UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the fiscal year ended December 31, 2025
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from ________ to _________
Commission
file number 001-37370
MY
SIZE, INC.
(Exact
name of registrant as specified in charter)
(Address of principal executive offices) (Zip code)
+972-3-
6009030
(Registrant’s
telephone number, including area code)
Securities
registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of Each Exchange on Which Registered
Common Stock, par value $0.001 per share MYSZ The Nasdaq Capital Market
Securities
registered pursuant to Section 12(g) of the Act: None.
Indicate
by check mark whether the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files). Yes ☒ No ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller
reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller Reporting Company ☒
Emerging Growth Company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. ☐
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate
by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive- based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate
by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act) Yes ☐ No ☒
The
aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant as of June 30, 2025, the last
business day of the registrant’s most recently completed second fiscal quarter, was approximately $4 million.
Number
of shares of common stock outstanding as of April 14, 2026 was 4,818,164.
Documents
Incorporated by Reference: None.
Table
of Contents
Part I
Item 1. Business 2
Item 1A. Risk Factors 17
Item 1B. Unresolved Staff Comments 39
Item 1C. Cybersecurity 39
Item 2. Properties 40
Item 3. Legal Proceedings 40
Item 4. Mine Safety Disclosures 40
Part II
Item 6. Selected Financial Data 41
Item 7A. Quantitative and Qualitative Disclosures about Market Risk 48
Item 8. Financial Statements and Supplementary Data 49
Item 9A. Controls and Procedures 49
Item 9B. Other Information 49
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. 49
Part III
Item 10. Directors, Executive Officers and Corporate Governance 50
Item 11. Executive Compensation 54
Item 14. Principal Accounting Fees and Services 63
Part IV
Item 15. Exhibits, Financial Statement Schedules 63
Signatures 68
PART
I
In this Annual Report on Form 10-K, unless the context requires otherwise,
the terms “we,” “our,” “us,” or “the Company” refer to MySize, Inc., a Delaware corporation,
and its subsidiaries, including MySize Israel 2014 Ltd., or MySize Israel, My Size LLC, Orgad International Marketing Ltd., or Orgad,
Naiz Bespoke Technologies, S.L, or Naiz Fit, New Percentil, S.L., or New Percentil, Ten Peacks Ltd., or Ten Peacks, and ShoeSize.Me AG,
or ShoeSize Me, taken as a whole.
References
to “U.S. dollars” and “$” are to currency of the United States of America, and references to “NIS”
are to New Israeli Shekels. Unless otherwise indicated, U.S. dollar translations of NIS amounts presented in this Annual Report on Form
10-K for the year ended on December 31, 2025 are translated using the rate of NIS 3.19 to $1.00.
All
information in this Annual Report on Form 10-K relating to shares or price per share reflects the 1-for-8 reverse stock split effected
by us on April 19, 2024.
CAUTIONARY
NOTE ON FORWARD-LOOKING STATEMENTS
This
Annual Report on Form 10-K contains certain forward-looking statements within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act. Any statements in Annual Report on Form 10-K about our expectations, beliefs, plans, objectives, assumptions
or future events or performance are not historical facts and are forward-looking statements. These statements are often, but not always,
made through the use of words or phrases such as “believe,” “will,” “expect,” “anticipate,”
“estimate,” “intend,” “plan” and “would.” For example, statements concerning financial
condition, possible or assumed future results of operations, growth opportunities, industry ranking, plans and objectives of management,
markets for our common stock and future management and organizational structure are all forward-looking statements. Forward-looking statements
are not guarantees of performance. They involve known and unknown risks, uncertainties and assumptions that may cause actual results,
levels of activity, performance or achievements to differ materially from any results, levels of activity, performance or achievements
expressed or implied by any forward-looking statement.
Any
forward-looking statements are qualified in their entirety by reference to the risk factors discussed throughout this Annual Report on
Form 10-K. Some of the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections
contained in the forward-looking statements include but are not limited to:
● our ability to continue as a going concern;
● the new and unproven nature of the measurement technology markets;
● our ability to achieve customer adoption of our products;
● our dependence on assets we purchased from a related party;
● our ability to enhance our brand and increase market awareness;
● the success of our strategic relationships with third parties;
● information technology system failures or breaches of our network security;
● competition from competitors;
● our reliance on key members of our management team;
● current or future litigation;
● the impact of the political and security situation in Israel on our business.
The
foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forward-looking
statements. You should read this Annual Report on Form 10-K and the documents that we reference herein and have filed as exhibits to
the Annual Report on Form 10-K, completely and with the understanding that our actual future results may be materially different from
what we expect. You should assume that the information appearing in this Annual Report on Form 10-K is accurate as of the date hereof.
Because the risk factors referred to in this Annual Report on Form 10-K, could cause actual results or outcomes to differ materially
from those expressed in any forward-looking statements made by us or on our behalf, you should not place undue reliance on any forward-looking
statements.
Further,
any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking
statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated
events. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot
assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results
to differ materially from those contained in any forward-looking statements. We qualify all of the information presented in this Annual
Report on Form 10-K, and particularly our forward-looking statements, by these cautionary statements.
