UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31,September 30, 2020
or
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________ to _______________________
Commission file number: 000-15746
VIEWBIX INC.
(Exact Name Of Registrant As Specified In Its Charter)
Delaware | 68-0080601 | |
(State of Incorporation) | (I.R.S. Employer Identification No.) |
14 Aryeh Shenkar Street, Herzliya, Israel | 4672514 | |
(Address of Principal Executive Offices) | (ZIP Code) |
Registrant’s Telephone Number, Including Area Code:+972 9-774-1505
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common Stock, Par Value $0.0001 | VBIX | OTCQB |
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 whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act) or a smaller reporting company.
Large accelerated filer | [ ] | Accelerated filer | [ ] | |
Non-accelerated filer | [X] (Do not check if a smaller reporting company) | Smaller reporting company | [X] | |
Emerging growth company | [ ] |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
On March 31,September 30, 2020, the Registrant had 31,201,669 shares of common stock issued and outstanding.
VIEWBIX INC. (Formerly known as Virtual Crypto Technologies, Inc.)
TABLE OF CONTENTS
Item | Description | Page | ||
PART I - FINANCIAL INFORMATION | ||||
ITEM 1. | FINANCIAL STATEMENTS | 1 | ||
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS | |||
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | |||
ITEM 4. | CONTROLS AND PROCEDURES | |||
PART II - OTHER INFORMATION | ||||
ITEM 1. | LEGAL PROCEEDINGS | |||
ITEM 1A. | RISK FACTORS | |||
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | |||
ITEM 3. | DEFAULT UPON SENIOR SECURITIES | |||
ITEM 4. | MINE SAFETY DISCLOSURE | |||
ITEM 5. | OTHER INFORMATION | |||
ITEM 6. | EXHIBITS | |||
SIGNATURES |
PART I - FINANCIAL INFORMATION
VIEWBIX INC. (Formerly known as Virtual Crypto Technologies, Inc.)
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31,FINANCIAL STATEMENTS (UNAUDITED)
September 30, 2020
CONTENTS
1 |
VIEWBIX INC. (Formerly known as Virtual Crypto Technologies, Inc.)
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
U.S. dollars in thousands (except share data)
As of March 31 | As of December 31 | |||||||||||
Note | 2 0 2 0 | 2 0 1 9 | ||||||||||
ASSETS | ||||||||||||
CURRENT ASSETS | ||||||||||||
Cash and cash equivalents | 110 | 87 | ||||||||||
Restricted cash | - | 2 | ||||||||||
Prepaid expenses | 12 | 17 | ||||||||||
Other accounts receivables | 3 | 38 | 119 | |||||||||
Total current assets | 160 | 225 | ||||||||||
NON CURRENT ASSETS | ||||||||||||
Property and equipment, net | 4 | - | 5 | |||||||||
Total non-current assets | - | 5 | ||||||||||
Total assets | 160 | 230 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
VIEWBIX INC.
CONSOLIDATED BALANCE SHEETS (Unaudited) (Cont.)
U.S. dollars in thousands (except share data)
As of March 31 | As of December 31 | |||||||||||
Note | 2 0 2 0 | 2 0 1 9 | ||||||||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||||||
CURRENT LIABILITIES | ||||||||||||
Trade payables | 1 | 66 | ||||||||||
Payable to parent company | 11 | 1,795 | 1,611 | |||||||||
Other accounts payables and accrued liabilities | 5 | 231 | 246 | |||||||||
Total current liabilities | 2,027 | 1,923 | ||||||||||
Commitments and contingencies | ||||||||||||
STOCKHOLDERS’ DEFICIT | 6 | |||||||||||
Share Capital | ||||||||||||
Ordinary shares of $0.0001 par value - Authorized: 490,000,000 shares; Issued and outstanding: 31,201,669 shares as of December 31, 2019; and March 31, 2020 | 3 | 3 | ||||||||||
Additional paid-in capital | 13,015 | 13,015 | ||||||||||
Accumulated deficit | (14,885 | ) | (14,711 | ) | ||||||||
Total stockholders’ deficit | (1,867 | ) | (1,693 | ) | ||||||||
Total liabilities and stockholders’ deficit | 160 | 230 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
VIEWBIX INC. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)
U.S. dollars in thousands (except share data)
For the three months ended March 31 | ||||||||||||
Note | 2 0 2 0 | 2 0 1 9 | ||||||||||
Revenues | 37 | 34 | ||||||||||
Cost of revenues | 4 | 2 | ||||||||||
Gross profit | 33 | 32 | ||||||||||
Operating expenses: | ||||||||||||
Research and development | 59 | 36 | ||||||||||
Selling and marketing | 7 | 80 | ||||||||||
General and administrative | 175 | 121 | ||||||||||
Gain from sale of a subsidiary | 1 | (8 | ) | - | ||||||||
Operating loss | 200 | 205 | ||||||||||
Financial expenses (income), net | 8 | (28 | ) | 24 | ||||||||
Loss before tax | 172 | 229 | ||||||||||
Taxes on income | 9 | 2 | 20 | |||||||||
Net loss | 174 | 249 | ||||||||||
Loss per share - basic and diluted | 10 | 0.006 | 0.91 | |||||||||
Weighted average number of ordinary shares outstanding used in the computations of loss per share (in thousands) (*) | 31,201,669 | 273,049 |
(*) The number of shares prior to the reverse recapitalization have been retroactively adjusted based on the equivalent number of shares received by the accounting acquirer in the Recapitalization Transaction. Refer to Note 1 for further information.
