VIEWBIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

Stockholders’ deficit.

Composition:

Ordinary Shares:

Ordinary shares confer the right toto: (i) participate in the general meetings, to one vote per share for any purpose, to an equal part, on share basis, (ii) in distribution of dividends and (iii) 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.

On December 18, 2020, the company entered into a Stock Subscription Agreement (the “Subscription”) with certain investors (the “Investors”) in connection with the sale and issuance of an aggregate of 3,000,000 shares of Common Stock, at a purchase price of $0.01$0.01 per share, and for an aggregate purchase price of $30,000. In addition, and on the same date, the company entered into a Loan Agreement (the “Loan”) with the Investors, pursuant to which the Investors lent an aggregate of $69,000 (the “Principal Amount”)$30,000. In accordance with the terms of the Loan, the company repaid the interest on the Principal Amount 8%8% compounded annually to the Investors in the form of an issuance of an aggregate of 552,000 shares of Common Stock, at a price per share of $0.01.$0.01. The shares of Common Stock were issued to the Investors pursuant to Regulation S of the Securities Act of 1933, as amended. For more details, please see note 1c.

VIEWBIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

Redemption

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 rights.

Share Exchange

As detailed in Note 1, as part of the Recapitalization Transaction in July 2019, the Company issued 30,928,620 common shares in exchange for 99.83% of the issued and outstanding ordinary shares and all the preferred shares of Viewbix Israel. The number of shares prior to the reverse capitalization have been retroactively adjusted based on the equivalent number of shares received by the accounting acquirer in the Recapitalization Transaction.

Warrants

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

SUMMARY OF OUTSTANDING WARRANTS

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 Gix an additional 1,642,193 shares of restricted common stock of the Company. 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, and 142,857 Class G warrants expired.

VIEWBIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

In June 2017, a lawsuit was filed by a former CEO of the Company with the Tel Aviv District Court (the “Tel Aviv Court”) against the Company claiming certain damages in the total amount of $225, under the assertion of wrongful termination by the Company and Emerald Israel. The Company believes these claims to be unsubstantiated and wholly without merit and accordingly filed its response with the Tel Aviv Court in October of 2017. The dispute was initially heard by the Tel Aviv Court on February 13, 2020. In a supplemental hearing on February 11, 2021 the former CEO provided data regarding his claims. On March 11, 2021 the former CEO filed his summaries. The Company’s summaries will be filed until May 20, 2021. As of March 31, 2021, the company’s management, in consultation with its legal advisors, believes that the former CEO’s claims will not be Successful.Composition:

SCHEDULE OF FINANCIAL EXPENSES, NET

Composition:

VIEWBIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

Viewbix Israel are taxed accordingThe Company is subject to income taxes under the Israeli and U.S. tax laws. The Israeli corporate tax rate is 23% inlaws

Tax rates applicable to the years 2019 and onwards.income of the Company:

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, 2018.2018.Viewbix Israel and Israeli subsidiaries are taxed according to Israeli tax laws. The Israeli corporate tax rate is 23% in the years 2022, 2021, 2020 and onwards.

Deferred income taxes:

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:

SCHEDULE OF DEFERRED INCOME TAXES

VIEWBIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

As of March 31, 2020,2022, the Company has provided valuation allowances of $6,981$7,208 in respect of deferred tax assets resulting from tax loss carryforward and other temporary differences. Management currently believes that because the Company has a history of losses, it is more likely than not that the deferred tax regarding the loss carryforward and other temporary differences will not be realized in the foreseeable future.

Available carryforward tax losses:

As of March 31, 20212022, Viewbix Israel incurred operating losses in Israel of approximately $13,466$14,263 which may be carried forward and offset against taxable income in the future for an indefinite period.

As of March 31, 20212022 the Company generated net operating losses in the U.S. of approximately $18,479 $18,705Net operating losses in the U.S. are available through 2035. Utilization of U.S. net operating losses may be subject to substantial annual limitation due to the “change in ownership” provisions of the Internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of net operating losses before utilization.

