UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ 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, 2022

☐ 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		(I.R.S. Employer
Incorporation)		Identification No.)

11 Derech Menachem Begin Street, Ramat Gan, Israel		5268104
(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~~N/A		~~VBIX~~N/A		~~OTCQB~~N/A

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 ☒ 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 ☒ 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	☒	Smaller reporting company	☒
		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 ☒

On ~~March 31,~~November 20, 2022, the Registrant had ~~34,753,669~~14,783,964 shares of common stock issued and outstanding.

~~-2-~~

VIEWBIX INC.

TABLE OF CONTENTS

Item	Description	Page

	PART I - FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS	3
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS	1939
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	2245
ITEM 4.	CONTROLS AND PROCEDURES	2245

	PART II - OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS		2346
ITEM 1A.	RISK FACTORS	2346
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	2346
ITEM 3.	DEFAULT UPON SENIOR SECURITIES	2346
ITEM 4.	MINE SAFETY DISCLOSURE	2346
ITEM 5.	OTHER INFORMATION	2346
ITEM 6.	EXHIBITS	2346
	SIGNATURES	2447

-2-

~~-3-~~

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

VIEWBIX INC

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

~~March 31,~~September 30, 2022

CONTENTS

	Page

Interim Condensed Consolidated Balance Sheets (unaudited)	4 - 5

Interim Condensed Consolidated Statements of ~~Comprehensive Loss~~Operations (unaudited)	6

Interim Condensed Consolidated Statements of Changes in Shareholders’ Equity (unaudited)	7

Interim Condensed Consolidated Statements of Cash Flows (unaudited)	88 - 9

Notes to the Interim Condensed Consolidated Financial Statements	910 - 1838

-3-

~~-4-~~

VIEWBIX ~~INC.~~INC

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

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

		As of March 31		As of December 31				As of September 30		As of December 31
	Note	2022		2021		Note		2022		2021

ASSETS

CURRENT ASSETS

Cash and cash equivalents			57		74				3,609		5,208
Trade receivables			9		8
Other accounts receivable			21		30
Prepaid expenses			28		44
Restricted deposits									223		234
Accounts receivable									16,398		16,415
Loan to parent company							15		7,096		6,384
Other receivables							3		814		1,004

Total current assets			115		156				28,140		29,245

NON-CURRENT ASSETS
Severance pay funds									73		83
Deferred taxes							11		62		133
Property and equipment, net							4		317		334
Operating lease right-of-use assets							5		505		569
Intangible assets, net							6		15,762		8,414
Goodwill							6		17,615		12,483

Total non-current assets									34,334		22,016

Total assets			115		156				62,474		51,261

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

-4-

~~-5-~~

VIEWBIX INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Cont.)

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

As of March 31 As of December 31
Note 2022 2021

LIABILITIES AND STOCKHOLDERS’ DEFICIT

CURRENT LIABILITIES
Trade payables 16 9
Other accounts payables and accrued liabilities 3 239 242
Parent company loan 4 2,240 2,116
Short term loan 5 69 69

Total current liabilities 2,564 2,436

Commitments and contingencies -

STOCKHOLDERS’ DEFICIT 6

Share Capital
Ordinary shares of $0.0001 par value - Authorized: 490,000,000 shares; Issued and outstanding: 34,753,669 shares as of March 31, 2022; and December 31, 2021 3 3
Additional paid-in capital 13,257 13,257
Accumulated deficit (15,709 ) (15,540 )

Total stockholders’ deficit (2,449 ) (2,280 )

Total liabilities and stockholders’ deficit 115 156

			As of September 30			As of December 31
	Note		2022			2021

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES
Current maturities of long-term loan		10		1,500			1,500
Loan from parent company		15		2,527			2,116
Accounts payable		8		16,144			16,676
Other payables		9		1,862			1,386
Short-term loans		10		5,000			5,000
Operating lease liabilities - short term		6		93			91

Total current liabilities				27,126			26,769

NON-CURRENT LIABILITIES

Accrued severance pay				176			188
Long-term loan		10		3,225			4,270
Operating lease liabilities - long term		6		433			491
Deferred taxes		11		1,853			1,026

Total non-current liabilities				5,687			5,975

SHAREHOLDERS’ EQUITY		13

Share Capital
Common stock of $0.0001 par value - Authorized: 490,000,000 shares; Issued and outstanding: 14,783,964 shares as of September 30, 2022 and December 31, 2021, respectively (*)				3			3
Additional paid-in capital				27,564			16,074
Accumulated deficit				(4,043	)		(2,366	)
Equity attributed to the company’s shareholders				23,524			13,711
Non-controlling interests				6,137			4,806
Total equity				29,661			18,517

Total liabilities and shareholders’ equity				62,474			51,261

(*)

Retroactively adjusted to reflect the reverse stock split effected on August 31, 2022 (see note 1.d) for all periods presented and to reflect the equivalent number of shares corresponding to the combined financial information of the Company and Gix Media Ltd. for all periods preceding the Reorganization Transaction (see note 1.b)

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

-5-

VIEWBIX INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

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

	Note		2022			2021			2022			2021
			For the nine months ended September 30						For the three months ended September 30
	Note		2022			2021			2022			2021
Revenues				66,115			23,874			22,778			8,079

Costs and Expenses:
Traffic-acquisition and related costs				56,400			19,582			19,464			6,738
Research and development		14A		2,957			1,530			987			471
Selling and marketing		14B		1,853			584			628			215
General and administrative		14C		1,326			907			450			313
Depreciation and amortization		4,6		2,051			1,289			736			427
Other expenses				121			26			86			26

Operating income (loss)				1,407			(44	)		427			(111	)

Financial income (expenses), net		14D		(1,374	)		91			(301	)		121

Income before income taxes				33			47			126			10

Taxes on income		11		(63	)		41			(55	)		81

Net income (loss)				(30	)		88			71			91

Net income (loss) for the period is attributable to:
Shareholders				(677	)		88			(147	)		91
Non-controlling interests				647			-			218			-
Net income (loss)				(30	)		88			71			91

Net income (loss) per Share – Basic and Diluted attributed to shareholders:				(0.05	)		0.01			(0.01	)		0.01

Weighted average number of shares (*) – Basic:				14,783,964			14,783,964			14,783,964			14,783,964

Weighted average number of shares (*) – Diluted:				14,783,964			15,044,630			14,783,964			15,044,630

(*)

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

-6-

VIEWBIX INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

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

	Number		Amount^(*)		capital		Earnings			Shareholders			Interests			Equity
	Ordinary shares (*)				Additional paid-in		Retained			Total Attributed to the company’s			Non- Controlling			Total
	Number		Amount		capital		Earnings			Shareholders			Interests			Equity
Balance as of January 1, 2022		14,783,964		3		16,074		(2,366	)		13,711			4,806			18,517
Net income (loss)		-		-		-		(677	)		(677	)		647			(30	)
Adjustment to ultimate parent’s carrying values (see note 1.c)						11,462					11,462			1,867			13,329
Share-based compensation		-		-		28		-			28			12			40
Dividend declared to shareholders		-		-		-		(1,000	)		(1,000	)		-			(1,000	)
Dividend distributed to non-controlling interests		-		-		-		-			-			(1,195	)		(1,195	)

Balance as of September 30, 2022		14,783,964		3		27,564		(4,043	)		23,524			6,137			29,661

	Ordinary shares (*)				Additional paid-in		Retained			Total Attributed to the company’s			Non- Controlling			Total
	Number		Amount		capital		Earnings			Shareholders			Interests			Equity
Balance as of July 1, 2022		14,783,964		3		27,541		(2,897	)		24,647			6,364			31,011
Net income (loss)		-		-		-		(146	)		(146	)		217			71
Share-based compensation		-		-		23		-			23			9			32
Dividend declared to shareholders		-		-		-		(1,000	)		(1,000	)		-			(1,000	)
Dividend distributed to non-controlling interests		-		-		-		-			-			(453	)		(453	)

Balance as of September 30, 2022		14,783,964		3		27,564		(4,043	)		23,524			6,137			29,661

	*Ordinary shares ()**				Additional paid-in			Retained			Total Attributed to the company’s			Non- Controlling		Total
	Number		Amount		capital			Earnings			Shareholders			Interests		Equity

Balance as of January 1, 2021		14,783,964		3		15,933			(2,666	)		13,270			-		13,270
Net income		-		-		-			88			88			-		88
Share-based compensation		-		-		(38	)		-			(38	)		-		(38	)

Balance as of September 30, 2021		14,783,964		3		15,895			(2,578	)		13,320			-		13,320

	Ordinary shares (*)				Additional paid-in			Retained			Total Attributed to the company’s			Non- Controlling		Total
	Number		Amount		capital			Earnings			Shareholders			Interests		Equity

Balance as of July 1, 2021		14,783,964		3		15,898			(2,669	)		13,232			-		13,232
Net income		-		-		-			91			91			-		91
Net income (loss)		-		-		-			91			91			-		91
Share-based compensation		-		-		(3	)		-			(3	)		-		(3	)

Balance as of September 30, 2021		14,793,964		3		15,895			(2,578	)		13,320			-		13,320

(*)

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

-7-

VIEWBIX INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

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

	2022			2021			2022			2021
	For the nine months ended September 30						For the three months ended September 30
	2022			2021			2022			2021
	Unaudited						Unaudited

Cash flows from Operating Activities
Net income (loss)		(30	)		88			71			91

Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortizations		2,051			1,289			736			427
Share-based compensation		40			(38	)		32			(3	)
Deferred taxes		(219	)		(65	)		(96	)		(41	)
Accrued interest, net		(50	)		(26	)		(11	)		62
Fair value revaluation and exchange rate differences on loans		1,033			14			72			5

Adjustment total		2,855			1,174			733			450
Changes in assets and liabilities items:
Decrease in accounts receivable		17			968			20			447
Decrease (increase) in other receivables		190			(39	)		378			(122	)
Decrease in operating lease right-of-use assets		64			48			22			21
Increase (decrease) in severance pay, net		(2	)		(229	)		(1	)		3
Increase (decrease) in accounts payable		(532	)		(57	)		535			(248	)
Decrease in other payables		(525	)		(522	)		(228	)		(158	)
Decrease in operating lease liabilities		(56	)		(39	)		(19	)		(17	)
Increase in parent company loan		194			172			66			55
Increase (Decrease) in Operating Capital		(650	)		302			773			(19	)

Net cash provided by operating activities		2,175			1,564			1,577			522

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

-8-

~~-6-~~

VIEWBIX INC. ~~AND ITS SUBSIDIARIES~~

CONDENSED CONSOLIDATED STATEMENTS OF ~~COMPREHENSIVE LOSS~~CASH FLOWS (Unaudited) (Cont.)

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

Note 2022 2021
For the three months ended March 31
Note 2022 2021

Revenues 1 8
Cost of revenues - -

Gross profit 1 8

Operating expenses:
Research and development 14 16
Selling and marketing - 2
General and administrative 68 63
Other expenses 13 -

Operating loss 94 73

Financial expenses, net 7 (75 ) (7 )

Loss before tax 169 80

Taxes on income 8 - -

Net loss 169 80

Loss per share - basic and diluted 9 0.005 0.002

Weighted average number of ordinary shares outstanding used in the computations of loss per share (in thousands) 34,753,669 34,753,669

For the nine months
ended September 30

For the three months
ended September 30

2022 2021 2022 2021
Unaudited Unaudited

Cash flows from Investing Activities
Purchase of property and equipment (54 ) (298 ) (7 ) (70 )
Capitalization of software development costs (14 ) (211 ) - (69 )

Net cash used in investing activities (68 ) (509 ) (7 ) (139 )

Cash flows from Financing Activities
Receipt of short-term loan 1,000 602
Repayment of short-term loan (1,000 ) (1,219 ) (1,000 ) (619 )
Increase in loan to parent company (1,462 ) (1,308 ) (606 ) (822 )
Repayment of long-term loan (1,060 ) - (358 ) -
Payment of dividend to non-controlling interests (1,195 ) - (453 ) -

Net cash used in financing activities (3,717 ) (1,925 ) (2,417 ) (1,441 )

Increase in cash and cash equivalents and restricted cash (1,610 ) (870 ) (847 ) (1,058 )

Cash and cash equivalents and restricted cash at beginning of the period 5,442 3,564 4,679 3,752

Cash and cash equivalents and restricted cash at end of the period 3,832 2,694 3,832 2,694

Supplemental Disclosure of Cash Flow Activities:

Cash paid and received during the period
Taxes paid (551 ) (222 ) (135 ) (88 )
Interest paid (391 ) (21 ) (164 ) (7 )

Total Cash paid and received during the period (942 ) (243 ) (299 ) (95 )

Substantial non-cash activities:
Right of use assets obtained in exchange for operating lease liabilities
- 637 - -
Dividend declared 1,000 -
1,000
-
~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~
~~-7-~~
~~VIEWBIX INC.~~
~~CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT (Unaudited)~~
~~U.S. dollars in thousands (except share data)~~
Number Amount capital deficit deficit
Ordinary shares Additional paid-in Accumulated Total stockholders’
Number Amount capital deficit deficit

Balance as of January 1, 2022 34,753,669 3 13,257 (15,540 ) (2,280 )

Net loss for the period - - - (169 ) (169 )
Balance as of March 31, 2022 34,753,669 3 13,257 (15,709 ) (2,449 )
Ordinary shares Additional paid-in Accumulated Total stockholders’
Number Amount capital deficit deficit

Balance as of January 1, 2021 34,753,669 3 13,073 (15,154 ) (2,078 )

Net loss for the period - - - (80 ) (80 )
Balance as of March 31, 2021 34,753,669 3 13,073 (15,234 ) (2,158 )
The accompanying notes are an integral part of these condensed consolidated financial statements.