The accompanying notes are an integral part of these condensed consolidated financial statements.
CONSOLIDATED STATEMENTS OF CHANGES IN TEMPORARY EQUITY AND STOCKHOLDERS’ DEFICIT (Unaudited)
U.S. dollars in thousands (except share data)
Ordinary shares | Additional paid-in | Accumulated | Total shareholders’ | |||||||||||||||||
Number | Amount | capital | deficit | deficit | ||||||||||||||||
Balance as of January 1, 2020 | 31,201,669 | 3 | 13,015 | (14,711 | ) | (1,693 | ) | |||||||||||||
Net loss for the period | - | - | - | (174 | ) | (174 | ) | |||||||||||||
Balance as of March 31, 2020 | 31,201,669 | 3 | 13,015 | (14,885 | ) | (1,867 | ) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
VIEWBIX INC.
CONSOLIDATED STATEMENTS OF CHANGES IN TEMPORARY EQUITY AND STOCKHOLDERS’ DEFICIT Unaudited)
U.S. dollars in thousands (except share data)
Preferred A-1 | Preferred A-2 | Preferred B | Preferred C | Preferred C-1 | Preferred C-2 | Total temporary | Ordinary shares | Additional paid-in | Accumulated | Total shareholders’ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number | Amount | Number | Amount | Number | Amount | Number | Amount | Number | Amount | Number | Amount | equity | Number | Amount | capital | deficit | deficit | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of January 1, 2019 (*) | 199,870 | * | 4,881,654 | 10 | 4,556,094 | 9 | 7,222,305 | 15 | 2,755,706 | 11 | 392,407 | 1 | 46 | 273,049 | 1 | 12,872 | (13,594 | ) | (721 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss for the period | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | (249 | ) | (249 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2019 (*) | 199,870 | * | 4,881,654 | 10 | 4,556,094 | 9 | 7,222,305 | 15 | 2,755,706 | 11 | 392,407 | 1 | 46 | 273,049 | 1 | 12,872 | (13,843 | ) | (970 | ) |
(*) The number of shares prior to the reverse recapitalization have been retroactively adjusted based on the equivalent number of shares received by the accounting acquirer in the Recapitalization Transaction. Refer to Note 1 for further information.
The accompanying notes are an integral part of these condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
U.S. dollars in thousands (except share data)
For the three months ended March 31 | ||||||||
2 0 2 0 | 2 0 1 9 | |||||||
Cash flows from operating activities | ||||||||
Net loss for the period | (174 | ) | (249 | ) | ||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
Gain from sale of a subsidiary | (8 | ) | - | |||||
Depreciation | 5 | 1 | ||||||
Changes in current assets and liabilities: | ||||||||
Decrease in trade receivables | 6 | 14 | ||||||
Decrease (Increase) in prepaid expenses and other receivables | 82 | (19 | ) | |||||
Increase (decrease) in trade payables | (71 | ) | 19 | |||||
Increase (decrease) in other accounts payables and accrued liabilites | (16 | ) | 52 | |||||
Increase in payable to parent company | 186 | 146 | ||||||
Net cash provided by (used in) operating activities | 10 | (36 | ) | |||||
Cash flows from investing activities | ||||||||
Cash received from sale of a subsidiary | 13 | - | ||||||
Net cash provided by Investing activities | 13 | - | ||||||
Increase (decrease) in cash and cash equivalents and restricted cash | 23 | (36 | ) | |||||
Cash and cash equivalents and restricted cash at the beginning of the year | 87 | 53 | ||||||
Cash and cash equivalents and restricted cash at the end of the year | 110 | 17 |
As of September 30 | As of December 31 | |||||||||||
Note | 2 0 2 0 | 2 0 1 9 | ||||||||||
ASSETS | ||||||||||||
CURRENT ASSETS | ||||||||||||
Cash and cash equivalents | 65 | 87 | ||||||||||
Restricted cash | - | 2 | ||||||||||
Trade receivables | 10 | - | ||||||||||
Prepaid expenses | - | 17 | ||||||||||
Other accounts receivables | 3 | 14 | 119 | |||||||||
Total current assets | 89 | 225 | ||||||||||
NON CURRENT ASSETS | ||||||||||||
Property and equipment, net | 4 | - | 5 | |||||||||
Total non-current assets | - | 5 | ||||||||||
Total assets | 89 | 230 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
VIEWBIX INC. (Formerly known as Virtual Crypto Technologies, Inc.)
CONSOLIDATED BALANCE SHEETS (Unaudited) (Cont.)
