QUANTUM X LABS INC. 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________________ to __________________ Commission file number: 000-15746 VIEWBIX INC. (Exact Name Of Registrant As Specified In Its Charter) Delaware 68-0080601 (State of (I.R.S. Employer Incorporation) Identification No.) 11 Derech Menachem Begin Street , Ramat Gan , Israel 5268104 (Address of Principal Executive Offices) (ZIP Code) Registrant’s Telephone Number, Including Area Code: +972 9-774-1505 Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, Par Value $0.0001 VBIX OTCQB Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act) or a smaller reporting company. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ (Do not check if a smaller reporting company) 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 June 30, 2021, the Registrant had 34,753,669 shares of common stock issued and outstanding. - 2 - VIEWBIX INC. TABLE OF CONTENTS Item Description Page PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS 3 ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS 20 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 23 ITEM 4. CONTROLS AND PROCEDURES 23 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS 24 ITEM 1A. RISK FACTORS 24 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 24 ITEM 3. DEFAULT UPON SENIOR SECURITIES 24 ITEM 4. MINE SAFETY DISCLOSURE 24 ITEM 5. OTHER INFORMATION 24 ITEM 6. EXHIBITS 25 SIGNATURES 26 - 3 - PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS VIEWBIX INC. (Formerly known as Virtual Crypto Technologies, Inc.) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) June 30, 2021 CONTENTS Page Interim Condensed Consolidated Balance Sheets (unaudited) Interim Condensed Consolidated Balance Sheets (unaudited) 4 – 5 Interim Condensed Consolidated Statements of Comprehensive Loss (unaudited) 6 Interim Condensed Consolidated Statements of Changes in Shareholders’ Equity (unaudited) 7 Interim Condensed Consolidated Statements of Cash Flows (unaudited) 8 Notes to the Interim Condensed Consolidated Financial Statements 9 - 19 - 4 - VIEWBIX INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) U.S. dollars in thousands (except share data) As of June 30 As of December 31 Note 2021 2020 ASSETS CURRENT ASSETS Cash and cash equivalents 126 148 Trade receivables 35 15 Other accounts receivable 3 15 20 Prepaid expenses 16 42 Total current assets 192 225 Total assets 192 225 The accompanying notes are an integral part of these condensed consolidated financial statements. - 5 - VIEWBIX INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (Cont.) U.S. dollars in thousands (except share data) As of June 30 As of December 31 Note 2021 2020 LIABILITIES AND STOCKHOLDERS’ DEFICIT CURRENT LIABILITIES Trade payables - 22 Other accounts payables and accrued liabilities 4 199 177 Payable to parent company 5 2,171 2,054 Short term loan 6 59 50 Total current liabilities 2,429 2,303 Commitments and contingencies 8 - - STOCKHOLDERS’ DEFICIT 7 Share Capital Common stock of $ 0.0001 par value - Authorized: 490,000,000 shares; Issued and outstanding: 34,753,669 shares as of December 31, 2020; and June 30, 2021 3 3 Additional paid-in capital 13,073 13,073 Accumulated deficit ( 15,313 ) ( 15,154 ) Total stockholders’ deficit ( 2,237 ) ( 2,078 ) Total liabilities and stockholders’ deficit 192 225 The accompanying notes are an integral part of these condensed consolidated financial statements. - 6 - VIEWBIX INC. AND ITS SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) U.S. dollars in thousands (except share data) Note 2021 2020 2021 2020 For the six months ended June 30 For the three months ended June 30 Note 2021 2020 2021 2020 Revenues 25 70 17 33 Cost of revenues - 4 - - Gross profit 25 66 17 33 Operating expenses: Research and development 28 59 12 - Selling and marketing 2 7 - - General and administrative 142 269 79 94 Gain from sale of a subsidiary - ( 8 ) - - Operating loss 147 261 74 61 Financial expenses, net 8 ( 11 ) ( 4 ) ( 4 ) ( 32 ) Loss before tax 158 265 78 93 Taxes on income 9 1 2 1 - Net loss 159 267 79 93 Loss per share - basic and diluted 10 0.005 0.009 0.002 0.003 Weighted average number of common stock outstanding used in the computations of loss per share (in thousands) (*) 34,753,669 31,201,669 34,753,669 31,201,669 The accompanying notes are an integral part of these condensed consolidated financial statements. - 7 - VIEWBIX INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT (Unaudited) U.S. dollars in thousands (except share data) Number Amount capital deficit deficit Common stock Additional paid-in Accumulated Total shareholders’ Number Amount capital deficit deficit Balance as of January 1, 2021 34,753,669 3 13,073 ( 15,154 ) ( 2,078 ) Net loss for the period - - - ( 159 ) ( 159 ) Balance as of June 30, 2021 34,753,669 3 13,073 ( 15,313 ) ( 2,237 ) Common stock Additional paid-in Accumulated Total shareholders’ Number Amount capital deficit deficit Balance as of April 1, 2021 34,753,669 3 13,073 ( 15,234 ) ( 2,158 ) Net loss for the period - - - ( 79 ) ( 79 ) Balance as of June 30, 2021 34,753,669 3 13,073 ( 15,313 ) ( 2,237 ) Common stock Additional paid-in Accumulated Total shareholders’ Number Amount capital deficit deficit Balance as of January 1, 2020 31,201,669 3 13,015 ( 14,711 ) ( 1,693 ) Net loss for the period - - - ( 267 ) ( 267 ) Balance as of June 30, 2020 31,201,669 3 13,015 ( 14,978 ) ( 1,960 ) Common stock Additional paid-in Accumulated Total shareholders’ Number Amount Capital deficit deficit Balance as of April 1, 2020 31,201,669 3 13,015 ( 14,885 ) ( 1,867 ) Balance 31,201,669 3 13,015 ( 14,885 ) ( 1,867 ) Net loss for the period - - - ( 93 ) ( 93 ) Balance as of June 30, 2020 31,201,669 3 13,015 ( 14,978 ) ( 1,960 ) Balance 31,201,669 3 13,015 ( 14,978 ) ( 1,960 ) The accompanying notes are an integral part of these condensed consolidated financial statements. - 8 - VIEWBIX INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) U.S. dollars in thousands (except share data) 2021 2020 2021 2020 For the six months ended June 30 For the three months ended June 30 2021 2020 2021 2020 Unaudited Unaudited Cash flows from operating activities Net loss for the period ( 159 ) ( 267 ) ( 79 ) ( 93 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation - 5 - - Gain from sale of a subsidiary - ( 8 ) - - Changes in assets and liabilities: Decrease (increase) in prepaid expenses 6 14 ( 4 ) 8 Decrease (increase) in other receivables 4 106 ( 2 ) 24 Increase (decrease) in trade payables - ( 76 ) 4 ( 4 ) Financing expenses from short-term loans 10 - 6 - Decrease in other accounts payables - ( 39 ) - ( 24 ) Increase in payable to parent company 117 244 67 58 Net cash provided by (used in) operating activities ( 22 ) ( 21 ) ( 8 ) ( 31 ) Cash flows from investing activities Cash received from sale of a subsidiary - 13 - - Net cash provided by Investing activities - 13 - - Decrease in cash and cash equivalents and restricted cash ( 22 ) ( 8 ) ( 8 ) ( 31 ) Cash and cash equivalents and restricted cash at the beginning of the year 148 87 134 110 Cash and cash equivalents and restricted cash at the end of the year 126 79 126 79 Supplemental Cash Flow Information: As of February 12 2020 Current assets excluding cash and cash equivalents 6 Current liabilities ( 1 ) Gain from sale of a subsidiary 8 Cash received from the sale of a subsidiary 13 The accompanying notes are an integral part of these condensed consolidated financial statements. - 9 - VIEWBIX INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share data) NOTE 1: GENERAL Organizational Background Viewbix Inc. (formerly known as Virtual Crypto Technologies, Inc.) (the “Company”) was incorporated in the State of Ohio in 1989 under a predecessor name, Zaxis International, Inc. (“Zaxis”). On August 25, 1995, Zaxis merged with a subsidiary of The InFerGene Company, a Delaware corporation, which entity changed its name to Zaxis International, Inc. and the Company was reincorporated in Delaware under the name of Zaxis International, Inc. On December 30, 2014, Zaxis entered into an agreement with Emerald Medical Applications Ltd., a private limited liability company organized under the laws of the State of Israel (“Emerald Israel”). On June 6, 2020, Algomizer changed its name to Gix Internet Ltd., or Gix. On February 7, 2019, the Company entered into a share exchange agreement (the “Share Exchange On February 7, 2019, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with Gix Internet Ltd. (TASE:ALMO), a company organized under the laws of the State of Israel (“Gix”), pursuant to which on July 25, 2019 (the “Closing Date”), Gix assigned, transferred and delivered its 99.83 % holdings in Viewbix Ltd. (“Viewbix Israel”) to the Company in exchange for shares of restricted common stock of the Company, representing 65 % of the issued and outstanding share capital of the Company on a fully diluted basis as of the Closing Date following the conversion of certain convertible notes of the Company and excluding certain warrants to purchase shares of the Common Stock expiring in 2020 and additional warrants as further described below (the “Fully Diluted Share Capital”). In addition, upon the earlier of: (a) the launch of a live video product to an American consumer in the United States by Viewbix Israel, or (b) the launch of an interactive television product to an American consumer in the United States by Viewbix Israel, the Company will issue to Gix an additional 1,642,193 shares of restricted common stock of the Company representing 5 % of the Fully Diluted Share Capital immediately following the Closing Date. On July 24, 2019, the Company filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of Delaware reflecting its name change from Virtual Crypto Technologies, Inc. to Viewbix Inc. to reflect its new operations and business focus and, effective on August 7, 2019, FINRA approved the Registrant’s name change and its trading symbol was changed from “VRCP” to “VBIX” on the OTCQB. On the Closing Date, the Company (i) issued 20,281,085 shares of its common stock to Gix in exchange for consideration consisting of consideration for its 99.83 % holdings in Viewbix Israel, and (ii) 3,434,889 shares of its common stock to holders of convertible notes, which were issued by the Company prior to the Reverse Recapitalization, and which were converted upon the Closing Date. The shares of common stock were issued under Regulation S. The Company also issued a total of 7,298,636 warrants to Gix to purchase the Company’s common stock, whereby (i) 3,649,318 of such warrants were issued with an exercise price of $ 0.48 , and (ii) 3,649,318 of such warrants were issued with an exercise price of $ 0.80 . As a result of the Recapitalization Transaction, Viewbix Israel became a subsidiary of the Company. As the shareholders of Viewbix Israel received the largest ownership interest in the Company, Viewbix Israel was determined to be the “accounting acquirer” in the Recapitalization Transaction. As a result, the historical financial statements of the Company were replaced with the historical financial statements of Viewbix Israel. The number of shares prior to the reverse recapitalization have been retroactively adjusted based on the equivalent number of