-9-
~~-8-~~

VIEWBIX INC.
~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)~~
~~U.S. dollars in thousands (except share data)~~
2022 2021
For the three months ended March 31
2022 2021
Cash flows from operating activities

Net loss for the period (169 ) (80 )
Adjustments to reconcile net loss to net cash (used in)
operating activities:
Finance expense 69 4
Changes in current assets and liabilities:
Increase in trade receivables (1 ) (6 )
Decrease prepaid expenses 16 16
Decrease in other receivables 9 6
Increase (decrease) in trade payables 7 (4 )
Decrease in other accounts payables and accrued liabilities (3 ) -
Increase in loan from parent company 55 50

Net cash used in operating activities (17 ) (14 )

Cash flows from investing activities

Net cash provided by Investing activities - -

Decrease in cash and cash equivalents (17 ) (14 )

Cash and cash equivalents at the beginning of the year 74 148

Cash and cash equivalents and restricted cash at the end of the year 57 134
~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~
~~-9-~~
~~VIEWBIX INC.~~
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

~~NOTE 1:~~ ~~GENERAL~~
NOTE 1:GENERAL

A. ~~Organizational Background~~
A. Organizational Background

Viewbix Inc. (formerly known as Virtual Crypto Technologies, Inc.) (the “Company”) was incorporated in the State of ~~Ohio in 1989~~Delaware on August 16, 1985, under a predecessor name, ~~Zaxis International, Inc.~~The InFerGene Company (“~~Zaxis”~~InFerGene Company”). On August 25, 1995, ~~Zaxis~~a wholly owned subsidiary of InFerGene Company merged with ~~a subsidiary of The~~Zaxis International, Inc., an Ohio corporation, which following such merger, the surviving entity, 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.~~Inc (“Zaxis”). In 2015, the Company ~~changes~~changed its name to Emerald Medical Applications Corp.

On January 17, 2018, the Company formed a new wholly-owned subsidiary under the laws of the State of Israel, Virtual Crypto Technologies Ltd. (“VCT Israel”), to develop and market software and hardware products facilitating and supporting the purchase and/or sale of cryptocurrencies. Effective as of March 7, 2018, the Company’s name was changed from Emerald Medical Applications Corp. to Virtual Crypto Technologies, Inc. to reflect its new operations and business focus.

~~VCT Israel ceased its business operation prior to consummation of the Recapitalization Transaction. On January 27, 2020, VCT Israel was sold to a third party for NIS~~ ~~50,000~~ ($~~14,459~~).
On February 7, 2019, the Company entered into a share exchange agreement (the “Share Exchange Agreement” or the “Recapitalization Transaction”) with Gix Internet Ltd., ana company organized under the laws of the State of Israel (“Gix” or “Parent Company’’), pursuant to which, Gix assigned, transferred and delivered its 99.83% holdings in Viewbix Ltd., a company organized under the laws of the State of Israel (“Viewbix Israel”), to the Company in exchange for shares ~~of restricted common stock~~ of the Company, which resulted in Viewbix Israel becoming a subsidiary of the Company. In connection with the Share Exchange Agreement, effective as of August 7, 2019, the Company’s name was changed from Virtual Crypto Technologies, Inc. to Viewbix Inc.

~~On January 1, 2020, the~~B. Definitions
In these financial statements:
The Company ~~announced certain cost reduction measures due the fact the Company not achieved certain revenues goals.~~
On December 5, 2021, the Company entered into a certain Agreement and Plan of Merger (the “Merger Agreement” or the “Gix Merger”) with Gix Media Ltd., an Israeli company and the majority-owned subsidiary of Gix (“Gix Media”) and Vmedia Merger Sub Ltd., an Israeli company and wholly-owned subsidiary of the Company (“Merger Sub”) (see also note 1.D).– Viewbix Inc.

The ~~Company~~Group – Viewbix Inc. and its subsidiaries ~~are collectively referred to as the “Company”.~~
The Parent 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.or Gix – Gix Internet Ltd.

Gix Media – Gix Media Ltd.
Cortex – Cortex Media Group Ltd.
-10-
VIEWBIX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

~~NOTE. 1~~ ~~GENERAL (Cont.):~~
NOTE 1:
B.GENERAL (Cont.) ~~Emerald Medical Applications Ltd.~~
Emerald Medical Applications Ltd., the Company’s wholly-owned subsidiary (“Emerald Israel”) was engaged in the business of developing 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. Reorganization Transaction
C. ~~Stock Subscription Agreement and Loan Agreement~~
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~~ ~~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”). In accordance with the terms of the Loan, the company repaid the interest on the Principal Amount (~~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. The shares of Common Stock were issued to the Investors pursuant to Regulation S of the Securities Act of 1933, as amended.~~
D. ~~Merger with Gix Media Ltd.~~

On December 5, 2021, the Company entered into ~~the~~a certain Agreement and Plan of Merger ~~Agreement~~ with Gix Media, an Israeli company and the majority-owned subsidiary of Gix, the Parent Company and Vmedia Merger Sub Ltd., an Israeli company and wholly-owned subsidiary of the Company (“Merger Sub”), pursuant to which, ~~following the Gix Merger, and upon satisfaction of additional closing conditions,~~ Merger Sub ~~will merge~~merged with and into Gix Media, with Gix Media being the surviving entity and a wholly-owned subsidiary of the ~~Company. As of the March 31, 2022 (“Reporting Date”~~Company (the “Reorganization Transaction”)~~, the closing conditions of the Merger Agreement have not been fulfilled yet (see note 11)~~.

On September 19, 2022, (the “Closing Date”) the Reorganization Transaction was consummated and as a result, all outstanding ordinary shares of Gix Media, having no par value (the “Gix Media Shares”) were delivered to the Company’s in exchange for the Company’s shares of common stock. Prior to the closing of the Reorganization Transaction, Gix Media was a majority-owned subsidiary of Gix. As a result of the Reorganization Transaction, the former holders of Gix Media Shares, who previously held approximately 69% of the Company’s shares on a fully diluted basis, hold 90% of the Company’s Common Stock on a fully diluted basis, and Gix Media became a wholly-owned subsidiary of the Company , which holds 100% of its share capital.
As the Company and Gix Media Ltd. were consolidated by the same parent and ultimate parent, Gix Internet Ltd. and Medigus Ltd., respectively, before and after the Reorganization Transaction, the Reorganization Transaction was accounted for as a transaction between entities under common control. Accordingly, the combined financial information of the Company and Gix Media Ltd. is presented in these financial statements, for all periods presented, reflecting the historical cost of the Company and Gix Media Ltd., as it is reflected in the consolidated financial statements of the direct parent, Gix Internet Ltd., for all periods preceding March 1, 2022, the date Medigus Ltd. obtained control in Gix Internet Ltd., and as it is reflected in the consolidated financial statements of Medigus Ltd. for all periods subsequent to March 1, 2022.
Share and per share data in these financial statements have been retrospectively adjusted, for all periods preceding the Reorganization Transaction, to reflect the equivalent number of shares of the Company corresponding to the combined financial information of the Company and Gix Media Ltd.
C. Business Operations
The Group, through its subsidiaries Gix Media Ltd. and Cortex Media Group Ltd., operates in the field of digital advertising. The Group has two main activities that are reported as separate business segments: the search segment and the digital content segment. The search segment activity is operated by Gix Media.
The search segment develops a variety of technological software solutions, which perform automation, optimization and monetization of internet campaigns, for the purposes of acquiring and routing internet user traffic to its customers.
The digital content segment is engaged in the creation and editing of content, in different languages, for different target audiences, for the purposes of generating revenues from leading advertising platforms, including Google, Facebook, Yahoo and Apple, by utilizing such content to obtain internet user traffic for its advertisers.The digital content activity is operated by Cortex. Gix Media holds 70% of Cortex’s share capital.
The Group’s technological tools allow advertisers and website owners to earn more from their advertising campaigns and generate additional profits from their websites.
D. Reverse Stock Split
In connection with the Closing of the Reorganization Transaction, the Company filed an Amended and Restated Certificate of Incorporation (the “Amended COI”) with the Secretary of State of Delaware, effective as of August 31, 2022, pursuant to which, concurrently with the effectiveness of the Amended COI, the Company, among other things, effected a reverse stock split of its Common Stock at a ratio of 1-for-28. Share and per share data in these financial statements have been retrospectively adjusted to reflect the reverse stock split for all periods presented.
-11-
VIEWBIX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

~~NOTE. 1~~ ~~GENERAL (Cont.):~~
NOTE 2:
E. ~~Going Concern~~
~~The Company has incurred $169~~ ~~in net loss for the three months ended March 31, 2022 and $~~80 ~~in net loss for the three months ended March 31, 2021. The Company has $2,449stockholders’ deficit as of March 31, 2022 and $2,158in stockholders’ deficit as of March 31, 2021 and $~~17 ~~in negative cash flows from operations for the three months ended March 31, 2022 and $~~14 in negative cash flows from operations for the three months ended March 31, 2021. Since January 2020, the Company has significantly reduced its operations and expenses of Viewbix Israel. 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.
~~-12-~~
~~NOTE. 2~~ ~~SUMMARY OF~~ SIGNIFICANT ACCOUNTING POLICIES
~~The significant accounting policies used in the preparation of the financial statements are as follows:~~

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~~subsidiaries and were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. 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 U.S. 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~~U.S .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, 2021 and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 17, ~~2021~~2022 (the “2021 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~~nine months ended ~~March 31,~~September 30, 2022, are not necessarily indicative of the results for the year ending December 31, ~~2021,~~2022, or for any future period.

As of ~~March 31,~~September 30, 2022, following the retrospective presentation of the combined financial information of the Company and Gix Media Ltd., the Company adopted the significant accounting policies described in Note 2 in these unaudited condensed consolidated financial statements. Other than these significant accounting policies, there have been no material changes in the Company’s significant accounting policies from those that were disclosed in the 2021 Annual Report.

-12-
~~-13-~~
VIEWBIX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

~~NOTE 3:~~ ~~OTHER ACCOUNTS PAYABLE AND ACCRUED LIABILITIES~~
~~Composition:~~NOTE 2:
~~SCHEDULE OF OTHER ACCOUNTS PAYABLE AND ACCRUED LIABILITIES~~

As of
March 31

As of
December 31

2022 2021

Other payables 47 47
Accrued liabilities 192 195
Total other accounts payables 239 242
~~NOTE 4:~~ ~~PARENT COMPANY LOAN~~
~~Balances:~~SIGNIFICANT ACCOUNTING POLICIES (Cont.)
~~SCHEDULE OF PAYABLE TO PARENT COMPANY~~
  As of March 31 As of December 31
2022 2021

Gix – Company Loan $ 2,240 $ 2,116
As part of the agreement with Gix, the parties agreed to have the Company’s operations outsourced to Gix from the agreement date and until the acquisition is consummated. The following term were included in the agreement pursuant to the above:
~~(a)~~ ~~From May 2018 all of the Company’s employees will become employees of Gix.~~
~~(b)~~ ~~Between the periods of May 2018 to October 2018, Gix will pay the full expenses of the employees as well as other related expenses.~~
~~(c)~~ ~~From November 2018 until to the Closing Date, the employees transferred from the Company to Gix will dedicate half of their time to the Company’s operations and correspondingly~~ 50~~% of the costs to be incurred by Gix in respect of these employees are to be charged to the Company.~~
~~From the closing date, the actual of the expenses incurred by Gix that related to the Company will be charged to the Company.~~

~~NaN~~C. Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts ~~were paid by~~reported of assets and liabilities and disclosure at the date of the consolidated financial statements and the reported amounts of income and expense during the reporting period. The Company evaluates on an ongoing basis its assumptions, including those related to contingencies, income taxes, deferred taxes, share-based compensation and leases. Actual results could differ from those estimates.
D.Functional Currency and Foreign Currency Transactions
Most of the revenues of the Company ~~to Gix during 2020 to~~are received in U.S. dollars. In addition, a substantial portion of the ~~Reporting Date.~~costs of the Company are incurred in U.S. dollars. Therefore, the Company’s management believes that the U.S. dollar is the currency of the primary economic environment in which the Company and each of its subsidiaries operates. Thus, the functional and reporting currency of the Company is the U.S. dollar.
Accordingly, monetary balances denominated in currencies other than the U.S. dollar are re-measured into U.S. dollars in accordance with Statement of the Accounting Standard Codification (“ASC”) No. 830 “Foreign Currency Matters” (“ASC No. 830”).
Transactions and balances originally denominated in U.S. dollars are presented at their original amounts. Balances in non U.S. dollar currencies are translated into U.S. dollars using historical and current exchange rates for non-monetary and monetary balances, respectively. For non-U.S. dollar transactions and other items in the statements of operations (indicated below), the following exchange rates are used: (i) for transactions exchange rates at transaction dates and (ii) for other items (derived from non-monetary balance sheet items such as depreciation and amortization) historical exchange rates. Currency transaction gains and losses are presented in the financial income or expenses, as appropriate
E.Cash and cash equivalents

The Company ~~entered into an agreement~~considers all short-term investments, which are highly liquid investments with ~~Gix, its parent company, pursuant~~original maturities of three months or less at the date of purchase, to ~~which, effective as of December 31, 2021, the parent company payable was modified into a loan, which may~~ be ~~increased from time to time, upon the written mutual consent of the Company and Gix (the “Gix Loan”).~~cash equivalents.

~~-14-~~
F.Restricted Deposits
Restricted cash held in interest bearing saving accounts which are used as a security for the Group’s credit card and lease obligations.

G.Accounts receivable and allowance for credit losses
Accounts receivables are recorded at the invoiced amount, net of an allowance for credit losses. The Group evaluates its outstanding accounts receivables and establishes an allowance for credit losses based on information available on their credit condition, current aging, historical experience, future economic and market conditions. These allowances are reevaluated and adjusted periodically as additional information is available. Changes in the allowance for expected credit losses are recorded under general and administrative expenses in the condensed consolidated statements of income.
-13-
VIEWBIX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

NOTE 2:SIGNIFICANT ACCOUNTING POLICIES (Cont.)
H.Fixed assets
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line basis over the estimated useful lives, at the following annual rates:
SCHEDULE OF ESTIMATED USEFUL LIVES
%
Computers and peripherals equipment 33
Office furniture and equipment ~~NOTE 4:~~6-15
Leasehold improvements (*)
(*) ~~PARENT COMPANY LOAN~~ ~~(Cont.):~~Over the shorter of the lease term (including options if any that are reasonably certain to be exercised estimated useful life).
I.Leases
In accordance with ASC No. 842 “Leases”, the Company determines if an arrangement is a lease at inception. If an arrangement is a lease, the Company determines whether it is an operating lease or a finance lease at the lease commencement date. Operating leases are included in operating lease assets, operating lease liabilities – current, and non-current operating lease liabilities in the Company’s condensed consolidated balance sheets.