U.S. dollars in thousands (except share data)
As of September 30 | As of December 31 | |||||||||||
Note | 2 0 2 0 | 2 0 1 9 | ||||||||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||||||
CURRENT LIABILITIES | ||||||||||||
Trade payables | 14 | 66 | ||||||||||
Payable to parent company | 11 | 1,902 | 1,611 | |||||||||
Other accounts payables and accrued liabilities | 5 | 177 | 246 | |||||||||
Total current liabilities | 2,093 | 1,923 | ||||||||||
Commitments and contingencies | 7 | |||||||||||
STOCKHOLDERS’ DEFICIT | 6 | |||||||||||
Share Capital | ||||||||||||
Ordinary shares of $0.0001 par value - Authorized: 490,000,000 shares; Issued and outstanding: 31,201,669 shares as of December 31, 2019; and September 30, 2020 | 3 | 3 | ||||||||||
Additional paid-in capital | 13,015 | 13,015 | ||||||||||
Accumulated deficit | (15,022 | ) | (14,711 | ) | ||||||||
Total stockholders’ deficit | (2,004 | ) | (1,693 | ) | ||||||||
Total liabilities and stockholders’ deficit | 89 | 230 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
3 |
VIEWBIX INC. (Formerly known as Virtual Crypto Technologies, Inc.)
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)
U.S. dollars in thousands (except share data)
For the nine months ended September 30 | For the three months ended September 30 | |||||||||||||||||||
Note | 2 0 2 0 | 2 0 1 9 | 2 0 2 0 | 2 0 1 9 | ||||||||||||||||
Revenues | 86 | 139 | 17 | 63 | ||||||||||||||||
Cost of revenues | 5 | 4 | 1 | 1 | ||||||||||||||||
Gross profit | 81 | 135 | 16 | 62 | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Research and development | 59 | 170 | - | 82 | ||||||||||||||||
Selling and marketing | 8 | 199 | 1 | 57 | ||||||||||||||||
General and administrative | 339 | 422 | 70 | 190 | ||||||||||||||||
Gain from sale of a subsidiary | (8 | ) | - | - | - | |||||||||||||||
Operating loss | 317 | 656 | 55 | 267 | ||||||||||||||||
Financial expenses (income), net | 8 | (8 | ) | 60 | (11 | ) | 21 | |||||||||||||
Loss before tax | 309 | 716 | 44 | 288 | ||||||||||||||||
Taxes on income | 9 | 2 | 19 | - | (4 | ) | ||||||||||||||
Net loss | 311 | 735 | 44 | 284 | ||||||||||||||||
Loss per share - basic and diluted | 10 | 0.01 | 0.09 | 0.001 | 0.01 | |||||||||||||||
Weighted average number of ordinary shares outstanding used in the computations of loss per share | 31,201,669 | 7,891,496 | 31,201,669 | 23,044,670 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
4 |
VIEWBIX INC. (Formerly known as Virtual Crypto Technologies, Inc.)
CONSOLIDATED STATEMENTS OF CHANGES IN TEMPORARY EQUITY AND STOCKHOLDERS’ DEFICIT Unaudited)
U.S. dollars in thousands (except share data)
Ordinary shares | Additional paid-in | Accumulated | Total shareholders’ | |||||||||||||||||
Number | Amount | capital | deficit | deficit | ||||||||||||||||
Balance as of January 1, 2020 | 31,201,669 | 3 | 13,015 | (14,711 | ) | (1,693 | ) | |||||||||||||
Net loss for the period | - | - | - | (311 | ) | (311 | ) | |||||||||||||
Balance as of September 30, 2020 | 31,201,669 | 3 | 13,015 | (15,022 | ) | (2,004 | ) |
Ordinary shares | Additional paid-in | Accumulated | Total shareholders’ | |||||||||||||||||
Number | Amount | Capital | deficit | deficit | ||||||||||||||||
Balance as of June 30, 2020 | 31,201,669 | 3 | 13,015 | (14,978 | ) | (1,960 | ) | |||||||||||||
Net loss for the period | - | - | - | (44 | ) | (44 | ) | |||||||||||||
Balance as of September 30, 2020 | 31,201,669 | 3 | 13,015 | (15,022 | ) | (2,004 | ) |
Preferred A-1 | Preferred A-2 | Preferred B | Preferred C | Preferred C-1 | Preferred C-2 | Total temporary | Ordinary shares | Additional paid-in | Accumulated | Total shareholders’ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number | Amount | Number | Amount | Number | Amount | Number | Amount | Number | Amount | Number | Amount | equity | Number | Amount | capital | deficit | deficit | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of January 1, 2019 | 199,870 | * | 4,881,654 | 10 | 4,556,094 | 9 | 7,222,305 | 15 | 2,755,706 | 11 | 392,407 | 1 | 46 | 279,049 | 1 | 12,872 | (13,594 | ) | (721 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss for the period | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | (249 | ) | (249 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2019 | 199,870 | * | 4,881,654 | 10 | 4,556,094 | 9 | 7,222,305 | 15 | 2,755,706 | 11 | 392,407 | 1 | 46 | 279,049 | 1 | 12,872 | (13,843 | ) | (970 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss for the period | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | (203 | ) | (203 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2019 (unaudited) | 199,870 | * | 4,881,654 | 10 | 4,556,094 | 9 | 7,222,305 | 15 | 2,755,706 | 11 | 392,407 | 1 | 46 | 279,049 | 1 | 12,872 | (14,046 | ) | (1,173 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Effect of reverse recapitalization | (199,870 | ) | (*) | (4,881,654 | ) | (10 | ) | (4,556,094 | ) | (9 | ) | (7,222,305 | ) | (15 | ) | (2,755,708 | ) | (11 | ) | (392,407 | ) | (1 | ) | (46 | ) | 30,928,620 | 2 | 143 | - | 145 | ||||||||||||||||||||||||||||||||||||||||||
Net loss for the period | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | (284 | ) | (284 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of September 30, 2019 (unaudited | - | - | - | - | - | - | - | - | -- | - | - | - | - | 31,201,669 | 3 | 13,015 | (14,329 | ) | (1,311 | ) |
(*) | Representing an amount less than $ 1. |
(**) | The number of shares prior to the reverse recapitalization have been retroactively adjusted based on the equivalent number of shares received by the accounting acquirer in the Recapitalization Transaction. Refer to Note 1 for further information. |
The accompanying notes are an integral part of these condensed consolidated financial statements.
