UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
or
For the transition period from __________________ to __________________
Commission file number:
(Exact Name Of Registrant As Specified In Its Charter)
| (State of | (I.R.S. Employer | |
| Incorporation) | Identification Number) |
| (Address of Principal Executive Officers) | (Zip Code) |
Registrant’s Telephone Number, Including
Area Code:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| N/A | N/A | 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.
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).
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 | ☐ |
| ☒ | 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 May 12, 2025, the Registrant had shares of common stock issued and outstanding.
VIEWBIX INC.
TABLE OF CONTENTS
| Item | Description | Page | ||
| PART I - FINANCIAL INFORMATION | 3 | |||
| ITEM 1. | FINANCIAL STATEMENTS | 3 | ||
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS | 30 | ||
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 37 | ||
| ITEM 4. | CONTROLS AND PROCEDURES | 37 | ||
| PART II - OTHER INFORMATION | 38 | |||
| ITEM 1. | LEGAL PROCEEDINGS | 38 | ||
| ITEM 1A. | RISK FACTORS | 39 | ||
| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 40 | ||
| ITEM 3. | DEFAULT UPON SENIOR SECURITIES | 40 | ||
| ITEM 4. | MINE SAFETY DISCLOSURE | 40 | ||
| ITEM 5. | OTHER INFORMATION | 40 | ||
| ITEM 6. | EXHIBITS | 41 | ||
| SIGNATURES | 42 |
| -2- |
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
VIEWBIX INC.
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 2025
CONTENTS
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VIEWBIX INC.
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
U.S. dollars in thousands (except share data)
As of March 31 | As of December 31 | |||||||||
| Note | 2025 | 2024 | ||||||||
| ASSETS | ||||||||||
| CURRENT ASSETS | ||||||||||
| Cash and cash equivalents | ||||||||||
| Restricted deposits | ||||||||||
| Accounts receivable | ||||||||||
| Loan to parent company | 3 | |||||||||
| Other current assets | ||||||||||
| Total current assets | ||||||||||
| NON-CURRENT ASSETS | ||||||||||
| Deferred taxes | ||||||||||
| Property and equipment, net | ||||||||||
| Intangible assets, net | 5 | |||||||||
| Goodwill | 5 | |||||||||
| Total non-current assets | ||||||||||
| Total assets | ||||||||||
The accompanying notes are an integral part of these Interim Condensed Consolidated financial statements.
| -4- |
VIEWBIX INC.
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Cont.)
U.S. dollars in thousands (except share data)
As of March 31 | As of December 31 | |||||||||
| Note | 2025 | 2024 | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
| CURRENT LIABILITIES | ||||||||||
| Accounts payable | ||||||||||
| Short-term loans | 7 | |||||||||
| Current maturities of long-term loans | 7 | |||||||||
| Embedded derivatives | 7,8 | |||||||||
| Short-term convertible loans | 7 | |||||||||
| Other payables | ||||||||||
| Total current liabilities | ||||||||||
| NON-CURRENT LIABILITIES | ||||||||||
| Long-term loans, net of current maturities | 7 | |||||||||
| Deferred taxes | ||||||||||
| Earn-out liability | 6 | |||||||||
| Total non-current liabilities | ||||||||||
| Commitments and Contingencies | 9 | |||||||||
| SHAREHOLDERS’ EQUITY | ||||||||||
| Common stock of $ par value - Authorized: shares; Issued and outstanding: and shares as of March 31, 2025, and December 31, 2024, respectively (*). | ||||||||||
| Additional paid-in capital | ||||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||||
| Equity attributed to shareholders of Viewbix Inc. | ||||||||||
| Non-controlling interests | ||||||||||
| Total equity | ||||||||||
| Total liabilities and shareholders’ equity | ||||||||||
| (*) |
The accompanying notes are an integral part of these Interim Condensed Consolidated financial statements.
| -5- |
VIEWBIX INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
U.S. dollars in thousands (except share data)
| For the three months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenues | ||||||||
| Costs and Expenses: | ||||||||
| Traffic-acquisition and related costs | ||||||||
| Research and development | ||||||||
| Selling and marketing | ||||||||
| General and administrative | ||||||||
| Depreciation and amortization | ||||||||
| Other expenses, net | ||||||||
| Operating loss | ||||||||
| Financial expense, net | ||||||||
| Loss before income taxes | ||||||||
| Income tax expense (benefit) | ( | ) | ||||||
| Net loss | ||||||||
| Less: net loss attributable to non-controlling interests | ||||||||
| Net loss attributable to shareholders of Viewbix Inc. | ||||||||
| Net loss per share – Basic and diluted attributed to shareholders: | ||||||||
| Weighted average number of shares – Basic and diluted: | (*) | |||||||
| (*) |
The accompanying notes are an integral part of these Interim Condensed Consolidated financial statements.
| -6- |
VIEWBIX INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)
U.S. dollars in thousands (except share data)
| Common stock (*) | Additional paid-in | Accumulated | Total Attributed to the company’s | Non- Controlling | Total | |||||||||||||||||||||||
| Number | Amount | capital | Deficit | Shareholders | Interests | Equity | ||||||||||||||||||||||
| Balance as of January 1, 2025 | ( | ) | ||||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||
| Shares issued in connection with the Reverse Stock Split (see note 10.D) | (**) | |||||||||||||||||||||||||||
| Issuance of shares in connection with acquisition of a subsidiary (see note 6) | (**) | |||||||||||||||||||||||||||
| Share-based compensation | - | |||||||||||||||||||||||||||
| Balance as of March 31, 2025 | ( | ) | ||||||||||||||||||||||||||
| Common stock (*) | Additional paid-in | Accumulated | Total Attributed to the company’s | Non- Controlling | Total | |||||||||||||||||||||||
| Number | Amount | capital | Deficit | Shareholders | Interests | Equity | ||||||||||||||||||||||
| Balance as of January 1, 2024 | ( | ) | ||||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||
| Share-based compensation | - | |||||||||||||||||||||||||||
| Balance as of March 31, 2024 | ( | ) | ||||||||||||||||||||||||||
| (*) |
| (**) |
The accompanying notes are an integral part of these Interim Condensed Consolidated financial statements.
| -7- |
VIEWBIX INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
U.S. dollars in thousands (except share data)
| For the three months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from Operating Activities | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortizations | ||||||||
| Share-based compensation | ||||||||
| Deferred taxes | ( | ) | ( | ) | ||||
| Accrued interest, net | ( | ) | ||||||
| Interest income | ( | ) | ( | ) | ||||
| Amortization of loan discounts | ||||||||
| Change in the fair value of financial assets at fair value through profit or loss (see note 8) | ||||||||
| Amortization of deferred debt issuance costs (see note 7.F, 7.G) | ||||||||
| Changes in assets and liabilities items: | ||||||||
| Decrease in accounts receivable | ||||||||
| Decrease (increase) in other current assets | ( | ) | ||||||
| Decrease in operating lease right-of-use assets | ||||||||
| Decrease in accounts payable | ( | ) | ( | ) | ||||
| Increase in other payables | ||||||||
| Decrease in operating lease liabilities | ( | ) | ||||||
| Net cash provided by (used in) operating activities | ( | ) | ||||||
The accompanying notes are an integral part of these Interim Condensed Consolidated financial statements.
| -8- |
VIEWBIX INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Cont.)
U.S. dollars in thousands (except share data)
| For the three months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from Investing Activities | ||||||||
| Net cash from acquisition of a subsidiary (see note 6) | ||||||||
| Net cash provided by investing activities | ||||||||
| Cash flows from Financing Activities | ||||||||
| Receipt of short-term bank loans | ||||||||
| Repayment of short-term bank loans | ( | ) | ( | ) | ||||
| Repayment of long-term bank loans | ( | ) | ||||||
| Change in loan to parent company | ( | ) | ||||||
| Net cash used in financing activities | ( | ) | ( | ) | ||||
| Decrease in cash and cash equivalents and restricted cash | ( | ) | ( | ) | ||||
| Cash and cash equivalents and restricted cash at beginning of period | ||||||||
| Cash and cash equivalents and restricted cash at end of period | ||||||||
| Supplemental Disclosure of Cash Flow Activities: | ||||||||
| Cash paid during the period | ||||||||
| Taxes paid | ||||||||
| Interest paid | ||||||||
The accompanying notes are an integral part of these Interim Condensed Consolidated financial statements.
| -9- |
VIEWBIX INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share data)
NOTE 1: GENERAL
A. Organizational Background
Viewbix Inc. (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 Ohio corporation, which following such merger, the surviving entity, InFerGene Company, changed its name to Zaxis International, Inc (“Zaxis”). In 2015 the Company changed its name to Emerald Medical Applications Corp., subsequent to which the Company, through its subsidiary, was engaged in the development of technology for use in detection of skin cancer. On January 29, 2018, the Company ceased its business operations in this field.
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.
VCT Israel ceased its business operation in 2019 and prior to consummation of the Recapitalization Transaction. On January 27, 2020,
VCT Israel was sold to a third party for NIS
On February 7, 2019, the Company entered into a share exchange agreement (the “Share Exchange Agreement” or the “Recapitalization Transaction”) with Gix Internet Ltd., a company organized under the laws of the State of Israel (“Gix” or “Parent Company”), pursuant to which, Gix assigned, transferred and delivered its % 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 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.
