UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

FORM 10-K

[X]☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31 2018, 2021

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 0-15746000-15746

VIRTUAL CRYPTO TECHNOLOGIES,VIEWBIX INC.

(Exact Name Ofof Registrant As Specified In Its Charter)

Registrant’s Telephone Number, Including Area Code: (212) 400-7198+9729-774-1505

Securities Registered Pursuantregistered pursuant to Section 12(g)12(b) of Thethe Act: Common Stock, $0.0001

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] ☒ No [  ]☐

Indicate by check mark if disclosure of delinquent filerswhether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to ItemRule 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in the definitive proxy or information statements incorporated by reference in Part IIIS-T (§ 232.405 of this Form 10-K or any amendment to this Form 10-K. [  ]

On June 30, 2018,chapter) during the aggregate market value of the 13,605,672 shares of common stock held by non-affiliates ofpreceding 12 months (or for such shorter period that the registrant was approximately $2,027,245 based on the closing price of $0.149 of the Registrant’s common stock on June 29, 2018, the last trading day in June 2018. On March 28, 2019, the Registrant had 110,749,643 shares of common stock outstanding.required to submit such files). Yes ☐ No ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, (as defineda smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act) or a smaller reporting company.Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes ☐ No ☒

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes ☐ No ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] ☐ No [X] ☒

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $815,277 as of June 30, 2021, based upon the closing price of the common stock on that date, which was $0.0401.

As of March 17, 2022, there were 34,753,669 shares of common stock, par value $0.0001 per share (“Common Stock”) outstanding.

TABLE OF CONTENTS

Cautionary Statement regarding Forward-Looking Statements

This Annual Report on Form 10-K includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Registrant has based these forward-looking statements on its current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about the Registrant that may cause its actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,”“may”, “will”, “should”, “could”, “would”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “continue”, or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in this Annual Report on Form 10-K and in the Registrant’s other Securities and Exchange Commission filings.

PART I

ITEM 1. DESCRIPTION OF BUSINESS

Overview and backgroundrecent developments

On January 17, 2018,Viewbix Inc. (f/k/a Virtual Crypto Technologies, Inc., f/k/a Emerald Medical Technologies,Applications Corp.) (the “Registrant”, “Viewbix” or the “Company”) was incorporated in the State of Ohio in 1989 under a predecessor name, Zaxis International, Inc. (the “Registrant” or “Company”(“Zaxis”). On August 25, 1995, Zaxis merged with a subsidiary of The InFerGene Company, a Delaware corporation, which entity changed its name to Zaxis International, Inc. and the Company was reincorporated in Delaware under the name of Zaxis International, Inc. On December 30, 2014, Zaxis entered into an agreement with Emerald Medical Applications Ltd., a private limited liability company organized under the laws of the State of Israel (“Emerald Israel”).

On March 16, 2015, Zaxis and Emerald Israel executed a share exchange agreement, which closed on July 14, 2015, and Emerald Israel became the Company’s wholly-owned subsidiary. Emerald Israel was engaged in the business of developing Emerald Israel’s DermaCompare technology and the development, sale and service of imaging solutions utilizing its DermaCompare software for use in derma imaging and analytics for the detection of skin cancer. On January 29, 2018, the Company ceased the DermaCompare operations of its former subsidiary.

On January 17, 2018, the Company formed Virtual Crypto Technologies Ltd as a new wholly-owned subsidiary under the laws of the State of Israel, (“Virtual Crypto Technologies Ltd. (the “VCT Israel”) and appointed Mr. Alon Dayan, who has served as the Registrant’s Chief Executive Officer since June 30, 2018 and has been a member of the Company’s Board of Directors since March 14, 2018, as CEO of Virtual Crypto Israel. Virtual Crypto Israel was formed, to develop and market software and hardware products facilitating allowing and supporting the purchase and/or sale of cryptocurrencies through ATMs, tablets, PCspersonal computers (“PCs”) and/or mobile devices (the “Products”).

devices. On January 29,February 12, 2018,pursuant to resolution of the Registrant’s Board of Directors,the Registrant transferred the management shares of the Registrant’s former Israeli subsidiary, Emerald Medical Applications Ltd. (“Emerald IL”) to Attorney Eviatar Knoller, Esq., with offices inTel Aviv-Jaffa, Israel, as trustee (the “Trustee”) for the purpose of enabling the Trustee to liquidate the management shares and/or the assets of Emerald IL to satisfy its debts.

The Company filed a Current Report on Form 8-K on January 24, 2018, with the United States Securities and Exchange Commission (the “SEC”), reporting that Virtual Crypto Israel had entered into a binding term sheet (the “Chiron Term Sheet”) with Chiron Refineries Ltd. (“Chiron”), a public company listed on the Tel-Aviv Stock Exchange (TASE: CHR). Pursuant to the Chiron Term Sheet: (i) Virtual Crypto Israel agreed to appoint a wholly-owned subsidiary of Chiron, to be organized under the laws of the Turkish Republic of Northern Cyprus (the “Distributor”), as the exclusive distributor of Virtual Crypto Israel’s Products in Turkey, including the territory of Turkish Republic of Northern Cyprus (collectively, the “Territory”); and (ii) the Distributor shall have the right to appoint sub-distributors within the Territory. The appointment of the Distributor was subject to the payment by the distributor to Virtual Crypto Israel of $250,000 as an appointment fee, of which $150,000 was to be deemed an advance payment by the distributor made on account of future purchases of the Company’s Products.

The Company further granted the Distributor an option, exercisable by the Distributor within 12 months from the date on which the ATM Product, including the related software and hardware, was fully tested and ready for installation and operation, to be appointed as an exclusive distributor of the Products for the Federal Republic of Nigeria. If the option was exercised, the Distributor was required to pay Virtual Crypto Israel an appointment fee not more than $250,000. In November 2018, Chiron reported that it had encountered financial difficulties and as such the Company will no longer pursue the transactions contemplated by the Chiron Term Sheet.

To date, $100,000 was paid by the Distributor to Virtual Crypto Israel, which has been recognized as revenues for the year ended December 31, 2018.

The Registrant filed a Definitive Information Statement on February 12, 2018definitive information statement to change its name from Emerald Medical Applications Corp. to Virtual Crypto Technologies, Inc. to reflect its new operations and business focus, and, effective onas of March 7, 2018, FINRAthe Financial Industry Regulatory Authority (“FINRA”) approved the Registrant’s name change and its trading symbol was changed from MRLA“MRLA” to VRCP“VRCP” on the OTCQB.

The disclosure in this annual report relates to our business activities during the fiscal year ended December 31, 2018. Additional disclosure has been included in this annual report related to recent developments and subsequent events that occurred after the fiscal year ended December 31, 2018. Reference is made to the disclosure in Note 10-Subsequent Events, to the Notes to Consolidated financial Statements.Transaction with Gix Internet Ltd.

During the period commencing January 16, 2018 through March 23, 2018, the Registrant raised $1.9 million in equity capital (the “Equity Raise”) through the offering of units (the “Unit Offering”) at a price of $0.07 per Unit, each Unit consisting of: (i) one (1) share of the Company’s common stock (the “Shares”); (ii) one (1) common stock purchase warrant exercisable for a period of twelve months to purchase one additional Share at an exercise price of $0.14 per Share (the “Class F Warrants”); and (iii) one (1) common stock purchase warrant exercisable for a period of twelve months to purchase one additional Share at an exercise price of $0.28 per Share (the “Class G Warrants”).The proceeds of the Equity Raise are being utilized by the Registrant to fund the operations of Virtual Crypto Israel including, but not limited to the costs associated with the development of the Products. Reference is made to the disclosure under Item 5. “Market For Registrant’s Common Stock, Related Stockholder Matters And Issuer Purchase Of Equity” and under the subcaption “Sale of Unregistered Securities in 2018” with respect to the Equity Raise from the sale of units in 2018.

The Unit Offering was made by the Registrant: (i) principally pursuant to the exemption provided by Regulation S promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Act”); and (ii) to a lesser extent pursuant to Regulation D promulgated by the SEC under the Act; and (iii) and only to “accredited investors” as that term is defined in Rule 501 of Regulation D promulgated by the SEC under the Act. With respect to the Unit Offering made pursuant to Regulation S, the Units were offered in offshore transactions to persons who are not “U.S. Persons” as that term is defined in Rule 902 of Regulation S promulgated by the SEC under the Act.

Recent Developments

Share Exchange Agreement

The operations of Virtual Crypto Israel only generated revenues of $100,000 during the year end December 31, 2018 from one customer, Chiron, who has encountered financial difficulties. During 2018, we spent $790,413 in order to develop our systems in an industry that has experienced significant difficulties over the last 18 months. We believe that this has led to a decrease in the anticipated demand for Virtual Crypto Israel’s products and services. Therefore, onOn February 7, 2019, we filed a Form 8-K reporting that the Registrant entered into a share exchange agreement (the “Share Exchange Agreement”) with Gix Internet Ltd., formerly known as Algomizer Ltd. (TASE:GIX), an Israeli Corporationa company organized under the laws of the State of Israel (“Algomizer”Gix Internet” or “Parent Company”), pursuant to which Algomizer will assign, transferon July 25, 2019 (the “Closing Date”) Gix Internet assigned, transferred and deliverdelivered its 99.83% holdings in Viewbix Ltd., an Israeli corporation, (“Viewbix Israel”) to usthe Company in exchange for shares of restricted common stock ofCommon Stock, representing 65% of the issued and outstanding share capital of the Company on a fully diluted basis onas of the closing date,Closing Date, following the conversion of certain convertible notes of the Company and excluding certain warrants to purchase shares of common stock, which will expirethe Common Stock expiring in 2020 and with an exercise price representing a valuation equal to $30,000,000 (“Fullyadditional warrants as further described below (the “Fully Diluted Share Capital”). In addition, upon the earlier of: (a) the launch of a live video product to an American consumer in the U.SUnited States by Viewbix Ltd.,Israel, or (b) the launch of an interactive television product to an American consumer in the U.S.,United States by Viewbix Ltd., weIsrael, the Company will issue Algomizerto Gix Internet an additional 1,642,193 shares of restricted common stockCommon Stock of the Company representing 5% of the Fully Diluted Share Capital.Capital immediately following the Closing Date.

Furthermore,On July 24, 2019, the Company filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of Delaware reflecting its name change from Virtual Crypto Technologies, Inc. to Viewbix Inc. to reflect its new operations and business focus and, effective on August 7, 2019, FINRA approved the Registrant’s name change and its trading symbol was changed from “VRCP” to “VBIX” on the closing date, we will issue Algomizer:OTCQB.

On the Closing Date, (i) the Company issued 20,281,085 shares of its Common Stock to Gix Internet in exchange for consideration consisting of 99.83% holdings in Viewbix Israel, and (ii) convertible notes representing 3,434,889 shares of Common Stock then currently issued to holders were converted. The shares of Common Stock were issued under Regulation S. The Company also issued a total of 7,298,636 warrants to Gix Internet to purchase shares of restricted common stockCommon Stock, whereby (i) 3,649,318 of such warrants were issued with an exercise price representing a valuation for the Company of $15,000,000 on Fully Diluted Share Capital basis, which will represent 10% of the Fully Diluted Share Capital immediately following the closing, which warrants will be exercisable for a period of ten years,$0.48, and (ii) 3,649,318 of such warrants to purchase shares of restricted common stockwere issued with an exercise price representingof $0.80.

Following the Closing Date, Viewbix Israel became a valuationsubsidiary of the Registrant. Viewbix Israel was incorporated in February 2006 in Israel.

On January 27, 2020, VCT Israel was sold to a third party for NIS 50,000 ($14,459).

Merger with Gix Media Ltd.

On December 5, 2021, the Company entered into a certain Agreement and Plan of $25,000,000 on Fully Diluted Share Capital basis, which will represent 10%Merger (the “Merger Agreement”) with Gix Media Ltd., an Israeli company and the majority-owned subsidiary of Gix Internet, in the field of MarTech (Marketing Technology) solutions, primarily search and content monetization (“Gix Media”) and Vmedia Merger Sub Ltd., an Israeli company and wholly-owned subsidiary of the Fully Diluted Share CapitalCompany (“Merger Sub”), pursuant to which, following the Merger (as defined herein), and upon satisfaction of additional closing conditions, Merger Sub will merge with and into Gix Media, with Gix Media being the surviving entity and wholly-owned subsidiary of the Company (the “Gix Merger”).

Subject to the terms and conditions of the Merger Agreement, at the Merger Effective Date (as defined in the Merger Agreement) all outstanding ordinary shares of Gix Media, having no par value (the “Gix Media Shares”) will be converted into shares of Common Stock, such that immediately following the closing, which latter warrantsGix Merger, holders of Gix Media Shares will hold 90% of the Company’s capital stock on a fully diluted basis. The Merger Agreement also contains customary representations, warranties and covenants made by each of the Company, Gix Media and Merger Sub.

Following the Gix Merger, the board of directors of the Company is expected to consist of six (6) directors and will be exercisable for a periodcomprised of ten years.four (4) new directors to be appointed by Gix Media, who will join the Company’s two currently-serving directors, Amihay Hadad and Alon Dayan.