5 |
VIEWBIX INC. (Formerly known as Virtual Crypto Technologies, Inc.)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
U.S. dollars in thousands (except share data)
For the nine months ended September 30 | For the three months ended September 30 | |||||||||||||||
2 0 2 0 | 2 0 1 9 | 2 0 2 0 | 2 0 1 9 | |||||||||||||
Unaudited | Unaudited | |||||||||||||||
Cash flows from operating activities | ||||||||||||||||
Net loss for the period | (311 | ) | (735 | ) | (44 | ) | (284 | ) | ||||||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||||||
Depreciation | 5 | 1 | - | - | ||||||||||||
Gain from sale of a subsidiary | (8 | ) | - | - | - | |||||||||||
Changes in assets and liabilities: | ||||||||||||||||
Decrease in prepaid expenses | 7 | 19 | (7 | ) | 3 | |||||||||||
Decrease in other receivables | 105 | 37 | (1 | ) | (2 | ) | ||||||||||
Increase (decrease) in trade payables | (76 | ) | 13 | (1 | ) | (17 | ) | |||||||||
Increase (decrease) in other accounts payables | (51 | ) | 58 | (12 | ) | (6 | ) | |||||||||
Increase in payable to parent company | 292 | 547 | 51 | 262 | ||||||||||||
Net cash provided by (used in) operating activities | (37 | ) | (60 | ) | (14 | ) | (44 | ) | ||||||||
Cash flows from investing activities | ||||||||||||||||
Purchase of property and equipment | - | (2 | ) | - | (2 | ) | ||||||||||
Proceeds from sale of property and equipment | - | 1 | - | 1 | ||||||||||||
Net cash used in investing activities | - | (1 | ) | - | (1 | ) | ||||||||||
Cash flows from investing activities | ||||||||||||||||
Cash received from sale of a subsidiary | 13 | - | - | - | ||||||||||||
Cash acquired in connection with the reverse recapitalization | - | 174 | - | 174 | ||||||||||||
Net cash provided by Investing activities | 13 | 174 | - | 174 | ||||||||||||
Increase (decrease) in cash and cash equivalents and restricted cash | (24 | ) | 113 | (14 | ) | 130 | ||||||||||
Cash and cash equivalents and restricted cash at the beginning of the period | 89 | 53 | 79 | 36 | ||||||||||||
Cash and cash equivalents and restricted cash at the end of the period | 65 | 166 | 65 | 166 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
6 |
VIEWBIX INC. (Formerly known as Virtual Crypto Technologies, Inc.)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
U.S. dollars in thousands (except share data)
Supplemental Cash Flow Information:
As of February | ||||
Current assets excluding cash and cash equivalents | 6 | |||
Current liabilities | (1 | ) | ||
Gain from sale of a subsidiary | 8 | |||
Cash received from the sale of a subsidiary | 13 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
7 |
VIEWBIX INC. (Formerly known as Virtual Crypto Technologies, Inc.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share data)
NOTE 1 - GENERAL
A. | Organizational Background | |
Viewbix Inc. (formerly known as Virtual Crypto Technologies, Inc.) (the “Company”) was incorporated in the State of Ohio in 1989 under a predecessor name, Zaxis International, Inc. (“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”). | ||
B. | 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 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 May 2, 2018, the District Court of Lod, Israel issued a winding-up order for Emerald Israel and appointed an Israeli attorney as special executor for Emerald Israel. | ||
C. | Virtual Crypto Technologies Ltd. | |
On January 17, 2018, the Company formed a new wholly-owned subsidiary under the laws of the State of Israel, Virtual Crypto Technologies Ltd. (the “VCT Israel”), to develop and market software and hardware products facilitating, allowing and supporting purchase and/or sale of cryptocurrencies through ATMs, tablets, personal computers (“PCs”) and/or mobile devices. VCT Israel ceased its business operation during the beginning of Q1 2020. On January 27, 2020, VCT Israel was sold to a third party for NIS 50 ($14). The effective closing date of the transaction was February 12, 2020. The gain from the sale of the company was $ 8. |
8 |
VIEWBIX INC. (Formerly known as Virtual Crypto Technologies, Inc.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share data)
NOTE 1 - GENERAL (Cont.)