B. Reorganization Transaction
On December 5, 2021, the Company entered
into a certain Agreement and Plan of Merger with Gix Media Ltd. (“Gix Media”), an Israeli company and the majority-owned
(
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 in exchange for the Company’s shares of common stock,
par value $ per share (“Common Stock”).
| -10- |
VIEWBIX INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except share data)
NOTE 1: GENERAL (Cont.)
B. Reorganization Transaction (Cont.)
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
As the Company and Gix Media were consolidated both by the Parent Company and Xylo Technologies Ltd. (formerly known as Medigus Ltd.) (the “Ultimate Parent”), before and after the Reorganization Transaction, the Reorganization Transaction was accounted for as a transaction between entities under common control. Accordingly, the financial information of the Company and Gix Media is presented in these financial statements, for all periods presented, reflecting the historical cost of the Company and Gix Media, as it is reflected in the consolidated financial statements of the Parent Company, for all periods preceding March 1, 2022, the date the Ultimate Parent obtained a controlling interest in the Parent Company and as it is reflected in the consolidated financial statements of the Ultimate Parent for all periods subsequent to March 1, 2022.
C. Business Overview
The Company and its subsidiaries (the “Group”), Gix Media and Cortex Media Group Ltd. (“Cortex”), operate in the field of digital advertising. The Group has two main activities that are reported as separate operating segments: the search segment and the digital content segment.
The search segment develops a variety of technological software solutions, which perform automation, optimization, and monetization of internet campaigns, for the purposes of obtaining and routing internet user traffic to its customers. The search segment activity is conducted by Gix Media.
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, by utilizing such content to obtain and route internet user traffic for its customers. The digital content segment activity is conducted by Cortex.
On January 23, 2023, Gix Media acquired
an additional
The Subsequent Purchase was recorded as a transaction with non-controlling interests in the Company’s statement of changes in shareholders equity for the year ended December 31, 2023.
On
March 24, 2025, the Company entered into a securities exchange agreement with the shareholders of Metagramm Software Ltd. (“Metagramm”),
pursuant to which the Company acquired
Metagramm specializes in developing advanced writing assistance tools that leverage artificial intelligence, machine learning and natural language processing technologies. Metagramm’s main product, “Bubbl” is a writing tool designed to provide personalized and customized text tailored to the user’s unique expression and can translate various languages into English. Metagramm licenses its products on a subscription basis to businesses and individual customers.
| -11- |
VIEWBIX INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except share data)
NOTE 1: GENERAL (Cont.)
D. Impact of the “Iron Swords” War on Israel
On October 7, 2023, following the brutal attacks on Israel by Hamas, a terrorist organization located in the Gaza Strip that infiltrated Israel’s southern border and conducted a series of attacks on civilian and military targets, Israel’s security cabinet declared war (the “War”). Following the commencement of the War, hostilities also intensified between Israel and Hezbollah, a terrorist organization located in Lebanon. This may escalate in the future into a greater regional conflict. The War led to a reduction of business activities in Israel, evacuation of residences located in the northern and southern borders of Israel, a significant call up of military reserves and lower availability of work force.
As the Group’s customers are mainly in the US and Europe, its operations, revenues, and profitability were indirectly affected due to recruitment of senior employees to military reserves for an extended period of time.
In January 2024, Gix Media and Cortex
filed a request with the Israeli Tax Authority (the “ITA”) to receive compensation for the decrease in revenues related to
the War. In April and May 2024, Gix Media and Cortex received a total of $
As of the date of these financial statements the War is still on going. Therefore, there is no assurance that future developments of the War will not have any impact for reasons beyond the Company’s control, such as expansion of the War to additional regions. The Company has business continuity procedures in place, and will continue to follow developments, assessing potential impact, if any, on the Company’s business, financials, and operations.
E. Cortex Adverse Effect
In April 2024, the Company was informed
by Cortex that a significant customer of Cortex recently notified Cortex it will stop advertising on Cortex’s sites, as part of
its policy decision to cease advertising on Made for Advertising (“MFA”) sites (the “Cortex Adverse Effect”).
The Cortex Adverse Effect, which has materially affected Cortex’s business and operations, has occurred following certain recent
developments relating to publishers that are categorized by a number of on-line advertisers as MFA, including decisions made by leading
media on-line advertisers to prioritize different media categories and implement publishing restrictions in connection with MFA. Due
to the Cortex Adverse Effect and additional circumstances as explained in note 5.B, the Company recorded an impairment of $
F. Filing of Insolvency Petition Against Gix Media
On March 27, 2025, a petition was
filed with the District Court of Tel Aviv-Jaffa for a court order to commence insolvency proceedings against Gix Media. The petition
was filed by a primary service provider alleging that Gix Media owes it approximately $
As of the date of approval of these financial statements, the Company cannot assess the likelihood of success of the Petition or its potential impact on the Company’s business.
| -12- |
VIEWBIX INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except share data)
NOTE 1: GENERAL (Cont.)
G. Going Concern
From the second half of 2023
through March 31, 2025, the Company experienced a decrease in its revenues from the digital content and search segments, as a result
of: the Cortex Adverse Effect (see note 1.E), a decrease in user traffic acquired from third party advertising platforms, an
industry-wide decrease in advertising budget, changes and updates to internet browsers’ technology, which adversely impacted
the Company’s ability to acquire traffic in the search segment and a decrease in revenues from routing of traffic acquired
from third-party strategic partners in the search segment, as a result of lack of availability of suppliers credit from such third
party strategic partners. As a result of the foregoing, during the three months ended March 31, 2025, the Company recorded an
operating loss of $
The decline in revenues and other circumstances described above raise substantial doubts about the Company’s ability to continue as a going concern during the 12-month period following the issuance date of these financial statements.
Management’s response to these
conditions included reduction of salaries and related expenses and reduction of professional services in the research and development
and selling and marketing functions, reduction of other operational expenses, such as lease costs and overheads, as well as creation
of new partnerships and other new income sources. In addition, during the period from June to August 2024, the Company raised through
a private placement and through three facility agreements with certain investors and lenders (see note 7.B) aggregate gross proceeds
of $
These financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
| -13- |
VIEWBIX INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except share data)
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES
A. Unaudited Interim Financial Statements
The accompanying unaudited interim condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of U.S. Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included (consisting only of normal recurring adjustments except as otherwise discussed). For further information, reference is made to the consolidated financial statements and footnotes thereto included in the Group’s Annual Report on Form 10-K for the year ended December 31, 2024.
B. Principles of Consolidation
The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
C. Use of estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. The Company evaluates on an ongoing basis its assumptions, including those related to contingencies, deferred taxes, inventory impairment, stock-based compensation, as well as in estimates used in applying the revenue recognition policy. Actual results may differ from those estimates.
D. Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. Derivative instruments are initially recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported in the unaudited condensed statements of operations.
| -14- |
VIEWBIX INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except share data)
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (Cont.)
E. Fair Value of Financial Instruments
Fair value is defined as the price that would be received for sale of an asset or paid to transfer of a liability, in an orderly transaction between market participants at the measurement date. US GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
| ● | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets. |
| ● | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
| ● | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
F. Significant Accounting Policies
The significant accounting policies followed in the preparation of these unaudited interim condensed consolidated financial statements are identical to those applied in the preparation of the latest annual financial statements other than the significant accounting policies of derivative financial instruments and fair value of financial instruments (see notes 2.D and 2.E above).
G. Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Group’s interim condensed consolidated financial statements.
| -15- |
VIEWBIX INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except share data)
NOTE 3: LOAN TO PARENT COMPANY
As of March 31 2025 | As of December 31 2024 | |||||||
| Loan to Parent Company | $ | $ | ||||||
The balance with the Parent Company represents a balance of an intercompany loan under a loan agreement signed between Gix Media and the Parent Company on March 22, 2020. The loan bears interest at a rate to be determined from time to time in 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. The amount of the loan is in U.S. dollars.
On March 19, 2025, the Company’s board of directors approved to extend the loan between Gix Media and the Parent Company until September 1, 2025. All other terms and conditions of the loan will remain unchanged.