~~The Gix Loan bears interest at a rate (see also note 7) equivalent~~Operating lease assets represent the Company’s right to control the ~~minimal interest rate~~use of an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the estimated lease.
Operating lease assets and liabilities are recognized ~~and attributed by~~on the ~~Israel Tax Authority and will be repaid, together with~~commencement date based on the ~~accrued interest, in one payment until December 31, 2022, unless extended upon mutual consent~~present value of lease payments over the ~~Company and Gix Internet.~~lease term.

The Company ~~accounted for~~uses its incremental borrowing rate based on the ~~modification as an extinguishment of~~information available at the ~~parent company payable and~~commencement date to determine the ~~issuance of a new debt. At the Reporting Date, the loan was recorded at its fair value of $2,172. At the December 31, 2021 at a fair value of $2,116~~ ~~as of the modification date, with the difference of $184~~ ~~between the fair~~present value of the ~~loan~~lease payments. The incremental borrowing rate is estimated based on factors such as the lease term, credit standing and the ~~carrying value~~economic environment of the ~~payable to the Parent Company recorded in the Company’s Consolidated Statement of Changes in Stockholders’ Deficit , as~~location of the signing of the Gix Loan, as a deemed contribution to the Company by the Parent Company, with a corresponding discount on the loan, to be amortized as finance expense in the Company’s Consolidated Statements of Comprehensive Loss over the term of the loan.lease.

~~NOTE 5:~~ ~~SHORT TERM LOAN~~
Variable lease payments, including payments based on an index or a rate, are expensed as incurred and are not included within the operating lease asset and operating lease liabilities. The Company does not separate non-lease components from lease components for its leases of real estate.

~~On December 18, 2020,~~The Company’s lease terms are the ~~company entered into a Loan Agreement (the “Loan”)~~noncancelable periods, including any rent-free periods provided by the lessor, and ~~Stock Subscription Agreement with~~include options to extend or terminate the lease when it is reasonably certain ~~Investors as described in note 1c, pursuant to which the Investors lent an aggregate amount of $~~69 ~~(the “Principal Amount”). In accordance with the terms of the Loan, the company prepaid the interest on the Principal Amount of~~ 8~~% compounded annually to the Investors as an issuance of~~ ~~552,000~~ ~~shares of Common Stock, at a price per share of $0.01. Under the Stock Subscription Agreement, the Investors transferred an amount of $~~31 to the company as consideration for the issued shares. In January 2022, the Investors under the Loan Agreement expressed their intention to convert the Principal Amount to the Company’s shares of Common Stock, and accordingly,that the Company ~~agreed~~will exercise that option. At lease inception, and in subsequent periods as necessary, the Company estimates the lease term based on its assessment of extension and termination options that are reasonably certain to ~~extend~~be exercised. Lease costs are recognized on a straight-line basis over the ~~repayment date.~~lease term.

The Company ~~allocated the total proceeds in respect of the shares issued~~does not recognize operating lease asset and ~~the Loan was extended based~~operating lease liabilities for leases with terms shorter than 12 months. Lease costs for short-term leases are recognized on ~~their_relative fair values. As~~ a ~~result of the allocation, a discount of $~~19 ~~was recorded on the loan. The discount is amortized~~straight-line basis over the ~~term of the loan as finance expense.~~lease term.

The ~~allocation~~Company has material non-functional currency leases. Lease liabilities in respect of leases denominated in a foreign currency are remeasured using the ~~proceeds to~~exchange rate at each reporting date. Lease assets are measured at historical rates, which are not affected by subsequent changes in the ~~fair value distribution of the liability and equity components on the transactions date was as follows:~~exchange rates.
~~SCHEDULE OF FAIR VALUE DISTRIBUTION OF LIABILITY AND EQUITY COMPONENTS~~
Instrument Fair Value % of total fair
Allocated
amount

Loan 55,200 49.45 49,246
Shares 54,000 50.55 50,340
Total 109,200 100 99,586
~~The composition of short term loan balance as of the transaction is as follows:~~
~~SCHEDULE OF COMPOSITION OF SHORT TERM LOAN~~
~~Principal amount~~ 69
~~Discount on Short term loan~~ ~~(19~~ )
~~Short term loan, Net~~ 50

-14-
~~-15-~~

VIEWBIX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

NOTE 2:SIGNIFICANT ACCOUNTING POLICIES (Cont.)
J.Revenue Recognition
As described in note 1(a) the Company generates revenues from obtaining internet user traffic and routing such traffic to its customers. The Company is entitled to receive consideration for its service upon each individual internet user traffic that was routed to and is monetized by its customers.
The Company’s revenues are measured according to the ASC 606, “Revenue from Contracts with Customers” (“ASC 606”). Under ASC 606, revenues are measured according to the amount of consideration that the Company expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties, such as VAT taxes. Revenues are presented net of VAT. The Company’s payments terms are less than one year. Therefore, no finance component is recognized.
The Company recognizes revenues upon routing of internet users’ traffic that is monetized by its customers. As the Company operates as the primary obligor in its arrangements and has sole discretion in determining to which of its customers internet user traffic is to be routed, revenues are presented on a gross basis.
K.Traffic-acquisition and related costs
Traffic acquisition and related costs consist primarily of fees paid to suppliers in connection with the Company’s internet traffic sources, as well as internal costs incurred in connection with the acquisition of such traffic. Traffic acquisition costs are expensed as incurred.
L.Research and development expenses
Research and development costs are charged to the condensed consolidated statements of income as incurred, except for certain costs relating to internally developed software, which are capitalized.
The Company capitalizes certain internal software development costs, consisting of direct subcontractors’ costs associated with creating the internally developed software. Software development projects generally include three stages: (i) the preliminary project stage (all costs expensed as incurred); (ii) the application development stage (costs are capitalized) and (iii) the post implementation/operation stage (all costs expensed as incurred).
The costs capitalized in the application development stage primarily include the costs of designing the application, coding and testing of the system. Capitalized costs are amortized using the straight-line method over the estimated useful life of the software, once it is ready for its intended use.
The Company believes that the straight-line recognition method best approximates the manner in which the expected benefit will be derived. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.
-15-
VIEWBIX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share data)
NOTE 2:SIGNIFICANT ACCOUNTING POLICIES (Cont.)
M.Income taxes
The Company accounts for income taxes in accordance with ASC 740, “Income Taxes”, and (“ASC 740”). ASC 740 prescribes the use of the asset and liability method whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities and for carry forward tax losses. Deferred taxes are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value if it is more-likely-than-not that some portion or all of the deferred tax asset will not be realized.
Uncertain tax positions are accounted for in accordance with the provisions of ASC 740-10, under which a company may recognize the tax benefit from an uncertain tax position claimed or expected to be claimed on a tax return only if it is more likely than not that the tax position will be sustained on examination by the taxation authorities, based on the technical merits of the position, at the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. Interest and penalties, if any, related to unrecognized tax benefits, are recognized in tax expense.
N.Fair Value of Financial Instruments
The carrying amounts of cash and cash equivalents, restricted deposits, accounts receivable, loan to parent company, other current assets, current maturities of long-term loan, accounts payable, other payables and short-term loans approximate their fair value due to the short-term maturities of such instruments.
The carrying amount of the variable interest rate long-term loan is approximates to its fair value as it bears interest at approximate market rate.
O.Business Combinations
The Company accounts for its business combinations in accordance with ASC 805, “Business Combinations” (“ASC 805”). ASC 805 specifies the accounting for business combinations and the criteria for recognizing and reporting intangible assets apart from goodwill. ASC 805 requires recognition of assets acquired, liabilities assumed and any non-controlling interest at the acquisition date, measured at their fair values as of that date.
Acquisition-related intangible assets result from the Company’s acquisitions of businesses accounted for under the purchase method and consist of the fair value of identifiable intangible assets including customer relations, technology, as well as goodwill. Goodwill is the amount by which the acquisition cost exceeds the fair values of identifiable acquired net assets on the date of purchase. Acquisition-related definite lived intangible assets are reported at cost, net of accumulated amortization.
-16-
VIEWBIX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share data)
NOTE 2:SIGNIFICANT ACCOUNTING POLICIES (Cont.)
P.Goodwill
The Company’s goodwill reflects the excess of the consideration paid or transferred including the fair value of contingent consideration over the fair values of the identifiable net assets acquired.
Goodwill is not amortized but instead is tested for impairment, in accordance with ASC 350, “Intangibles – Goodwill and Other” (“ASC 350”), at the reporting unit level, at least annually at December 31 each year, or more frequently if events or changes in circumstances indicate that the carrying value may be impaired.
The goodwill impairment test is performed by evaluating an initial qualitative assessment of the likelihood of impairment. If this step indicates that the qualitative assessment does not result in a more likely than not indication of impairment, no further impairment testing is required. If it does result in a more likely than not indication of impairment, the impairment test is performed.
In the impairment test, the Company compares the fair value of the reporting unit to the carrying value of the reporting unit. If the fair value of the reporting unit exceeds the carrying value of the net assets allocated to that unit, goodwill is not impaired, and no further testing is required. If the fair value is less than the carrying value of the reporting unit, then the second step of the impairment test is performed to measure the amount of the impairment.
Q.Intangible assets, other than goodwill
Intangible assets are identifiable non-monetary assets that have no physical substance. Intangible assets with indefinite useful lives are not amortized and are tested for impairment once a year, or whenever there is a sign indicating that impairment may have occurred, in accordance with ASC 350. An estimate of the useful life of intangible assets with an indefinite useful life is examined at the end of each reporting year. A change in the estimated useful life of an intangible asset that changes from indefinite to defined is treated prospectively.
Intangible assets with a defined useful life are amortized in a straight line over their estimated useful life subject to impairment testing. A change in the estimated useful life of an intangible asset with a defined useful life is treated prospectively.
The useful life used to amortize intangible assets with a defined useful life is as follows:
SCHEDULE OF AMORTIZE INTANGIBLE ASSETS
%
Customer relations 14.3
Technology 16.7-22
Internal software 33
-17-
VIEWBIX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share data)
NOTE 2:SIGNIFICANT ACCOUNTING POLICIES (Cont.)
R.Impairment of long-lived assets
The Company’s long-lived assets to be held or used, including property and equipment, right of use assets and intangible assets subject to amortization are reviewed for impairment in accordance with ASC 360, “Property, Plants and Equipment” (“ASC 360”), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset.
S.Severance Pay
The Company’s liability for severance pay for some of its Israeli employees is calculated pursuant to Israeli Severance Pay Law, 1963 (the “Israeli Severance Pay Law”) based on the most recent salary of the employee multiplied by the number of years of employment, as of the balance sheet date. These employees are entitled to one month’s salary for each year of employment or a portion thereof. The Company records the liability as if it were payable at each balance sheet date on an undiscounted basis. The liability is classified based on the expected date of settlement and therefore is usually classified as a long-term liability unless the cessation of the employees is expected during the upcoming year.
The Company’s liability for these Israeli employees is partially covered by monthly deposits for insurance policies and the remainder by an accrual. The deposited funds for these policies are recorded as an asset in the Company’s balance sheet and include profits and losses accumulated up to the balance sheet date. The deposited funds may be withdrawn only upon the fulfillment of the obligation pursuant to the Israeli Severance Pay Law or labor agreements. The value of the deposited funds is based on the cash redemption value of these policies.
With respect to other Israeli employees, the Company acts pursuant to the general approval of the Israeli Ministry of Labor and Welfare, pursuant to the terms of Section 14 of the Israeli Severance Pay Law (“Section 14”), according to which the current deposits with the pension fund and/or with the insurance company exempt the Company from any additional obligation to these employees for whom the said depository payments are made. As a result, the Company does not recognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in the Company’s balance sheet.
Severance expenses for the nine months ended September 30, 2022, and September 30, 2021, amounted to $101 and $120, respectively.
T.Share-based compensation
The Company accounts for share-based compensation in accordance with ASC 718, “Stock Compensation” (“ASC 718”), which requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods, which is generally the vesting period, in the Company’s condensed consolidated statement of income.
-18-
VIEWBIX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share data)
NOTE 2:SIGNIFICANT ACCOUNTING POLICIES (Cont.)
T. Share-based compensation (Cont.)
The Company selected the Black-Scholes option pricing model as the most appropriate fair value method for its share-options awards. The option-pricing model requires several assumptions, of which the most significant are the expected share price volatility and the expected option term.
The Company accounts for forfeitures as they occur.
U.Net earnings per share
In accordance with ASC 260, “Earnings Per Share” (“ASC 260”), basic net earnings per share is computed by dividing net earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted net earnings per share reflects the potential dilution that could occur if share options, warrants or other commitments to issue ordinary shares were exercised or equity awards vested, resulting in the issuance of ordinary shares that could share in the net earnings of the Company.
V.Segment reporting
The Company reports financial and descriptive information about its reportable segments. Reportable segments are operating segments or aggregations of operating segments that meet specified criteria as defined in ASC 280, “Segments Reporting”.
Operating segments are distinguishable components of an entity for each of which a separate financial information is available and is reported in a manner consistent with the internal reporting provided to the entity’s Chief Operating Decision Maker (“CODM”) in making decisions about how to allocate resources and in assessing performance.
The review of the CODM is carried out according to the results of the segment’s activity. His review does not include certain expenses that are not related specifically to the activity of each of the segments. Those expenses are presented as reconciliation between segments operating results to total operating results in financial statements.
W.Recent accounting pronouncements
ASU 2019-12, Income Taxes
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this ASU simplify the accounting for income taxes, eliminates certain exceptions to the general principles in Topic 740 and clarifies certain aspects of the current guidance to improve consistent application among reporting entities. ASU 2019-12 is effective for annual periods beginning after January 1, 2022 and interim periods within annual periods beginning after January 1, 2023, and early adoption was permitted.
The Company currently does not expect the adoption of this accounting standard will have a material impact on its consolidated financial statements
-19-
VIEWBIX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share data)
NOTE 2:SIGNIFICANT ACCOUNTING POLICIES (Cont.)
W. Recent accounting pronouncements (cont.)
ASU 2019-10, Financial Instruments—Credit Losses (Topic 326)
In September 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326)” (“ASU 2016-13”), which requires the immediate recognition of management’s estimates of current and expected credit losses. In November 2018, the FASB issued ASU 2018-19, which makes certain improvements to Topic 326. In April and May 2019, the FASB issued ASUs 2019-04 and 2019-05, respectively, which adds codification improvements and transition relief for Topic 326. In November 2019, the FASB issued ASU 2019-10, which delays the effective date of Topic 326 for Smaller Reporting Companies to interim and annual periods beginning after December 15, 2022, with early adoption permitted. In November 2019, the FASB issued ASU 2019-11, which makes improvements to certain areas of Topic 326. In February 2020, the FASB issued ASU 2020-02, which adds an SEC paragraph, pursuant to the issuance of SEC Staff Accounting Bulletin No. 119, to Topic 326.
The amendments in this update are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, and early adoption is permitted.
The Company currently does not expect that the adoption of this accounting standard will have a material impact on its consolidated financial statements
ASU 2021-08, Business Combinations
In October 2021 the FASB issued ASU 2021-08, “Business Combinations (Topic 805) – Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”. The amendments in this update require that an entity (acquirer), recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. To achieve this, an acquirer may assess how the acquiree applied Topic 606 to determine what to record for the acquired revenue contracts.
The amendments in this update are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, and early adoption is permitted.
The Company currently does not expect that the adoption of this accounting standard will have a material impact on its consolidated financial statements
-20-
VIEWBIX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share data)
NOTE 3:OTHER RECEIBALES
Composition:
SCHEDULE OF OTHER ACCOUNTS RECEIVABLES COMPOSITION

