What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2021-03-16 compared with 2020-03-20 · 448 added, 359 removed, 249 unchanged (76% of the section changed)

1 unchanged sentence

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the stockholders and the Board of Directors of

the Shareholders and Board of Directors of

(Formerly known as Virtual Crypto Technologies, Inc.)

1 unchanged sentence

have audited the accompanying consolidated balance sheets of Viewbix Inc.

and its subsidiaries (the “Company”)

as of December 31, 2019 and 2018, the related consolidated statements of comprehensive loss, stockholders’

deficit and cash flows for each of the two years in the period ended December 31, 2019, and the related notes (collectively referred

to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects,

the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for

each of the two years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the

United States of America.

and its subsidiary (the “Company”) as of

December 31, 2020 and 2019 and the related consolidated statements of comprehensive loss, stockholders’

cash flows for each of the two years in the period ended December 31, 2020, and the related notes (collectively referred to as

the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the

financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each

of the two years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United

States of America.

accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

in Note 1 to the consolidated financial statements, the Company’s substantial net losses, stockholders’

in Note 1 to the consolidated financial statements, the Company’s substantial net losses, shareholders’

and negative cash flows from operations raise substantial doubt about its ability to continue as a going concern.

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The financial statements do not include

any adjustments that might result from the outcome of these uncertainties.

any adjustments that might result from the outcome of’

these uncertainties

financial statements are the responsibility of the Company’s management.

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with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission

and the PCAOB.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the

conducted our audits in accordance with the standards of the PCAOB.

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We believe that our audits provide a reasonable basis for our opinion.

Critical audit matters are matters

arising from the current-period audit of the financial statements that were communicated or required to be communicated to the

audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved

our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

Brightman Almagor Zohar & Co.

1 unchanged sentence

Firm in the Deloitte Global Network

March 19, 2020

have served as the Company’s auditor since 2019

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Trade payables

Payable to parent company

Other accounts payable and accrued liabilities

Payable to parent company

Short term loan

Total current liabilities

Commitments and contingencies

TEMPORARY EQUITY (Viewbix Ltd, pre - Recapitalization Transaction)(**)

Preferred A-1 shares of NIS 0.01 par value - Authorized:

199,929 shares;

Issued and outstanding:

None and 199,870 shares as of December 31, 2019 and December 31, 2018, respectively

Preferred A-2 shares of NIS 0.01 par value - Authorized:

4,881,762 shares;

Issued and outstanding:

None and 4,881,654 shares as of December 31, 2019 and December 31, 2018, respectively

Preferred B shares of NIS 0.01 par value - Authorized:

4,556,154 shares;

Issued and outstanding:

None and 4,556,094 shares as of December 31, 2019 and December 31, 2018, respectively

Preferred C shares of NIS 0.01 par value:

12,141,116 shares;

Issued and outstanding:

None and 7,222,305 shares as of December 31, 2019 and December 31, 2018, respectively

Preferred C-1 shares of NIS 0.01 par value:

2,756,158 shares;

Issued and outstanding:

None and 2,755,706 shares as of December 31, 2019 and December 31, 2018, respectively

Preferred C-2 shares of NIS 0.01 par value:

454,383 shares;

Issued and outstanding:

None and 392,407 shares as of December 31, 2019 and December 31, 2018, respectively

Total temporary equity

STOCKHOLDERS’

Share Capital

Preferred stock, $0.0001 par value;

Authorized:10,000,000

Issued and outstanding:

December 31, 2019

Common stock, $0.0001 par value;

490,000,000 shares;

Issued and outstanding:

shares as of December 31, 2019 and 273,049 as of December 31, 2018

490,000,000 shares authorized;

34,753,669 shares issued and outstanding at December 31, 2020 and 31,201,669 at December 31, 2019

Additional paid-in capital

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Total liabilities, temporary equity and stockholders’

Represents an amount less than $1.

The number of shares prior to the reverse capitalization have been retroactively adjusted based on the equivalent number of shares

received by the accounting acquirer in the Recapitalization Transaction.

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

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dollars in thousands (except share and per share data)

December 31, 2019

December 31, 2018

and development

and marketing

and administrative

operating expenses

from operations

before taxes on income

and diluted net loss per share:

average shares outstanding - basic and diluted(*)

The number of shares prior to the reverse capitalization have been retroactively adjusted based on the equivalent number of shares

received by the accounting acquirer in the Recapitalization Transaction.

Cost of revenues

Research and development

Sales and marketing

General and administrative

Gain from sale of a subsidiary

Total operating expenses

Loss from operations

Finance income

Finance expense

Loss Before taxes on income

Taxes on income

Basic and diluted net loss per share:

Weighted average shares outstanding - basic and diluted

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

2 unchanged sentences

dollars in thousands (except share and per share data)

Recapitalization Transaction Viewbix Ltd)

stockholders’

as of January 1, 2019

of reverse recapitalization

loss for the period

as of December 31, 2019

Recapitalization Transaction Viewbix Ltd)

stockholders’

as of January 1, 2018

of convertible loan into Preferred C-2 Shares

loss for the period

as of December 31, 2018

Ordinary shares

Additional paid-in

Total shareholders’

Balance as of January 1, 2020

Issuance of shares

Net loss for the period

Balance as of December 31, 2020

shareholders’

Balance as of January 1, 2019

Effect of reverse recapitalization

Net loss for the period

Balance as of December 21, 2019

Represents an amount less than $1.