For the three months ended March 31,
2025 and 2024, Gix Media recognized interest income in the amount of $
NOTE 4: LEASES
On February 25, 2021, Gix Media entered
into a lease agreement for a new corporate office of
The Company included renewal options
that it was reasonably certain to exercise in the measurement of the lease liabilities. In December 2023, the Company exercised the option
to extend the lease period for an additional term of 24 months (from March 1, 2024, to
On June 20, 2024, Gix Media and the
lessor of its offices entered into a lease termination agreement. According to the agreement, the lease, which originally had a termination
date of February 28, 2026, terminated on June 30, 2024. In compensation for the lessor’s consent to an early termination, Gix Media
paid the lessor $
Operating lease expenses amounted to $
| -16- |
VIEWBIX INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except share data)
NOTE 5: GOODWILL AND INTANGIBLE ASSETS, NET
A. Composition:
| Internal-use Software | Customer Relations | Technology | Goodwill | Total | ||||||||||||||||
| Cost: | ||||||||||||||||||||
| Balance as of January 1, 2025 | ||||||||||||||||||||
| Consolidation of Metagramm (see note 6) | ||||||||||||||||||||
| Balance as of March 31, 2025 | ||||||||||||||||||||
| Accumulated amortization: | ||||||||||||||||||||
| Balance as of January 1, 2025 | ||||||||||||||||||||
| Amortization recognized during the period | ||||||||||||||||||||
| Balance as of March 31, 2025 | ||||||||||||||||||||
| Amortized cost: | ||||||||||||||||||||
| As of March 31, 2025 | ||||||||||||||||||||
| Internal-use Software | Customer Relations | Technology | Goodwill | Total | ||||||||||||||||
| Cost: | ||||||||||||||||||||
| Balance as of January 1, 2024 | ||||||||||||||||||||
| Impairment of goodwill | ( | ) | ( | ) | ||||||||||||||||
| Balance as of December 31, 2024 | ||||||||||||||||||||
| Accumulated amortization: | ||||||||||||||||||||
| Balance as of January 1, 2024 | ||||||||||||||||||||
| Amortization recognized during the year | ||||||||||||||||||||
| Balance as of December 31, 2024 | ||||||||||||||||||||
| Amortized cost: | ||||||||||||||||||||
| As of December 31, 2024 | ||||||||||||||||||||
| -17- |
VIEWBIX INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except share data)
NOTE 5: GOODWILL AND INTANGIBLE ASSETS, NET (Cont.)
B. Impairment of goodwill:
As of December 31, 2024, the Company
identified indicators of impairment of the digital content reporting unit. As a result, the Company performed an impairment test which
included a quantitative analysis of the fair value of the reporting unit. The fair value was estimated using the income approach, which
is based on the present value of the future cash flows attributable to the reporting unit. The Company compared the fair value of the
reporting unit to its carrying amount. As the carrying amount exceeded the fair value, the Company recognized an impairment loss of $
The Company also performed a quantitative impairment test of the search reporting unit. The Company did not recognize an impairment regarding this reporting unit.
NOTE 6: BUSINESS COMBINATION
Metagramm Acquisition:
On July 31, 2024, the Company entered into a securities exchange agreement with Metagramm pursuant to which the Company agreed to issue to Metagramm % of its issued and outstanding share capital in exchange for % of Metagramm’s issued and outstanding share capital (the “2024 SEA”).
On March 24, 2025 (the
“Closing Date”), the Company entered into a new securities exchange agreement with the shareholders of Metagramm which
replaced and terminated the 2024 SEA (the “2025 SEA”). Pursuant to the 2025 SEA, the Company acquired
In addition, the Company agreed to
pay Metagramm’s shareholders cash earn-out payments on a pro rata basis of up to a cumulative sum of $
Fair Value of Metagramm’s Identifiable Assets and Liabilities:
| Cash and cash equivalents | ||||
| Other current assets | ||||
| Property and equipment | ||||
| Goodwill arising from the acquisition | ||||
| Technology, net of deferred taxes | ||||
| Customer Relations, net of deferred taxes | ||||
Total cost of the acquisition | ||||
| Earn-out liability arising from the acquisition | ||||
| Total liabilities | ||||
| Consideration paid in Company’s shares |
The total cost of the acquisition has been allocated between tangible and intangible assets acquired and liabilities assumed based on estimated fair values, with the residual of the acquisition cost recorded as goodwill. The intangible assets identified in the Metagramm Acquisition were technology and customer relations. The estimation of the fair value of these intangible assets was determined using the income approach, which is based on the present value of the future cash flows attributable to each identifiable intangible asset. The estimation of the fair value of the earn-out liability was calculated based on Monte Carlo method.
Other current assets were estimated to have fair values that approximate their carrying values due to the short-term maturities of these instruments.
The estimated useful lives for
the acquired technology and customer relations of Metagramm Acquisition are
NOTE 7: LOANS
A. Composition of long-term loans, short-term loans, and credit lines of the Group:
The following is the composition of the balance of the Group’s loans according to their nominal value:
| Interest rate | As of March 31, 2025 |
As of December 31, 2024 |
||||||||||
| Short-term bank loans – Gix Media | % | |||||||||||
| Short-term bank loan – Cortex | % | |||||||||||
| Long-term bank loan, including current maturity – Gix Media (received on October 13, 2021) | % | |||||||||||
| Long-term bank loan, including current maturity – Gix Media (received on January 17, 2023) | % | |||||||||||
| Short-term loan – June 2024 Facility Agreement – Viewbix Inc | % | |||||||||||
| Short-term convertible loan – June 2024 Facility Agreement – Viewbix Inc | % | |||||||||||
| Short-term convertible loan – First July 2024 Facility Agreement – Viewbix Inc | % | |||||||||||
| Short-term convertible loan – Second July 2024 Facility Agreement – Viewbix Inc | % | |||||||||||
| -18- |
VIEWBIX INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except share data)
NOTE 7: LOANS (Cont.)
B. Gix Media’s Loan Agreement and short-term loans:
On October 13, 2021, 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 $
The Financing Agreement included the following main terms:
| 1) | A loan of $ | |
| 2) | A renewable monthly line of credit, of up to $ | |
| 3) | Gix Media undertook to meet financial covenants over the life of the
loans as follows: | |
| 4) | As part of the Financing Agreement, Gix Media and the Company provided several liens in favor of Leumi (see note 9). |
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 $
On January 23, 2023, Gix Media acquired
an additional 10% of Cortex’s capital shares (see notes 1.C and 7.A) which was financed by Gix Media’s existing cash balances
and by the Additional Loan received on January 17, 2023, in the amount of $
On October 10, 2023, Gix Media and
Leumi entered into a second addendum to the Financing Agreement, according to which, Leumi extended an existing monthly renewable credit
line of $
On June 13, 2024, Gix Media and Leumi
entered into a third addendum to the Financing Agreement between the parties which was effective from May 15, 2024, pursuant to which,
inter alia: (i) the addendum will be effective until August 31, 2024; (ii) the Company is obligated to transfer to Gix Media $
| -19- |
VIEWBIX INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except share data)
NOTE 7: LOANS (Cont.)
B. Gix Media’s Loan Agreement and short-term loans:
Effective as of August 30, 2024, Gix
Media and Leumi entered into a fourth addendum to the Financing Agreement, pursuant to which, inter alia: (i) subject to the receipt
of at least $
On September 16, 2024, Gix Media repaid
an aggregate amount of $
On September 19, 2024, Gix Media received
a short-term loan of $
On February 4, 2025, Gix Media and Leumi entered into a fifth addendum to the Financing Agreement, which was effective from January 29, 2025, according to which, inter alia: (i) the Gix Media Credit Line was extended to March 31, 2025, (ii) the repayment the outstanding principal amounts of the long term bank loans of Gix Media under the Financing Agreement, was deferred until the actual deposit by the Company in Gix Media’s account of an investment account equal to the amounts of the deferred long term bank loans owned by Gix Media (the “Investment Amount”), which in any event shall be no later than March 31, 2025 (the “Deposit Date”), (iii) upon such Deposit Date, all deferred payments will be immediately repaid using the deposited amounts and any remaining amounts from any other sources, (iv) all remaining future due payments will be repaid as scheduled until the end of the updated terms of each long term bank loan.
On March 30, 2025, Gix Media and Leumi entered into a sixth additional addendum to the Financing Agreement, which extended the Deposit Date until May 20, 2025.
As of March 31, 2025, Gix Media has
drawn $
C. Cortex’s Loan Agreement:
On September 21, 2022, Cortex and
Leumi entered into an addendum to an existing loan agreement between the parties, dated August 15, 2020 (“Cortex Loan Agreement”).
As part of the addendum to the Cortex Loan Agreement, Leumi provided Cortex with a monthly renewable credit line of $
On April 27, 2023, Leumi increased
the Cortex Credit Line by $
On May 27, 2024, Cortex and Leumi
entered into an amendment to Cortex Loan Agreement, pursuant to which, the credit line to Cortex will be
On August 15, 2024, Cortex and Leumi
entered into an additional amendment to Cortex Loan Agreement, pursuant to which, the credit line in the amount of $
On February 28, 2025, Cortex and Leumi
entered into an additional amendment to Cortex’s Loan Agreement, pursuant to which: (i) the credit line of $
As of March 31, 2025, Cortex has drawn
$
| -20- |
VIEWBIX INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except share data)
NOTE 7: LOANS (Cont.)
D. Long term loan and issuance of warrants:
On November 15, 2023, Viewbix Israel
entered into a Loan Agreement (the “2023 Loan”) with certain lenders (the “Lenders”) whereby the Lenders provided
Viewbix Israel with loans in the aggregate amount of $
The terms of the 2023 Loan were substantially
amended on June 18, 2024, by the June 2024 Facility Agreement (see note 7.E). These amendments represented a substantial modification
in accordance with ASC Topic 470. Accordingly, the terms modification was accounted for as an extinguishment of the original financial
liability and the initial recognition of new financial instruments issued at their fair value as of the effective date of the June 2024
Facility Agreement. As a result of the substantial modification of terms, the Company recognized finance expense of $
E. June 2024 Facility Agreement:
On June 18, 2024, the Company entered
into a credit facility agreement with a group of lenders including a lead lender (the “June 2024 Lead Lender”, and collectively,
the “June 2024 Lenders”) for an amount of up to $
The Total Credit Facility Amount
will accrue interest at a rate of
The interest for the first year of
the June 2024 Facility Agreement, which was equal to $
Immediately following the effectiveness
of the Uplist, $
During the term of the June 2024
Facility Agreement, some of the June 2024 Lenders whose portion of the Total Credit Facility Amount is not automatically converted as
part of the Uplist will have the right to convert their portion of the Total Credit Facility Amount within 12 months from the Uplist
date into units, which will include shares of common stock of the Company at a conversion rate of $
In addition, the Company paid to
the June 2024 Lead Lender a commission consisting of: (a) common stock of the Company, (b)
| -21- |
VIEWBIX INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except share data)
NOTE 7: LOANS (Cont.)