ITEM
1. BUSINESS
Overview
We are a fashion technology company operating an integrated portfolio of businesses designed to address the most pressing challenges facing fashion brands and retailers
today—size and fit accuracy, excess inventory management, circular economy solutions, and international market distribution. Through
our subsidiaries, we provide end-to-end support across the fashion value chain: Naiz Fit, our technology subsidiary, delivers AI-driven
size and fit solutions for fashion e-commerce companies, and includes ShoeSize.Me, a European AI-powered footwear sizing solution we
acquired in September 2025; Orgad, an online retailer and technology-enabled consumer products company operating principally as a third-party
seller on Amazon; Percentil, a managed second-hand fashion recommerce platform operating across Southern and Central Europe; and Ten
Peacks Ltd., a distribution subsidiary focused on marketing and distributing global apparel and footwear brands in Israel.
Our strategy is to build an
integrated fashion platform—the infrastructure layer that enables fashion brands to address four critical pain points
simultaneously: size and fit challenges that drive returns and suppress conversion rates; overstocked and unsold inventory that
erodes margins; sustainability obligations that increasingly require brands to offer circular economy solutions; and international
growth ambitions that require local distribution expertise and relationships.
We believe this integrated
approach is differentiated in the market. Unlike point solutions that address a single problem, our platform is designed to allow
brands to work with one group-level partner across technology, commerce, circularity, and distribution—each business unit
reinforcing the others through shared data, commercial relationships, and infrastructure.
Recent Developments
Acquisition of Production
Unit (Casi Nuevo Kids, S.L.)
On May 9, 2025, we acquired,
through our wholly-owned Spanish subsidiary New Percentil, a production unit of Casi Nuevo Kids, S.L., or Casi
Nuevo, with a trade name of Percentil, or the Production Unit, that was judicially awarded to us in April 2025 within the framework of
insolvency proceedings of Casi Nuevo filed with Commercial Court No. 13 of Madrid, Spain. The acquisition was completed on the same day.
The total purchase price for the acquisition was
€610,806.81 (approximately $679,000), which consists of (i) €40,000 (approximately $44,500) paid by our wholly-owned subsidiary,
Naiz Fit, (ii) €358,196 (approximately $398,000) for the assumption of certain liabilities owed by Casi Nuevo to its customers,
(iii) €48,000 (approximately $53,500) for the assumption of certain debt and social security payments related to former employees
of Casi Nuevo who have transferred to New Percentil in connection with the acquisition, or the Percentil Employees, and (iv) €164,610
(approximately $183,000) for the assumption of accrued labor liabilities related to the Percentil Employees.
Formation of Ten Peacks
On July 21, 2025, we
established Ten Peacks, which was incorporated in Israel and is a wholly-owned subsidiary of our Israeli
subsidiary, My Size Israel, that focuses on marketing and distribution of global apparel and shoes
brands in Israel. We sold items to distributors in Israel during the last quarter of 2025.
Acquisition of ShoeSize.Me
On September 8, 2025, we entered
into a share sale and purchase agreement, or the ShoeSize Purchase Agreement, with certain sellers, or the Sellers, who are the holders
of 100% of the share capital of ShoeSize.Me, pursuant to which the Sellers agreed to sell us all of
the issued and outstanding shares of ShoeSize.Me. The transaction was closed on the same day, or the ShoeSize Closing Date.
In consideration for the
purchase of the shares of ShoeSize.Me and in accordance with the ShoeSize Purchase Agreement, the Sellers received (i) a cash
payment of $150,000 and (ii) 241,093 shares of our common stock having an aggregate value of $290,000, determined by dividing
$290,000 by the average closing price of our common stock during the seven trading days immediately preceding the ShoeSize Closing
Date. In addition, pursuant to the ShoeSize Purchase Agreement, we issued to a key employee of ShoeSize a warrant, or the ShoeSize
Warrant, to purchase up to 28,000 shares of our common stock. The ShoeSize Warrant, which is subject to vesting upon satisfaction of
certain service-based, financial performance and integration milestones, provides for a tiered exercise structure, with (i) 10,000
shares exercisable at $2.00 per share, (ii) 6,000 shares exercisable at $3.00 per share, (iii) 5,000 shares exercisable at $4.00 per
share, (iv) 4,000 shares exercisable at $5.00 per share, and (v) 3,000 shares exercisable at $6.00 per share.
Our Solutions
We provide fashion brands and
retailers with a comprehensive suite of technology solutions, commerce capabilities, and circular economy services organized around four
interconnected business units. Each unit addresses a distinct challenge in the fashion industry value chain, and together they form a
platform designed to support brands across sizing accuracy, inventory efficiency, circular sustainability, and international distribution.
Naiz Fit — Size &
Fit Technology
Naiz Fit
is our AI-driven size and fit technology platform, or the Naiz Fit Platform, serving as the technology backbone of the MySize group.
The platform operates on a B2B SaaS model and is deployed by more than 100 fashion and footwear brands globally, including
Levi’s, Desigual, Canali, Moschino, and Pepe Jeans, among others.