Loss from continuing operations, before taxes on income, consists of the following:

SCHEDULE OF LOSS (INCOME) FROM CONTINUING OPERATIONS, BEFORE TAXES ON INCOME

VIEWBIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

Composition:

SCHEDULE OF LOSS PER SHARE-BASIC AND DILUTED

The COVID-19 pandemic which originated in China in late 2019, has since spread acrossresulted in a widespread health crisis that has adversely affected businesses, economies and financial markets worldwide, placed constraints on the globeoperations of businesses, decreased consumer mobility and affected theactivity, and caused significant economic condition of most, if not all, countries, includingvolatility in the United States, Israel and many countries in Europe. On March 11, 2020, the World Health Organization declared the outbreak a pandemic. Whileinternational capital markets. The 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 March 31, 2021, the pandemic has caused repeated statesan economic recession, high unemployment rates and other disruptions, both in the United States, Israel and the rest 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.the world. The Company is actively monitoring the pandemic and is taking any necessary measures to respond to the situation in cooperation with the various stakeholders. Due to the uncertainty surrounding the COVID-19 pandemic, the Company will continue to assess the situation, including government-imposed restrictions, market by market. ItThe COVID-19 pandemic has not yet currently adversely affected our business, however, it is not possible at this time to estimate the full impact that the COVID-19 pandemic, could have on the Company’s business, the continued spread of COVID-19, and any additional measures taken by governments, health officials or by the Company in response to such spread, could have on the Company’s business, results of operations and financial condition. The COVID-19 pandemic

Gix Merger

On December 5, 2021, the Company entered into the Merger Agreement with Gix Media and mitigation measuresMerger Sub, pursuant to which, following the Gix Merger, 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. As of the March 31, 2022 (“Reporting Date”), the closing conditions of the Merger Agreement have also negatively impacted global economicnot been fulfilled yet.

Subject to the terms and conditions which,of the Merger Agreement, at the Merger Effective Date (as defined in turn, could adversely affectthe 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 Gix Merger, holders of Gix Media Shares will hold 90% of the Company’s business, resultscapital stock on a fully diluted basis. The Merger Agreement contains customary representations, warranties and covenants made by each of operationsthe Company, Gix Media and financial condition. The extentMerger Sub.

On December 21, 2021, the shareholders of each of Gix Media and Merger Sub approved the Merger Agreement. Consummation of the Gix Merger is subject to whichcertain additional closing conditions, including, among other things, (i) the COVID-19 outbreak continuesCompany filing an amendment to impactits certificate of incorporation to change the Company’s financial condition will depend on future developments that are highly uncertain and cannot be predicted,name to “Gix Media, Inc.”, (ii) obtaining approval from certain third parties, including new government actions or restrictions, new information that may emerge concerning the severity, longevity and impactapproval of Bank Leumi due to certain liens registered in its favor against ordinary shares of Gix Media; (iii) conversion of the COVID-19 pandemic on economic activity.Company’s outstanding convertible instruments into restricted shares of Common Stock and (iv) obtaining a tax pre-ruling from the Israeli Tax Authority relating to the Agreement.

Reverse Stock Split

In connection with the Gix Merger, on February 13, 2022, the requisite majority of the Company’s stockholders approved certain amendments to the Company’s certificate of incorporation, including, but not limited to (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. Pursuant to the Planned Reverse Stock Split, each twenty-eight (28) shares of the Company’s common stock will be automatically converted, without any further action by the stockholders, into one share of the Company’s 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.

The Company intends to effect the foregoing amended and restated certificate of incorporation upon the closing of the Gix Merger, thus, as of the Reporting Date the Planned Reverse Stock Split has not been effected.

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 March 31, 20212022 and 2020,2021, and the related statements of comprehensive loss, statement of changes in stockholders’ equity (deficit) and statements of cash flows for the three months then ended, and the related notes thereto contained in this Quarterly Report on Form 10-Q (this “Quarterly Report”).

