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 ☐
Check
the appropriate box:
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Preliminary Proxy Statement
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Confidential, for the use of the Commission
only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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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.
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Fee computed on table below per
Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction
applies:
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Aggregate number of securities to which transaction
applies:
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(3)
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Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state
how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary
materials.
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Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-1l (a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date
of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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Filing Party:
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Date Filed:
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MY
SIZE, INC.
NOTICE
OF ANNUAL MEETING
AND
PROXY
STATEMENT
Meeting
to be held on August 5, 2019, 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 AUGUST 5, 2019
An
annual meeting (the “Annual Meeting”) of stockholders of My Size, Inc. (the “Company”) will be held on
August 5, 2019, 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.
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Election
of four directors to serve on the Company’s board of directors until the 2020 annual
meeting of stockholders or until their successors are elected and qualified;
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2.
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Grant
discretionary authority to the Company’s board of directors to (A) amend the Certificate
of Incorporation of the Company to effect one or more consolidations of the issued and
outstanding shares of common stock of the Company 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-2 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 the Company's 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 the Company 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 August 5,
2020;
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3.
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To
ratify the appointment of Somekh Chaikin as our independent public accountant for the
fiscal year ending December 31, 2019; and
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4.
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To
transact such other business as may be properly brought before the Annual Meeting and
any adjournments thereof.
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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, and 3. The Company intends
to mail the Proxy Statement and Proxy Card enclosed with this notice on or about July 8, 2019 to all stockholders entitled to
vote at the Annual Meeting. Only stockholders of record at the close of business on June 27, 2019 (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, 5
th
Floor, New York, NY 10151
North
American Toll Free Phone:
1-855-683-3113
Email:
contactus@kingsdaleadvisors.com
Call
Collect Outside North America: 416-867-2272
Important
Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on August 5, 2019. The
Proxy Statement is available at: http://www.vstocktransfer.com/proxy.
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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
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WHETHER
OR NOT YOU PLAN ON ATTENDING THE MEETING IN PERSON, PLEASE VOTE AS PROMPTLY AS POSSIBLE TO ENSURE THAT YOUR VOTE IS COUNTED.
My
Size, Inc.
3
Arava St., pob 1026
Airport
City, Israel, 7010000
PROXY
STATEMENT
ANNUAL GENERAL
MEETING OF SHAREHOLDERS
August 5, 2019
This
Proxy Statement is furnished in connection with the solicitation of proxies by the board of directors of My Size, Inc.
(“My Size”, the “Company”, “we”, “us”, or “our”) to be voted at
the Annual Meeting of stockholders (“Annual Meeting”) which will be held on August 5, 2019 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 July 8, 2019.
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 up to $13,500 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 1-855-683-3113 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 June 27, 2019 (the “Record Date”), will be entitled to receive notice of, attend
and vote at the meeting.
INFORMATION
ABOUT THE ANNUAL MEETING AND VOTING
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 vote 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, 2018.
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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) election of four directors to serve on the Company’s board of directors until the 2020 annual
meeting of stockholders or until their successors are elected and qualified; (ii) granting discretionary authority to the Company’s
board of directors to (A) amend the Certificate of Incorporation of the Company to effect one or more consolidations of the issued
and outstanding shares of common stock of the Company, 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-2 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 the Company's 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 the Company 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 August 5, 2020; and (iii)
ratification of the appointment of Somekh Chaikin as our independent public accountant for the fiscal year ending December 31,
2019.
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 29,883,639 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 9,961,213 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 June 27, 2019, 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?
Stockholders
of Record.
If you are a stockholder of record, you may vote by any of the following methods:
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By
Internet
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internet voting instructions on the proxy card accompanying the proxy statement;
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By
Telephone.
You may submit your proxy by following the telephone voting instructions
on the proxy card accompanying the proxy statement;
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By
Mail.
You may vote by completing, signing, dating and returning your proxy card
in the pre-addressed, postage-paid envelope provided; or
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In
Person.
You may attend and vote at the Annual Meeting. The Company will give
you a ballot when you arrive.
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Beneficial
Owners of Shares Held in Street Name.