The June 2024 Lead Lender Fee Warrants, which were exercisable immediately after the closing of the agreement, were allocated subject to certain ownership restrictions, adjustments, and anti-dilution protections. Furthermore, the Company has committed to submitting a request for the registration of the shares and warrants issued to the June 2024 Lenders within thirty (30) days from the date of the June 2024 Facility Agreement.
In July 2024, following the closing
of the Private Placement (as defined in note 10.B), the exercise price of the June 2024 Lead Lender Fee Warrants was adjusted to $
The conversion related features of the June 2024 Facility Agreement were bifurcated from their host debt contract and recognized as liabilities measured at fair value at each cut-off date. The facility loan was initially recorded at its fair value and subsequently measured at cost. The shares and warrants issued as prepayment of interest and as commission to the June 2024 Lead Lender were initially recognized at fair value and classified in equity.
The June 2024 Lead Lender Fee Warrants
were initially recognized in fair value at the amount of $
F. First July 2024 Facility Agreement
On July 4, 2024, the Company entered
into a credit line agreement with a certain lender (the “First July 2024 Facility Agreement”). Under the First July 2024
Facility Agreement and amendments from July 22, 2024, and July 25, 2024, the lender will provide a total credit line of $
The First July 2024 Facility Agreement
will remain available until the earliest of: (a)(1) full utilization of the First July 2024 Facility Loan Amount, (a)(2) after 36 months
from the date of the First July 2024 Facility Agreement, and (b) upon such date that the Company completes a $
The First July 2024 Facility
Agreement Amount will accrue interest at a rate of
Immediately after the Uplist, $
Furthermore, the Company paid the
lender of the First July 2024 Facility Agreement a one-time fee consisting of: (a) common stock of the Company, which representing
a fee of five percent (
The conversion related features of the First July 2024 Facility Agreement were bifurcated from their host debt contract and recognized as liabilities measured at fair value at each cut-off date.
In connection with the First July
2024 Facility Agreement, the Company received a loan of $
As of December 31, 2024, the Company
incurred deferred debt issuance costs of $
| -22- |
VIEWBIX INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except share data)
NOTE 7: LOANS (Cont.)
G. Second July 2024 Facility Agreement
On July 28, 2024, The Company entered
into a credit line agreement with certain lenders (the “Second July 2024 Facility Agreement”) for a total amount of $
The Second July 2024 Facility Agreement
will remain available until the earliest of: (a) (1) full utilization of the Second July 2024 Facility Loan Amount, (a)(2) after 40 months
from the date of Second July 2024 Facility Agreement, and (b) upon such date that the Company completes a $
The Second July 2024 Facility Loan
Amount will accrue interest at a rate of
Immediately after the Uplist, $
Furthermore, the Company paid the
lenders of the Second July 2024 Facility Agreement a one-time fee consisting of common stock of the Company, which represent
a fee of five percent (
The conversion related features of the Second July 2024 Facility Agreement were bifurcated from their host debt contract and recognized as liabilities measured at fair value at each cut-off date.
In connection with the Second July
2024 Facility Agreement, the Company received a loan of $
As of December 31, 2024, the Company
incurred deferred debt issuance costs of $
| -23- |
VIEWBIX INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except share data)
NOTE 8: FINANCIAL INSTRUMENTS AT FAIR VALUE
Financial instruments:
The Company has financial instruments measured at level 3 arising from the June 2024 Facility Agreement, the First July 2024 Facility Agreement and the Second July 2024 Facility Agreement (see notes 7.E, 7.F, 7.G).
The fair value of the financial instruments as of December 31, 2024, was calculated using the following unobservable inputs: share price:
$, expected volatility:
The
fair value of the financial instruments as of March 31, 2025, was calculated using the following unobservable inputs: share price: $,
expected volatility:
The following table presents the financial instruments that were measured at fair value through profit or loss:
| Embedded
derivatives |
||||
| Balance as of January 1, 2025 | ||||
| Net changes at fair value recognized through profit or loss | ||||
| Balance as of March 31, 2025 | ||||
| Embedded derivatives |
||||
| Balance as of January 1, 2024 | ||||
| Embedded derivatives recorded in connection with the June 2024 Facility Agreement, the First July 2024 Facility Agreement and the Second July 2024 Facility Agreement | ||||
| Net changes at fair value recognized through profit or loss | ( |
) | ||
| Balance as of December 31, 2024 | ||||
NOTE 9: COMMITMENTS AND CONTINGENCIES
A. Liens:
On September 19, 2022, as part of the Reorganization Transaction terms, 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 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 $
B. Filing of Insolvency Petition Against Gix Media:
On March 27, 2025, a petition was
filed with the District Court of Tel Aviv-Jaffa for a court order to commence insolvency proceedings under the Insolvency and Economic
Rehabilitation Law, 5778 - 2018, against Gix Media (the “Petition”). The Petition was filed by a primary service provider
(the “Service Provider”) alleging that Gix Media owes it approximately $
As a result of the filing of the Petition, Leumi may demand immediate repayment of Gix Media’s long-term bank loans under the Financing Agreement. As of the date of approval of these financial statements, the Company is unable to assess the likelihood of the Petition’s success or its potential impact on the Company’s business.
| -24- |
VIEWBIX INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except share data)
NOTE 10: SHAREHOLDERS’ EQUITY
A. Shares of Common Stock:
On June 18, 2024, as part of the June
2024 Facility Agreement, the Company issued to the June 2024 Lenders shares of common stock and warrants to purchase
such number of shares of common stock with an exercise price of $
On July 4, 2024, as part of the First
July 2024 Facility Agreement, the Company issued to the First July 2024 Lender shares of common stock and
On July 14, 2024 and July 25, 2024, the Company entered into consulting agreements with certain consultants (the “Consultants”) pursuant to which the Consultants agreed to provide certain services to the Company in connection with the Uplist (as defined in note 1.F). In consideration with the Consultants’ services, the Company issued to the Consultants shares of common stock in July 2024. The Company recorded a share-based compensation expense of $ in other expenses in connection with the issuance of shares to the Consultants.
On July 28, 2024, as part of the Second
July 2024 Facility Agreement, the Company issued to the lenders of the Second July 2024 Facility Agreement shares of common stock
and
On March 24, 2025, the Company entered into a securities exchange agreement with the shareholders of Metagramm, pursuant to which the Company issued to Metagramm’s shareholders of the Company’s shares representing % of its issued and outstanding share capital in exchange for % of Metagramm’s issued and outstanding share capital (see note 10.E).
B. Private Placement
On July 3, 2024, the Company
entered into a definitive securities purchase agreement with a certain investor (the “Lead Investor”) for the purchase
and sale in a private placement (the “Private Placement”) of units consisting of (i)
shares of the Company’s common stock at a purchase price of $
per share and (ii)
The aggregate gross proceeds received
by the Company from the Private Placement were $
Upon the closing of the Private Placement,
the Company agreed to pay the Lead Investor: (1) $
In July 2024, the Company issued
shares of common stock and
| -25- |
VIEWBIX INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except share data)
NOTE 10: SHAREHOLDERS’ EQUITY (Cont.)
C. Warrants:
The following table summarizes information of outstanding warrants as of March 31, 2025:
| Warrants | Warrant Term | Exercise Price | Exercisable | |||||||||||
| Class J Warrants | ||||||||||||||
| Class K Warrants | ||||||||||||||
| 2023 Warrants (see note 7.D) | ||||||||||||||
| June 2024 Facility Agreement Warrants (see note 7.E) | ||||||||||||||
| June 2024 Lead Lender Fee Warrants (see note 7.E) | ||||||||||||||
| First July 2024 Facility Warrants (see note 7.F) | ||||||||||||||
| Second July 2024 Facility Warrants (see note 7.G) | ||||||||||||||
| PIPE Warrants (see note 10.B) | ||||||||||||||
D. Reverse Stock Split:
On July 15, 2024, the Company
filed an amendment to its Amended COI to effect a
As a result of the Reverse Stock Split, every 4 outstanding shares of the Company’s common stock were converted into 1 share of the Company’s common stock. The Reverse Stock Split did not change the par value of the Company’s common stock or the number of its authorized shares.
Share and per share data in these financial statements have been retrospectively adjusted to reflect the Reverse Stock Split for all periods presented.
E. Securities Exchange Agreement
On July 31, 2024, the Company entered into the 2024 SEA with Metagramm pursuant to which the Company agreed to issue to Metagramm % of its issued and outstanding share capital in exchange for % of Metagramm’s issued and outstanding share capital.
On March 24, 2025, the Company entered into the 2025 SEA with the shareholders of Metagramm which replaced and terminated the 2024 SEA. Pursuant to the 2025 SEA, the Company issued to the shareholders of Metagramm of the Company’s shares representing % of its issued and outstanding share capital in exchange for % of Metagramm’s issued and outstanding share capital.