The closingOn December 21, 2021, the shareholders of each of Gix Media and Merger Sub approved the Merger Agreement. Consummation of the Share Exchange AgreementGix Merger is conditioned upon ussubject to certain additional closing conditions, including, among other things, (i) the Company filing an amendment to ourits certificate of incorporation to change the Company’s name to ViewBix“Gix Media, Inc.”, effecting a reverse split(ii) obtaining approval from certain third parties, including the approval of ourBank Leumi due to certain liens registered in its favor against ordinary shares of common stock at a ratio of 1:15, which we intend to effect whether or not the transactions under the Share Exchange Agreement will consummate,Gix Media; (iii) conversion of ourthe Company’s outstanding convertible notesinstruments into restricted shares of restricted common stockCommon Stock and Algomizer(iv) obtaining a tax pre-ruling from the Israeli Tax Authority relating to the Share Exchange Agreement.

ViewBix Ltd., through its ViewBix Studio, provides its clientsIn connection with a video engagement platform designed to add enhanced branding and interactive elements – from call-to-action buttons to email captures – to digital videos. ViewBix Studio is simple, intuitive and requires no coding experience, thereby enabling clients to enhance videos and publish them across any platform, for any device in just minutes. Videos enhanced by Viewbix are compatible with existing ad serving, measurement and analytics platforms and easily work within existing agency or client processes for launching advertising campaigns. Beyond adding interactions to video, Viewbix uses second-by-second measurement of engagements to uncover contextual insights as to what, when and how users are engaging or responding to brand messaging.

Reverse Stock Split

OnGix Merger, on February 26, 2019, stockholders holding a13, 2022, the requisite majority of our outstanding shares of common stockthe Company’s stockholders approved an amendmentcertain amendments to ourthe Company’s certificate of incorporation, in orderincluding, but not limited to affect(i) a name change from “Viewbix Inc.” to “Gix Media, Inc.”, (ii) a reverse stock split of the Company’s common Stock at a ratio of 1-for-28 (the “Planned Reverse Split”), (iii) a staggered board structure, and (iv) certain other provisions therein. The Company intends to effect the foregoing amended and restated certificate of incorporation upon the closing of the Gix Merger. Additionally, on February 25, 2022, the Company filed a Schedule 14C Information Statement with the SEC, whereby it reported the foregoing approvals by the requisite majority of the Company’s stockholders.

Viewbix Business Overview

Viewbix is an interactive video technology and data platform that provides its client with deep insights into their video marketing performance as well as the effectiveness of its messaging. Viewbix allows companies to add a layer of interactive content on top of a video that allows viewers to engage and interact with the video. The platform measures exactly when a viewer takes an action while watching a video and collects and reports the results to the client.

Viewbix developed the interactive video platform based on a Software as a Service (“SaaS”) business model with interactive elements, and the ability to collect and analyze information about each interactive action performed during the viewing of the video clip. The interactive elements and information gathered allows the client to analyze user viewing habits and optimize in real-time throughout the campaign, while increasing the effectiveness of online and live video marketing.

Viewbix has adapted its technology platform to work on most nonproprietary platforms on the Internet, including, but not limited to, online video campaigns, brand and image videos, online tutorials, live and real-time video streaming (e.g. music concerts and sporting events), video presentations, and more. Using the Viewbix platform, video creators can integrate advances features into their videos, specifically the inclusion of “click” buttons that trigger a particular action, into a given video, like the insertion of a smart form for retrieving the contact information of the viewer. Viewbix then collects all the data around the cross section of the viewing data and engagement data and offers its clients the opportunity to download and analyze the results. Viewbix also offers a full service option where the Viewbix account managers will analyze the data and report results and suggestions to its clients.

Notwithstanding the foregoing, the Company initiated certain cost reduction measures during fiscal year-ended December 31, 2020. On January 1, 2020, each of the Company’s former Chief Executive Officer and Chief Operating Officer tendered their resignations from their respective positions. Moreover, due to the Company’s failure to meet predetermined sales targets set forth in the Share Exchange Agreement, the Company determined to reduce the size of its sales team and, likewise, the R&D team was replaced with a more cost-effective consultant. These decisions, and future decisions related to cost-reduction measures, may impact the Company’s ability to sell and support its products in the future and, accordingly, may materially impact the Company’s business operations.

Industry Overview

Video marketing remains one of the fastest growing industries, and, accordingly is increasingly crowded with competition. According to a study published by Cisco, by 2022 online videos will represent 82% of online consumer traffic. Globally, three trillion minutes (or five million years) of video content will cross the Internet each month by 2022, which is the equivalent of 1.1 million minutes of video streamed or downloaded every second.

According to an additional study published by Statista, ad spending is expected to show an annual growth rate of 11%, resulting in a projected market volume of $162,242 million by 2026. In the video advertising segment, it is expected that $136,486 million will be generated through mobile in 2026.

Competition

While there are many companies that offer hosting and streaming services, Viewbix focuses on providing expanded value to its clients that reaches beyond the hosting and streaming platforms. Viewbix has several direct competitors, including Hapyak, which operates primarily via websites, and Innovid, which focuses on advertisements. Additionally, video hosting companies, such as Wistia and Vidyard, both offer certain interactive elements similar to Viewbix. However, Viewbix’s proprietary component is its focus on interactivity and deep data, whose results can thereafter be analyzed and applied.

Intellectual Property and Other Proprietary Rights

Our commercial success depends, in part, on obtaining and maintaining patent and other intellectual property protection, in the United States and internationally, for the technologies used in our products. We cannot be sure that any of our common stockpatents will be commercially useful in protecting our technology. Our commercial success also depends in part on a 1-for-15 basis. our non-infringement of the patents or proprietary rights of third parties. The patent positions can be highly uncertain and involve complex and evolving legal and factual questions.

We intendhave four patents that have been granted to effect such reverse stock split once all approvalsus in the U.S. which we consider material to our business and operating success, including the following:

We also protect our proprietary technology and processes, in part, by confidentiality and invention assignment agreements with our employees, consultants, scientific advisors and other contractors. These agreements may be breached, and we may not have adequate remedies for such actions are obtained.

Pursuantany breach. We also rely on trade secrets to protect our product candidates. However, our trade secrets may otherwise become known or be independently discovered by competitors. To the extent that our employees, consultants, scientific advisors or other contractors use intellectual property owned by others in their work for us, disputes may arise as to the Reverse stock split,rights in related or resulting know-how and inventions.

Product Development

Viewbix focuses its R&D efforts on the expansion of its interactive live capabilities by collecting the engagement data for each fifteen (15) sharessession and relating back to a live stream, which is aimed to enhance clients’ feedback on its stream for both real time and future stream optimizations.

Employees

As of our common stock will be automatically converted, without any further action by our stockholders, into one shareDecember 31, 2021, Viewbix has two employees in management and finance in Israel. Additionally, Viewbix retains the services of common stock. No fractional shares will be issued as the result of the reverse stock split. Instead, each stockholder will be entitled to receive one share of common stock in lieu of the fractional share that would have resulted from the reverse stock split.two R&D service providers.

ITEM 1A. RISK FACTORS

The shares of our Common Stock are highly speculative in nature, involve a high degree of risk and should be purchased only by persons who can afford to lose their entire amount invested in the Common Stock. Accordingly, prospective investors should carefully consider, along with other matters referred to herein, the following risk factors in evaluating our business before purchasing any shares of Common Stocks.Stock. If any of the following risks actually occurs, our business, financial condition or operating results could be materially adversely affected. In such case, you may lose all or part of your investment. You should carefully consider the risks described below and the other information in this Prospectus before investing in our Common Stock. Prospective investors should also carefully consider

Summary Risk Factors

Our business is subject to numerous risks and uncertainties, including those highlighted in the fact that several ofsection titled “Risk Factors” immediately following this prospectus summary. These risks include, among others, the risk factors related to our former business are no longer applicable and that there are new risk factors applicable to our new business operations.following:

Risks Associated with Our Business and Industry

We initiated certain cost-reduction measures during the previous fiscal year, which could have long-term adverse effects on our business and we may not realize the operational or financial benefits from such actions.

We initiated certain cost-reduction measures during the previous fiscal year, and we may engage in similar activities in the future. This decision may distract management, could slow improvements in our platform and limit our ability to attract customers. It remains unclear how and to what extent this decision will impact our future business and operating success.

The COVID-19 pandemic may negatively impact the global economy in a significant manner for an extended period of time, and also adversely affect our business and operating results.

The COVID-19 pandemic has resulted in a widespread health crisis that has adversely affected businesses, economies and financial markets worldwide, placed constraints on the operations of businesses, decreased consumer mobility and activity, and caused significant economic volatility in the United States, Israel and international capital markets. The COVID-19 pandemic has caused an economic recession, high unemployment rates and other disruptions, both in the United States, Israel and the rest of the world. The COVID-19 pandemic has not yet currently adversely affected our business, however, any of these impacts, including the prolonged continuation of these impacts, could in the future, adversely affect our business and operating results and heighten many of the other risks described in these “Risk Factors.”

Our former DermaCompare operation never achieved marketsuccess depends, in part, upon the continued demand of video as an integral part of corporate marketing and internal communications plans and the continued growth and acceptance nor were any revenues ever generated. The failure of such acceptance caused usvideos as effective alternatives to cease our DermaCompare operationtraditional online and divest our DermaCompare subsidiary in January 2018.offline marketing products and services.

We provide a platform that allows companies to understand what messages are resonating with their video viewers and how to leverage that data to enrich and empower a more effective video experience. Our revenues were expected to comeare derived from the sale of the DermaCompare product. As a result, we continued to incur operating losses until our new management and Board of Directors determined to divest the DermaCompare subsidiary. We are now dependent upon our ability to successfully manufacture, via third-party agreements, to develop and market our planned Products implementing software and hardware facilitating, allowing and supporting the purchase and/or sale of cryptocurrencies through ATMs, tablets, PCs and/or mobile devices (collectively, our “Products”)

We only commenced operations in March 2018, following the equity raise, in the business of developing and marketing software and hardware products facilitating, for the purpose of allowing and supporting purchase and/or sale of cryptocurrencies through ATMs, tablets, PCs and/or mobile devices and, as a result, have no history of operations in such business.

On January 17, 2018, we organized Virtual Crypto Israel as a new, wholly-owned Israeli subsidiary to develop and market software and hardware products facilitating, allowing and supporting purchase and/or sale of cryptocurrencies through ATMs, tablets, PCs and/or mobile devices (the “Products”). To date, these efforts have not produced any significant revenues from our new business activities and we have virtually no history of operations in developing and marketing the Products.

Our historical financial information does not reflect our new business activities nor our recent agreement to distribute our Products.

As a result, our historic operations do not provide any basis for an evaluation of our business or our current business operations or focus. Our prospects must be considered in light of the uncertainties, risks, expenses, and difficulties frequently encountered by companies in their early stages of operations in new and developing fields such manufacturing and marketing Products for the purchase and sale of cryptocurrencies through ATMs, tablets, PCs and mobile devices. We may expect to incur additional net losses over the next several years as we seek to develop our operations in the field of supporting the purchase and sale of cryptocurrencies using our Products. The amount of future losses and when, if ever, we will achieve profitability are uncertain.platform. If we are unsuccessful at executing on our business plan, our business, prospects, and results of operations may be materially adversely affected.

We have an evolving business model.

As blockchain technologies and cryptocurrencies become more widely available and utilized in early 2018, we expected the services and products associated with them to evolve and, as a result, our Products would have to continue to evolve. Very recently, the Securities and Exchange Commission (the “SEC”) issued a Report that promoters that use initial coin offerings or token sales to raise capital may be engaged in the offer and sale of securities in violation of the Securities Act of 1933, as amended (the “Act”) and the Securities Exchange Act of 1934 (the “Exchange Act”). While we are not involved, nor will we engage in the business of initial coin offerings or token sales, any adverse impact on the cryptocurrency industry that may occur as a result of the recent SEC Report or other potential regulatory actions may adversely impact our ability to successfully market our Products. From time to time we may modify aspects of our business model rand our Products and there can be no assurance that these or any other modifications will be successful or will not result in harm to the business. We will continue, however, to try and develop Products with in anticipation of any positive change or improvement in the regulatory environments for blockchain technologies and cryptocurrencies, of which there can be no assurance. Notwithstanding the foregoing, we fully intend to maintain the existence and operations of Virtual Crypto Israel and at December 31, 2018, we had approximately $500,000 in cash available for our Virtual Crypto Israel operations

Our management team has limited experience in the field of manufacturing and marketing our new Products, which are still in development, to support the cryptocurrency market.

The Registrant’s management only determined in or about January 2018 to shift our primary corporate focus towards the manufacture and sale of software and hardware Products facilitating, allowing and supporting purchase and/or sale of cryptocurrencies through ATMs, tablets, PCs and/or mobile devices. Our management and that of Virtual Crypto Israel has relatively limited experience in supporting purchase and/or sale of cryptocurrencies and the blockchain technology industry generally. While we intend to expand our management team and staff as market conditions justify with individuals with more experience in this industry and will closely scrutinize any individuals we engage, we cannot assure you that well-qualified individuals will be available to us or that our assessment of individuals we retain will prove to be correct, if and when we determine to engage new personnel, of which there can be no assurance. These individuals may be unfamiliar with the requirements of being involved in a public company which could cause us to have to expend time and resources helping them become familiar with such requirements. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.