Forward-Looking Statements

This management discussion and analysis section contains forward-looking statements, such as statements of the Company’s plans, objectives, expectations and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect” and the like, and/or future tense or conditional constructions “will,” “may,” “could,” “should,” etc., or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements are based on information we have when those statements are made or our management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to:

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 our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the Securities and Exchange Commission (the “SEC”) on March 16, 202117, 2022 (the “Annual Report”). The Company’s actual results could differ materially from those contemplated in these forward-looking statements as a result of these factors. The Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report.

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 AgreementMerger with Gix Media Ltd.

On February 7, 2019,December 5, 2021, the Company entered into a share exchange agreementcertain Agreement and Plan of Merger (the “Share Exchange“Merger Agreement”) with Gix Media Ltd., an Israeli company and the majority-owned subsidiary of Gix Internet Ltd. (f/k/a Algomizer(“Parent Company”), in the field of MarTech (Marketing Technology) solutions, primarily search and content monetization (“Gix Media”) and Vmedia Merger Sub Ltd.) (TASE:GIX), aan Israeli company organized under the lawsand wholly-owned subsidiary of the State of IsraelCompany (“Gix”Merger Sub”), pursuant to which, on July 25, 2019 (the “Closing Date”)following the Merger (as defined herein), and upon satisfaction of additional closing conditions, Merger Sub will merge with and into Gix assigned, transferredMedia, with Gix Media being the surviving entity and delivered its 99.83% holdings in Viewbix Ltd. (“Viewbix Israel”) to the Company in exchange for shares of restricted common stock, par value $0.0001 per sharewholly-owned subsidiary of the Company (the “Common Stock”“Gix Merger”), representing 65%.

Subject to the terms and conditions of the issued andMerger Agreement, at the Merger Effective Date (as defined in the Merger Agreement) all outstanding share capitalordinary 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 Gix Merger, holders of Gix Media Shares will hold 90% of the CompanyCompany’s capital stock on a fully diluted basis as of the Closing Date, following the conversion of certain convertible notesbasis. The Merger Agreement also contains customary representations, warranties and covenants made by each of the Company, Gix Media and excludingMerger Sub.

Following the Gix Merger, the board of directors of the Company is expected to consist of six (6) directors and will be comprised of 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.

On December 21, 2021, the shareholders of each of Gix Media and Merger Sub approved the Merger Agreement. Consummation of the Gix Merger is subject to certain warrantsadditional closing conditions, including, among other things, (i) the Company filing an amendment to purchaseits certificate of incorporation to change the Company’s name to “Gix Media, Inc.”, (ii) obtaining approval from certain third parties, including the approval of Bank Leumi due to certain liens registered in its favor against ordinary shares of Gix Media; (iii) conversion of the Company’s outstanding convertible instruments into restricted shares of Common Stock expiring in 2020 and additional warrants as further described below(iv) obtaining a tax pre-ruling from the Israeli Tax Authority relating to the Agreement.

In connection with Gix Merger, on February 13, 2022, the requisite majority of the Company’s stockholders approved certain amendments to the Company’s certificate of incorporation, including, but not limited to (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 “Fully Diluted Share Capital”“Planned Reverse Split”). In addition,, (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 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 an additional 1,642,193 shares of restricted Common Stock representing 5%closing of the Fully Diluted Share Capital immediately following the Closing Date.

On July 24, 2019, and in connection with the Share Exchange Agreement,Gix Merger. Additionally, on February 25, 2022, the Company filed a Certificate of Amendment to its Certificate of IncorporationSchedule 14C Information Statement 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 approvedSEC, whereby it reported the Registrant’s name change and its trading symbol was changed from “VRCP” to “VBIX” onforegoing approvals by the OTCQB.

On the Closing Date, (i) the Company issued 20,281,085 shares of Common Stock to Gix 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, whereby (i) 3,649,318 of such warrants to purchase shares of Common Stock were issued with an exercise price of $0.48, and (ii) 3,649,318 of such warrants to purchase shares of Common Stock were issued with an exercise price of $0.80.