In addition, the Company agreed to
pay Metagramm’s shareholders cash earn-out payments on a pro rata basis of up to a cumulative sum of $
| -26- |
VIEWBIX INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except share data)
NOTE 10: SHAREHOLDERS’ EQUITY (Cont.)
F. Share option plan:
In 2017, 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 employees to purchase ordinary shares of the Parent Company that are traded in the Tel-Aviv Stock Exchange.
On March 2, 2023, the Board approved
the adoption of the 2023 Stock Incentive Plan (the “2023 Plan”). The 2023 Plan permits the issuance of up to (i)
shares of Common Stock, plus (ii) an annual increase equal to the lesser of (A)
The 2023 Plan provides for the grant of stock options, restricted stock, restricted stock units, stock or other stock-based awards, under various tax regimes, including, without limitation, in compliance with Section 102 and Section 3(i) of the Israeli Income Tax Ordinance (New Version) 5271-1961, and for awards granted to United States employees or service providers, including those who are deemed to be residents of the United States for tax purposes, Section 422 and Section 409A of the United States Internal Revenue Code of 1986.
In connection with the adoption of the 2023 Plan, on March 7, 2023, the Company entered into certain intercompany reimbursement agreements with two of its subsidiaries, Viewbix Israel and Gix Media (the “Recharge Agreements”). The Recharge Agreements provide for the offer of awards under the 2023 Plan to employees or service providers of Viewbix Israel and Gix Media (the “Affiliates”) under the 2023 Plan. Under the Recharge Agreements, the Affiliates will each bear the costs of awards granted to its employees or its service providers under the 2023 Plan and will reimburse the Company upon the issuance of shares of Common Stock pursuant to an award, for the costs of shares issued, but in any event not prior to the vesting of an award. The reimbursement amount will be equal to the lower of (a) the book expense for such award as recorded on the financial statements of one of the respective Affiliates, determined and calculated according to U.S. GAAP, or any other financial reporting standard that may be applicable in the future, or (b) the fair value of the shares of Common Stock at the time of exercise of an option or at the time of vesting of an RSU, as applicable.
On July 20, 2023, the Company granted restricted share units (the “RSUs”) under the 2023 Plan to Gix Media’s CEO, as part of his employment terms, (the “Grantee”) under the following terms and conditions:
On July 1, 2023, upon the vesting of the First Tranche, the Company issued shares of Common Stock to the Grantee. On July 1, 2024, upon the vesting of the Second Tranche, the Company issued shares of Common Stock to the Grantee.
| -27- |
VIEWBIX INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except share data)
NOTE 11: SEGMENT REPORTING
The Group operates in
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 obtaining 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 customers.
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 and financing expenses incurred on loans taken for the purpose of purchasing those companies. Therefore, these items are not allocated to the various segments.
The chief executive officer, who is the Company’s chief operating decision maker (“CODM”), assesses performance for these segments and decides how to allocate resources based the segments’ operating income or loss and income or loss before tax. Segments’ assets and liabilities are not reviewed by the CODM and therefore were not reflected in the segment reporting. The significant expense categories comprising segments profit and loss regularly reviewed by the CODM for the periods ended March 31, 2025 and 2024 are set forth in the tables below.
The substantial amount of non-current assets is derived from Israel and the substantial amount of revenues is derived from United States.
Segments revenues and operating results:
| For the three months ended March 31, 2025 | ||||||||||||||||
| Search segment |
Digital content segment |
Adjustments and eliminations (See below) |
Total | |||||||||||||
| Revenues from external customers | ||||||||||||||||
| Traffic-acquisition and related costs | ||||||||||||||||
| Research and development expenses | ||||||||||||||||
| Sales and marketing expenses | ||||||||||||||||
| General and administrative expenses | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Other expenses, net | ||||||||||||||||
| Segment operating income (loss) | ( |
) | ( |
) | ( |
) | ||||||||||
| Financial expenses, net | ( |
) | ( |
) | ( |
)(*) | ( |
) | ||||||||
| Segment income (loss), before income taxes | ( |
) | ( |
) | ( |
) | ||||||||||
| -28- |
VIEWBIX INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
U.S. dollars in thousands (except share data)
NOTE 11: SEGMENT REPORTING (Cont.)
A. Segments revenues and operating results: (Cont.)
| For the three months ended March 31, 2024 | ||||||||||||||||
| Search segment |
Digital content segment |
Adjustments and eliminations (See below) |
Total | |||||||||||||
| Revenues from external customers | ||||||||||||||||
| Traffic-acquisition and related costs | ||||||||||||||||
| Research and development expenses | ||||||||||||||||
| Sales and marketing expenses | ||||||||||||||||
| General and administrative expenses | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Other expenses, net | ||||||||||||||||
| Segment operating income (loss) | ( |
) | ( |
) | ( |
) | ||||||||||
| Financial income (expenses), net | ( |
) | ( |
)(**) | ( |
) | ||||||||||
| Segment income (loss), before income taxes | ( |
) | ( |
) | ( |
) | ||||||||||
The “adjustments and eliminations” column for segment operating income includes unallocated selling, general, and administrative expenses and certain items which management excludes from segment results when evaluating segment performance, as follows:
For the three March 31, | For the three March 31, | |||||||
| Depreciation and amortization expenses not attributable to segments (***) | $ | ( | ) | $ | ( | ) | ||
| Research and development expenses, sales and marketing expenses, general and administrative expenses and other expenses , net not attributable to the segments (****) | $ | ( | ) | $ | ( | ) | ||
| ( | ) | ( | ) | |||||
| (*) | Mainly consist of financial expenses arising from changes in the fair value of financial assets measured at fair value through profit or loss (see note 8). | |
| (**) | Mainly consist of interest expenses on bank loans in connection with the Financing Agreement (see note 7.A, 7.B). |
| (***) | ||
| (****) |
NOTE 12: SUBSEQUENT EVENTS
On May 8, 2025, a preliminary hearing was held regarding the Petition filed by the Service Provider. The district court instructed the parties to reach a mutual settlement and scheduled a follow-up hearing for May 22, 2025.
| -29- |
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, 2025 and 2024, and the related statements of statement operation, statement of changes in shareholders’ equity and statements of cash flows for the three months then ended, and the related notes thereto contained in this Quarterly Report on Form 10-Q (this “Quarterly Report”).
Our reporting currency and functional currency is the U.S. dollar. Unless otherwise expressly stated or the context otherwise requires, references in this prospectus to “NIS” are to New Israeli Shekels, and references to “dollars” or “$” mean U.S. dollars.
On July 10, 2024, our board of directors approved to effect a one-for-four consolidation of our share capital, pursuant to which holders of our shares of common stock will receive one share of common stock for every four shares of common stock held (the “Reverse Stock Split”). The Reverse Stock Split became effective on March 14, 2025, following the process and announcement by FINRA. Unless the context expressly indicates otherwise, all references to share and per share amounts referred to herein reflect the amounts after giving effect to the Reverse Stock Split.
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 continued demand of digital advertising as an integral part of corporate marketing and internal communications plans and the continued growth and acceptance of digital advertising as effective alternatives to traditional offline marketing products and service;
● our ability to retain and attract a programmatic advertiser, and the associated payments received from such programmatic advertisers’ ads on websites which have been categorized as “Made for Advertising”;
● our ability to generate enough cash flow to meet our debt obligations or fund our other liquidity needs, and substantial doubt regarding our ability to continue as a going concern;
● 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 shareholders’ ownership interests;
● our common stock may not be approved for listing on the Nasdaq Stock Market LLC (“Nasdaq”) or another recognized national exchange and many potential investors may be unwilling to purchase our common stock;
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● our ability to receive credit facility or utilize existing credit facilities, to fund our operations, at favorable terms, or at all;
● our ability to pay our obligations when they become due, including our loan and facility agreements and Financing Agreement (as defined below);
● uncertainties regarding the petition to commence insolvency proceedings filed against Gix Media Ltd. (“Gix Media”), a wholly-owned subsidiary of the Company, and the impact of such proceedings on the Company’s business and financial condition;
● our subsidiaries’ future performance, including our ability to instill potential measures to assist Cortex and Gix Media in mitigating future economic harm;
● entry of new competitors and products, the impact of large and established internet and technology companies and potential technological obsolescence of our offered platforms; and
● conditions in Israel, including Israel’s conflicts with Hamas and other parties in the region, as well as political and economic instability potential impact on our business and operation.
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, and those contained in section captioned “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the Securities and Exchange Commission (the “SEC”) on March 21, 2025 (the “Annual Report”). The Company’s actual results could differ materially from those contemplated in these forward-looking statements as a result of these factors. The Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report.
Overview and Background
Viewbix Inc. (the “Registrant”, “Viewbix” or the “Company”) is a digital advertising platform that develops and markets a variety of technological platforms that automate, optimize and monetize digital online campaigns. Viewbix’s operations were previously focused on analysis of the video marketing performance of its clients as well as the effectiveness of their messaging (“Video Advertising Platform”). With the Video Advertising Platform, Viewbix allowed its clients with digital video properties the ability to use its platforms in a way that allows viewers to engage and interact with the video. The Video Advertising Platform measures when a viewer performs a specific action while watching a video and collects and reports the results to the client. However, due to the Company’s failure to meet predetermined sales targets which were set pursuant to the Recapitalization Transaction (as defined in note 1.A to the interim condensed consolidated financial statements) with Gix Internet Ltd., in January 2020, the Company determined to reduce its operations and the size of its sales and R&D team in the Video Advertising Platform.
