UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934 (Amendment No. )
Filed
by the Registrant ☒ |
|
Filed
by a Party other than the Registrant ☐ |
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Check
the appropriate box: |
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☐ |
Preliminary
Proxy Statement |
☐ |
Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
☒ |
Definitive
Proxy Statement |
☐ |
Definitive
Additional Materials |
☐ |
Soliciting
Material Pursuant to §240.14a-12 |
MY
SIZE, INC.
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box): |
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☒ |
No
fee required. |
☐ |
Fee
paid previously with preliminary materials. |
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☐ |
Fee
computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a–6(i)(1) and 0–11 |
MY
SIZE, INC.
NOTICE
OF ANNUAL MEETING
AND
PROXY
STATEMENT
Meeting
to be held on December 7, 2022, at 10:00 a.m. (local time)
At
the Offices of Barnea Jaffa Lande & Co Law Offices, 58 HaRakevet St., Tel Aviv 6777016, Israel
MY
SIZE, INC.
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD ON DECEMBER 7, 2022
An
annual meeting of stockholders (the “Annual Meeting”) of My Size, Inc. (“My Size”, the “Company”,
“we”, “us”, or “our”) will be held on December 7, 2022, at the offices of Barnea Jaffa Lande &
Co Law Offices, 58 HaRakevet St., Tel Aviv 6777016, Israel at 10:00 a.m. (local time), to consider the following proposals:
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1. |
To
elect two Class I directors to serve on our board of directors to serve on our board of directors for a term of three years or until
his successor is elected and qualified, for which Arik Kaufman and Oren Elmaliah are the nominees; |
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2. |
Grant
discretionary authority to our board of directors to (A) amend our Amended and Restated Certificate of Incorporation to effect one or
more consolidations of the issued and outstanding shares of our common stock pursuant to which the shares of common stock would be combined
and reclassified into one (1) share of common stock at a ratio within the range from 1-for-10 up to 1-for-30 (the “Reverse Stock
Split”) and (B) determine whether to arrange for the disposition of fractional interests by stockholders entitled thereto, to pay
in cash the fair value of fractions of a share of common stock as of the time when those entitled to receive such fractions are determined,
or to entitle stockholders to receive from our transfer agent, in lieu of any fractional share, the number of shares of common stock
rounded up to the next whole number, provided that, (X) that we shall not effect Reverse Stock Splits that, in the aggregate, exceeds
1-for-30, and (Y) any Reverse Stock Split is completed no later than December 7, 2023 (the “Reverse Stock Split Proposal”);
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3. |
To approve an amendment to the My Size 2017 Equity Incentive Plan to increase the reservation of common stock for issuance thereunder
to 7,225,000 shares from 5,770,000 shares. |
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4. |
To
ratify the appointment of Somekh Chaikin as our independent public accountant for the fiscal year ending December 31, 2022; |
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5. |
Approval of a proposal to adjourn the Annual Meeting to a later date or dates, if necessary or appropriate, to permit further solicitation
and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Reverse Stock
Split Proposal; and |
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6. |
To
transact such other business as may be properly brought before the Annual Meeting and any adjournments thereof. |
BECAUSE
OF THE SIGNIFICANCE OF THESE PROPOSALS TO THE COMPANY AND ITS STOCKHOLDERS, IT IS VITAL THAT EVERY STOCKHOLDER VOTES AT THE ANNUAL MEETING
IN PERSON OR BY PROXY.
These
proposals are fully set forth in the accompanying Proxy Statement, which you are urged to read thoroughly. For the reasons set forth
in the Proxy Statement, your board of directors recommends a vote “FOR” Proposals 1, 2, 3, 4 and 5. The Company intends to
mail the Proxy Statement and Proxy Card enclosed with this notice on or about November 4, 2022 to all stockholders entitled to vote at
the Annual Meeting. Only stockholders of record at the close of business on October 24, 2022 (the “Record Date”) will be
entitled to attend and vote at the meeting. A list of all stockholders entitled to vote at the Annual Meeting will be available at the
principal office of the Company during usual business hours, for examination by any stockholder for any purpose germane to the Annual
Meeting for 10 days prior to the date thereof. Stockholders are cordially invited to attend the Annual Meeting. However, whether or not
you plan to attend the meeting in person, your shares should be represented and voted. After reading the enclosed Proxy Statement, please
sign, date, and return promptly the enclosed Proxy in the accompanying postpaid envelope we have provided for your convenience to ensure
that your shares will be represented. If you do attend the meeting and wish to vote your shares personally, you may revoke your Proxy.
If
you have any questions or need assistance voting your shares, please call Kingsdale Advisors at:
Strategic
Shareholder Advisor and Proxy Solicitation Agent
745
Fifth Avenue, 5th Floor, New York, NY 10151
North
American Toll Free Phone:
1-888-642-3150
Email:
contactus@kingsdaleadvisors.com
Call
Collect Outside North America: 917-813-1249
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By
Order of the Board of Directors |
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/s/
Ronen Luzon |
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Ronen
Luzon |
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Member
of the Board of Directors
November
4, 2022 |
WHETHER
OR NOT YOU PLAN ON ATTENDING THE MEETING IN PERSON, PLEASE VOTE AS PROMPTLY AS POSSIBLE TO ENSURE THAT YOUR VOTE IS COUNTED.
Important
Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on December 7, 2022. The Proxy
Statement is available at www.proxyvote.com.
TABLE
OF CONTENTS
My
Size, Inc.
4
Hayarden St., P.O.B. 1026,
Airport
City, Israel, 7010000
PROXY
STATEMENT
ANNUAL
MEETING OF STOCKHOLDERS
December
7, 2022
This
Proxy Statement is furnished in connection with the solicitation of proxies by the board of directors of the Company to be voted at the
Annual Meeting of stockholders, which will be held on December 7, 2022 at the offices of the Company’s legal counsel, Barnea Jaffa
Lande & Co Law Offices, at 58 HaRakevet St., Tel Aviv 6777016, Israel at 10.00 a.m. (local time), and at any postponements or adjournments
thereof. The proxy materials will be mailed to stockholders on or about November 4, 2022.
REVOCABILITY
OF PROXY AND SOLICITATION
Any
stockholder executing a proxy that is solicited hereby has the power to revoke it prior to the voting of the proxy. Revocation may be
made by attending the Annual Meeting and voting the shares of stock in person, or by delivering to the Secretary of the Company at the
principal office of the Company prior to the Annual Meeting a written notice of revocation or a later-dated, properly executed proxy.
Solicitation of proxies may be made by directors, officers and other employees of the Company by personal interview, telephone, facsimile
transmittal or electronic communications. No additional compensation will be paid for any such services. This solicitation of proxies
is being made by the Company which will bear all costs associated with the mailing of this proxy statement and the solicitation of proxies.
In addition, we have retained Kingsdale Advisors (“Kingsdale”) to assist in the solicitation of proxies for a fee of $10,000
plus telephone solicitation fees and reimbursement of other expenses.
If
you have any questions or require any assistance with completing your proxy, please contact Kingsdale by telephone (toll-free within
North America) at 1-888-642-3150 or (call collect outside North America) at 416-867-2272 or by email at contactus@kingsdaleadvisors.com.
RECORD
DATE
Stockholders
of record at the close of business on October 24, 2022, the Record Date, will be entitled to receive notice of, attend and vote at the
meeting.
Why
am I receiving these materials?
The
Company has delivered printed versions of these materials to you by mail, in connection with the Company’s solicitation of proxies
for use at the Annual Meeting. These materials describe the proposals on which the Company would like you to vote and also give you information
on these proposals so that you can make an informed decision.
What
is included in these materials?
These
materials include:
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this
Proxy Statement for the Annual Meeting; |
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the
Proxy Card or voting instruction form for the Annual Meeting; and |
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the
Company’s Annual Report on Form 10-K for the year ended December 31, 2021. |
What
is the Proxy Card?
The
Proxy Card enables you to appoint Ronen Luzon, our Chief Executive Officer, and Or Kles, our Chief Financial Officer, as your representative
at the Annual Meeting. By completing and returning a Proxy Card, you are authorizing each of Mr. Luzon and Mr. Kles, to vote your shares
at the Annual Meeting in accordance with your instructions on the Proxy Card. This way, your shares will be voted whether or not you
attend the Annual Meeting.
What
is the purpose of the Annual Meeting?
At
our Annual Meeting, stockholders will act upon the matters outlined in the Notice of Annual Meeting on the cover page of this Proxy Statement,
including (i) the election of two Class 1 directors to serve on the Company’s board of directors for a term of three years or until
his successor is elected and qualified, for which Arik Kaufman and Oren Elmaliah are the nominees (the “Director
Election Proposal”); (ii) granting discretionary authority to our board of directors to (A) amend our Amended and Restated Certificate
of Incorporation (the “Certificate of Incorporation”) to effect one or more consolidations of the issued and outstanding
shares of our common stock pursuant to which the shares of common stock would be combined and reclassified into one (1) share of common
stock at a ratio within the range from 1-for-10 up to 1-for-30 (the “Reverse Stock Split”) and (B) determine whether to arrange
for the disposition of fractional interests by stockholders entitled thereto, to pay in cash the fair value of fractions of a share of
common stock as of the time when those entitled to receive such fractions are determined, or to entitle stockholders to receive from
our transfer agent, in lieu of any fractional share, the number of shares of common stock rounded up to the next whole number, provided
that, (X) that we shall not effect Reverse Stock Splits that, in the aggregate, exceeds 1-for-30, and (Y) any Reverse Stock Split is
completed no later than December 7, 2023 (the “Reverse Stock Split Proposal”); (iii) approval of an amendment to the My Size
2017 Equity Incentive Plan (the “2017 Plan”) to increase the reservation of common stock for issuance thereunder to 7,225,000
shares from 5,770,000 shares (the “Plan Amendment Proposal”); (iv) ratification of the appointment of Somekh Chaikin as our
independent public accountant for the fiscal year ending December 31, 2021 (the “Auditor Reappointment Proposal”); and (v)
a proposal to adjourn the Annual Meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote
of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Reverse Stock Split
Proposal (the “Adjournment Proposal”).
What
constitutes a quorum?
The
presence at the meeting, in person or by proxy, of the holders of one third of the number of shares of common stock issued and outstanding
on the Record Date will constitute a quorum permitting the meeting to conduct its business. As of the Record Date, there were 36,126,284
shares of the Company’s common stock issued and outstanding, each share entitled to one vote at the meeting. Thus, the presence
of the holders of 12,042,095 shares of common stock will be required to establish a quorum. Abstentions, withhold votes and broker non-votes
are counted as shares present and entitled to vote for purposes of determining a quorum.
What
is the difference between a stockholder of record and a beneficial owner of shares held in street name?
Most
of our stockholders hold their shares in an account at a brokerage firm, bank or other nominee holder, rather than holding share certificates
in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially in street
name.
Stockholder
of Record
If
on October 24, 2022, your shares were registered directly in your name with our transfer agent, VStock Transfer, LLC, you are considered
a stockholder of record with respect to those shares, and the Notice of Annual Meeting and Proxy Statement was sent directly to you by
the Company. As the stockholder of record, you have the right to direct the voting of your shares by returning the Proxy Card to us.
Whether or not you plan to attend the Annual Meeting, please complete, date, sign and return a Proxy Card to ensure that your vote is
counted.
Beneficial
Owner of Shares Held in Street Name (non-Israeli brokerage firm, bank, broker-dealer, or other nominee holders)
If
on the Record Date, your shares were held in an account at a brokerage firm, bank, broker-dealer, or other nominee holder, then you are
considered the beneficial owner of shares held in “street name,” and the Notice of Annual Meeting and Proxy Statement was
forwarded to you by that organization. The organization holding your account is considered the stockholder of record for purposes of
voting at the Annual Meeting. As the beneficial owner, you have the right to direct that organization on how to vote the shares held
in your account. However, since you are not the stockholder of record, you may not vote these shares in person at the Annual Meeting
unless you receive a valid proxy from the organization.
How
do I vote?
Your
vote is very important to us. Whether or not you plan to attend the Annual Meeting, please vote by proxy in accordance with the instructions
on your proxy card or voting instruction form (from your broker or other intermediary). There are three convenient ways of submitting
your vote:
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By
Telephone or Internet - All record holders can vote by touchtone telephone from the United States using the toll free telephone
number on the proxy card, or over the Internet, using the procedures and instructions described on the proxy card. “Street
name” holders may vote by telephone or Internet if their bank, broker or other intermediary makes those methods available,
in which case the bank, broker or other intermediary will enclose the instructions with the proxy materials. The telephone and Internet
voting procedures are designed to authenticate stockholders’ identities, to allow stockholders to vote their shares, and to
confirm that their instructions have been recorded properly. |
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In
Person - All record holders may vote in person at the Annual Meeting. “Street name” holders may vote in person at
the Annual Meeting if their bank, broker or other intermediary has furnished a legal proxy. If you are a “street name”
holder and would like to vote your shares by proxy, you will need to ask your bank, broker or other intermediary to furnish you with
an intermediary issued proxy. You will need to bring the intermediary issued proxy with you to the Annual Meeting and hand it in
with a signed ballot that will be provided to you at the Annual Meeting. You will not be able to vote your shares without an intermediary
issued proxy. Note that a broker letter that identifies you as a stockholder is not the same as an intermediary issued proxy. |
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By
Mail - You may vote by completing, signing, dating and returning your proxy card or voting instruction form in
the pre-addressed, postage-paid envelope provided. |
The
board of directors has appointed Ronen Luzon, our Chief Executive Officer, and Or Kles, our Chief Financial Officer, to serve as the
proxies for the Annual Meeting.
If
you complete and sign the proxy card but do not provide instructions for one or more of the proposals, then the designated proxies will
or will not vote your shares as to those proposals, as described under “What happens if I do not give specific voting instructions?”
below. We do not anticipate that any other matters will come before the Annual Meeting, but if any other matters properly come before
the meeting, then the designated proxies will vote your shares in accordance with applicable law and their judgment.
If
you hold your shares in “street name,” and complete the voting instruction form provided by your broker or other intermediary
except with respect to one or more of the proposals, then, depending on the proposal(s), your broker may be unable to vote your shares
with respect to those proposal(s). See “What is a broker non-vote?” above.
Even
if you currently plan to attend the Annual Meeting, we recommend that you vote by telephone or Internet or return your proxy card or
voting instructions as described above so that your votes will be counted if you later decide not to attend the Annual Meeting or are
unable to attend.
How
are votes counted?
Votes
will be counted by the inspector of election appointed for the Annual Meeting, who will separately count, for the election of directors,
“For,” “Withhold” and broker non-votes and, with respect to the other proposals, votes “For” and
“Against,” abstentions and broker non-votes.