On June 6, 2020, Algomizer changed its name to Gix Internet Ltd., or Gix. | ||
On February 7, 2019, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with Gix Internet Ltd. (TASE:ALMO), a company organized under the laws of the State of Israel (“Gix”), pursuant to which on July 25, 2019 (the “Closing Date”), Gix assigned, transferred and delivered its 99.83% holdings in Viewbix Ltd. (“Viewbix Israel”) to the Company in exchange for shares of restricted common stock of the Company, 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 the 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 will issue to Gix an additional 1,642,193 shares of restricted common stock of the Company representing 5% of the Fully Diluted Share Capital immediately following the Closing Date. | ||
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 OTCQB. | ||
On the Closing Date, the Company (i) issued 20,281,085 shares of its common stock to Gix in exchange for consideration consisting of consideration for its 99.83% holdings in Viewbix Israel, and (ii) 3,434,889 shares of its common stock to holders of convertible notes, which were issued by the Company prior to the Reverse Recapitalization, and which were converted upon the Closing Date. The shares of common stock were issued under Regulation S. The Company also issued a total of 7,298,636 warrants to Gix to purchase the Company’s common stock, whereby (i) 3,649,318 of such warrants were issued with an exercise price of $0.48, and (ii) 3,649,318 of such warrants were issued with an exercise price of $0.80. |
9 |
Organizational Background
Viewbix Inc. (formerlyVIEWBIX INC. (Formerly known as Virtual Crypto Technologies, Inc.) (the “Company””) was incorporated in the State of Ohio in 1989 under a predecessor name, Zaxis International, Inc. (“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”).
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 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 May 2, 2018, the District Court of Lod, Israel issued a winding-up order for Emerald Israel and appointed an Israeli attorney as special executor for Emerald Israel.
Virtual Crypto Technologies Ltd.
On January 17, 2018, the Company formed a new wholly-owned subsidiary under the laws of the State of Israel, Virtual Crypto Technologies Ltd. (the “VCT Israel”), to develop and market software and hardware products facilitating, allowing and supporting purchase and/or sale of cryptocurrencies through ATMs, tablets, personal computers (“PCs”) and/or mobile devices.
VCT Israel ceased its business operation During the beginning of Q1 2020. On January 27, 2020, VCT Israel was sold to a third party for NIS 50 ($14). The effective closing date of the transaction was February 12, 2020. The gain from the sale of the company was $8.
Transaction with Algomizer Ltd. (the “Recapitalization Transaction”)
On February 7, 2019, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with Algomizer Ltd. (TASE:ALMO), a company organized under the laws of the State of Israel (“Algomizer”), pursuant to which on July 25, 2019 (the “Closing Date”), Algomizer assigned, transferred and delivered its 99.83% holdings in Viewbix Ltd. (“Viewbix Israel”) to the Company in exchange for shares of restricted common stock of the Company, 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 the 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 will issue to Algomizer an additional 1,642,193 shares of restricted common stock of the Company representing 5% of the Fully Diluted Share Capital immediately following the Closing Date.
VIEWBIX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share data)
NOTE 1 - GENERAL (Cont.)
As a result of the Recapitalization Transaction, Viewbix Israel became a subsidiary of the Company. As the shareholders of Viewbix Israel received the largest ownership interest in the Company, Viewbix Israel was determined to be the “accounting acquirer” in the Recapitalization Transaction. As a result, the historical financial statements of the Company were replaced with the historical financial statements of Viewbix Israel. The number of shares prior to the reverse recapitalization have been retroactively adjusted based on the equivalent number of shares received by the accounting acquirer in the Recapitalization Transaction. | ||
The Company and its subsidiaries are collectively referred to as the “Company”. Viewbix Israel was incorporated on February 2006 in Israel. The Company has developed an interactive video platform based on 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, allowing the advertiser to analyze user viewing habits and optimize real-time throughout the campaign while increasing the effectiveness of online and live video advertising. | ||
On January 1, 2020, the Company announced certain cost reduction measures due the Company not achieving certain revenues goals. | ||
E. | Going Concern | |
The Company has incurred $311 in net loss for the nine months period ended September 30, 2020, has $2,004 stockholders’ deficit as of September 30, 2020 and $1,693 in total stockholders’ deficit as of December 31, 2019 .Management expects the Company to continue to generate substantial operating losses and continue to fund its operations primarily through utilization of its current financial resources and through additional raises of capital. | ||
Such conditions raise substantial doubts about the Company’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 assets, carrying amounts or the amount and classification of liabilities that may be required should the Company be unable to continue as a going concern. |
10 |
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
VIEWBIX INC. (Formerly known as 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 OTCQB.