shares received by the accounting acquirer in the Recapitalization Transaction. - 10 - VIEWBIX INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share data) NOTE 1: GENERAL (Cont.) Organizational Background (Cont.) The Company and its subsidiaries are collectively referred to as the “Company”. Viewbix Israel was incorporated on February 2006 in Israel. The Company has developed an interactive video platform based on Software as a Service (“SaaS”) business model with interactive elements, and the ability to collect and analyze information about each interactive action performed during the viewing of the video clip. The interactive elements and information gathered, allowing the advertiser to analyze user viewing habits and optimize real-time throughout the campaign while increasing the effectiveness of online and live video advertising. On January 1, 2020, the Company announced certain cost reduction measures due the Company not achieving certain revenues goals. Emerald Medical Applications Ltd. On March 16, 2015, Zaxis and Emerald Israel executed a share exchange agreement, which closed on July 14, 2015, and Emerald Israel became the Company’s wholly-owned subsidiary. Emerald Israel was engaged in the business of developing Emerald Israel’s DermaCompare technology and the development, sale and service of imaging solutions utilizing its DermaCompare software for use in derma imaging and analytics for the detection of skin cancer. On January 29, 2018, the Company ceased the DermaCompare operations of its former subsidiary. On May 2, 2018, the District Court of Lod, Israel issued a winding-up order for Emerald Israel and appointed an Israeli attorney as special executor for Emerald Israel. Virtual Crypto Technologies Ltd. On January 17, 2018, the Company formed a new wholly-owned subsidiary under the laws of the State of Israel, Virtual Crypto Technologies Ltd. (the “VCT Israel”), to develop and market software and hardware products facilitating, allowing and supporting purchase and/or sale of cryptocurrencies through ATMs, tablets, personal computers (“PCs”) and/or mobile devices. VCT Israel ceased its business operation 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 ). Stock Subscription Agreement and Loan Agreement On December 18, 2020, the Company entered into a Stock Subscription Agreement (the “Subscription”) with certain investors (the “Investors”) in connection with the sale and issuance of an aggregate of 3,000,000 shares of Common Stock, at a purchase price of $ 0.01 per share, and for an aggregate purchase price of $ 30,000 . In addition, and on the same date, the Company entered into a Loan Agreement (the “Loan”) with the Investors, pursuant to which the Investors lent an aggregate of $ 69,000 (the “Principal Amount”). In accordance with the terms of the Loan, the Company repaid the interest on the Principal Amount ( 8 % compounded annually) to the Investors in the form of an issuance of an aggregate of 552,000 shares of Common Stock, at a price per share of $ 0.01 . The shares of Common Stock were issued to the Investors pursuant to Regulation S of the Securities Act of 1933, as amended. - 11 - VIEWBIX INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share data) NOTE 1: GENERAL (Cont.) Going Concern The Company has incurred $ 159 in net loss for the six months ended June 30 2021 has $ 2,237 stockholders’ deficit as of June 30, 2021 and $ 2,078 in total stockholders’ deficit as of December 31, 2020. Management expects the Company to continue to generate substantial operating losses and to continue to fund its operations primarily through utilization of its current financial resources and through additional raises of capital. Such conditions raise substantial doubts about the Company’s ability to continue as a going concern. Management’s plan includes raising funds from outside potential investors. However, there is no assurance such funding will be available to the Company or that it will be obtained on terms favorable to the Company or will provide the Company with sufficient funds to meet its objectives. These financial statements do not include any adjustments relating to the recoverability and classification of assets, carrying amounts or the amount and classification of liabilities that may be required should the Company be unable to continue as a going concern. NOTE 2: SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation : The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary and were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany accounts and transactions have been eliminated in consolidation. Unaudited Interim Financial Information The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with GAAP and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these condensed consolidated financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2020 and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 16, 2021 (the “2020 Annual Report”). The results for any interim period are not necessarily indicative of results for any future period. The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments that are necessary to present fairly the Company’s financial position and results of operations for the interim periods presented .The results for the three months ended June 30, 2021 are not necessarily indicative of the results for the year ending December 31, 2021, or for any future period. As of June 30, 2021, there have been no material changes in the Company’s significant accounting policies from those that were disclosed in the 2020 Annual Report. - 12 - VIEWBIX INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share