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Net loss for the period

Adjustments to reconcile net profit (loss) to net cash provided by (used in) operating activities:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Gain from sale of a subsidiary

Changes in operating assets and liabilities:

Decrease in trade receivables

Increase in other accounts receivable

Increase in prepaid expenses

Decrease (Increase) in trade receivables and prepaid expenses

Decrease (Increase) in other accounts receivable

Increase (decrease) in trade payables

Increase in payable to parent company

Increase in payable to parent company (See Note 6)

Increase (decrease) in other accounts payables and accrued liabilities

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Cash flows from investing activities

Cash received from the sale of a subsidiary

Purchase of property and equipment

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Cash acquired in connection with the reverse recapitalization

Issuance of shares

Short term loan received

Net cash provided by financing activities

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dollars in thousands (except share and per share data)

information for Cash Flow:

Cash Flow Information:

February 12, 2020

Current assets excluding cash and cash equivalents

Current liabilities

Gain from sale of a subsidiary

Cash received from the sale of a subsidiary

Assets acquired (liabilities assumed):

July 25, 2019

acquired (liabilities assumed):

assets excluding cash and cash equivalents

recapitalization effect on equity

acquired in connection with Recapitalization Transaction

Current assets excluding cash and cash equivalents

Current liabilities

Reverse recapitalization effect on equity

Cash acquired in connection with Recapitalization Transaction

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

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Organizational

(formerly known as Virtual Crypto Technologies, Inc.) (the “Company”

or the “Registrant”) was incorporated

in the State of Ohio in 1989 under a predecessor name, Zaxis International, Inc.

(formerly known as Virtual Crypto Technologies, Inc.) (the “Company”) was incorporated in the State of Ohio

in 1989 under a predecessor name, Zaxis International, Inc.

(“Zaxis”).

On August 25, 1995, Zaxis

merged with a subsidiary of The InFerGene Company, a Delaware corporation, which entity changed its name to Zaxis International,

and the Company was reincorporated in Delaware under the name of Zaxis International, Inc.

On August 25, 1995, Zaxis merged with a

subsidiary of The InFerGene Company, a Delaware corporation, which entity changed its name to Zaxis International, Inc.

the Company was reincorporated in Delaware under the name of Zaxis International, Inc.

On December 30, 2014, Zaxis entered

into an agreement with Emerald Medical Applications Ltd., a private limited liability company organized under the laws of the

State of Israel (“Emerald Israel”).

into an agreement with Emerald Medical Applications Ltd., a private limited liability company organized under the laws of

the State of Israel (“Emerald Israel”).

Medical Applications Ltd.

March 16, 2015, Zaxis and Emerald Israel executed a share exchange agreement, which closed on July 14, 2015, and Emerald Israel

became the Company’s wholly-owned subsidiary.

Emerald Israel was engaged in the business of developing Emerald Israel’s

DermaCompare technology and the development, sale and service of imaging solutions utilizing its DermaCompare software for use

in derma imaging and analytics for the detection of skin cancer.

On January 29, 2018, the Company ceased the DermaCompare operations

of its former subsidiary.

March 16, 2015, Zaxis and Emerald Israel executed a share exchange agreement, which closed on July 14, 2015, and Emerald

Israel became the Company’s wholly-owned subsidiary.

Emerald Israel was engaged in the business of developing Emerald

Israel’s DermaCompare technology and the development, sale and service of imaging solutions utilizing its DermaCompare

software for use in derma imaging and analytics for the detection of skin cancer.

On January 29, 2018, the Company ceased

the DermaCompare operations of its former subsidiary.

May 2, 2018, the District Court of Lod, Israel issued a winding-up order for Emerald Israel and appointed an Israeli attorney

1 unchanged sentence

Crypto Technologies Ltd.

January 17, 2018, the Company formed a new wholly-owned subsidiary under the laws of the State of Israel, Virtual Crypto Technologies

(the “VCT Israel”), to develop and market software and hardware products facilitating, allowing and supporting

purchase and/or sale of cryptocurrencies through ATMs, tablets, personal computers (“PCs”) and/or mobile devices.

January 17, 2018, the Company formed a new wholly-owned subsidiary under the laws of the State of Israel, Virtual Crypto

Technologies Ltd.

(the “VCT Israel”), to develop and market software and hardware products facilitating, allowing

and supporting purchase and/or sale of cryptocurrencies through ATMs, tablets, personal computers (“PCs”)

and/or mobile devices.

Israel ceased its business operation prior to consummation of the Recapitalization Transaction.

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

with Algomizer Ltd.

(the “Recapitalization Transaction”)

February 7, 2019, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with Algomizer

(TASE:ALMO), a company organized under the laws of the State of Israel (“Algomizer”), pursuant to which on July

25, 2019 (the “Closing Date”), Algomizer assigned, transferred and delivered its 99.83% holdings in Viewbix Ltd.

On January 27, 2020, Virtual Crypto

Israel was sold to a third party for NIS 50,000 ($14,459).

(Formerly known as Virtual Crypto Technologies, Inc.)

to Consolidated Financial Statements

dollars in thousands (except share and per share data)

1 GENERAL (Cont.)

with Gix Internet Ltd.

(formerly known as Algomizer Ltd.), or Gix (the “Recapitalization Transaction”)

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

February 7, 2019, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with Gix

Internet Ltd.

(TASE:ALMO), a company organized under the laws of the State of Israel (“Gix”), pursuant to which

on July 25, 2019 (the “Closing Date”), Gix assigned, transferred and delivered its 99.83% holdings in Viewbix

(“Viewbix Israel”) to the Company in exchange for shares of restricted common stock of the Company, representing

of the issued and outstanding share capital of the Company on a fully diluted basis as of the Closing Date following the conversion

of certain convertible notes of the Company and excluding certain warrants to purchase shares of the Common Stock expiring in

2020 and additional warrants as further described below (the “Fully Diluted Share Capital”).