The Company, through its subsidiaries, Gix Media and Cortex Media Group Ltd. (“Cortex”), expanded its digital advertising operations across two main sectors: ad search and digital content (the “Search Platform” and the “Content Platform”, respectively”). Gix Media and Cortex develop and market a variety of technological software solutions that automate, optimize and monetize online campaigns.
Through its Search Platform, the Company provides services to leading search engines worldwide (“Search Engines”) by developing, marketing and distributing software products to internet users. The operations and activity on this platform are powered by Gix Media.
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Through the Content Platform, the Company provides editing and marketing services of content in different languages and to different target audiences with the goal of generating revenues from advertising employed in such content, which is posted on digital content marketing and advertising platforms. The operations and activity on this platform are powered by Cortex.
Search Platform
Gix Media’s Search Platform allows for the referral of user traffic (i.e., searches that are performed by internet users) to the Search Engines, such as Yahoo and Bing, where the Search Engines display the ads of their customers. The Search Engines pay Gix Media for the searches that were referred by it, based on the amount of consideration that the Search Engine receives from the advertisers for the user traffic generated, less a certain percentage from the revenues attributed to the Search Engine. Since the customers of Gix Media are the Search Engines, and not the advertisers, Gix Media recognizes revenues for the actual amount received from the Search Engines, and not from the advertisement revenue itself.
The referral of user traffic by Gix Media to the Search Engines is possible after users download Gix Media’s products, which are browser add-ons, usually from the browser stores (mostly Google Chrome browsers) and by downloading desktop software products, free of charge, for the Apple operating system (for Mac computers) and for the Microsoft operating system (for PC computers). When downloading Gix Media’s products, the users grant permission to Gix Media to refer the searches performed while using Gix Media’s products to the Search Engines.
Gix Media provides user traffic referral services to Search Engines through the referral of traffic of browsers who engage content generated by Gix Media, or the “Seach to Search” model. These ads are displayed on the Search Engines’ result pages (SERP) that are purchased by the Company from other Search Engines (such as Yahoo! Bing / Microsoft Ads and Google). When such user clicks on these search ads, Gix Media refers the user to a paid offering from a Search Engine which contains ads that are related to the initial ad made by Gix media (the Company buys ad space from Search Engines and sell them to other search ads while profiting from the price difference).
Content Platform
Cortex’s Content Platform produces engaging content and marketing material in various languages to various target audiences, in order to generate revenues from advertisements displayed together with the content, which are posted on digital content, marketing and advertising platforms (“Third Party Platforms”). In order to advertise its content on Third Party Platforms, Cortex purchases ad spaces (media) on the Third Party Platforms. Cortex developed capabilities that enable it and its customers to profit from the original content which it publishes by advertising the content on Third Party Platforms.
Cortex’s previously focused its Content Platform on publishing content written by creative writers and editors which it employs, which is then displayed on several different content websites owned by Cortex, covering various subjects including culture, history, trips, pets, entertainment and leisure, food, etc. (the “Cortex Websites”). Readers are exposed to the articles on the Third-Party Platforms and may choose to read them by clicking an ad, after which readers are directed automatically to the Cortex Websites where the content is posted.
In response to the MFA changes and in order to minimize the Cortex Adverse Effect (as defined below), Cortex expanded its revenue strategy through the development of a new business model, which directs searches through content to Google’s search platform called “related search for content” (“RSOC”), which is the current primary focus of its Content Platform. The process of directing the search to Google is enabled by Cortex’s algorithm and begins with the purchase of targeted advertisements (media) on Third Party Platforms (such as Facebook, Outbrain, Taboola) with the aim of engaging users in specific categories (such as health, insurance, cars, etc.). After users click on the advertisements, they are directed to the additional content on the Cortex Websites related to those advertisements, which include selected search terms. Clicking on these terms leads to Google’s search results page. Google, in turn, displays ads from its clients, who are various advertisers. For searches directed by Cortex to Google, a payment is made by Google, which constitutes part of the amount Google receives from the advertisers. Cortex’s capabilities in digital content creation and campaign management enable the direct cooperation with Google on the RSOC platform.
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Recent Developments
Filing of Insolvency Petition Against Gix Media
On March 27, 2025, a petition (the “Petition”) was filed with the District Court of Tel Aviv-Jaffa for a court order to commence insolvency proceedings under the Insolvency and Economic Rehabilitation Law, 5778 - 2018, against Gix Media.
The Petition was filed by a primary service provider (the “Service Provider”) alleging that Gix Media owes it approximately $260,000 (excluding linkage differentials and interest) and that Gix Media is unable to repay its debts to the Service Provider. The Petition requests, among other things, that the court appoint a trustee for Gix Media to implement insolvency proceedings, vest its assets for the sole purpose of paying past debts and expenses of the insolvency proceedings, and freeze all legal proceedings against Gix Media. On May 8, 2025, a preliminary hearing was held and the district court directed the parties to reach a mutual settlement and set an additional hearing for May 22, 2025.
As of the date of this Quarterly Report, Gix Media had outstanding loans from Bank Leumi Le Israel (“Leumi”), as further disclosed in the Company’s Annual Report, and, due to the filing of the Petition, Leumi may demand immediate repayment of such loans. The Company cannot currently assess the likelihood of success of the Petition or its potential impact on the Company’s business.
Financing Agreement
Effective as of January 29, 2025, Gix Media and Leumi entered into a fifth addendum, to a certain financing agreement with 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 Media used to finance the acquisition of Cortex Acquisition on October 13, 2021 (the “Financing Agreement”), which was effective as of January 29, 2025, pursuant to which, inter alia: (i) the existing credit facility to Gix Media was extended to March 31, 2025; (ii) the repayment schedule of all outstanding obligations under the long term bank loans of Gix Media under the Financing Agreement, was deferred until the actual deposit by the Company in Gix Media’s account of an investment account equal to the amounts of the deferred long term bank loans owned by Gix Media (the “Investment Amount”), which in any event shall be no later than March 31, 2025 (the “Deposit Date”); (iii) upon such deposit date, all deferred payments shall be immediately repaid using the deposited amounts and any remaining amounts from any other sources; (iv) all remaining future due payments will be repaid as scheduled until the end of the updated terms of each long term bank loan. On March 30, 2025, Gix Media and Leumi entered into a sixth additional addendum to the Financing Agreement, which extended the Deposit Date until May 20, 2025.
Securities Exchange Agreement
On March 24, 2025, the Company entered into a securities exchange agreement (the “Metagramm Agreement”) with Metagramm Software Ltd., an Israeli company (“Metagramm”), and all of the shareholders of Metagramm (the “Metagramm Shareholders”), pursuant to which the Company issued to the Metagramm Shareholders an aggregate of 19.99% of its issued and outstanding capital stock on a post-closing, pro rata basis, equal to 1,323,000 shares of the Company’s common stock, in exchange for 100% of Metagramm’s issued and outstanding share capital, equal to 718,520 ordinary shares of Metagramm (the “Metagramm Acquisition”). The Metagramm Acquisition was completed on March 24, 2025, resulting in Metagramm becoming a wholly-owned subsidiary of the Company.
The Company also agreed to pay the Metagramm Shareholders cash earn-out payments of up to $2.0 million in the aggregate on a pro rata basis, contingent upon the achievement of certain financing and revenue milestones during the three-year period following the closing date. In connection with entering into the Metagramm Agreement, the Company and Metagramm mutually agreed to terminate the securities exchange agreement previously entered into on July 31, 2024.
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Metagramm specializes in developing advanced writing assistance tools that leverage artificial intelligence, machine learning and natural language processing technologies. Metagramm’s main product, “Bubbl” is a writing tool designed to provide personalized and customized text tailored to the user’s unique expression and can translate various languages into English. Metagramm licenses its products on a subscription basis to businesses and individual customers.
Amendment to Certificate of Incorporation
On July 15, 2024, the Company filed an Amendment to its Certificate of Incorporation (the “Amendment”) to effect a 1-for-4 Reverse Stock Split of the Company’s common stock, par value $0.0001 per share (the “Common Stock”). The Amendment became effective upon filing, and the Reverse Stock Split became effective at market open on March 14, 2025, following the process and announcement by FINRA. As a result, the Reverse Stock Split, every four (4) outstanding shares of the Company’s Common Stock were converted into one (1) share of the Company’s Common Stock. The Reverse Stock Split did not change the par value of the Common Stock or the number of authorized shares of Common Stock, which is 490,000,000 shares of Common Stock. Consequently, the number of shares of the Company’s Common Stock that may be purchased upon the exercise of outstanding warrants, options, or other securities convertible into, or exercisable or exchangeable for, shares of our Common Stock, and the exercise or conversion prices for these securities, have been ratably adjusted in accordance with their terms. All descriptions of our capital stock, including share amounts and per share amounts in this Quarterly Report, are presented after giving effect to the Reverse Stock Split.
