material legal proceedings except as described below.

 

On December 27, 2015, the Company received a legal complaint. The defendants are the Company itself, all the members of the Board of Directors, Mrs. Shoshana Zigdon, a shareholder and related party of the Company, as well as two additional defendants who are nor shareholders neither officers or directors of the Company, and are not shareholders. The plaintiff alleges that the Company violated its obligation to register his shares for trade with the Tel Aviv 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 the Company’s shares between the time the claim was submitted and the exercise date; and also court costs and attorney's fees of the plaintiff.

 

All pre-trial preliminary proceedings as well as submission of all evidentiary affidavits and expert opinions by both parties have been completed.

 

Pursuant to the Court's recommendation, the case was referred to mediation by the honorable Judge (Rtd.) Hilla Gerstel, former president of the Central District Court. The mediation is going on and the next mediation session is scheduled for June 5, 2017.

 

The Company estimates, based on the opinion of its legal counsel that the risk of acceptance of the remedyrequested by the plaintiff in his claim, namely, that the Company was obligated to remove the restriction which was imposed on the shares and register plaintiff's shares for trade on the stock exchange, exceeds the chance of its dismissal. This remedy, as such, does not constitute any financial exposure to the Company.

 

However, the company believes, based on the opinion of its legal counsel, that assuming the plaintiff's claim for the main relief, i.e. the removal of the restriction from and the registration of his shares on the stock exchange, will be accepted by the court, it appears that prima face the risk that the court will also rule that the plaintiff is entitled to financial compensation for the alleged delay in registering his shares, exceeds the chance that such financial compensation will not be awarded.

 

According to the expert opinion submitted to the court by the plaintiff, the plaintiff's expert calculates the approximate damage allegedly caused to the plaintiff between 3-3.6 million NIS assuming the shares will be registered by December 31, 2016, and additional compensation for each additional month subsequently. According to the Company's expert opinion submitted to the court, the Company's expert asserts that the plaintiff's expert opinion is erroneous and in his opinion and assuming the plaintiff's claim will be accepted by the court, than the estimated damage caused to the plaintiff as a result of a 4-5 years delay in registering his shares is estimated at approximately NIS 234, 000 (plus interest and CPI differences) if it will be ruled that the restriction from plaintiff's shares should have been removed within six months as of the purchase date thereof and at approximately NIS 130,000 if it will be ruled that the restriction from plaintiff's shares should have been removed within twelve months as of the purchase day thereof. It should be noted that all experts' calculations are based on the share market price, and consequently any changes in the share price at the time a judgement will be rendered by the court, could increase or decrease the Company's exposure respectively.

 

At this stage, the time for the submission of an expert opinion on behalf of the Company for the calculation of the damage has not arrived and the appropriate method of calculating the loss based on the circumstances in this case has not been determined

 

 23 
 

 

  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. On June 13, 2016, a settlement agreement was entered into between the parties according to which in consideration for the final and conclusive annulment of all claims and/or demands raised by the plaintiff against the Company in the framework of the law suit, the Company would pay the plaintiff the sum of 250 thousand NIS forthwith by wire transfer of about 95 thousand NIS and by the forfeiture of the sum of about 155 thousand NIS which had been deposited with the court. An additional amount of 50 thousand NIS would be paid within twelve months from the approval of the settlement agreement by the court or on the closing date of a public offering of Mysize shares, pursuant to its terms, on a stock exchange in the United States, the earlier of. As of the date on which the financial reports were signed the terms have not yet occurred.

 

On September 9, 2015 14 shareholders filed a complaint against the Company and its CEO Mr. Ronen Luzon, alleging that in accordance with agreements signed between plaintiffs and the Company, the plaintiffs are entitled to register their shares on the stock market while the Company allegedly breached its obligation and refrains from doing its duty to register the plaintiffs' shares. The plaintiffs seek declaratory remedy that they are entitled to register their shares and also request the right to split their remedies so they will also be able subsequently to claim from the defendants compensation for any financial damage causes by the Company's failure to register their shares, including damage due to any decrease in the shares' price during the period the shares should have been registered. On November 5, 2015, the Company filed its defense and a counter claim against the plaintiffs and against two additional defendants (who are not plaintiffs) Mr. Asher Shmuelevitch and Mr. Eitan Nahum. In its counter claim, the Company alleges that the agreements by force of which the plaintiffs (the counter defendants) hold their shares are defunct, based on fraud, as the plaintiffs (the counter defendants) never paid and never intended to pay the agreed consideration for their shares. The Company further alleges the Mr. Shmuelevitch used his position as a director and controlling shareholder of the Company to knowingly cause the Company to enter such defunct agreements. The Company moves that court will dismiss the complaint against it, declare that all agreements with the plaintiffs (the counter defendants) are null and void and that the shares should be returned to the Company. Additionally, the Company seeks financial compensation from the counter defendants for financial damage caused as a result of their actions. For the purpose of the trial charge only, the Company capped the requested compensation against counter defendants at NIS 10 million. All preliminary proceedings and hearing of all evidence by the court have been completed and the case awaits the court's judgement. 

 

On January 16, 2014, the Company received a demand letter from one of its shareholders for the payment of about $1.4 million 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.  

 

 

 24 
 

 

 

On April 20, 2017, the Company received a communication from the Israeli Postal Service (the “Israeli Post”) terminating its relationship and ceasing further discussions.

 

Previously, on April 18, 2017, the Company announced it had entered into a cooperation agreement with Israel Post which was mischaracterized by the Company as a definitive agreement. The Company and the Israeli Post had exchanged letters under which it was agreed to enter into a non-exclusive pilot program, pursuant to which the Israeli Post would decide whether it would enter negotiations with the company regarding the purchase of the product and under which commercial terms.

 


On April 20, 2017, the Company issued a corrective press release explaining that while the Company had submitted a proposal to the Israel Post, which was initially received favorably, the parties had not entered into or signed any formal or definitive agreement, and did not expect to enter into a formal or definitive agreement with respect to the pilot program or new services until the completion of the development and trial periods.

 

The Israel Post expressed its discontent with the release of inaccurate information, and has elected to cease communication with the Company.

 

 

On May 3, 2017, Lightcom (Israel) Ltd., an Israeli company, alleging that it is a shareholder of the Company, filed a motion with the Tel Aviv District Court (Financial Division) to approve an action against the Company as a shareholders’ class action. The subject matter of the action appears to be an immediate report filed by the Company on April 19, 2017. The Court ordered the Company to respond to the motion by August 2, 2017 (“the Application”).

 

On May 7 2017, the Company was served with the application.

 

The Application alleges, inter alia, that the Company's report of April 19, 2017 regarding its engagement with the Israeli Post was false and misleading, and that as a result thereof financial damages have been incurred by two purported classes of shareholders: (i) any shareholder who sold Company's shares as of April 20, 2017 and until April 27, 2017, with respect to damage directly caused by such sale and (ii) any shareholder which held shares on April 20, 2017 and subsequent to April 27, 2017 with respect to damage caused by permanent adverse effect to the shares' value. The alleged financial damage caused to members of both classes is estimated at NIS 18.8 million.

 

The Company reviewed the Application initially with its legal counsel. At this preliminary stage, the Company believes that there is no direct causal connection between the Company's report which is the subject matter of the Application and the alleged damages caused to either class of purported plaintiffs and that in any case there appears to be no correlation between the alleged scope of damages and the merits of the alleged case.