In addition, upon

the earlier of:

(a) the launch of a live video product to an American consumer in the United States by Viewbix Israel, or (b)

the launch of an interactive television product to an American consumer in the United States by Viewbix Israel, the Company will

issue to Algomizer an additional 1,642,193 shares of restricted common stock of the Company representing 5% of the Fully Diluted

Share Capital immediately following the Closing Date.

July 24, 2019, the Company filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of

Delaware reflecting its name change from Virtual Crypto Technologies, Inc.

65% of the issued and outstanding share capital of the Company on a fully diluted basis as of the Closing Date following the

conversion of certain convertible notes of the Company and excluding certain warrants to purchase shares of the Common Stock

expiring in 2020 and additional warrants as further described below (the “Fully Diluted Share Capital”).

upon the earlier of:

(a) the launch of a live video product to an American consumer in the United States by Viewbix Israel,

or (b) the launch of an interactive television product to an American consumer in the United States by Viewbix Israel, the

Company will issue to Gix an additional 1,642,193 shares of restricted common stock of the Company representing 5% of the

Fully Diluted Share Capital immediately following the Closing Date.

July 24, 2019, the Company filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State

of Delaware reflecting its name change from Virtual Crypto Technologies, Inc.

to Viewbix Inc.

to reflect its new operations and business

focus and, effective on August 7, 2019, FINRA approved the Registrant’s name change and its trading symbol was changed from

“VRCP”

to reflect its new operations

and business focus and, effective on August 7, 2019, FINRA approved the Registrant’s name change and its trading symbol

was changed from “VRCP”

to “VBIX”

on the OTCQB.

the Closing Date, the Company (i) issued 20,281,085 shares of its common stock to Algomizer in exchange for consideration

consisting of consideration for its 99.83% holdings in Viewbix Israel, and (ii) 3,434,889 shares of its common

stock to holders of convertible notes, which were issued by the Company prior to the Reverse Recapitalization,

and which were converted upon the Closing Date.

The shares of common stock were issued

under Regulation S.

The Company also issued a total of 7,298,636 warrants to Algomizer to purchase the Company’s common

stock, whereby (i) 3,649,318 of such warrants were issued with an exercise price of $0.48, and (ii) 3,649,318 of such warrants

were issued with an exercise price of $0.80.

the Closing Date, the Company (i) issued 20,281,085 shares of its common stock to Gix in exchange for consideration consisting

of consideration for its 99.83% holdings in Viewbix Israel, and (ii) 3,434,889 shares of its common stock to holders of convertible

notes, which were issued by the Company prior to the Reverse Recapitalization, and which were converted upon the Closing Date.

The shares of common stock were issued under Regulation S.

The Company also issued a total of 7,298,636 warrants to Gix to

purchase the Company’s common stock, whereby (i) 3,649,318 of such warrants were issued with an exercise price of $0.48,

and (ii) 3,649,318 of such warrants were issued with an exercise price of $0.80.

(Formerly known as Virtual Crypto Technologies, Inc.)

to Consolidated Financial Statements

dollars in thousands (except share and per share data)

1 GENERAL (Cont.)

with Gix Internet Ltd.

(formerly known as Algomizer Ltd.), or Gix (the “Recapitalization Transaction”):

a result of the Recapitalization Transaction, Viewbix Israel became a subsidiary of the Company.

As the shareholders

of Viewbix Israel received the largest ownership interest in the Company, Viewbix Israel was determined to be the “accounting

acquirer”

As the shareholders of Viewbix

Israel received the largest ownership interest in the Company, Viewbix Israel was determined to be the “accounting acquirer”

in the Recapitalization Transaction.

As a result, the historical financial statements of the Company were replaced

with the historical financial statements of Viewbix Israel.

The number of shares prior to the reverse capitalization have been

retroactively adjusted based on the equivalent number of shares received by the accounting acquirer in the Recapitalization Transaction.

As a result, the historical financial statements of the Company were replaced with the

historical financial statements of Viewbix Israel.

The number of shares prior to the reverse recapitalization have been retroactively

adjusted based on the equivalent number of shares received by the accounting acquirer in the Recapitalization Transaction.

Company and its subsidiaries are collectively referred to as the “Company”.

Viewbix Israel was incorporated on February

2006 in Israel.

The Company has developed an interactive video platform based on Software as a Service (“SaaS”) business

model with interactive elements, and the ability to collect and analyze information about each interactive action performed during

the viewing of the video clip.

The interactive elements and information gathered, allowing the advertiser to analyze user viewing

habits and optimize real-time throughout the campaign while increasing the effectiveness of online and live video advertising.

Viewbix Israel was incorporated on

February 2006 in Israel.

The Company has developed an interactive video platform based on Software as a Service (“SaaS”)

business model with interactive elements, and the ability to collect and analyze information about each interactive action

performed during the viewing of the video clip.

The interactive elements and information gathered, allowing the advertiser

to analyze user viewing habits and optimize real-time throughout the campaign while increasing the effectiveness of online

and live video advertising.

January 1, 2020, the Company announced certain cost reduction measures due the Company not achieving certain revenues goals.

Subscription Agreement and Loan Agreement

December 18, 2020, the company entered into a Stock Subscription Agreement (the “Subscription”) with certain investors

(the “Investors”) in connection with the sale and issuance of an aggregate of 3,000,000 shares of Common Stock,

at a purchase price of $0.01 per share, and for an aggregate purchase price of $30,000.

In addition, and on the same date,

the company entered into a Loan Agreement (the “Loan”) with the Investors, pursuant to which the Investors lent

an aggregate amount of $69,000 (the “Principal Amount”).