What
is a broker non-vote?
If
your shares are held in street name, you must instruct the organization who holds your shares how to vote your shares. If you sign your
proxy card but do not provide instructions on how your broker should vote on “routine” proposals, your broker will vote your
shares as recommended by the board of directors. If a stockholder does not give timely customer direction to its broker or nominee with
respect to a “non-routine” matter, the shares represented thereby (“broker non-votes”) cannot be voted by the
broker or nominee, but will be counted in determining whether there is a quorum. Of the proposals described in this Proxy Statement,
Proposals 1 and 3 are considered “non-routine” matters. Proposals 2, 4 and 5 are considered “routine” matters.
What
is an abstention?
An
abstention is a stockholder’s affirmative choice to decline to vote on a proposal. Under Delaware law, abstentions are counted
as shares present and entitled to vote at the Annual Meeting.
What
happens if I do not give specific voting instructions?
Stockholders
of Record. If you are a stockholder of record and you sign and return a proxy card without giving specific voting instructions, then
the proxy holders will vote your shares in the manner recommended by the board of directors on all matters presented in this Proxy Statement
and as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the Annual
Meeting.
Beneficial
Owners of Shares Held in Street Name. If you are a beneficial owner of shares held in street name and do not provide the organization
that holds your shares with specific voting instructions, under the rules of various national and regional securities exchanges, the
organization that holds your shares may generally vote on routine matters, but cannot vote on non-routine matters.
What
is the required vote for each proposal?
Proposal
1: The affirmative vote of a plurality of the votes cast at the Annual Meeting is required for the election of directors. “Plurality”
means that the nominees who receive the largest number of votes cast “for” are elected as directors. As a result, any shares
not voted “for” a particular nominee (whether as a result of stockholder abstention or a broker non-vote) will not be counted
in such nominee’s favor and will have no effect on the outcome of the election. The proxies cannot be voted for a greater number
of persons than two.
Proposal
2: The affirmative vote of a majority of our outstanding shares is required for approval of Proposal 2. Because the affirmative
vote of holders of a majority of the outstanding shares of our common stock is required for this proposal, abstentions will have the
same effect as votes against this proposal. Because this proposal is considered a “routine” matter under applicable stock
exchange rules, we do not expect to receive any broker non-votes on this proposal.
Proposal
3: The affirmative vote of a majority of the votes cast on the matter is required for the approval of Proposal 3. Any abstention
from voting or broker non-vote with respect to such matter will not count as a vote for or against the amendment and will not affect
the outcome of the proposal.
Proposal
4: The affirmative vote of a majority of the votes cast on the matter is required for the approval of Proposal 4. Stockholder
ratification of the selection of Somekh Chaikin as the Company’s independent registered public accounting firm for the fiscal year
ending December 31, 2022 is not required by our Bylaws or other applicable legal requirement; however, our board is submitting the selection
of Somekh Chaikin to stockholders for ratification as a matter of good corporate practice. In the event that the stockholders do not
approve the selection of Somekh Chaikin, the audit committee will reconsider the appointment of the independent registered accounting
firm. Even if the selection is ratified, the audit committee in its discretion may direct the appointment of a different independent
registered accounting firm at any time during the year if the audit committee believes that such a change would be in the best interests
of the Company and its stockholders. Abstentions are considered votes present and entitled to vote on this proposal, and thus, will have
the same effect as a vote “against” the proposal. Because this proposal is considered a “routine” matter under
applicable stock exchange rules, we do not expect to receive any broker non-votes on this proposal.
Proposal
5: The affirmative vote of a majority of the votes cast on the matter is required for the approval of Proposal 5. Any
abstention from voting or broker non-vote with respect to such matter will not count as a vote for or against the amendment and will
not affect the outcome of the proposal.
What
are the board’s recommendations?
The
board’s recommendation is set forth together with the description of each item in this Proxy Statement. In summary, the board recommends
a vote:
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“FOR”
the Director Election Proposal; |
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“FOR”
the approval of the Reverse Stock Split Proposal; |
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“FOR”
the approval of the Plan Amendment Proposal; |
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“FOR”
approval of the Auditor Reappointment Proposal; and |
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“FOR”
approval of the Adjournment Proposal. |
With
respect to any other matter that properly comes before the meeting, the proxy holder will vote as recommended by the board of directors
or, if no recommendation is given, in his own discretion.
Dissenters’
Right of Appraisal
Holders
of shares of our common stock do not have appraisal rights under Delaware law or under the governing documents of the Company in connection
with this solicitation.
How
are proxy materials delivered to households?
With
respect to eligible stockholders who share a single address, we may send only one Notice or other Annual Meeting materials to that address
unless we receive instructions to the contrary from any stockholder at that address. This practice, known as “householding,”
is designed to reduce our printing and postage costs. However, if a stockholder of record residing at such address wishes to receive
a separate notice or proxy statement in the future, he or she may contact My Size, Inc., 4 Hayarden St., P.O.B. 1026, Airport City, Israel,
7010000, Attention: Corporate Secretary or by calling us at +972 3 600 9030. Eligible stockholders of record receiving multiple copies
of our Notice or other Annual Meeting materials can request householding by contacting us in the same manner. Stockholders who own shares
through a bank, broker or other intermediary can request householding by contacting the intermediary.
We
hereby undertake to deliver promptly, upon written or oral request, a copy of Notice or other Annual Meeting materials to a stockholder
at a shared address to which a single copy of the document was delivered. Requests should be directed to the Corporate Secretary at the
address or phone number set forth above.
When
are Stockholder Proposals Due for the 2022 Annual Meeting?
Stockholders
who wish to present proposals for inclusion in our proxy materials for the 2023 annual meeting of stockholders (the “2023 Annual
Meeting”) may do so by following the procedures prescribed in Securities Exchange Act of 1934, as amended (the “Exchange
Act”), regarding the inclusion of stockholder proposals in company-sponsored proxy materials. To be eligible, the stockholder proposals
must be received by our corporate secretary on or before July 7, 2023. Although the board will consider stockholder proposals, we reserve
the right to omit from our proxy statement, or to vote against, stockholder proposals that we are not required to include under the Exchange
Act, including Rule 14a-8.
Our bylaws govern the submission
of nominations for director or other business proposals that a stockholder wishes to have considered at a meeting of stockholders, but
which are not included in our proxy statement for that meeting. Any appropriate proposal submitted by a stockholder and intended to be
presented at the 2023 Annual Meeting must be submitted in writing to the Company’s Secretary at 4 Hayarden St., P.O.B. 1026, Airport
City, Israel 7010000 and received no earlier than September 8, 2023, and no later than August 9, 2023. However, if the date of the 2023
Annual Meeting is convened more than 30 days before, or delayed by more than 60 days after, December 7, 2023, to be considered at our
2022 Annual Meeting, a stockholder proposal must be submitted in writing to the Company’s Secretary at 4 Hayarden St., P.O.B. 1026,
Airport City, Israel 7010000 a stockholder proposal must be submitted in writing to the Company’s Secretary at 4 Hayarden St., P.O.B.
1026, Airport City, Israel 7010000 and received no earlier than the 120th day prior to such annual meeting and not later than the later
of the 90th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting
is first made by the Company.
To
comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than our nominees
at the 2023 annual meeting must provide notice that sets forth the information required by Rule 14a19 under the Exchange Act no later
than October 8, 2023. If the date of the 2023 annual meeting is changed by more than 30 calendar days from the anniversary date of the
2022 annual meeting, however, then the stockholder must provide notice by the later of 60 calendar days prior to the date of the 2023
annual meeting or the 10th calendar day following the date on which public announcement of the date of the 2023 annual meeting is first
made.
A
copy of our bylaws may be obtained by accessing our public filings on the SEC’s website at www.sec.gov. You may also contact our
Secretary at our principal executive offices for a copy of the relevant bylaw provisions regarding the requirements for making stockholder
proposals and nominating director candidates.
ACTIONS
TO BE TAKEN AT THE MEETING
PROPOSAL
NO. 1
ELECTION
OF TWO DIRECTORS
Our
board of directors are classified into three classes with staggered three-year terms (with the exception of the expiration of the initial
Class I and Class II directors), as follows:
| ● | Class
I, comprised of two directors, initially Arik Kaufman and Oren Elmaliah (with their initial
terms expiring at the Annual Meeting and who are the nominees for re-election and members
of such class serving successive three-year terms); |
| ● | Class
II, comprised of two directors, initially Oron Branitzky and Guy Zimmerman (with their initial
terms expiring at our 2023 annual meeting of stockholders and members of such class serving
successive three-year terms); and |
| ● | Class
III, comprised of one director, initially Ronen Luzon (with his initial term expiring at
our 2024 annual meeting of stockholders and members of such class serving successive three-year
terms). |
To
preserve the classified board structure, a director elected by the board of directors to fill a vacancy holds office until the next election
of the class for which such director has been chosen, and until that director’s successor has been elected and qualified or until
his or her earlier death, resignation, retirement or removal.
Biographical
and certain other information concerning the Company’s nominees for election to the board of directors and additional directors
is set forth below. Except as indicated below, none of our directors is a director in any other reporting companies. We are not aware
of any proceedings to which any of our directors, or any associate of any such director is a party adverse to us or any of our subsidiaries
or has a material interest adverse to us or any of our subsidiaries.
The
following sets forth certain information with respect to each of our directors who are up for election or re-election at the Annual Meeting
(Class I directors) and each additional director currently serving on our board of directors:
Name |
|
Age |
|
Class
|
|
Position(s) |
Ronen
Luzon |
|
51 |
|
Class
III |
|
Chief
Executive Officer and Director |
|
|
|
|
|
|
|
Arik
Kaufman* |
|
41 |
|
Class
I |
|
Director |
|
|
|
|
|
|
|
Oren
Elmaliah* |
|
38 |
|
Class
I |
|
Director |
|
|
|
|
|
|
|
Oron
Branitzky* |
|
63 |
|
Class
II |
|
Director |
|
|
|
|
|
|
|
Guy
Zimmerman* |
|
53 |
|
Class
II |
|
Director |
* |
Independent
as that term is defined by the rules of the Nasdaq Stock Market. |
Biographies
of Class 1 Director Nominees Subject to Re-election at the Annual Meeting
Arik
Kaufman – Director
Arik
Kaufman has served as a member of our board of directors since June 2017. Mr. Kaufman is an attorney specializing in the fields of commercial
law, corporate law and capital markets and since 2016 runs his own law office in Israel. He has vast experience in the fields of financial
reporting and financial regulation. Mr. Kaufman serves as the Chief Executive Officer of Steakholder Foods since January
2022. From September 2017 until January 2022, Mr. Kaufman served as VP Business Development of Mor Research Applications. Mr.
Kaufman holds an LLB in Law from the Interdisciplinary Center, Herzliya, and is admitted to the Israeli Bar. We believe that Mr. Kaufman
is qualified to serve as a member of our board of directors based upon his experience of assisting with the completion of numerous venture
capital financings, mergers, acquisitions, and strategic relationships. In addition, he has served as a member of the board of various
publicly traded companies, including companies that operate in the same industry as us.
Oren
Elmaliah – Director
Oren
Elmaliah, has served as a member of our board of directors since May 2017. In September 2015, Oren Elmaliah founded Accounting Team IL
and has acted as Account Manager since then. Accounting Team IL is a financial consultancy and service provider to public companies traded
in Israel and abroad. Since February 2017, Mr. Elmaliah has served as controller of Enlivex Therapeutics Ltd., and since January 2017
he has served as Chief Financial Officer of Presstek Israel. In addition, since September 2015, Mr. Elmaliah has served as an Israel
Authorities Reporting Officer of LG Electronics Israel and since September 2015 he has served as Local Financial Report Consultant of
Chiasma. From July 2011 until August 2015, Mr. Elmaliah served as CPA, Financial Director of CFO Director Ltd and from June 2010 until
July 2011 he served as Risk Management Consultant of RSM International Limited. Mr. Elmaliah holds a B.A. in Accounting/Economics and
a Msc. in Finance/Accounting from Tel Aviv University, Israel. He is a licensed Certified Public Accountant in Israel. We believe that
Mr. Elmaliah is qualified to serve as a member of our board of directors because of his vast finance experience and public company management
and administration in the fields of finance, accounting, and financial regulation.
Biography
of Other Directors
Ronen
Luzon — Founder, Director & Chief Executive Officer
Ronen
Luzon has served as our Chief Executive Officer and a member of our board of directors since September 2013. Since 2006, Mr. Luzon has
additionally served as Chief Executive Officer and founder of Malers Ltd., a company in the global security solutions market which provides
technological solutions for integrated communication infrastructures, security and control systems. Prior to Malers, he held several
senior marketing, sales management and professional services positions in a variety of international high tech companies including VP
marketing of GA Tech and Professional Services Manager of Eldat Communication. Mr. Luzon graduated from Middlesex University in London
with a B.S. in IT and Business Information Systems. We believe that Mr. Luzon is qualified to serve as a member of our board of directors
because of his more than 20 years of experience in the technology sector.
Oron
Branitzky – Director
Oron
Branitzky has served as a member of our board of directors since March 2017. Mr. Barnitzky has vast experience in retail technology.
Since November 2017, Mr. Branitzky has served as Global Retail Business Development at Superup, and from January 2007 until December
2014 he served as Vice President of Sales and Marketing at Pricer AB. Prior to that, Mr. Branitzky has served as VP Marketing and Sales
at Eldat Communication and Sarin Technologies Ltd. Since January 2015, Mr. Branitzky has served as chairman of the board of directors
of WiseShelf Ltd. and from May 2015 until March 2016, Mr. Branitzky served as an advisory board member of ciValue. Mr. Branitzky received
a B.S. from the Hebrew University of Jerusalem and an MBA in International Marketing from Tel Aviv University. We believe that Mr. Branitzky
is qualified to serve as a member of our board of directors because of his more than 20 years of experience in managing the sales of
hi-tech solutions to retailers across the globe.
Guy
Zimmerman – Director
Guy
Zimmerman, has served as a member of our board of directors since August 2021. Previously, Mr. Zimmerman served as Founder and CEO of
ManuFuture, an online b2b engineering market place, since February 2021. Prior to that from 2017 to 2021, Mr. Zimmerman acted as a consultant
to several technology start-ups and was a founding partner of a business travel online platform. From 2013 to 2017, Mr. Zimmerman served
as EVP of Marketing and Business Development of Kornit Digital and was part of the IPO leadership. Prior to that, Mr. Zimmerman served
as VP of Global Sales and Business Development at Tefron Ltd., a provider of seamless garment technology, where he led the $100m sales
and sales support organization serving global retail and fashion brands. Prior to that he served as Vice President of Strategy and Business
Development at Tnuva Group, Israel’s largest food manufacturer and spent eight years at McKinsey & Company. Mr. Zimmerman previously
led a software startup in the field of operational healthcare management systems. Mr. Zimmerman holds a B.Sc. in Industrial Engineering
from Tel Aviv University in Israel. We believe that Mr. Zimmerman is qualified to serve as a member of our board of directors because
of his experience in business development in the technology and retail sectors.