 

The Company's is reviewing its rights to file a third party claim (notice) against third parties the unlawful acts or omissions of which may have had an adverse effect on the Company's share price and may have contributed to any alleged damage which may have been caused to any of the classes of alleged plaintiffs. The Company will respond to the Application in the time frame ordered by the Court.

 

 25 
 

 

Item 1A. Risk Factors.

 

Not required for a smaller reporting company.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

On February 13, 2017, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with an accredited investor (the “Purchaser”). On February 22, 2017, the Company and the Purchaser consummated the transactions contemplated by the Securities Purchase Agreement, pursuant to which, subject to the terms and conditions set forth therein, the Purchaser acquired from the Company, for an aggregate purchase price of $200,000: (i) 200,000 shares (the “Common Shares”) of Company common stock (“Common Stock”), and (ii) warrants (the “Warrants”) to acquire 250,000 shares of Common Stock. The Common Shares and Warrants were issued pursuant to exemptions from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof and Rule 506 of Regulation D promulgated thereunder.

 

The Warrants have an exercise price of $3.50 and are exercisable for a period of ten months.

 

Item 3. Defaults Upon Senior Securities.

  

None.

 

Item 4. Mine Safety Disclosures.  

 

Not applicable.

  

Item 5. Other Information.

 

In November of 2015, My Size, Inc. engaged the services of ZAI Corporate Finance LTD as its London based nominated advisor to assist the Company with its listing on the AIM.   In light of the Company’s Nasdaq listing in November of 2016, the Company has elected to discontinue its listing application with the London Stock Exchange.

   

Item 6. Exhibits.

  

Exhibit Number   Description of Exhibits
3.1   Amended and Restated Certificate of Incorporation (incorporated by reference to the Current Report on Form 8-K filed by the Company on March 23, 2017 as Exhibit 3.1).
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

 

 26 
 

 

SIGNATURES

 

Pursuant to the requirements 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.

  

  My Size, Inc.
   
Date: May 16, 2017 By: /s/ Ronen Luzon
    Ronen Luzon
   

Chief Executive Officer

(Principal Executive Officer)

 

Date: May 16, 2017 By: /s/ Or Kles
    Or Kles
   

Chief Financial Officer

(Principal Financial and Accounting Officer)

 

 

 

27

 

EX-31.1 2 f10q0317ex31i_mysizeinc.htm CERTIFICATION

Exhibit 31.1

 

Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley

Act of 2002 and pursuant to Rule 13a-14(a) and Rule 15d-14 under the Securities Exchange Act of 1934

 

I, Ronen Luzon certify that:

 

1. I have reviewed this Quarterly report on Form 10-Q of My Size, Inc.;

 

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  c. Evaluated the effectiveness of the registrant’s disclosure and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluations; and

 

  d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

  a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

  b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

Date: May 16, 2017 By: /s/ Ronen Luzon
    Ronen Luzon
   

Chief Executive Officer

(Principal Executive Officer)

 

EX-31.2 3 f10q0317ex31ii_mysizeinc.htm CERTIFICATION

Exhibit 31.2

 

Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley

Act of 2002 and pursuant to Rule 13a-14(a) and Rule 15d-14 under the Securities Exchange Act of 1934

 

I, Or Kles, certify that: 

 

1 I have reviewed this Quarterly report on Form 10-Q of My Size, Inc.;

 

2 Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  c. Evaluated the effectiveness of the registrant’s disclosure and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluations; and

 

  d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

  a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

  b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

Date: May 16, 2017 By: /s/ Or Kles
    Or Kles
   

Chief Financial Officer

(Principal Financial Officer) 

EX-32.1 4 f10q0317ex32i_mysizeinc.htm CERTIFICATION

Exhibit 32.1

 

CERTIFICATIONS PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

 

In connection with the Quarterly Report of My Size, Inc. (the "Company") on Form 10-Q for the period ending March 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Ronen Luzon, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)           The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

 

(2)           The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

Date: May 16, 2017 By: /s/ Ronen Luzon
    Ronen Luzon
   

Chief Executive Officer

(Principal Executive Officer)

 

EX-32.2 5 f10q0317ex32ii_mysizeinc.htm CERTIFICATION

Exhibit 32.2

 

CERTIFICATIONS PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

 

In connection with the Quarterly Report of My Size, Inc. (the "Company") on Form 10-Q for the period ending March 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Or Kles, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)           The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

 

(2)           The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

Date: May 16, 2017 By: /s/ Or Kles
    Or Kles
   

Chief Financial Officer

(Principal Financial Officer)

 

 