In accordance with the terms of the Loan, the

company repaid the interest on the Principal Amount (8% compounded annually) to the Investors as an issuance of 552,000 shares of Common Stock, at a price per share of $0.01.

The shares of Common Stock were issued to the

Investors pursuant to Regulation S of the Securities Act of 1933, as amended.

(Formerly known as Virtual Crypto Technologies, Inc.)

to Consolidated Financial Statements

dollars in thousands (except share and per share data)

1 GENERAL (Cont.)

Company has incurred $ 443 in net loss for the year ended December 31, 2020, has $2,078 stockholders’

deficit as of December

31,2019 and $721 in total stockholders’

deficit as of December 31,2018 and $135 in negative cash flows from operations for

the year ended December 31,2019.

On July 25, 2019, the Company ceased the operations of VCT Israel and subsequent to the balance

sheet date, the Company has significantly reduced its operations and expenses of Viewbix Israel.

Management expects the Company

to continue to generate substantial operating losses and to continue to fund its operations primarily through utilization of its

current financial resources and through additional raises of capital.

deficit as of

December 31, 2020 and $1,693 in total stockholders’

deficit as of December 31, 2019 and $61 in negative cash flows from

operations for the year ended December 31, 2020.

On July 25, 2019, the Company ceased the operations of VCT Israel and since

January 2020, the Company has significantly reduced its operations and expenses of Viewbix Israel.

Management expects the

Company to continue to generate substantial operating losses and to continue to fund its operations primarily through utilization

of its current financial resources and through additional raises of capital.

conditions raise substantial doubts about the Company’s ability to continue as a going concern.

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includes raising funds from outside potential investors.

However, there is no assurance such funding will be available to the

Company or that it will be obtained on terms favorable to the Company or will provide the Company with sufficient funds to meet

its objectives.

These financial statements do not include any adjustments relating to the recoverability and classification of

assets, carrying amounts or the amount and classification of liabilities that may be required should the Company be unable to

continue as a going concern.

However, there is no assurance such funding will be available to

the Company or that it will be obtained on terms favorable to the Company or will provide the Company with sufficient funds

to meet its objectives.

These financial statements do not include any adjustments relating to the recoverability and classification

of assets, carrying amounts or the amount and classification of liabilities that may be required should the Company be unable

to continue as a going concern.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States

of America (US GAAP).

of estimates in the preparation of consolidated financial statements

financial statements, which have been prepared in accordance

with accounting principles generally accepted in the United States of America (“U.S.

GAAP”).

In connection with the

preparation of our financial statements, the Company is required to make assumptions and estimates about future events, and apply

judgments that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures.

assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be

relevant at the time our consolidated financial statements are prepared.

On a regular basis, management reviews the accounting

policies, assumptions, estimates and judgments to ensure that our financial statements are presented fairly and in accordance

However, because future events and their effects cannot be determined with certainty, actual results could differ

from our assumptions and estimates, and such differences could be material.

significant accounting policies used in the preparation of the financial statements are as follows:

functional currency of the Company and its subsidiary is the US dollar, which is the currency of the primary economic environment

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In accordance with ASC 830, “Foreign Currency Matters”

(ASC 830), balances denominated or

linked to foreign currencies other than US dollar are stated on the basis of the exchange rates prevailing at the applicable

balance sheet date.

For foreign currency transactions included in the Consolidated Statements of Comprehensive Loss, the

exchange rates applicable on the relevant transaction dates are used.

Gains or losses arising from changes in the exchange rates

used in the translation of such transactions are carried as financing income or expenses.

(ASC 830), balances denominated in or

linked to foreign currency are stated on the basis of the exchange rates prevailing at the applicable balance sheet date.

foreign currency transactions included in the statement of operations, the exchange rates applicable on the relevant transaction

dates are used.

Gains or losses arising from changes in the exchange rates used in the translation of such transactions are carried

as financing income or expenses.

(Formerly known as Virtual Crypto Technologies, Inc.)

to Consolidated Financial Statements

dollars in thousands (except share and per share data)

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)

of consolidation

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To date the Group did not incur any material impairment

(Formerly known as Virtual Crypto Technologies, Inc.)

to Consolidated Financial Statements

dollars in thousands (except share and per share data)

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Company applies ASC 718-10, “Share-Based Payment,”

which requires the measurement and recognition of compensation

expenses for all share-based payment awards made to employees and directors (including employee stock options under the Company’s

stock plans) based on estimated fair values.

718-10 requires companies to estimate the fair value of equity-based payment awards on the date of grant.

The value of the portion

of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company’s

statement of operations.

Company recognizes compensation expenses for the value of non-employee awards based on the straight-line method over the requisite

service period of each award, net of estimated forfeitures.

Company estimates the fair value of stock options granted as equity awards using a Black-Scholes options pricing model.

The option-pricing

model requires a number of assumptions, of which the most significant are share price, expected volatility and the expected option

term (the time from the grant date until the options are exercised or expire).

Expected volatility is estimated based on volatility

of similar companies in the technology sector.

The Company has historically not paid dividends and has no foreseeable plans to

issue dividends.

The risk-free interest rate is based on the yield from governmental zero-coupon bonds with an equivalent term.

The expected option term is calculated for options granted to employees and directors using the “simplified”

Grants to non-employees are based on the contractual term.

Changes in the determination of each of the inputs can affect the fair

value of the options granted and the results of operations of the Company.

per Common Share

Earnings or loss per

share (“EPS”) is the amount of earnings attributable to each share of common stock.