Board
Diversity Matrix
The
table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.
Board
Diversity Matrix (As of October 23, 2022) |
|
Total
Number of Directors |
|
5 |
|
|
Female |
|
Male |
|
Non-Binary |
|
Did
Not Disclose Gender |
Part
I: Gender Identity |
|
|
|
|
|
|
|
|
Directors |
|
# |
|
5 |
|
# |
|
# |
Part
II: Demographic Background |
|
|
|
|
|
|
|
|
African
American or Black |
|
# |
|
# |
|
# |
|
# |
Alaskan
Native or Native American |
|
# |
|
# |
|
# |
|
# |
Asian |
|
# |
|
# |
|
# |
|
# |
Hispanic
or Latinx |
|
# |
|
# |
|
# |
|
# |
Native
Hawaiian or Pacific Islander |
|
# |
|
# |
|
# |
|
# |
White |
|
# |
|
1 |
|
# |
|
# |
Two
or More Races or Ethnicities |
|
# |
|
2 |
|
# |
|
# |
LGBTQ+ |
|
|
|
0 |
|
|
|
|
Did
Not Disclose Demographic Background |
|
|
|
2 |
|
|
|
|
Family
Relationships
Ronen
Luzon, the Chief Executive Officer and a member of our board of directors, and Billy Pardo, the Chief Product Officer and Chief Operating
Officer, are husband and wife. There are no other family relationships among any of our current or former directors or executive officers.
Arrangements
between Officers and Directors
To
our knowledge, there is no arrangement or understanding between any of our officers and any other person, including directors, pursuant
to which the officer was selected to serve as an officer.
Involvement
in Certain Legal Proceedings
We
are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters
in bankruptcy, insolvency, criminal proceedings (other than traffic and other minor offenses), or being subject to any of the items set
forth under Item 401(f) of Regulation S-K.
Board
Meetings
The
board met on 13 occasions during the fiscal year ended December 31, 2021. Each of the members of the board other than Guy Zimmerman attended
at least 75% of the meetings held by the board during the fiscal year ended December 31, 2021. Mr. Zimmerman joined our board of directors
in August 2021. One of our directors attended our 2021 annual meeting of stockholders.
Although
we do not have a formal policy regarding attendance by members of our board of directors at annual meetings of stockholders, we strongly
encourage our directors to attend.
Committees
of the Board
Audit
Committee
Our
audit committee, is comprised of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Elmaliah serves as chairman of the audit committee.
The audit committee is responsible for retaining and overseeing our independent registered public accounting firm, approving the services
performed by our independent registered public accounting firm and reviewing our annual financial statements, accounting policies and
our system of internal controls. The audit committee acts under a written charter, which more specifically sets forth its responsibilities
and duties, as well as requirements for the audit committee’s composition and meetings. The audit committee charter is available
on our website www.mysizeid.com.
The
board of directors has determined that each member of the audit committee is “independent,” as that term is defined by applicable
SEC rules. In addition, the board of directors has determined that each member of the audit committee is “independent,” as
that term is defined by the rules of the Nasdaq Stock Market.
The
board of directors has determined that Oren Elmaliah is an “audit committee financial expert” serving on its audit committee
as the SEC has defined that term in Item 407 of Regulation S-K.
The
audit committee met on five occasions during the fiscal year ended December 31, 2021. Each of the members of the audit committee attended
at least 75% of the meetings held by the audit committee during the fiscal year ended December 31, 2021.
Compensation
Committee
Our
compensation committee consists of Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Branitzky serves as chairman of the compensation
committee.
The
compensation committee’s roles and responsibilities include making recommendations to the board of directors regarding the compensation
for our executives, the role and performance of our executive officers, and appropriate compensation levels for our CEO, which are determined
without the CEO present, and other executives. Our compensation committee also administers our 2017 Equity Incentive Plan and our 2017
Consultant Equity Incentive Plan. The compensation committee acts under a written charter, which more specifically sets forth its responsibilities
and duties, as well as requirements for the compensation committee’s composition and meetings. The compensation committee charter
is available on our website www.mysizeid.com.
Our
compensation committee is responsible for the executive compensation programs for our executive officers and reports to our board of
directors on its discussions, decisions and other actions. Our compensation committee reviews and approves corporate goals and objectives
relating to the compensation of our Chief Executive Officer, evaluates the performance of our Chief Executive Officer in light of those
goals and objectives and determines and approves the compensation of our Chief Executive Officer based on such evaluation. The Chief
Executive Officer may not participate in, or be present during, any deliberations or determinations of the compensation committee regarding
his compensation or individual performance objectives. Our compensation committee has the sole authority to determine our Chief Executive
Officer’s compensation. In addition, our compensation committee, in consultation with our Chief Executive Officer, reviews and
approves all compensation for other officers, including the directors. Our Chief Executive Officer and Chief Financial Officer also make
compensation recommendations for our other executive officers and initially propose the performance objectives to the compensation committee.
The
compensation committee is authorized to retain the services of one or more executive compensation and benefits consultants or other outside
experts or advisors as it sees fit, in connection with the establishment of our compensation programs and related policies. In August
2021, the compensation committee engaged Compvision Ltd. (“Compvision”) as an independent compensation consultant to assess
the market competitiveness of the Company’s stock-based incentive awards granted to our executive officers and employees and provide
the compensation committee with recommendations based on such assessment. At the compensation committee’s request, Compvision produced
and reviewed market data relating to long-term stock-based incentive awards, participated in certain compensation committee meetings
and prepared an assessment of and recommendations with respect to the long-term stock-based incentive awards granted to our executive
officers.
Our
board of directors has determined that all of the members of the compensation committee are “independent” as that term is
defined by the rules of the Nasdaq Stock Market.
The
compensation committee met on five occasions during the fiscal year ended December 31, 2021. Each of the members of the compensation
committee attended at least 75% of the meetings held by the compensation committee during the fiscal year ended December 31, 2021.
Nominating
and Governance Committee
The
members of the nominating and corporate governance committee are Oron Branitzky, Oren Elmaliah and Arik Kaufman. Mr. Kaufman serves as
chairman of the corporate governance and nominations committee. The nominating and corporate governance committee acts under a written
charter, which more specifically sets forth its responsibilities and duties, as well as requirements for the nominating and corporate
governance committee’s composition and meetings. The nominating and corporate governance committee charter is available on our
website www.mysizeid.com.
The
nominating and corporate governance committee develops, recommends and oversees implementation of corporate governance principles for
us and considers recommendations for director nominees. The nominating and corporate governance committee also considers stockholder
recommendations for director nominees that are properly received in accordance with applicable rules and regulations of the SEC. Our
stockholders that wish to nominate a director for election to the board of directors should follow the procedures set forth in our bylaws.
See “When are Stockholder Proposals Due for the 2023 Annual Meeting?”
The
nominating and corporate governance committee will consider persons identified by its members, management, stockholders, investment bankers
and others. The guidelines for selecting nominees, which are specified in the nominating committee charter, generally provide that persons
to be nominated:
|
● |
should
be accomplished in his or her field and have a reputation, both personal and professional, that is consistent with our image and
reputation; |
|
● |
should
have relevant experience and expertise and would be able to provide insights and practical wisdom based upon that experience and
expertise; and |
|
● |
should
be of high moral and ethical character and would be willing to apply sound, objective and independent business judgment, and to assume
broad fiduciary responsibility. |
The
nominating and corporate governance committee will consider a number of qualifications relating to management and leadership experience,
background and integrity and professionalism in evaluating a person’s candidacy for membership on the board of directors. The nominating
and corporate governance committee may require certain skills or attributes, such as financial or accounting experience, to meet specific
board needs that arise from time to time and will also consider the overall experience and makeup of its members to obtain a broad and
diverse mix of board of directors members. The nominating and corporate governance committee will not distinguish among nominees recommended
by stockholders and other persons.
Our
board of directors has determined that all of the members of the nominating and corporate governance committee are “independent”
as that term is defined by the rules of the Nasdaq Stock Market.
The
nominating and corporate governance committee met on two occasions during the fiscal year ended December 31, 2021. Each of the members
of the audit committee attended at least 75% of the meetings held by the audit committee during the fiscal year ended December 31, 2021.
Stockholder
Communications with the Board of Directors
Historically,
we have not provided a formal process related to stockholder communications with the board. Nevertheless, every effort has been made
to ensure that the views of stockholders are heard by the board or individual directors, as applicable, and that appropriate responses
are provided to stockholders in a timely manner. Stockholders or other interested parties may communicate with any director by writing
to them at My Size, Inc., 4 Hayarden St., P.O.B. 1026, Airport City, Israel, 7010000, Attention: Corporate Secretary.
Code
of Conduct and Ethics
We
have a Code of Business Conduct and Ethics that applies to all our employees. The text of the Code of Business Conduct and Ethics is
publicly available on our website at www.mysizeid.com. Information contained on, or that can be accessed through, our website does not
constitute a part of this report and is not incorporated by reference herein. Disclosure regarding any amendments to, or waivers from,
provisions of the code of conduct and ethics that apply to our directors, principal executive and financial officers will be posted on
the “Investors-Corporate Governance” section of our website at www.mysizeid.com or will be included in a Current Report on
Form 8-K, which we will file within four business days following the date of the amendment or waiver.
Board
Leadership Structure and Role in Risk Oversight
Although
we do not require separation of the offices of the Chairman of the Board and Chief Executive Officer, we have in the past had a different
person serving in each such role. The position of Chairman is currently vacant. The decision whether to combine or separate these positions
depends on what our board deems to be in the long term interest of stockholders in light of prevailing circumstances. The separation
of duties provides strong leadership for the board while allowing the Chief Executive Officer to be the leader of the Company, focusing
on its customers, employees, and operations. Our board of directors believes the Company is well-served by this flexible leadership structure
and that the combination or separation of these positions should continue to be considered on an ongoing basis.
Anti-hedging
Policy
Our
insider trading policy prohibits directors, officers and other employees or contractors from engaging in short sales, transactions in
put or call options, hedging transactions or other inherently speculative transactions with respect to our stock at any time.
Director
Compensation
The
following table sets forth compensation information for our non-employee directors for the year ended December 31, 2021.
Name | |
Fees
earned or paid in cash ($)(1) | | |
Option
awards ($)(1)(2) | | |
Total
($) | |
Oren
Elmaliah | |
| 18,000 | | |
| 0 | | |
| 18,000 | |
Oron
Barnitzky | |
| 18,000 | | |
| 0 | | |
| 18,000 | |
Arik
Kaufman | |
| 17,000 | | |
| 0 | | |
| 17,000 | |
Guy
Zimmerman | |
| 6,000 | | |
| 0 | | |
| 6,000 | |
(1) |
Fees
for the year 2021 are based on average US$/NIS representative exchange rates of NIS 3.11. |
|
|
(2) |
Amounts
in this column represent the grant date fair value of options granted to the non-employee directors during 2021 computed in accordance
with FASB ASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the non-employee
directors. The assumptions made in valuing the options reported in this column are discussed in Note 11 to our audited financial
statements for the year ended December 31, 2021. |
We
compensate our non-employee directors for their service as a member of our board. Mr. Luzon received no separate compensation for Board
service. Mr. Luzon’s compensation is set forth above in the Summary Compensation Table.
Each
non-employee director is entitled to receive a per meeting fee of $286. Non-employee directors are also reimbursed for their travel and
reasonable out-of-pocket expenses incurred in connection with attending Board and committee meetings, to the extent that attendance is
required by the Board or the committee(s) on which that director serves.
RECOMMENDATION
OF THE BOARD FOR PROPOSAL NO. 1:
THE
BOARD RECOMMENDS A VOTE FOR THE ELECTION OF THE TWO NOMINEES NAMED ABOVE UNTIL THE TERM OF SUCH DIRECTORS EXPIRES IN ACCORDANCE WITH
HIS CLASS, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth certain information regarding beneficial ownership of shares of our common stock as of October 24, 2022 by
(i) each person known to beneficially own more than 5% of our outstanding common stock, (ii) each of our directors, (iii) each of our
executive officers, and (iv) all of our directors and executive officers as a group. Except as otherwise indicated, the persons named
in the table below have sole voting and investment power with respect to all shares beneficially owned, subject to community property
laws, where applicable.