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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&#8217;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. 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According to the Company's expert opinion submitted to the court, the Company's expert asserts that the plaintiff's expert opinion is erroneous and in his opinion and assuming the plaintiff's claim will be accepted by the court, than the estimated damage caused to the plaintiff as a result of a 4-5 years delay in registering his shares is estimated at approximately NIS 234,000 (plus interest and CPI differences) if it will be ruled that the restriction from plaintiff's shares should have been removed within six months as of the purchase date thereof and at approximately NIS 130,000 if it will be ruled that the restriction from plaintiff's shares should have been removed within twelve months as of the purchase day thereof. 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In accordance with the loan agreement, the Company received a total of NIS 200,000 with the signing of the loan agreement and was to receive an additional amount of NIS 100,000 at the end of a period not exceeding 21 days, during which the investor would perform due diligence on the Company. 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An additional amount of NIS 50,000 would be paid within twelve months from the approval of the settlement agreement by the court or on the closing date of a public offering of Company shares, pursuant to its terms, on a stock exchange in the United States, the earlier of. 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On November 5, 2015, the Company filed its defense and a counter claim against the plaintiffs and against two additional defendants (who are not plaintiffs) Mr. Asher Shmuelevitch and Mr. Eitan Nahum. In its counter claim, the Company allege that the agreements by force of which the&#160;counter defendants hold their shares are defunct, based on fraud, as the counter defendants never paid and never intended to pay the agreed consideration for their shares. The Company further alleges the Mr. Shmuelevitch used his position as a director and controlling shareholder of the Company to knowingly cause the Company to enter such defunct agreements. The Company moved the court to dismiss the complaint against it, declare that all agreements with the counter defendants are null and void and that the shares should be returned to the Company. Additionally, the Company seeks financial compensation from the counter defendants for financial damage caused as a result of their actions. For the purpose of the trial charge only, the Company capped the requested compensation against counter defendants at NIS 10 million. 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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. 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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&#8217;s assets or any material part thereof or for the imposition of a lien on a material part of the Company&#8217;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 NIS 3.6 million. According to the Company&#8217;s evaluation, the current value is negligible. The buy-back option is valid for 90 days from the occurrence of either one of the above events. 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An additional amount of NIS 50,000 would be paid within twelve months from the approval of the settlement agreement by the court or on the closing date of a public offering of Company shares, pursuant to its terms, on a stock exchange in the United States, according to the earlier. 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 NIS 3.6 million. According to the Company's evaluation, the current 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. 3600000 The collaboration agreement is for a period of up to six months, which may be extended by agreement of both parties or terminated by either party with prior notice of 14 days. 0.075 2500 <div><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 1in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font: 10pt/normal 'times new roman', times, serif; font-stretch: normal;">1)</font>&#160;<font style="font: 10pt/normal 'times new roman', times, serif; font-stretch: normal;">Minimum income of $ 1,000 at the end of the first period of 24 months from the effective date, and</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 1in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">&#160;</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 1in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">2) Minimum income of $ 5,000 at the end of each subsequent year.</font></p></div> <div><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 1.25in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">1) $ 10 upon signing the agreement.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 1.25in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">2) $30 upon start of implementation.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 1.25in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">3) $20 upon completion of implementation.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px 0px 0px 1.25in; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; orphans: 2; widows: 2; font-stretch: normal; -webkit-text-stroke-width: 0px; text-decoration-style: initial; text-decoration-color: initial;"><font style="font-family: 'times new roman', times, serif; font-size: 10pt;">4) $40 balance upon completion of testing and monitoring implementation and the agreement taking effect.</font></p></div> 100 10 2000000 The Company's expert asserts that the plaintiff's expert opinion is erroneous and in his opinion and assuming the plaintiff's claim will be accepted by the court, than the estimated damage caused to the plaintiff as a result of a 4-5 years delay in registering his shares is estimated at approximately NIS 234,000 (plus interest and CPI differences) if it will be ruled that the restriction from plaintiff's shares should have been removed within six months as of the purchase date thereof and at approximately NIS 130,000 if it will be ruled that the restriction from plaintiff's shares should have been removed within twelve months as of the purchase day thereof. 200000 200000 250000 3.50 2017-11-22 168000 865000 1419000 1419000 see note 4a. Represent an amount less than $1. At March 31, 2017, gross unrecognized loss, recognized loss and fair value (based on quoted market prices) of these securities were $(93), $340 and $362, respectively (At December 31, 2016 $24, $1,233 and $579, respectively) see note 6. 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Document and Entity Information - shares
3 Months Ended
Mar. 31, 2017
May 16, 2017
Document and Entity Information [Abstract]    
Entity Registrant Name My Size, Inc.  
Entity Central Index Key 0001211805  
Trading Symbol MYSZ  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Document Type 10-Q  
Document Period End Date Mar. 31, 2017  
Document Fiscal Year Focus 2017  
Document Fiscal Period Focus Q1  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   17,605,359
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Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands
Mar. 31, 2017
Dec. 31, 2016
Current Assets:    
Cash and cash equivalents $ 359 $ 34
Other receivables and prepaid expenses 1,619 1,401
Restricted cash 66 62
Total current assets 2,044 1,497
Investment in marketable securities 362 579
Property and equipment, net 75 74
Total noncurrent aseets 437 653
Total assets 2,481 2,150
Current liabilities    
Trade payable 188 229
Accounts payable 431 316
Derivative liabilities 78 80
Warrants to purchase common stock 168
Total current liabilities 865 625
COMMITMENTS AND CONTINGENCIES
Stockholders' equity (Deficiency):    
Capital stock - Common stock of $ 0.001 par value - Authorized: 50,000,000 shares; Issued and outstanding: 17,605,359 and 17,405,359 respectively 17 17
Additional paid-in capital 14,744 13,347
Available for sale reserve (93)
Accumulated other comprehensive loss (107) (102)
Accumulated deficit (13,038) (11,644)
Total stockholders' equity 1,616 1,525
Total liabilities and stockholders' equity $ 2,481 $ 2,150
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Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares
Mar. 31, 2017
Dec. 31, 2016
Statement of Financial Position [Abstract]    
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 50,000,000 50,000,000
Common stock, shares issued 17,605,359 17,405,359
Common stock, shares outstanding 17,605,359 17,405,359
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Condensed Consolidated Statements of Comprehensive Loss - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Dec. 31, 2016
Operating expenses      
Research and development $ 207 $ 177 $ 727
Marketing, General and administrative 879 326 1,859
Total operating expenses 1,086 503 2,586
Operating loss (1,086) (503) (2,586)
Financial (expense) income, net (308) 614 (1,748)
Net (loss) income from continuing operations (1,394) 111 (4,334)
Other comprehensive (loss) income:      
Gain (loss) on available for sale securities 93 67 (24)
Foreign currency translation differences (5) (90) 2
Total comprehensive (loss) income $ (1,306) $ 88 $ (4,356)
Basic (loss) earnings per share $ (0.08) $ 0.01 $ (0.27)
Diluted (loss) earnings per share $ (0.08) $ 0.05 $ (0.27)
Basic weighted average number shares outstanding 17,525,359 15,313,793 16,345,499
Diluted weighted average number of shares outstanding 17,525,359 15,492,659 16,345,499
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Condensed Consolidated Statements Shareholders' Equity (Deficiency) (Unaudited) - USD ($)
$ in Thousands
Total
Common stock
Additional paid-in capital
Available for sale reserve
Accumulated other comprehensive income (loss)
Accumulated Deficit
Foreign currency transaction
Balance at Dec. 31, 2015 $ (2,613) $ 15 $ 4,855 $ (69) $ (104) $ (7,310) $ (104)
Balance, shares at Dec. 31, 2015   15,313,793          
Total comprehensive loss 88 (90) 111 (90)
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 at Mar. 31, 2016 (1,534) $ 15 5,844 (194) (7,199) (194)
Balance, shares at Mar. 31, 2016   15,313,793          
Balance at Dec. 31, 2015 (2,613) $ 15 4,855 (69) $ (104) (7,310) (104)
Balance, shares at Dec. 31, 2015   15,313,793          
Total comprehensive loss (4,356)     (24)   (4,334) 2
Stock-based compensation related to options granted to consultants (23) (23)  
Warrants reclassified to equity as a result of amended exercise price currency 987 987  
Convertible loans converted to equity 7,530 $ 2 7,528  
Convertible loans converted to equity, shares   2,091,566          
Balance at Dec. 31, 2016 1,525 $ 17 13,347 (93)   (11,644) (102)
Balance, shares at Dec. 31, 2016   17,405,359          
Total comprehensive loss (1,306) 93   (1,394) (5)
Stock-based compensation related to options granted to consultants 997 997  
Receipts on account of shares and New investments 400 [1] $ 400  
Receipts on account of shares and New investments, Shares   200,000        
Balance at Mar. 31, 2017 $ 1,616 $ 17 $ 14,744   $ (13,038) $ (107)
Balance, shares at Mar. 31, 2017   17,605,359          
[1] Represent an amount less than $1.
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Condensed Interim Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Dec. 31, 2016
Cash flows from operating activities:      
Net income (loss) $ (1,394) $ 111 $ (4,334)
Adjustments to reconcile net income (loss) to net cash used in operating activities:      
Depreciation 7 5 24
Amortization of warrant, convertible loans and Derivative (29) (614) (182)
Revaluation PUT Option     776
Revaluation investment in marketable securities 340   1,233
Stock based compensation 39 (50) (23)
Decrease (increase) in receivables and prepaid expenses (8) (15) (27)
Increase (decrease) in embedded derivative (6) 80
Increase (decrease) in trade payable (54) 56 86
Increase in other accounts payable 93 28 208
Net cash used in operating activities (1,012) (479) (2,159)
Cash flows from investing activities:      
Purchase of property and equipment (3) (13) (36)
Net cash used in investing activities (3) (13) (36)
Cash flows from financing activities:      
Payment for a loan (25)
Payment from guarantees 1,149
Proceeds from Issuing shares, warrants and convertible loans 200 1,339
Net cash provided by financing activities 1,349 1,314
Effect of exchange rate changes on cash and cash equivalents (9) (2) (4)
(Decrease) Increase in cash and cash equivalents 325 (494) (885)
Cash and cash equivalents at the beginning of the period 34 919 919
Cash and cash equivalents at the end of the period 359 425 34
Non cash transactions      
Warrants reclassified to equity as a result of amended exercise price currency 1,041
Warrants reclassified to equity as a result of amended exercise price currency 987
Conversion of loan to equity 4,846
Non cash share base payments $ 958
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General
3 Months Ended
Mar. 31, 2017
General [Abstract]  
General

Note 1 – General

 

 a.My Size Inc. (the “Company”) developed a unique measurement technology based on sophisticated algorithms with broad applications in a variety of areas, from the apparel e-commerce market to Do It Yourself (DIY) smartphone & tablet apps. The technology is driven by several patent-pending algorithms which are able to calculate and record measurements in a variety of novel ways.
   
 b.Since inception, the Company has incurred losses and negative cash flows from operations and the accumulated loss has reached $13 million. The Company has financed its operations mainly through fundraising from private investors.