As of
September 30

As of
December 31

2022 2021

Prepaid expenses $ 301 $ 350
Government authorities $ 513 $ 624
Other receivables $ - $ 30
Other accounts receivables 814 1,004
NOTE 4:PROPERTY AND EQUIPMENT, NET
Composition:
SCHEDULE OF PROPERTY AND EQUIPMENT, NET
As of
September 30
As of
December 31

2022 2021

Cost:
Computers and peripheral equipment $ 490 $ 436
Office furniture and equipment $ 134 $ 134
Leasehold improvements $ 273 $ 273

Total cost $ 897 $ 843
Less: accumulated depreciation (580 ) (509 )
Property and equipment, net 317 334
Depreciation expenses totaled to $71 and $54 for the nine months ended September 30, 2022, and September 30 2021, respectively.
-21-
VIEWBIX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share data)
NOTE 5: LEASES
On February 25, 2021, Gix Media entered into a lease agreement for a new corporate office of 479 square meters in Ramat Gan, Israel, at a monthly rent fee of $10. The lease period is for 36 months (the “initial lease period”) with an option by the Company to extend for two additional terms of 24 months each. In accordance with the lease agreement, the Company made leasehold improvements in exchange for a rent fee discount of $67 which will be spread over the initial lease period.
The Company includes renewal options that it is reasonably certain to exercise in the measurement of the lease liabilities.
Leases recorded on the balance sheet consist of the following:
SCHEDULE OF LEASE
 
As of
September 30
As of
December 31
2022 2021

Assets
Right-of-use assets $ 505 $ 569

Liabilities
Operating lease – current $ 93 $ 91
Operating lease – non-current $ 433 $ 491
Total lease liabilities $ 526 $ 582
Weighted-average remaining lease term and discount rate were as follows:
SCHEDULE OF WEIGHTED AVERAGE REMAINING LEASE TERMS AND DISCOUNT RATES
As of
September 30,
2022
Operating leases weighted average remaining lease term (in years) 5.42
Operating leases weighted average discount rate 3.10 %
Maturities of operating lease liabilities as of September 30, 2022 and December 31, 2021, are as follows:
SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES
 
As of
September 30
As of
December 31
2022 2021

2022 $ 22 $ 99
2023 $ 88 $ 100
2024 $ 88 $ 100
2025 $ 88 $ 100
Thereafter $ 251 $ 285
Total lease payments 537 684
Less: imputed interest (11 ) (102 )
Present value of lease liabilities 526 582
Operating lease expenses amounted to $77 and $60 for the nine months ended September 30, 2022, and September 30, 2021, respectively.
-22-
VIEWBIX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share data)
NOTE 6: GOODWILL AND INTANGIBLE ASSETS
SCHEDULE OF GOODWILL AND INTANGIBLE ASSETS
^(*)
Internal Software (*) Customer Relations Technology Goodwill Total

Cost:
Balance as of January 1, 2022 449 10,720 4,790 12,483 28,442
Adjustments to ultimate parent company earning values (see note 1.c) -
2,356

6,958

5,132

14,446

Additions 14 - - -
14

Acquisitions
Balance as of September 30, 2022 463 13,076 11,748 17,615 42,902

Accumulated amortization:
Balance as of January 1, 2022 - 4,261 3,284 - 7,545
Amortization recognized during the period 85 667 1,228 - 1,980
Balance as of September 30, 2022 85 4,928 4,512 - 9,525

Amortized cost:
As of September 30, 2022 378 8,148 7,236 17,615 33,377

Internal Software (*) Customer Relations Technology Goodwill Total

Cost:
Balance As of January 1, 2021 180 6,080 3,117 2,902 12,279
Cost: beginning balance 180 6,080 3,117 2,902 12,279
Acquisition of Cortex (see note 7) - 4,640 1,673 9,581 15,894
Additions 269 - - - 269
Balance as of December 31, 2021 449 10,720 4,790 12,483 28,442
Cost: ending balance 449 10,720 4,790 12,483 28,442

Accumulated amortization:
Balance as of January 1, 2021 - 3,274 2,424 - 5,698
Accumulated amortization: beginning balance - 3,274 2,424 - 5,698
Amortization recognized during the year - 987 860 - 1,847
Balance as of December 31, 2021 - 4,261 3,284 - 7,545
Accumulated amortization: ending balance - 4,261 3,284 - 7,545

Amortized cost:
As of December 31, 2021 449 6,459 1,506 12,483 20,897
Amortized cost: 449 6,459 1,506 12,483 20,897
~~NOTE 6:~~(*)
(*) During 2020, Gix Media engaged with a subcontractor for the development of an internal software (the “Software”). Gix Media capitalized its developments costs.
Total expenses capitalized as of September 30, 2022, and December 31, 2021, were $463 and $449, respectively.
Since March 1, 2022, the Software is available for use. Accordingly, Gix Media recognized amortization expenses over the estimated useful life of the Software determined to be three years. For the period from March 1, 2022, until September 30, 2022, Gix Media recorded amortization expenses of $85. The Company estimates the useful life of the software to be amortized over 36 months.
-23-
VIEWBIX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share data)
NOTE 7: BUSINESS COMBINATION
Cortex Acquisition
On October 13, 2021, Gix Media acquired 70% (on a fully diluted basis) of the shares of Cortex (“Cortex Transaction”), a private company operating in the field of online media and advertising. In consideration for Cortex Transaction, Gix Media paid NIS 35 million in cash (approximately $11 million), out of which an amount of $0.5 million was deposited in trust for a period of 12 months from the closing date.
The Cortex Transaction also included the following main terms:
● Gix Media will acquire ~~STOCKHOLDERS’ DEFICIT~~30% of Cortex’s shares in three equal stages, (at the beginning of 2023, at the beginning of 2024 and at the beginning of 2025) (the “Remaining Balance Shares”), so that following the completion of the acquisition of all of the Remaining Balance Shares, Gix Media will hold 100% of Cortex’s share capital on a fully diluted basis.
● The obligation (and right) to acquire the Remaining Balance Shares will expire in the event of an initial public offering of Cortex’s shares or in the event of a 50% or more decrease in Cortex’s annual net income, for a period of 12 consecutive months, compared to the net income during the period of 12 months ended July 31, 2021. As of the date of filling of these financial statements, this right and obligation has not expired.
● If Gix Media does not fulfill its obligation to acquire the Remaining Balance Shares, within 90 days from the Designated Acquisition Date as stated above, the selling shareholders of Cortex (the original shareholders of Cortex) will be released from their obligation not to sell or transfer their holdings in Cortex to a third party, in relation to the same stage of the balance of the shares not acquired as aforesaid. If Gix Media does not fulfilled its obligation to acquire the Remaining Balance Shares in a certain stage, its right to acquire the Remaining Balance Shares in the subsequent stage, will be conditioned upon the acquisition of the Remaining Balance Shares not purchased by it in the previous stage as well, provided that the Remaining Balance Shares were not transferred or pledged by the selling shareholders of Cortex to a third party.
The Cortex Transaction was financed by Gix Media’s existing cash balances and substantially by debt through a bank financing in the aggregate amount of $9.5 million, that consists of a line of credit of up to $3.5 million and a long-term loan of $6 million (see note 10).
-24-
VIEWBIX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share data)
NOTE 7: BUSINESS COMBINATION (Cont.)
Cortex Acquisition (Cont.)
Fair Value of Cortex’s Identifiable Assets and Liabilities:
SCHEDULE OF BUSINESS COMBINATION OF ASSETS AND LIABILITIES
Cash and cash equivalents 775
Restricted deposits 29
Trade receivables 10,662
Other accounts receivables 346
Property and Equipment, net 9
Goodwill arising from the acquisition 9,581
Intangible assets 6,134
Total assets 27,716
Accounts payables 8,906
Short-term loan 1,500
Accrued expenses and other current liabilities 854
Deferred taxes and taxes payable 758
Non-Controlling Interests 4,709
Total liabilities 16,727
Total acquisition cost 10,989
Gix Media recorded acquisition costs in the amount of $197 with respect to Cortex Transaction.
Net Cash Flow from the Cortex Transaction:
Consideration paid in cash 10,989
Less cash and cash equivalents and restricted deposits received from acquisition of Cortex (804 )
Total net cash paid 10,185
-25-
VIEWBIX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share data)
NOTE 8: ACCOUNTS PAYABLE
SCHEDULE OF ACCOUNTS PAYABLE

As of
September 30

As of
December 31

2022 2021

Trade payables $ 11,665 $ 10,491
Accrued expenses $ 4,479 $ 6,185
Accounts payable 16,144 16,676
NOTE 9:OTHER PAYABLES
SCHEDULE OF OTHER ACCOUNTS PAYABLE

As of
September 30

As of
December 31

2022 2021
Dividend declared $ 1,000 $ -
Government authorities $ 155 $ 615
Employees and payroll accruals $ 567 $ 655
Other accounts payable $ 140 $ 116
Accounts payable other 1,862 1,386
NOTE 10: LOANS
Bank Financing:
On the the closing date of the Cortex Transaction, Gix Media entered into a financing agreement with Bank Leumi Le Israel Ltd (“Leumi”), an Israeli bank, for the provision of a line of credit in the total amount of up to $3.5 million and a long-term loan totaling $6 million, which Gix Media used to finance the Cortex Transaction (see note 9) (the “Financing Agreement”).
The Financing Agreement included the following main terms:
1) A loan of $6 million to be provided to Gix Media for a period of 48 months at an annual interest rate of LIBOR + 4.12%.
2) A renewable monthly line of credit, of up to $3.5 million to be provided to Gix Media, which will be available for utilization for a period of two years and will be determined on a monthly basis, at 80% of Gix Media’s accounts receivable balance (“Line of Credit”). The amounts that will be withdrawn from the Line of Credit will bear annual interest of LIBOR + 3.2%.
3) Gix Media undertook to meet financial covenants over the life of the loans as follows: (1) the ratio of debt to EBITDA, based on the Gix Media’s consolidated financial statements in all 4 consecutive quarters, will not exceed 2.4 in the first two years and will not exceed 1.75 in the following two years. As of September 30, 2022, and December 31, 2021, Gix Media is in compliance with the financial covenants in connection with the Financing Agreement.
4) As part of the Financing Agreement, Gix Media and the Company provided several liens in favor of Leumi (see Note 12).
-26-
VIEWBIX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share data)
NOTE 10: LOANS (Cont.)
On April 7, 2022, Cortex and Leumi entered into an addendum to an existing loan agreement between the parties, dated August 15, 2021. As part of the addendum to the loan agreement, Leumi provided Cortex with a monthly renewable credit line (the “Additional Credit Line”) in the amount of up to $1,000, which is an addition to the existing credit line of $1,500. The aggregate amount of the credit lines is $2,500 (the “Total Credit Line”). The Total Credit Line was available for utilization by Cortex until September 24, 2022. The Total Credit Line was determined every month at the level of 70% of Cortex’s customers’ balance. The amounts that were drawn from the Additional Credit Line bear an annual interest of SOFR + 3.52%(Overnight Financing Rate Secured, guaranteed daily interest as determined in accordance with the Federal Bank in New York). The Additional Credit Line was required for the purpose of increasing the traffic-acquisition and related costs and as part of the continuation growth trend in Cortex’s business activity. As of September 30, 2022, the Additional Credit Line was not renewed.
On July 25, 2022, Gix Media and Leumi entered into an addendum to the Financing Agreement, according to which, Leumi will provide Gix Media with a loan of $1,500, to be withdrawn at the discretion of Gix Media no later than January 31, 2023 (the “Additional Loan”).
The Additional Loan will bear an annual interest of SOFR + 5.25% to be repaid in 42 equal monthly payments starting from the date of the Additional Loan’s receipt. The Additional Loan will be used to purchase an additional 10% of Cortex’s shares in accordance with Cortex Transaction.
As of the date of issuance of these financial statements, no amounts under the Additional Loan were withdrawn.
Composition of long-term loans, short-term loans and line of credit of the Group:
The following is the composition of the balance of the Group’s loans according to their nominal value:
SCHEDULE OF COMPOSITION OF THE BALANCE OF THE GROUP’S LOANS

As of
Interest rate (*)
September 30
2022

December 31
2021

Short-term bank loan – Gix Media LIBOR + 3.20% 3,500 3,500
Short-term bank loan – Cortex SOFR + 3.52% 1,500 1,500
Long-term bank loan, including current maturity – Gix Media LIBOR + 4.12% 4,725 5,770

Bank Loan 9,725 10,770
(*) The LIBOR interest rate will continue to be published until June 2023 and then will be replaced by the Secured Overnight Financing Rate (“SOFR”).