Beneficial
Owner(1) | |
Shares
of Common Stock Beneficially Owned | | |
Percentage(2) | |
More
than 5% Holders | |
| | | |
| | |
Whitehole,
S.L. | |
| 2,365,800 | | |
| 6.6 | % |
Executive
officers and directors: | |
| | | |
| | |
Ronen
Luzon | |
| 3,589,399 | (3) | |
| 9.9 | % |
Or
Kles | |
| 749,667 | (4) | |
| 2.0 | % |
Billy
Pardo | |
| 3,589,399 | (5) | |
| 9.9 | % |
Ezequiel
Javier Brandwain | |
| 300,000 | (6) | |
| * | |
Ilia
Turchinsky | |
| 458,671 | (7) | |
| 1.3 | % |
Arik
Kaufman | |
| 32,334 | (8) | |
| * | |
Oren
Elmaliah | |
| 32,334 | (9) | |
| * | |
Oron
Branitzky | |
| 32,334 | (10) | |
| * | |
Guy
Zimmerman | |
| - | | |
| - | |
All
Executive Officers and Directors as a Group (9 persons) | |
| 5,194,739 | | |
| 14.1 | % |
* |
Less
than 1% |
|
|
(1) |
The
address of each person is c/o My Size, Inc., 4 HaYarden St., P.O.B. 1026, Airport City, Israel 7010000 unless otherwise indicated herein. |
|
|
(2) |
The
calculation in this column is based upon 36,266,568 shares of common stock outstanding on October 24, 2022. Beneficial ownership
is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to the subject
securities. Shares of common stock that are currently exercisable or exercisable within 60 days of October 24, 2022 are deemed to
be beneficially owned by the person holding such securities for the purpose of computing the percentage beneficial ownership of such
person, but are not treated as outstanding for the purpose of computing the percentage beneficial ownership of any other person. |
|
|
(3) |
Consists
of (i) 2,500,000 shares of restricted stock granted under the 2017 Plan, (ii) 117,064 shares of common stock, (iii) options to purchase
up to 210,001 shares of our common stock, and (iv) 600,000 shares of restricted stock and options to purchase up to 162,334 shares
of our common stock which are held by Billy Pardo, Ronen Luzon’s spouse. Mr. Luzon may be deemed to beneficially hold the securities
of us held by Ms. Pardo. |
|
|
(4) |
Consists
of (i) 600,000 shares of restricted stock granted under the 2017 Plan, and (ii) an option to purchase 149,667 shares of our common
stock. Does not include an aggregate of 2,994,000 shares of restricted stock over which Mr. Kles has been designated the initial
proxy to vote such shares pursuant to a voting agreement entered into between Whitehole S.L., Twinbel S.L. and EGI Acceleration,
S.L. |
|
|
(5) |
Consists
of (i) 600,000 shares of restricted stock granted under the 2017 Plan, (ii) options to purchase up to 162,334 shares of our common
stock, (iii) 2,500,000 shares of restricted stock which are held by Ronen Luzon, Billy Pardo’s spouse (iii) 117,064 shares
of common stock which are held by Mr. Luzon, and (iii) options to purchase up to 210,001 shares of our common stock which are held
by Mr. Luzon. Ms. Pardo may be deemed to beneficially hold the securities of the Company held by Mr. Luzon. |
|
|
(6) |
Consists
of 300,000 shares of restricted stock granted under the 2017 Plan. |
|
|
(7) |
Consists
of (i) 400,000 shares of restricted stock granted under the 2017 Plan, and (ii) options to purchase up to 58,671 shares of our common
stock. |
|
|
(8) |
Consists
of options to purchase up to 32,334 shares of our common stock. |
|
|
(9) |
Consists
of options to purchase up to 32,334 shares of our common stock. |
|
|
(10) |
Consists
of options to purchase up to 32,334 shares of our common stock. |
EXECUTIVE
COMPENSATION AND OTHER INFORMATION
The
following table sets forth certain information about our executive officers:
Name |
|
Age |
|
Position |
Ronen
Luzon |
|
52 |
|
Chief
Executive Officer and Director |
Or
Kles |
|
39 |
|
Chief
Financial Officer |
Billy
Pardo |
|
47 |
|
Chief
Operating Officer and Chief Product Officer |
Ilia
Turchinsky |
|
35 |
|
Chief
Technology Officer |
Ezequiel
Javier Brandwain |
|
53 |
|
Chief
Commercial Officer |
Ronen
Luzon — Founder, Director & Chief Executive Officer
Mr.
Luzon’s biography is listed under Proposal 1—Election of Directors.
Or
Kles — Chief Financial Officer
Or
Kles has served as our Chief Financial Officer since May 2016. He is a certified public accountant with a broad, diverse financial background.
From May 2013 until April 2016 he served as Assistant Controller of Shikun and Binui-Solel Boneh Infrastructure Ltd. and from December
2010 until May 2013 he served as an Associate at KPMG. Mr. Kles holds an MBA and a B.A. in Business Management and Accounting (specializing
in financing) from The College of Management Academic Studies. Mr. Kles is a certified public accountant in Israel.
Billy
Pardo — Chief Operating Officer and Chief Product Officer
Billy
Pardo has served as our Chief Product Officer since May 2014 and Chief Operating Officer since April 2019. From April 2010 until August
2013, Ms. Pardo served as Senior Director of Product Management of Fourier Education. Among her areas of expertise are launching products
from concept to successful delivery in various methodologies, including Fourier Education’s award-winning einstein™ Science
Tablet. Prior to that Ms. Pardo served in various product management positions including, Project Manager of Time to Know, Product Marketing
Manager of RiT Technologies, Product Manager of Pricer AB and R&D Team Leader at Pricer AB. Ms. Pardo previously served as Software
Engineer at Eldat Communication Ltd., and QA Engineer at NICE Systems. Ms. Pardo received an MBA from The Interdisciplinary Center and
a B.A. in Computer Science from The Academic College of Tel-Aviv-Yaffo.
Ilia
(Eli) Turchinsky — Chief Technology Officer
Ilia
Turchinsky has served as our Chief Technology Officer since April 2019 and from July 2018 until April 2019 as our Director of Technology.
Prior to joining us, from 2013 until 2018, Mr. Turchinsky served in various roles, most recently Chief Technology Officer, at MonkeyTech
Ltd., a company that provides design, development and characterization of mobile applications. Prior to that, Mr. Turchinsky served in
various roles including development course instructor at IQLine, was a founder of Arnavsoft and was a software developer for MintLab
and a political party. Mr. Turchinsky holds a B.Sc. from the Ben Gurion University in Computer Science and an M.Sc. from the Open University
of Israel in Computer Science.
Ezequiel
Javier Brandwain — Chief Commercial Officer
Ezequiel
Javier Brandwain has served as our Chief Commercial Officer since February 2022. Mr. Brandwain brings more than two decades of global
experience in retail and the fashion industry, mainly in business development, operations, and international markets. Before joining
the Company, Mr. Brandwain held positions of increasing responsibility at several companies, including between June 2017 and November
2020, at 7 For All Mankind International, where he served as Director, Latin America and Caribbean, managing business development and
operations across Latin America and the Caribbean. Before that, between May 2016 and June 2017, Mr. Brandwain served as Chief Business
Development Officer at Replay – Fashion Box SPA, where he oversaw business development and operations, expansion and control in
the Americas, the Caribbean, and North-East Asia. Prior this role, between September 2015 and May 2016, he served as the Replay’s
Managing Director in Latin America and the Caribbean, leading the company’s international expansion in these regions. Prior to
that, between April 2015 and September 2015, Mr. Brandwain served as Managing Director, Latin America and Caribbean at Authentic Brands
Group LLC, where he led that company’s operations, business developments and international expansion within these regions, and
served as the direct liaison with the company’s headquarters in New York. Prior to that, between April 2015 and September 2015,
Mr. Brandwain served as Chief Operating Officer, Latin America and Caribbean at Flemingo International Ltd., overseeing operations, as
well as projected operations in the travel retail field across these regions. Prior to that, between December 2010 and February 2014,
Mr. Brandwain served as Regional Director, Southern Hemisphere at Calvin Klein, where he was responsible for defining and implementing
the operational and commercial strategy for Southern Hemisphere, as well as overseeing the retail, travel retail, concession, and wholesale
businesses of the company. During his tenure at Calvin Klein, Mr. Brandwain also served as Travel Retail Director, Latin America, where
he built the travel retail business and developed operations. Prior to that, between July 2010 and November 2010, Mr. Brandwain served
as Business Director, Latin America and Caribbean at Givenchy Latin America, and between January 2010 and June 2010 he served as Commercial
Director, Latin America and Caribbean at Nautica Latin America. During December 2004 and December 2009, Mr. Brandwain served as Vice
President, International Business Development at Report Collection/Modextil, Inc., where he was in charge of business and operational
expansion, global growth, and brand extensions. Prior to that, between 2003 and October 2004, Mr. Brandwain served as General Manager
at Andrew Koenig International, Inc. Between September 2019 and November 2020, Mr. Brandwain served as a member of the Board of Directors
of 7 For All Mankind Brazil Importacao, Comercio E Distribuicao S.A. Mr. Brandwain earned a Bachelor degree in architecture from the
University of the Republic (Uruguay).
Summary
Compensation Table
The
following sets forth the compensation paid by us to our named executive officers, during the years ended December 31, 2021 and December
31, 2020.
Name
and Principal Position | |
Year | | |
Salary
($) (1) | | |
Bonus
($) | | |
Stock
Awards ($) | | |
Option
Awards ($) (2) | | |
All
Other Compensation ($) | | |
Total
($) | |
Ronen
Luzon | |
| 2021 | | |
| 194,000 | | |
| 5,000 | | |
| - | | |
| 23,000 | | |
| 97,000 | | |
| 319,000 | |
Chief
Executive Officer | |
| 2020 | | |
| 174,000 | | |
| - | | |
| - | | |
| 150,000 | | |
| 99,000 | | |
| 423,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Or
Kles | |
| 2021 | | |
| 123,000 | | |
| 8,000 | | |
| - | | |
| 30,000 | | |
| 61,000 | | |
| 222,000 | |
Chief
Financial Officer | |
| 2020 | | |
| 105,000 | | |
| - | | |
| - | | |
| 97,000 | | |
| 57,000 | | |
| 259,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Billy
Pardo | |
| 2021 | | |
| 162,000 | | |
| 7,000 | | |
| - | | |
| 18,000 | | |
| 74,000 | | |
| 261,000 | |
Chief
Operating Officer | |
| 2020 | | |
| 140,000 | | |
| - | | |
| - | | |
| 102,000 | | |
| 68,000 | | |
| 310,000 | |
(1) |
Salary
for the years 2021 and 2020 are based on average US$/NIS representative exchange rates of NIS 3.11 and NIS 3.215 respectively. |
|
|
(2) |
Amounts
in this column represent the grant date fair value of options granted to the named executive officers during 2021 and 2020, computed
in accordance with FASB ASC Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the
named executive officers. The assumptions made in valuing the options reported in this column are discussed in Note 11 to our audited
financial statements for the year ended December 31, 2021. |
All
Other Compensation Table
The
“All Other Compensation” amounts set forth in the Summary Compensation Table above consist of the following:
Name | |
Year | | |
Automobile-
Related Expenses ($) | | |
Manager’s
Insurance* ($) | | |
Education
Fund* ($) | | |
Other
social benefits** ($) | | |
Total
($) | |
Ronen
Luzon | |
| 2021 | | |
| 33,000 | | |
| 33,000 | | |
| 15,000 | | |
| 16,000 | | |
| 97,000 | |
| |
| 2020 | | |
| 31,000 | | |
| 32,000 | | |
| 13,000 | | |
| 23,000 | | |
| 99,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Or
Kles | |
| 2021 | | |
| 14,000 | | |
| 19,000 | | |
| 9,000 | | |
| 19,000 | | |
| 61,000 | |
| |
| 2020 | | |
| 14,000 | | |
| 16,000 | | |
| 8,000 | | |
| 19,000 | | |
| 57,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Billy
Pardo | |
| 2021 | | |
| 17,000 | | |
| 24,000 | | |
| 12,000 | | |
| 21,000 | | |
| 74,000 | |
| |
| 2020 | | |
| 16,000 | | |
| 21,000 | | |
| 10,000 | | |
| 21,000 | | |
| 68,000 | |
* |
Manager’s
insurance and education funds are customary benefits provided to employees based in Israel. Manager’s insurance is a combination
of severance savings (in accordance with Israeli law), defined contribution tax-qualified pension savings and disability insurance
premiums. An education fund is a savings fund of pre-tax contributions to be used after a specified period of time for educational
or other permitted purposes. |
|
|
** |
Other
social benefits for 2021 and 2020 for all named individuals includes tax payments in respect of social benefits. |
Agreements
with Named Executive Officers
Ronen
Luzon
On
November 18, 2018, My Size Israel, our wholly owned subsidiary, entered into an employment agreement with Ronen Luzon, or the Luzon Employment
Agreement, pursuant to which Mr. Luzon will serve as our Chief Executive Officer. Pursuant to the terms of the Luzon Employment Agreement,
Mr. Luzon shall receive NIS 50,000 per month as his base salary and shall be eligible to receive such bonus as determined by us. In addition,
Mr. Luzon shall be entitled social benefits and to other benefits, including, but not limited to, contributions towards an education
fund, pension scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annual vacation days,
sick leave and expense reimbursement. Pursuant to the terms of the Luzon Employment Agreement and subject to certain conditions, payments
made by the Company to the pension fund or manager’s insurance fund shall be made in lieu of severance payments due to Mr. Luzon.
The term of the Luzon Employment Agreement shall be effective as of September 1, 2018 and shall continue until such time either party
provides written notice to the other party at least 75 days in advance of the termination of such agreement. We may also terminate Mr.
Luzon’s employment without prior written notice (or payment in lieu of such notice) for Cause (as defined in the Luzon Employment
Agreement).
Or
Kles
On
November 18, 2018, My Size Israel entered into an employment agreement with Or Kles, or the Kles Employment Agreement, pursuant to which
Mr. Kles will serve as our Chief Financial Officer. Pursuant to the terms of the Kles Employment Agreement, Mr. Kles shall receive NIS
30,000 per month as his base salary and shall be eligible to receive such bonus as determined by us. In addition, Mr. Kles shall be entitled
to social benefits and other benefits, including, but not limited to, contributions towards an education fund, pension scheme, manager’s
insurance, insurance coverage, including insurance in case of disability, annual vacation days, sick leave and expense reimbursement.
Pursuant to the terms of the Kles Employment Agreement and subject to certain conditions, payments made by us to the pension fund or
the manager’s insurance fund shall be made in lieu of severance payments due to Mr. Kles. The term of the Kles Employment Agreement
shall be effective as of September 1, 2018 and shall continue until such time either party provides written notice to the other party
at least 75 days in advance of the termination of such agreement. We may also terminate Mr. Kles’s employment without prior written
notice (or payment in lieu of such notice) for Cause (as defined in the Kles Employment Agreement).
Billy
Pardo
On
November 18, 2018, My Size Israel entered into an employment agreement with Billy Pardo, or the Pardo Employment Agreement, pursuant
to which Ms. Pardo will serve as our Chief Product Officer. Pursuant to the terms of the Pardo Employment Agreement, Ms. Pardo shall
receive NIS 40,000 per month as her base salary and shall be eligible to receive such bonus as determined by us. In addition, Ms. Pardo
shall be entitled to social benefits and other benefits, including, but not limited to, contributions towards an education fund, pension
scheme, manager’s insurance, insurance coverage, including insurance in case of disability, annual vacation days, sick leave and
expense reimbursement. Pursuant to the terms of the Pardo Employment Agreement and subject to certain conditions, payments made by us
to the pension fund or the manager’s insurance fund shall be made in lieu of severance payments due to Ms. Pardo. The term of the
Pardo Employment Agreement shall be effective as of September 1, 2018 and shall continue until such time either party provides written
notice to the other party at least 75 days in advance of the termination of such agreement. We may also terminate Ms. Pardo’s employment
without prior written notice (or payment in lieu of such notice) for Cause (as defined in the Pardo Employment Agreement).