data) NOTE 3: OTHER ACCOUNTS RECEIVABLES Composition: SCHEDULE OF OTHER ACCOUNTS RECEIVABLES COMPOSITION As of June 30 As of December 31 2021 2020 Government authorities $ 15 $ 20 Total 15 20 NOTE 4: OTHER ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Composition: SCHEDULE OF OTHER ACCOUNTS PAYABLE AND ACCRUED LIABILITIES As of June 30 As of December 31 2021 2020 Other payables $ 47 $ 47 Accrued liabilities 152 130 Total other accounts payables $ 199 $ 177 NOTE 5: PAYABLE TO PARENT COMPANY Balances: SCHEDULE OF PAYABLE TO PARENT COMPANY   As of June 30 As of December 31 2021 2020 Gix – Parent Company Payable $ 2,171 $ 2,054 As part of the agreement with Gix, the parties agreed to have the Company’s operations outsourced to Gix from the agreement date and until the acquisition is consummated. The following terms were included in the agreement pursuant to the above: (a) From May 2018 all of the Company’s employees will become employees of Gix. (b) Between the periods of May 2018 to October 2018, Gix will pay the full expenses of the employees as well as other related expenses. (c) From November 2018 until to the Closing Date, the employees transferred from the Company to Gix will dedicate half of their time to the Company’s operations and correspondingly 50 % of the costs to be incurred by Gix in respect of these employees are to be charged to the Company. From the closing date, the actual expenses incurred by Gix related to the Company will be charged to the Company. No amounts were paid by the Company to Gix during 2021 and 2020. - 13 - VIEWBIX INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share data) NOTE 6: SHORT TERM LOAN On December 18, 2020, the Company entered into the Loan and Subscription with certain Investors as described in note 1e, pursuant to which the Investors lent 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. The 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. The allocation of the proceeds to the fair value distribution of the liability and equity components on the transactions date was as follows: SCHEDULE OF FAIR VALUE DISTRIBUTION OF LIABILITY AND EQUITY COMPONENTS Instrument Fair Value % of total fair Allocated amount Short term loan and prepaid interest 55,200 49.45 49,246 Investment in the company’s shares 54,000 50.55 50,340 Total 109,200 100 99,586 The composition of short term loan balance as of the transaction is as follows: SCHEDULE OF COMPOSITION OF SHORT TERM LOAN As of June 30 2021 As of December 31 2020 Short term loan $ 69 $ 69 Discount on Short term loan ( 10 ) ( 19 ) Short term loan, Net $ 59 $ 50 - 14 - VIEWBIX INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share data) NOTE 7: STOCKHOLDERS’ DEFICIT Stockholders’ deficit. Composition: SCHEDULE OF COMMON STOCK COMPOSITION As of June 30 As of December 31 2021 2020 Authorized Issued and outstanding Authorized Issued and outstanding Unaudited Number of shares Common Stock 490,000,000 34,753,669 490,000,000 34,753,669 Common Stock: Common stock confers 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 otherwise provided by law. Some investors have standard anti-dilutive rights, registration rights, and information and representation rights. On December 18, 2020, the Company entered into the Subscription with 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 the Loan with the Investors, pursuant to which the Investors lent the Principal Amount. In accordance with the terms of the Loan, the Company repaid the interest on the Principal Amount, 8 % compounded annually to the Investors, in the form of an issuance of an aggregate of 552,000 shares of Common Stock, at a price per share of $ 0.01 . The shares of Common Stock were issued to the Investors pursuant to Regulation S of the Securities Act of 1933, as amended. - 15 - VIEWBIX INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share data) NOTE 7: STOCKHOLDERS’ DEFICT (Cont.) Share Exchange As detailed in Note 1, as part of the Recapitalization Transaction in July 2019, the Company issued 30,928,620 common shares in exchange for 99.83 % of the issued and outstanding common stock and all the preferred shares of Viewbix Israel. The number of shares prior to the reverse capitalization have been retroactively adjusted based on the equivalent number of shares received by the accounting acquirer in the Recapitalization Transaction. Warrants The following table summarizes information of outstanding warrants as of June 30, 2021: SUMMARY OF OUTSTANDING WARRANTS Warrants Warrant Term Exercise Price Exercisable Class J Warrants 3,649,318 July 2029 0.48 3,649,318 Class K Warrants 3,649,318 July 2029 0.80 3,649,318 Additionally, in connection with the Share Exchange Agreement, upon the earlier of: (a) the launch of a live video product to an American consumer in the United States by Viewbix Israel, or (b) the launch of an interactive television product to an American consumer in the United States by Viewbix Israel, the Company will issue to Gix an additional 1,642,193 shares of restricted common stock of the Company. All of the Company’s warrants meet the US GAAP criteria for equity classification. During January and March 2020, 50,000 class H warrants expired. During January 2020, 38,095 class I warrants expired. During April 2020, 142,857 Class G warrants expired. - 16 - VIEWBIX INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share data) NOTE 8: COMMITMENTS AND CONTINGENCIES – In June 2017, a lawsuit was filed by a former CEO of the Company with the Tel Aviv District Court (the “Tel Aviv Court”) against the Company claiming certain damages in the total amount of $ 225 , under