The further development and acceptance of cryptocurrency trading, of which there can be no assurance, represents a new and rapidly changing industry.

If an when the market conditions and regulatory environment for our Products improve, of which there can be no assurance, we will be dependent upon our ability to manufacture and market our Products in a timely manner if we hope to succeed in serving this new and developing industry. We will be subject to a variety of factors that are difficult to evaluate. Further slowing or stopping of the development or acceptance of cryptocurrencies and our ability to manufacture Products in a timely manner and within the limits of our capital resources may adversely affect an investment in our common stock.

The use of our Products to purchase and sell cryptocurrencies to, among other things, buy and sell goods and services and/or the acquisition of cryptocurrencies as an investment, is part of a new and evolving industry that has confronted certain adverse regulatory pressure, particularly from the SEC. There can be no assurance that our Products will be accepted by this new and likely demanding market that employs the use of a computer-generated mathematical and/or cryptographic protocol. The growth of this industry, in general, is subject to a high degree of uncertainty. The factors affecting the further development of this industry, include, but are not limited to:

A decline in the popularity or acceptance of cryptocurrencies caused by regulatory uncertainty, among other reasons, would harm our ability to market our Products and, as a result, could adversely impact our ability to generate revenues and profits, if any.

Currently, there is relatively small use of cryptocurrencies in the retail and commercial marketplace in comparison to relatively large use by speculators; as a result, we expect that the market for our Products may develop slowly, if at all.

Cryptocurrencies have only recently become accepted as a means of payment for goods and services by certain major retail and commercial outlets and use of cryptocurrencies by consumers to pay such retail and commercial outlets remains limited. As a result, the demand for our Products may be expectedvideo advertising does not continue to develop slowly, if at all. As a result, we reasonably anticipate that we will not generate positive cash flow from operations for the foreseeable and there can be no assurance that we will ever generate profits.

If wegrow or customers do not keep pace with technological changes,embrace our Products, if and when developed, may not become competitive and/or our competitors may develop and market similar products that receive greater market acceptance.

The market for blockchain technology is characterized by rapid technological change, frequent product and service innovation and evolving industry standards. As a result, our Products must be able to keep pace withplatform, this rapidly developing and competitive marketplace and at the same time deal with continuing regulatory uncertainty. There can be no assurance that we will be able to manufacture our Products successfully or, if we can manufacture Products that achieve market acceptance, that we will be able to fulfill demand if such demand exceeds our production capabilities. In fact, there can be no assurance that demand for our Products will ever develop. We expect that we will be dependent on third party manufacturers for the foreseeable future but at present have no firm arrangements for the manufacture of our Products. If we are unable to provide enhancements and new features for our Products and any future product offerings that achieve market acceptance or that keep pace with these technological developments, our business could be adversely affected.

It may be illegal now, or in the future, to acquire, own, hold, sell or use cryptocurrencies and, as a result, the potential use and demand for our Products could be materially adversely affected.

Although currently cryptocurrencies generally are not regulated or are lightly regulated in most countries, including the United States, one or more countries may take regulatory actions in the future that could severely restrict the right to acquire, own, hold, sell or use cryptocurrencies which would adversely impact demand for our Products and/or limit their acceptance by potential users, including locations where we expect to place our Products. Such restrictions may adversely affect the Company. Such circumstances would have a material adverse effect on the ability of the Company to continue as a going concern or to pursue this segment at all, which would have a material adverse effectour business and financial condition.

Our success also depends, in part, on the business, prospects or operations of the Company and potentially the value of any cryptocurrencies the Company holds or expects to acquire for its own account and harm investors.

We will be dependent upon our ability to compete for a share of available video advertising/marketing expenditures as more traditional offline and emerging media companies continue to raise equityenter the online advertising/marketing market, as well as on the continued growth and acceptance of online advertising generally. If for any reason online advertising is not perceived as effective (relative to traditional advertising), web browsers, software programs and/or debt financing at acceptable termsother applications that limit or prevent advertising from being displayed become commonplace and/or the industry fails to effectively manage click fraud, the market for online advertising will be negatively impacted. Any lack of growth in the market for online advertising/marketing (particularly for paid listings) could adversely affect our business, financial condition and results of operations.

Due to our evolving business model and rapid changes in the Internet and the nature of services, it is difficult to accurately predict our future performance and may be difficult to increase revenue or profitability..

We believe thatdeveloped our platform based on a SaaS business model. We do not have an extensive history of ongoing operations in orderusing our business model from which to continue as a going concern, includingpredict our future performance, and making such predictions, particularly with regard to the costs of being a public company, we will need approximately $60,000 per year simply to cover the administrative, legal and accounting fees. We have funded these losses primarily through the sale of restricted shareseffect of our Common Stockefforts to aggressively increase the distribution and the issuance of convertible notes, which have subsequently been converted into restricted shares of Common Stock.

We generated revenues of $100,000 for the year ended December 31, 2018, all of which came from one customer with whom we are no longer doing business,profitability is very complex and no revenues for the ended December 31, 2017.

Notwithstanding our capital raise from the sale of our equity securities primarily during the period from January 2018 through March 2018, following the formation of Virtual Crypto Israel, there can be no assurance that we will have adequate capital resources or be able to continue to raise equity and/or debt capital to fund planned operations or that any additional funds will be available to us when needed or at all, or, if available, will be available on favorable terms or in amounts required by us.challenging. If we are unable to obtain adequate capital resourcescontinuously improve our platform, this could have a negative effect on our competitiveness and ability to fund operations,service and attract customers. If we are unsuccessful in doing so in a timely fashion, we may not be requiredable to delay, scale backachieve revenue growth or eliminate someincrease our profitability.

Our customers may reduce or allterminate their business relationship with us at any time. If customers representing a significant portion of our plan of operations, which mayrevenue reduce or terminate their relationship with us, it could have a material adverse effect on our business, results of operations and abilityfinancial condition.

We generally engage with two types of customers: small companies who change from time to operate astime and a going concern.

Our new Products will be dependent upon software still in development; Software failures, breakdowns innumber of large companies with whom the operationsengagement is for shorter periods of time. We do not enter into long-term contracts with our serverscustomers, and communications systems or the failure to implement system enhancements could harm our business.

Our success dependssuch customers do business with us on the efficient and uninterrupted operation of our servers and communications system, all of which are still in early stages of development. A failure of our network or data gathering procedures could impede the processing of data, delivery of databases and services, client data and day-to-day management ofa non-exclusive basis. Accordingly, our business is highly vulnerable to adverse economic conditions, market evolution and development of new or more compelling offerings by our competitors, which could resulteither lead to reduced advertising spend generally or motivate our current or potential customers to migrate to our competitors. Any reduction in the corruptionspending by, or loss of, data. While we plan that allexisting or potential customers would negatively impact our revenue and operating results.

Furthermore, the discretionary, non-exclusive nature of our operations will have disaster recovery plans in place, such plans, when in place, might not adequately protectrelationships with customers subjects us and any failure could irreparably damage any efforts for establishing a successful market presence. In addition, any failure by our computer environment to provide our required data communications capacity could result in interruptions in our service, which could be expected to prevent us from achieving any market acceptance for our new Products.

Additionally, significant delays in the planned delivery of system enhancements, improvements and inadequate performance of the systems once they are completed could damage our reputation and harm our business. Long-term disruptions in the infrastructure caused by events such as natural disasters, the outbreak of war, the escalation of hostilities and acts of terrorism, particularly involving cities in which we have offices, could adversely affect our businesses.increased pricing pressure. Although we planbelieve our rates are competitive, our competitors may be able to carry property and business interruption insurance for our business operations, our coverage might not be adequate to compensate us for all losses that may occur.

We face risks related to the storage of customers’ and their end users’ confidential and proprietary information.

Our Products are being designed to maintain the confidentiality and security of our customers’ and their end users’ confidential and proprietary data that are stored on our server systems, which may include sensitive personal data. However, any accidental or willful security breachesoffer more favorable pricing or other unauthorized access to these data could expose us to liability for the loss of such information, time-consuming and expensive litigation and other possible liabilities as well as negative publicity. Techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are difficult to recognize and react to. We may be unable to anticipate these techniques or implement adequate preventative or reactionary measures.

Compliance with changing regulations concerning corporate governance and public disclosure may result in additional expenses.

In recent years, there have been several changes in laws, rules, regulations and standards relating to corporate governance and public disclosure, including the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) and various other new regulations promulgated by the SEC and rules promulgated by the national securities exchanges.

The Dodd-Frank Act, enacted in July 2010, expands federal regulation of corporate governance matters and imposes requirements on publicly-held companies, including us, to, among other things, provide stockholders with a periodic advisory vote on executive compensation and also adds compensation committee reforms and enhanced pay-for-performance disclosures. While some provisions of the Dodd-Frank Act were effective upon enactment, others will be implemented upon the SEC’s adoption of related rules and regulations. The scope and timing of the adoption of such rules and regulations is uncertain and accordingly, the cost of compliance with the Dodd-Frank Act is also uncertain.

In addition, Sarbanes-Oxley specifically requires, among other things, that we maintain effective internal control over financial reporting and disclosure of controls and procedures. In particular, we must perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of Sarbanes-Oxley Act (“Section 404”), and our independent registered public accounting firm is required to attest to our internal control over financial reporting.

Our testing, or the subsequent testing by our independent registered public accounting firm may reveal deficiencies in our internal control over financial reporting that are deemed to be material weaknesses. Our compliance with Section 404 will require that we incur substantial accounting expenses and expend significant management efforts. We currently have limited internal audit capabilities and will need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge. Moreover, if we are not able to comply with the requirements of Section 404 in a timely manner, or if we or our independent registered public accounting firm identifies deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the market price of our stock could decline, and we could be subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and management resources.

These and other new or changed laws, rules, regulations and standards are, or will be, subject to varying interpretations in many cases due to their lack of specificity. As a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies, which could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. Our efforts to comply with evolving laws, regulations and standards are likely to continue to result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. Further, compliance with new and existing laws, rules, regulations and standards may make it more difficult and expensive for us to maintain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. Members of our board of directors and our principal executive officer and principal financial officer could face an increased risk of personal liability in connection with the performance of their duties.advantageous terms. As a result, we may be compelled to reduce our rates or offer other incentives in order to maintain our current customers and attract new customers. If a significant number of customers are able to compel us to charge lower rates or provide rate concessions or incentives, there is no assurance that we would be able to compensate for such price reductions or conserve our profit margins.

Risks Related to our Competition

Large and established internet and technology companies, such as Google and Facebook, play a substantial role in the digital advertising market and may significantly impair our ability to operate in this industry.

Google is a substantial player in the digital advertising market along with other players such as Microsoft. In addition, a small number of social network companies, such as Facebook, account for a large portion of digital advertising budgets. The high concentration of power among Google, Facebook and some other large market participants causes us to be subject to any unilateral changes they may make with respect to advertising on their respective platforms, which may be more lucrative than alternative methods of advertising or partnerships with other publishers that are not subject to such changes. Furthermore, we could have difficulty attractinglimited ability to respond to, and retaining qualified directorsadjust for, changes implemented by large market participants.

These companies, along with other large and executive officers,established Internet and technology companies, may also leverage their power to make changes to their web browsers, operating systems, platforms, networks or other products or services in a way that impacts the entire digital advertising marketplace.

The advertising/marketing industry is highly competitive. If we cannot compete effectively in this market, our revenues are likely to decline.

We face intense competition in the marketplace. We operate in a dynamic market that is subject to rapid development and introduction of new technologies, products and solutions, changing branding objectives, evolving customer demands and industry guidelines, all of which affect our ability to remain competitive. There are a large number of companies and advertising technology companies that offer products or services similar to ours and that compete with us for finite advertising budgets. There is also a large number of niche companies that are competitive with us, as they provide a subset of the services that we provide. Some of our existing and potential competitors may be better established, benefit from greater name recognition, may offer solutions and technologies that we do not offer or that are more evolved than ours, and may have significantly more financial, technical, sales and marketing resources than we do. In addition, some competitors, particularly those with a larger and more diversified revenue base and a broader offering, may have greater flexibility than we do to compete aggressively on the basis of price and other contract terms as well as respond to market changes. Additionally, companies that do not currently compete with us in this space may change their services to be competitive if there is a revenue opportunity, and new or stronger competitors may emerge through consolidations or acquisitions. If our platform is not perceived as competitively differentiated or we fail to develop adequately to meet market evolution, we could lose customers and market share or be compelled to reduce our prices and harm our operational results.

Risks Related to our Intellectual Property

If we cannot enforce and protect our intellectual property rights, our business could be adversely affected.