For convenience, the term is used

to refer to either earnings or loss per share.

or loss per share (“EPS”) is the amount of earnings attributable to each share of common stock.

For convenience, the

term is used to refer to either earnings or loss per share.

EPS is computed pursuant to ASC 260-10-45.

Pursuant to ASC 260-10-45-10 through

260-10-45-16 Basic EPS is computed by dividing income available to common stockholders (the numerator) by the weighted-average

Pursuant to ASC 260-10-45-10

through 260-10-45-16 Basic EPS is computed by dividing income available to common stockholders (the numerator) by the weighted-average

number of common shares outstanding (the denominator) during the period.

26 unchanged sentences

and development expenses are charged to the statement of operations as incurred.

(Formerly known as Virtual Crypto Technologies, Inc.)

to Consolidated Financial Statements

dollars in thousands (except share and per share data)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Company accounts for income taxes in accordance with ASC 740, “Income Taxes”, and (“ASC 740”).

14 unchanged sentences

Contingencies

Group records accruals for loss contingencies arising from claims, litigation and other sources when it is probable that a liability

has been incurred and the amount can be reasonably estimated.

These accruals are adjusted periodically as assessments change or

additional information becomes available.

Legal costs incurred in connection with loss contingencies are expensed as incurred.

Company records accruals for loss contingencies arising from claims, litigation and other sources when it is probable that

a liability has been incurred and the amount can be reasonably estimated.

These accruals are adjusted periodically as assessments

change or additional information becomes available.

Legal costs incurred in connection with loss contingencies are expensed as

(Formerly known as Virtual Crypto Technologies, Inc.)

to Consolidated Financial Statements

dollars in thousands (except share and per share data)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)

issued accounting pronouncements

August 2018, the FASB issued ASU No.

2018-14, “Compensation—Retirement Benefits—Defined Benefit Plans—General

(Subtopic 715- 20).”

The guidance focuses on additional disclosure of reasons for significant gains and losses to changes

in the benefit obligation for the period, in addition to removal and clarification of existing disclosures.

The guidance will

be effective for the Company’s fiscal year beginning January 1, 2021, on a retrospective basis.

is currently evaluating the potential effect of the adoption of ASU 2018-04 on our financial position and results of operations.

The Company does not expect the adoption of this ASU to have a material impact on the Company’s financial statements.

August 2018, the FASB issued ASU No.

2018-13, “Fair Value Measurement (Topic 820).”

The guidance focuses on modification

of disclosures, which includes the consideration of costs and benefits.

The guidance will be effective for the Company’s

fiscal year beginning January 1, 2020, including interim periods within that year.

The Company does not

expect the adoption of this ASU to have a material impact on the Company’s financial statements.

June 2018, the FASB issued, ASU No.

2018-07, “Compensation—Stock Compensation (Topic 718).”

The guidance focuses

on expansion of scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees.

The guidance will be effective for the Company’s fiscal year beginning January 1, 2019, including interim

periods within that year.

The Company is currently evaluating the potential effect of the adoption of ASU 2018-07 on our financial

position and results of operations.

The Company does not expect the adoption of this ASU to have a material impact on the Company’s

financial statements.

January 2017, the FASB issued ASU No.

2019-10, “Intangibles—Goodwill and Other (Topic 350).”

guidance reduces the complexity of goodwill impairment tests by no longer requiring entities to determine goodwill impairment

by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities

as if that reporting unit had been acquired in a business combination.

The guidance will be effective for the Company’s

fiscal year beginning January 1, 2023, including interim periods within that year on a prospective basis.

Company is currently evaluating the potential effect of the adoption of ASU 2019-10 on our financial position and results

of operations.

The Company does not expect the adoption of this ASU to have a material impact on the Company’s financial

Instruments –

Credit Losses

June 2016, the FASB issued ASU No.

2016-13, “Financial Instruments—Credit Losses (Topic 326).”

replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires

consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

The guidance will

be effective for the Company’s fiscal year beginning January 1, 2023, including interim periods within

replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and

requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

guidance will be effective for the Company’s fiscal year beginning January 1, 2023, including interim periods within

The Company is currently evaluating the potential effect of the adoption of ASU 2019-10 on our financial position

and results of operations.

The Company does not expect the adoption of this ASU to have a material impact on the Company’s

financial statements.

accounts receivables

The Company does not expect the adoption of this ASU to have a material impact on the

Company’s financial statements.

for Income Taxes

December 2019, the FASB issued a new standard to simplify the accounting for income taxes.

The guidance eliminates certain exceptions

related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and

the recognition of deferred tax liabilities for outside basis differences related to changes in ownership of equity method investments

and foreign subsidiaries.

The guidance also simplifies aspects of accounting for franchise taxes and enacted changes in tax laws

or rates, and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill.

The standard will

be effective for us beginning July 1, 2021, with early adoption permitted.

Adoption of the standard will not have a material

impact on our consolidated financial statements.

(Formerly known as Virtual Crypto Technologies, Inc.)

to Consolidated Financial Statements

dollars in thousands (except share and per share data)

Other Accounts receivables

Government authorities

and equipment

and related equipment

furniture and equipment

Computers and related equipment

Office furniture and equipment

Accumulated depreciation

Net book value

accounts payable and accrued liabilities

payables and deferred revenues

Temporary Equity and Stockholders’

shares confer the right to participate in the general meetings,

to one vote per share for any purpose, to an equal part, on share basis, in distribution of dividends and to equally participate,

on share basis, in distribution of excess of assets and funds from the Company and they shall not confer other privileges unless

stated hereunder or in the Companies Law otherwise.