the assertion of wrongful termination by the Company and Emerald Israel. The Company filed its response with the Tel Aviv Court in October of 2017. The dispute was initially heard by the Tel Aviv Court on February 13, 2020. In a supplemental hearing on February 11, 2021 the former CEO provided data regarding his claims. On March 11, 2021 the former CEO filed his summaries. The Company’s summaries filed on May, 2021. On June 3, 2021, and after the summaries were filed, the lawsuit against Emerald Israel was dismissed by the Tel Aviv Court . NOTE 9: FINANCIAL (EXPENSES) INCOME, NET Composition: SCHEDULE OF FINANCIAL (INCOME) EXPENSES, NET For the six months ended June 30 2021 2020 Unaudited Bank fees ( 1 ) ( 4 ) Exchange rate differences ( 2 ) ( 4 ) Other ( 8 ) 4 ( 11 ) ( 4 ) For the three months ended June 30 2021 2020 Unaudited Bank fees ( 1 ) ( 2 ) Exchange rate differences ( 3 ) ( 44 ) Other - 14 ( 4 ) ( 32 ) NOTE 10: TAXES ON INCOME A. Tax rates applicable to the income of the Company: Viewbix Israel are taxed according to Israeli tax laws. The Israeli corporate tax rate is 23 % in the years 2019 and onwards. Viewbix Inc. is taxed according to U.S. tax laws. On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Act”), which among other provisions, reduced the U.S. corporate tax rate from 35% to 21%, effective January 1, 2018. - 17 - VIEWBIX INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share data) NOTE 10: TAXES ON INCOME (Cont.) B. Deferred income taxes: Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows: SCHEDULE OF DEFERRED INCOME TAXES As of June 30 As of December 31 2021 2020 Deferred R&D expenses $ 16 $ 114 Operating loss carryforward 32,295 32,256 Total $ 32,311 $ 32,370 Net deferred tax asset before valuation allowance $ 7,062 $ 7,076 Valuation allowance ( 7,062 ) ( 7,076 ) Net deferred tax asset $ - $ - As of June 30, 2020, the Company has provided valuation allowances of $ 7,062 in respect of deferred tax assets resulting from tax loss carryforward and other temporary differences. Management currently believes that because the Company has a history of losses, it is more likely than not that the deferred tax regarding the loss carryforward and other temporary differences will not be realized in the foreseeable future. C. Available carryforward tax losses: As of June 30, 2021, Viewbix Israel incurred operating losses in Israel of approximately $ 13,801 which may be carried forward and offset against taxable income in the future for an indefinite period. As of June 30, 2021, the Company generated net operating losses in the U.S. of approximately $ 18,494 . Net operating losses in the U.S. are available through 2035 . Utilization of U.S. net operating losses may be subject to substantial annual limitation due to the “change in ownership” provisions of the Internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of net operating losses before utilization. - 18 - VIEWBIX INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share data) NOTE 10: TAXES ON INCOME (Cont.) D. Loss (income) from continuing operations, before taxes on income, consists of the following: SCHEDULE OF LOSS (INCOME) FROM CONTINUING OPERATIONS, BEFORE TAXES ON INCOME 2021 2020 2021 2020 For the six months ended June 30 For the three months ended June 30 2021 2020 2021 2020 USA $ 42 $ 10 $ 15 $ 5 Israel 114 255 61 88 Total loss before taxes on income $ 156 $ 265 $ 76 $ 93 NOTE 11: LOSS PER SHARE-BASIC AND DILUTED Composition: SCHEDULE OF LOSS PER SHARE-BASIC AND DILUTED 2021 2020 2021 2020 For the six months ended June 30 For the three months ended June 30 2021 2020 2021 2020 Basic and diluted: Net loss attributable to ordinary stockholders 159 267 79 93 Weighted-average common stock 34,753,669 31,201,669 34,753,669 31,201,669 Loss per share-basic and diluted 0.005 0.009 0.002 0.003 - 19 - VIEWBIX INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) U.S. dollars in thousands (except share data) NOTE 12: COVID-19 PANDEMIC IMPLICATIONS The COVID-19 pandemic, which originated in China in late 2019, has since spread across the globe and affected the economic condition of most, if not all, countries, including the United States, Israel and many countries in Europe. On March 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 June 30, 2021, the pandemic has caused repeated states of emergency to be declared in various countries, ongoing and extended travel restrictions have been imposed for several months, strict quarantines rules have been established and maintained for an extended period of time in a plethora of jurisdictions and various institutions and companies have been closed and rendered bankrupt. 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 condition. 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. - 20 - 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 June 30, 2021 and 2020, and the related statements of comprehensive loss, statement of changes in stockholders’ equity (deficit) and statements of cash flows for the three months then ended, and the related notes thereto contained in this Quarterly Report on Form 10-Q (this “Quarterly Report”). Forward-Looking Statements This management discussion and analysis section contains forward-looking statements, such as statements of the Company’s plans, objectives, expectations and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect” and the like, and/or future tense or conditional constructions “will,” “may,” “could,” “should,” etc., or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements are based on information we have when those statements are made or our