Cortex Adverse Effect
In April 2024, the Company was informed by Cortex, that certain recent developments relating to publishers that are categorized by a number of programmatic advertisers as “Made for Advertising” (“MFA”) sites, including decisions made by leading media programmatic advertisers to prioritize different media categories and implement publishing restrictions in connection with MFA, have materially affected Cortex’s business and operations. In connection with the foregoing, a significant customer of Cortex notified Cortex that in light of the foregoing changes relating to MFA that customer decided to stop advertising on Cortex’s Websites, which decision significantly and negatively impacted Cortex’s future revenue streams (the “Cortex Adverse Effect”). Upon receipt of this update, the Company’s board of directors convened a meeting to discuss the implications on the Company as well as potential measures to assist Cortex in mitigating any future economic harm to Cortex and the Company, including (inter alia), assisting with reducing operating expenses, helping identify new revenues sources for Cortex, participating in any negotiations with Cortex’s and Gix Media’s bank regarding the terms of its outstanding loans and business plans in an effort to provide additional liquidity and ensure continued compliance with Cortex’s and Gix Media’s obligations towards the bank, and assisting with fundraising prospects in debt or equity capital in order to help enable Cortex’s and Gix Media’s continued business and operations.
Corporate Information
We were 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 Ohio corporation, which following such merger, the surviving entity, InFerGene Company, changed its name to Zaxis International, Inc.
Our principal executive offices are located at: 3 Hanehoshet St, Building B, 7th floor, Tel Aviv, Israel and our telephone number is +972-9-774-1505. Our website address is www.view-bix.com. The information contained on, or that can be accessed through, our websites is not incorporated by reference into this prospectus and is intended for informational purposes only.
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Results of Operations
Results of Operations During the Three Months Ended March 31, 2025 as Compared to the Three Months Ended March 31, 2024
Our revenues were $2,733 thousand for the three months ended March 31, 2025, compared to $10,002 thousand during the same period in the prior year.
Our revenues from the Content Platform were $2,204 thousand for the three months ended March 31, 2025, a decrease of $5,326 as compared to $7,530 thousand during the same period in the prior year. The decrease during the three months ended March 31, 2025, is due to the Cortex Adverse Effect.
Our revenues from Gix Media’s Search Platform for the for the three months ended March 31, 2025, totaled $529 thousand, representing a decrease of $1,943 thousand compared to $2,472 thousand during the same period in the prior year.
Our revenue from Gix Media’s Search Platform’s direct model was $529 thousand for the three months ended March 31, 2025, as compared to $1,095 thousand during the same period in the prior year. During the three months ended March 31, 2025, the number of search referrals to the Gix Major Customer conducted by users from the direct model was 6.3 million, compared to 24.7 million during the three months ended March 31, 2024. The decrease in user search referrals is primarily due to changes and updates in internet browsers’ technology, which have reduced the scale of distribution of the Company’s products through the direct model. The Company anticipates that its revenues from add-ons to internet browsers will continue to decrease due to changes and updates in internet browsers’ technology while its revenues from the Search to Search model will increase.
We have no revenue from Gix Media’s Search Platform’s indirect model for the three months ended March 31, 2025, compared to $1,377 thousand for the same period in the prior year. The decrease during the three months ended March 31, 2025 is due to the decrease in user search referrals through the indirect model, which is primarily due to a decrease in the credit received from third-party strategic partners. In order to increase the revenues from the Search Platform’s indirect model, the Company is planning to renew the credit received from third-party strategic partners.
Our traffic-acquisition and related costs were $2,323 thousand for the three months ended March 31, 2025, a decrease of $5,892 compared to $8,215 thousand during the same period in the prior year. The decrease in the three months ended March 31, 2025, is due to the decrease in revenues from both the Content and Search Platforms during the three months ended March 31, 2025, as mentioned above.
Our research and development expenses were $147 thousand for the three months ended March 31, 2025, as compared to $730 thousand during the same period in the prior year. The decrease in the three months ended March 31, 2025, is due to the expense reduction in both the Content and Search Platforms during the three months ended March 31, 2025, as compared to the same period in the prior year.
Our selling and marketing expenses decreased to $216 thousand for the three months ended March 31, 2025, as compared to $658 thousand during the same period in the prior year. The decrease in the three months ended March 31, 2025, is due to the expense reduction primarily in salaries in the Content Platforms during the three months ended March 31, 2025, as compared to the same period in the prior year.
Our general and administrative expenses were $253 thousand for the three months ended March 31, 2025, as compared to $656 thousand during the same period in the prior year. The decrease in the three months ended March 31, 2025, is primarily due to reductions in salaries, rent, and headquarters-related expenses in the three months ended March 31, 2025, as compared to the same period in the prior year.
Our depreciation and amortization expenses for the three months ended March 31, 2025, were $719 thousand as compared to $734 thousand during the same period in the prior year.
Our other expenses for the three months ended March 31, 2025, were $44 compared to $20 during the three months ended March 31, 2024. The increase in our other expenses during the three months ended March 31, 2025, is mainly due to professional expenses incurred in connection with the Company’s planned Uplist.
Our net financial expenses were $2,903 thousand for the three months ended March 31, 2025, compared to $163 thousand net financial expenses during the same period in the prior year. The increase during the three months ended March 31, 2025, is due to financing expenses arising from net changes in the fair value of embedded derivatives associated with the Company’s credit facilities.
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Our income tax benefit was $28 thousand for the three months ended March 31, 2025, as compared to a $1 thousand tax expenses during the same period in the prior year.
Liquidity and Capital Resources
As of March 31, 2025, we had current assets of $6,514 thousand, consisting of $181 thousand in cash and cash equivalents, $59 thousand restricted deposits, $1,037 thousand in accounts receivable, $1,224 thousand in other current assets and $4,013 thousand in a loan to our Parent Company.
As of March 31, 2025, we had non-current assets of $19,898 thousand, consisting of $48 thousand in deferred taxes, $129 thousand in property and equipment net, $10,017 thousand in intangible assets net and $9,704 thousand in goodwill, of which $5,125 thousand arose from the Metagramm Acquisition.
As of March 31, 2025, we had $15,356 thousand in current liabilities consisting of $4,957 thousand in accounts payable, $1,027 thousand in other payables and $5,830 thousand in short term loans and current maturities of long-term loans, $2,752 thousand in embedded derivatives and $790 thousand in short-term convertible loans.
As of March 31, 2025, we had $2,231 thousand in non-current liabilities consisting of $1,221 thousand in deferred taxes and $1,010 thousand in earn-out liability which arose from the Metagramm Acquisition.
As of December 31, 2024, we had current assets of $7,752 thousand consisting of $624 thousand in cash and cash equivalents, $58 thousand in restricted deposits, $1,832 thousand in accounts receivable, $1,257 thousand in other current assets and $3,981 thousand in the loan to our parent company.
As of December 31, 2024, we had non-current assets of $14,214 thousand consisting of $56 thousand in deferred taxes, $27 thousand in property and equipment net, $9,552 thousand in intangible assets net and $4,579 thousand in goodwill.
As of December 31, 2024, we had $12,929 thousand in current liabilities consisting of $5,935 thousand in accounts payable, $812 thousand in other payables, $5,374 thousand in short term loans and current maturities of a long-term loans, $29 thousand in embedded derivatives and $779 thousand in short-term convertible loans.
As of December 31, 2024, we had $1,530 thousand in non-current liabilities consisting of $496 thousand long-term loans and $1,034 thousand in deferred taxes.
We had a negative working capital of $8,842 thousand as compared to a negative working capital of $5,177 thousand as of March 31, 2025, and December 31, 2024, respectively.
During the three months ended March 31, 2025, we had a negative cash flow from operating activities of $409 thousand as compared to a positive cash flow from operations of $107 thousand during the same period in the prior year. The decrease in the three months ended March 31, 2025 is mainly due to an increase in the Company’s operating loss.
During the three months ended March 31, 2025, we had a positive cash flow from investment activities of $12 thousand which arose from the Metagramm Acquisition, as compared to $0 thousand during the same period in the prior year.
During the three months ended March 31, 2025, we had $45 thousand negative cash flow from financing activities as compared to $660 thousand negative cash flow from financing activities during the same period in the prior year. The decrease in the three months ended March 31, 2025, was primarily due to lower net repayments of bank loans which totaled $51 thousand as compared to $643 thousand in the same period in the prior year.
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.
Gix Media has provided several liens under the Financing Agreement with Leumi in connection with the Cortex Transaction, including: (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 all of Gix Media’s holdings in Cortex.
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As of March 31, 2025, the Company has also provided several liens under Financing Agreement with Leumi in connection with the Cortex Acquisition, as follows: (1) a guarantee to Leumi of all of Gix Media’s obligations and undertakings to Leumi, unlimited in amount; (2) a subordination letter on behalf of the Company to Leumi; (3) a first ranking asset charge over all of the assets of the Company; and (4) a Deposit Account Control Agreement over the Company’s bank accounts.
According to the Financing Agreement, Gix Media undertook to meet financial covenants over the life of the loans, including positive EBITDA. As of March 31, 2025, Gix Media is in compliance with the financial covenants in connection with the Financing Agreement.