Some investors have standard anti-dilutive rights, registration rights, and

information and representation rights.

preferred shareholder shall have one vote for each ordinary share that would have been received if preference shares had been

converted into common shares.

shares (relating to Viewbix Ltd prior to the Recapitalization Transaction ) :

Other payables and deferred revenues

Accrued liabilities

(Formerly known as Virtual Crypto Technologies, Inc.)

to Consolidated Financial Statements

dollars in thousands (except share and per share data)

Party Transactions.

Parent Company Payable

part of the agreement with Gix, the parties agreed to have the Company’s operations outsourced to Gix from the agreement

date and until the acquisition is consummated.

The following term were included in the agreement pursuant to the above:

May 2018 all of the Company’s employees will become employees of Gix.

the periods of May 2018 to October 2018, Gix will pay the full expenses of the employees as well as other related expenses.

November 2018 until to the Closing Date, the employees transferred from the Company to Gix will dedicate half of their time

to the Company’s operations and correspondingly 50% of the costs to be incurred by Gix in respect of these employees

are to be charged to the Company.

From the closing date, the actual of the

expenses incurred by Gix that related to the Company will be charged to the Company.

amounts were paid by the Company to Gix during 2020 and 2019.

term loan and Issues of shares

December 18, 2020, the company entered into a Loan Agreement (the “Loan”) and Stock Subscription Agreement

with certain Investors as described in note 1e, pursuant to which the Investors lent an aggregate amount of $69,000 (the

“Principal Amount”).

In accordance with the terms of the Loan, the company prepaid the interest on the Principal Amount

of 8% compounded annually to the Investors as an issuance of 552,000 shares of Common Stock, at

a price per share of $0.01.

Under the Stock Subscription Agreement, the Investors transferred an amount of $ 30,587 to the company

as consideration for the issued shares.

Company allocated the total proceeds in respect of the shares issued and the Loan extended based on its relative fair values.

As a result of the allocation, a discount of $19 was recorded on the loan.

The discount is amortized over the term of the loan

as finance expense.

(Formerly known as Virtual Crypto Technologies, Inc.)

to Consolidated Financial Statements

dollars in thousands (except share and per share data)

term loan and Issues of shares (Cont.)

The allocation of the proceeds to the fair value distribution of the liability and equity components on the transactions date was as follows:

% of total fair

composition of short term loan balance as of the transaction is as follows:

Principal amount

Discount on Short term loan

Short term loan, Net

Stockholders’

shares confer the right to participate in the general meetings, to one vote per share for any purpose, to an equal part, on share

basis, in distribution of dividends and to equally participate, on share basis, in distribution of excess of assets and funds

from the Company and they shall not confer other privileges unless stated hereunder or in the Companies Law otherwise.

Some investors

have standard anti-dilutive rights, registration rights, and information and representation rights.

December 18, 2020, the company entered into a Stock Subscription Agreement (the “Subscription”) with certain investors

(the “Investors”) in connection with the sale and issuance of an aggregate of 3,000,000 shares of Common Stock, at

a purchase price of $0.01 per share, and for an aggregate purchase price of $30,000.

In addition, and on the same date, the company

entered into a Loan Agreement (the “Loan”) with the Investors, pursuant to which the Investors lent an aggregate amount

of $69,000 (the “Principal Amount”).

In accordance with the terms of the Loan, the company repaid the interest

on the Principal Amount of 8% compounded annually to the Investors as an issuance of 552,000 shares

of Common Stock, at a price per share of $0.01.

The shares of Common Stock were issued to the Investors pursuant to Regulation

S of the Securities Act of 1933, as amended.

For more details, please see note 1e.

(Formerly known as Virtual Crypto Technologies, Inc.)

to Consolidated Financial Statements

dollars in thousands (except share and per share data)

Stockholders’

shares (relating to Viewbix Ltd the prior to the Recapitalization Transaction ) :

shares may have been converted into ordinary shares of Viewbix Ltd at any time.

15 unchanged sentences

Company’s AOA do not provide redemption rights to the holders of the preferred shares.

In the event of a liquidation event,

all the funds and assets of the Company available for distribution among all the stockholders shall be distributed based on a

certain mechanism as described in the Company’s AOA.

Although the preferred shares are not redeemable, in the event of certain

“deemed liquidation events”

that are not solely within the Company’s control (including merger, acquisition,

or sale of all or substantially all of the Company’s assets), the holders of the preferred shares would be entitled to preference

amounts paid before distribution to other stockholders (as explained in the previous paragraph) and hence effectively redeeming

the preference amount.

In accordance with ASR 268 and ASC 480 “Distinguishing Liabilities from Equity”, the Company’s

preferred shares are classified outside of stockholders’

deficit as a result of these in-substance contingent redemption

As of December 31, 2019 and 2018, the Company did not adjust the carrying values of the convertible preferred shares to

the deemed liquidation values of such shares since a liquidation event was not probable of occurring.

detailed in Note 1, as part of the Recapitalization Transaction in July 2019, the Company issued 20,281,085 shares of

common stock to Algomizer in exchange for its 99.83% holdings in Viewbix Israel.

In the event of a liquidation

event, all the funds and assets of the Company available for distribution among all the stockholders shall be distributed

based on a certain mechanism as described in the Company’s AOA.

Although the preferred shares are not redeemable, in

the event of certain “deemed liquidation events”

that are not solely within the Company’s control

(including merger, acquisition, or sale of all or substantially all of the Company’s assets), the holders of the

preferred shares would be entitled to preference amounts paid before distribution to other stockholders (as explained in the

previous paragraph) and hence effectively redeeming the preference amount.