As of March 31, 2017, the Company entered into fund raising agreements in a total sum of $8,015 out of which the sum of $4,596 and $1,410 was received in cash and marketable securities, respectively. The marketable securities are shares of common stock of Diamante minerals Inc (“DIMN”), which are presented in the Company’s balance sheet as a financial asset available for sale.

 

As of the date of the report, the Company has $1,514 and $495 in guaranteed notes and checks, respectively. The guarantee has been provided by an ungraded financial institution. Subsequent to March 31, 2017, the sum of $550 and $40 of the guarantee notes and the checks respectively have been redeemed in cash.

 

For the purpose of financing its operating activities in the foreseeable future, the Company relies on the collection of existing cash commitments from investors, the sale of marketable securities and raising additional funds. However, there is no certainty regarding the Company’s ability to collect committed funds, obtain additional  funding or sell the DIMN shares that it holds. The Company estimates that the committed investments will be adequate to fund its operations through the 12 months following the approval date of the financial statements. Failure to obtain the additional funds as mentioned above will require the Company to curtail operations.

 

However, If all the committed funds are not collected or not replaced by additional funding,  there is a significant doubt regarding the Company's ability to continue its operation as a going concern. The financial statements include no adjustments for measurement or presentation of assets and liabilities, which may be required should the Company fail to operate as a going concern.

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Significant Accounting Policies
3 Months Ended
Mar. 31, 2017
Significant Accounting Policies [Abstract]  
Significant Accounting Policies

Note 2 - Significant Accounting Policies

 

a.Unaudited condensed consolidated financial statements:

 

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, 2017 are not necessarily indicative of the results that may be expected for any future period or for the year ending December 31, 2017.

 

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, 2016.

 

b.Use of estimates:

 

The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates.

 

c.Impact of recently issued accounting standard not yet adopted:

 

In January 2016, the FASB issued Accounting Standards Update No. 2016-01 (ASU 2016-01) “Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 amends various aspects of the recognition, measurement, presentation, and disclosure for financial instruments. With respect to our consolidated financial statements, the most significant impact relates to the recognition and measurement for equity investments. Additionally, ASU 2016-01 will impact the disclosure and presentation of financial assets and liabilities. ASU 2016-01 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2017. Early adoption by public entities is permitted only for certain provisions. The Company is examining the effects of the update on the financial statements with no plans for early adoption.

 

In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (ASU 2016-02) which amends the FASB Accounting Standards Codification and created Topic 842, “Leases.” Under Topic 842, lessees are required to recognize assets and liabilities on the balance sheet for most leases and provides for enhanced disclosures. Leases will continue to be classified as either finance or operating. ASU 2016-02 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2018. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Full retrospective application is prohibited and early adoption by public entities is permitted. The Company is examining the possibility of early adoption of the update and the anticipated effects of its adoption on the financial statements.

  

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments, which significantly changes the way entities recognize impairment of many financial assets by requiring immediate recognition of estimated credit losses expected to occur over their remaining life. This ASU is effective for annual and interim periods in fiscal years beginning after December 15, 2019. Early adoption is permitted for annual and interim periods in fiscal years beginning after December 15, 2018. The impact of adopting the new standard on the net income is not expected to be material.

XML 20 R9.htm IDEA: XBRL DOCUMENT v3.7.0.1
Financial Instruments
3 Months Ended
Mar. 31, 2017
Financial Instruments [Abstract]  
Financial Instruments

Note 3 - Financial Instruments

 

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.

 

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 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 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.

 

The Company holds shares in a publicly-traded company - Diamante minerals Inc which are classified as available-for-sale equity securities. The marketable securities have readily determinable fair market values that are calculated based on the share price in the measurement date and ranked as Level 1 assets.

 

   March 31, 2017 
   Fair value hierarchy 
   Level 1  Level 2  Level 3 
 Financial assets         
              
 Investment in marketable securities (*)  362   -   - 

 

   March 31, 2017 
   Fair value hierarchy 
   Level 1  Level 2  Level 3 
 Financial liabilities         
           
 Warrants to purchase common stock (*)  -   168   - 
 Derivative liabilities (**)  -   78   - 

  

(*) see note 6.

(**) see note 4a.

   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   - 

 

   December 31, 2016 
   Fair value hierarchy 
   Level 1  Level 2  Level 3 
 Financial assets         
              
 Investment in marketable securities (***)  579   -   - 

 

   December 31, 2016 
   Fair value hierarchy 
   Level 1  Level 2  Level 3 
 Financial liabilities         
              
 Derivative liabilities  -   80   - 

 

(***) At March 31, 2017, gross unrecognized loss, recognized loss and fair value (based on quoted market prices) of these securities were $(93), $340 and $362, respectively (At December 31, 2016, $24, $1,233 and $579, respectively)

XML 21 R10.htm IDEA: XBRL DOCUMENT v3.7.0.1
Stock Based Compensation
3 Months Ended
Mar. 31, 2017
Stock Based Compensation [Abstract]  
Stock Based Compensation

Note 4 - Stock Based Compensation

 

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

 

      Three months ended 
March 31
    Year ended 
December 31,
 
      2017     2016     2016  
                     
  Marketing, General and Administrative     39       (50 )     (23 )
                           
        39       (50 )     (23 )

 

  a.

In December 2016, the Company entered into a consulting agreement with a consultant (the “Consultant”) for the rendering of providing services in connection with marketing strategies, micro and macro-economic issues and for the promotion of the Company's marketing, business, products and operations through smartphone applications. The agreement is for a period of 18 months commencing from October 2016.

 

In consideration for the services the Company will issue to the Consultant 25,000 shares of common stock of the Company which will be transferred in five installments of 4,150 each and a sixth installment of 4,250 shares each quarter. In addition, the company will issue to the Consultant stock options for the acquisition of the Company shares, exercisable not later than March 31, 2018 at an exercise price of NIS18 per share.

In addition, the Company undertook to pay the balance of the consideration for the sale of the shares by the Consultant up to the sum of NIS500,000. If the consideration for the sale of the shares falls below 90% of the shares' price on the stock exchange on the date of their sale, the Company shall pay the Consultant the difference. The company may decide at its own discretion whether to make such payment in cash or shares.

 

On March 21, 2017, the general meeting adopted a resolution for the approval of a capital remuneration plan for consultants. The approval was required for the issue of the shares of common stock of the Company and the stock options.