Maturities of the Group’s bank loans as of September 30, 2022, are as follows:
SCHEDULE OF MATURITIES OF DEBT

2022 6,500 (*)
2023 1,500
2024 1,500
2025 225
Total 9,725
(*) Includes a sum of $5,000 which is a renewable monthly credit.
-27-
VIEWBIX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share data)
NOTE 11: INCOME TAXES
A. Tax rates applicable to the 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.
Viewbix Israel is taxed according to Israeli tax laws. The Israeli corporate tax rate is 23% in the years 2022, 2021 and onwards.
Gix Media and Cortex are recognized as a “Preferred-Technology Enterprise” in accordance with Section 51 of the Encouragement of Capital Investments Law, 1959 and are taxed at a reduced corporate tax rate of 12%.
B. Tax assessments:
As of September 30, 2022, Gix Media has a final tax assessment for tax years prior to and including the tax year ended December 31, 2014.
Cortex has a final tax assessment for tax years prior to and including the tax year ended December 31, 2018.
Viewbix Israel has a final tax assessment for tax years prior to and including the tax year ended December 31, 2015.
During 2022, the Israeli tax authority commenced a tax assessment of Gix Media for the tax years 2017 to 2020. As of the date of issuance of these financial statements, tax assessment have not been completed.
-28-
VIEWBIX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share data)
NOTE 11: TAXES ON INCOME (Cont.)
C. Deferred taxes are comprised of the following components:
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.
Deferred taxes are comprised of the following components:
SCHEDULE OF DEFERRED INCOME TAXES

As of
September 30 As of
December 31
2022 2021

Deferred tax assets
Deferred research and development expenses $ 34 $ 38
Employee compensation and benefits $ 12 $ 19
Operating loss carryforward $ 7,670 $ 7,477
Accrued severance pay $ 12 $ 13

Total deferred tax assets $ 7,728 $ 7,547

Deferred tax liabilities:
Differences between tax basis and carrying values of loans $ - $ 184
Intangible assets associated with business combinations $ 1,853 $ 1,026
Total deferred tax liabilities $ 1,853 1,210

Net deferred tax assets before valuation allowance $ 5,875 $ 6,337
Valuation allowance (7,666 ) (7,230 )
Net deferred tax liabilities $ 1,791 $ 893
As of September 30, 2022, the Company has recorded a valuation allowance of $7,666 in respect of the deferred tax assets resulting primary from tax loss carryforward of Viewbix Inc., as management currently believes these deferred tax assets will not be released in the foreseeable future.
-29-
VIEWBIX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share data)
NOTE 11:TAXES ON INCOME (Cont.)
Income tax expenses are comprised as follows:
SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFITS)
2022 2021

For the nine months ended
September 30

2022 2021

Current tax expenses $ 393 $ 78
Tax benefit in respect of prior years $ (102 ) $ (54 )
Deferred tax income $ (227 ) $ (65 )
Total $ 63 $ (41 )
2022 2021

For the three months ended
September 30

2022 2021

Current tax expenses $ 130 $ (23 )
Taxes expenses (benefit) in respect of previous years $ 21 $ (18 )
Deferred tax income $ (96 ) $ (40 )
Total Income tax expenses $ 55 $ (81 )
D.Reconciliation of the theoretical tax expenses to the actual tax expenses:
A reconciliation between the theoretical tax expense, assuming all income is taxed at the statutory tax rate applicable to income of the Company, and the actual tax expense as reported in the statement of operations is as follows:
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION
2022 2021
For the nine months ended
September 30
2022 2021

Income before income taxes as reported in the consolidated statements of operations $ 33 $ 44
Statutory tax rate in USA 21 % 21 %
Theoretical tax expense $ 7 $ 9
Increase (decrease) in tax expenses resulting from:
Lower tax rates for preferred technology enterprises (322 ) (29 )
Non-deductible expenses 5 1
Tax benefits in respect of prior years (102 ) (54 )
Change in valuation allowance 436 58
Others 39 (26 )
Taxes on income $ 63 $ (41 )
-30-
VIEWBIX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share data)
NOTE 11:TAXES ON INCOME (Cont.)
E. Available carryforward tax losses:
As of September 30, 2022 Viewbix Israel incurred operating losses of approximately $15,015 which may be carried forward and offset against taxable income in the future for an indefinite period.
As of June 30, 2022 the Company generated net operating losses in the U.S. of approximately $19,000. Net 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.
F. Loss from continuing operations, before taxes on income, consists of the following:
SCHEDULE OF LOSS (INCOME) FROM CONTINUING OPERATIONS, BEFORE TAXES ON INCOME
2022 2021 2022 2021

For the nine months ended
September 30

For the three months ended
September 30

2022 2021 2022 2021

USA $ 385 $ 69 $ 190 $ 27
Israel 574 185 432 71
Total loss before taxes on income $ 959 $ 254 $ 622 $ 98
NOTE 12:COMMITMENTS AND CONTINGENCIES
Liens:
As of September 30, 2022, the Company has provided several liens under Gix Media’s Financing Agreement with Leumi in connection with the Cortex Transaction, as follows: (1) a guarantee to Bank Leumi of all of Gix Media’s obligations and undertakings to Bank Leumi unlimited in amount; (2) a subordination letter signed by the company to Leumi Bank; (3) A first ranking all asset charge over all of the assets of the Company; and (4) a Deposit Account Control Agreement over the Company’s bank accounts.
Gix Media has provided several liens under the Financing Agreement with Leumi in connection with the acquisition of Cortex Transaction, as follows: (1) a floating lien on Gix Media’s assets; (2) a lien on Gix Media’s bank account in Leumi; (3) a lien on Gix Media’s rights under the Cortex Transaction; (4) a fixed lien on Gix Media’s intellectual property; and (5) a lien on Gix Media’s full holdings in Cortex.
Gix Media restricted deposits in the amount of $195are used as a security in respect of credit cards, bank guaranties, office lease agreement and hedge transactions on the USD exchange rate.
Cortex has a restricted deposit in the amount of $27 which is used as a security in respect of its leased offices.
-31-
VIEWBIX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share data)
NOTE 13:SHAREHOLDERS’ EQUITY
A.Ordinary Shares:

Ordinary shares confer the right to: (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~~will 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.~~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 ofB. ~~3,000,000~~ ~~shares of Common Stock, at a purchase price of $0.01~~ ~~per share, and for an aggregate purchase price of $30,000. In accordance with the terms of the Loan, the company repaid the interest on the Principal Amount~~ 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. 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.~~Warrants:
~~Warrants~~
The following table summarizes information of outstanding warrants as of ~~December 31, 2021:~~September 30, 2022:
SUMMARY OF OUTSTANDING WARRANTS
Warrants Warrant Term Exercise Price Exercisable Warrants Warrant Term Exercise Price Exercisable

Class J Warrants 3,649,318 July 2029 0.48 3,649,318 130,333 July 2029 13.44 130,333
Class K Warrants 3,649,318 July 2029 0.80 3,649,318 130,333 July 2029 22.4 130,333

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 USU.S. GAAP criteria for equity classification. ~~During 2020,~~
~~50,000~~ ~~class H warrants,~~
~~38,095~~C. ~~class I warrants~~Reverse Stock Split:
On August 31, 2022, the Company filed the Amended COI with the Secretary of State of Delaware to effect a 28 to 1 reverse stock split of the Company’s outstanding shares of Common Stock. As a result of the reverse stock split, every 28 shares of the Company’s outstanding Common Stock prior to the effect of the amended COI was combined and ~~142,857~~ ~~Class G warrants expired.~~reclassified into one share of the Company’s shares of Common Stock. The number of authorized share capital of the Company’s Common Stock and par value of the shares remained unchanged. All share and stock options information related to the Company, was adjusted to reflect the reverse stock split on a retroactive basis.

-32-
~~-16-~~
VIEWBIX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
U.S. dollars in thousands (except share data)
~~NOTE 7:~~ ~~FINANCIAL EXPENSES, NET~~
~~Composition:~~NOTE 13: SHAREHOLDERS’ EQUITY (Cont.)
~~SCHEDULE OF FINANCIAL EXPENSES, NET~~

For the three months ended
March 31

2022 2021
Unaudited
Exchange rate differences 6 (1 )
Interests on loans 69 4
Other - 4
75 7
D.
~~NOTE 8:~~ ~~TAXES ON INCOME~~
~~The Company is subject to income taxes under the Israeli and U.S. tax laws~~Share option plan:

~~Tax rates applicable~~After the completion of Gix Media’s acquisition by the Parent Company, the Parent Company granted options to Gix Media’s employees. These options entitle the ~~income~~employees to purchase ordinary shares of the ~~Company:~~Parent Company that its shares are traded on Tel-Aviv stock exchange.

~~Viewbix Inc.~~A summary of Gix Media’s employee share options activity and related information 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 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~~STOCK OPTION ACTIVITY
As of
March 31 As of
December 31
2022 2021

Deferred R&D expenses $ 164 $ 167
Operating loss carryforward 32,968 33,055
Differences between tax basis and carrying values of loans (see note 4) $ (184 ) $ (184 )
Total $ 32,948 $ 33,038

Net deferred tax asset before valuation allowance $ 7,208 $ 7,230
Valuation allowance (7,208 ) (7,230 )
Net deferred tax asset $ - $ -
As of September 30, 2022 As of December 31, 2021
Number of options Weighted average exercise price Number of options Weighted average exercise price
$ $
Options outstanding at beginning of the year 737,915 1.61 1,120,000 1.56
Changes during the period:
Granted - - - -
Exercised - - - -
Expired or forfeited (577,915 ) 1.41 (382,085 ) 1.61

Outstanding at end of period 160,000 1.41 737,915 1.61
Options exercisable at end of period 157,086 1.41 504,585 1.61
The following tables summarize additional information regarding the Gix Media’s outstanding and exercisable options as of December 31, 2021:
SCHEDULE OF OPTION OUTSTANDING AND EXERCISABLE
Options outstanding
As of September 30, 2022
Range of
exercise price Number of
options Weighted average
exercise price Weighted
average remaining
contractual life (years)
$ $
1.41 160,000 1.41 5.85
Options Exercisable
As of September 30, 2022
Range of
exercise price Number of
options Weighted average
exercise price Weighted
average remaining
contractual life (years)
$ $
1.41 157,086 1.41 5.82

-33-
~~-17-~~

VIEWBIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

~~NOTE 8:~~

~~TAXES ON INCOME (Cont.)~~

NOTE 13: SHAREHOLDERS’ EQUITY (Cont.)

The Company recognized stock-based compensation expenses related to employee’s stock options in the statement of operations as follows:

SCHEDULE OF STOCK BASED COMPENSATION EXPENSES

	2022			2021			2022		2021
	For the nine months ended September 30						For the three months ended September 30
	2022			2021			2022		2021

Research and development		31			(37	)		29		(3	)
Selling and marketing		11			(6	)		3		-
General and administrative		(2	)		5			-		-

Total		40			(38	)		32		(3	)

E.Dividends:

During the nine months ended September 30,2022, Cortex distributed a dividend in the amount of $1,195 to the non-controlling interests.

On September 30, 2022, Gix Media declared a dividend in a total amount of $1,000. As of ~~March 31,~~September 30, 2022, the ~~Company has provided valuation allowances of $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 thandividend was not ~~that the deferred tax regarding the loss carryforward and other temporary differences will not be realized in the foreseeable future.~~distributed (see note 9).

NOTE 14:ADDITIONAL INFORMATION REGARDING TO PROFIT AND LOSS ITEMS

~~Available carryforward tax losses:~~Composition:

~~As of March 31, 2022, Viewbix Israel incurred operating losses in Israel of approximately $14,263~~ ~~which may be carried forward and offset against taxable income in the future for an indefinite period.~~

~~As of March 31, 2022 the Company generated net operating losses in the U.S. of approximately $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~~

For the three months
ended March 31
2021 2022

USA $ 93 $ 27
Israel 76 53
$ 169 $ 80

SCHEDULE OF INFORMATION REGARDING TO PROFIT AND LOSS

A. Research and development expenses:

	2022		2021			2022		2021
	For the nine months ended September 30					For the three months ended September 30
	2022		2021			2022		2021

Salaries and related expenses		1,633		1,124			519		327
Professional services and subcontractors		906		297			282		96
Share-based compensation	$	31	$	(37	)	$	29	$	(3	)
Others		387		146			157		51
Research and development expenses	$	2,957	$	1,530		$	987	$	471

-34-

~~-18-~~

VIEWBIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

~~NOTE 9:~~

~~LOSS PER SHARE-BASIC AND DILUTED~~

NOTE 14:ADDITIONAL INFORMATION REGARDING TO PROFIT AND LOSS ITEMS (Cont.)

B.Sales and marketing expenses:

	2022		2021			2022		2021
	For the nine months ended September 30					For the three months ended September 30
	2022		2021			2022		2021

Salaries and related expenses	$	1,401	$	482		$	476	$	179
Share-based compensation		11		(6	)		3		-
Advertising and marketing expenses		363		17			124		7
Other	$	78	$	91		$	25	$	29
Sales and marketing expenses:	$	1,853	$	584		$	628	$	215

C.General and administrative expenses:

	2022			2021		2022		2021
	For the nine months ended September 30					For the three months ended September 30
	2022			2021		2022		2021

Salaries and related expenses		691			545		243		183
Professional services		394			279		140		104
Share-based compensation		(2	)		5		-		-
Other	$	243		$	78	$	67	$	26
General and administrative	$	1,326		$	907	$	450	$	313

~~Composition:~~D.Financial expenses, net:

~~SCHEDULE OF~~Financial income:

	2022		2021		2022		2021
	For the nine months ended September 30				For the three months ended September 30
	2022		2021		2022		2021

Exchange rate differences	$	124	$	45	$	55	$	103
Interest income from loan to related party		110		108		39		40

Financial income	$	234	$	153	$	94	$	143

-35-

VIEWBIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

NOTE 14:ADDITIONAL INFORMATION REGARDING TO PROFIT AND LOSS ~~PER SHARE-BASIC AND DILUTED~~ITEMS (Cont.)