On the Closing Date, the Company (i) issued 20,281,085 shares of its common stock to Algomizer in exchange for consideration consisting of consideration for its 99.83% holdings in Viewbix Israel, and (ii) 3,434,889 shares of its common stock to holders of convertible notes, which were issued by the Company prior to the Reverse Recapitalization, and which were converted upon the Closing Date. The shares of common stock were issued under Regulation S. The Company also issued a total of 7,298,636 warrants to Algomizer to purchase the Company’s common stock, whereby (i) 3,649,318 of such warrants were issued with an exercise price of $0.48, and (ii) 3,649,318 of such warrants were issued with an exercise price of $0.80.
As a result of the Recapitalization Transaction, Viewbix Israel became a subsidiary of the Company. As the shareholders of Viewbix Israel received the largest ownership interest in the Company, Viewbix Israel was determined to be the “accounting acquirer” in the Recapitalization Transaction. As a result, the historical financial statements of the Company were replaced with the historical financial statements of Viewbix Israel. The number of shares prior to the reverse recapitalization have been retroactively adjusted based on the equivalent number of shares received by the accounting acquirer in the Recapitalization Transaction.
The Company and its subsidiaries are collectively referred to as the “Company”. Viewbix Israel was incorporated on February 2006 in Israel. The Company has developed an interactive video platform based on 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, allowing the advertiser to analyze user viewing habits and optimize real-time throughout the campaign while increasing the effectiveness of online and live video advertising.
On January 1, 2020, the Company announced certain cost reduction measures due the Company not achieving certain revenues goals.
Going Concern
The Company has incurred $174 in net loss for the period ended March 31, 2020, has $1,867 stockholders’ deficit as of March 31, 2020 and $1,863 in total stockholders’ deficit as of December 31, 2019 .Management expects the Company to continue to generate substantial operating losses and to continue to fund its operations primarily through utilization of its current financial resources and through additional raises of capital.
Such conditions raise substantial doubts about the Company’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 assets, carrying amounts or the amount and classification of liabilities that may be required should the Company be unable to continue as a going concern.
VIEWBIX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share data)
Basis of Presentation and Principles of Consolidation:
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary and were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”)
All intercompany accounts and transactions have been eliminated in consolidation.
Unaudited Interim Financial InformationNOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with GAAP and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these condensed consolidated financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2019 and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on March 20, 2020 (the “2019 Annual Report”). The results for any interim period are not necessarily indicative of results for any future period.
The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments that are necessary to present fairly the Company’s financial position and results of operations for the interim periods presented .The results for the three months
A. | Basis of Presentation and Principles of Consolidation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary and were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
All intercompany accounts and transactions have been eliminated in consolidation. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
B. | Unaudited Interim Financial Information | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with GAAP and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these condensed consolidated financial statements should be read in conjunction with the audited financial statements as of and for the year ended
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As of September 30, 2020, there have been no material changes in the Company’s significant accounting policies from those that were disclosed in the 2019 Annual Report. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
C. | Recently Adopted Accounting Pronouncement
VIEWBIX INC. (Formerly known as Virtual Crypto Technologies, Inc.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share data)
NOTE 3 - OTHER ACCOUNTS RECEIVABLES
Composition:
NOTE 4 - PROPERTY AND EQUIPMENT
Composition:
NOTE 5 - OTHER ACCOUNTS PAYABLES Composition:
VIEWBIX INC. (Formerly known as Virtual Crypto Technologies, Inc.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share data) NOTE 6 - STOCKHOLDERS DEFICT
Ordinary shares confer the right to participate in the general meetings, to one vote per share for any purpose, to an equal part, on share basis, in distribution of dividends and to equally participate, on share basis, in distribution of excess of assets and funds from the Company and they shall not confer other privileges unless stated hereunder or in the Companies Law otherwise. Some investors have standard anti-dilutive rights, registration rights, and information and representation rights.
Preferred shares may have been converted into ordinary shares of Viewbix Ltd at any time. The preferred shares would have automatically converted into ordinary shares if (a) the holders of at least (i) 67% (sixty seven percent) of the issued and outstanding Preferred C/C-1 shares, (ii) a majority of the issued and outstanding Preferred B shares, and (iii) a majority of the issued and outstanding Preferred A shares, so agree in writing; or (b) in the event of an IPO.
The conversion price for any class or series of preferred would have been subject to adjustment, as follows: at any time, upon each issuance or deemed issuance by the Company of any new securities at a price per share less than the applicable conversion price in effect on the date of and immediately prior to the issuance of such new securities, the conversion price shall be reduced. Preferred shares had priority in the distribution of dividends and upon liquidation in accordance with the Company’s Articles of Association (“AOA”). These rights may be changed if a meeting of the Company’s stockholders gather up and decides on a change of regulations in this context.
The preference mechanism for liquidation and the distribution of dividends gave priority to the most recent preferred stockholders.
The preferred shares were convertible into 16,199,520 ordinary shares of the Company.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share data) NOTE 6 - STOCKHOLDERS DEFICT (Cont.)