During 2017, costs in the sum of $12 ($90 during 2016) were recorded by the Company and an undertaking to pay the balance of the consideration was recognized in the sum of $78 ($80 during 2016) according to the fair value of the undertaking. The issue of the shares of common stock of the Company and stock options was subject to the receipt of all required regulatory approvals. As of the date of the financial report, the shares and options have not yet been issued.

 

  b.

In December 2016, the Company engaged with an external consultant (the “Consultant”) to provide services in marketing strategy and public relations, including potential investors relations. For such consulting services, the Company shall issue to the Consultant options to purchase 2,000,000 shares of common stock at variable exercise prices ranging from $3.50 to $9.00 per share and exercisable for periods ranging from 12 month (or 6 months from filing date of registration statement) to 36 months. The issuance of the options under the agreement is subject to the receipt of all the approvals required by the laws applicable to the Company, including stock exchange approvals and the approval of a meeting of its shareholders to adopt an equity incentive plan for consultants. The equity incentive plan for consultants was approved by the shareholders on March 21, 2017, and such options have not yet been issued. The expenses were recognized for the proportion of the time in the sum of $26 according to the fair value of the undertaking. The balance of the consideration for the rest of the expenses in accordance with the fair value was recognized in trade receivables for the sum of $958.

 

On May 16, 2017, subsequent to the reporting period, the Company and the Consultant signed an amendment to the agreement for making the adjustment to the strike prices so prices ranging from $1.50 to $5.00 per share.

XML 22 R11.htm IDEA: XBRL DOCUMENT v3.7.0.1
Contingencies and Commitments
3 Months Ended
Mar. 31, 2017
Contingencies and Commitments [Abstract]  
Contingencies and Commitments

Note 5 -Contingencies and Commitments 

 

 a.

On December 27, 2015, the Company received a legal complaint. The defendants are the Company, all the members of the Board of Directors, Mrs. Shoshana Zigdon, a shareholder and related party of the Company, as well as two additional defendants who are not shareholders, officers or directors of the Company. The plaintiff alleges that the Company violated its obligation to register his shares for trade with the Tel Aviv 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 Tel Aviv Stock Exchange ("the exercise date "), if the rate of a Company shares rises above the amount of 20.98 NIS ("the base rate"), an additional amount at the rate of the difference between the base rate and the highest rate of the Company's shares between the time the claim was submitted and the exercise date; and also court costs and attorney's fees of the plaintiff.

 

All pre-trial preliminary proceedings as well as submission of all evidentiary affidavits and expert opinions by both parties have been completed.

 

Pursuant to the Court's recommendation, the case was referred to mediation by the honorable Judge (Rtd.) Hilla Gerstel, former president of the Central District Court. The mediation is going on and the next mediation session is scheduled for June 5, 2017.

 

The Company estimates, based on the opinion of its legal counsel that the risk of acceptance of the remedy requested by the plaintiff in his claim, namely, that the Company was obligated to remove the restriction which was imposed on the shares and register plaintiff's shares for trade on the stock exchange, exceeds the chance of its dismissal. This remedy, as such, does not constitute any financial exposure to the Company. However, the company believes, based on the opinion of its legal counsel, that assuming the plaintiff's claim for the main relief, i.e. the removal of the restriction from and the registration of his shares on the stock exchange, will be accepted by the court, it appears that prima face the risk that the court will also rule that the plaintiff is entitled to financial compensation for the alleged delay in registering his shares, exceeds the chance that such financial compensation will not be awarded.

 

According to the expert opinion submitted to the court by the plaintiff, the plaintiff's expert calculates the approximate damage allegedly caused to the plaintiff between 3-3.6 million NIS assuming the shares will be registered by December 31, 2016, and additional compensation for each additional month subsequently. According to the Company's expert opinion submitted to the court, the Company's expert asserts that the plaintiff's expert opinion is erroneous and in his opinion and assuming the plaintiff's claim will be accepted by the court, than the estimated damage caused to the plaintiff as a result of a 4-5 years delay in registering his shares is estimated at approximately NIS 234,000 (plus interest and CPI differences) if it will be ruled that the restriction from plaintiff's shares should have been removed within six months as of the purchase date thereof and at approximately NIS 130,000 if it will be ruled that the restriction from plaintiff's shares should have been removed within twelve months as of the purchase day thereof. It should be noted that all experts' calculations are based on the share market price, and consequently any changes in the share price at the time a judgement will be rendered by the court, could increase or decrease the Company's exposure, respectively. 

 

 

At this stage, the time for the submission of an expert opinion on behalf of the Company for the calculation of the damage has not arrived and the appropriate method of calculating the loss based on the circumstances in this case has not been determined.

 

 b.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 200,000 with the signing of the loan agreement and was to receive an additional amount of NIS 100,000 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 2,000,000.

 

Under the agreement, the investor was 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 200,000, which was granted to the Company on May 17, 2012, plus interest of 10% annually as from May 20, 2012 until payment of the debt, which as of the date of filing of the claim was NIS 258,000.

 

On June 13, 2016, a settlement agreement was entered into between the parties according to which in consideration for the final and conclusive annulment of all claims and/or demands raised by the plaintiff against the Company in the framework of the law suit, the Company would pay the plaintiff the sum of NIS 250,000 forthwith by wire transfer of about NIS 95,000 and by the forfeiture of the sum of about NIS 155,000 which had been deposited with the court. An additional amount of NIS 50,000 would be paid within twelve months from the approval of the settlement agreement by the court or on the closing date of a public offering of Company shares, pursuant to its terms, on a stock exchange in the United States, the earlier of. As of the date on which the financial statements were signed the payment has not yet occurred.

 

 c.On September 9, 2015, fourteen shareholders filed a complaint against the Company and its CEO Mr. Ronen Luzon, alleging that in accordance with agreements signed between plaintiffs and the Company, the plaintiffs are entitled to register their shares for sale with the stock market, while the Company allegedly breached its obligation and refrained from doing its duty to register the plaintiffs' shares.  The plaintiffs seek declaratory remedy that they are entitled to register their shares and also request the right to split their remedies so they will also be able subsequently to claim from the defendants compensation for any financial damage causes by the Company's failure to register their shares, including damage due to any decrease in the shares' price during the period the shares should have been registered. On November 5, 2015, the Company filed its defense and a counter claim against the plaintiffs and against two additional defendants (who are not plaintiffs) Mr. Asher Shmuelevitch and Mr. Eitan Nahum. In its counter claim, the Company allege that the agreements by force of which the counter defendants hold their shares are defunct, based on fraud, as the counter defendants never paid and never intended to pay the agreed consideration for their shares. The Company further alleges the Mr. Shmuelevitch used his position as a director and controlling shareholder of the Company to knowingly cause the Company to enter such defunct agreements. The Company moved the court to dismiss the complaint against it, declare that all agreements with the counter defendants are null and void and that the shares should be returned to the Company. Additionally, the Company seeks financial compensation from the counter defendants for financial damage caused as a result of their actions. For the purpose of the trial charge only, the Company capped the requested compensation against counter defendants at NIS 10 million. All preliminary proceedings and hearing of all evidence by the court have been completed and the case awaits the court's judgement.

 

 d.On January 16, 2014, the Company received a demand letter from one of its shareholders for the payment of about $1.4 million 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 the 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.

 

 e.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 cooperation.

 

f.On January 9, 2014, the Company’s general meeting approved an engagement with one of the investors (as specified in paragraph 1b above) 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 NIS 3.6 million. According to the Company’s evaluation, the current 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.