management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to: ● the short-term and long-term implications caused by our recent cost reduction efforts, including, but not limited to, our growing inability to secure and maintain customers on the basis of insufficient capital resources; ● sustained turnover of key management; ● our history of recurring losses and negative cash flows from operating activities, significant future commitments and the uncertainty regarding the adequacy of our liquidity to pursue our complete business objectives, and substantial doubt regarding our ability to continue as a going concern; ● our need to raise additional capital to meet our business requirements in the future and such capital raising may be costly or difficult to obtain and could dilute out stockholders’ ownership interests; ● the impact of the COVID-19 pandemic on our business plan and the global economy; ● our ability to adequately protect our intellectual property; and ● entry of new competitors and products and potential technological obsolescence of our products. The foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or risk factors that we are faced with which may cause our actual results to differ from those anticipated in our forward-looking statements. For a discussion of these and other risks that relate to our business and investing in our common stock, you should carefully review the risks and uncertainties described in this Quarterly Report on Form 10-Q, and those contained in section captioned “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the Securities and Exchange Commission (the “SEC”) on March 16, 2021 (the “Annual Report”). The Company’s actual results could differ materially from those contemplated in these forward-looking statements as a result of these factors. The Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report. Overview and background Viewbix Inc. (f/k/a Virtual Crypto Technologies, Inc., f/k/a Emerald Medical Applications Corp.) (the “Registrant” or the “Company”) is an interactive video technology and data platform that provides its clients with deep insights into their video marketing performance as well as the effectiveness of its messaging. - 21 - Recent Developments Share Exchange Agreement On February 7, 2019, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with Gix Internet Ltd. (f/k/a Algomizer Ltd.) (TASE:GIX), a company organized under the laws of the State of Israel (“Gix”), pursuant to which on July 25, 2019 (the “Closing Date”), Gix assigned, transferred and delivered its 99.83% holdings in Viewbix Ltd. (“Viewbix Israel”) to the Company in exchange for shares of restricted common stock, par value $0.0001 per share of the Company (the “Common Stock”), representing 65% of the issued and outstanding share capital of the Company on a fully diluted basis as of the Closing Date, following the conversion of certain convertible notes of the Company and excluding certain warrants to purchase shares of 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 agreed to issue to Gix an additional 1,642,193 shares of restricted Common Stock representing 5% of the Fully Diluted Share Capital immediately following the Closing Date. On July 24, 2019, and in connection with the Share Exchange Agreement, the Company filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of Delaware reflecting its name change from Virtual Crypto Technologies, Inc. to Viewbix Inc. to reflect its new operations and business focus. On August 7, 2019, FINRA approved the Registrant’s name change and its trading symbol was changed from “VRCP” to “VBIX” on the OTCQB. On the Closing Date, (i) the Company issued 20,281,085 shares of Common Stock to Gix in exchange for consideration consisting of 99.83% holdings in Viewbix Israel, and (ii) convertible notes representing 3,434,889 shares of Common Stock then currently issued to holders were converted. The shares of Common Stock were issued under Regulation S. The Company also issued a total of 7,298,636 warrants to purchase shares of Common Stock to Gix, whereby (a) 3,649,318 of such warrants to purchase shares of Common Stock were issued with an exercise price of $0.48, and (b) 3,649,318 of such warrants to purchase shares of Common Stock were issued with an exercise price of $0.80. Following the Closing Date, Viewbix Israel became a subsidiary of the Registrant. Viewbix Israel was incorporated in February 2006 in Israel. On June 6, 2020, Algomizer Ltd. changed its name to Gix Internet Ltd. On January 1, 2020, the Company announced certain cost reduction measures due the Company not achieving certain revenues goals. In connection with these cost reduction measures, 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 whereby Mr. Stefansky would step down as chief executive officer, effective March 1, 2020. On the same date, the Company and Mr. Hillel Scheinfeld, the Company’s then chief operating officer, reached a similar mutual understanding and agreed he would step down, also effective March 1, 2020. Mr. Amihay Hadad, the Company’s chief financial officer, was appointed to the Company’s board of directors on January 1, 2020, and, effective as of March 1, 2020, he was also appointed as the Company’s chief executive officer as well. On January 27, 2020, the Company entered into an agreement with a third-party to sell Virtual Crypto Technologies Ltd. for NIS 50,000 ($14, 459), which transaction was consummated on February 12, 2020. Results of Operations Results of Operations During the Three Months Ended June 30, 2021 as Compared to the Three Months Ended June 30, 2020 Our revenues were $17 thousand for the three months ended