Business Context and Reporting Period
Company: My Size, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: May 26, 2021
Reporting Period: Event date May 26, 2021
The Company entered into an Amendment to a Purchase Agreement dated February 16, 2014, with Shoshana Zigdon. This agreement concerns assets related to data collection for measurement purposes, which are substantially dependent for the Company's business operations.
Key Financial Metrics
This filing does not contain standard financial performance metrics such as revenue, profit, cash flow, margins, debt, or liquidity. The filing focuses on a specific corporate transaction involving equity issuance.
- Equity Issuance: 2,500,000 shares of common stock issued to Shoshana Zigdon.
- Consideration: Issuance of shares in exchange for the waiver of repurchase rights and intellectual property claims.
Material Changes Versus Prior Period
The filing details a material change in the terms of the 2014 Purchase Agreement:
- Waiver of Rights: Ms. Zigdon irrevocably waived her right to repurchase the Assets (previously exercisable until June 16, 2021) and all rights to future royalties or compensation (previously 18% of operating profit connected with the Assets for seven years).
- Registration Obligations: The Company agreed to file a registration statement (Form S-3 or S-1) by June 24, 2021, to allow resale of the shares, with an effectiveness target of July 26, 2021.
- Lock-Up and Resale: Ms. Zigdon agreed to a lock-up until November 1, 2021. Following registration effectiveness, she may sell one-fourth of the shares monthly starting July 30, 2021.
Guidance, Outlook, and Risks
Management Commentary: The filing confirms the Company's reliance on the assets acquired from Ms. Zigdon for its business operations. The transaction eliminates future royalty obligations and repurchase risks associated with these assets.
Risks and Contingencies:
- Regulatory Risk: The Company must successfully file and have a registration statement declared effective by July 26, 2021, to facilitate the resale of shares.
- Legal Compliance: The transaction relied on exemptions under Section 4(a)(2) and Regulation S of the Securities Act of 1933, based on Ms. Zigdon's status as an accredited investor and non-U.S. person.
Investor Verification Checklist
- Verify the filing of the Form S-3 or S-1 registration statement by June 24, 2021.
- Confirm the effectiveness date of the registration statement to ensure it meets the July 26, 2021 target.
- Review the full text of the Amendment to Purchase Agreement (to be filed as an exhibit to the Q2 2021 Form 10-Q) for complete terms.
- Monitor the Company's quarterly reports for any impact on operating expenses due to the elimination of the 18% royalty obligation.