  

 g.In November, 2015, the Company entered a collaboration agreement with one of the Israel’s largest private couriers (“Katz”) 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 and to receive details about the cost of sending the package, based on its size. The collaboration agreement is for a period of up to six months, which may be extended by agreement of both parties or terminated by either party with prior notice of 14 days.

 

On July 4, 2016, the Company announced that it completed integration of the first app (beta) that it developed in the said affiliation in the Katz’ systems.

 

The application uses the Company’s exclusive measuring algorithm and enables measuring the package’s volume by moving the smart phone over the package. This information, and the package’s barcode scan, picture and location,are sent to the information servers of the Katz company and help in its pricing.

 

On November 7, 2016, the Company announced the launch of KatzID app, which is an application that enables customers to quickly and easily measure the size of a package and calculate the exact shipping cost. KatzID also provides shipping companies accurate logistic data to better manage the process of shipping packages before the packages reach their distribution centers. The Company is currently carrying out a pilot to implement KatzID with Katz. According to the last agreement with Katz , by the end of 2017 the commercial terms will be discussed , depends on the activity during the pilot.

 

 

 h.On March 4, 2016, the Company entered a collaboration and license agreement 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 shearling under the brand name
“Yudovsky”.

 

Under the agreement, the parties will cooperate for the purpose of integrating 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 the agreement was signed. The complexity in achieving the correct matching between the fur coat and the Human body is still in an experiment stage.

 

The Parties are in a continues contact and decided to delay the completion of the integration.

Upon completion of the integration, a 60-day technology testing period will begin, after which, subject to the fulfillment of the technological conditions, the agreement will take effect.

 

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 $ 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 shearling. 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 $ 1,000 at the end of the first period of 24 months from the effective date, and

 

2) Minimum income of $ 5,000 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 balance upon completion of testing and monitoring implementation and the agreement taking effect.

 

As of the reporting date, the Company received a total of $10 in accordance with the said terms of the agreement, which was recorded as deferred revenue in the framework of the payables section and credit balances until the fulfillment of conditions for revenue recognition.

 

 

i.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

On April 20, 2017, the Company received a communication from the Israeli Postal Service (the “Israeli Post”) terminating its relationship and ceasing further discussions.

 

Previously, on April 18, 2017, the Company announced it had entered into a cooperation agreement with Israel Post which was mischaracterized by the Company as a definitive agreement. The Company and the Israeli Post had exchanged letters under which it was agreed to enter into a non-exclusive pilot program, pursuant to which the Israeli Post would decide whether it would enter negotiations with the company regarding the purchase of the product and under which commercial terms.


On April 20, 2017, the Company issued a corrective press release explaining that while the Company had submitted a proposal to the Israel Post, which was initially received favorably, the parties had not entered into or signed any formal or definitive agreement, and did not expect to enter into a formal or definitive agreement with respect to the pilot program or new services until the completion of the development and trial periods.

 

The Israel Post expressed its discontent with the release of inaccurate information, and has elected to cease communication with the Company.

 j.

On May 3, 2017, Lightcom (Israel) Ltd., an Israeli company, alleging that it is a shareholder of the Company, filed a motion with the Tel Aviv District Court (Financial Division) to approve an action against the Company as a shareholders’ class action. The subject matter of the action appears to be an immediate report filed by the Company on April 19, 2017. The Court ordered the Company to respond to the motion by August 2, 2017 (“the Application”).

 

On May 7 2017, the Company was served with the application.

 

The Application alleges, inter alia, that the Company's report of April 19, 2017 regarding its engagement with the Israeli Post was false and misleading, and that as a result thereof financial damages have been incurred by two purported classes of shareholders: (i) any shareholder who sold Company's shares as of April 20, 2017 and until April 27, 2017, with respect to damage directly caused by such sale and (ii) any shareholder which held shares on April 20, 2017 and subsequent to April 27, 2017 with respect to damage caused by permanent adverse effect to the shares' value. The alleged financial damage caused to members of both classes is estimated at NIS 18.8 million.

 

The Company reviewed the Application initially with its legal counsel. At this preliminary stage, the Company believes that there is no direct causal connection between the Company's report which is the subject matter of the Application and the alleged damages caused to either class of purported plaintiffs and that in any case there appears to be no correlation between the alleged scope of damages and the merits of the alleged case.
 

The Company's is reviewing its rights to file a third party claim (notice) against third parties the unlawful acts or omissions of which may have had an adverse effect on the Company's share price and may have contributed to any alleged damage which may have been caused to any of the classes of alleged plaintiffs. The Company will respond to the Application in the time frame ordered by the Court.

XML 23 R12.htm IDEA: XBRL DOCUMENT v3.7.0.1
Significant Events During the Reporting Period
3 Months Ended
Mar. 31, 2017
Significant Events During the Reporting Period [Abstract]  
Significant Events During the Reporting Period

Note 6 - Significant Events During the Reporting Period

 

 a.

In February 2017, the Board of Directors approved agreements with investors that provided an investment for a total amount of $200 in exchange for 200,000 shares of common stock of the Company and non-negotiable warrants exercisable into 250,000 shares of common stock of the Company until November 22, 2017 at an exercise price of $3.50 per share.

 

On the date of its receipt of the investment, the amount was attributed to options to Company shares – measured according to the fair value on the measurement date. There was no attribute to the share issuance due to the fair value of the options. The options were recorded as a liability and was recognized for the reporting date in the sum of $168 according to the fair value of the undertaking.

XML 24 R13.htm IDEA: XBRL DOCUMENT v3.7.0.1
Subsequent Events
3 Months Ended
Mar. 31, 2017
Subsequent Events [Abstract]  
Subsequent Events

Note 7 - Subsequent Events

 

  Pro-forma equity

 

As described in Note 1b, as of March 31, 2017 the Company entered into fund raising agreements in a total sum of $8,015 out of which the sum of $4,596 and $1,410 was received in cash and marketable securities, respectively.

 

As the date of this report the Company has $1,514 and $495 in guaranteed notes and checks. Subsequent to March 31, 2017, the sum of $550 and $40 of the guarantee notes and the checks, respectively, have been redeemed in cash.

 

The following proforma consolidated balance sheet is based on the March 31, 2017 balance sheet with adjustments for receipt of $1,419 from the remaining guarantee notes and checks from investors for stock subscribed for but not yet issued.

 

 Assets $3,900 
      
 Liabilities  865 
 Stockholders’ equity  3,035 
 Total liabilities and stockholders’ equity $3,900 

 

The effect on equity and on the assets of collecting the money from the bank guarantees and the checks is an increase of $1,419. As a result of the foregoing, the Company’s stockholder’s equity, on a pro forma basis, is $3,035 as of March 31, 2017.

XML 25 R14.htm IDEA: XBRL DOCUMENT v3.7.0.1
Significant Accounting Policies (Policies)
3 Months Ended
Mar. 31, 2017
Significant Accounting Policies [Abstract]  
Unaudited condensed consolidated financial statements
a.Unaudited condensed consolidated financial statements:

 

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, 2017 are not necessarily indicative of the results that may be expected for any future period or for the year ending December 31, 2017.

 

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, 2016.

Use of estimates
b.Use of estimates:

 

The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates.