2022 2021

For the three months ended
March 31

2022 2021
Unaudited

Basic and diluted:

Net loss attributable to ordinary stockholders 169 80

Weighted-average ordinary shares 34,753,669 34,753,669

Loss per share-basic and diluted 0.005 0.002

Financial expenses:

	2022		2021		2022		2021
	For the nine months ended September 30				For the three months ended September 30
	2022		2021		2022		2021

Bank interest and fees	$	115	$	20	$	58	$	10
Interest expense from loans		605		21		240		7
Exchange rate differences		846		2		86		-
Other		42		19		11		5
Financial expenses	$	1,608	$	62	$	395	$	22

NOTE 15:LOANS - PARENT COMPANY

~~NOTE 10:~~

~~COVID-19 PANDEMIC IMPLICATIONS~~

A. Loan to Parent Company:

SCHEDULE OF LOAN TO PARENT COMPANY

	As of September 30		As of December 31
	2022		2021

Loan to Parent Company	$	7,096	$	6,384

The ~~COVID-19 pandemic which originated~~balance with the Parent Company represents a balance of an intercompany loan under a loan agreement signed between Gix Media and the Parent Company (the “Loan”) on March 22, 2020. The Loan bears interest at a rate to be determined from time to time in ~~China~~accordance with Section 3(j) of the Income Tax Ordinance, new version, and the Income Tax Regulations (Determination of Interest Rate for the purposes of Section 3(j), 1986) or according to a market interest rate decision as agreed between the parties.

During the nine months ended September 30, 2022, and 2021, Gix Media recognized interest income in ~~late 2019, has resulted in a widespread health crisis that has adversely affected businesses, economies and financial markets worldwide, placed constraints on~~respect of the ~~operations of businesses, decreased consumer mobility and activity, and caused significant economic volatility~~Loan in the ~~United States, Israel~~ amount of $110 and ~~international capital markets.~~ $108 respectively.

B. Loan from Parent Company:

SCHEDULE OF LOAN TO PARENT COMPANY

	As of September 30		As of December 31
	2022		2021

Loan from Parent Company	$	2,527	$	2,116

The ~~COVID-19 pandemic has caused an economic recession, high unemployment rates~~balance with the Parent Company represents certain expenses with respect to the Company’s ongoing operation (mainly salary expenses and other ~~disruptions, both in~~general and administrative expenses) which were financed by the ~~United States, Israel~~Parent Company (the “Intercompany Balance”).

The Company entered into an agreement with the Parent Company, according to which, effective as of December 31, 2021, the Intercompany Balance was modified into a loan, which may be increased from time to time, upon the written mutual consent between the Company and the ~~rest~~Parent Company. The Parent Company loan bears interest at a rate equivalent to the minimal interest rate recognized and attributed by the Israel Tax Authority and will be repaid, together with the accrued interest, in one payment until December 31, 2022, unless extended upon mutual consent of the ~~world. The~~ Company ~~is actively monitoring~~and 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. The 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, the continued spreadParent Company.

As of ~~COVID-19, and any additional measures taken by governments, health officials or~~September 30, 2022, no amounts were repaid by the Company ~~in response~~ to ~~such spread, could have on~~ the ~~Company’s business, results of operations and financial condition.~~Parent Company.

NOTE 16:MAJOR CUSTOMERS

The following table sets forth the customers that represent 10% or more of the Group’s total revenues in each of the periods presented below:

SCHEDULE OF TOTAL REVENUES

	For the nine months ended September 30						For the three months ended September 30
	2022			2021			2022			2021

Customer A		26	%		98	%		19	%		97	%
	$	17,340		$	23,337		$	4,242		$	7,863
Customer B		18	%		-			20	%		-
	$	12,240		$	-		$	4,460		$	-

-36-

VIEWBIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

NOTE 17:SEGMENT REPORTING

The Group operates in two different segments in such a way that each company in the Group operates as a separate business segment.

Search segment- the search segment develops a variety of technological software solutions, which perform automation, optimization and monetization of internet campaigns, for the purposes of acquiring and routing internet user traffic to its customers.

Digital content segment- the digital content segment is engaged in the creation and editing of content, in different languages, for different target audiences, for the purposes of generating revenues from leading advertising platforms, including Google, Facebook, Yahoo and Apple, by utilizing such content to obtain internet user traffic for its advertisers.

The segments’ results include items that directly serve and/or are used by the segment’s business activity and are directly allocated to the segment. As such they do not include depreciation and amortization expenses for intangible assets created at the time of the purchase of those companies, financing expenses created for loans taken for the purpose of purchasing those companies, and therefore these items are not allocated to the various segments.

Segments’s assets and liabilities are not reviewed by the CODM and therefore were not reflected in the segment reporting.

A.Segments revenues and operating results:

SCHEDULE OF SEGMENTS REVENUES AND OPERATING RESULTS

	Search segment			Digital content segment		Adjustments (See below)			Nine months ended September 30, 2022
Revenues from external customers		17,600			48,515		-			66,115
Depreciation and amortization		-			-		2,051			2,051

Segment operating income		316			3,586		(2,495	)		1,407
Financial expenses, net		99			1		1,274			1,374
Segment Income (loss), before income taxes		217			3,585		(3,769	)		33
Taxes on income		(91	)		393		(239	)		63
Segment net income (loss)		308			3,192		(3,530	)		(30	)

-37-

VIEWBIX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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

NOTE 17:SEGMENT REPOTING (Cont.)

	Search segment		Digital content segment		Adjustments (See below)			Three months ended September 30, 2022
Revenues from external customers		5,702		17,076		-			22,778
Depreciation and amortization		-		-		736			736

Segment operating income		147		1,265		(985	)		427
Financial expenses, net		32		27		242			301
Segment Income (loss), before income taxes		115		1,238		(1,227	)		126
Taxes on income		14		132		(91	)		55
Segment net income (loss)		101		1,106		(1,136	)		71

B.Reconciliation between segments operating results to total operating results in financial statements:

SCHEDULE OF RECONCILIATION BETWEEN SEGMENTS OPERATING RESULTS

	Nine months ended September 30			Three months ended September 30
	2022			2022

Segments total operating results	$	3,902		$	1,412
Depreciation and amortization expenses not attributable to segments (*)	$	(2,051	)	$	(736	)
General and administrative and other costs not attributable to the segments (**)	$	(544	)	$	(308	)
Finance expenses net, not attributable to the segments (***)		(1,274	)		242
Income (expenses), before income taxes	$	33		$	126

(*)	Mainly consist of technology and customer relations amortization costs from business combinations (see note 7).

(**)	Mainly consist of salary and related expenses, professional consulting expenses and other expenses in connection with the business combinations and the Reorganization Transaction.

(***)

Mainly consist of financial expenses from the Financing Agreement of bank loans taken for business combinations (see note 10).

~~NOTE 11:~~

~~SUBSEQUENT EVENTS~~

~~Gix Merger~~

NOTE 18: SUBSEQUENT EVENTS

On December 5, 2021, the Company entered into the Merger Agreement with Gix Media and Merger 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 not been fulfilled yet.

Subject to the terms and conditions of the Merger Agreement, at the Merger Effective Date (as defined in the Merger Agreement) all outstanding ordinary shares of Gix Media, having no par value (the “Gix Media Shares”) will be converted into shares of Common Stock, such that immediately following the Gix Merger, holders of Gix Media Shares will hold 90% of the Company’s capital stock on a fully diluted basis. The Merger Agreement contains customary representations, warranties and covenants made by each of the Company, Gix Media and Merger 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 certain additional closing conditions, including, among other things, (i) the Company filing an amendment to its 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 and (iv) obtaining a tax pre-ruling from the Israeli Tax Authority relating to the Agreement.

~~Reverse Stock Split~~

In ~~connection with~~October 2022, Cortex distributed a dividend in the ~~Gix Merger, on February 13, 2022, the requisite majority~~amount of ~~the Company’s stockholders approved certain amendments~~$127 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.non-controlling interests.

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.

-38-

~~-19-~~

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,~~September 30, 2022 and 2021, and the related statements of ~~comprehensive loss,~~statement operation, statement of changes in ~~stockholders’~~shareholders’ equity ~~(deficit)~~ and statements of cash flows for the nine and 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 short-term and long-term implications caused by our recent cost reduction efforts, including, but not limited to, our growing inability to secure and maintain customers on the basis of insufficient capital resources;

●	sustained turnover of key management;

●	our history of recurring losses and negative cash flows from operating activities, significant future commitments and the uncertainty regarding the adequacy of our liquidity to pursue our complete business ~~objectives, and substantial doubt regarding our ability to continue as a going concern;~~objectives;

●	our need to raise additional capital to meet our business requirements in the future and such capital raising may be costly or difficult to obtain and could dilute out ~~stockholders’~~shareholders’ ownership interests;

●	the impact of the COVID-19 pandemic on our business plan and the global economy;

●	our ability to adequately protect our intellectual property; ~~and~~

●	our ability to successfully integrate the business of Gix MediaLtd. (“Gix Media”), our wholly owned subsidiary;

●	Subsidiaries’ future performance;

●	entry of new competitors and products and potential technological obsolescence of our products.

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 17, 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.

~~-20-~~

Overview and background

Viewbix Inc. (f/k/a Virtual Crypto Technologies, Inc., f/k/a Emerald Medical Applications Corp.) (the “Registrant” or the “Company”) isand its subsidiaries (the “Group”) operate in the field of digital advertising in two main areas of activity: search and digital content. The Group develops and markets a variety of technological software solutions that automate, optimize and monetize online campaigns. The Group, through its subsidiary, Cortex Media Group Ltd. (“Cortex”), also creates, edits and markets content in various languages to different target audiences for the purpose of generating advertising revenue on the content, based on the world’s leading advertising platforms, such as Google, Facebook, Yahoo, Apple and more. The Group’s technological tools enable advertisers and website owners to earn more from their advertising campaigns and generate additional profits from their sites.

-39-

The Company was incorporated in the State of Delaware on August 16, 1985, under a predecessor name, The InFerGene Company (“InFerGene Company”). On August 25, 1995, a wholly owned subsidiary of InFerGene Company merged with Zaxis International, Inc., an ~~interactive video technology~~Ohio corporation, which following such merger, the surviving entity, InFerGene Company, changed its name to Zaxis International, Inc (“Zaxis”).

On March 16, 2015, Zaxis and ~~data platform that provides~~Emerald Medical Applications Ltd., a private limited liability company (“Emerald Israel”) executed a share exchange agreement, which closed on July 14, 2015, and Emerald Israel became the Company’s wholly-owned subsidiary. Accordingly, on September 14, 2015, the Company changed its ~~clients~~name to Emerald Medical Applications Corp. 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.

On January 17, 2018, the Company formed a new wholly-owned subsidiary under the laws of the State of Israel, Virtual Crypto Technologies Ltd. (“VCT Israel”). On February 22, 2018, the Company’s name was changed from Emerald Medical Applications Corp. to Virtual Crypto Technologies, Inc. to reflect its new operations and business focus. On January 27, 2020, VCT Israel was sold to a third party for NIS 50,000 ($14,459).

On February 7, 2019, the Company entered into a share exchange agreement (the “Recapitalization Transaction”) with ~~deep insights into their video marketing performance as well as~~Gix Internet Ltd., an company organized under the ~~effectiveness~~laws of the State of Israel (“Gix” or “parent company”), pursuant to which, Gix assigned, transferred and delivered 99.83% of its ~~messaging.~~holdings in Viewbix Ltd., a company organized under the laws of the State of Israel (“Viewbix Israel”), to the Company in exchange for shares of restricted common stock, par value $0.0001 per share (“Common Stock”) of the Company, which resulted in Viewbix Israel becoming a subsidiary of the Company. In connection with the Recapitalization Transaction, effective as of July 26, 2019, the Company’s name was changed from Virtual Crypto Technologies, Inc. to Viewbix Inc.

On September 19, 2022, the Company consummated the Reorganization Transaction (as further described below), which resulted in Gix Media Ltd. (“Gix Media”) becoming a wholly owned subsidiary of the Company. Following the closing of the Reorganization Transaction, the Company intends to incorporate Gix Media’s technology into its operations while aiming to expand its growth potential in the search and content monetization space. Gix Media’s business operations include both (i) the provision of services to the world’s leading search engines through the development, marketing and distribution of free software to many Internet users, and (ii) editing and marketing of content in different languages to different target markets, for the purpose of monetizing advertisements on digital marketing and advertising platforms.

Recent Developments

~~Merger~~Appointments of Executive Officers and Director

On September 19, 2022, in connection with the Reorganization Transaction, the Company’s board of directors appointed Mr. Eliyahu Yoresh, Mr. Amitay Weiss and Mr. Liron Carmel as directors of the Company, as representatives of Gix Media.

On June 28, 2022, Mr. Amihay Hadad, the Company’s current chief executive officer, tendered his resignation from his position as chief financial officer, effective June 28, 2022, and concurrent therewith, the Company’s board of directors appointed Mr. Shahar Marom to serve as the Company’s new chief financial officer, effective July 1, 2022.

On June 13, 2022, the Company’s board of directors appointed Mr. Yoram Baumann as a director of the Company and as chairman of the board of directors of the Company.

-40-

Reorganization Transaction with Gix Media Ltd.

On December 5, 2021, the Company entered into a certain Agreement and Plan of Merger (the ~~“Merger Agreement”~~“Reorganization Transaction”) with Gix Media, ~~Ltd.,~~ an Israeli company and the majority-owned subsidiary of Gix, ~~Internet Ltd. (“Parent Company”), in~~ the ~~field of MarTech (Marketing Technology) solutions, primarily search and content monetization (“Gix Media”)~~parent company and Vmedia Merger Sub Ltd., an Israeli company and wholly-owned subsidiary of the Company (“Merger Sub”), pursuant to which, following the ~~Merger (as defined herein),~~Reorganization Transaction, and upon satisfaction of additional closing conditions, Merger Sub will merge with and into Gix Media, with Gix Media being the surviving entity and a wholly-owned subsidiary of the Company. Prior to the closing of the Reorganization Transaction, Gix Media was a majority-owned subsidiary of Gix, which held approximately 58% of the Common Stock of the Company, ~~(the “Gix Merger”).~~on a fully diluted basis.