The Company’s AOA do not provide redemption rights to the holders of the preferred shares. In the event of a liquidation event, all the funds and assets of the Company available for distribution among all the stockholders shall be distributed based on a certain mechanism as described in the Company’s AOA. Although the preferred shares are not redeemable, in the event of certain “deemed liquidation events” that are not solely within the Company’s control (including merger, acquisition, or sale of all or substantially all of the Company’s assets), the holders of the preferred shares would be entitled to preference amounts paid before distribution to other stockholders (as explained in the previous paragraph) and hence effectively redeeming the preference amount. In accordance with ASR 268 and ASC 480 “Distinguishing Liabilities from Equity”, the Company’s preferred shares are classified outside of stockholders’ deficit as a result of these in-substance contingent redemption
As of December 31,
As detailed in Note 1, as part of the Recapitalization Transaction in July 2019, the Company issued 20,281,085 shares of common stock to
The following table summarizes information of outstanding warrants as of
Additionally 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, the Company will issue to All of the Company’s warrants meet the US GAAP criteria for equity classification. During January and March 2020, 50,000 class H warrants expired. During January 2020, 38,095 class I warrants expired. During April 2020, 142,857 Class G warrants expired.
VIEWBIX INC. (Formerly known as Virtual Crypto Technologies, Inc.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share data) NOTE 7 - COMMITMENTS AND CONTINGENCIES
During August 2019, a
In
As of
VIEWBIX INC. (Formerly known as Virtual Crypto Technologies, Inc.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share data)
NOTE 8 - FINANCIAL EXPENSES (INCOME), NET
Composition:
NOTE 9 - TAXES ON INCOME
Viewbix Israel
Viewbix Inc. is taxed according to U.S. tax laws. On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”), which among other provisions, reduced the U.S. corporate tax rate from 35% to 21%, effective January 1, 2018.
VIEWBIX INC. (Formerly known as Virtual Crypto Technologies, Inc.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share data) NOTE 9 - TAXES ON INCOME (Cont.)
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:
As of
As of
As of
VIEWBIX INC. (Formerly known as Virtual Crypto Technologies, Inc.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share data) NOTE 9 - TAXES ON INCOME (Cont.)
NOTE 10: LOSS PER SHARE-BASIC AND DILUTED
Composition:
VIEWBIX INC. (Formerly known as Virtual Crypto Technologies, Inc.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share data)
NOTE 11 - TRANSACTION AND BALANCES WITH PARENT COMPANY
Balances:
As part of the agreement with
No amounts were paid by the Company to NOTE 12 - COVID-19 PANDEMIC IMPLICATIONS The COVID-19 pandemic, which originated in China in late 2019, has since spread across the globe and affected the economic condition of most, if not all, countries, including the United States, Israel and many countries in Europe. On March
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS
Special Note Regarding Forward-Looking Statements
The following management’s discussion and analysis section should be read in conjunction with the Company’s unaudited financial statements as of Forward-Looking Statements This
The foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or risk factors that we are faced with which may cause our actual results to differ from those anticipated in our forward-looking statements. For a discussion of these and other risks that relate to our business and investing in our common stock, you should carefully review the risks and uncertainties described in this Quarterly Report on Form 10-Q, and those contained in section captioned “Risk Factors” of
Overview and background
Viewbix Inc. (f/k/a Virtual Crypto Technologies, Inc., f/k/a Emerald Medical Applications Corp.) (the “Registrant” or the “Company”) is an interactive video technology and data platform that provides its clients with deep insights into their video marketing performance as well as the effectiveness of its messaging.
Recent Developments
Share Exchange Agreement
On February 7, 2019, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with Gix Internet Ltd. (f/k/a Algomizer Ltd.) (TASE:
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. to Viewbix Inc. to reflect its new operations and business focus. On August 7, 2019, FINRA approved the Registrant’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
Following the Closing Date, Viewbix Israel became a subsidiary of the Registrant. Viewbix Israel was incorporated in February 2006 in Israel.
On June 6, 2020, Algomizer Ltd. changed its name to Gix Internet Ltd., or Gix On January 1, 2020, the Company announced certain cost reduction measures due to the Company not achieving certain
On January 27, 2020, the Company entered into an agreement with a third-party to sell Virtual Crypto Technologies Ltd. for NIS 50,000 ($14, 459), which transaction was consummated on February 12, 2020.
Results of Operations
Results of Operations During the Three Months Ended
Our revenues were
Our Our research and development expenses were $0 thousand for the three months ended September 30, 2020, as compared to Our selling and Our general and administrative expenses decreased to $70 thousand for the three months ended September 30, 2020 as compared to $190 thousand during the same period in the prior year. Beginning on January 1, 2020, we announced and began implementing certain cost reduction measures. In addition, during the same period last year, the Company incurred various fees and expenses related to its status as a public company, including certain compliance and consultancy related fees and expenses.