We rely on patents, copyright, trademark, domain name and trade secret laws in the United States and similar laws in other countries, as well as licenses and other agreements with our employees, and other parties, to establish and maintain our intellectual property rights in the technology, products and services used in our operations. These laws and agreements may not guarantee that our intellectual property rights will be protected and our intellectual property rights could be challenged or invalidated. Amendments to or interpretations of U.S. patent laws or new rulings around U.S. patent laws may adversely impact our ability to protect our new technologies, content, products and services and to defend against claims of patent infringement. In addition, such intellectual property rights may not be sufficient to permit us to take advantage of current industry trends or otherwise to provide competitive advantages, which could harmresult in costly redesign efforts, discontinuance of offerings, decreased traffic and associated revenue or otherwise adversely affect our business. We continually evaluate and monitor regulatory developments and cannot estimate the timing or magnitude of additional costs we may incur as a result.

We may needin the future be, subject to increase the sizeclaims of our organization and may experience difficulties in managing growth, if any.

At present, we are a small company. If and when the regulatory market permits and the market for blockchain and crypto-currencies stabilize, of which there can be no assurance, we expect to experience a period of expansion in infrastructure and overhead and anticipateintellectual property infringement that further expansion will be required to address potential growth and market opportunities. Future growth will impose significant added responsibilities on members of management, including the need to identify, recruit, maintain and integrate new managers. Our future financial performance and its ability to compete effectively will depend, in part, on its ability to manage any future growth effectively.

The loss of key personnel could adversely affect our business. We

Many companies (including patent holding companies) and individuals own patents, copyrights, trademarks, and trade secrets and frequently enter into litigation based on allegations of infringement or other violations of intellectual property rights. As we develop and offer our platform through various distribution channels we may experience an increase in the number of intellectual property claims against us. These claims, whether meritorious or not, may result in litigation, may be abletime-consuming and costly to hireresolve, and retain qualified personnelmay require expensive changes in our methods of doing business. These intellectual property infringement claims may require us to supportenter into royalty or licensing agreements on unfavorable terms or to incur substantial monetary liability. Additionally, these claims may result in our growth.being enjoined preliminarily or permanently from further use of certain intellectual property or may require us to cease or significantly alter certain of our operations.

The Company’s success dependsSome of our commercial agreements may require us to indemnify third parties against intellectual property infringement claims, which may require us to use substantial resources to defend against or settle such claims or, potentially, to pay damages. These third parties may also discontinue the use of our platform, as a significant extent upon the effortsresult of its CEO, and other key senior employees and other key personnel. Theinjunctions or otherwise, which could result in loss of revenues and adversely impact our business. Additionally, we may be exposed to liability or substantially increased costs if a commercial partner does not honor its contractual obligation to indemnify us for intellectual property infringement claims made by third parties or if any amounts received are not adequate to cover our liabilities or the servicescosts associated with defense of such personnelclaims. The occurrence of any of these events could adversely affect our business andbusiness.

Patent terms may be inadequate to protect our ability to implement our growth plan. We cannot assure you thatcompetitive position for an adequate amount of time.

Patents have a limited lifespan. In the servicesUnited States, if all maintenance fees are timely paid, the natural expiration of the members of our management team will continue toa patent is generally 20 years from its earliest U.S. non-provisional or international patent application filing date. Various extensions may be available, to us, or that we will be able to findbut the life of a suitable replacement for any of them. We do not have key man insurance on any members ofpatent, and the protection it affords, is limited. Even if patents covering our management team. If any member of our management team were to die and weproducts are unable to replace either or both of them for a prolonged period of time,obtained, once the patent life has expired, we may be unableopen to carry outcompetition from competitive products, including generics. As a result, our long-term business planpatent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.

Risks Related to Cyber and our future prospect for growth, and our business, may be harmed.Data Collection

Our success is dependent upon our ability to attract, train, manage and retain sales, marketing and other qualified personnel. There is substantial competition for qualified personnel, and an inability to recruit or retain qualified personnel may impact our ability to implement our strategy to grow our business.

If we are unable to adopt, implement and maintain equity compensation arrangements that provide sufficient incentives, we may be unable to hire and retain employees and attract qualified candidates in the future. If we are unable to hire and retain employees, including qualified technical personnel, and attract additional qualified candidates, our business and results of operations could be adversely affected.

We may not be able to successfully expandprotect our business through acquisitions.systems, technology and infrastructure from cyberattacks.

We review corporatemay be under attack by perpetrators of malicious technology-related events, such as the use of botnets, malware or other destructive or disruptive software, distributed denial of service attacks, phishing, attempts to misappropriate user information and product line acquisition candidatesother similar malicious activities. The incidence of events of this nature (or any combination thereof) is on the rise worldwide. While we continuously develop and maintain systems designed to detect and prevent events of this nature from impacting our platform, we have invested (and continue to invest) heavily in these efforts. These efforts are costly and require ongoing monitoring and updating as a parttechnologies change and efforts to overcome preventative security measures become more sophisticated.

Any event of this nature that we experience could damage our systems, technology and infrastructure, prevent us from providing our services, compromise the integrity of our growth strategy. If we decidedservices, damage our reputation and/or be costly to undertake an acquisition, we may not be ableremedy, as well as subject us to successfully integrate itinvestigations by regulatory authorities, fines and/or litigation that could result in orderliability to realize the full benefit of such acquisition. Factors which may affectthird parties.

Our business depends on our ability to grow successfully through acquisitions include:collect and use data, and any limitation on the collection and use of this data could significantly diminish the value of our platform and cause us to lose customers and revenue.

Our platform receives, collects, stores, processes, transfers and uses certain data about how viewers engaged with videos and helps companies to leverage that data to become a better story teller and optimize the videos. Our ability to access and utilize such data is crucial.

Our ability to either collect or use data could be restricted by new laws or regulations. We are subject to numerous federal, state, local, and international laws, directives and regulations regarding privacy, data protection, and data security and the collection, storing, sharing, use, processing, transfer, disclosure and protection of personal information and other data, the scope of which are changing, subject to differing interpretations, and may be inconsistent among jurisdictions or conflict with other legal and regulatory requirements. We are also subject to certain contractual obligations to third parties related to privacy, data protection and data security. We strive to comply with our applicable policies and applicable laws, regulations, contractual obligations and other legal obligations relating to privacy, data protection and data security to the extent possible. However, the regulatory framework for privacy, data protection and data security worldwide is, and is likely to remain for the foreseeable future, uncertain and complex, and it is possible that these or other actual or alleged obligations may be interpreted and applied in a manner that we do not anticipate or that is inconsistent from one jurisdiction to another and may conflict with other legal obligations or our practices. Further, any significant change to applicable laws, regulations or industry practices regarding the collection, use, retention, security or disclosure of data, or their interpretation, or any changes regarding the manner in which the consent of users or other data subjects for the collection, use, retention or disclosure of such data must be obtained, could increase our costs and require us to modify our services and features, possibly in a material manner, which we may be unable to integrate ViewBix Ltd.’scomplete, and may limit our ability to store and process user data or develop new services and features.

If we were found in violation of any applicable laws or regulations relating to privacy, data protection or security, our business may be materially and technology successfullyadversely affected and we would likely have to change our business practices and potentially the services and features available through our platform. In addition, these laws and regulations could impose significant costs on us and could constrain our ability to use and process data in manners that may be commercially desirable. In addition, if a breach of data security were to occur or achieveto be alleged to have occurred, if any violation of laws and regulations relating to privacy, data protection or data security were to be alleged, or if we had any actual or alleged defect in our safeguards or practices relating to privacy, data protection, or data security, our solutions may be perceived as less desirable and our business, prospects, financial condition and results of operations could be materially and adversely affected.

We also expect that there will continue to be new laws, regulations and industry standards concerning privacy, data protection and information security proposed and enacted in various jurisdictions. For example, the European Union’s (“EU”), data protection landscape is currently unstable, resulting in possible significant operational costs for internal compliance and risks to our business. The EU has adopted the General Data Protection Regulation (“GDPR”), which became effective in May 2018, and contains numerous requirements and changes from previously existing EU laws, including more robust obligations on data processors and heavier documentation requirements for data protection compliance programs by companies. Among other requirements, the GDPR regulates the transfer of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the United States. Failure to comply with the GDPR could result in penalties for noncompliance.

In addition to the GDPR, the European Commission has another draft regulation in the approval process that focuses on a person’s right to conduct a private life. The proposed legislation, known as the Regulation of Privacy and Electronic Communications (“ePrivacy Regulation”), would replace the current the current ePrivacy Directive. Originally planned to be adopted and implemented at the same time as the GDPR, the ePrivacy Regulation is still being negotiated.

Additionally, in June 2018, California passed the California Consumer Privacy Act (“CCPA”), which provides new data privacy rights for consumers and new operational requirements for companies. Specifically, the CCPA provides that covered companies must provide new disclosures to California consumers and afford such consumers new abilities to opt-out of certain sales of personal information. The CCPA became operative January 1, 2020. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected benefitsto increase data breach litigation. We cannot fully predict the impact of such acquisition.the CCPA on our business or operations, but it may require us to modify our data practices and policies and to incur substantial costs and expenses in an effort to comply. Some observers have noted the CCPA could mark the beginning of a trend toward more stringent privacy legislation in the United States, which could increase our potential liability and adversely affect our business. Further in March 2017, the United Kingdom (“U.K.”) formally notified the European Council of its intention to leave the EU pursuant to Article 50 of the Treaty on European Union (“Brexit”). The U.K. ceased to be an EU Member State on January 31, 2020, but enacted, a Data Protection Act substantially implementing the GDPR, effective in May 2018, which was further amended to align more substantially with the GDPR following Brexit. It is unclear how U.K. data protection laws or regulations will develop in the medium to longer term and how data transfers to and from the U.K. will be regulated. In addition, some countries are considering or have enacted legislation requiring local storage and processing of data that could increase the cost and complexity of delivering our services.

As partIn addition, failure to comply with the Israeli Privacy Protection Law 1981, and its regulations as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrative fines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the current enforcement measures and sanctions.

Any failure or perceived failure by us to comply with our posted privacy policies, our privacy-related obligations to users or other third parties, or any other legal obligations or regulatory requirements relating to privacy, data protection or data security may result in governmental investigations or enforcement actions, litigation, claims or public statements against us by consumer advocacy groups or others and could result in significant liability, cause our users to lose trust in us, and otherwise materially and adversely affect our reputation and business. Furthermore, the costs of compliance with, and other burdens imposed by, the laws, regulations, other obligations and policies that are applicable to the businesses of our users may limit the adoption and use of, and reduce the overall demand for, our platform. Additionally, if third parties we work with violate applicable laws, regulations or contractual obligations, such violations may put our users’ data at risk, could result in governmental investigations or enforcement actions, fines, litigation, claims, or public statements against us by consumer advocacy groups or others and could result in significant liability, cause our users to lose trust in us and otherwise materially and adversely affect our reputation and business. Further, public scrutiny of, or complaints about, technology companies or their data handling or data protection practices, even if unrelated to our business, strategy, on February 7, 2019, we entered into a Share Exchange Agreement with Algomizer Ltd., an Israeli corporation, pursuantindustry or operations, may lead to which Algomizer will assign, transfer and deliver its 99.83% holdings in Viewbix Ltd., an Israeli corporation, to us in exchange for sharesincreased scrutiny of restricted common stock as further detailed in “Item 1. Description of Business” above. The Share Exchange Agreement is subject to certain closing conditionstechnology companies, including us, filing an amendmentand may cause government agencies to enact additional regulatory requirements, or to modify their enforcement or investigation activities, which may increase our certificate of incorporation to change the Company’s name to ViewBix Inc., effecting a reverse split of our shares of common stock at a ratio of 1:15, conversion of our outstanding convertible notes into shares of restricted common stockcosts and Algomizer obtaining a tax pre-ruling from the Israeli Tax Authority relating to the Share Exchange Agreement. If these conditions are not satisfied or waived, the acquisition will not be consummated. There can be no assurance that we will complete the acquisition on the time frame that we anticipate or under the terms set forth in the Share Exchange Agreement, or at all. Failure to complete the acquisition of ViewBix Ltd. or any delays in completing the acquisition could have an adverse impact on our future business and operations. In addition, we will have incurred significant acquisition-related expenses without realizing the expected benefits.risks.

In addition, even if the acquisition of ViewBix Ltd. under the Share Exchange Agreement is consummated, we may encounter difficulties integrating the business, technology, products, personnel or operations of ViewBix Ltd., particularly if the key personnel of ViewBix Ltd. choose not to work for us or we have difficulty retaining the customers or partners of ViewBix Ltd. due to changes in management or otherwise. Moreover, the anticipated benefits of the acquisition of ViewBix Ltd. may not be realized or we may be exposed to unknown liabilities.

Risks Related to Our Common Stock

Shares of Common Stock issuable upon the conversion of warrants may substantially increase the number of Sharesshares of Common Stock available for sale in the public market and depress the price of our stock.Common Stock.

As of December 31, 2018,2021, we had outstanding: (i) Class FJ Warrants exercisable to purchase 27,697,855 Shares,3,649,318 shares of Common Stock at an exercise price of $0.28$0.48 per Share.;share of Common Stock; and (ii) Class GK Warrants exercisable to purchase 27,697,855 Shares,3,649,318 shares of Common Stock, at an exercise price of $0.14$0.80 per Share; (iii) Class H Warrants exercisable to purchase 1,321,429 Shares, at an exercise priceshare of $0.14 per Share; and (iv) Class I Warrants exercisable to purchase 571,429 Shares, at an exercise price of $0.14 per Share .Common Stock.