Outstanding
Equity Awards at Fiscal Year-End
The
following table provides information regarding options held by each of our named executive officers that were outstanding as of December
31, 2021.
| |
Option
Awards | | |
| |
Stock
Awards | |
Name
and Principal Position | |
Number
of Securities Underlying Unexercised Options Exercisable | | |
Number
of Securities Underlying Unexercised Options Unexercisable | | |
Option
Exercise Price | | |
Option
Expiration Date | |
Equity
incentive plan awards: Number of Unearned Shares that Have Not Vested | | |
Equity
incentive plan awards: Market Value of Unearned Shares, That Have Not Vested | |
Ronen
Luzon - Chief Executive Officer | |
| 10,000 | (1) | |
| - | | |
$ | 1.04 | (8) | |
7/24/2023 | |
| - | | |
| - | |
| |
| 28,889 | (2) | |
| 11,111 | | |
$ | 1.04 | (8) | |
5/29/2025 | |
| - | | |
| - | |
| |
| 160,000 | (3) | |
| 120,000 | | |
$ | 1.04 | | |
8/10/2025 | |
| - | | |
| - | |
Or
Kles – Chief Financial Officer | |
| 5,667 | (4) | |
| - | | |
$ | 1.04 | (8) | |
7/24/2023 | |
| - | | |
| - | |
| |
| 7,333 | (5) | |
| 6,667 | | |
$ | 1.04 | (8) | |
5/29/2025 | |
| - | | |
| - | |
| |
| 130,000 | (6) | |
| 97,500 | | |
$ | 1.04 | | |
8/10/2025 | |
| - | | |
| - | |
Billy
Pardo- Chief Operating Officer | |
| 10,000 | (1) | |
| - | | |
$ | 1.04 | (8) | |
7/24/2023 | |
| - | | |
| - | |
| |
| 16,667 | (7) | |
| 5,667 | | |
$ | 1.04 | (8) | |
5/29/2025 | |
| - | | |
| - | |
| |
| 130,000 | (6) | |
| 97,500 | | |
$ | 1.04 | | |
8/10/2025 | |
| - | | |
| - | |
(1) |
The
option has a grant date of July 24, 2017 and vested in full on January 24, 2018. |
|
|
(2) |
The
option has a grant date of May 29, 2019. 6,667 options vested immediately upon grant, 11,111 options vested on January 24, 2019,
11,111 options vested on January 24, 2020 and 11,111 options vested on January 24, 2021. |
|
|
(3) |
The
option has a grant date of October 8, 2020, 40,000 options vested on November 26, 2020, 40,000 options will vest on May 26, 2021,
40,000 options will vest on November 26, 2021, and 40,000 options will vest on May 26, 2022. |
|
|
(4) |
The
option has a grant date of July 24, 2017. 1,889 options vested immediately upon grant, 1,889 options vested on May 1, 2018 and 1,889
options vested on May 1, 2019. |
|
|
(5) |
The
option has a grant date of May 29, 2019. 4,000 options vested immediately upon grant, 3,333 options vested on May 1, 2020, 3,333
options will vest on May 21, 2021 and 3,334 options will vest on May 1, 2022. |
|
|
(6) |
The
option has a grant date of October 8, 2020, 37,500 options vested on November 26, 2020, 37,500 options will vest on May 26, 2021,
37,500 options will vest on November 26, 2021, and 37,500 options will vest on May 26, 2022. |
|
|
(7) |
The
option has a grant date of May 29, 2019. 5,334 options vested immediately upon grant, 5,666 options vested on January 24, 2019, 5,667
options vested on January 24, 2020 and 5,667 options will vest on January 24, 2021. |
|
|
(8) |
On
May 25, 2020, the compensation committee of the Board of Directors of the Company reduced the exercise price of outstanding options
of employees and directors of the Company for the purchase of an aggregate of 140,237 shares of common stock of the Company (with
exercise prices ranging between $18.15 and $9.15) to $1.04 per share, which was the closing price for the Company’s common
stock on May 22, 2020, and extended the term of the foregoing options for an additional one year from the original date of expiration. |
PROPOSAL
NO. 2
GRANT
OF AUTHORITY FOR A REVERSE SPLIT OF
THE COMPANY’S COMMON STOCK
Our
board deems it advisable and in the best interest of the Company that the board be granted the discretionary authority to amend the Company’s
Certificate of Incorporation to effect the Reverse Stock Split of the Company’s issued and outstanding common stock as described
below (the “Reverse Stock Split Amendment”).
The
form of Reverse Stock Split Amendment to be filed with the Delaware Secretary of State is set forth in Appendix A (subject
to any changes required by applicable, the Company may file one or more amendments with the Delaware Secretary of State to effect multiple
approved proposals).
Approval
of the proposal would permit (but not require) our board of directors to effect one or more reverse stock splits of our issued and outstanding
common stock by a ratio of not less than 1-for-10 and not more than 1-for-30, with the exact ratio to be set at a number within this
range as determined by our board of directors in its sole discretion, provided that the board of directors determines to effect the Reverse
Stock Split and such amendment is filed with the appropriate authorities in the State of Delaware no later than December 7, 2023. The
Company shall not effect Reverse Stock Splits that, in the aggregate, exceeds 1-for-30. We believe that enabling our board of directors
to set the ratio within the stated range will provide us with the flexibility to implement the Reverse Stock Split in a manner designed
to maximize the anticipated benefits for our stockholders. In determining a ratio, if any, our board of directors may consider, among
other things, factors such as:
|
● |
the
initial or continuing listing requirements of various stock exchanges, including the Nasdaq Capital Market; |
|
● |
the
historical trading price and trading volume of our common stock; |
|
● |
the
number of shares of our common stock outstanding; |
|
● |
the
then-prevailing trading price and trading volume of our common stock and the anticipated impact of the Reverse Stock Split on the
trading market for our common stock; |
|
● |
the
anticipated impact of a particular ratio on our ability to reduce administrative and transactional costs; and |
|
● |
prevailing
general market and economic conditions. |
Our
board of directors reserves the right to elect to abandon the Reverse Stock Split, including any or all proposed reverse stock split
ratios, if it determines, in its sole discretion, that the Reverse Stock Split is no longer in the best interests of the Company and
its stockholders.
Depending
on the ratio for the Reverse Stock Split determined by our board of directors, no less than 10 and no more than 30 shares
of existing common stock, as determined by our board of directors, will be combined into one share of common stock. The Company shall
not effect Reverse Stock Splits that, in the aggregate, exceeds 1-for 30. Our board of directors will have the discretionary authority
to determine whether to arrange for the disposition of fractional interests by holder entitled thereto, to pay in cash the fair value
of fractions of a share as of the time when those entitled to receive such fractions are determined, or to entitle holders to receive
from the Company transfer agent, in lieu of any fractional share, the number of shares rounded up to the next whole number. The amendment
to our Certificate of Incorporation to effect a Reverse Stock Split, if any, will include only the reverse split ratio determined by
our board of directors to be in the best interests of our stockholders and all of the other proposed amendments at different ratios will
be abandoned.
Reasons
for the Reverse Stock Split; Potential Consequences of the Reverse Stock Split
Our
primary reasons for approving and recommending the Reverse Stock Split are to increase the per share price and bid price of our common
stock to regain compliance with the continued listing requirements of Nasdaq and make the common stock more attractive to certain institutional
investors, which would provide for a stronger investor base.
On
January 3, 2022, we were notified by the Nasdaq Listing Qualifications that we are not in compliance with the minimum bid price requirements
set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market. The notification provided that we had
180 calendar days, or until July 5, 2022, to regain compliance with the minimum bid price rule. We did not regain compliance with the
minimum bid price rule during the first 180 calendar day compliance period and submitted a written request to the Nasdaq to afford us
an additional 180-day compliance period to cure the deficiency. On July 6, 2022, we were notified by Nasdaq that we were afforded an
additional 180-day compliance period, or until January 2, 2023 to regain compliance. If at any time before January 2, 2023, the bid price
of our common stock is at least $1.00 per share for a minimum of 10 consecutive business days, Nasdaq is expected to provide written
confirmation of compliance to us and the listing compliance matter will be closed. If we fail to regain compliance during the second
compliance period, then Nasdaq will notify us of its determination to delist our common stock, at which point we will have an opportunity
to appeal the delisting determination to a Hearings Panel.
Reducing
the number of outstanding shares of common stock should, absent other factors, generally increase the per share market price of the common
stock. Although the intent of the Reverse Stock Split is to increase the price of the common stock, there can be no assurance, however,
that even if the Reverse Stock Split is effected, that the bid price of our common stock will be sufficient for us to maintain compliance
with the Nasdaq minimum bid price requirement in the event that our common stock does not, in the future, comply with the minimum bid
price requirement.
In
addition, we believe the Reverse Stock Split will make our common stock more attractive to a broader range of investors, as we believe
that the current market price of our common stock may prevent certain institutional investors, professional investors and other members
of the investing public from purchasing stock. Many brokerage houses and institutional investors have internal policies and practices
that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers from recommending low-priced stocks
to their customers. Furthermore, some of those policies and practices may function to make the processing of trades in low-priced stocks
economically unattractive to brokers. Moreover, because brokers’ commissions on low-priced stocks generally represent a higher
percentage of the stock price than commissions on higher-priced stocks, the current average price per share of common stock can result
in individual stockholders paying transaction costs representing a higher percentage of their total share value than would be the case
if the share price were higher. We believe that the Reverse Stock Split will make our common stock a more attractive and cost effective
investment for many investors, which in turn would enhance the liquidity of the holders of common stock.
Reducing
the number of outstanding shares of our common stock through the Reverse Stock Split is intended, absent other factors, to increase the
per share market price of our common stock. However, other factors, such as our financial results, market conditions and the market perception
of our business may adversely affect the market price of our common stock. As a result, there can be no assurance that the Reverse Stock
Split, if completed, will result in the intended benefits described above, that the market price of our common stock will increase following
the Reverse Stock Split, that as a result of the Reverse Stock Split we will be able to meet or maintain a bid price over the minimum
bid price requirement of Nasdaq or that the market price of our common stock will not decrease in the future. Additionally, we cannot
assure you that the market price per share of our common stock after the Reverse Stock Split will increase in proportion to the reduction
in the number of shares of our common stock outstanding before the Reverse Stock Split. Accordingly, the total market capitalization
of our common stock after the Reverse Stock Split may be lower than the total market capitalization before the Reverse Stock Split.
Procedure
for Implementing the Reverse Stock Split
The
Reverse Stock Split will become effective upon the filing or such later time as specified in the filing (the “Effective Time”)
of the Reverse Stock Split Amendment with the Delaware Secretary of State. The form of the Reverse Stock Split Amendment is attached
hereto as Appendix A. The exact timing of the filing of the Reverse Stock Split Amendment and the ratio of the Reverse
Stock Split (within the approved range) will be determined by our board of directors based on its evaluation as to when such action and
at what ratio will be the most advantageous to the Company and our stockholders. In addition, our board of directors reserves the right,
notwithstanding stockholder approval and without further action by the stockholders, to elect not to proceed with the Reverse Stock Split
if, at any time prior to filing the Reverse Stock Split Amendment, our board of directors, in its sole discretion, determines that it
is no longer in our best interest and the best interests of our stockholders to proceed with the Reverse Stock Split. If the Reverse
Stock Split Amendment has not been filed with the Delaware Secretary of State by December 7, 2023, our board of directors will abandon
the Reverse Stock Split.
Effect
of the Reverse Stock Split on Holders of Outstanding Common Stock
Depending
on the ratio for the Reverse Stock Split determined by our board of directors, a minimum of 10 and a maximum of 30 shares in aggregate
of existing common stock will be combined into one new share of common stock. Based on 36,126,284 shares of common stock issued and outstanding
as of the Record Date, immediately following the reverse split the Company would have approximately 3,612,628 shares of common stock
issued and outstanding (without giving effect to rounding for fractional shares) if the ratio for the reverse split is 1-for-10, approximately
1,806,314 shares of common stock issued and outstanding (without giving effect to rounding for fractional shares) if the ratio for the
reverse split is 1-for-20, and approximately 1,204,209 shares of common stock issued and outstanding (without giving effect to rounding
for fractional shares) if the ratio for the reverse split is 1-for-30, which is the aggregate ratio allowed under this proposal. Any
other ratios selected within such range would result in a number of shares of common stock issued and outstanding following the transaction
between 1,204,209 and 3,612,628 shares. The foregoing does not give effect to (i) 1,045,277 shares of common stock issuable upon exercise
of outstanding options as of the Record Date and (ii) 7,199,103 shares of common stock issuable upon exercise of outstanding warrants
as of the Record Date.
The
actual number of shares issued after giving effect to the Reverse Stock Split, if implemented, will depend on the Reverse Stock Split
ratio and the number of Reverse Stock Splits, if any, that are ultimately determined by our board of directors.
The
Reverse Stock Split will affect all holders of our common stock uniformly and will not affect any stockholder’s percentage ownership
interest in the Company, except that as described below in “— Fractional Shares,” record holders of common stock otherwise
entitled to a fractional share as a result of the Reverse Stock Split will be rounded up to the next whole number. In addition, the Reverse
Stock Split will not affect any stockholder’s proportionate voting power (subject to the treatment of fractional shares).
The
Reverse Stock Split may result in some stockholders owning “odd lots” of less than 100 shares of common stock. Odd lot shares
may be more difficult to sell, and brokerage commissions and other costs of transactions in odd lots are generally somewhat higher than
the costs of transactions in “round lots” of even multiples of 100 shares.
After
the Effective Time, our common stock will have a new Committee on Uniform Securities Identification Procedures (“CUSIP”)
number, which is a number used to identify our common stock, and stock certificates with the older CUSIP numbers will need to be exchanged
for stock certificates with the new CUSIP number by following the procedures described below. After the Effective Time, we will continue
to be subject to the periodic reporting and other requirements of the Securities Exchange Act of 1934 and our common stock will continue
to be quoted on the Nasdaq Capital Market under the symbol “MYSZ”. The Reverse Stock Split is not intended as, and will not
have the effect of, a “going private transaction” as described by Rule 13e-3 under the Exchange Act.
After
the Effective Time of the Reverse Stock Split, the post-split market price of our common stock may be less than the pre-split price multiplied
by the Reverse Stock Split ratio. In addition, a reduction in number of shares outstanding may impair the liquidity for our common stock,
which may reduce the value of our common stock.
Authorized
Shares of Common Stock
The
Reverse Stock Split will not change the number of authorized shares of the Company’s common stock under the Company’s Certificate
of Incorporation. Because the number of issued and outstanding shares of common stock will decrease, the number of shares of common stock
remaining available for issuance will increase. Currently, under our Certificate of Incorporation, our authorized capital stock consists
of 250,000,000 shares of common stock.
Subject
to limitations imposed by Nasdaq, the additional shares available for issuance may be issued without stockholder approval at any time,
in the sole discretion of our board of directors. The authorized and unissued shares may be issued for cash, for acquisitions or for
any other purpose that is deemed in the best interests of the Company.