The Naiz Fit Platform is organized
around four connected modules: an Ecommerce Hub (size recommendation, virtual try-on, and AI stylist tools); a Product Hub (fitting analysis
and sizing consistency audits for design and merchandising teams); a Retail Hub (phygital sizing tools for physical stores, recognized
with a Paris Retail Award); and a Strategy Hub (merchandising analytics, market benchmarking, and internationalization support). The
platform integrates into client environments within four to six weeks and is compatible with all major e-commerce content management
systems.
The acquisition of ShoeSize.Me
in September 2025 extended Naiz Fit’s coverage into footwear, a category with distinct sizing complexity. ShoeSize.Me operates a proprietary
AI-powered footwear sizing engine with a database of over 92 million shopper experiences across more than 1.2 million shoe models and
6,400+ brands. Together, Naiz Fit and ShoeSize.Me offer an integrated size and fit solution covering both apparel and footwear. Clients
deploying our size recommendation tools have experienced average reductions in size-related returns of 15% to 40% and conversion rate
improvements of two to eight times among shoppers who engage with the size recommendation widget.
Orgad — Inventory
Commerce & Overstock Management
Orgad is a technology-enabled e-commerce retailer that uses machine learning and data analytics to identify, source, and sell fashion
and footwear products on Amazon.com, where it has operated as a third-party seller since 2016. Orgad manages more than 5,000 SKUs across
footwear, apparel, and accessories, and substantially all of its revenue is generated through the Amazon marketplace.
For fashion brands, Orgad addresses
one of the industry’s most persistent and costly challenges: excess inventory. The fashion industry produces an estimated 2.5 to 5 billion
items of excess stock annually, representing between $70 billion and $140 billion in unrealized revenue, according to research cited
in the BoF-McKinsey State of Fashion 2025 report. Approximately 20% to 30% of all apparel inventory goes unsold each season. Orgad provides
brands with a direct, scalable channel to liquidate end-of-season surplus and overstock on the world’s largest e-commerce marketplace,
without the brand dilution risks of traditional discount channels.
Orgad’s competitive advantage
lies in its proprietary software systems, which process large volumes of sales and market data to optimize inventory sourcing and pricing
in real time, and in its experienced operations team with expertise across listing, advertising, reconciliation, and fulfillment. Within
the MySize group, Orgad also creates a natural commercial entry point: brands seeking to clear excess inventory through Orgad become
natural candidates for Naiz Fit’s size and fit technology to reduce the returns and sizing errors that contribute to overstock creation
in the first place.
Percentil — Circular
Economy & Recommerce
Percentil, acquired through our
wholly-owned Spanish subsidiary New Percentil in May 2025, is a managed recommerce platform founded in Spain in 2012 that gives
pre-owned fashion a second life. Percentil operates across Spain, France, Germany, and Italy, with all operations managed from its office
and warehouse in Madrid. Since founding, Percentil has received and classified over 12 million garments, sold more than 5 million items
online, shipped over 600,000 orders, and built a registered user base of approximately 1 million consumers.
Percentil addresses the sustainability
and regulatory dimension of the fashion industry’s overstock and end-of-life challenge. Under the EU Ecodesign for Sustainable Products
Regulation, fashion brands operating in the EU are required to report on the management of unsold textiles from 2025 and will be prohibited
from destroying unsold products from 2026. These obligations are creating structural demand for the kind of managed recommerce infrastructure
that Percentil provides.
Percentil’s B2B Circular Solutions
offering operates at three levels: consignment (picking up and reselling brand surplus or consumer returns through the Percentil platform,
with a profit-sharing arrangement); logistics (providing Percentil’s software and operational infrastructure to power a brand’s own branded
pre-owned store); and take-back store concierge (enabling brands to offer in-store or online clothing take-back services for their own
customers). Percentil’s platform is connected to MySize’s technology capabilities, including the Naiz Fit size recommendation engine,
which is a meaningful differentiator in second-hand commerce where garment size information is often incomplete.
Ten Peacks — International
Brand Distribution
Ten Peacks was incorporated
in Israel in July 2025 as a wholly-owned subsidiary of My Size Israel. Ten Peacks focuses on the marketing and distribution of global
apparel and footwear brands in the Israeli market, providing brands with local-market expertise, distributor relationships, and commercial
infrastructure for market entry and growth. Ten Peacks commenced commercial activity in the fourth quarter of 2025 and represents an
emerging channel for the MySize group to expand its brand partner relationships into new geographies.
The Integrated MySize Platform
We believe the strategic value
of our portfolio is greater than the sum of its parts. Each business unit addresses a specific challenge — sizing returns, excess
inventory, end-of-life obligations, and international distribution — but they share a common commercial logic: fashion brands are
increasingly seeking partners who can address multiple challenges with a single relationship. By offering size and fit technology (Naiz
Fit), overstock commerce (Orgad), circular solutions (Percentil), and distribution support (Ten Peacks), we believe MySize is positioned
as a uniquely comprehensive operating partner for the global fashion industry.