In addition, upon the closing of the Share Exchange Agreement, of which there can be no assurance, we will issue to Algomizer: (i) warrants to purchase shares of restricted common stock with an exercise price representing a valuation for the Company of $15,000,000 on Fully Diluted Share Capital basis, which will represent 10% of the Fully Diluted Share Capital immediately following the closing, which warrants will be exercisable for a period of ten years, and (ii) warrants to purchase shares of restricted common stock with an exercise price representing a valuation for the Company of $25,000,000 on Fully Diluted Share Capital basis, which will represent 10% of the Fully Diluted Share Capital immediately following the closing, which latter warrants will be exercisable for a period of ten years.

To the extent any of these Warrantswarrants are exercised and any additional warrants are grantedissued and subsequently exercised, there will be further dilution to our stockholders. Until the warrants expire, these warrant holders will have an opportunity to profit from any increase in the market price of our SharesCommon Stock without assuming the risks of ownership. Holders of options and warrants may exercise these securities at a time when we could obtain additional capital on terms more favorable.

The exercise price of the warrants will dilute the voting interest of the owners of presently outstanding shares of Common Stock by adding a substantial number of additional Sharesshares of our Common Stock. We have reserved Sharesshares of Common Stock for issuance upon the exercise of the warrants and may increase the Sharesshares reserved for these purposes in the future.

The Sharesshares of our Common Stock, which are issuable upon the exercise of any outstanding warrants may be sold in the public market pursuant to Rule 144, if applicable. The sale of our common stockCommon Stock issued or issuable upon the exercise of the warrants and options described above, or the perception that such sales could occur, may adversely affect the market price of our common stock.Common Stock. 

Our Planned Reverse Split may not result in a proportional increase in the per share price of our Common Stock.

We intend to effect the Planned Reverse Split with the primary intent of increasing the price of our Common Stock in order to meet the initial listing requirements of the Nasdaq Capital Market. The effect of the Planned Reverse Split on the market price for our Common Stock cannot be accurately predicted. In particular, we cannot assure you that the proportionate increase in the price of our common stock immediately after the Planned Reverse Split from the price for shares of our Common Stock immediately before the Planned Reverse Split will be maintained for us to meet the initial listing requirements of the Nasdaq Capital Market or that the such market prices will be maintained for a substantial period of time. It is not uncommon for the market price of a company’s common stock to decline in the period following a reverse stock split. If the market price of our Common Stock declines following the Planned Reverse Split, the percentage decline may be greater than would occur in the absence of the Planned Reverse Split. The market price of our Common Stock may also be affected by other factors which may be unrelated to the Planned Reverse Split or the number of shares outstanding.

Moreover, because some investors may view the Planned Reverse Split negatively, we cannot assure you that the Planned Reverse Split will not adversely impact the market price of our Common Stock. Accordingly, our total market capitalization after the Planned Reverse Split may be lower than the market capitalization before the Planned Reverse Split.

We are subject to compliance with securities law, which exposes us to potential liabilities, including potential rescission rights.

We have offered and sold restricted shares ofour Common Stock and other restricted securities to investors pursuant to certain exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Act”), as well as those of various state securities laws, including the exemptions provided under Regulation S and Regulation D promulgated by the SEC under the Act.laws. The basis for relying on such exemptions is factual; that is, the applicability of such exemptions depends upon our conduct and that of those persons contacting prospective investors and making the offering. We have not received a legal opinion to the effect that any of our prior offerings were exempt from registration under any federal or state law. Instead, we have relied upon the operative facts as the basis for such exemptions, including information provided by investors themselves.

If any prior offering did not qualify for such exemption, an investor would have the right to rescind its purchase of the securities if it so desired. It is possible that if an investor should seek rescission, such investor would succeed. A similar situation prevails under state law in those states where the securities may be offered without registration in reliance on the partial preemption from the registration or qualification provisions of such state statutes. If investors were successful in seeking rescission, we would face severe financial demands that could adversely affect our business and operations. Additionally, if we did not in fact qualify for the exemptions upon which it has relied, we may become subject to significant fines and penalties imposed by the SECU.S. Securities and Exchange Commission (the “SEC”) and state securities agencies.

The availability of a large number of authorized but unissued shares of Common Stock may, upon their issuance, lead to dilution of existing stockholders.

We are authorized to issue 490,000,000 shares of Common Stock, $0.0001 par value per share, of which, as of March 28, 2019, 110,749,643December 31, 2021, 34,753,669 shares of Common Stock were outstanding. Additional shares of Common Stock may be issued by our board of directors without further stockholder approval. The issuance of large numbers of shares, possibly at below market prices, is likely to result in substantial dilution to the interests of other stockholders. In addition, issuances of large numbers of shares of Common Stock may adversely affect the market price of our Common Stock. Reference is made to the disclosure under Item 1 “Description of Business” and under the subcaption “Recent Development” with respect to the issuance of shares: (i) on the conversion of convertible notes; (ii) representing 65% of the issued and outstanding share capital of the Company on a fully diluted basis on the closing date of the Share Exchange Agreement; and (iii) of up to 5,000,000 restricted shares of the Company’s common stock, as well as the issuance of Class T cashless warrants to purchase up to 3,000,000 restricted shares of the Company’s common stock, exercisable within 36 months at an exercise price of $0.01 per restricted shares, as compensation for services rendered by directors, employees and consultants. Such restricted shares and warrants shall be allocated among the relevant existing personnel at the discretion of the Company’s chief executive officer and chief financial officer. As of the date of this Form 10-K, no restricted shares nor Class T warrants were issued by the Company.

Our Certificate of Incorporation authorizes 10,000,000 shares of preferred stock, $0.0001 par value $0.0001 per share of which none were issued and outstanding as of the date of this registration statement.December 31, 2021. The board of directors is authorized to provide for the issuance of these unissued shares of preferred stock in one or more series, and to fix the number of shares and to determine the rights, preferences and privileges thereof. Accordingly, the board of directors may issue preferred stock which may convert into large numbers of shares of Common Stockcommon stock and consequently lead to further dilution of other shareholders.stockholders.

We have never paid cash dividends and do not anticipate doing so in the foreseeable future.

We have never declared or paid cash dividends on our common shares.Common Shares. We currently plan to retain any earnings to finance the growth of our business rather than to pay cash dividends. Payments of any cash dividends in the future will depend on our financial condition, results of operations and capital requirements, as well as other factors deemed relevant by our board of directors.

Our Common Stock is subject to the “Penny Stock” rules of the SEC and the trading market in our stock is limited, which makes transactions in our stock cumbersome and may reduce the value of an investment.

The Securities and Exchange CommissionSEC has adopted Rule 15g-9 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:

In order to approve a person’s account for transactions in penny stocks, the broker or dealer must:

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the CommissionSEC relating to the penny stock market, which, in highlight form:

Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our Common Stock and cause a decline in the market value of our stock.Common Stock.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

Financial Industry Regulatory Authority, Inc. (“FINRA”) sales practice requirements may limit a shareholder’s ability to buy and sellSince our Common Stock.

In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our Common Stock which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

Our stock is thinly traded, sale of your holding may take a considerable amount of time.

The shares of our Common Stock are thinly-traded on the OTCQB Market, meaning that the number of persons interested in purchasing our Common Stock at or near bid prices at any given time may be relatively small or non-existent. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot give you any assurance that a broader or more active public trading market for our Common Stock will develop or be sustained, or that current trading levels will be sustained. Due to these conditions, we can give you no assurance that you will be able to sell your shares at or near bid prices or at all if you need money or otherwise desire to liquidate your shares.

Shares of Common Stock eligible for future sale may adversely affect the market.

From time to time, certain of our stockholders may be eligible to sell all or some of their shares of Common Stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144 promulgated under the Securities Act, subject to certain limitations. In general, pursuant to amended Rule 144, non-affiliate stockholders may sell freely after six months, subject only to the current public information requirement. Affiliates may sell after six months, subject to the Rule 144 volume, manner of sale (for equity securities), current public information and notice requirements. Any substantial sales of our Common Stockcommon stock pursuant to Rule 144 may have a material adverse effect on the market price of our Common Stock. Reference is made to the disclosure under the Risk Factor “The availability of a large number of authorized but unissued shares of Common Stock may, upon their issuance, lead to dilution of existing stockholders” above.

If we fail to maintain effective internal controls over financial reporting, the price of our Common Stock may be adversely affected.

We identified a material weakness in our period and our financial reporting process. Our internal control over financial reporting may have material weaknesses and conditions that could require correction or remediation, the disclosure of which may have an adverse impact on the price of our Common Stock. We are required to establish and maintain appropriate internal controls over financial reporting. Failure to establish those controls, or any failure of those controls once established, could adversely affect our public disclosures regarding our business, prospects, financial condition or results of operations. In addition, management’s assessment of internal controls over financial reporting may identify material weaknesses and conditions that need to be addressed in our internal controls over financial reporting or other matters that may raise concerns for investors. Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting or disclosure of management’s assessment of our internal controls over financial reporting may have an adverse impact on the price of our Common Stock.

We are required to comply with certain provisions of Section 404 of the Sarbanes-Oxley Act of 2002 and if we fail to comply in a timely manner, our business could be harmed and our stock price could decline.

Rules adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 require an annual assessment of internal controls over financial reporting, and for certain issuers an attestation of this assessment by the issuer’s independent registered public accounting firm. The standards that must be met for management to assess the internal controls over financial reporting as effective are evolving and complex, and require significant documentation, testing, and possible remediation to meet the detailed standards.

We expect to incur expenses and to devote resources to Section 404 compliance on an ongoing basis. It is difficult for us to predict how long it will take or costly it will be to complete the assessment of the effectiveness of our internal control over financial reporting for each year and to remediate any deficiencies in our internal control over financial reporting. As a result, we may not be able to complete the assessment and remediation process on a timely basis. In addition, although attestation requirements by our independent registered public accounting firm are not presently applicable to us, we could become subject to these requirements in the future and we may encounter problems or delays in completing the implementation of any resulting changes to internal controls over financial reporting. In the event that our Chief Executive Officer orand Chief Financial Officer, determinewhich currently is the same individual, determines that our internal control over financial reporting is not effective as defined under Section 404, we cannot predict how the market prices of our shares of Common Stock will be affected; however, we believe that there is a risk that investor confidence and share value may be negatively affected.

Our share price could be volatile, and our trading volume may fluctuate substantially.

The price of our common shares has been and may in the future continue to be extremely volatile, with the sale price fluctuating from a low of $0.1 to a high of $2.24 since 2012. Many factors could have a significant impact on the future price of our common shares, including:

Our annual and quarterly results may fluctuate, which may cause substantial fluctuations in our common stockCommon Stock price.

Our annual and quarterly operating results may in the future fluctuate significantly depending on factors including the timing of purchase orders, new product releases by us and other companies, gain or loss of significant customers, price discounting of our product, the timing of expenditures, product delivery requirements and economic conditions. Revenues related to our product are required to be recognized upon satisfaction of all applicable revenue recognition criteria. The recognition of revenues from our product is dependent on a number of factors, including, but not limited to, the terms of any license agreement and the timing of implementation of our products by our customers.

Any unfavorable change in these or other factors could have a material adverse effect on our operating results for a particular quarter or year, which may cause downward pressure on our common stock price. We expect quarterly and annual fluctuations to continue for the foreseeable future.

Delaware law contains provisions that could discourage, delay or prevent a change in control of our company, prevent attempts to replace or remove current management and reduce the market price of our stock.

Provisions in our certificate of incorporation and bylaws may discourage, delay or prevent a merger or acquisition involving us that our stockholders may consider favorable. For example, our certificate of incorporation authorizes our board of directors to issue up to ten million shares of “blank check” preferred stock. As a result, without further stockholder approval, the board of directors has the authority to attach special rights, including voting and dividend rights, to this preferred stock. With these rights, preferred stockholders could make it more difficult for a third party to acquire us.

We are also subject to the anti-takeover provisions of the DGCL.Delaware General Corporation Law (the “DGCL”). Under these provisions, if anyone becomes an “interested stockholder,” we may not enter into a “business combination” with that person for three years without special approval, which could discourage a third party from making a takeover offer and could delay or prevent a change in control of us. An “interested stockholder” is, generally, a stockholder who owns 15% or more of our outstanding voting stock or an affiliate of ours who has owned 15% or more of our outstanding voting stock during the past three years, subject to certain exceptions as described in the DGCL.

Risks Related to our Operations in Israel

Political, economic and military instability in Israel may impede our ability to operate and harm our financial results.