If you are a street name stockholder, you will receive voting instructions from
your broker, bank or other nominee. You must follow the voting instructions provided by your broker, bank or other nominee in
order to instruct your broker, bank or other nominee on how to vote your shares. Street name stockholders should generally be
able to vote by returning an instruction card, or by telephone or on the Internet. However, the availability of telephone and
Internet voting will depend on the voting process of your broker, bank or other nominee. As discussed above, if you are a street
name stockholder, you may not vote your shares in person at the Annual Meeting unless you obtain a legal proxy from your broker,
bank or other nominee.
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,” and abstentions.
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, Proposal 1 is considered a “non-routine” matter. Proposals 2 and 3 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 four.
Proposal
2
: The affirmative vote of a majority of our outstanding shares will be 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
and broker non-votes will have the same effect as votes against this proposal.
Proposal
3
: The affirmative vote of a majority of the shares of our common stock present in person or by proxy at the Annual Meeting
and entitled to vote thereon will be required for approval of Proposal 3. Stockholder ratification of the selection of Somekh
Chaikin as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2019 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.
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 election of all four board nominees as directors;
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“FOR”
for granting discretionary authority to the Company’s board of directors to (A) amend the Certificate of Incorporation
of the Company to effect one or more consolidations of the issued and outstanding shares of common stock of the Company,
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-2 up to 1-for-30 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 the Company's 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 the Company 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 August 5,
2020;
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“FOR”
ratification of the appointment of Somekh Chaikin as our independent public accountant for the fiscal year ending
December 31, 2019.
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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?
Only
one copy of this Proxy Statement will be delivered to an address where two or more stockholders reside with the same last name
or who otherwise reasonably appear to be members of the same family based on the stockholders’ prior express or implied
consent.
We
will deliver promptly upon written or oral request a separate copy of this Proxy Statement upon such request. If you share
an address with at least one other stockholder, currently receive one copy of our Proxy Statement at your residence, and
would like to receive a separate copy of our Proxy Statement for future stockholder meetings of the Company, please specify
such request in writing and send such written request to My Size, Inc., 3 Arava St., POB 1026, Airport City, Israel, 7010000,
Attention: Corporate Secretary.
When
are Stockholder Proposals Due for the 2020 Annual Meeting?
Shareholders
who wish to present proposals for inclusion in our proxy materials for the 2020 annual meeting of stockholders (the “2020
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 March 10, 2020. 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 shareholders, 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 2020 Annual Meeting must be submitted in writing to the Company’s
Secretary at 3 Arava St., pob 1026, Airport City, Israel 7010000 and received no earlier than March 7, 2020 and no later
than April 6, 2020. However, if the date of the 2020 Annual Meeting is convened more than 30 days before, or delayed by more than
60 days after, August 5, 2020, to be considered for inclusion in proxy materials for our 2020 Annual Meeting, a stockholder proposal
must be submitted in writing to the Company’s Secretary at 3 Arava St., pob 1026, Airport City, Israel 7010000 and
received no earlier than March 7, 2020 and no later than April 6, 2020 or the 10th day following the day on which public announcement
of the date of such meeting is first made by the Company.
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 FOUR DIRECTORS TO SERVE ON THE COMPANY’S BOARD UNTIL THE 2020 ANNUAL MEETING OF STOCKHOLDERS OR UNTIL THEIR SUCCESSORS
ARE ELECTED AND QUALIFIED
At
this Annual Meeting, four (4) persons, comprising the entire membership of the board of directors, are to be elected. Each
elected director will serve until the Company’s next annual meeting of stockholders and until a successor is elected
and qualified. All of the nominees currently serve on the board of directors.
All
nominees have consented to serve if elected. We expect that each of the nominees will be available for election, but if any of
them is not a candidate at the time the election occurs, such proxy will be voted for the election of another nominee to be designated
by the board to fill any such vacancy.
The
term of office of each person elected as a director will continue until the next annual meeting or until his successor has been
elected and qualified, or until the director’s death, resignation or removal.
Biographical
and certain other information concerning the Company’s nominees for election to the board of 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.
NOMINEES
FOR DIRECTOR
Name of Nominee
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Age
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Ronen Luzon
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48
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Arik Kaufman*
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38
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Oren Elmaliah*
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35
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Oron Branitzky*
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61
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*
Independent as that term is defined by the rules of the Nasdaq Stock Market.
Nominees’
Biographies
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.