In accordance with ASR 268 and ASC 480

“Distinguishing Liabilities from Equity”, the Company’s preferred shares are classified outside of

stockholders’

deficit as a result of these in-substance contingent redemption rights.

As of December 31, 2019 and 2018,

the Company did not adjust the carrying values of the convertible preferred shares to the deemed liquidation values of such

shares since a liquidation event was not probable of occurring.

detailed in Note 1, as part of the Recapitalization Transaction in July 2019, the Company issued 30,928,620 common shares in exchange

for 99.83% of the issued and outstanding ordinary shares and all the preferred shares of Viewbix Israel.

The number of shares

2 unchanged sentences

following table summarizes information of outstanding warrants as of December 31, 2020:

2020 - March 2020

connection with the Share Exchange Agreement, upon the earlier of:

Exercise Price

Class J Warrants

Class K Warrants

Additionally,

in connection with the Share Exchange Agreement, upon the earlier of:

(a) the launch of a live video product to an American consumer

in the United States by Viewbix Israel, or (b) the launch of an interactive television product to an American consumer in the

United States by Viewbix Israel, the Company will issue to Algomizer an additional 1,642,193 shares of restricted common stock

of the Company.

All of the Company’s warrants were concluded to meet the US

GAAP criteria for equity classification and are accordingly are classified in equity.

Party Transactions.

Parent Company Payable

May, 2018, Viewbix Israel and Algomizer entered into an agreement, pursuant to which the parties agreed to have the Viewbix Israel’s

operations outsourced to Algomizer from the date of the agreement (the “Algomizer Agreement”).

The following terms

were included in the agreement:

of May 2018 all of the Company’s employees became employees of Algomizer.

the periods of May 2018 to October 2018, Algomizer charged Viewbix all the expenses incurred in respect of these employees

(see (a) above) as well as other related expenses.

November 2018 until the Closing Date, the employees that transferred from the Company to Algomizer dedicated half of their time

to the Company’s operations and correspondingly 50% of the costs to be incurred by Algomizer in respect of these employees

are to be charged to the Company.

the Closing Date, 100% of the all employee costs incurred by Algomizer that relate to the Company will be charged to the

amounts were paid by the Company to Algomizer during 2019 and 2018 in respect of the above, which resulted in a parent company

payable of $789 as of December 31, 2018 and $1,611 as of December 31, 2019.

and Contingencies

August 2019, a law suit was filed against the Company and, the parent company.

Algomizer claiming that the applicants

were entitled to receive shares of the Company as part of the consideration in the Company’s acquisition by Algomizer.

the opinion of the Company’s management, the applicants’

claims are based on incorrect assumptions and deals with

the distribution of the internal shares between the applicants and the other former shareholders of the Company before the acquisition

transaction, resulting in a consideration coming to the applicants following the acquisition transaction.

The understanding of

the Company and its legal advisers is that the claim may not create financial exposure to the Company.

April 2017, a lawsuit was filed by a former CEO of the Company with the Tel Aviv District Court (the “Tel Aviv Court”)

against the Company claiming certain damages in the total amount of $100,000, under the assertion of wrongful termination by the

Company and Emerald Israel.

The Company believes these claims to be unsubstantiated and wholly without merit and accordingly filed

its response with the Tel Aviv Court in October of 2017.

United States by Viewbix Israel, the Company will issue to Gix an additional 1,642,193 shares of restricted common stock of the

All of the Company’s warrants meet the US GAAP criteria for equity classification.

During January and March 2020,

50,000 class H warrants expired.

During January 2020, 38,095 class I warrants expired.

During April 2020, 142,857 Class G warrants

(Formerly known as Virtual Crypto Technologies, Inc.)

to Consolidated Financial Statements

dollars in thousands (except share and per share data)

Commitments and Contingencies

August 2019, a lawsuit was filed against the Company and its parent Company, Gix.

The plaintiffs claim that they were entitled

to receive shares of the Company as a part of the consideration in Gix’s acquisition of the Company.

In management’s

opinion, the plaintiffs’

claims are based on incorrect assumptions that relate to the distribution of shares between the

plaintiffs and other former shareholders of the Company prior to Gix’s acquisition which would have resulted in the receipt

of shares in the acquisition transaction.

During September 2020, a settlement was reached between the parties which was later

approved by the court.

The settlement outlines that in exchange for the voluntary waiver of claims made by the plaintiffs, Gix

will issue 63,350 shares of its common stock held in trust in favor of securing the transaction by which Gix acquired shares of

in November 2018.

The remaining shares in the trust account will be used to indemnify Gix for any expenses related

to the litigation.

Since the consideration was paid in Gix’s shares, and as the claims relate to the distribution of shares

between the plaintiffs and other former shareholders of the Company, the settlement did not impact on the Company’s financial

June 2017, a lawsuit was filed by a former CEO of the Company with the Tel Aviv District Court (the “Tel Aviv Court”)

against the Company claiming certain damages in the total amount of $225, under the assertion of wrongful termination by the Company

and Emerald Israel.

The Company believes these claims to be unsubstantiated and wholly without merit and accordingly filed its

response with the Tel Aviv Court in October of 2017.

The dispute was initially heard by the Tel Aviv Court on February 13, 2020.

2020 and a supplemental hearing has been set for March 19, 2020.

As of December 31, 2019, the company’s management, in

consultation with its legal advisors, believes that their claim will be successful and should the plaintiff be successful,

they will be awarded an insignificant amount and therefore no amount has been provided for in these financial statements.

ended December 31,

subscriptions

and development expenses.

ended December 31,

and related expense

and marketing expenses.

ended December 31,

and related expense

and administrative expenses.

ended December 31,

salaries and related expenses

Recapitalization

Transaction costs

(income) expenses, net

ended December 31,

rate differences

financial income

In a supplemental hearing on February 11, 2021 the former CEO provided data regarding his claims and his summaries were filed

The Company’s summaries will be filed within 30 days of receiving the former CEO summaries.