Our financial income was
Our tax on income was
Results of Operations During the Nine Months Ended September 30, 2020 as Compared to the Nine Months Ended September 30, 2019 Our revenues were $86 thousand for the nine months ended September 30, 2020, compared to Our cost of revenues were $5 thousand for the nine months ended September 30, 2020, which is a slight increase compared to $4 thousand during the same period in the prior year. Our research and development expenses were $59 thousand for the nine months ended September 30, 2020, as compared to $170 thousand during the same period in the prior year. The reason for the decrease in the nine months ended September 30, 2020 is due to the fact that beginning on January 1, 2020, the Company announced and began implementing certain cost reduction measures. Our selling and marketing expenses were $8 thousand for the nine months ended September 30, 2020, as compared to $199 thousand during the same period in the prior year. The reason for the decrease in the nine months ended September 30, 2020 is due to the fact that beginning on January 1, 2020, the Company announced and began implementing certain cost reduction measures. Our general and administrative expenses decreased to $339 thousand for the nine months ended September 30, 2020 as compared to $422 thousand during the same period in the prior year. Beginning on January 1, 2020, we announced and began implementing certain cost reduction measures. In addition, during the same period last year, the Company incurred various fees and expenses related to its status as a public company, including certain compliance and consultancy related fees and expenses. Our financial income was $8 thousand for the nine months ended September 30, 2020, compared to financial expenses of $60 thousand during the same period in the prior year. The reason for the financial decrease in the nine months ended September 30, 2020 is due to the US dollar exchange rate difference during the nine months ended September 30, 2020 as compared to the same period in the prior year. Our tax on income was $2 thousand for the nine months ended September 30, 2020, as compared to $19 thousand during the same period in the prior year. The reason for the decrease in the nine months ended September 30, 2020 is due to the fact that during the same period in the prior year the Company recognized a one-time tax
Liquidity and Capital Resources
Our balance sheet as of
We had negative working capital of
During the
During the
There are no limitations in the Company’s Certificate of Incorporation on the Company’s ability to borrow funds or raise funds through the issuance of shares of its common stock to affect a business combination. The Company’s limited resources and lack 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 issuance of restricted capital stock required to effect or facilitate a business combination may have a material adverse effect on the Company’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 and collaborations. The Company does not have any committed external source of funds. 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 stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. 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 may have to relinquish 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 segments.
Going Concern:
The Company has incurred
Such conditions raise substantial doubts about the Company’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 assets, carrying amounts or the amount and classification of liabilities that may be required should the Company be unable to continue as a going concern.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not required for smaller reporting companies.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
As of
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting or in other factors identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the quarter ended
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.
On August 7, 2019, Viewbix Ltd. was named as a co-defendant in a civil lawsuit filed with the Jerusalem District Court (the “Jerusalem Court”) by three shareholders of Viewbix Ltd. (in this section, the “Shareholders”), alleging that they were entitled to receive certain preferred shares in Viewbix Ltd., pursuant to a certain 2007 loan agreement by and between Viewbix Ltd. and the petitioning Shareholders, following the sale of Viewbix Ltd. shares to
In June 2017, a lawsuit was filed with the Tel Aviv District Court (the “Tel Aviv Court”) against Emerald Israel, and other defendants, claiming certain damages in the total amount of approximately $100,000, under the assertion of wrongful termination by Emerald Israel. We believe these claims to be unsubstantiated and wholly without merit and accordingly filed
The COVID-19 pandemic, or any other pandemic, epidemic or outbreak of an infectious disease, may materially and adversely affect our business and operations. The COVID-19 pandemic, which originated in China in late 2019, has since spread across the globe and affected the economic condition of most, if not all, countries, including the United States, Israel and many countries in Europe. On March 11, 2020, the World Health Organization declared the outbreak a pandemic. While COVID-19 is still spreading and the final implications of the pandemic are difficult to estimate at this stage, it is clear that it has affected the lives of a large portion of the global population. As of September 30, 2020, the pandemic has caused repeated states of emergency to be declared in various countries, ongoing and extended travel restrictions have been imposed for several months, strict quarantines rules have been established and maintained for an extended period of time in a plethora of jurisdictions and various institutions and companies have been closed and rendered bankrupt. We are actively monitoring the pandemic and we are taking any necessary measures to respond to the situation in cooperation with the various stakeholders. Due to the uncertainty surrounding the COVID-19 pandemic, we will continue to assess the situation, including government-imposed restrictions, market by market. It is not possible at this time to estimate the full impact that the COVID-19 pandemic could have on our business, the continued spread of COVID-19, and any additional measures taken by governments, health officials or by us in response to such spread, could have on our business, results of operations and financial condition. The COVID-19 pandemic and mitigation measures have also negatively impacted global economic conditions, which, in turn, could adversely affect our business, results of operations and financial condition. The extent to which the COVID-19 outbreak continues to impact our financial condition will depend on future developments that are highly uncertain and cannot be predicted, including new government actions or restrictions, new information that may emerge concerning the severity, longevity and impact of the COVID-19 pandemic on economic activity. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURE
Not applicable.
None.
(a) The following documents are filed as exhibits to this Quarterly Report or incorporated by reference herein.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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