June 30, 2021, compared to $33 thousand during the same period in the prior year. The reason for the decrease in the three months ended June 30, 2021 is due to the fact that beginning on January 1, 2020, the Company announced and began implementing certain cost reduction measures. Our research and development expenses were $12 thousand for the three months ended June 30, 2021, as compared to $0 thousand during the same period in the prior year. The reason for the increase in the three months ended June 30, 2021 is due to the fact that the Company hired a new research and development team during the second half of 2020. Our general and administrative expenses decreased to $79 thousand for the three months ended June 30, 2021 as compared to $94 thousand during the same period in the prior year. The reason for the decrease in the three months ended June 30, 2021 is that beginning on January 1, 2020, the Company announced and began implementing certain cost reduction measures. - 22 - Our net financial expenses was $4 thousand for the three months ended June 30, 2021, compared to net financial expenses of $32 thousand during the same period in the prior year. The reason for the decrease in the three months ended June 30, 2021 is due to the US dollar exchange rate decrease during the three months ended June 30, 2021 as compared the same period in the prior year. Our tax on income was $1 thousand for the three months ended June 30, 2021, slightly increase as compared to $0 thousand during the same period in the prior year. Results of Operations During the Six Months Ended June 30, 2021 as Compared to the Six Months Ended June 30, 2020 Our revenues were $25 thousand for the six months ended June 30, 2021, compared to $70 thousand during the same period in the prior year. The reason for the decrease in the six months ended June 30, 2021 is due to the fact that beginning on January 1, 2020, the Company announced and began implementing certain cost reduction measures. Our cost of revenues were $0 thousand for the six months ended June 30, 2021, which is a slight decrease compared to $4 thousand during the same period in the prior year. Our research and development expenses were $28 thousand for the six months ended June 30, 2021, as compared to $59 thousand during the same period in the prior year. The reason for the decrease in the six months ended June 30, 2021 is due to the fact that beginning on January 1, 2020, the Company announced and began implementing certain cost reduction measures. Our selling and marketing expenses were $2 thousand for the six months ended June 30, 2021, which is a slight decrease as compared to $7 thousand during the same period in the prior year. Our general and administrative expenses increased to $142 thousand for the six months ended June 30, 2021 as compared to $269 thousand during the same period in the prior year. The reason for the decrease in the six months ended June 30, 2021 is due to the fact that beginning on January 1, 2020, the Company announced and began implementing certain cost reduction measures. Our net financial expenses was $11 thousand for the six months ended June 30, 2021, compared to net financial expenses of $4 thousand during the same period in the prior year. The reason for the financial increase in the six months ended June 30, 2021 is due to the US dollar exchange rate increase during the six months ended June 30, 2021 as compared the same period in the prior year. Our tax on income was $1 thousand for the six months ended June 30, 2021, slightly decreased as compared to $2 thousand during the same period in the prior year. Liquidity and Capital Resources As of June 30, 2021, we had current assets of $192 thousand consisting of $126 thousand in cash and cash equivalents, $35 thousand in trade receivables, $15 thousand in other accounts receivables and, $16 thousand in prepaid expenses. As of June 30, 2021, we had $2,429 thousand in current liabilities consisting of $199 in other accounts payable and accrued liabilities, $59 Short term loan, and $2,171 payable to our parent company. As of December 31, 2020, we had current assets of $225 thousand consisting of $148 thousand in cash and cash equivalents, $20 thousand in other receivables, $15 thousand in trade receivables and $42 thousand in prepaid expenses. We had $2,303 thousand in current liabilities, which consisted of $177 in accounts payable and accrued liabilities, $22 trade payable, $2,054 payable to our parent company and $50 in Short term loan. We had a negative working capital of $2,237 thousand and $2,078 thousand as of June 30, 2021 and December 31, 2020, respectively. - 23 - During the three months ended June 30, 2021, we had negative cash flow from operations of $8 thousand, which was mainly the result of a net loss of $79 thousand, offset by increase in working capital of $71. During the six months ended June 30, 2021, we had negative cash flow from operations of $22 thousand, , which was mainly the result of a net loss of $159 thousand, offset by increase in working capital of $137. There are no limitations in the Company’s Certificate of Incorporation on the Company’s ability to borrow funds or raise funds through the issuance of shares of its common stock to affect a business combination. The Company’s limited resources and lack of having cash-generating business operations may make it difficult to borrow funds or raise capital. The Company’s limitations to borrow funds or raise funds through the issuance of restricted capital stock required to effect or facilitate a business combination may have a material adverse effect on the Company’s financial