By
increasing the number of authorized but unissued shares of common stock, the Reverse Stock Split could, under certain circumstances,
have an anti-takeover effect, although this is not the intent of the board of directors. For example, it may be possible for the board
of directors to delay or impede a takeover or transfer of control of the Company by causing such additional authorized but unissued shares
to be issued to holders who might side with the board of directors in opposing a takeover bid that the board of directors determines
is not in the best interests of the Company or its stockholders. The Reverse Stock Split therefore may have the effect of discouraging
unsolicited takeover attempts. By potentially discouraging initiation of any such unsolicited takeover attempts the Reverse Stock Split
may limit the opportunity for the Company’s stockholders to dispose of their shares at the higher price generally available in
takeover attempts or that may be available under a merger proposal. The Reverse Stock Split may have the effect of permitting the Company’s
current management, including the current board of directors, to retain its position, and place it in a better position to resist changes
that stockholders may wish to make if they are dissatisfied with the conduct of the Company’s business. However, the board of directors
is not aware of any attempt to take control of the Company and the board of directors has not approved the Reverse Stock Split with the
intent that it be utilized as a type of anti-takeover device.
Beneficial
Holders of Common Stock (i.e. stockholders who hold in street name)
Upon
the implementation of the Reverse Stock Split, we intend to treat shares held by stockholders through a bank, broker, custodian or other
nominee in the same manner as registered stockholders whose shares are registered in their names. Banks, brokers, custodians or other
nominees will be instructed to effect the Reverse Stock Split for their beneficial holders holding our common stock in street name. However,
these banks, brokers, custodians or other nominees may have different procedures than registered stockholders for processing the Reverse
Stock Split. Stockholders who hold shares of our common stock with a bank, broker, custodian or other nominee and who have any questions
in this regard are encouraged to contact their banks, brokers, custodians or other nominees.
Registered
“Book-Entry” Holders of Common Stock (i.e. stockholders that are registered on the transfer agent’s books and records
but do not hold stock certificates)
Certain
of our registered holders of common stock may hold some or all of their shares electronically in book-entry form with the transfer agent.
These stockholders do not have stock certificates evidencing their ownership of the common stock. They are, however, provided with a
statement reflecting the number of shares registered in their accounts.
Stockholders
who hold shares electronically in book-entry form with the transfer agent will not need to take action (the exchange will be automatic)
to receive whole shares of post-Reverse Stock Split common stock, subject to adjustment for treatment of fractional shares.
Holders
of Certificated Shares of Common Stock
Stockholders
holding shares of our common stock in certificated form will be sent a transmittal letter by our transfer agent after the Effective Time.
The letter of transmittal will contain instructions on how a stockholder should surrender his, her or its certificate(s) representing
shares of our common stock (the “Old Certificates”) to the transfer agent in exchange for certificates representing the appropriate
number of whole shares of post-Reverse Stock Split common stock (the “New Certificates”). No New Certificates will be issued
to a stockholder until such stockholder has surrendered all Old Certificates, together with a properly completed and executed letter
of transmittal, to the transfer agent. No stockholder will be required to pay a transfer or other fee to exchange his, her or its Old
Certificates. Stockholders will then receive a New Certificate(s) representing the number of whole shares of common stock that they are
entitled as a result of the Reverse Stock Split, subject to the treatment of fractional shares described below. Until surrendered, we
will deem outstanding Old Certificates held by stockholders to be cancelled and only to represent the number of whole shares of post-Reverse
Stock Split common stock to which these stockholders are entitled, subject to the treatment of fractional shares. Any Old Certificates
submitted for exchange, whether because of a sale, transfer or other disposition of stock, will automatically be exchanged for New Certificates.
If an Old Certificate has a restrictive legend on the back of the Old Certificate(s), the New Certificate will be issued with the same
restrictive legends that are on the back of the Old Certificate(s).
The
Company expects that our transfer agent will act as an exchange agent for purposes of implementing the exchange of stock certificates.
No service charges will be payable by holders of shares of common stock in connection with the exchange of certificates. All of such
expenses will be borne by the Company.
STOCKHOLDERS
SHOULD NOT DESTROY ANY STOCK CERTIFICATE(S) AND SHOULD NOT SUBMIT ANY STOCK CERTIFICATE(S) UNTIL REQUESTED TO DO SO.
Fractional
Shares
The
board of directors will have the discretionary authority to determine whether to arrange for the disposition of fractional interests
by stockholders entitled thereto, to pay in cash the fair value of fractions of a share as of the time when those entitled to receive
such fractions are determined, or to entitle stockholders to receive from the Company’s transfer agent, in lieu of any fractional
share, the number of shares rounded up to the next whole number.
If
the board of directors determines to arrange for the disposition of fractional interests by stockholders entitled thereto or to pay in
cash the fair value of fractions of a share as of the time when those entitled to receive such fractions are determined, stockholders
who would otherwise hold fractional shares because the number of shares of common stock they hold before the Reverse Stock Split is not
evenly divisible by the ratio ultimately selected by the board of directors will be entitled to receive cash (without interest or deduction)
in lieu of such fractional shares from either: (i) the Company, upon receipt by the transfer agent of a properly completed and duly executed
transmittal letter and, where shares are held in certificated form, upon due surrender of any certificate previously representing a fractional
share, in an amount equal to such holder’s fractional share based upon the closing sale price of the common stock on the trading
day immediately prior to the Effective Time as reported on the Nasdaq Capital Market, or other principal market of the common stock,
as applicable, as of the date the Reverse Stock Split is effected; or (ii) the transfer agent, upon receipt by the transfer agent of
a properly completed and duly executed transmittal letter and, where shares are held in certificated form, the surrender of all old certificate(s),
in an amount equal to the proceeds attributable to the sale of such fractional shares following the aggregation and sale by the transfer
agent of all fractional shares otherwise issuable. If the board of directors determines to dispose of fractional interests pursuant to
clause (ii) above, the Company expects that the transfer agent would conduct the sale in an orderly fashion at a reasonable pace and
that it may take several days to sell all of the aggregated fractional shares of common stock. In this event, such holders would be entitled
to an amount equal to their pro rata share of the proceeds of such sale. The Company will be responsible for any brokerage fees or commissions
related to the transfer agent’s open market sales of shares that would otherwise be fractional shares.
The
ownership of a fractional share interest following the Reverse Stock Split will not give the holder any voting, dividend or other rights,
except to receive the cash payment, or, if the so determines, to receive the number of shares rounded up to the next whole number, as
described above.
Stockholders
should be aware that, under the escheat laws of various jurisdictions, sums due for fractional interests that are not timely claimed
after the effective time of the Reverse Stock Split may be required to be paid to the designated agent for each such jurisdiction, unless
correspondence has been received by the Company or the transfer agent concerning ownership of such funds within the time permitted in
such jurisdiction. Thereafter, if applicable, stockholders otherwise entitled to receive such funds, but who do not receive them due
to, for example, their failure to timely comply with the transfer agent’s instructions, will have to seek to obtain such funds
directly from the state to which they were paid.
Effect
of the Reverse Stock Split on Employee and Consultant Plans, Options, Warrants, and Convertible or Exchangeable Securities
Based
upon the Reverse Stock Split ratio determined by the board of directors, proportionate adjustments are generally required to be made
to the per share exercise price and the number of shares issuable upon the exercise or conversion of all outstanding options, warrants,
convertible or exchangeable securities entitling the holders to purchase, exchange for, or convert into, shares of common stock. This
would result in approximately the same aggregate price being required to be paid under such options, warrants, convertible or exchangeable
securities upon exercise, and approximately the same value of shares of common stock being delivered upon such exercise, exchange or
conversion, immediately following the Reverse Stock Split as was the case immediately preceding the Reverse Stock Split. The number of
shares reserved for issuance pursuant to these securities will be proportionately based upon the Reverse Stock Split determined by the
board of directors, subject to our treatment of fractional shares.
Accounting
Matters
The
Reverse Stock Split Amendment will not affect the par value of our common stock per share, which will remain $0.001 par value per share.
As a result, as of the Effective Time, the stated capital attributable to common stock and the additional paid-in capital account on
our balance sheet, on aggregate, will not change due to the Reverse Stock Split. Reported per share net income or loss will be higher
because there will be fewer shares of common stock outstanding.
Certain
U.S. Federal Income Tax Consequences of the Reverse Stock Split
The
following summary describes certain material U.S. federal income tax consequences of the Reverse Stock Split to holders of our common
stock
Unless
otherwise specifically indicated herein, this summary addresses the tax consequences only to a beneficial owner of our common stock that
is a citizen or individual resident of the United States, a corporation organized in or under the laws of the United States or any state
thereof or the District of Columbia or otherwise subject to U.S. federal income taxation on a net income basis in respect of our common
stock (a “U.S. holder”). A trust may also be a U.S. holder if (1) a U.S. court is able to exercise primary supervision over
administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2)
it has a valid election in place to be treated as a U.S. person. An estate whose income is subject to U.S. federal income taxation regardless
of its source may also be a U.S. holder. This summary does not address all of the tax consequences that may be relevant to any particular
investor, including tax considerations that arise from rules of general application to all taxpayers or to certain classes of taxpayers
or that are generally assumed to be known by investors. This summary also does not address the tax consequences to (i) persons that may
be subject to special treatment under U.S. federal income tax law, such as banks, insurance companies, thrift institutions, regulated
investment companies, real estate investment trusts, tax-exempt organizations, U.S. expatriates, persons subject to the alternative minimum
tax, traders in securities that elect to mark to market and dealers in securities or currencies, (ii) persons that hold our common stock
as part of a position in a “straddle” or as part of a “hedging,” “conversion” or other integrated
investment transaction for federal income tax purposes, or (iii) persons that do not hold our common stock as “capital assets”
(generally, property held for investment).
If
a partnership (or other entity classified as a partnership for U.S. federal income tax purposes) is the beneficial owner of our common
stock, the U.S. federal income tax treatment of a partner in the partnership will generally depend on the status of the partner and the
activities of the partnership. Partnerships that hold our common stock, and partners in such partnerships, should consult their own tax
advisors regarding the U.S. federal income tax consequences of the Reverse Stock Split.
This
summary is based on the provisions of the Code, U.S. Treasury regulations, administrative rulings and judicial authority, all as in effect
as of the date of this information statement. Subsequent developments in U.S. federal income tax law, including changes in law or differing
interpretations, which may be applied retroactively, could have a material effect on the U.S. federal income tax consequences of the
Reverse Stock Split.
PLEASE
CONSULT YOUR OWN TAX ADVISOR REGARDING THE U.S. FEDERAL, STATE, LOCAL, AND FOREIGN INCOME AND OTHER TAX CONSEQUENCES OF THE REVERSE STOCK
SPLIT IN YOUR PARTICULAR CIRCUMSTANCES UNDER THE INTERNAL REVENUE CODE AND THE LAWS OF ANY OTHER TAXING JURISDICTION.
U.S.
Holders
The
Reverse Stock Split should be treated as a recapitalization for U.S. federal income tax purposes. Therefore, a stockholder generally
will not recognize gain or loss on the Reverse Stock Split, except to the extent of cash, if any, received in lieu of a fractional share
interest in the post-Reverse Stock Split shares. The aggregate tax basis of the post-split shares received will be equal to the aggregate
tax basis of the pre-split shares exchanged therefore (excluding any portion of the holder’s basis allocated to fractional shares),
and the holding period of the post-split shares received will include the holding period of the pre-split shares exchanged. A holder
of the pre-split shares who receives cash will generally recognize gain or loss equal to the difference between the portion of the tax
basis of the pre-split shares allocated to the fractional share interest and the cash received. Such gain or loss will be a capital gain
or loss and will be short term if the pre-split shares were held for one year or less and long term if held more than one year. No gain
or loss will be recognized by us as a result of the Reverse Stock Split.
No
Appraisal Rights
Under
Delaware law and our charter documents, holders of our common stock will not be entitled to dissenter’s rights or appraisal rights
with respect to the Reverse Stock Split.
RECOMMENDATION
OF THE BOARD FOR PROPOSAL NO. 2:
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR GRANT OF AUTHORITY FOR A REVERSE SPLIT OF THE COMPANY’S COMMON STOCK.
PROPOSAL
NO. 3
APPROVAL
OF AN AMENDMENT TO THE MY SIZE, INC. 2017 EQUITY INCENTIVE PLAN TO
INCREASE
THE RESERVATION OF COMMON STOCK FOR ISSUANCE THEREUNDER TO
7,225,000
SHARES FROM 5,770,000 SHARES
Our
2017 Plan was approved by our board of directors and by our stockholders and went into effect as of March 21, 2017. On July 3, 2018,
our stockholders voted to increase the reservation of our common stock for issuance under the 2017 Plan to 200,000 shares from 133,334
shares; on August 10, 2020, our stockholders voted to increase the reservation of our common stock for issuance thereunder to 1,450,000
shares from 200,000 shares; and on December 30, 2021, our stockholders voted to increase the reservation of common stock for issuance
under the 2017 Plan to 5,770,000 shares from 1,450,000 shares.
On
October 23, 2022, our compensation committee recommended to the board of directors to increase the number of shares available for issuance
under the 2017 Plan by 1,455,000 shares to 7,225,000 shares from 5,770,000 shares, subject to stockholder approval of the amendment to
the 2017 Plan.
Our
board of directors deems it advisable and in the best interest of the Company to increase the number of shares available for issuance
under the 2017 Plan by 1,455,000 shares to 7,225,000 shares from 5,770,000 shares to attract and retain key personnel and to provide
a means for directors, officers, managers and employees to acquire and maintain an interest in the Company, which interest may be measured
by reference to the value of its common stock.
A
copy of the proposed amendment is attached hereto as Appendix B.
Reasons
for the Proposed Plan Amendment
We
believe that operation of the 2017 Plan is a necessary and powerful tool in attracting and retaining the services of key employees, key
contractors, and outside directors in a competitive labor market, which is essential to our long-term growth and success. We also need
to ensure that we can continue to provide an incentive to our current employees, contractors and outside directors, many of whom hold
outstanding options that were previously awarded under the 2017 Plan with exercise prices above the current fair market value of our
common stock. We have strived to use our 2017 Plan resources effectively and maintain an appropriate balance between stockholder interests
and the ability to recruit and retain valuable employees. However, we believe that there is an insufficient number of shares remaining
under our 2017 Plan to meet our projected needs which will impair our ability to both attract and retain key persons going forward. Accordingly,
it is the judgment of our board of directors that increasing the number of shares of common stock available for issuance under the 2017
Plan is in the best interest of the Company and its stockholders.
Description
of Our 2017 Plan
Set
forth below is a summary of the 2017 Plan, but this summary is qualified in its entirety by reference to the full text of the 2017 Plan.
Shares
Available
The
2017 Plan currently authorizes the issuance of 5,770,000 shares of common stock. As of the Record Date, an aggregate of 5,507,231
shares have been granted under the 2017 Plan and 262,769 shares were available for future awards under the 2017 Plan.