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 revenue goals. In connection with these cost reduction measures, on January 1, 2020, Mr. Jonathan Stefansky, the Company’s then chief executive officer and memberrequisite majority of the Company’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 Company’s board of directors on January 1, 2020, and, effective as of March 1, 2020, he was also appointed as the Company’s chief executive officer.stockholders.

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 March 31, 20212022 as Compared to the Three Months Ended March 31, 20202021

Our revenues were $8$1 thousand for the three months ended March 31, 2021,2022, compared to $37$8 thousand during the same period in the prior year. The reason for the decrease in the three months ended March 31, 20212021. The reason for the decrease during the three months ended March 31, 2022 is due to the factCompany’s cost-reduction measures that were initially implemented beginning on January 1, 2020,2021.

Our research and development expenses were $14 thousand for the Company announcedthree months ended March 31, 2022, which is a slight decrease as compared to $16 thousand during the three months ended March 31, 2021.

Our selling and began implementing certain cost reduction measures.

Our cost of revenuesmarketing expenses were $0 thousand for the three months ended March 31, 2021, with2022, which is a slight decrease as comparecompared to $4$2 thousand during the same period in the prior year.three months ended March 31, 2021.

Our researchgeneral and developmentadministrative expenses were $16$68 thousand for the three months ended March 31, 2021,2022, slight increase as compared to $59 thousand during the same period in the prior year. The reason for the decrease in the three months ended March 31, 2021 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 $2 thousand for the three months ended March 31, 2021, as compared to $7 thousand during the same period in the prior year. The reason for the decrease in the three months ended March 31, 2021 is due to the fact that on January 1, 2020, the Company announced and begin implementing certain cost reduction measures.

Our general and administrative expenses decreased to $63 thousand for the three months ended March 31, 2021 as compared to $175 thousand during the same period in the prior year. Beginning on January 1, 2020, we announced and began implementing certain cost reduction measures.2021.

Our net financialother expenses was $7were $13 thousand for the three months ended March 31, 2021,2022, compared to net financial income of $28$0 thousand during the same period in the prior year. The reason for the change is due to the US dollar exchange rate difference during the three months ended March 31, 2021 as compared2021. Our other expenses are due to expenses in connection with the same period in the prior year. In addition during December 2020 the company entered into a Loan Agreement with certain investors which bearing an annually interest of 8%.Merger Agreement.

Our tax on income was $0net financial expenses were $75 thousand for the three months ended March 31, 2021, which is a slight decrease2022, compared to $2net financial income of $7 thousand during the same periodthree months ended March 31, 2021. The reason for the increase during the three months ended March 31, 2022 is due to certain financial expenses in connection with the prior year.loan to the Parent Company, which was signed during the quarter ended December 31, 2021.

Liquidity and Capital Resources

As of March 31, 2022, we had current assets of $115 thousand consisting of $57 thousand in cash and cash equivalents, $9 thousand in trade receivables, $21 thousand in other accounts receivables and $28 thousand in prepaid expenses.

As of March 31, 2022, we had $2,564 thousand in current liabilities consisting of $16 in trade payables, $239 in other accounts payable and accrued liabilities, $69 in short term loans and a loan to the Parent Company in the amount of $2,240.

As of December 31, 2021, we had current assets of $196$156 thousand consisting of $134$74 thousand in cash and cash equivalents, $21$8 thousand in trade receivables, $14$30 thousand in other accounts receivables and $27$44 thousand in prepaid expenses.

We As of December 31, 2021, we had $2,354$2,436 thousand in current liabilities consisting of $186$9 in trade payables, $242 in other accounts payable and accrued liabilities, $54 Short$69 in short term loans, and a loan $10 trade payable, and $2,104 payable to our parent company.the Parent Company in the amount of $2,116.

As of December 31, 2020, we had current assets of $225 thousand consisting of $148 thousand in cash and cash equivalents, $20 thousand in other receivables, $15 thousand in trade 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, $22 trade payable, $2,054 payable to our parent company and $50 in Short term loan.