Impact of recently issued accounting standard not yet adopted

c.Impact of recently issued accounting standard not yet adopted:

 

In January 2016, the FASB issued Accounting Standards Update No. 2016-01 (ASU 2016-01) “Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” ASU 2016-01 amends various aspects of the recognition, measurement, presentation, and disclosure for financial instruments. With respect to our consolidated financial statements, the most significant impact relates to the recognition and measurement for equity investments. Additionally, ASU 2016-01 will impact the disclosure and presentation of financial assets and liabilities. ASU 2016-01 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2017. Early adoption by public entities is permitted only for certain provisions. The Company is examining the effects of the update on the financial statements with no plans for early adoption.

 

In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (ASU 2016-02) which amends the FASB Accounting Standards Codification and created Topic 842, “Leases.” Under Topic 842, lessees are required to recognize assets and liabilities on the balance sheet for most leases and provides for enhanced disclosures. Leases will continue to be classified as either finance or operating. ASU 2016-02 is effective for annual reporting periods, and interim periods within those years beginning after December 15, 2018. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Full retrospective application is prohibited and early adoption by public entities is permitted. The Company is examining the possibility of early adoption of the update and the anticipated effects of its adoption on the financial statements.

  

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments, which significantly changes the way entities recognize impairment of many financial assets by requiring immediate recognition of estimated credit losses expected to occur over their remaining life. This ASU is effective for annual and interim periods in fiscal years beginning after December 15, 2019. Early adoption is permitted for annual and interim periods in fiscal years beginning after December 15, 2018. The impact of adopting the new standard on the net income is not expected to be material.

XML 26 R15.htm IDEA: XBRL DOCUMENT v3.7.0.1
Financial Instruments (Tables)
3 Months Ended
Mar. 31, 2017
Financial Instruments [Abstract]  
Schedule of significant assets and liabilities that are measured at fair value on recurring basis
   March 31, 2017 
   Fair value hierarchy 
   Level 1  Level 2  Level 3 
 Financial assets         
              
 Investment in marketable securities (*)  362   -   - 

   March 31, 2017 
   Fair value hierarchy 
   Level 1  Level 2  Level 3 
 Financial liabilities         
           
 Warrants to purchase common stock (*)  -   168   - 
 Derivative liabilities (**)  -   78   - 

  

(*) see note 6.

(**) see note 4a.

 

   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   - 

 

   December 31, 2016 
   Fair value hierarchy 
   Level 1  Level 2  Level 3 
 Financial assets         
              
 Investment in marketable securities (***)  579   -   - 

 

   December 31, 2016 
   Fair value hierarchy 
   Level 1  Level 2  Level 3 
 Financial liabilities         
              
 Derivative liabilities  -   80   - 

 

(***) At March 31, 2017, gross unrecognized loss, recognized loss and fair value (based on quoted market prices) of these securities were $(93), $340 and $362, respectively (At December 31, 2016, $24, $1,233 and $579, respectively)

XML 27 R16.htm IDEA: XBRL DOCUMENT v3.7.0.1
Stock Based Compensation (Tables)
3 Months Ended
Mar. 31, 2017
Stock Based Compensation [Abstract]  
Summary of stock based expense (income) recognized for for services received from employees and non-employees

   Three months ended 
March 31
  Year ended 
December 31,
 
   2017  2016  2016 
           
 Marketing, General and Administrative  39   (50)  (23)
              
    39   (50)  (23)
XML 28 R17.htm IDEA: XBRL DOCUMENT v3.7.0.1
Subsequent Events (Tables)
3 Months Ended
Mar. 31, 2017
Subsequent Events [Abstract]  
Summary of proforma consolidated balance sheet

 Assets $3,900 
      
 Liabilities  865 
 Stockholders’ equity  3,035 
 Total liabilities and stockholders’ equity $3,900 
XML 29 R18.htm IDEA: XBRL DOCUMENT v3.7.0.1
General (Details)
$ in Thousands
Mar. 31, 2017
USD ($)
General (Textual)  
Accumulated loss $ 13,000
Guarantee notes [Member]  
General (Textual)  
Guarantee of notes 1,514
Guarantee of checks 495
Subsequent to March 31, 2017 [Member]  
General (Textual)  
Guarantee of notes 550
Guarantee of checks 40
Fund raising agreements [Member]  
General (Textual)  
Cash 4,596
Fund amount, total 8,015
Marketable securities $ 1,410
XML 30 R19.htm IDEA: XBRL DOCUMENT v3.7.0.1
Financial Instruments (Details) - USD ($)
$ in Thousands
Mar. 31, 2017
Dec. 31, 2016
Mar. 31, 2016
Financial liabilities      
Derivative liabilities $ 78 $ 80  
Level 1 [Member]      
Financial assets      
Investment in marketable securities 362 [1] 579 [2] $ 1,012 [2]
Put Options - DIMN shares    
Financial liabilities      
Warrants to purchase common stock [1]  
Derivative liabilities [3]  
Derivative liabilities embedded conversion options    
Level 2 [Member]      
Financial assets      
Investment in marketable securities [1] [2] [2]
Put Options - DIMN shares     989
Financial liabilities      
Warrants to purchase common stock 168 [1]   9
Derivative liabilities 78 [3] 80  
Derivative liabilities embedded conversion options     14
Level 3 [Member]      
Financial assets      
Investment in marketable securities [1] [2] [2]
Put Options - DIMN shares    
Financial liabilities      
Warrants to purchase common stock [1]  
Derivative liabilities [3]  
Derivative liabilities embedded conversion options    
[1] see note 6.
[2] At March 31, 2017, gross unrecognized loss, recognized loss and fair value (based on quoted market prices) of these securities were $(93), $340 and $362, respectively (At December 31, 2016 $24, $1,233 and $579, respectively)
[3] see note 4a.
XML 31 R20.htm IDEA: XBRL DOCUMENT v3.7.0.1
Financial Instruments (Details Textual) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Mar. 31, 2017
Dec. 31, 2016
Financial Instruments (Textual)    
Gross unrecognized loss $ (93) $ 24
Gross recognized loss 340 1,233
Fair value $ 362 $ 579
XML 32 R21.htm IDEA: XBRL DOCUMENT v3.7.0.1
Stock Based Compensation (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Share based compensation expense $ 39 $ (50) $ (23)
Marketing, General and Administrative [Member]      
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]      
Share based compensation expense $ 39 $ (50) $ (23)
XML 33 R22.htm IDEA: XBRL DOCUMENT v3.7.0.1
Stock Based Compensation (Details Textual)
₪ / shares in Units, $ / shares in Units, $ in Thousands
3 Months Ended 12 Months Ended
Mar. 31, 2017
USD ($)
shares
Mar. 31, 2017
ILS (₪)
shares
Mar. 31, 2016
USD ($)
Dec. 31, 2016
USD ($)
$ / shares
shares
May 16, 2017
$ / shares
Mar. 31, 2017
₪ / shares
Stock Based Compensation (Textual)            
Fair value disclosure, cost       $ 90    
Consideration recognized fair value $ 78     80    
Expenses were recognized fair value 39   $ (50) (23)    
Fair value was recognized in trade receivables $ 958      
Consultant [Member]            
Stock Based Compensation (Textual)            
Consideration for the services of common stock | shares 25,000 25,000        
Exercise price | ₪ / shares           ₪ 18
Consideration for the sale of shares | ₪   ₪ 500,000        
Share price falls on the stock exchange, percentage 90.00% 90.00%        
Fair value disclosure, cost $ 12          
Purchase of common stock | shares       2,000,000    
Expenses were recognized fair value $ 26          
Common stock at variable exercise, description       Exercisable for periods ranging from 12 month (or 6 months from filing date of registration statement) to 36 months.    
Consultant [Member] | Minimum [Member]            
Stock Based Compensation (Textual)            
Exercise price | $ / shares       $ 3.50    
Consultant [Member] | Maximum [Member]            
Stock Based Compensation (Textual)            
Exercise price | $ / shares       $ 9.00    
Five Installments [Member]            
Stock Based Compensation (Textual)            
Common stock of share transferred in installment | shares 4,150 4,150        
Sixth Installment [Member]            
Stock Based Compensation (Textual)            
Common stock of share transferred in installment | shares 4,250 4,250        
Subsequent Event [Member] | Minimum [Member]            
Stock Based Compensation (Textual)            
Exercise price | $ / shares         $ 1.50  
Subsequent Event [Member] | Maximum [Member]            
Stock Based Compensation (Textual)            
Exercise price | $ / shares         $ 5.00  
XML 34 R23.htm IDEA: XBRL DOCUMENT v3.7.0.1
Contingencies and Commitments (Details)
₪ / shares in Units, $ / shares in Units, € in Thousands
1 Months Ended 3 Months Ended 12 Months Ended
Jun. 13, 2016
Mar. 04, 2016
USD ($)
Dec. 27, 2015
ILS (₪)
₪ / shares
Feb. 18, 2015
ILS (₪)
Nov. 14, 2014
EUR (€)
Jan. 09, 2014
ILS (₪)
May 17, 2012
ILS (₪)
Apr. 19, 2017
ILS (₪)
Nov. 15, 2015
Jan. 16, 2014
USD ($)
Mar. 31, 2017
USD ($)
$ / shares
shares
Dec. 31, 2016
ILS (₪)
Mar. 31, 2017
₪ / shares
Commitments and Contingencies (Textual)                          
Compensation for damages       ₪ 258,000 € 60         $ 1,400,000      
Interest rate       10.00%                  
Repayments of loan       ₪ 200,000                  
Name of plaintiff, Description The Company would pay the plaintiff the sum of NIS 250,000 forthwith by wire transfer of about NIS 95,000 and by the forfeiture of the sum of about NIS 155,000 which had been deposited with the court.                        
Court of law closing date description An additional amount of NIS 50,000 would be paid within twelve months from the approval of the settlement agreement by the court or on the closing date of a public offering of Company shares, pursuant to its terms, on a stock exchange in the United States, according to the earlier.                        
Consideration of acquisition, description           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 NIS 3.6 million. According to the Company's evaluation, the current 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.              
Patent           ₪ 3,600,000              
Collaboration agreement description                 The collaboration agreement is for a period of up to six months, which may be extended by agreement of both parties or terminated by either party with prior notice of 14 days.        
Total sale by LSY, Percentage   7.50%                      
LSY pay monthly for maintenance fees and services | $   $ 2,500                      
Description of LSY minimal income from agreement                    