As of December

31, 2020, the company’s management, in consultation with its legal advisors, believes that the former CEO’s claims

will not be Successful.

Year ended December 31,

Individual Subscriptions

Enterprise Subscriptions

Research and development expenses.

Year ended December 31,

Salaries and related expense

(Formerly known as Virtual Crypto Technologies, Inc.)

to Consolidated Financial Statements

dollars in thousands (except share and per share data)

Seles and marketing expenses.

Year ended December 31,

Salaries and related expense

General and administrative expenses.

Year ended December 31,

Wages, salaries and related expenses

Professional fees

Recapitalization Transaction costs

Financing (income) expenses, net

Year ended December 31,

Exchange rate differences

Other financial income

(Formerly known as Virtual Crypto Technologies, Inc.)

to Consolidated Financial Statements

dollars in thousands (except share and per share data)

Income Taxes.

Company is subject to income taxes under the Israeli and U.S.

13 unchanged sentences

are as follows:

loss carryforward

deferred tax asset before valuation allowance

deferred tax asset

Deferred R&D expenses

Operating loss carryforward

Net deferred tax asset before valuation allowance

Valuation allowance

Net deferred tax asset

of December 31, 2020, the Company has provided valuation allowances of $7,076 in respect of deferred tax assets resulting from

4 unchanged sentences

carryforward tax losses:

of December 31, 2019, the Virtual Crypto Israel and Viewbix Israel incurred operating losses in Israel of approximately $1,229

and $13,075, respectively, which may be carried forward and offset against taxable income in the future for an indefinite

of December 31, 2020, Viewbix Israel incurred operating losses in Israel of approximately $13,804 which may be carried forward

and offset against taxable income in the future for an indefinite period.

of December 31, 2020 the Company generated net operating losses in the U.S.

of approximately $18,378.

Net operating losses in

of approximately $18,452 Net operating losses in the

are available through 2035.

Utilization of U.S.

net operating losses may be subject to substantial annual limitation

due to the “change in ownership”

net operating losses may be subject to substantial annual limitation due

to the “change in ownership”

provisions of the Internal Revenue Code of 1986 and similar state provisions.

annual limitation may result in the expiration of net operating losses before utilization.

Loss before taxes on income, consists of the following:

the year ended December 31

Reconciliation

of Income Taxes:

The following is a reconciliation

of the taxes on income assuming that all income is taxed at the ordinary statutory corporate tax rate in Israel and tax incurred

in income statement:

the year ended December 31

loss before tax on income

Tax under statutory tax rate

in valuation allowance

Taxes on income

January 1, 2020, the Company announced certain cost reduction measures due the Company not achieving certain revenues goals.

On January 1, 2020, Mr.

Jonathan Stefansky, the Company’s then chief executive officer and member of the Company’s

board of directors, tendered his resignation from the Board, and on the same date the sides reached a mutual understanding

Stefansky would step down as chief executive officer, effective March 1, 2020.

On the same date,

the Company and Mr.

Hillel Scheinfeld, the Company’s then chief operating officer, reached a similar mutual understanding

and agreed he would step down, also effective March 1, 2020.

Effective March 1, 2020, Mr.

Amihay Hadad was appointed

as the Chief Executive Officer and Chief Financial Officer.

limitation may result in the expiration of net operating losses before utilization.

(Formerly known as Virtual Crypto Technologies, Inc.)

to Consolidated Financial Statements

dollars in thousands (except share and per share data)

Income Taxes (cont.)

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

For the year ended December 31

LOSS PER SHARE-BASIC AND DILUTED

For the year ended December 31

Basic and diluted:

Net loss attributable to ordinary stockholders

Weighted-average ordinary shares

Loss per share-basic and diluted

- COVID-19 PANDEMIC IMPLICATIONS

COVID-19 pandemic, which originated in China in late 2019, has since spread across the globe and affected the economic condition

of most, if not all, countries, including the United States, Israel and many countries in Europe.

On March 11, 2020, the World

Health Organization declared the outbreak a pandemic.

While COVID-19 is still spreading and the final implications of the pandemic

are difficult to estimate at this stage, it is clear that it has affected the lives of a large portion of the global population.

As of December 31, 2020, the pandemic has caused repeated states of emergency to be declared in various countries, ongoing and

extended travel restrictions have been imposed for several months, strict quarantines rules have been established and maintained

for an extended period of time in a plethora of jurisdictions and various institutions and companies have been closed and rendered

The Company is actively monitoring the pandemic and is taking any necessary measures to respond to the situation in

cooperation with the various stakeholders.

Due to the uncertainty surrounding the COVID-19 pandemic, the Company will continue

to assess the situation, including government-imposed restrictions, market by market.

It is not possible at this time to estimate

the full impact that the COVID-19 pandemic could have on the Company’s business, the continued spread of COVID-19, and any

additional measures taken by governments, health officials or by the Company in response to such spread, could have on the Company’s

business, results of operations and financial condition.

The COVID-19 pandemic and mitigation measures have also negatively impacted

global economic conditions, which, in turn, could adversely affect the Company’s business, results of operations and financial

The extent to which the COVID-19 outbreak continues to impact the Company’s financial condition will depend on

future developments that are highly uncertain and cannot be predicted, including new government actions or restrictions, new information

that may emerge concerning the severity, longevity and impact of the COVID-19 pandemic on economic activity.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data