condition and future prospects, including the ability to complete a business combination. Until such time as the Company can generate substantial revenues, the Company expects to finance its cash needs through a combination of the sale of its equity and/or convertible debt securities, debt financing and strategic alliances and collaborations. The Company does not have any committed external source of funds. To the extent that the Company raises additional capital through the sale of its equity and/or convertible debt securities, the ownership interest of its stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. To the extent that debt financing ultimately proves to be available, any borrowing will subject us to various risks traditionally associated with indebtedness, including the risks of interest rate fluctuations and insufficiency of cash flow to pay principal and interest, including debt of an acquired business. If the Company raises funds through additional collaborations or strategic alliances with third parties, we may have to relinquish valuable rights to our future revenue streams and/or distribution arrangements. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. If the Company is unable to raise additional funds through equity and/or debt financings when needed or on attractive terms, the Company may be required to delay, limit, reduce or terminate the operations of some or all of its business segments. Going Concern: The Company has incurred $159 in net losses for the six months ended June 30, 2021, has $2,237 stockholders’ deficit as of June 30, 2021 and $2,078 in total stockholders’ deficit as of December 31, 2020. Management expects the Company to continue to generate substantial operating losses and to continue to fund its operations primarily through utilization of its current financial resources and through additional raises of capital. Such conditions raise substantial doubts about the Company’s ability to continue as a going concern. Management’s plan includes raising funds from outside potential investors. However, there is no assurance such funding will be available to the Company or that it will be obtained on terms favorable to the Company or will provide the Company with sufficient funds to meet its objectives. These financial statements do not include any adjustments relating to the recoverability and classification of assets, carrying amounts or the amount and classification of liabilities that may be required should the Company be unable to continue as a going concern. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not required for smaller reporting companies. ITEM 4. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures As of June 30, 2021, the Company’s chief executive officer and chief financial officer, which is currently the same individual, conducted an evaluation (the “Evaluation”) regarding the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act. Based upon the Evaluation, as required by Rules 13a-15 or 15d-15, the Company’s chief executive officer and chief financial officer concluded that the Company’s disclosure controls and procedures were ineffective as of the end of June 30, 2020, and pursuant to the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013) because of certain material weaknesses. - 24 - 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 June 30, 2021 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. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of the Company, threatened against or affecting the Company, our common stock, our officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect, other than as set forth below. In June 2017, a lawsuit was filed with the Regional Labor Court in Tel Aviv (the “Tel Aviv Court”) against Emerald Israel, and other defendants, claiming certain damages in the total amount of approximately $225,000, under the assertion of wrongful termination by Emerald Israel. We filed our response with the Tel Aviv Court in October of 2017. The dispute was initially heard by the Tel Aviv Court on February 13, 2020. In a supplemental hearing on February 11, 2021, the plaintiff provided a certified confirmation of payment of approximately $14,668 by the National Insurance Institute of Israel for one month’s prior notice of termination, redemption of 16.8 days of vacation and severance pay. On June 3, 2021, and after the plaintiff and the defendants filed their summaries, the lawsuit against Emerald Israel was dismissed. ITEM 1A. RISK FACTORS There have been no material changes from the information set forth in “Item 1A. Risk Factors” in the Form 10-K filed with the SEC on March 16, 2021 . 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. - 25 - ITEM 6. EXHIBITS (a) The following documents are filed as exhibits to this Quarterly Report or incorporated by reference herein. Exhibit Number Description 31.1* Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act 32.1** Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101 SCH Inline XBRL Taxonomy Extension Schema Document 101 CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101 DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101 LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101 PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104* Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) * Filed herewith. ** Furnished herewith. - 26 - SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. VIEWBIX INC. By: /s/ Amihay Hadad Name: Amihay Hadad Title: Chief Executive Officer and Chief Financial Officer Date: August 12, 2021 (Principal Executive Officer and Principal Financial Officer)