Company: MYSZ
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001641172-25-000990
Chunk: 16

Company: My Size, Inc.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 1B
Chunk 16
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 over financial reporting. Accordingly, we express no such opinion.

Our
audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether
due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that our audits provide a reasonable basis for our opinion.

Critical
Audit Matter

The
critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that
was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material
to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The
communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole,
and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.

Goodwill
impairment assessment

As
discussed in Notes 2i and 7 to the consolidated financial statements, the Company examines on an annual basis whether there is an impairment
of goodwill, or between annual tests in certain circumstances. The Company performed its annual quantitative impairment test of goodwill
at the reporting unit level using the income approach. Based on this analysis, the Company determined that the carrying value of its
SaaS Solutions reporting unit exceeded its fair value and an impairment charge of $631 thousand was recorded.

We
identified the evaluation of the goodwill impairment assessment for the SaaS Solutions reporting unit as a critical audit matter. A high
degree of subjective auditor judgment was required to evaluate the assumptions used to estimate the fair value of the Company’s
SaaS Solutions reporting unit. Specifically, the following assumptions had limited observable inputs (i) forecasted reporting unit cost
of sales and operating expenses (ii) revenue growth rates, and (iii) discount rate. The fair value determined was sensitive to changes
in these key assumptions. Additionally, specialized skills and knowledge were needed to evaluate the discount rate.

The
following are the primary procedures we performed to address this critical audit matter. We evaluated the design of certain internal
controls related to the Company’s goodwill impairment evaluation process.