Our offices and management team are located in the Tel-Aviv metropolitan area, Israel. Accordingly, political, economic, and military conditions in Israel and the surrounding region may directly affect our business and operations. In recent years, Israel has been engaged in sporadic armed conflicts with Hamas, an Islamist terrorist group that controls the Gaza Strip, with Hezbollah, an Islamist terrorist group that controls large portions of southern Lebanon, and with Iranian-backed military forces in Syria. In addition, Iran has threatened to attack Israel and may be developing nuclear weapons. Some of these hostilities were accompanied by missiles being fired from the Gaza Strip against civilian targets in various parts of Israel, including areas in which our employees and some of our consultants are located, and negatively affected business conditions in Israel. Any hostilities involving Israel or the interruption or curtailment of trade between Israel and its trading partners could adversely affect our operations and results of operations Our commercial insurance does not cover losses that may occur as a result of events associated with war and terrorism. Although the Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that this government coverage will be maintained or that it will sufficiently cover our potential damages. Any losses or damages incurred by us could have a material adverse effect on our business. Any armed conflicts or political instability in the region would likely negatively affect business conditions and could harm our results of operations.

Further, in the past, the State of Israel and Israeli companies have been subjected to economic boycotts. Several countries still restrict business with the State of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or the expansion of our business. A campaign of boycotts, divestment and sanctions has been undertaken against Israel, which could also adversely impact our business.

In addition, many Israeli citizens are obligated to perform several days, and in some cases more, of annual military reserve duty each year until they reach the age of 40 (or older, for reservists who are military officers or who have certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases in terrorist activity, there have been periods of significant call-ups of military reservists. It is possible that there will be military reserve duty call-ups in the future. Our operations could be disrupted by such call-ups, which may include the call-up of members of our management. Such disruption could materially adversely affect our business, prospects, financial condition and results of operations.

Exchange rate fluctuations between foreign currencies and the U.S. Dollar may negatively affect our earnings.

Our reporting and functional currency is the U.S. dollar. Our revenues are currently primarily payable in U.S. dollars and we expect our future revenues to be denominated primarily in U.S. dollars and Euros. However, certain amount of our expenses are in NIS and as a result, we are exposed to the currency fluctuation risks relating to the recording of our expenses in U.S. dollars. We may, in the future, decide to enter into currency hedging transactions. These measures, however, may not adequately protect us from material adverse effects.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

After the year-ended December 31, 2018: (i) the Registrant’s subsidiary, Virtual Crypto IL, leased offices facilities from an unaffiliated third-party at 10 Ha’amal Street, Rosh Ha’ayin, Israel 4809234 consisting of approximately 50 square feet of office space, for $800 per month. The Registrant believes that its present facilities are sufficient for the foreseeable future.None.

ITEM 3. LEGAL PROCEEDING

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations, except as set forth below. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of the Company, threatened against or affecting the Company, our Common Stock, our officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect, other than as set forth below.

In AprilJune 2017, a lawsuit was filed with the Regional Labor Court in Tel Aviv court by Mr. Wayn(the “Tel Aviv Court”) against Emerald Israel, and other defendants, claiming certain damages toin the total amount of $100,000,approximately $225,000, under the assertion of wrongful dismissaltermination by the Registrant and Emerald IL. The Registrant believes these claims to be unsubstantiated and wholly without merit and intends to defend itself against these claims. The Company believes that he will not be successful in his claim. Nevertheless, the outcome of the proceeding will not materially affect the Registrant.

In December 2017, a liquidation request wasIsrael. We filed our response with the Tel Aviv District Court in October of 2017. The dispute was initially heard by the Tel Aviv Court on February 13, 2020. In a groupsupplemental hearing on February 11, 2021, the plaintiff provided a certified confirmation of former employeespayment of Emerald IL, underapproximately $14,668 by the assertionNational Insurance Institute of delayIsrael for one month’s prior notice of paytermination, redemption of 16.8 days of vacation and insolvency.severance pay. On December 20, 2017, at a hearing beforeJune 3, 2021, and after the court, it was ordered that the Emerald IL shall settle its pension debts to the former employees under applicable Israeli law within 21 days and settle its other debts to them in 60 days, the failure of which would result in a winding-up order (the equivalent of a liquidation) could be given. Based on the collaboration of Emerald IL and its former employeesplaintiff and the fact thatdefendants filed their summaries, the Companylawsuit against Emerald Israel was in negotiation with third-parties for the infusion of equity capital and has started negotiating the sale of certain assets, the Company’s legal advisors believe that the liquidation claim will be dismissed by the court. The amounts being claimed by the former employees was less than $96,000 and are included in current liabilities at December 31, 2018.dismissed.

On January 29, 2018, the “Registrant”) transferred the ordinary shares of the Registrant’s former Israeli subsidiary, Emerald IL to Attorney Eviatar Knoller, Esq., with offices at20 Lincoln, Tel Aviv-Jaffa 6713412, as trustee (the “Trustee”). The purpose of the transfer of the management shares to the Trustee, pursuant to resolution of the Registrant’s Board of Directors, was to enable the Trustee to liquidate the management shares and/or the assets of Emerald IL to satisfy its debtsand satisfy its financial obligations to former employees. As a result, the former employees of Emerald IL commenced an action in a court of competent jurisdiction in Israel to liquidate Emerald IL and use any assets to satisfy the debts owed to the former employees.

ITEM 4. MINE SAFETY DISCLOSURES

None.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASE OF EQUITY

Market Information

Our common stockCommon Stock is currently quoted on the OTCQB market under the symbol VCRP. ForVBIX. We plan to effect the periods indicated, the following table sets forth the highPlanned Reverse Split, and, low bid pricesaccordingly, share amounts, per share data, share prices, exercise prices or conversion rates in this annual report on Form 10-K are subject to change following the effectiveness of the Planned Reverse Split. The Planned Reverse Split will not change the authorized number of shares or the par value of our common stock. The below prices represent inter-dealer quotations without retail markup, markdown, or commission and may not necessarily represent actual transactions.

Holders of Common Stock

As of December 31, 2021, there were approximately 2,692 stockholders of record of our Common Stock and 34,753,669 shares of our Common Stock outstanding.

Our transfer agent is Transfer Online, 512 SE Salmon Street, Portland, OR 97214-3444, Phone: (503) 227-2950.

Dividends

Holders of common stockCommon Stock are entitled to dividends if declared by the Boardour board of Directors,directors, out of funds legally available therefore. We have never declared cash dividends on our common stockCommon Stock and our Boardboard of Directorsdirectors does not anticipate paying cash dividends in the foreseeable future as it intends to retain future earnings to finance the growth of our businesses.

Rule 144 Shares

As of the date of this Registration Statement, we do not have any significant number of shares of our Common Stock that are currently available for sale to the public in accordance with the volume and trading limitations of Rule 144.

Outstanding Warrants

As described in Note 3. Convertible Nots, the Company’s 6,334,626 Class A Warrants and 5,400,478 Class B Warrants were cancelled during the first quarter of 2018, in connection with the change in terms of the convertible notes.

As described above in this Note 4. Stockholders’ Equity, the Company issued 27,697,855 Class F and 27,697,855, Class G Warrants in connection with the $0.07 Unit Offering.

On January 26, 2018, the Company signed a two-year consulting agreement with Maz Partners, pursuant to which it will to provide investment and corporate finance advice to the Company in consideration for 200,000 Class H Warrants. Each Class H Warrant is exercisable through to January 2020 to purchase one (1) Share at an exercise price of $0.14 per Share. The fair value of these Class H Warrants at the issuance date was $39,845 and was charged to General and administration expenses in the Statement of Comprehensive Loss with a corresponding credit to Additional Paid-in Capital in the Statement of Changes in Stockholders’ Deficit.

The following table summarizes information of outstanding warrants as of December 31, 2018:2021:

In connection with the Share Exchange Agreement, upon the earlier of: (a) the launch of a live video product to an American consumer in the United States by Viewbix Israel, or (b) the launch of an interactive television product to an American consumer in the United States by Viewbix Israel, we will issue to Gix Internet an additional 1,642,193 shares of restricted Common Stock of the Company.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table summarizes information of outstanding options as of December 31, 2018:2021:

Sale of Unregistered Securities

During the last three years, the Registrant issued the following restricted shares which were not registered under the Act

Sale of Unregistered Securities in 2016:

During 2016,

Recent Sales of Unregistered Securities

On December 18, 2020, we entered into a Stock Subscription Agreement (the “Subscription”) with certain investors (the “Investors”) in connection with the Registrant issued Class A Warrantssale and Class B Unit Warrantsissuance of an aggregate of 3,000,000 shares of Common Stock, at a purchase price of US$0.01 per share, and for an aggregate purchase price of US$30,000. In addition, and on the same date, we entered into a Loan Agreement (the “Loan Agreement”) with the Investors, pursuant to which the Investors lent an aggregate of $69,000 (the “Principal Amount”). In accordance with the terms of the Loan Agreement, we repaid the interest on the Principal Amount (8% compounded annually) to the following entities for bona fide servicesInvestors in the form of an issuance of an aggregate of 552,000 shares of Common Stock, at a price per share of $0.01. The shares of Common Stock were issued to the Registrant. The issuances of these Warrants were in consideration for convertible note payable and was made without registration under the Act in reliance upon the exemptions provided in Section 4(2) of the Act and Reg S.

Sale of Unregistered Securities in 2017:

On February 24, 2017, Publicis Groupe 90 (“Publicis 90”) invested 500,000 Euros or approximately U$526,000 and the Registrant accepted a RegInvestors pursuant to Regulation S Subscription Agreement from Publicis 90 in consideration for the issuance to Publicis 90 of 1,315,563 restricted shares of the Registrant’s common stock at a subscription price of $0.40 per share. The issuance was made in reliance upon the exemptions provided in Section 4(2) of the Securities Act of 1933, as amended (the “Act”) and Regulation S promulgated byamended. In January 2022, the SEC underInvestors expressed their intention to convert the Act.

On April 25, 2017, a holder of a convertible note in the principal amount of $100,000 converted $10,400 into 74,572, shares based on an adjusted conversion price of $0.14. The conversion price was adjusted on March 22, 2017 pursuant to the provisionsremaining sum of the 2016 Secured Convertible Note Agreement.

On June 12, 2017, certain warrant holders holding 1,100,000 Class A Warrants and 1,100,000 Class B Warrants, electedPrincipal Amount to exercise certain warrants on a cashless basis. In accordance with the 2016 Secured Convertible Note Agreement the Class A warrants and Class B warrants were increased to 5,665,626 each, based on an adjusted share price of $0.14 per share and 3,451,490 Class B Warrants were converted to 1,096,395 shares at $0.14 per share. The exercise price and number of shares issued were adjusted on March 22, 2017.

On June 12, 2017, the Company completed the issuance of 125,000 shares of our Common Stock and accordingly, we agreed to extend the Company’s common stock to Alpha Anstalt Capital (“Alpha”) pursuant to the Company’s agreement with Alpha in the prior year.repayment date.

In July and August 2017, the Company issued 571,429 units to two accredited investors for $0.14 per unit in total amount of $80,000. Each unit consist (i) 571,429 restricted shares at a price of $0.14 per share, (ii) 571,429 warrants exercisable for a one-year period in exercise price of $0.14, and (iii) 571,429 warrants exercisable for a two-year. As of December 31, 2017, the Company had not issued the shares to the accredited investors.

Sale of Unregistered Securities in 2018:

During the first quarter of 2018, the Company received the aggregate amount of $1,940,950 from certain “accredited investors” in consideration for the issuance of 27,697,855 of the Company’s units at an offering price of $0.07 per Unit, defined as the “$0.07 Unit Offering” discussed above, each consisting of: (i) one Share; (ii) one Class F Warrant exercisable for a period of twelve months to purchase one additional Share at an exercise price of $0.14 per Share; and (iii) one Class G Warrant exercisable for a period of twelve months to purchase one additional Share at an exercise price of $0.28 per Share. The offer and sale of these Units, without registration under the Securities Act of 1933, as amended (the “Act”), was made in reliance upon the exemption provided by Section 4(2) of the Act and/or Regulation S and Regulation D promulgated thereunder.

On February 8, 2018, in connection with the August 2017 Unit Offering discussed above, the Company issued 571,429 units of the Company’s securities to two accredited investors for consideration of $80,000 which was received in August 2017. Each Unit in the August 2017 Unit financing consisted of: (i) one Share; (ii) one Class H Warrant exercisable for twelve months to purchase one additional Share at a price of $0.14 per Share; and (iii) one Class I Warrant exercisable for twenty-four months to purchase one additional Share at a price of $0.14 per Share.

On March 12, 2018, the Company issued a total of 3,629,999 restricted Shares to certain consultants in consideration for services rendered during the first quarter of 2018, which Shares were valued at $892,300, based on the closing share price on the day prior to the date of issuance. The above-mentioned amount was recorded as a charge to the Company’s Statement of Comprehensive Loss, with a corresponding credit to Additional Paid in Capital in the Company’s Statement of Changes in Stockholders’ Equity.

On March 20, 2018, the Company issued a total of 62,500 restricted Shares pursuant to the exercise of a stock option at an exercise price of $0.01 per Share, which option was granted in connection of certain services rendered in October 2016.

On March 9, 2018, the Company signed a consulting agreement with Ayin, Nun, Chaf, Yeuzt Ltd, pursuant to which it will to provide professional legal advice to the Company in consideration for 550,000 Class H Warrants. Each Class H Warrant is exercisable through to March 2020 to purchase one (1) Share at an exercise price of $0.14 per Share.

