Business Context and Reporting Period
Company: My Size, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: March 4, 2016
Event: Entry into a Material Definitive Agreement (Item 1.01).
Key Financial Metrics
This filing reports a specific contractual agreement rather than periodic financial statements. Consequently, the filing text does not provide clear values for overall revenue, profit, cash flow, margins, debt, or liquidity for the reporting period.
Agreement Financial Terms:
- Initial Payment: $100,000 total from LSY International, Inc. (LSY).
- Payment Schedule:
- $10,000 upon signing.
- $30,000 upon beginning of installation.
- $20,000 upon completion of installation.
- $40,000 upon completion of the trial period.
- Recurring Revenue: 7.5% of the transaction value of products marketed and sold by LSY.
Material Changes and Agreement Details
On March 4, 2016, My Size, Inc. entered into a technology and license agreement with LSY International, Inc., a Kentucky-based retailer of luxury outerwear.
- Scope: LSY receives a limited, designated license to use My Size's technology for selling luxury outerwear (furs, sheerings, alpaca, cashmere, leather).
- Exclusivity: LSY is granted exclusivity for 24 months following the initial trial period, contingent on performance.
- Performance Milestones for Exclusivity:
- Initial 24-month period: Must generate at least $1,000,000 in revenue for My Size.
- Subsequent years: Must generate a minimum of $5,000,000 in revenue for My Size per year.
Guidance, Outlook, and Risks
Management Commentary: The filing summarizes the terms of the agreement but does not provide broader strategic guidance or outlook beyond the specific contract details.
Risks and Contingencies:
- Performance Risk: The exclusivity granted to LSY is conditional. If LSY fails to meet the revenue thresholds ($1M for the first 24 months, $5M annually thereafter), the exclusivity terms may not be sustained.
- Revenue Recognition: Future revenue is dependent on LSY's sales volume and the successful completion of installation and trial phases.
Key Facts for Investor Verification
- Verify the execution status of the $100,000 initial payment schedule.
- Monitor LSY International, Inc.'s sales performance to determine if the $1,000,000 revenue threshold for the initial 24-month exclusivity period is met.
- Confirm the timeline for the technology installation and trial period completion to trigger the final $40,000 payment.
- Assess the potential impact of the 7.5% transaction fee on future revenue streams based on LSY's market reach.