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. Since September 2017, Mr. Kaufman serves as VP Business Development
of Mor Research Applications and since November 2016 he has served as General Legal Counsel of Mor Research Applications. From
December 2008 until March 2016, Mr. Kaufman was an attorney at Victor Tshuva and Co. Mr. Kaufman interned at Baratz, Horn and
Co. Previously, Mr. Kaufman served as Call Center Shift Manager/Oracle CRM Implementation Team at Comverse Technology, Inc. Since
February 2018, Mr. Kaufman has served as a director of Ophectra Real Estate & Investments Ltd and, since January 2018, Mr.
Kaufman has served as an external director of TechnoPlus Ventures. In addition, since May 2016 he serves as a director of BGI
Investments 1961 Ltd. 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 BioBlast Pharma, 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.
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.
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 16 occasions during the fiscal year ended December 31, 2018. Each of the members of the board attended at least 75%
of the meetings held by the board during the time such directors served as a member of the board. Three of our directors attended
our 2018 annual meeting of stockholders, either in person or telephonically.
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, and is independent, as the SEC has defined that term in Item 407 of Regulation S-K.
The
audit committee met on eight occasions during the fiscal year ended December 31, 2018. Each of the members of the audit committee
attended at least 75% of the meetings held by the audit committee during the time such directors served as a member of the committee.
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.
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, 2018. Each of the members of the compensation
committee attended at least 75% of the meetings held by the compensation committee during the time such directors served as a
member of the committee.
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.
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:
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●
|
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
|
|
●
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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 governance committee did not meet during the fiscal year ended December 31, 2018.
Compliance
with Section 16(a) of the Securities Exchange Act of 1934
Section
16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than 10% of a registered class
of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of our common
stock and other equity securities. Officers, directors and greater than 10% stockholders are required by SEC regulations to furnish
us with copies of all Section 16(a) forms they file.
To
our knowledge, based solely upon a review of Forms 3, 4, and 5 furnished to us during the fiscal year ended December 31, 2018,
we believe that the directors, executive officers, and greater than 10% beneficial owners have complied with all applicable filing
requirements during the fiscal year ended December 31, 2018, except as follows: (i) our directors, Arik Kaufman, Oren Elmaliah
and Oron Braniztky, each filed one late Form 4 with respect to a grant of options that we made to them, and (ii) Israel Levy,
who may have been a former 10% beneficial owner, filed one late Form 4 with respect to a sale of our shares.
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., 3 Arava St., POB 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 historically have a different
person serving in each such role – until recently, Mr. Walles was our Chairman and Mr. Luzon is our Chief Executive Officer.
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.
The
following table sets forth compensation information for our non-employee directors for the year ended December 31, 2018.
Name
|
|
Fees earned or paid in
cash ($)(1)
|
|
|
Option
awards
($)(1)
|
|
|
Total
($)
|
|
Oren Elmalih
|
|
|
17,007
|
|
|
|
4,819
|
|
|
|
21,826
|
|
Oron Barnitzky
|
|
|
20,324
|
|
|
|
4,819
|
|
|
|
25,143
|
|
Arik Kaufman
|
|
|
16,828
|
|
|
|
4,819
|
|
|
|
21,647
|
|
(1)
|
Fees for the years 2018 and 2017 are based on
average US$/NIS representative exchange rates of NIS 3.60.
|
(2)
|
Amounts in this
column represent the grant date fair value of options granted to the non-employee directors during 2018, 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 10 to our financial statements
for the year ended December 31, 2018.