On April 20, 2018, the Company issued a total of 700,000 restricted Shares to certain consultants in connection with services rendered during the second quarter of 2018, which Shares were valued at $112,000, based on the closing share price on the day prior to the date of issuance. The above-mentioned amount was recorded as a charge to the Company’s Statements of Operations and Comprehensive Loss, with a corresponding credit to Additional Paid in Capital in the Company’s Statement of Changes in Stockholders’ Deficit.

During the year ended December 31, 2018 the Company issued a total of 54,621,800 Shares in connection with the conversion of convertible note in amount of $546,218.

ITEM 6. SELECTED FINANCIAL DATA

None.Not required for smaller reporting companies.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND PLAN OF OPERATION

Overview

The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our consolidated financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which refer to future events. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.

PlanOrganizational Background

The Registrant was incorporated in the State of Operations

Ohio in 1989 under a predecessor name, Zaxis International, Inc. On January 23, 2018,August 25, 1995, Zaxis International, Inc. merged with a subsidiary of The InFerGene Company, a Delaware corporation, which entity changed its name to Zaxis International, Inc. and the Registrant, through its newly organized, wholly-owned Israeli subsidiary, Virtual Crypto Technologies Ltd. (the “Subsidiary” or “Virtual Crypto Israel”),Company was reincorporated in Delaware under the name of Zaxis International, Inc. On December 30, 2014, Zaxis entered into a binding term sheet (the “Term Sheet”)an agreement with Chiron RefineriesEmerald Medical Applications Ltd. (“Chiron”), a publicprivate limited liability company listed on the Tel-Aviv Stock Exchange (TASE: CHR). Pursuant to the Term Sheet, the Registrant’s Subsidiary agreed to: (i) appoint a wholly-owned subsidiary of Chiron, under incorporationorganized under the laws of the Turkish RepublicState of Northern Cyprus, asIsrael.

Emerald Medical Applications Ltd.

On March 16, 2015, Zaxis and Emerald Israel executed a share exchange agreement, which closed on July 14, 2015, and Emerald Israel became the exclusive distributor (the “Distributor”) of our Subsidiary’s products (as defined below)Company’s wholly-owned subsidiary. Emerald Israel was engaged in the territorybusiness of developing Emerald Israel’s DermaCompare technology and the Republicdevelopment, sale and service of Turkey, includingimaging solutions utilizing its DermaCompare software for use in derma imaging and analytics for the territorydetection of Turkish Republicskin cancer. On January 29, 2018, the Company ceased the DermaCompare operations of Northern Cyprus (the “Territory”);its former subsidiary.

On January 29, 2018, the Company ceased the DermaCompare operations of Emerald Israel and (ii)on May 2, 2018, the Distributor shall have the rightDistrict Court of Lod, Israel issued a winding-up order for Emerald Israel and appointed an Israeli attorney to appoint sub-distributors within the Territory.serve as special executor for Emerald Israel.

Virtual Crypto Technologies Ltd. was formed on

On January 17, 2018, the Company formed VCT Israel to develop and market software and hardware products facilitating, allowing and supporting purchase and/or sale of cryptocurrencies through ATMs, tablets, PCspersonal computers (“PCs”) and/or mobile devices (the “Products”).

devices. On January 29, 2018,27, 2020, VCT Israel was sold to a third party for NIS 50,000 ($14,459).

Transaction with Gix (the “Recapitalization Transaction”)

On February 7, 2019, the Company entered into the Share Exchange Agreement with Gix Internet, pursuant to which on Closing Date, Gix Internet assigned, transferred and delivered its 99.83% holdings in Viewbix Israel to the Company in exchange for Common Stock representing 65% of the issued and outstanding share capital of the Company on a fully diluted basis as of the Closing Date, following the conversion of certain convertible notes of the Company and excluding certain warrants to purchase shares of Common Stock expiring in 2020 and additional warrants as further described below (the “Fully Diluted Share Capital”). In addition, upon the earlier of: (a) the launch of a live video product to an American consumer in the United States by Viewbix Israel, or (b) the launch of an interactive television product to an American consumer in the United States by Viewbix Israel, the Company agreed to issue to Gix Internet an additional 1,642,193 shares of restricted Common Stock representing 5% of the Fully Diluted Share Capital immediately following the Closing Date.

On July 24, 2019, and in connection with the Share Exchange Agreement, the Company filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of Delaware reflecting its name change from Virtual Crypto Technologies, Inc., f/k/a Emerald Medical Applications Corp. (the “Registrant”) transferred to Viewbix Inc. to reflect its new operations and business focus. On August 7, 2019, FINRA approved the managementRegistrant’s name change and its trading symbol was changed from “VRCP” to “VBIX” on the OTCQB.

On the Closing Date, (i) the Company issued 20,281,085 shares of Common Stock to Gix Internet in exchange for consideration consisting of 99.83% holdings in Viewbix Israel, and (ii) convertible notes representing 3,434,889 shares of Common Stock then currently issued to holders were converted. The shares of Common Stock were issued under Regulation S. The Company also issued a total of 7,298,636 warrants to purchase shares of Common Stock to Gix Internet, whereby (a) 3,649,318 of such warrants to purchase shares of Common Stock were issued with an exercise price of $0.48, and (b) 3,649,318 of such warrants to purchase shares of Common Stock were issued with an exercise price of $0.80.

Following the Registrant’s former IsraeliClosing Date, Viewbix Israel became a subsidiary Emerald Medical Applications Ltd. (“Emerald IL”) owned by the Registrant to Attorney Eviatar Knoller, Esq., with offices at20 Lincoln, Tel Aviv-Jaffa 6713412, as trustee (the “Trustee”). The purpose of the transferRegistrant. Viewbix Israel was incorporated in February 2006 in Israel.

On June 6, 2020, Algomizer Ltd. changed its name to Gix Internet Ltd.

On January 1, 2020, the Company announced certain cost reduction measures due the Company not achieving certain revenues goals. In connection with these cost reduction measures, on January 1, 2020, Mr. Jonathan Stefansky, the Company’s then chief executive officer and member of the management sharesCompany’s board of directors, tendered his resignation from the Board, and on the same date the sides reached a mutual understanding whereby Mr. Stefansky would step down as chief executive officer, effective March 1, 2020. On the same date, the Company and Mr. Hillel Scheinfeld, the Company’s then chief operating officer, reached a similar mutual understanding and agreed he would step down, also effective March 1, 2020. Mr. Amihay Hadad, the Company’s chief financial officer, was appointed to the Trustee, pursuant to resolutionCompany’s board of directors on January 1, 2020, and, effective as of March 1, 2020, he was also appointed as the Registrant’s Board of Directors dated January 29, 2018, was to enable the Trustee to liquidate the management shares and/or the assets of Emerald IL to satisfy its debts.Company’s chief executive officer as well.

The operations of its former subsidiary never generated any revenues and was unable to raise capital to fund its ongoing operations and satisfy its financial obligations to former employees. As a result, the former employees of Emerald IL commenced an action in a court of competent jurisdiction in Israel to liquidate Emerald IL and use any assets to satisfy the debts owed to the former employees. Effective March 8, 2018, Emerald IL ceased to be a wholly-owned subsidiary and a part of the Registrant.

On January 17, 2018,27, 2020, the Registrant formedCompany entered into an agreement with a third-party to sell Virtual Crypto Technologies Ltd as a new wholly-owned subsidiary under the laws of the State of Israel (“Virtual Crypto Israel”).Ltd. for NIS 50,000 ($14, 459), which transaction was consummated on February 12, 2020.

Our Business Operations during 2018

We were a digital health startup company engaged in the development, sale and service of imaging solutions utilizing our proprietary DermaCompare software that we developed for use in derma imaging and analytics (our “DermaCompare” or “Product”). We believed that the DermaCompare software represents an advancement in skin cancer screening that should enable physicians to more readily identify and monitor changes in their patients’ skin characteristics. As discussed above, we determined in January 2018 to terminate the business of our DermaCompare subsidiary, Emerald IL, and transferred the assets of that subsidiary to the Trustee for liquidation.

Results of Operations during the year ended December 31, 20182021 as compared to the year ended December 31, 20172020

We generated revenues of $100,000Revenues for the year ended December 31, 2018, all of which were generated from our Chiron term sheet agreement. We are no longer pursuing our business relationship with Chiron or its subsidiary. We generated no revenues2021 was $41 thousand as compared to $96 thousand for the year end December 31, 2020. The reason for the decrease during the fiscal year ended December 31, 2017 during which fiscal year we were still trying2021 is due to commercially exploit our DermaCompare technology, to no avail. We had operating expenses related to research and development and general and administrative expensesthe Company’s cost-reduction measures implemented beginning on January 1, 2021.

DuringCost of revenues for the year ended December 31, 2018, we incurred $25,006,486 in net loss due2021 was $0 which is a slight decrease to $790,413 in research$5 thousand for the year end December 31, 2020.

Research and development expenses and $1,773,839 in general and administrative expenses, $22,542,234 in financing expenses.

Duringcosts for the year ended December 31, 2017, we incurred $1,573,906 in net loss2021 was $64 thousand as compared to $108 thousand for the year end December 31, 2020. The reason for the decrease during the fiscal year ended December 31, 2021 is due to $557,300the Company’s cost-reduction measures implemented beginning on January 1, 2020, though despite these measures, the Company hired the services of an R&D team during the fiscal year ended December 31, 2021.

Sales and marketing expenses for the year ended December 31, 2021 was $2 thousand as compared to $8 thousand for the year end December 31, 2020. The reason for the decrease during the year ended December 31, 2021 is due to the Company’s cost-reduction measures implemented beginning on January 1, 2020.

General and Administration expenses for the year ended December 31, 2021 was $304 thousand as compared to $437 thousand for the year end December 31, 2020. The reason for the decrease in general and administrative expenses and $307,516 in financing expenses and $709,090 Loss from discontinued operations available2021 is due to shareholderscertain cost reduction measures initiated by the Company as of the company.beginning of January 2020.

Our net financial expense was $30 thousand for the year ended December 31, 2021, compared to net financial income of $13 thousand for the year end December 31, 2020. The reason for the increase in financial expenses in 2021 is due to the loan agreement with Pure Capital and other lenders entered into on December 18, 2020, which interest expenses were recognized in the year ended December 31, 2021.

Our taxes on income was $2 thousand for the year ended December 31, 2021 and for the year ended December 31, 2020.

Liquidity and Capital Resources

OnAs of December 31, 2018,2021, we have had current assets of $558,677$156 thousand consisting of $499,919$74 thousand in cash and cash equivalents, $8 thousand in trade receivables, $30 thousand in other accounts receivables and, $44 thousand in prepaid expenses.

As of $41,516 and marketable securities of $17,242. WeDecember 31, 2021, we had $975,153$2,436 thousand in current liabilities consisting of $13,115$9 in trade payables, $242 in other accounts payable and accrued liabilities, $69 Short term loan, and $2,116 payable to our Parent Company.

As of December 31, 2020, we had current assets of $225 thousand consisting of $148 thousand in cash and cash equivalents and restricted cash, $15 thousand in trade receivables, $20 thousand in other receivables and $42 thousand in prepaid expenses. We had $2,303 thousand in current liabilities, which consisted of $177 in accounts payable and accrued liabilities $7,064 employeeand $22 trade payable, $50 Short term loan, and short-term portion of convertible notes of $485,449 and liabilities held of sale in respect of$2,054 payable to our discontinued operations of $469,525.Parent Company.

On December 31, 2017, we have had current assets of $15,181 consisting of $2,959 in cash and other receivables of $12,222. We had fixed assets, net of $14,290. We had $1,011,941 in current liabilities consisting of $445,653 in accounts payable and accrued liabilities, $82,331 in accounts payable to related party, $98,476 employee payable, and short-term portion of convertible notes of $385,481.

We hada negative working capital of $416,476$2,280 thousand and $996,760$2,078 thousand as of December 31, 20182021 and December 31, 2017,2020, respectively. The Company is assessing a number of options to increase its working capital to better sustain its operations. During the first quarter of 2018 we raised $1.9 million through the issuances of convertible loans and addition equity financings.

Our total liabilities as of December 31, 20182021 were $975,153$2,436 thousand compared to $1,618,106 at$2,303 thousand as of December 31, 2017.2020.

During the fiscal year ended December 31, 2018,2021, we had negative cash flow from operations of $1,544,054$74 thousand which was mainly the result of a net loss of $25,006,486, depreciation expense of $14,290, increase in provision for settlements of convertible loan of $21,472,897, $1,150,675 worth of shares and warrants issued for services, $1,040,838 amortization of debt discount, $50,000 decreased of deferred revenues, and loss from marketable securities of $32,758,$386 thousand, offset by decrease in working capital of $199,026.$312 thousand.

During the fiscal year ended December 31, 2017,2020, we had negative cash flow from operations of $630,015$53 thousand which was mainly the result of a net loss of $1,573,906, $2,866 increase in other receivables, $40,339 increase in amounts due from related party and$443 thousand, depreciation expense of $5 thousand, offset by $189,461 increasegains from the sale of a subsidiary and decrease in accounts payable and accrued liabilities and $350,208 interest and amortizationworking capital of discount on convertible debt.$385 thousand.