Additionally, all four business
units generate proprietary data — on consumer body measurements, product fit, purchasing behavior, inventory sell-through, and
garment resale patterns — that creates a compounding data asset across the group. We believe this data flywheel will become an
increasingly important source of competitive differentiation as we deepen our platform capabilities over time.
Our Growth Strategy
We aim to drive revenue through
the combined commercialization of our technology, commerce, sustainability, and distribution businesses, with a particular focus on the
United States, European, and Latin American markets. We are pursuing the following growth strategies:
Market Summary
Global E-Commerce Market
Global retail e-commerce sales
are estimated to have reached approximately $6.4 trillion in 2025, representing a year-over-year increase of approximately 6.8% and accounting
for more than 20% of total global retail sales, according to Shopify and eMarketer data. By 2028, global e-commerce sales are projected
to reach approximately $7.89 trillion. China, the United States, and Western Europe are the three largest e-commerce markets, with combined
sales exceeding $5.17 trillion in 2025. The U.S. e-commerce market is projected to grow at a compound annual growth rate of approximately
16.4% from 2024 to 2030.
Despite this growth, high return
rates remain a structural profitability challenge for online retailers. According to the National Retail Federation, approximately 15.8%
of online sales in the United States are returned. The average online return rate for apparel specifically is approximately 22%, more
than three times the 6.2% rate for brick-and-mortar stores, according to the ICSC 2024 Consumer Returns Survey. Size and fit issues are
consistently cited as the primary driver of apparel returns, underscoring the commercial importance of accurate size recommendation technology.
Fashion and Apparel E-Commerce
The global fashion e-commerce
market grew from approximately $821 billion in 2023 to approximately $951 billion in 2024, and is expected to reach approximately $1.06
trillion in 2025, reflecting a compound annual growth rate of approximately 11.2%. The market is projected to reach approximately $1.65
trillion by 2029.
Fashion brands invested approximately
1.6% to 1.8% of revenues in technology in 2021, with technology investment expected to approximately double by 2030. Key investment priorities
include personalization, AI-driven consumer engagement, size and fit accuracy, and sustainable commerce solutions. We believe our portfolio
of businesses is positioned to benefit from each of these investment trends. Approximately 50% of shopping cart abandonments are attributable
to high shipping or return costs, underlining the commercial importance of preventing returns before they occur through accurate size
recommendations.
Fashion Overstock and Inventory
Challenge
Excess inventory is one of
the most consequential and persistent financial and sustainability challenges facing fashion brands. The fashion industry produced
an estimated 2.5 to 5 billion items of excess stock in 2023, representing between $70 billion and $140 billion in potential sales
that were never realized, according to the BoF-McKinsey State of Fashion 2025 report. Industry research shows that approximately 20%
to 30% of apparel inventory goes unsold each season. The average share of fashion brands’ assortments sold at a discount
increased by five percentage points in the first half of 2024 compared to the prior year. McKinsey estimates that 30% to 40% of all
apparel is sold at a discount, with many units never sold at all.
Inaccurate size distribution
is a material driver of overstock. Poor sizing across a product range is estimated to result in profit losses of up to 20% on average,
as certain sizes are systematically over- or under-produced relative to consumer demand. LVMH and Kering, two of the world’s largest
luxury fashion groups, reported a combined €4.7 billion in excess inventory in 2023, highlighting that overstock is not a challenge
limited to fast fashion but affects brands across all price points.
The cost of holding unsold inventory
is significant and often underestimated. Industry benchmarks indicate that total carrying costs — including warehousing, insurance,
handling, and opportunity cost — typically run between 20% and 30% of inventory value per year. Warehousing costs increased 10%
in 2023 due to constrained logistics capacity, compounding the financial burden of overstock positions.
Regulatory pressure is
intensifying the urgency for brands to address overstock. The EU Ecodesign for Sustainable Products Regulation, approved in July
2024, requires fashion companies to report on the management of unsold textiles beginning in 2025 and will make it illegal to
destroy certain unsold products by July 2026. In September 2024, California enacted the Responsible Textile Recovery Act (SB 707),
the first Extended Producer Responsibility (EPR) program for textiles in the United States. The law requires apparel and textile
producers to finance and participate in a statewide system for the collection, repair, reuse, and recycling of covered products
through an approved Producer Responsibility Organization, with full program implementation expected by 2030. These regulatory developments create structural
demand for the types of managed overstock and recommerce solutions offered by Orgad and Percentil within the MySize group.
Second-Hand Fashion Market
The global second-hand apparel market is
projected to reach $367 billion by 2029, growing at a compound annual growth rate of approximately 10%, according to ThredUp’s
2025 Resale Report, based on research conducted by GlobalData. The sector is estimated to be expanding at approximately 2.7 times
the rate of the broader global apparel industry. In 2024, the global second-hand apparel market grew by approximately 15%, and
online resale specifically grew by 23%, its strongest annual growth rate since 2021.
In the United States, the secondhand apparel market
is expected to reach $74 billion by 2029, growing at a compound annual growth rate of approximately 9% — five times faster than
the broader apparel sector in 2024. Online resale is projected to nearly double by 2029, reaching $40 billion at a CAGR of 13%. 66% of
U.S. adults report regularly shopping second-hand, with Gen Z leading adoption.