If
an award is forfeited, canceled, or if any option terminates, expires or lapses without being exercised, the common stock subject to
such award will again be made available for future grant. However, shares that are used to pay the exercise price of an option or that
are withheld to satisfy the participant’s tax withholding obligation will not be available for re-grant under the 2017 Plan.
If
there is any change in the Company’s corporate capitalization or structure, the 2017 Plan Committee (as defined below) in its sole
discretion may make substitutions or adjustments to the number of shares of common stock reserved for issuance under the 2017 Plan, the
number of shares covered by awards then outstanding under the 2017 Plan, the limitations on awards under the 2017 Plan, the exercise
price of outstanding options and such other equitable substitution or adjustments as it may determine appropriate.
The
2017 Plan will have a term of ten years and no further awards may be granted under the 2017 Plan after that date.
Administration
The
Company’s compensation committee (the “2017 Plan Committee”) administers the 2017 Plan. The 2017 Plan Committee has
the authority, without limitation to (i) to designate participants to receive awards, (ii) determine the types of awards to be granted
to participants, (iii) determine the number of shares of common stock to be covered by awards, (iv) determine the terms and conditions
of any awards granted under the 2017 Plan, (v) determine to what extent and under what circumstances awards may be settled in cash, shares
of common stock, other securities, other awards or other property, or canceled, forfeited or suspended, (vi) determine whether, to what
extent, and under what circumstances the delivery of cash, common stock, other securities, other awards or other property and other amounts
payable with respect to an award shall be made; (vii) interpret, administer, reconcile any inconsistency in, settle any controversy regarding,
correct any defect in and/or complete any omission in the 2017 Plan and any instrument or agreement relating to, or award granted under,
the 2017 Plan; (viii) establish, amend, suspend, or waive any rules and regulations and appoint such agents as the 2017 Plan Committee
shall deem appropriate for the proper administration of the 2017 Plan; (ix) accelerate the vesting or exercisability of, payment for
or lapse of restrictions on, awards; (x) reprice existing awards or to grant awards in connection with or in consideration of the cancellation
of an outstanding award with a higher price; and (xi) make any other determination and take any other action that the 2017 Plan Committee
deems necessary or desirable for the administration of the 2017 Plan. The 2017 Plan Committee has full discretion to administer and interpret
the 2017 Plan and to adopt such rules, regulations and procedures as it deems necessary or advisable and to determine, among other things,
the time or times at which the awards may be exercised and whether and under what circumstances an award may be exercised.
Eligibility
Employees,
directors and officers of the Company or their affiliates are eligible to participate in the 2017 Plan. The 2017 Plan Committee has the
sole and complete authority to determine who will be granted an award under the 2017 Plan; however, it may delegate such authority to
one or more officers of the Company under the circumstances set forth in the 2017 Plan.
Awards
Available for Grant
The
Committee may grant awards of non-qualified stock options, incentive stock options, stock appreciation rights (“SARs”), restricted
stock awards, restricted stock units, stock bonus awards, performance compensation awards (including cash bonus awards) or any combination
of the foregoing. Notwithstanding, the Committee may not grant to any one person in any one calendar year awards (i) for more than 50%
of the available shares in the aggregate or (ii) payable in cash in an amount exceeding $10,000,000 in the aggregate.
U.S.
Federal Income Tax Consequences
The
following is a general summary of the material U.S. federal income tax consequences of the grant and exercise and vesting of awards under
the 2017 Plan and the disposition of shares acquired pursuant to the exercise of such awards. This summary is intended to reflect the
current provisions of the Code and the regulations thereunder. However, this summary is not intended to be a complete statement of applicable
law, nor does it address foreign, state, local and payroll tax considerations. Moreover, the U.S. federal income tax consequences to
any particular participant may differ from those described herein by reason of, among other things, the particular circumstances of such
participant.
Pursuant
to Section 15(e) of the 2017 Plan, the 2017 Plan Committee may, in its sole discretion, amend the terms of the 2017 Plan or outstanding
awards (or establish a sub-plan) with respect to such participants in order to conform such terms with the requirements of local law
or to obtain more favorable tax or other treatment for such participants or the Company. The Company operates in Israel, and the applicable
tax consequences for participants may be Israeli tax consequences.
Options
There
are a number of requirements that must be met for a particular option to be treated as an incentive stock option. One such requirement
is that common stock acquired through the exercise of an incentive stock option cannot be disposed of before the later of (i) two years
from the date of grant of the option, or (ii) one year from the date of its exercise. Holders of incentive stock option will generally
incur no federal income tax liability at the time of grant or upon exercise of those options. However, the spread at exercise will be
an “item of tax preference,” which may give rise to “alternative minimum tax” liability for the taxable year
in which the exercise occurs. If the holder does not dispose of the shares before the later of two years following the date of grant
and one year following the date of exercise, the difference between the exercise price and the amount realized upon disposition of the
shares will constitute long-term capital gain or loss, as the case may be. Assuming both holding periods are satisfied, no deduction
will be allowed to the Company for federal income tax purposes in connection with the grant or exercise of the incentive stock option.
If, within two years following the date of grant or within one year following the date of exercise, the holder of shares acquired through
the exercise of an incentive stock option disposes of those shares, the participant will generally realize taxable compensation at the
time of such disposition equal to the difference between the exercise price and the lesser of the fair market value of the share on the
date of exercise or the amount realized on the subsequent disposition of the shares, and that amount will generally be deductible by
the Company for federal income tax purposes, subject to the possible limitations on deductibility under Sections 280G and 162(m) of the
Code for compensation paid to executives designated in those Sections. Finally, if an otherwise incentive stock option becomes first
exercisable in any one year for shares having an aggregate value in excess of $100,000 (based on the date of grant value), the portion
of the incentive stock option in respect of those excess shares will be treated as a non-qualified stock option for federal income tax
purposes.
No
income will be realized by a participant upon grant of a non-qualified stock option. Upon the exercise of a non-qualified stock option,
the participant will recognize ordinary compensation income in an amount equal to the excess, if any, of the fair market value of the
underlying exercised shares over the option exercise price paid at the time of exercise. Such income will be subject to income tax withholdings,
and the participant will be required to pay to the Company the amount of any required withholding taxes in respect to such income. The
Company will be able to deduct this same amount for U.S. federal income tax purposes, but such deduction may be limited under Sections
280G and 162(m) of the Code for compensation paid to certain executives designated in those Sections.
Restricted
Stock
A
participant will not be subject to tax upon the grant of an award of restricted stock unless the participant otherwise elects to be taxed
at the time of grant pursuant to Section 83(b) of the Code. On the date an award of restricted stock becomes transferable or is no longer
subject to a substantial risk of forfeiture, the participant will recognize ordinary compensation income equal to the difference between
the fair market value of the shares on that date over the amount the participant paid for such shares, if any. Such income will be subject
to income tax withholdings, and the participant will be required to pay to the Company the amount of any required withholding taxes in
respect to such income. If the participant made an election under Section 83(b) of the Code, the participant will recognize ordinary
compensation income at the time of grant equal to the difference between the fair market value of the shares on the date of grant over
the amount the participant paid for such shares, if any, and any subsequent appreciation in the value of the shares will be treated as
a capital gain upon sale of the shares. Special rules apply to the receipt and disposition of restricted shares received by officers
and directors who are subject to Section 16(b) of the Exchange Act. The Company will be able to deduct, at the same time as it is recognized
by the participant, the amount of taxable compensation to the participant for U.S. federal income tax purposes, but such deduction may
be limited under Sections 280G and 162(m) of the Code for compensation paid to certain executives designated in those Sections.
Restricted
Stock Units
A
participant will not be subject to tax upon the grant of a restricted stock unit award. Rather, upon the delivery of shares or cash pursuant
to a restricted stock unit award, the participant will recognize ordinary compensation income equal to the fair market value of the number
of shares (or the amount of cash) the participant actually receives with respect to the award. Such income will be subject to income
tax withholdings, and the participant will be required to pay to the Company the amount of any required withholding taxes in respect
to such income. The Company will be able to deduct the amount of taxable compensation recognized by the participant for U.S. federal
income tax purposes, but the deduction may be limited under Sections 280G and 162(m) of the Code for compensation paid to certain executives
designated in those Sections.
SARs
No
income will be realized by a participant upon grant of a SAR. Upon the exercise of a SAR, the participant will recognize ordinary compensation
income in an amount equal to the fair market value of the payment received in respect of the SAR. Such income will be subject to income
tax withholdings, and the participant will be required to pay to the Company the amount of any required withholding taxes in respect
to such income. The Company will be able to deduct this same amount for U.S. federal income tax purposes, but such deduction may be limited
under Sections 280G and 162(m) of the Code for compensation paid to certain executives designated in those Sections.
Stock
Bonus Awards
A
participant will recognize ordinary compensation income equal to the difference between the fair market value of the shares on the date
the shares of common stock subject to the award are transferred to the participant over the amount the participant paid for such shares,
if any, and any subsequent appreciation in the value of the shares will be treated as a capital gain upon sale of the shares. The Company
will be able to deduct, at the same time as it is recognized by the participant, the amount of taxable compensation to the participant
for U.S. federal income tax purposes, but such deduction may be limited under Sections 280G and 162(m) of the Code for compensation paid
to certain executives designated in those Sections.
Section
162(m)
In
general, Section 162(m) of the Code denies a publicly held corporation a deduction for U.S. federal income tax purposes for compensation
in excess of $1,000,000 per year per person paid to its principal executive officer and the three other officers (other than the principal
executive officer and principal financial officer) whose compensation is disclosed in its proxy statement/prospectus as a result of their
total compensation, subject to certain exceptions. The 2017 Plan is intended to satisfy an exception with respect to grants of options
to covered employees.
Interest
of Directors and Executive Officers.
All
members of our board of directors and all of our executive officers are eligible for awards under the 2017 Plan and, thus, have a personal
interest in the approval of the proposal to increase the number of shares available for issuance under the 2017 Plan.
New
Plan Benefits
With
respect to the increased number of shares reserved under the 2017 Plan, we cannot currently determine the benefits or number of shares
that will be subject to awards that may be granted in the future to eligible participants under the 2017 Plan because the grant of awards
and terms of such awards are to be determined in the sole discretion of the compensation committee.
Equity
Compensation Plan Information
The
following table summarizes information about our equity compensation plans and individual compensation arrangements as of December 31,
2021.
| |
Number of
securities
to be issued
upon exercise of
outstanding options,
warrants and rights
(a) | | |
Weighted-
average exercise
price of
outstanding
options,
warrants and
rights
(b) | | |
Number of
securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column
(a) (c) | |
Equity
compensation plans approved by security holders | |
| 947,150 | | |
| 1.25 | | |
| 5,273,961 | |
Equity
compensation plans not approved by security holders | |
| 160,568 | | |
| 1.57 | | |
| - | |
Total | |
| 1,107,718 | | |
| 1.30 | | |
| 5,273,961 | |
RECOMMENDATION
OF THE BOARD FOR PROPOSAL NO. 3:
THE
BOARD RECOMMENDS A VOTE FOR APPROVAL OF AN AMENDMENT TO THE MY SIZE, INC. 2017 PLAN TO INCREASE THE RESERVATION OF COMMON STOCK
FOR ISSUANCE THEREUNDER TO 7,225,000 SHARES FROM 5,770,000 SHARES
PROPOSAL
NO. 4
RATIFICATION
OF THE APPOINTMENT OF SOMEKH CHAIKIN AS INDEPENDENT PUBLIC ACCOUNTANT FOR THE FISCAL YEAR ENDING DECEMBER 31, 2022
The
audit committee has appointed Somekh Chaikin, independent public accountant, to audit our financial statements for the fiscal year ending
December 31, 2022. The board proposes that the stockholders ratify this appointment. We expect that representatives of Somekh Chaikin
will be either physically present or available via phone at the Annual Meeting, will be able to make a statement if they so desire, and
will be available to respond to appropriate questions.
The
following table sets forth the fees billed by Somekh Chaikin for each of our last two fiscal years for the categories of services indicated.
Fee
Category | |
2021 | | |
2020 | |
Audit
Fees | |
| 298,300 | | |
| 138,600 | |
Tax
Fees | |
| 29,300 | | |
| 49,200 | |
Total
Fees | |
| 327,600 | | |
| 187,800 | |
Audit
Fees: Audit Fees consist of fees billed for professional services performed by Somekh Chaikin for the audit of our annual financial
statements, the review of interim consolidated financial statements, and related services that are normally provided in connection with
registration statements, including the registration statement for S-1 and S-3.
Tax
Fees: Tax Fees may consist of fees for professional services, including tax and VAT consulting and compliance performed by an independent
registered public accounting provided during the period.
Pre-Approval
Policies and Procedures
In
accordance with the Sarbanes-Oxley Act of 2002, as amended, our audit committee charter requires the audit committee to pre-approve all
audit and permitted non-audit services provided by our independent registered public accounting firm, including the review and approval
in advance of our independent registered public accounting firm’s annual engagement letter and the proposed fees contained therein.
The audit committee has the ability to delegate the authority to pre-approve non-audit services to one or more designated members of
the audit committee. If such authority is delegated, such delegated members of the audit committee must report to the full audit committee
at the next audit committee meeting all items pre-approved by such delegated members. In the fiscal years ended December 31, 2021
and December 31, 2020 all of the services performed by our independent registered public accounting firm were pre-approved
by the audit committee.
RECOMMENDATION
OF THE BOARD FOR PROPOSAL NO. 4:
THE
BOARD RECOMMENDS A VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF SOMEKH CHAIKIN AS INDEPENDENT PUBLIC ACCOUNTANT FOR THE FISCAL YEAR
ENDING DECEMBER 31, 2022.
PROPOSAL
NO. 5
ADJOURNMENT
OF THE ANNUAL MEETING, IF NECESSARY, TO SOLICIT ADDITIONAL PROXIES IF THERE ARE INSUFFICIENT VOTES AT THE TIME OF THE ANNUAL MEETING
TO APPROVE THE REVERSE STOCK SPLIT PROPOSAL
Our
board believes that if the number of shares of our
common stock outstanding and entitled to vote at the Annual Meeting is insufficient to approve the Reverse Stock Split Proposal, it is
in the best interests of the stockholders to enable the board to continue to seek to obtain a sufficient number of additional
votes to approve the Reverse Stock Split.
In
the Adjournment Proposal, we are asking stockholders to authorize the holder of any proxy solicited by the board to vote in favor
of adjourning or postponing the Annual Meeting or any adjournment or postponement thereof. If our stockholders approve this proposal,
we could adjourn or postpone the Annual Meeting, and any adjourned session of the Annual Meeting, to use the additional time to solicit
additional proxies in favor of such proposals.