~~Subject to~~On September 19, 2022, the ~~terms~~Reorganization Transaction, was consummated (the “Closing”) and ~~conditions of the Merger Agreement, at the Merger Effective Date (as defined in the Merger Agreement)~~as a result, all outstanding ordinary shares of Gix Media, having no par value (the “Gix Media Shares”) ~~will be converted into~~were exchanged for shares of the Company’s Common ~~Stock, such that immediately following~~Stock. Following the ~~Gix Merger,~~Reorganization Transaction, holders of the Gix Media Shares ~~will hold~~held 90% of the Company’s ~~capital stock~~Common Stock on a fully diluted basis, with Gix holding 76.67% of the Common Stock on a fully diluted basis.

The ~~Merger Agreement also contains customary representations, warranties and covenants made by each~~following illustrates the corporate structure of the Company ~~Gix Media~~prior to and ~~Merger Sub.~~following the Reorganization Transaction.

Following the ~~Gix Merger,~~Reorganization Transaction, the board of directors of the Company ~~is expected to consist~~consists of six (6) directors, ~~and will be~~ comprised of ~~four (4)~~the three (3) new directors ~~to be~~ appointed by Gix Media, Eliyahu Yoresh, Amitay Weiss and Liron Carmel, who ~~will join~~joined the Company’s ~~two currently-serving~~three currently serving directors, Yoram Baumann, Amihay Hadad and Alon Dayan.

In connection with the Closing, the Company filed an Amended and Restated Certificate of Incorporation with the Secretary of State of Delaware, effective as of August 31, 2022, pursuant to which the Company, among other things, effected a reverse stock split of its Common Stock at a ratio of 1-for-28. The foregoing description of the Amended and Restated Certificate of Incorporation does not purport to be completed and is qualified in its entirety by reference to the full text of the Amended and Restated Certificate of Incorporation, of which was filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 6, 2022 and is incorporated by reference herein.

Additionally, and in connection with the Closing, the Company adopted Amended and Restated Bylaws, a copy of which was filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K and is incorporated by reference herein.

Acquisition of Cortex Media Group Ltd.

On ~~December 21,~~October 13, 2021, Gix Media acquired 70% (on a fully diluted basis) of the ~~shareholders~~share capital of ~~each~~Cortex Media Group Ltd. (“Cortex” and the “Cortex Acquisition”, respectively), a private company operating in the field of online media and advertising. In consideration for the Cortex Acquisition, Gix Media paid NIS 35 million in cash (approximately $11 million), out of which an amount of $0.5 million was deposited in trust for a period of 12 months from the closing date. The Cortex Acquisition also includes the obligation (and right) of Gix Media ~~and Merger Sub approved~~to acquire 30% of Cortex’s share capital in three equal stages, each at the ~~Merger Agreement. Consummation~~beginning of the ~~Gix Merger is subject to certain additional closing conditions, including, among other things, (i)~~years 2023, 2024 and 2025 (“Remaining Balance Shares”), such that following the Company filing an amendment to its 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) conversioncompletion of the ~~Company’s outstanding convertible instruments into restricted shares~~acquisition of ~~Common Stock and (iv) obtaining~~all the Remaining Balance Shares, Gix Media will hold 100% of Cortex’s share capital on a ~~tax pre-ruling from the Israeli Tax Authority relating to the Agreement.~~fully diluted basis.

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 StockCortex Acquisition, at a ratio of 1-for-28 (the “Planned Reverse Split”), (iii) a staggered board structure, and (iv) certain other provisions therein. The Company intends to effect the foregoing amended and restated certificate of incorporation upon the closing date, Gix Media entered into a financing agreement with Bank Leumi Le Israel Ltd (“Leumi”), for the provision of a line of credit in the total amount of up to $3.5 million and a long-term loan totaling $6 million, which Gix ~~Merger. Additionally, on February 25, 2022,~~Media used to finance the ~~Company filed a Schedule 14C Information Statement with the SEC, whereby it reported the foregoing approvals by the requisite majority of the Company’s stockholders.~~Cortex Acquisition (the “Financing Agreement”).

-41-

Results of Operations

Results of Operations During the ~~Three~~Nine Months Ended ~~March 31,~~September 30, 2022 as Compared to the ~~Three~~Nine Months Ended ~~March 31,~~September 30, 2021

Our revenues were $1$66,115 thousand for the ~~three~~nine months ended ~~March 31,~~September 30, 2022, compared to $8$23,874 thousand during the ~~three months ended March 31, 2021.~~same period in the prior year. The reason for the ~~decrease during~~increase in the ~~three~~nine months ended ~~March 31,~~September 30, 2022, is due to the ~~Company’s cost-reduction measures that were initially implemented beginning~~Cortex Acquisition on ~~January 1, 2021.~~October 13, 2021, therefore, the financial statements of the Company for the nine months ended September 30, 2022, include Cortex’s financial statements as compared to the same period in the prior year which does not include Cortex’s financial statements.

~~-21-~~

Our traffic-acquisition and related costs buy expenses were $56,400 thousand for the nine months ended September 30, 2022, as compared to $19,582 thousand during the same period in the prior year. The reason for the increase in the nine months ended September 30, 2022, is due to the inclusion of Cortex’s financial statements.

Our research and development expenses were ~~$14~~$2,957 thousand for the ~~three~~nine months ended ~~March 31,~~September 30, 2022, ~~which is a slight decrease as compared to $16 thousand during~~and $1,530 for the ~~three~~nine months ended ~~March 31,~~September 30, 2021. The reason for the increase in the nine months ended September 30, 2022, is due to the inclusion of Cortex’s financial statements.

Our selling and marketing expenses were $0$1,853 thousand for the ~~three~~nine months ended ~~March 31,~~September 30, 2022, ~~which is a slight decrease~~ as compared to $2$584 thousand during the ~~three~~same period in the prior year. The reason for the increase in the nine months ended ~~March 31, 2021.~~September 30, 2022 is due to the inclusion of Cortex’s financial statements.

Our general and administrative expenses were ~~$68~~$1,326 thousand for the nine months ended September 30, 2022, as compared to $907 thousand during the same period in the prior year. The reason for the increase in the nine months ended September 30, 2022, is due to the inclusion of the Cortex’s financial statements.

Our depreciation and amortization expenses increased to $2,051 thousand for the nine months ended September 30, 2022, as compared to $1,289 thousand during the same period in the prior year. The reason for the increase in the three months ended ~~March 31,~~September 30, 2022, ~~slight increase as compared to~~is that the ~~$63 thousand for~~Company recorded depreciation and amortization expenses in connection with the ~~three months ended March 31,~~Cortex Acquisition on October 13, 2021.

Our other expenses were ~~$13~~$121 thousand for the ~~three~~nine months ended ~~March 31,~~September 30, 2022, compared to $0$26 thousand during the ~~three~~nine months ended ~~March 31,~~September 30, 2021. ~~Our other expenses are due to~~The reason for the increase during the nine months ended September 30, 2022, is an increase in the expenses in connection with the ~~Merger Agreement.~~Reorganization Transaction.

Our net financial expenses were ~~$75~~$1,374 thousand for the nine months ended September 30, 2022, compared to $91 thousand net financial income during the same period in the prior year. The reason for the increase during the nine months ended September 30, 2022 is mainly due to: (1) financial expenses in connection with the Financing Agreement as part of the Cortex Acquisition on October 13, 2021 and (2) the increase of the USD to NIS exchange rate in the period ended September 30, 2022.

Our tax expenses were $63 thousand for the nine months ended September 30, 2022, as compared to $41 thousand income tax during the same period in the prior year. The reason for the increase during the nine months ended September 30, 2022 is due to the inclusion of Cortex’s financial statements.

Results of Operations During the Three Months Ended September 30, 2022 as Compared to the Three Months Ended September 30, 2021

Our revenues were $22,778 thousand for the three months ended ~~March 31,~~September 30, 2022, compared to ~~net~~$8,079 thousand during the same period in the prior year.

Our traffic-acquisition and related costs were $19,464 thousand for the three months ended September 30, 2022, as compared to $6,738 thousand during the same period in the prior year. The reason for the increase in the three months ended September 30, 2022, is due to the inclusion of the Cortex’s financial ~~income~~statements.

-42-

Our research and development expenses were $987 thousand for the three months ended September 30, 2022, as compared to $474 thousand during the same period in the prior year. The reason for the increase in the three months ended September 30, 2022 is due to the inclusion of $7Cortex’s financial statements.

Our selling and marketing expenses increase to $628 thousand for the three months ended September 30, 2022, as compared to $215 thousand during the same period in the prior year. The reason for the increase in the three months ended September 30, 2022 is due to the inclusion of Cortex’s financial statements.

Our general and administrative expenses increased to $450 thousand for the three months ended September 30, 2022, as compared to $313 thousand during the same period in the prior year. The reason for the increase in the three months ended September 30, 2022, is due to the inclusion of Cortex’s financial statements.

Our depreciation and amortization expenses increased to $736 thousand for the three months ended September 30, 2022, as compared to $427 thousand during the same period in the prior year. The reason for the increase in the three months ended September 30, 2022, is that the Company recorded depreciation and amortization expenses in connection with the Cortex Acquisition on October 13, 2021.

Our other expenses were $86 thousand for the three months ended September 30, 2022, compared to $26 thousand during the three months ended ~~March 31,~~September 30, 2021. The reason for the increase during the three months ended ~~March 31,~~September 30, 2022, is the increase in the expenses in connection with the Reorganization Transaction.

Our net financial expenses were $301 thousand for the three months ended September 30, 2022, compared to $121 thousand net financial income during the same period in the prior year. The reason for the increase during the three months ended September 30, 2022, is mainly due to ~~certain~~ financial expenses in connection with the ~~loan~~Financing Agreement as part of the Cortex Acquisition on October 13, 2021, and the increase of the USD to NIS exchange rate in the three months ended September 30, 2022.

Our tax expenses were $55 thousand for the three months ended September 30, 2022, as compared to $81 income tax thousand during the same period in the prior year. The reason for the change in the three months ended September 30, 2022, is due to the ~~Parent Company, which was signed during the quarter ended December 31, 2021.~~inclusion of Cortex’s financial statements.

-43-

Liquidity and Capital Resources

As of ~~March 31,~~September 30, 2022, we had current assets of ~~$115~~$28,140 thousand consisting of ~~$57~~$3,609 thousand in cash and cash equivalents, $9$223 thousand restricted deposit, $16,398 thousand in ~~trade receivables, $21~~accounts receivable, $814 thousand in other accounts ~~receivables~~receivable and ~~$28~~$7,096 thousand in ~~prepaid expenses.~~loan to parent company.

As of ~~March 31,~~September 30, 2022, we had ~~$2,564~~non-current assets of $34,334 thousand consisting of $73 thousand in severance pay funds, $62 thousand in deferred taxes, $505 thousand in operating lease right-of-use assets, $317 thousand in property and equipment net, $15,762 thousand in intangible assets, net and $17,615 thousand in goodwill.

As of September 30, 2022, we had $27,126 thousand in current liabilities consisting of ~~$16~~$16,144 thousand in ~~trade payables, $239~~accounts payable, $1,862 thousand in other ~~accounts payable and accrued liabilities, $69~~payables, $6,569 thousand in short term ~~loans~~loan and acurrent maturities of long-term loan, ~~to the Parent Company~~$93 thousand in ~~the amount~~operating lease liabilities – short term and $2,527 thousand in loan from parent company.

As of ~~$2,240.~~September 30, 2022, we had $5,687 thousand in non-current liabilities consisting of $176 thousand in accrued severance pay, $3,225 thousand long-term loan, $433 thousand in operating lease liabilities - long term and $1,853 thousand in deferred taxes.

As of December 31, 2021, we had current assets of ~~$156~~$29,245 thousand consisting of ~~$74~~$5,208 thousand in cash and cash equivalents, $8$16,415 thousand in ~~trade receivables, $30~~accounts receivable, $1,004 thousand in other accounts ~~receivables~~receivable and ~~$44~~a $6,384 thousand in ~~prepaid expenses.~~ loan to the parent company.

As of December 31, 2021, we had ~~$2,436~~non-current assets of $22,016 thousand consisting of $83 thousand in severance pay funds, $133 thousand in deferred taxes, $569 thousand in operating lease right-of-use assets, $334 thousand in property and equipment net, $8,414 thousand in intangible assets, net and $12,483 thousand in goodwill.

As of December 31, 2021, we had $26,769 thousand in current liabilities consisting of $9$16,676 thousand in ~~trade payables, $242~~accounts payable, $1,317 thousand in other ~~accounts payable and accrued liabilities, $69~~payables, $6,569 thousand in short term ~~loans,~~loan and acurrent maturities of long-term loan, ~~to the Parent Company~~$91 thousand in ~~the amount~~operating lease liabilities – short term and $2,116 thousand loan from parent company.

As of ~~$2,116.~~December 31, 2021, we had $5,975 thousand in non-current liabilities consisting of $188 thousand in accrued severance pay, $4,270 thousand in long-term loan, $491 thousand in operating lease liabilities - long term and $1,026 thousand in deferred taxes.

We had a ~~negative~~positive working capital of ~~$2,449~~$1,014 thousand and ~~$2,280~~$2,476 thousand as of ~~March 31,~~September 30, 2022 and December 31, 2021, respectively.

During the nine months ended September 30, 2022, we had positive cash flow from operating activities of $2,175 thousand, which was mainly the result of a $30 thousand in net loss, $2,855 thousand from positive adjustments to operating activities, offset by $650 negative changes in assets and liabilities items.

During the nine months ended September 30, 2021, we had positive cash flow from operating activities of $1,564 thousand, which was mainly the result of $88 thousand in net income, $1,174 thousand from positive adjustments to operating activities and $302 thousand positive changes in assets and liabilities items.

During the three months ended September 30, 2022, we had positive cash flow from operating activities of $1,577 thousand, which was mainly the result of $71 thousand in net income, $733 thousand from positive adjustments to operating activities, and $773 thousands from positive changes in assets and liabilities items.