The European second-hand fashion
market, which is the primary geographic focus of our Percentil subsidiary, is supported by both strong consumer demand and an accelerating
regulatory framework. In Spain specifically, second-hand fashion is projected to grow at a compound annual growth rate of approximately
8.1% through 2034. Research indicates that European consumers cite cost savings and environmental considerations as the two primary motivations
for purchasing second-hand clothing, with younger demographics driving outsized engagement.
According to ThredUp’s 2025 Resale
Report, 94% of retail executives acknowledge that their customers are already participating in the second-hand market, and 47% of consumers
are more likely to make a first-time purchase from a brand that offers a trade-in or take-back program. These figures underscore the
dual commercial and loyalty benefits of recommerce programs for fashion brands, and the market opportunity available to Percentil’s B2B
Circular Solutions offering.
Amazon Third-Party Marketplace
According to data from
Marketplace Pulse, Amazon generated approximately $440 billion in U.S. e-commerce sales in 2025, representing approximately 35.7% of
the $1.2 trillion U.S. e-commerce market. Amazon’s dominance in the U.S. e-commerce market makes it the primary selling
channel for Orgad’s wholesale third-party seller business. Third-party sellers account for a majority of Amazon’s
overall marketplace volume, representing a large and competitive seller ecosystem within which Orgad’s operational and
technological capabilities are deployed.
Naiz Fit
Overview
Naiz Fit is an AI-driven fashion technology platform headquartered in Bilbao, Spain. Founded in 2019 and acquired by us in October 2022, Naiz
Fit has evolved from a size recommendation widget into a comprehensive, multi-hub SaaS platform that addresses size and fit challenges
across the entire fashion value chain—from e-commerce conversion to product design, physical retail, and strategic planning. The
platform is currently deployed by more than 100 international fashion and footwear brands, including Levi’s, Desigual, Canali,
Moschino, Pepe Jeans, Kiabi, Alberta Ferretti, Hackett, Fabiana Filippi, and Boglioli, among others.
We believe Naiz Fit’s core
differentiator is its integrated platform approach. Unlike point solutions that solve a single sizing problem at the checkout page, the
Naiz Fit Platform connects four distinct business functions—ecommerce, product design, physical retail, and commercial strategy—into
a unified data and technology layer. This means a fashion brand working with Naiz Fit is not only reducing sizing-related returns in
its online store; it is simultaneously generating the data needed to improve next season’s collection fit, personalize the in-store
experience for its customers, and benchmark its sizing practices against the market. The platform’s value proposition compounds
as more of a brand’s teams adopt it.
The Naiz Fit Platform is organized
into four interconnected hubs, each addressing a distinct stage in the fashion value chain: the Ecommerce Hub, the Product Hub, the Retail
Hub, and the Strategy Hub. Within each hub, brands can activate individual solutions or modules depending on their needs. As of the date of this Annual Report on Form 10-K, the platform has delivered over 45 million size recommendations, conducted over 220,000 physical garment fitting analyses
across more than 60 brands, and supported clients in countries across Europe, North America, Latin America, and Asia. The acquisition
of ShoeSize.Me AG in September 2025 extended the platform’s coverage into AI-powered footwear sizing, completing a full apparel-and-footwear
size and fit offering under the Naiz Fit umbrella.
Business Model
Naiz Fit operates on a recurring
B2B SaaS subscription model. Clients pay a subscription fee to access one or more modules within the Naiz Fit Platform, with pricing
structured around the combination of hubs and solutions activated and the volume of usage generated across those solutions. A brand may
begin with a single solution—such as the Size Advisor within the Ecommerce Hub—and progressively activate additional hubs
and modules as its adoption of the platform deepens. This modular approach lowers the barrier to initial adoption while creating a clear
path to contract expansion over time.
The Ecommerce Hub solutions—Size
Advisor, Virtual Try-On, and AI Stylist—are typically priced based on the volume of size recommendations or sessions delivered
to the brand’s shoppers, as these solutions scale directly with traffic and usage. The Product Hub solutions—Fitting Audit,
Sizing Consistency Audit, and Product Measurement Audit—are typically delivered on a per-project or per-collection basis, as they
involve Naiz Fit’s in-house pattern-making experts and physical garment testing teams performing work that is scoped per engagement.
The Retail Hub’s Naiz Shopper solution involves hardware and software licensing for in-store deployments. Strategy Hub solutions—Naiz
Merchandising, Naiz Internationalisation, and Naiz Benchmarking—are typically delivered as data subscriptions or advisory retainers.
Naiz Fit integrates into client
e-commerce environments within four to six weeks and is compatible with all major content management systems, including Shopify, Salesforce
Commerce Cloud, VTEX, Magento, PrestaShop, WooCommerce, BigCommerce, and others. The platform also integrates with all major returns
management systems. This broad compatibility and rapid integration timeline are core commercial advantages in a market where long implementation
cycles are a common barrier to technology adoption.