|
We
compensate our non-employee directors for their service as a member of our board. Mr. Luzon receives no separate compensation
for board service. Mr. Luzon’s compensation is set forth below 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 FOUR NOMINEES NAMED ABOVE, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN
FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
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-2 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 August 5, 2020. 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:
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●
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the
initial or continuing listing requirements of various stock exchanges, including the Nasdaq Capital Market;
|
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●
|
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
|
|
●
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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 two and no more than ten 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 22, 2019, we were notified by the Nasdaq Stock Market, LLC that we were 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. Nasdaq Listing Rule 5550(a)(2)
requires listed securities to maintain a minimum bid price of $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) provides
that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business
days. The notification provided that we had 180 calendar days, or until July 22, 2019, to regain compliance with Nasdaq Listing
Rule 5550(a)(2). To regain compliance, the bid price of our common stock must have a closing bid price of at least $1.00 per share
for a minimum of 10 consecutive business days. If we do not regain compliance by July 22, 2019, an additional 180 days may
be granted to regain compliance, so long as we meet the Nasdaq Capital Market continued listing requirements (except
for the bid price requirement) and notify Nasdaq in writing of our intention to cure the deficiency during the
second compliance period. If we do not qualify for the second compliance period or fail to regain compliance during the second
180-day 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
August 5, 2020, 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 two and a maximum of ten shares
in aggregate of existing common stock will be combined into one new share of common stock. Based on 29,883,639 shares of
common stock issued and outstanding as of the Record Date, immediately following the reverse split the Company would have
approximately 14,941,819 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-2, approximately 5,976,738 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-5, approximately
2,988,364 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 1,494,182 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 996,121
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 9,961,213
and 1,030,470 shares. The foregoing does not give effect to (i) 3,163,897 shares of common stock issuable upon exercise of
outstanding options as of the Record Date and (ii) 3,234,957 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 100,000,000 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
RATIFICATION
OF THE APPOINTMENT OF SOMEKH CHAIKIN AS INDEPENDENT PUBLIC ACCOUNTANT FOR THE FISCAL YEAR ENDING DECEMBER 31, 2019
The
audit committee has appointed Somekh Chaikin, independent public accountant, to audit our financial statements for the fiscal
year ending December 31, 2019. 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
|
|
2018
|
|
|
2017
|
|
Audit Fees
|
|
|
95,213
|
|
|
|
91,220
|
|
Audit-Related Fees
|
|
|
-
|
|
|
|
-
|
|
Tax Fees
|
|
|
9,300
|
|
|
|
21,222
|
|
All Other Fees
|
|
|
10,000
|
|
|
|
7,000
|
|
Total Fees
|
|
|
114,513
|
|
|
|
119,442
|
|
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 consulting and compliance performed by an
independent registered public accounting firm.
All
Other Fees:
All Other Fees for 2018 consist of professional services for a transfer pricing study and for 2017 consist
of professional services with respect to government grants.
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, 2018 and December 31, 2017 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. 3:
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, 2019.
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 June 27, 2019
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)
|
|
5% Holder:
|
|
|
|
|
|
|
Shoshana Zigdon
|
|
|
3,500,000
|
|
|
|
11.7
|
%
|
Executive officers and directors:
|
|
|
|
|
|
|
|
|
Ronen Luzon
|
|
|
2,487,617
|
(3
|
)
|
|
8.1
|
%
|
Or Kles
|
|
|
145,000
|
(4
|
)
|
|
*
|
|
Billy Pardo
|
|
|
2,487,617
|
(5
|
)
|
|
6.8
|
%
|
Ilia Turchinsky
|
|
|
28,384
|
(6
|
)
|
|
*
|
|
Arik Kaufman
|
|
|
10,000
|
(7
|
)
|
|
*
|
|
Oren Elmaliah
|
|
|
10,000
|
(8
|
)
|
|
*
|
|
Oron Branitzky
|
|
|
10,000
|
(9
|
)
|
|
*
|
|
All Executive Officers and Directors as a Group (7 persons)
|
|
|
2,691,
001
|
|
|
|
8.7
|
%
|
*
|
Less than 1%
|
|
|
(1)
|
The address of each
person is c/o My Size, Inc., 3 Arava St., POB 1026, Airport City, Israel 7010000 unless otherwise indicated herein.
|
(2)
|
The
calculation in this column is based upon 29,883,639 shares of common stock outstanding on June 27, 2019. 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 June 27, 2019 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)
1,755,950 shares of common stock, (ii) options to purchase up to 416,667 shares of our common stock, (iii) options to purchase
up to 315,000 shares of our common stock which are held by Billy Pardo, Ronen Luzon’s spouse. Excludes (i) an option
to purchase 333,333 shares of our common stock half of which will vest on January 24, 2020 and the other half of which will
vest on January 24, 2021, and (ii) an option to purchase 170,000 shares of our common stock which are held by Ms. Pardo, half
of which will vest on January 24, 2020 and the other half of which will vest on January 24, 2021. Mr. Luzon may be deemed
to beneficially hold the securities of us held by Ms. Pardo.
|
|
|
(4)
|
Consists of an option
to purchase 145,000 shares of our common stock. Excludes an option to purchase up to 150,000 shares of our common stock which
will vest as to one-third of the total shares on each of May 1, 2020, May 1, 2021 and May 1, 2022.