-44-

During the three months ended September 30, 2021, we had positive cash flow from operating activities of $522 thousand, which was mainly the result of $91 thousand in net income, $450 thousand from positive adjustments to operating activities offset by $19 negative changes in assets and liabilities items.

There are no limitations in the Company’s Amended and Restated 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~~

As of September 30, 2022, the Company has provided several liens under Gix Media’s Financing Agreement with Leumi in connection with the Cortex Acquisition, as follows: (1) a guarantee to Bank Leumi of all of Gix Media’s obligations and ~~lack~~undertakings to Bank Leumi, unlimited in amount; (2) a subordination letter on behalf of ~~having cash-generating business operations may make it difficult~~the Company to ~~borrow funds or raise capital. The Company’s limitations to borrow funds or raise funds through~~Leumi Bank; (3) a first ranking asset charge over all of the ~~issuance~~assets of ~~restricted capital stock required to effect or facilitate~~the Company; and (4) a ~~business combination may have a material adverse effect on~~Deposit Account Control Agreement over the Company’s ~~financial condition and future prospects, including the ability to complete a business combination.~~bank accounts.

~~Until such time~~Gix Media has provided several liens under the Financing Agreement with Leumi in connection with the Cortex Transaction, as follows: (1) a floating lien on Gix Media’s assets; (2) a lien on Gix Media’s bank account in Leumi; (3) a lien on Gix Media’s rights under the ~~Company can generate substantial revenues, the Company expects to finance its cash needs through~~Cortex Transaction; (4) a ~~combination of the sale of its equity and/or convertible debt securities, debt financing~~fixed lien on Gix Media’s intellectual property; 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(5) a lien 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.~~Gix Media’s holdings in Cortex.

~~-22-~~

~~Going Concern~~

The Company has incurred $169 in net losses for the three months ended March 31, 2022, and $80 in net loss for the three months ended March 31, 2021. The Company has $2,449 stockholders’ deficit as of March 31, 2022 and $2,158 in total stockholders’ deficit as of March 31, 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 availableAccording to the ~~Company or that it will be obtained on terms favorable to the Company or will provide the Company with sufficient funds~~Financing Agreement, Gix Media undertook to meet ~~its objectives. These~~financial covenants over the life of the loans as follows: (1) the ratio of debt to EBITDA, based on the Gix Media’s consolidated financial statements doin all 4 consecutive quarters, will not ~~include any adjustments relating to~~exceed 2.4 in the ~~recoverability~~first two years and ~~classification~~will not exceed 1.75 in the following two years. As of ~~assets, carrying amounts or~~September 30, 2022, Gix Media is in compliance with the ~~amount and classification of liabilities that may be required should~~financial covenants in connection with the ~~Company be unable to continue as a going concern.~~Financing Agreement.

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 ~~March 31,~~September 30, 2022, the Company’s chief executive officer and chief financial officer ~~which is currently the same individual,~~ conducted an evaluation (the “Evaluation”) regarding the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act. Based upon the Evaluation, as required by Rules 13a-15 or 15d-15, the Company’s chief executive officer and chief financial officer concluded that the Company’s disclosure controls and procedures were ineffective as of the end of ~~March 31,~~September 30, 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

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 ~~March 31,~~September 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management’s Plan to Remediate the Material Weakness

With the oversight of senior management, we implemented remediation steps in 2022, including the addition of a new chief financial officer and a controller with significant public company finance and accounting experience and continue to evaluate and implement procedures that will strengthen our internal controls. We have also began to implement a SOX compliance project. While we believe these measures will remediate the material weakness identified and strengthen our internal control over financial reporting, the implemented and enhanced controls have not operated for a sufficient period of time to demonstrate that the material weakness is remediated. We are committed to continuing to improve our internal control processes and will continue to diligently review our financial reporting controls and procedures.

-45-

~~-23-~~

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, our officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

ITEM 1A. RISK FACTORS

~~There have been no material changes from~~As a smaller reporting company, we are not required to provide the information ~~set forth in “Item 1A. Risk Factors” in the Form 10-K filed with the SEC on March 17, 2022.~~required by this Item.

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.

Exhibit Number		Description
3.1		Amended and Restated Certificate of Incorporation of Viewbix Inc. (incorporated by reference to Exhibit 3.1 to the Company’s current report on Form 8-K, filed with the SEC on September 6, 2022).

3.2		Amended and Restated Bylaws of Viewbix Inc. (incorporated by reference to Exhibit 3.2 to the Company’s current report on Form 8-K, filed with the SEC on September 20, 2022).

10.1		Agreement and Plan of Merger, dated December 5, 2021 (incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K, filed with the SEC on December 6, 2021).

31.1*		Certification of Principal Executive Officer ~~and~~pursuant to Section 302 of the Sarbanes-Oxley Act

31.2*		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act

32.1**		Certification of Principal Executive Officer ~~and~~pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2**		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

~~101 SCH~~101.INS*		Inline XBRL Instance Document
101.INS*		Inline XBRL Taxonomy Extension Schema Document

~~101 CAL~~101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document

~~101 DEF~~101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document

~~101 LAB~~101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document

~~101 PRE~~101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104*104		Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

*		Filed herewith.

**		Furnished herewith.

-46-

~~-24-~~

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.

	VIEWBIX INC.

	By:	/s/ Amihay Hadad
	Name:	Amihay Hadad
	Title:	Chief Executive Officer ~~and Chief Financial Officer~~
Date: ~~May 16,~~November 21, 2022		(Principal Executive Officer)

	By:	/s/ Shahar Marom
	Name:	Shahar Marom
	Title:	Chief Financial Officer ~~and~~
Date: November 21, 2022		(Principal Financial Officer)

-47-

	Ordinary shares				Additional paid-in		Accumulated			Total stockholders’
	Number		Amount		capital		deficit			deficit

Balance as of January 1, 2021		34,753,669		3		13,073		(15,154	)		(2,078	)

Net loss for the period		-		-		-		(80	)		(80	)
Balance as of March 31, 2021		34,753,669		3		13,073		(15,234	)		(2,158	)

	2022			2021
	For the three months ended March 31
	2022			2021
Cash flows from operating activities

Net loss for the period		(169	)		(80	)
Adjustments to reconcile net loss to net cash (used in) operating activities:
Finance expense		69			4
Changes in current assets and liabilities:
Increase in trade receivables		(1	)		(6	)
Decrease prepaid expenses		16			16
Decrease in other receivables		9			6
Increase (decrease) in trade payables		7			(4	)
Decrease in other accounts payables and accrued liabilities		(3	)		-
Increase in loan from parent company		55			50

Net cash used in operating activities		(17	)		(14	)

Cash flows from investing activities

Net cash provided by Investing activities		-			-

Decrease in cash and cash equivalents		(17	)		(14	)

Cash and cash equivalents at the beginning of the year		74			148

Cash and cash equivalents and restricted cash at the end of the year		57			134

	As of March 31		As of December 31
	2022		2021

Other payables		47		47
Accrued liabilities		192		195
Total other accounts payables		239		242

	~~(a)~~	~~From May 2018 all of the Company’s employees will become employees of Gix.~~
	~~(b)~~	~~Between the periods of May 2018 to October 2018, Gix will pay the full expenses of the employees as well as other related expenses.~~
	~~(c)~~	~~From November 2018 until to the Closing Date, the employees transferred from the Company to Gix will dedicate half of their time to the Company’s operations and correspondingly~~ 50~~% of the costs to be incurred by Gix in respect of these employees are to be charged to the Company.~~

	%
Computers and peripherals equipment		33
Office furniture and equipment		~~NOTE 4:~~6-15
Leasehold improvements		(*)

Instrument	Fair Value		% of total fair		Allocated amount
Loan		55,200		49.45		49,246
Shares		54,000		50.55		50,340
Total		109,200		100		99,586


~~Principal amount~~	69
~~Discount on Short term loan~~	~~(19~~	)
~~Short term loan, Net~~	50

	As of September 30, 2022

Operating leases weighted average remaining lease term (in years)		5.42
Operating leases weighted average discount rate		3.10	%

	^(*)
	Internal Software (*)		Customer Relations		Technology		Goodwill		Total

Cost:
Balance as of January 1, 2022		449		10,720		4,790		12,483		28,442
Adjustments to ultimate parent company earning values (see note 1.c)		-		2,356		6,958		5,132		14,446
Additions		14		-		-		-		14
Acquisitions
Balance as of September 30, 2022		463		13,076		11,748		17,615		42,902

Accumulated amortization:
Balance as of January 1, 2022		-		4,261		3,284		-		7,545
Amortization recognized during the period		85		667		1,228		-		1,980
Balance as of September 30, 2022		85		4,928		4,512		-		9,525

Amortized cost:
As of September 30, 2022		378		8,148		7,236		17,615		33,377

	●	Gix Media will acquire ~~STOCKHOLDERS’ DEFICIT~~30% of Cortex’s shares in three equal stages, (at the beginning of 2023, at the beginning of 2024 and at the beginning of 2025) (the “Remaining Balance Shares”), so that following the completion of the acquisition of all of the Remaining Balance Shares, Gix Media will hold 100% of Cortex’s share capital on a fully diluted basis.

	●	The obligation (and right) to acquire the Remaining Balance Shares will expire in the event of an initial public offering of Cortex’s shares or in the event of a 50% or more decrease in Cortex’s annual net income, for a period of 12 consecutive months, compared to the net income during the period of 12 months ended July 31, 2021. As of the date of filling of these financial statements, this right and obligation has not expired.

	●	If Gix Media does not fulfill its obligation to acquire the Remaining Balance Shares, within 90 days from the Designated Acquisition Date as stated above, the selling shareholders of Cortex (the original shareholders of Cortex) will be released from their obligation not to sell or transfer their holdings in Cortex to a third party, in relation to the same stage of the balance of the shares not acquired as aforesaid. If Gix Media does not fulfilled its obligation to acquire the Remaining Balance Shares in a certain stage, its right to acquire the Remaining Balance Shares in the subsequent stage, will be conditioned upon the acquisition of the Remaining Balance Shares not purchased by it in the previous stage as well, provided that the Remaining Balance Shares were not transferred or pledged by the selling shareholders of Cortex to a third party.


Consideration paid in cash	10,989
Less cash and cash equivalents and restricted deposits received from acquisition of Cortex	(804	)
Total net cash paid	10,185

	1)	A loan of $6 million to be provided to Gix Media for a period of 48 months at an annual interest rate of LIBOR + 4.12%.

	2)	A renewable monthly line of credit, of up to $3.5 million to be provided to Gix Media, which will be available for utilization for a period of two years and will be determined on a monthly basis, at 80% of Gix Media’s accounts receivable balance (“Line of Credit”). The amounts that will be withdrawn from the Line of Credit will bear annual interest of LIBOR + 3.2%.

	3)	Gix Media undertook to meet financial covenants over the life of the loans as follows: (1) the ratio of debt to EBITDA, based on the Gix Media’s consolidated financial statements in all 4 consecutive quarters, will not exceed 2.4 in the first two years and will not exceed 1.75 in the following two years. As of September 30, 2022, and December 31, 2021, Gix Media is in compliance with the financial covenants in connection with the Financing Agreement.

	4)	As part of the Financing Agreement, Gix Media and the Company provided several liens in favor of Leumi (see Note 12).


			As of
	Interest rate (*)		September 30 2022		December 31 2021
Short-term bank loan – Gix Media		LIBOR + 3.20%		3,500		3,500
Short-term bank loan – Cortex		SOFR + 3.52%		1,500		1,500
Long-term bank loan, including current maturity – Gix Media		LIBOR + 4.12%		4,725		5,770

Bank Loan				9,725		10,770

	2022			2021
	For the nine months ended September 30
	2022			2021

Current tax expenses	$	393		$	78
Tax benefit in respect of prior years	$	(102	)	$	(54	)
Deferred tax income	$	(227	)	$	(65	)
Total	$	63		$	(41	)

	2022			2021
	For the three months ended September 30
	2022			2021

Current tax expenses	$	130		$	(23	)
Taxes expenses (benefit) in respect of previous years	$	21		$	(18	)
Deferred tax income	$	(96	)	$	(40	)
Total Income tax expenses	$	55		$	(81	)

	Warrants		Warrant Term	Exercise Price		Exercisable		Warrants		Warrant Term		Exercise Price		Exercisable

Class J Warrants		3,649,318	July 2029		0.48		3,649,318		130,333		July 2029		13.44		130,333
Class K Warrants		3,649,318	July 2029		0.80		3,649,318		130,333		July 2029		22.4		130,333

	For the three months ended March 31
	2022		2021
	Unaudited
Exchange rate differences		6		(1	)
Interests on loans		69		4
Other		-		4
		75		7

	As of March 31			As of December 31
	2022			2021

Deferred R&D expenses	$	164		$	167
Operating loss carryforward		32,968			33,055
Differences between tax basis and carrying values of loans (see note 4)	$	(184	)	$	(184	)
Total	$	32,948		$	33,038

Net deferred tax asset before valuation allowance	$	7,208		$	7,230
Valuation allowance		(7,208	)		(7,230	)
Net deferred tax asset	$	-		$	-

	As of September 30, 2022					As of December 31, 2021
	Number of options			Weighted average exercise price		Number of options			Weighted average exercise price
				$					$
Options outstanding at beginning of the year		737,915			1.61		1,120,000			1.56
Changes during the period:
Granted		-			-		-			-
Exercised		-			-		-			-
Expired or forfeited		(577,915	)		1.41		(382,085	)		1.61

Outstanding at end of period		160,000			1.41		737,915			1.61
Options exercisable at end of period		157,086			1.41		504,585			1.61

		Options outstanding
		As of September 30, 2022
Range of exercise price		Number of options		Weighted average exercise price		Weighted average remaining contractual life (years)
	$				$
	1.41		160,000		1.41		5.85

		Options Exercisable
		As of September 30, 2022
Range of exercise price		Number of options		Weighted average exercise price		Weighted average remaining contractual life (years)
	$				$
	1.41		157,086		1.41		5.82

	For the three months
	ended March 31
	2021		2022

USA	$	93	$	27
Israel		76		53
	$	169	$	80