1) Minimum income of $ 1,000 at the end of the first period of 24 months from the effective date, and

 

2) Minimum income of $ 5,000 at the end of each subsequent year.

   
Description of technology systems                    

1) $ 10 upon signing the agreement.

2) $30 upon start of implementation.

3) $20 upon completion of implementation.

4) $40 balance upon completion of testing and monitoring implementation and the agreement taking effect.

   
Total amount of LSY pay fees for technology systems | $                     $ 100    
Total of deferred revenue | $                     $ 10    
Purchase shares of common stock | shares                     2,000,000    
Loss contingency plaintiff damage, description                       The Company's expert asserts that the plaintiff's expert opinion is erroneous and in his opinion and assuming the plaintiff's claim will be accepted by the court, than the estimated damage caused to the plaintiff as a result of a 4-5 years delay in registering his shares is estimated at approximately NIS 234,000 (plus interest and CPI differences) if it will be ruled that the restriction from plaintiff's shares should have been removed within six months as of the purchase date thereof and at approximately NIS 130,000 if it will be ruled that the restriction from plaintiff's shares should have been removed within twelve months as of the purchase day thereof.  
Minimum [Member]                          
Commitments and Contingencies (Textual)                          
Plaintiff damaged value                       ₪ 3,000,000  
Maximum [Member]                          
Commitments and Contingencies (Textual)                          
Plaintiff damaged value                       ₪ 3,600,000  
Subsequent Event [Member]                          
Commitments and Contingencies (Textual)                          
Compensation for damages               ₪ 18,800,000          
Convertible Loan [Member]                          
Commitments and Contingencies (Textual)                          
Convetible loan agreement             ₪ 200,000            
Additional loan received             100,000            
Additional investment on agreement             ₪ 2,000,000            
Convertible loan term             21 days            
Conversion price | (per share)                     $ 0.001   ₪ 0.97
Interest rate                     10.00%   10.00%
Defendants [Member]                          
Commitments and Contingencies (Textual)                          
Plaintiff damaged value     ₪ 2,622,500                    
Compensation for damages     ₪ 400,000                    
Company share value rises per share | ₪ / shares     ₪ 20.98                    
XML 35 R24.htm IDEA: XBRL DOCUMENT v3.7.0.1
Significant Events During the Reporting Period (Details)
$ / shares in Units, $ in Thousands
1 Months Ended
Feb. 28, 2017
USD ($)
$ / shares
shares
Significant Events During the Reporting Period (Textual)  
Investments | $ $ 200
Exchange of common stock, shares | shares 200,000
Non-negotiable warrants exercisable | shares 250,000
Exercise price of warrants | $ / shares $ 3.50
Investment warrants exercisable, expiration date Nov. 22, 2017
Fair value of liability recognized | $ $ 168
XML 36 R25.htm IDEA: XBRL DOCUMENT v3.7.0.1
Subsequent Events (Details) - USD ($)
$ in Thousands
Mar. 31, 2017
Dec. 31, 2016
Mar. 31, 2016
Dec. 31, 2015
Subsequent Event [Line Items]        
Assets $ 2,481 $ 2,150    
Stockholders' equity 1,616 1,525 $ (1,534) $ (2,613)
Total liabilities and stockholders' equity 2,481 $ 2,150    
Proforma [Member]        
Subsequent Event [Line Items]        
Assets 3,900      
Liabilities 865      
Stockholders' equity 3,035      
Total liabilities and stockholders' equity $ 3,900      
XML 37 R26.htm IDEA: XBRL DOCUMENT v3.7.0.1
Subsequent Events (Details Textual) - USD ($)
$ in Thousands
Mar. 31, 2017
Dec. 31, 2016
Mar. 31, 2016
Dec. 31, 2015
Subsequent Events (Textual)        
Adjustments for receipt of guarantee notes and checks $ 1,419      
Increase in bank guarantee and checks 1,419      
Stockholders' equity 1,616 $ 1,525 $ (1,534) $ (2,613)
Guarantee notes [Member]        
Subsequent Events (Textual)        
Guarantee of notes 1,514      
Guarantee of checks 495      
Subsequent to March 31, 2017 [Member]        
Subsequent Events (Textual)        
Guarantee of notes 550      
Guarantee of checks 40      
Proforma [Member]        
Subsequent Events (Textual)        
Stockholders' equity 3,035      
Fund raising agreements [Member]        
Subsequent Events (Textual)        
Fund amount, total 8,015      
Marketable securities 1,410      
Cash $ 4,596      
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