Going Concern
The Company experienced a decrease in its revenues from the Content and Search Platforms, as a result of the Cortex Adverse effect, a decrease in user traffic acquired from third party advertising platforms, an industry-wide decrease in advertising budget, changes and updates to internet browsers’ technology, which adversely impacted the Company’s ability to acquire traffic in the search segment and a decrease in revenues from routing of traffic acquired from third-party strategic partners in the search segment, as a result of lack of availability of suppliers credit from such third party strategic partners. As a result of the foregoing, the Company’s operations were adversely affected.
The decline in revenues and other circumstances described above raise substantial doubts about the Company’s ability to continue as a going concern during the 12-month period following the issuance date of this Quarterly Report.
Management’s response to these conditions included reduction of salaries and related expenses and reduction of professional services in the research and development, selling and marketing functions, reduction of other operational expenses, such as lease costs and overheads, as well as creation of new partnerships and other new income sources. In addition, the company entered into the facility agreements and a private placement, through which it has raised capital. Additionally, the Company plans to effect the Uplist and submitted an application to the Nasdaq, after which, if the Uplist is successful, in accordance with the terms of the aforesaid private placement and facility agreements, the Company is expected to receive additional funds. Furthermore, the Company’s subsidiaries entered into an addendum to the loan agreement with Bank Leumi pursuant to which loans repayments were deferred while short term credit lines with Bank Leumi continued to be utilized. However, there is significant uncertainty as to whether the Company will further succeed to implement its plans or be able to secure additional funds when needed
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not required for smaller reporting companies.
ITEM 4. CONTROLS AND PROCEDURES
| A. | Evaluation of Disclosure Controls and Procedures |
As of March 31, 2025, the Company’s chief executive officer and chief financial officer, 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, and pursuant to the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013), the Company’s disclosure controls and procedures were effective as of the end of March 31, 2025.
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| B. | 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, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations, except as set forth below.
On March 27, 2025, the Petition was filed with the District Court of Tel Aviv-Jaffa for a court order to commence insolvency proceedings against Gix Media as further described above under “Recent Developments— Filing of Insolvency Petition Against Gix Media”. We cannot currently assess the likelihood of success of the Petition or its potential impact on the Company’s business.
There is no other 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.
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ITEM 1A. RISK FACTORS
Our business faces many risks, a number of which are described under the caption “Risk Factors” in our Annual Report. Other than as set forth below, there have been no material changes from the risk factors previously disclosed in our Annual Report. The risks described in our Annual Report and below may not be the only risks we face. Other risks of which we are not yet aware, or that we currently believe are not material, may also materially and adversely impact our business operations or financial results. If any of the events or circumstances described in the risk factors contained in our Annual Report or described below occurs, our business, financial condition or results of operations could be adversely impacted and the value of an investment in our securities could decline. Investors and prospective investors should consider the risks described in our Annual Report and below, and the information contained under the caption “Forward-Looking Statements” and elsewhere in this Quarterly Report on Form 10-Q before deciding whether to invest in our securities.
We may not realize the anticipated benefits of the acquisition of Metagramm
In March 2025, we acquired Metagramm, a Company that specializes in developing advanced writing assistance tools and licenses its products on a subscription basis. Metagramm’s products and revenue model differs from those of our current platforms. We may not be able to assimilate or integrate the acquired personnel, operations, products, services, and technologies of Metagramm successfully or effectively manage the business of Metagramm and our management may be distracted from operating our business. We also may not achieve the anticipated benefits from the acquisition of Metagramm due to a number of factors, including, without limitation, unanticipated costs or liabilities associated with the acquisition and difficulty of incorporating Metagramm’s technology into our platforms. If the acquisition of Metagramm fails to meet our expectations, our operating results, business, and financial condition may suffer.
Our common stock may never be listed on a recognized national exchange
Our common stock trades on the OTCQB Pink Sheets. You should not assume that any effort to uplist the trading of our common stock to a recognized national exchange would be successful, or if successful, that compliance with the listing requirements of such recognized national exchange will be maintained, including but not limited to requirements associated with maintenance of a minimum net worth, minimum stock price, minimum number of shareholders, and ability to establish a sufficient number of market makers. A failure or inability to uplist the trading of our common stock to a recognized national exchange, or any failure to maintain compliance with the listing requirements of such recognized national exchange, may materially adversely affect our Company and the trading price of our common stock.
In addition, failure to uplist to a recognize national exchange may adversely impact our ability to finance our operations through investments, which may in turn may impact our ability to pay our obligations, including under our financing agreements, loan agreements and credit facilities, when they become due.
The foregoing risks may have a material adverse effect on our Company and the trading price of our common stock.
Unless and until our common stock is approved for listing on a recognized national exchange, many potential investors may be unwilling to purchase our common stock
Our common stock currently trades on the OTCQB Pink Sheets. Many funds and other potential investors are unable or unwilling to purchase stocks on the OTCQB Pink Sheets, being required or simply preferring to purchase stocks that have been approved for listing on a recognized national exchange, such as the Nasdaq or the NYSE. Recognizing this situation, on September 13, 2024, we submitted an application to uplist to the Nasdaq. The timing of the Nasdaq uplisting process will depend on a variety of factors, including, but not limited to, overall market conditions. No assurance can be given that our application will be approved or that a trading market will develop. Unless and until we successfully uplist, potential investor interest in our common stock may be muted, which may adversely affect our company and the trading price of our common stock. The foregoing risks may have a material adverse effect on our Company and the trading price of our common stock.
We may not be able to retain and attract programmatic advertisers, and the associated payments received from such programmatic advertisers’ ads on websites which have been categorized as “Made for Advertising” may be adversely affected.
Certain recent developments relating to publishers that are categorized by a number of programmatic advertisers as “Made for Advertising” (MFA) sites, including decisions made by leading media programmatic advertisers to prioritize different media categories and implement publishing restrictions in connection with MFA, have negatively impacted Cortex’s business and operations. In connection with the foregoing, a significant customer of Cortex has decided to stop advertising on Cortex’s sites. Additional advertising customers of Cortex may opt to stop advertising on Cortex’s sites, which will impact Cortex’s, and as a result thereof, the Company’s current and future revenue streams and results of operations. The foregoing issues could lead to decreased advertiser interest in Cortex’s sites, potentially resulting in lower bids for ad space, and as a result thereof, lower revenues from Cortex’s business, and decrease in the Company’s results of operation.
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Insolvency proceedings filed against Gix Media may adversely affect our financial condition and operations
The Petition filed against Gix Media for the court to issue an order to commence insolvency proceedings, may harm the ability of Gix Media to carry out its business as usual, meet its obligations or pay its debt as they come due. Furthermore, due to the filing of the Petition, Leumi may demand immediate repayment of the loans outstanding under the Financing Agreement. We are currently unable to predict the outcome of the legal proceedings. In the event that the Petition is granted in part or in full, or an order is issued, our business, financial condition, or results of operations may be adversely affected.
We may not be able to receive credit facility to fund our operations, on favorable terms, or at all.
We generally finance our operations primarily through a combination of cash flow generated from operations and borrowings under our credit facilities, loans, and through credit with our vendors. Our ability to access capital through our existing credit facilities and raise additional capital by expanding our credit facilities on economically favorable terms (including available borrowing line and the rate of interest charged thereunder) or at all, or if we are in violation of our financial covenants in the future and do not receive a waiver, depends on our ability to stay in compliance with the Financing Agreement. The Financing Agreement poses certain limitations, as explained elsewhere in this Quarterly Report. In addition, and as a result of the decrease in the Company’s revenues, our financial performance has been negatively impacted, which may affect the terms on which we are able to obtain credit facilities and loans.
If adequate capital is not available at the time we need it, we may have to curtail future growth or change our expansion plans, which could have a material adverse effect on us.
If borrowing under our existing credit facilities is reduced, or otherwise becomes unavailable, or we are unable to arrange substitute financing facilities or other sources of capital, our ability to fund our operations would be impaired, which would have a material adverse effect on our results of operations.
We may be unable to pay our obligations when they become due, including under the Financing Agreement.
We have financed our acquisitions principally through the raising of debt, credit facilities, and our operations through credit with our vendors. Our ability to continue our operations and to pay our obligations, including under the Financing Agreement and credit facilities (as described elsewhere in this Quarterly Report), when they become due is contingent upon obtaining additional financing. Furthermore, due to the filing of the Petition, Leumi may demand immediate repayment of the loans outstanding under the Financing Agreement.
During August 2024, we renegotiated the terms of the Financing Agreement and entered into the Fifth and Sixth Addendum to the Financing Agreement. The availability of the credit facilities to Gix Media is subject to us depositing the Investment Amount by the Deposit Date with Gix Media. If the Company, Cortex and Gix Media cannot maintain compliance with the terms and covenant of the Financing Agreement, or if we are unable to obtain sufficient amounts of additional capital, we may be required to reduce the scope of our planned operations, and/or consider reductions in personnel costs or other operating costs, in addition to the measures currently contemplated pursuant to the Financing Agreement.
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.
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ITEM 6. EXHIBITS
(a) The following documents are filed as exhibits to this Quarterly Report or incorporated by reference herein.
| * | Filed herewith. |
| ** | Furnished herewith. |
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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 | |
| Date: May 13, 2025 | (Principal Executive Officer) | |
| By: | /s/ Shahar Marom | |
| Name: | Shahar Marom | |
| Title: | Chief Financial Officer | |
| Date: May 13, 2025 | (Principal Financial Officer) |
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