|
|
|
(5)
|
Consists of (i)
options to purchase up to 315,000 shares of the Company’s common stock, (ii) 1,755,950 shares of common stock which
are held by Ronen Luzon, Billy Pardo’s spouse, and (iii) options to purchase up to 416,667 shares of our common stock
which are held by Ronen Luzon, Billy Pardo’s spouse. Excludes (i) an option to purchase 170,000 shares of our common
stock half of which will vest on January 24, 2020 and the other half of which will vest on January 24, 2021, and (ii) an option
to purchase 333,333 shares of our common stock which are held by Mr. Luzon, half of which will vest on January 24, 2020 and
the other half of which will vest on January 24, 2021. Ms. Pardo may be deemed to beneficially hold the securities of the
Company held by Mr. Luzon.
|
(6)
|
Consists
of options to purchase up to 28,384 shares of our common stock. Excludes an option to purchase up to 26,666 shares of
our common stock which will vest half of the total shares on each of July 1, 2020 and July 1, 2021.
|
(7)
|
Consists of options
to purchase up to 10,000 shares of our common stock. Excludes (i) an option to purchase up to 10,000 shares of our common
stock which will vest in full on September 6, 2019, and (ii) an option to purchase up to 15,000 shares of our common stock
which will vest in full on December 31, 2019.
|
|
|
(8)
|
Consists of options
to purchase up to 10,000 shares of our common stock. Excludes (i) an option to purchase up to 10,000 shares of our common
stock which will vest in full on September 6, 2019, and (ii) an option to purchase up to 15,000 shares of our common stock
which will vest in full on December 31, 2019.
|
|
|
(9)
|
Consists of options
to purchase up to 10,000 shares of our common stock. Excludes (i) an option to purchase up to 10,000 shares of our common
stock which will vest in full on September 6, 2019, and (ii) an option to purchase up to 15,000 shares of our common stock
which will vest in full on December 31, 2019.
|
EXECUTIVE
COMPENSATION AND OTHER INFORMATION
The
following table sets forth certain information about our executive officers:
Name
|
|
Age
|
|
Position
|
Ronen
Luzon
|
|
48
|
|
Chief Executive
Officer and Director
|
Or
Kles
|
|
36
|
|
Chief Financial
Officer
|
Billy
Pardo
|
|
43
|
|
Chief Operating
Officer and Chief Product Officer
|
Ilia
Turchinsky
|
|
31
|
|
Chief Technology
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.
Summary
Compensation Table
The
following sets forth the compensation paid by us to our named executive officers, during the years ended December 31, 2018 and
December 31, 2017.
Name
and Principal Position
|
|
Year
|
|
|
Salary
($) (1)
|
|
|
Bonus
($)
|
|
|
Stock
Awards
($)
|
|
|
Option
Awards
($) (2)
|
|
|
All
Other
Compensation
($)
|
|
|
Total
($)
|
|
Eli
Walles
|
|
2018
|
|
|
|
117,000
|
|
|
|
19,000
|
|
|
|
-
|
|
|
|
37,000
|
|
|
|
56,000
|
|
|
|
229,000
|
|
Former
Chairman of the Board
|
|
2017
|
|
|
|
117,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
66,000
|
|
|
|
57,000
|
|
|
|
240,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ronen
Luzon
|
|
2018
|
|
|
|
145,000
|
|
|
|
44,000
|
|
|
|
-
|
|
|
|
18,000
|
|
|
|
78,000
|
|
|
|
285,000
|
|
Chief
Executive Officer
|
|
2017
|
|
|
|
133,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
31,000
|
|
|
|
49,000
|
|
|
|
213,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Or
Kles
|
|
2018
|
|
|
|
89,000
|
|
|
|
21,000
|
|
|
|
-
|
|
|
|
14,000
|
|
|
|
36,000
|
|
|
|
160,000
|
|
Chief
Financial Officer
|
|
2017
|
|
|
|
83,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
13,000
|
|
|
|
35,000
|
|
|
|
131,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Billy
Pardo
|
|
2018
|
|
|
|
125,000
|
|
|
|
19,000
|
|
|
|
-
|
|
|
|
18,000
|
|
|
|
50,000
|
|
|
|
213,000
|
|
Chief
Product Officer
|
|
2017
|
|
|
|
117,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
31,000
|
|
|
|
38,000
|
|
|
|
186,000
|
|
(1)
|
Salary for the years
2018 and 2017 are based on average US$/NIS representative exchange rates of NIS3.6.
