My Size, Inc. — 2022 Form 10-K Summary
Reporting period: Fiscal year ended December 31, 2022; the filing was signed April 14, 2023. This is an annual report, not a standalone fourth-quarter report. Dollar amounts below are in U.S. dollars; financial statement amounts are generally in thousands unless stated otherwise.
Business context
My Size develops AI-driven measurement and sizing products, including MySizeID for apparel sizing, and also operates an omnichannel e-commerce retail business through Orgad and sizing-software business Naiz. The company acquired Orgad in February 2022 and Naiz in October 2022, so 2022 results include only partial-year contributions from both acquisitions. MySizeID generated more than 23.5 million size recommendations during 2022. Management describes continued commercialization and expansion of retailer relationships as priorities.
Financial performance and liquidity
| Metric | 2022 | 2021 |
|---|---|---|
| Revenue | $4.459 million | $131,000 |
| Gross profit | $634,000 | $131,000 |
| Gross margin | Approximately 14.2% | 100% as reported |
| Operating loss | $8.110 million | $10.577 million |
| Net loss | $8.310 million | $10.520 million |
| Basic and diluted loss per share | $7.47 | $17.75 |
| Cash used in operating activities | $7.290 million | $7.297 million |
Revenue included $4.132 million from Orgad, $224,000 from My Size SaaS solutions and $103,000 from Naiz. Cost of revenue was $3.825 million. Revenue growth chiefly reflects the acquisitions; the filing does not provide a comparable full-year organic growth measure.
At year-end, cash and cash equivalents were $2.100 million and restricted cash was $263,000, versus combined cash and restricted cash of $10.943 million at December 31, 2021. Current assets were $6.058 million and current liabilities $4.179 million. Total loans were approximately $531,000; operating lease liabilities totaled $467,000. Shareholders’ equity was $4.536 million, down from $10.857 million, and accumulated deficit was $53.501 million.
Investing activities used $993,000, primarily associated with acquisitions; financing activities used $67,000, compared with $16.292 million provided in 2021. The January 2023 registered direct and private placements generated approximately $3.0 million in gross proceeds before fees and expenses. The filing states that the pre-funded warrants from that financing were exercised by March 31, 2023.
Material changes versus 2021
- Revenue rose substantially from $131,000, mainly because Orgad contributed $4.132 million from its February acquisition date and Naiz contributed $103,000 from October.
- Gross profit increased to $634,000, but the resulting gross margin was approximately 14.2% as acquired retail sales brought significant product costs.
- Net loss narrowed by $2.210 million. Lower R&D expense—down $2.547 million—was a major factor; the 2021 comparison included $2.618 million of noncash share-based expense related to the Shoshana Zigdon agreement. Sales and marketing expense rose $807,000, while general and administrative expense declined $224,000.
- Operating cash use remained high and broadly unchanged year over year, while year-end cash and restricted cash fell by $8.580 million.
- The company added acquisition-related assets and obligations, including $1.395 million of goodwill and $1.377 million of intangible assets at year-end. No goodwill impairment was recorded.
Outlook, risks and unusual items
- Going concern: Management expects continuing losses and negative operating cash flows and says year-end cash, together with the January 2023 financing, is insufficient to fund operations for more than 12 months. The auditor’s report includes a going-concern explanatory paragraph. Additional capital may be required and may be unavailable or dilutive.
- Acquisition obligations: Orgad and Naiz consideration includes conditional future cash, stock and earn-out payments tied to revenue targets and, in some cases, continued involvement of key sellers. The Naiz agreement also includes a potential $459,240 equity-value shortfall payment subject to conditions.
- Warehouse fire: A January 2, 2023 fire affected Orgad’s Israeli warehouse and approximately $450,000 of inventory. The inventory was uninsured; operations shifted to Orgad’s headquarters. Management expected no effect on 2023 sales, but the overall impact was not yet determined.
- Business and market risks: My Size identifies customer adoption, long and uncertain sales cycles, competition, reliance on third-party platforms and cloud providers, and dependence on Amazon for a substantial portion of Orgad revenue as significant risks. One Orgad customer represented 37.9% of consolidated revenue.
- Geographic, regulatory and financing risks: The filing discusses the Israel security situation, Russia-related sanctions and suspension of most Russian activity, foreign-exchange exposure, privacy and data-protection rules, and uncertain capital-market access.
- Litigation: The North Empire dispute remains unresolved and was referred to mediation in March 2023. North Empire asserts counterclaims of approximately $10.96 million; the company says it believes the counterclaims are more likely than not to be denied. The filing does not provide a clear estimate of any potential financial exposure.
- Guidance: The filing provides no quantified revenue, earnings or cash-flow guidance. Management’s stated outlook is to continue commercialization and seek additional financing; it cautions that funding may not be available on acceptable terms.
The company reported effective disclosure controls and effective internal control over financial reporting as of year-end; the auditor did not attest to internal-control effectiveness. A 1-for-25 reverse stock split took effect in December 2022, and share and per-share figures were adjusted retroactively.
Important facts for investors to verify
- Current cash, cash runway and the net proceeds and remaining dilutive impact of the January 2023 financing, including warrant terms and exercises.
- Revenue quality and sustainability: acquired versus legacy SaaS contributions, customer concentration, gross margins, receivables collection and Orgad’s dependence on Amazon.
- Amounts, timing and conditions for remaining Orgad and Naiz acquisition payments, earn-outs and the Naiz shortfall provision.
- The uninsured warehouse inventory loss and any subsequent effects on Orgad’s operations, insurance claims or other parties.
- Latest status and potential exposure from the North Empire litigation and mediation.
- Reconcile share counts and acquisition consideration across the filing: the text contains inconsistent figures for Orgad shares and Naiz shares issued, and some reported share figures may reflect different split-adjustment bases.