Platform and Products
Ecommerce Hub
The Ecommerce Hub is the customer-facing
layer of the platform, focused on improving the online shopping experience through accurate size and fit recommendations and immersive
visualization tools. It includes three solutions:
Product Hub
The Product Hub addresses the
fitting and sizing accuracy of a brand’s collection before products reach consumers. It transforms the data generated from consumer
interactions with the Ecommerce Hub—as well as physical garment testing—into actionable product decisions for design and
merchandising teams. It includes three solutions:
Retail Hub
The Retail Hub extends the Naiz
Fit platform into physical stores, enabling brands to offer data-driven sizing experiences in brick-and-mortar environments. It includes
one solution:
Strategy Hub
The Strategy Hub provides brands
with market intelligence and strategic decision support derived from the data generated across the entire Naiz Fit platform ecosystem.
It includes three solutions:
Market Description
The global market for artificial
intelligence in fashion was valued at approximately $1.77 billion in 2025 and is projected to grow to approximately $6.99 billion by
2029, at a compound annual growth rate of approximately 40% to 41%, according to research published by The Business Research Company.
More broadly, the global fashion technology market is projected to grow from approximately $254 billion in 2025 to approximately $345
billion by 2030, at a CAGR of approximately 6.3%, according to Grand View Research.
Within the AI in fashion market,
size and fit technology—the category in which Naiz Fit competes—is one of the highest-impact and most commercially validated
subcategories. Size-related returns consistently represent the largest single category of fashion returns, and the financial cost of
sizing failure cascades across the value chain: higher return rates compress margins, unsold inventory accumulates from size distribution
errors, and brands that cannot solve fit online face structural disadvantages in e-commerce conversion relative to physical retail.
We believe Naiz Fit’s platform
architecture positions it to capture a disproportionately large share of the AI in fashion market over time for two reasons. First, while
most AI fashion tools address one problem in isolation—size recommendation, virtual try-on, collection planning, or merchandising—Naiz
Fit’s platform addresses all of these from a unified data layer, increasing both the addressable revenue per client and the depth
of competitive lock-in. Second, the data flywheel created by the platform’s multi-hub architecture creates compounding value: as
more brands deploy more hubs, the anthropometric, garment fit, and consumer behavior datasets underlying the platform grow richer, improving
recommendation accuracy and enabling new analytical products that further differentiate the platform from standalone competitors.
We also see significant white
space in the geographic expansion of size and fit technology adoption. While Naiz Fit currently serves clients predominantly in Europe
and Latin America, with early commercial relationships in North America and the Asia-Pacific region, the U.S. market—the world’s
largest fashion e-commerce market—remains a primary target for commercial acceleration. The U.S. fashion industry is projected
to reach approximately $358 billion by 2025, and online fashion return rates in the U.S. average approximately 22%, creating a large
and commercially motivated buyer base for accurate size and fit technology.
Over 60% of fashion companies
in the EU had adopted AI-based visual recognition tools for design and trend forecasting as of 2024, up from 38% in 2021, according to
the European Commission’s Joint Research Centre—reflecting the pace of AI adoption in the fashion sector and the expanding
appetite for AI-driven product solutions across the value chain. We believe Naiz Fit’s multi-hub platform, its expanding footwear
capability through ShoeSize.Me, and its growing proprietary data assets position it to be a leading AI-driven fashion technology platform
as the market matures.
Orgad
Overview
Orgad is a
technology-enabled consumer products company that uses machine learning and data analytics to develop, market, and sell products in
e-commerce retailing across global markets. Orgad has been operating as a third-party seller on Amazon.com since 2016 and was
acquired by us in February 2022. To date, Orgad has generated substantially all of its revenue as a third-party seller on
Amazon.com. Orgad manages more than 5,000 stock-keeping units, or SKUs, across product categories including footwear,
apparel, and accessories.
Business Model
Orgad operates under a
wholesale resale model, also known as third-party selling, in which it purchases products in bulk directly from brands or
manufacturers at wholesale prices and resells them on Amazon.com at a retail margin. Sales are fulfilled by Amazon through its
Fulfilled by Amazon, or FBA, logistics infrastructure. Orgad pays Amazon fees for the right to sell on its platform and for
fulfillment and logistics services.
The advantages of the wholesale model include the
ability to purchase lower unit quantities relative to private-label products, greater scalability relative to retail arbitrage sourcing,
and the ability to offer brands broader Amazon marketplace presence. The primary challenges include competition for the Amazon “Buy
Box”—the featured offer position on a product detail page—and the ongoing cultivation of supplier and brand relationships.
Orgad’s primary competitive advantages on the
Amazon marketplace are its proprietary software systems, which enable it to process large volumes of product and sales data daily to
identify gaps, optimize inventory levels, and manage pricing; its experienced operations team with expertise in Amazon listing, advertising,
reconciliation, and fulfillment; and its focus on three core product categories, which it believes enables deeper supplier relationships
and a more competitive cost structure relative to generalist third-party sellers.