|
(2)
|
Amounts in this
column represent the grant date fair value of options granted to the named executive officers during 2018 and 2017, 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
10 to our financial statements for the year ended December 31, 2018.
|
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
($)
|
|
Eli
Walles
|
|
|
2018
|
|
|
|
11,000
|
|
|
|
21,000
|
|
|
|
11,000
|
|
|
|
13,000
|
|
|
|
56,000
|
|
|
|
|
2017
|
|
|
|
11,000
|
|
|
|
17,000
|
|
|
|
9,000
|
|
|
|
20,000
|
|
|
|
57,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ronen Luzon
|
|
|
2018
|
|
|
|
24,000
|
|
|
|
26,000
|
|
|
|
11,000
|
|
|
|
12,000
|
|
|
|
73,000
|
|
|
|
|
2017
|
|
|
|
16,000
|
|
|
|
18,000
|
|
|
|
8,000
|
|
|
|
7,000
|
|
|
|
49,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Or Kles
|
|
|
2018
|
|
|
|
6,000
|
|
|
|
13,000
|
|
|
|
7,000
|
|
|
|
10,000
|
|
|
|
36,000
|
|
|
|
|
2017
|
|
|
|
6,000
|
|
|
|
12,000
|
|
|
|
6,000
|
|
|
|
10,000
|
|
|
|
34,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Billy Pardo
|
|
|
2018
|
|
|
|
2,000
|
|
|
|
26,000
|
|
|
|
12,000
|
|
|
|
10,000
|
|
|
|
50,000
|
|
|
|
|
2017
|
|
|
|
6,000
|
|
|
|
16,000
|
|
|
|
8,000
|
|
|
|
8,000
|
|
|
|
38,000
|
|
*
|
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 2018 and 2017 for all named individuals includes tax payments in respect of social benefits, and additionally in 2018,
for each of Ronen Luzon and Billy Pardo, includes a sum of $5,000 for travel related expenses.
|
Agreements
with Named Executive Officers
Eli
Walles
On
November 18, 2018, My Size Israel 2014 Ltd., or My Size Israel entered into an employment agreement with Eliyahu Walles, or the
Walles Employment Agreement, pursuant to which Mr. Walles will serve as our Chairman of the board of directors. Pursuant to the
terms of the Walles Employment Agreement, Mr. Walles shall receive NIS 35,000 per month as his base salary and shall be eligible
to receive such bonus as determined by us. In addition, Mr. Walles 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 Walles
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. Walles. The term of the Walles 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. Walles’ employment without prior written
notice (or payment in lieu of such notice) for Cause (as defined in the Walles Employment Agreement).
On
June 2, 2019, Eli Walles tendered his resignation as Chairman of the board of directors, effective immediately. In connection
with Mr. Walles’s resignation, we and Mr. Walles agreed to amend his employment agreement to provide that Mr. Walles’s
term of employment with the Company shall cease as of June 1, 2019, the advance notice period shall be amended to four months
such that Mr. Walles shall be entitled to receive four monthly salaries, and the termination date of all vested options granted
to Mr. Walles shall be extended until June 1, 2020.
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, 2018.
|
|
Option
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
|
Eli
Walles –
Former Chairman of the Board
|
|
|
300,000
|
(1)
|
|
|
-
|
|
|
$
|
1.21
|
|
|
7/24/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ronen
Luzon -
Chief Executive Officer
|
|
|
150,000
|
(1)
|
|
|
-
|
|
|
$
|
1.21
|
|
|
7/24/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Or
Kles –
Chief Financial Officer
|
|
|
56,666
|
(2)
|
|
|
28,334
|
(2)
|
|
$
|
1.21
|
|
|
7/24/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Billy
Pardo-
Chief Product Officer
|
|
|
150,000
|
(1)
|
|
|
-
|
|
|
$
|
1.21
|
|
|
7/24/2022
|
(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 July 24, 2017. 28,334 options vested immediately upon grant, 28,333 options vested on May 1, 2018
and as the remaining 28,333 options will vest on May 1, 2019.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Since
December 31, 2017, except for compensation arrangements described elsewhere herein, 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.
Compensation
arrangements for our named executive officers and directors are described in the section entitled “Executive
Compensation and Other Information”
, “ Security Ownership of Certain Beneficial Owners and
Management”, and in “Nominees for Directors”.