During the fiscal year ended December 31, 2021, we had no cash flow from investing activities as compared to a positive cash flow effect from investing activities of $13 thousand as during the year ended December 31, 2018,2020.

During the fiscal year ended December 31, 2021, we had no cash flow effect from investing activities.

During the year ended December 31, 2017, we had negative investingfinancing activities resulted from decrease in restricted cash $11,866.

During the year ended December 31, 2018, we hadas compared to a positive cash flow from financing activities of $2,041,014,$99 thousand during the fiscal year ended December 31, 2020, which related to the Loan Agreement and issuance of shares we have made during the fiscal year ended December 31, 2020. In January 2022, the repayment date under the Loan Agreement was extended per the resultInvestors’ request. The Investors also expressed their intention to convert the remaining sum of proceedsthe Principal Amount to shares of $1,940,951 receivedour Common Stock, however, if we are required to repay the Principal Amount in cash, we will be able to receive cash flow for the repayment from saleour Parent Company. The Gix Loan along with any accrued interest is due on December 31, 2022, unless extended upon mutual consent of common stockthe Company and related warrants (netGix Internet.

There are no limitations in the Company’s Certificate of issuance expenses), $100,000 received fromIncorporation on the Company’s ability to borrow funds or raise funds through the issuance of short-term convertible notes,shares of its common stock to affect a business combination. The Company’s limited resources and $63 fromlack of having cash-generating business operations may make it difficult to borrow funds or raise capital. The Company’s limitations to borrow funds or raise funds through the exerciseissuance of options. Basedrestricted capital stock required to effect or facilitate a business combination may have a material adverse effect on the receiptCompany’s financial condition and future prospects, including the ability to complete a business combination.

Until such time as the Company can generate substantial revenues, the Company expects to finance its cash needs through a combination of the sale of its equity and/or convertible debt securities, debt financing and strategic alliances, collaborations, and funds from its Parent Company. To the extent that the Company raises additional capital through the sale of its equity and/or convertible debt securities, the ownership interest of its shareholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common shareholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. To the extent that debt financing ultimately proves to be available, any borrowing will subject us to various risks traditionally associated with indebtedness, including the risks of interest rate fluctuations and insufficiency of cash flow to pay principal and interest, including debt of an acquired business. If the Company raises funds through additional collaborations or strategic alliances with third parties, we believe wemay have adequate capital to operate pursuantrelinquish valuable rights to our future revenue streams and/or distribution arrangements. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. If the Company is unable to raise additional funds through equity and/or debt financings when needed or on attractive terms, the Company may be required to delay, limit, reduce or terminate the operations of some or all of its business plan through December 2019.segments.

During

Going Concern

The Company has incurred $386 thousand in net losses for the year ended December 31, 2017, we had positive2021, has $2,280 thousand shareholders’ deficit as of December 31, 2021 and $2,078 thousand in total shareholders’ deficit as of December 31, 2020 and $74 thousand negative cash flowflows from financing activitiesoperations for the year ended December 31, 2021, and $53 thousand negative cash flows from operations for the year ended December 31, 2020. Management expects the Company to continue to generate substantial operating losses and to continue to fund its operations primarily through utilization of $606,342 which wasits current financial resources and through additional raises of capital.

Such conditions raise substantial doubts about the resultCompany’s ability to continue as a going concern. Management’s plan includes raising funds from outside potential investors. However, there is no assurance such funding will be available to the Company or that it will be obtained on terms favorable to the Company or will provide the Company with sufficient funds to meet its objectives. These financial statements do not include any adjustments relating to the recoverability and classification of proceedsassets, carrying amounts or the amount and classification of $526,342 received from sale of common stock and related warrants (net of issuance expenses), and $80,000 fromliabilities that may be required should the Receipt on account of stock. Based on the receipt of these funds, we believe we have adequate capitalCompany be unable to operate pursuant to our business plan through December 2019continue as a going concern.

Availability of Additional Capital

Our potential financing transactions may include the issuance of equity and/or debt securities including convertible debt, obtaining credit facilities, or other financing mechanisms. In the event that we seek to raise funds through additional private placements of equity or convertible debt, the trading price of our common stock could be adversely affected. Further, any adverse conditions in the financial markets could make it more difficult to obtain future financing through the issuance of equity or debt securities when and if needed. Even if we are able to raise a sufficient amount of funds that may be required, it is possible that we could incur unexpected costs and expenses or experience unexpected cash requirements that would force us to seek additional and/or alternative financing. Further, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. If additional financing is not available or is not available on acceptable terms, we may have to curtail our plan of operations.

The Company has only limited capital. Additional financing is necessary for the Company to continue as a going concern. Our independent auditors have issued an unqualified audit opinion for the year ended December 31, 20182021 with an explanatory paragraph on going concern.

In view of these matters, realization of a major portion of the assets in the accompanying balance sheet is dependent upon continued operations of the Company. Management believes that actions presently being taken to obtain additional equity financing will provide the opportunity to continue as a going concern.

Off-Balance Sheet Arrangements

As of December 31, 2018, and 2017, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Act of 1934.

Contractual Obligations and Commitments

As of December 31, 2018,2021, and 2017,2020, we did not have any contractual obligations.

Critical Accounting Policies

This Management’s Discussion and Analysis of Financial Condition and Results of Operations discuss ourOur consolidated financial statements which have beenare prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In connection with theThe preparation of our consolidated financial statements we are requiredand disclosures requires us to make assumptionsjudgments, estimates, and estimates about future events, and apply judgmentsassumptions that affect the reported amounts of assets and liabilities revenue, expenses and the related disclosures.disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported revenue and expenses during the reporting periods. We base our assumptions, estimates and judgments on historical experience, currentknown trends and events and various other factors that management believeswe believe to be relevant atreasonable under the timecircumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our consolidated financial statements are prepared. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our financial statements are presented fairly and in accordance with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material. As applicable to the consolidated financial statements included elsewhere in this report, the most significant estimates and assumptions relate to (i) the going concernon an ongoing basis. Our actual results may differ from these estimates under different assumptions (iv) measurement of Convertible Note.and conditions.

Our significant accounting policies are discusseddescribed in Note 2, Summary of Significant Accounting Policies, ofmore detail in the Notesnotes to Consolidated Financial Statements includedour audited consolidated financial statements appearing elsewhere in this report. Our management believes that, as for the financial statements for the periods included in this report, the going concern assessment is a critical accounting policy. However, due to the early stage of operations of the Company, there are no other accounting policies that are considered to be critical accounting policies by management.Annual Report on Form 10-K.

Going Concern Uncertainty

The development and commercialization of our product will require substantial expenditures. We have not yet generated any material revenues and have incurred substantial accumulated deficit and negative operating cash flows. We currently have no sources of recurring revenue and are therefore dependent upon external sources for financing our operations. There can be no assurance that we will succeed in obtaining the necessary financing to continue our operations. As a result, our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Recently issued accounting pronouncements

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Not required for smaller reporting companies.

ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTSViewbix Inc.

Index to Consolidated Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OFTo the Stockholders and Board of Directors of Viewbix Inc.

Virtual Crypto Technologies Inc (Formerly Emerald Medical Applications Corp)

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheetsheets of Virtual Crypto Technologies Inc (Formerly Emerald Medical Applications Corp.)Viewbix Inc. and its subsidiary (the “Company”) as of December 31, 20182021 and 2020 and the related consolidated statements of comprehensive loss, stockholders’stockholder’s deficit and cash flows for each of the yeartwo years in the period ended December 31, 2018,2021, and the related notes (collectively referred to as the “consolidated financial“financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018,2021 and 2020, and the results of its operations and its cash flows for each of the yeartwo years in the period ended December 31, 2018,2021, in conformity with accounting principles generally accepted in the United States of America.

The consolidated financial statements of the Company for the year ended December 31, 2017, before the effects of the retrospective adjustments for the discontinued operations discussed in Note 1C to the financial statements, were audited by other auditors whose report, dated April 17, 2018, expressed an unqualified opinion on those statements with an explanatory paragraph regarding the Company’s ability to continue as a going concern. We also have audited the retrospective adjustments to the 2017 consolidated financial statements for the operations discontinued in 2018, as discussed in Note 1C to the financial statements. In our opinion, such retrospective adjustments are appropriate and have been properly applied. However, we were not engaged to audit, review, or apply any procedures to the 2017 consolidated financial statements of the Company other than with respect to the retrospective adjustments, and accordingly, we do not express an opinion or any other form of assurance on the 2017 consolidated financial statements taken as a whole.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 11.E to the consolidated financial statements, the Company’ has not yet generated material revenues from its operations to fund its activities and is therefore dependent upon external sources for financing its operations. As of December 31, 2018, the Company has incurred accumulatedCompany’s substantial net losses, shareholder’s deficit of $41,626,905, stockholder’s deficit of $416,476 and negative operating cash flows. These factor among others, as discussed in Note 1 to the consolidated financial statementsflows from operations raise substantial doubt about the Company’sits ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 11.E to the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of'of’ these uncertainties.uncertainties

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit.audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit 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 audit 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 audit provides a reasonable basis for our opinion.

Halperin Ilanit.

Certified Public Accountants (Isr.)

Tel Aviv, Israel

March 28, 2019

We have served as the Company’s auditor since 2018

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF

Virtual Crypto Technologies Inc (Formerly Emerald Medical Applications Corp.)

Opinion on the Financial Statements

We have audited, before the effects of the retrospective adjustments for the discontinued operations discussed in Note 1C to the consolidated financial statements, the accompanying consolidated balance sheet of Virtual Crypto Technologies Inc (Formerly Emerald Medical Applications Corp.) and its subsidiary (the “Company”) as of December 31, 2017 and the related consolidated statements of comprehensive loss, shareholders’ deficit and cash flows for the year ended December 31, 2017, and the related notes (collectively referred to as the “financial statements”) (the 2017 financial statements before the effects of the retrospective adjustments discussed in Note 1C to the financial statements are not presented herein). In our opinion, the 2017 financial statements before the effects of the retrospective adjustments for the discontinued operations discussed in Note 1C to the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017, and the results of its operations and its cash flows for the year ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America. We were not engaged to audit, review, or apply any procedures to the retrospective adjustments for the discontinued operations discussed in Note 1C to the consolidated financial statements, and accordingly, we do not express an opinion or any other form of assurance about whether such retrospective adjustments are appropriate and have been properly applied. Those retrospective adjustments were audited by other auditors.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company’s lack of revenues and substantial operating losses raise substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 1 to the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of' these uncertainties.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our auditaudits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit,audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our auditaudits included performing procedures to assess the risks of material misstatement of the 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 financial statements. Our auditaudits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit providesaudits 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 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 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 financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Payable to Parent Company - Valuation of Fair Value of Debt Recognized upon Modification – Refer to Note 4 to the consolidated financial statements

Critical Audit Matter Description

The Company entered into an agreement with its parent company, Gix Internet Ltd., (the “Parent Company”), effective as of December 31, 2021, for the modification of the balance payable to the Parent Company, in the amount of $2,299,956, from a current payable balance into a loan.

The Company accounted for the modification as an extinguishment of the balance payable to the Parent Company and the issuance of a new debt. Accordingly, the loan was recorded at its fair value of $2,115,853 as of December 31, 2021. The difference of $184,103 between the fair value of the loan and the carrying value of the payable to the Parent Company was recorded in the Company’s consolidated statement of changes in stockholders’ deficit as a deemed contribution to the Company by the Parent Company. The Company determined the fair value of the loan using the discounted cash flow model. This valuation involves management judgement in determining the discount rate.

We identified the valuation of the loan at fair value as a critical audit matter because of the magnitude of the loan balance, the judgment involved in determining the discount rate and due to the increased extent of audit effort in relation to our audit as a whole, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the valuation of the fair value of the loan included the following, among others:

● With the assistance of our fair value specialists, we evaluated the Company’s valuation methodologies, assumptions and fair value results.

● With the assistance of our fair value specialists, we developed an independent estimate of the discount rate and the resulting fair value and compared our estimate to the Company’s estimate.

/S/ Brightman Almagor Zohar & Co.

Certified Public Accountants

Member ofA Firm in the Deloitte Touche Tohmatsu LimitedGlobal Network

Tel Aviv, Israel

AprilMarch 17, 20182022

We began servinghave served as the Company’s auditor in 2016. In 2018, we became the predecessor auditor.since 2019

Virtual Crypto Technologies Inc (Formerly Emerald Medical Applications Corp)

Viewbix Inc.

Consolidated Balance Sheets

U.S. dollars in thousands (except share and per share data)

(*) less than $1

The accompanying notes are an integral part of these consolidated financial statements.

Virtual Crypto Technologies Inc (Formerly Emerald Medical Applications Corp)Viewbix Inc.

Consolidated Statements of Comprehensive Loss

U.S. dollars in thousands (except share and per share data)

The accompanying notes are an integral part of these consolidated financial statements.

Virtual Crypto Technologies Inc (Formerly Emerald Medical Applications Corp)

Viewbix Inc.

Consolidated Statements of Changes in Stockholders’ Deficit