Market Description/Opportunities
According to data from Marketplace Pulse and eMarketer,
Amazon generated approximately $440 billion in U.S. sales in 2025, representing approximately 35.7% of the $1.2 trillion U.S. e-commerce
market, making it the dominant e-commerce platform in the United States. The U.S. e-commerce market is projected to grow at a compound
annual growth rate of approximately 16.4% from 2024 to 2030. Third-party sellers, including Orgad, account for a majority of Amazon’s
marketplace volume, representing an active and competitive seller ecosystem. We believe Orgad’s operational capabilities and proprietary
data infrastructure position it to compete effectively in this market.
Percentil
Overview
Percentil is a managed second-hand
fashion recommerce platform founded in Spain in 2012 and acquired by us through our wholly-owned Spanish subsidiary New Percentil, S.L.
in May 2025. Percentil’s mission is to encourage responsible fashion consumption by giving quality pre-owned clothing a second
life, reducing the environmental impact of clothing production, and democratizing access to quality fashion. Percentil currently operates
across four European markets—Spain, France, Germany, and Italy—through dedicated local-language e-commerce platforms (percentil.com,
percentil.fr, percentil.de, and percentil.it), with its office and operations warehouse headquartered in Madrid, Spain.
Percentil operates what it refers to as a “managed
recommerce” model, which distinguishes it from peer-to-peer resale platforms. Rather than simply connecting sellers and buyers,
Percentil takes physical custody of garments, applies a rigorous quality control and filtering process, photographs and prices each item
individually, manages all logistics and fulfillment, and handles post-sale customer service. The quality of second-hand clothing processed
by Percentil is, by its own assessment, at least three times higher than the industry average, reflecting its selective acceptance criteria.
Since its founding, Percentil has received and classified
over 12 million garments, sold more than 5 million garments online, shipped over 600,000 orders, and resolved over 800,000 customer service
tickets. Percentil’s catalog currently features over 120,000 unique references from more than 8,000 brands, spanning mass-market
through high fashion. Percentil has approximately 1 million registered users, approximately half of whom are based in Spain.
Business Model
Percentil’s business model
is built around its managed consignment service. The process operates as follows: individual sellers or institutional partners request
a clothing pickup through the Percentil website; Percentil collects the items, filters them against its quality criteria, photographs
each accepted item, prices it using a proprietary dynamic pricing algorithm, and lists it for sale on the relevant local-language platform;
when an item is sold, it is fulfilled by Percentil from its Madrid warehouse, with delivery within 24 to 48 hours; and sellers receive
a percentage of the realized selling price as their payout. Items that do not meet Percentil’s quality standards are either donated
to partner organizations or routed to textile recycling.
In addition to its consumer-facing
consignment service, Percentil operates a B2B Circular Solutions offering targeting fashion brands and retailers. This offering is structured
across three tiers of engagement: (i) Consignment, in which Percentil collects unsold season-end inventory or customer returns from a
brand’s warehouse, processes and sells the items on its platform, and shares the revenue with the brand; (ii) Logistics, in which
Percentil provides its software and operational infrastructure to power the brand’s own branded pre-owned store; and (iii) Take-Back
(Store Concierge), in which Percentil operates an in-store or online take-back service that allows the brand’s customers to consign
pre-owned items directly through the brand’s physical or digital touchpoints. This B2B offering positions Percentil as a circular
economy infrastructure provider for fashion brands, and we expect demand for this service to increase as EU extended producer responsibility
and textile recycling regulations take effect across Percentil’s operating markets.
Percentil’s technology
platform includes real-time API infrastructure updating inventory data every five seconds, an automated pricing and discount algorithm,
an advanced CRM system with over 200 automated workflows, and image-based product search. The platform is connected to MySize Inc.’s
technology capabilities, including the Naiz Fit size recommendation engine, which we believe is a meaningful differentiator for second-hand
commerce where size information is often incomplete.
Market Description
The market for second-hand fashion
is experiencing structural growth across Percentil’s European operating markets, driven by growing consumer demand for sustainable
purchasing options, rising prices for new clothing, and increasing regulatory pressure on fashion brands to take responsibility for the
end-of-life management of their products. In Spain specifically, a compound annual growth rate of approximately 8.1% is projected for
the second-hand fashion market through 2034. No single fashion brand or large textile group has established a leadership position in
the physical or online second-hand channel in Spain, which we believe represents a significant market opportunity for Percentil as it
continues to expand its brand and institutional partner relationships.
Percentil’s operational expertise is built
on over 13 years of continuous operation and encompasses more than 300,000 hours of experience in garment classification, quality control,
photography, pricing, logistics, and customer service, and the analysis of over 70,000 brands.
Ten Peacks
Overview
Ten Peacks was incorporated in Israel on July 21, 2025, as a wholly-owned subsidiary of My Size Israel. Ten Peacks focuses on the marketing
and distribution of global apparel and footwear brands in the Israeli market. The company commenced commercial operations in the fourth
quarter of 2025, selling items to distributors in Israel, and represents our initial strategic entry into fashion brand distribution
as a distinct business activity.