Monkeytech
Our
former Chief Technology Officer, Oded Shoshan, was compensated pursuant to a technology consulting agreement between the Company
and Monkeytech Ltd. Mr. Shoshan is the chief executive officer and owner of Monkeytech Ltd. Mr. Shoshan owns less than 50% of
Monkeytech Ltd. In 2018 and 2017, we paid Monkeytech, Ltd. approximately $164,000 and $84,000, respectively in consulting fees.
In addition, in 2017, Mr. Shoshan was granted options to purchase 45,000 shares of our common stock.
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 Directors” above for a discussion regarding the independence of the members of our board of directors.
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 100,000,000 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 _____, 201__ (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 _________, 201__.
|
VOTE ON INTERNET
Go to http://www.vstocktransfer.com/proxy and log-on using the
below control number.
CONTROL #
|
|
|
* SPECIMEN *
1 MAIN STREET
ANYWHERE PA 99999-9999
|
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the envelope
we have provided.
VOTE BY EMAIL
Mark, sign and date your proxy card and send it to vote@vstocktransfer.com.
VOTE IN PERSON
If you would like to vote in person, please attend the Annual
Meeting to be held at the offices of Barnea Jaffa Lande & Co Law Offices, 58 HaRakevet Street, Tel Aviv 6777016, Israel on
August 5, 2019, at 10:00 a.m.(local time)
|
Please Vote, Sign, Date and Return
Promptly in the Enclosed Envelope.
Annual Meeting Proxy Card
- My Size, Inc.
|
|
DETACH PROXY CARD HERE TO VOTE BY MAIL
|
|
|
|
(1)
|
Election of Directors:
|
|
☐
|
FOR ALL NOMINEES LISTED BELOW
(except as marked to the contrary below)
|
|
☐
|
WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW
|
INSTRUCTION:
TO WITHHOLD AUTHORITY TO VOTE FOR ONE OR
MORE INDIVIDUAL NOMINEES STRIKE A LINE THROUGH THE NOMINEES' NAMES BELOW:
|
01 Ronen Luzon
|
02 Arik Kaufman
|
03 Oren Elmaliah
|
04 Oron Branitzky
|
|
(2)
|
To grant discretionary
authority to the Company’s Board of Directors to (A) amend the Certificate of Incorporation of the Company to effect one
or more consolidations of the issued and outstanding shares of common stock of the Company, par value $0.001 per share, (the “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-2 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 the Company's 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 the Company 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 August 5, 2020;
|
|
☐
VOTE FOR
|
☐
VOTE AGAINST
|
☐
ABSTAIN
|
|
(3)
|
To ratify the appointment of Somekh Chaikin as our
independent public accountant for the fiscal year ending December 31, 2019.
|
|
☐
VOTE FOR
|
☐
VOTE AGAINST
|
☐
ABSTAIN
|
Date
|
|
Signature
|
|
Signature, if held jointly
|
|
|
|
|
|
|
|
|
|
|
To change the address on your account, please check the box at right and indicate your new address. ☐
|
* SPECIMEN *
|
AC:ACCT9999
|
90.00
|
MY SIZE, INC.
Annual Meeting of Stockholders
August 5, 2019
MY SIZE, INC.
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
The undersigned hereby
appoints Ronen Luzon and Or Kles, each as proxy, with full power of substitution, to represent and to vote all the shares of common
stock of My Size, Inc. (the “Company”), which the undersigned would be entitled to vote, at the Company’s Annual
Meeting of Stockholders to be held on August 5, 2019 and at any adjournments thereof, subject to the directions indicated on this
Proxy Card.
In his discretion,
each proxy is authorized to vote upon any other matter that may properly come before the meeting or any adjournments thereof. This
proxy will be voted in accordance with the specifications made, but if no choices are indicated, this proxy will be voted FOR all
the proposals listed on the reverse side. The Board of Directors recommends a vote
FOR
proposals 1, 2 and 3.
Please check here if you plan to attend the Annual Meeting of
Stockholders on August 5, 2019 at 10:00 a.m. (local time) ☐
Please indicate your status by signing Ѵ in the relevant
checkbox:
Related Party
1
|
Company officeholder
|
Institutional Investor
|
None of the above
|
1
A holder of not less
than 5 percent of the outstanding securities.
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