In
addition, approval of the Adjournment Proposal could mean that, in the event we receive proxies indicating that a majority of the number
of outstanding shares of our common stock will vote against the Reverse Stock Split Proposal, we could adjourn or postpone the Annual
Meeting without a vote on such proposal and use the additional time to solicit the holders of those shares to change their vote in favor
of such proposal.
RECOMMENDATION
OF THE BOARD FOR PROPOSAL NO. 5:
THE
BOARD RECOMMENDS A VOTE FOR THE ADJOURNMENT OF THE ANNUAL MEETING, IF NECESSARY, TO SOLICIT ADDITIONAL PROXIES IF THERE ARE INSUFFICIENT
VOTES AT THE TIME OF THE ANNUAL MEETING TO APPROVE THE REVERSE STOCK SPLIT PROPOSAL.
REPORT
OF THE AUDIT COMMITTEE
The
audit committee has reviewed and discussed the audited financial statements for the fiscal year ended December 31, 2021 with management
of the Company. The audit committee has discussed with the independent registered public accounting firm the matters required to be discussed
by the applicable requirements of the Public Company Accounting Oversight Board, or the PCAOB, and the SEC. The audit committee has also
received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements
of the PCAOB regarding the independent accountants’ communications with the audit committee concerning independence and has discussed
with the independent registered public accounting firm the accounting firm’s independence. Based on these reviews and discussions,
the audit committee has recommended to the board that the audited financial statements be included in our Form 10-K for the year ended
December 31, 2021.
|
Oron
Branitzky |
|
Oren
Elmaliah |
|
Arik
Kaufman |
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Other
than the compensation agreements and other arrangements described under “Executive Compensation” and the transactions described
below, since January 1, 2021, we did not participate in any transaction, and we are not currently participating in any proposed transaction,
or series of transactions, in which the amount involved exceeded the lesser of $120,000 or one percent of the average of our total assets
at year end for the last two completed fiscal years, and in which, to our knowledge, any of our directors, officers, five percent beneficial
security holders, or any member of the immediate family of the foregoing persons had, or will have, a direct or indirect material interest.
Employment
Agreements
We
have entered into written employment agreements with each of our executive officers. These agreements generally provide for notice periods
of varying duration for termination of the agreement by us or by the relevant executive officer, during which time the executive officer
will continue to receive base salary and benefits. We have also entered into customary non-competition, confidentiality of information
and ownership of inventions arrangements with our executive officers. However, the enforceability of the noncompetition provisions may
be limited under applicable law.
Options
Since
our inception we have granted options to purchase our common stock to our officers and directors. Such option agreements may contain
acceleration provisions upon certain merger, acquisition, or change of control transactions.
Restricted
Stock Grants
On
September 29, 2022, our compensation committee approved grants of restricted share awards under our 2017 Plan to Ronen Luzon, Or Kles,
Billy Pardo, Ilia Turchinsky and Ezequiel Javier Brandwain, pursuant to which they were issued 2,500,000 restricted shares, 600,000 restricted
shares, 600,000 restricted shares, 400,000 restricted shares and 300,000 restricted shares, respectively. The restricted shares shall
vest in three equal installments on January 1, 2023, January 1, 2024 and January 1, 2025, conditioned upon continuous employment with
the Company, and subject to accelerated vesting upon a change in control of the Company.
Indemnification
Agreements and Directors’ and Officers’ Liability Insurance
We
have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other things,
require us to indemnify these individuals and, in certain cases, affiliates of such individuals, to the fullest extent permitted by Delaware
law against liabilities that may arise by reason of their service to us or at our direction, and to advance expenses incurred as a result
of any proceedings against them as to which they could be indemnified. We also maintain an insurance policy that insures our directors
and officers against certain liabilities, including liabilities arising under applicable securities laws.
Director
Independence
See
“Nominees for Director” above for a discussion regarding the independence of the members of our board of directors.
Naiz
Bespoke Technologies Acquisition
On
October 7, 2022, we entered into that certain Share Purchase Agreement (the “Agreement”) with Borja Cembrero Saralegui (“Borja),
Aritz Torre Garcia (“Aritz”), Whitehole, S.L. (“Whitehole”), Twinbel, S.L. (“Twinbel”) and EGI Acceleration,
S.L. (“EGI) (each of Borja, Aritz, Whitehole, Twinbel and EGI shall be referred to as the “Sellers”), pursuant to which
the Sellers agreed to sell to us all of the issued and outstanding equity of Naiz Bespoke Technologies, S.L., a limited liability company
incorporated under the laws of Spain (“Naiz”). The acquisition of Naiz was completed on October 11, 2022.
In
consideration of the purchase of the shares of Naiz, the Agreement provided that the Sellers are entitled to receive (i) an aggregate
of 6,000,000 shares (the “Equity Consideration”) of our common stock (the “Shares”), representing in the aggregate,
immediately prior to the issuance of such shares at the closing of the transaction, not more than 19.9% of the issued and outstanding
Shares and (ii) up to US$2,050,000 in cash (the “Cash Consideration”).
The
Equity Consideration was issued to the Sellers at closing of the transaction of which 2,365,800 shares of our common stock were issued
to Whitehole constituting 6.6% of our outstanding shares following such issuance. The Agreement also provides that, in the event that
the actual value of the Equity Consideration (based on the average closing price of the Shares on the Nasdaq Capital Market over the
10 trading days prior to the closing of the transaction (the “Equity Value Averaging Period”)) is less than US$1,650,000,
we shall make an additional cash payment (the “Shortfall Value”) to the Sellers within 45 days of the Company’s receipt
of Naiz’s 2025 audited financial statements; provided that certain revenue targets are met. Following the Equity Value Averaging
Period, it was determined that the Shortfall Value is US$459,240.
The
Cash Consideration is payable to the Sellers in five installments, according to the following payment schedule: (i) US$500,000 at closing,
(ii) up to US$500,000 within 45 days of the Company’s receipt of Naiz’s 2022 audited financial statements, (iii) up to US$350,000
within 45 days of the Company’s receipt of Naiz’s unaudited financial statements for the six months ended June 30, 2023,
(iv) up to US$350,000 within 45 days of the Company’s receipt of Naiz’s unaudited financial statements for the six months
ended December 31, 2023, and (v) up to US$350,000 within 45 days of the Company’s receipt of Naiz’s 2024 audited financial
statements; provided that in the case of the second, third, fourth and fifth installments certain revenue targets are met.
The
payment of the second, third, fourth and fifth cash installments are further subject to the continuing employment or involvement of Borja
and Aritz (each of Borja and Aritz shall be referred to as a “Key Person” and collectively, as the Key Persons) by or with
Naiz at the date such payment is due (except if a Key Person is terminated from Naiz due to a Good Reason (as defined in the Agreement).
The
Agreement contains customary representations, warranties and indemnification provisions. In addition, the Sellers will be subject to
non-competition and non-solicitation provisions pursuant to which they agree not to engage in competitive activities with respect to
the Company’s business.
In
connection with the Agreement, (i) each of the Sellers entered into six-month lock-up agreements (the “Lock-Up Agreement”)
with the Company, (ii) Whitehole, Twinbel and EGI entered into a voting agreement (the “Voting Agreement) with the Company and
(iii) each of the Key Persons entered into employment agreements and services agreements with Naiz.
The
Lock-Up Agreement provides that each Seller will not, for the six-month period following the closing of the transaction, (i) offer, pledge,
sell, contract to sell, sell any option, warrant or contract to purchase, purchase any option, warrant or contract to sell, grant any
option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible
into or exercisable or exchangeable for Shares in each case, that are currently or hereafter owned of record or beneficially (including
holding as a custodian) by such Seller, or publicly disclose the intention to make any such offer, sale, pledge, grant, transfer or disposition;
or (ii) enter into any swap, short sale, hedge or other agreement that transfers, in whole or in part, any of the economic consequences
of ownership of such Seller’s Shares regardless of whether any such transaction described in clause (i) or this clause (ii) is
to be settled by delivery of Shares or such other securities, in cash or otherwise. The Lock-Up Agreement also contains an additional
three-month “dribble-out” provision that provides following the expiration of the initial six-month lock-up period, without
the Company’s prior written consent (which the Company shall be permitted to withhold at its sole discretion), each Seller shall
not sell, dispose of or otherwise transfer on any given day a number of Shares representing more than the average daily trading volume
of the Shares for the rolling 30 day trading period prior to the date on which such Seller executes a trade of the Shares.
The
Voting Agreement provides that the voting of any Shares held by each of Whitehole, Twinbel and EGI (each a “Stockholder”)
will be exercised exclusively by a proxy designated by the Company’s board of directors from time to time (the “Proxy”)
and that each Stockholder will irrevocably designate and appoint the then-current Proxy as its sole and exclusive attorney-in-fact and
proxy to vote and exercise all voting right with respect to the Shares held by each Stockholder. The Voting Agreement also provides that,
if the voting power held by the Proxy, taking into account the proxies granted by the Stockholders and the Shares owned by the Proxy,
represents 20% or more of the voting power of the Company’s stockholders that will vote on an item (the “Voting Power”),
then the Proxy shall vote such number of Shares in excess of 19.9% of the Voting Power in the same proportion as the Shares that are
voted by the Company’s other stockholders. The Voting Agreement will terminate on the earliest to occur of (i) such time that such
Stockholder no longer owns the Shares, (ii) the sale of all or substantially all of the assets of the Company or the consolidation or
merger of the Company with or into any other business entity pursuant to which stockholders of the Company prior to such consolidation
or merger hold less than 50% of the voting equity of the surviving or resulting entity, (iii) the liquidation, dissolution or winding
up of the business operations of the Company, and (iv) the filing or consent to filing of any bankruptcy, insolvency or reorganization
case or proceeding involving the Company or otherwise seeking any relief under any laws relating to relief from debts or protection of
debtors.
ANNUAL
REPORT
Our
Annual Report on Form 10-K for the year ended December 31, 2021 is being delivered with this proxy statement. Any person who was a beneficial
owner of our ordinary shares on the Record Date may request a copy of our Annual Report, and it will be furnished without charge upon
receipt of a written request identifying the person so requesting an Annual Report as a stockholder of My Size at such date. Requests
should be directed in writing to My Size, Inc., 4 Hayarden St., P.O.B. 1026, Airport City, Israel, 7010000, Attention: Corporate Secretary
or by calling us at +972 3 600 9030, Attention: Corporate Secretary. Our Annual Report, as well as other company reports, are also available
on the SEC’s website (www.sec.gov).
OTHER
MATTERS
We
have no knowledge of any other matters that may come before the Annual Meeting and does not intend to present any other matters. However,
if any other matters shall properly come before the meeting or any adjournment, the persons soliciting proxies will have the discretion
to vote as they see fit unless directed otherwise.
If
you do not plan to attend the Annual Meeting, in order that your shares may be represented and in order to assure the required quorum,
please sign, date and return your proxy promptly. In the event you are able to attend the Annual Meeting, at your request, we will cancel
your previously submitted proxy.
Appendix
A
Certificate
of Amendment
of
Amended and Restated Certificate of Incorporation
of
My Size, Inc.
Under
Section 242 of the Delaware General Corporation Law
My
Size, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”) hereby certifies
as follows:
FIRST:
The Amended and Restated Certificate of Incorporation of the Corporation is hereby amended by replacing FIFTH in its entirety with the
following:
FIFTH:
The total number of shares of stock which the Corporation shall have authority to issue is one hundred million 250,000,000 shares of
common stock with a par value of $0.001 per share (the “Common Stock”). The Common Stock may be issued from time to time
without action by the stockholders. The Common Stock may be issued for consideration as may be fixed by the Corporation’s Board
of Directors (the “Board of Directors”).
The
foregoing amendment shall be effective as of _____ a.m., New York City time on _____, 202__ (the “Effective Time”), every
_____ (_____) shares of the Corporation’s Common Stock (the “Old Common Stock”), issued and outstanding immediately
prior to the Effective Time, will be automatically reclassified as and converted into one (1) share of common stock, par value $0.001
per share, of the Corporation (the “New Common Stock”) (such formula herein, the “Determined Ratio”). Further,
every right, option and warrant to acquire shares of Old Common Stock outstanding immediately prior to the Effective Time shall, as of
the Effective Time and without any further action, automatically be reclassified into the right to acquire one (1) share of New Common
Stock based on the Determined Ratio of shares of Old Common Stock to shares of New Common Stock, but otherwise upon the terms of such
right, option or warrant (except that the exercise or purchase price of such right, option or warrant shall be proportionately adjusted).
Notwithstanding
the immediately preceding paragraph, the Corporation shall not be required to issue or deliver any fractional shares of New Common Stock.
At the Effective Time any such fractional interest in such shares of New Common Stock shall be [converted into the right to receive,
an amount in cash, without interest, determined by multiplying (i) the closing sale price of the Common Stock (on a post-reverse-split
basis as adjusted for the amendment effected hereby) on the trading day immediately prior to the Effective Time as reported on the Nasdaq
Capital Market by (ii) such fractional share interest to which the holder would otherwise be entitled]/[rounded up to the next whole
share]. Shares of Common Stock that were outstanding prior to the Effective Time and that are not outstanding after the Effective Time
shall resume the status of authorized but unissued shares of Common Stock.
Each
stock certificate that, immediately prior to the Effective Time, represented shares of Old Common Stock shall, from and after the Effective
Time, represent that number of whole shares of New Common Stock into which the shares of Old Common Stock represented by such certificate
shall have been reclassified (as well as the right to receive [cash]/[whole shares] in lieu of any fractional shares of New Common Stock
as set forth above); provided, however, that each holder of record of a certificate that represented shares of Old Common Stock shall
receive, upon surrender of such certificate, a new certificate representing the number of whole shares of New Common Stock into which
the shares of Old Common Stock represented by such certificate shall have been reclassified, as well as any [cash]/[whole share] in lieu
of fractional shares of New Common Stock to which such holder may be entitled pursuant to the immediately preceding paragraph.
SECOND:
The foregoing amendment has been duly adopted in accordance with the provisions of Section 242 of the General Corporation law of the
State of Delaware by the vote of a majority of each class of outstanding stock of the Corporation entitled to vote thereon.
IN
WITNESS WHEREOF, I have signed this Certificate this __ day of _________, 202__.
Appendix
B
Amendment
to the
My
Size, Inc.
2017
Equity Incentive Plan
Section
5(b) of the My Size, Inc. 2017 Equity Incentive Plan, as amended (the “Plan”) is hereby amended by replacing Section 5(b)
with the following sentence:
“Subject
to Section 12 of this Plan, the Committee is authorized to deliver under this Plan an aggregate of 7,225,000 Common Shares.”
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