Ten Peacks is designed to serve
as the MySize group’s distribution arm in Israel, leveraging the group’s existing relationships with global apparel and footwear
brands—relationships built through the commercial activities of Naiz Fit and ShoeSize.Me—to create a new revenue channel
through local-market distribution, wholesale, and brand representation. By establishing a dedicated distribution entity in Israel, we
aim to formalize and monetize the group’s brand network in a market that has historically welcomed international fashion brands
and where local distribution expertise is a meaningful barrier to entry for brands seeking market access.
Business Model
Ten Peacks operates as a fashion
brand distributor in Israel, acting as the local market partner for international apparel and footwear brands that seek distribution,
wholesale representation, and retail placement in the Israeli market. The distribution model involves Ten Peacks purchasing or consigning
inventory from brand partners, managing the logistics and commercial relationships with Israeli distributors and retailers, and earning
revenue from the margin between acquisition cost and realized wholesale or retail price.
The Israeli fashion distribution
model typically involves a local distributor serving as the brand’s exclusive or primary market representative, responsible for
managing trade customer relationships across the country’s retail chains, boutiques, and multi-brand stores, as well as for adapting
the brand’s commercial presentation to local market preferences while preserving brand identity. Ten Peacks is structured to perform
this function across both apparel and footwear categories, reflecting the combined capabilities of the MySize group across these product
types.
Ten Peacks’ commercial
model is differentiated by its access to the MySize group’s technology infrastructure. Brands distributed by Ten Peacks in Israel
can be offered the full suite of Naiz Fit and ShoeSize.Me size and fit technology, enabling Ten Peacks to bring technology-enhanced distribution
to the Israeli market. We believe this integrated offering—combining local distribution expertise with proven e-commerce size and
fit technology—is a meaningful differentiator relative to traditional Israeli fashion distributors and creates additional commercial
value for brand partners beyond standard wholesale representation.
Market Description and Opportunities
The Israeli apparel retail market
generated revenues of approximately $4.4 billion in 2024, according to MarketLine, with the womenswear segment representing the largest
share at approximately $2.1 billion. The Israeli fashion e-commerce market generated approximately $1.64 billion in online revenue in
2024, with an online market share of 20% to 25% of total fashion retail. The Israeli fashion market overall is projected to grow by approximately
8.9% between 2024 and 2029, reaching a market volume of approximately $2.1 billion in fashion e-commerce by 2029, according to Statista.
The Israeli market has historically
demonstrated strong receptivity to international fashion brands. A significant proportion of the country’s fashion retail activity
is driven by internationally recognized labels, with established players including Zara, H&M, Nike, and Uniqlo maintaining strong
presences in the market. Approximately one third of all franchises operating in Israel are in the apparel and fashion sector, according
to data from the U.S. Department of Commerce’s International Trade Administration, and the franchise and distribution model is
the dominant channel through which international brands access Israeli consumers.
We believe Ten Peacks is positioned
to compete in this market by leveraging three distinct advantages: first, the pre-existing brand relationships built through the Naiz
Fit and ShoeSize.Me client base, which includes over 100 international fashion and footwear brands that are existing commercial partners
of the MySize group; second, the ability to offer brand partners an integrated distribution and technology proposition that includes
size and fit solutions alongside local market representation; and third, the operational infrastructure and market knowledge of My Size
Israel, which has been operating in the Israeli market since the Company’s early development stage and provides Ten Peacks with
an established local foundation.
Research and Development
Research and development is a
core strategic activity across the MySize group. Our subsidiaries’ proprietary technologies serve a dual purpose: generating direct
commercial revenue from brand clients and retailers while simultaneously building shared infrastructure that makes the broader group
more operationally efficient, more data-rich, and more competitively differentiated. We incurred research and development expenses of
approximately $0.6 million in 2025 and approximately $0.49 million in 2024.
Naiz Fit and ShoeSize.Me — Fashion AI
and Size & Fit Technology
The largest share of the group’s
R&D investment is concentrated in Naiz Fit, whose engineering and data science team is responsible for three interconnected proprietary
technology layers. The first is a proprietary anthropometric engine that translates basic consumer inputs into 21 body measurements,
trained and continuously refined against a growing dataset of real consumer body data and validated through over 220,000 physical garment
try-on sessions. The second is a garment modelling technology that creates a per-SKU digital fit model for each product by combining
technical measurements with physical try-on data and brand-specific fit rules—enabling size recommendations at the individual product
level rather than relying on generic size charts. The third is a machine learning layer that ingests consumer behavior data from every
interaction on the platform—recommendations made, sizes chosen, purchases, and returns—to improve algorithm accuracy at scale
and power the platform’s analytics products.
ShoeSize.Me contributes a complementary
and architecturally distinct technology: an AI-powered footwear sizing engine built on a database of over 92 million shopper experiences
across more than 1.2 million shoe models and 19 international size scales. Its peer-comparison approach—inferring a consumer’s
correct size in a new shoe based on shoes they already own—addresses the specific complexity of footwear sizing that apparel-focused
algorithms cannot solve. Together, Naiz Fit and ShoeSize.Me give the group unified AI-driven size and fit coverage across both apparel
and footwear.