We had a negative working capital of $2,158$2,449 thousand and $2,078$2,280 thousand as of March 31, 20212022 and December 31, 2020,2021, respectively.

Our Current liabilities as of March 31, 2021 were $2,354 thousand compared to $2,303 thousand as of December 31, 2020.

During the three months ended March 31, 2021, we had negative cash flow from operations of $14 thousand which was mainly the result of a net loss of $80 thousand, offset by decrease in working capital of $66 thousand.

During the three months ended March 31, 2020, we had positive cash flow from operations of $10 thousand which was mainly the result of a net loss of $174 thousand, offset by gains from the sale of a subsidiary and decrease in working capital of $187.

During the three months ended March 31, 2021, we had none cash flow effect from investing activities as compared to a positive cash flow effect from investing activities of $13 thousand as during the three mounts ended March 31, 2020.

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:Concern

The Company has incurred $80$169 in net losses for the three months ended March 31, 2021,2022, and $80 in net loss for the three months ended March 31, 2021. The Company has $2,158$2,449 stockholders’ deficit as of March 31, 20212022 and $2,078$2,158 in total stockholders’ deficit as of DecemberMarch 31, 2020.2021. 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.

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

Our management, including our principalAs of March 31, 2022, the Company’s chief executive officer and principalchief financial officer, evaluatedwhich is currently the same individual, conducted an evaluation (the “Evaluation”) regarding the effectiveness of ourthe Company’s disclosure controls and procedures pursuant to(as defined in Rules 13a-15(e) andor 15d-15(e) under the Exchange ActAct. Based upon the Evaluation, as of March 31, 2021,required by Rules 13a-15 or 15d-15, the end of the period covered by this Report on Form 10-Q.` Based on such evaluation, due to the material weakness discussed below, our principalCompany’s chief executive officer and principalchief financial officer concluded that ourthe Company’s disclosure controls and procedures were not effective at a reasonable assurance levelineffective as of the end of March 31, 2021.2022, and pursuant to the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013) because of certain material weaknesses.

Changes in Internal Control Over Financial Reporting

In connection with the preparation of our consolidated financial statements as of and for the period ended March 31, 2021, we have identified a material weakness in our internal control over financial reporting. The material weakness was identified in the period-end financial reporting process, and is associated with our history as a private company and a material weakness is a deficiency or combination of deficienciesThere were no changes in our internal control over financial reporting suchor in other factors identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that there is a reasonable possibilityoccurred during the quarter ended March 31, 2022 that a material misstatement ofhave materially affected, or are reasonably likely to materially affect, our consolidatedinternal control over financial statements would not be prevented or detected on a timely basis. This deficiency could result in additional misstatements to our consolidated financial statements that would be material and would not be prevented or detected on a timely basis.reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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,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.effect.

In June 2017, a lawsuit was filed with the Regional Labor Court in Tel Aviv (the “Tel Aviv Court”) against Emerald Israel, and other defendants, claiming certain damages in the total amount of approximately $225,000, under the assertion of wrongful termination by Emerald Israel. We believe these claims to be unsubstantiated and wholly without merit and accordingly filed our response with the Tel Aviv Court in October of 2017. The dispute was initially heard by the Tel Aviv Court on February 13, 2020. In a supplemental hearing on February 11, 2021, the plaintiff provided a certified confirmation of payment of approximately $14,668 by the National Insurance Institute of Israel for one month’s prior notice of termination, redemption of 16.8 days of vacation and severance pay. The plaintiff’s summaries were filed on March 11, 2021, and the defendant’s summaries will be filed until May 20, 2021.

ITEM 1A. RISK FACTORS

There have been no material changes from the information set forth in “Item 1A. Risk Factors” in the Form 10-K filed with the SEC on March 16, 202117, 2022.

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.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

(a) The following documents are filed as exhibits to this Quarterly Report or incorporated by reference herein.

SIGNATURES

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.