What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-03-17 compared with 2021-03-16 · 426 added, 512 removed, 185 unchanged (84% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID No.

Consolidated Balance Sheets

Consolidated Statements of Comprehensive Loss

Consolidated Statements of Changes in Stockholders’ Deficit

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Shareholders and Board of Directors of

(Formerly known as Virtual Crypto Technologies, Inc.)

To the Stockholders and Board of Directors of Viewbix Inc.

on the Financial Statements

have audited the accompanying consolidated balance sheets of Viewbix Inc.

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.

and its subsidiary (the “Company”) as of December

31, 2021 and 2020 and the related consolidated statements of comprehensive loss, stockholder’s deficit and cash flows for each

of the two years in the period ended December 31, 2021, 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, 2021 and 2020, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2021,

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, shareholders’

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

Management’s

plans concerning these matters are also described in Note 1 to the financial statements.

The financial statements do not include

any adjustments that might result from the outcome of’

these uncertainties

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

Our responsibility is to express an opinion on

the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company

Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance

with the U.S.

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

As discussed in Note

1.E to the consolidated financial statements, the Company’s substantial net losses, shareholder’s deficit and negative cash

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

Management’s plans concerning these

matters are also described in Note 1.E to the financial statements.

The financial statements do not include any adjustments that might

result from the outcome of’ these uncertainties

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

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

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

Those standards require that we plan and perform the audit

to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but

not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits,

we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to

error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

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.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated

or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial

statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

to Parent Company - Valuation of Fair Value of Debt Recognized upon Modification – Refer to Note 4 to the consolidated financial

Audit Matter Description

Company entered into an agreement with its parent company, Gix Internet Ltd., (the “Parent Company”), effective as of December

31, 2021, for the modification of the balance payable to the Parent Company, in the amount of $2,299,956, from a current payable balance

Company accounted for the modification as an extinguishment of the balance payable to the Parent Company and the issuance of a new debt.

Accordingly, the loan was recorded at its fair value of $2,115,853 as of December 31, 2021.

The difference of $184,103 between the fair

value of the loan and the carrying value of the payable to the Parent Company was recorded in the Company’s consolidated statement

of changes in stockholders’ deficit as a deemed contribution to the Company by the Parent Company.

The Company determined the fair

value of the loan using the discounted cash flow model.

This valuation involves management judgement in determining the discount rate.

identified the valuation of the loan at fair value as a critical audit matter because of the magnitude of the loan balance, the judgment

involved in determining the discount rate and due to the increased extent of audit effort in relation to our audit as a whole, including

the need to involve our fair value specialists.

the Critical Audit Matter Was Addressed in the Audit

audit procedures related to the valuation of the fair value of the loan included the following, among others:

● With the assistance of our fair value specialists, we evaluated the Company’s valuation methodologies, assumptions and fair value results.

● With the assistance of our fair value specialists, we developed an independent estimate of the discount rate and the resulting fair value and compared our estimate to the Company’s estimate.

Brightman Almagor Zohar & Co.

1 unchanged sentence

Firm in the Deloitte Global Network

have served as the Company’s auditor since 2019

(Formerly known as Virtual Crypto Technologies, Inc.)

have served as the Company’s auditor since 2019

Balance Sheets

2 unchanged sentences

Cash and cash equivalents

Restricted cash

Trade receivables

2 unchanged sentences

Total current assets

NON CURRENT ASSETS

Property and equipment, net

LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’

LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ DEFICIT

CURRENT LIABILITIES

1 unchanged sentence

Other accounts payable and accrued liabilities

Payable to parent company

Parent company

Short term loan

Total current liabilities

Commitments and contingencies

STOCKHOLDERS’

STOCKHOLDERS’ DEFICIT

Share Capital

4 unchanged sentences

Accumulated deficit

Total stockholders’

Total liabilities, temporary equity and stockholders’

Total stockholders’ deficit

Total liabilities, temporary equity and stockholders’ deficit

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

(Formerly known as Virtual Crypto Technologies, Inc.)

Statements of Comprehensive Loss

dollars in thousands (except share and per share data)

Year ended December 31,

Cost of revenues

2 unchanged sentences

General and administrative

Other expenses

Gain from sale of a subsidiary

8 unchanged sentences

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

(Formerly known as Virtual Crypto Technologies, Inc.)

Statements of Changes in Stockholders’

Statements of Changes in Stockholders’ Deficit

dollars in thousands (except share and per share data)

Ordinary shares

Additional paid-in

Total shareholders’

shareholders’

Balance as of January 1, 2021

Financing provided by the Parent Company (see note 4)

Issuance of shares

Issuance of shares, shares

Net loss for the period

Balance as of December 31, 2021

shareholders’

Ordinary shares

shareholders’

Balance as of January 1, 2020

Effect of reverse recapitalization

Issuance of shares

Net loss for the period

Balance as of December 31, 2020

Represents an amount less than $1.

Represents an amount

less than $1.

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

(Formerly known as Virtual Crypto Technologies, Inc.)

Statements of Cash Flows

dollars in thousands (except share and per share data)

For the year ended

the year ended

Cash flows from operating activities

Net loss for the period

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

Adjustments to reconcile net loss to net cash used in operating activities:

Gain from sale of a subsidiary

3 unchanged sentences

Increase (decrease) in trade payables

Increase in payable to parent company (See Note 6)

Increase in payable to parent company

Increase (decrease) in other accounts payables and accrued liabilities

Net cash used in operating activities

Net cash used by operating activities

Cash flows from investing activities

Cash received from the sale of a subsidiary

Purchase of property and equipment

Proceeds from sale of property and equipment

Net cash used in investing activities

Cash flows from financing activities

Cash acquired in connection with the reverse recapitalization

Issuance of shares

2 unchanged sentences

Increase (decrease) in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash at the beginning of the period

Cash and cash equivalents and restricted cash at the end of the period

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

(Formerly known as Virtual Crypto Technologies, Inc.)

Cash and cash equivalents and restricted cash at the beginning

of the period

Cash and cash equivalents and restricted cash at the end

of the period

Consolidated Statements of Cash Flows

dollars in thousands (except share and per share data)

Cash Flow Information:

DISCLOSURE OF CASH FLOW INFORMATION:

of parent company payable into a loan (see note 4)

February 12, 2020

3 unchanged sentences

Cash received from the sale of a subsidiary

Assets acquired (liabilities assumed):

July 25, 2019

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.

(Formerly known as Virtual Crypto Technologies, Inc.)

to Consolidated Financial Statements

1 unchanged sentence

Organizational

(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.

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”).

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.

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.

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 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.

(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.

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.

In 2015 the Company changes its name to Emerald Medical Applications Corp.

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

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

sale of cryptocurrencies.

Effective as of March 7, 2018, the Company’s name was changed from Emerald Medical Applications Corp.

to Virtual Crypto Technologies, Inc.

to reflect its new operations and business focus.

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).

(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

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.

On January 27, 2020, VCT Israel was sold

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

February 7, 2019, the Company entered into a share exchange agreement (the “Share Exchange Agreement” or the “Recapitalization

Transaction”) with Gix Internet Ltd., an company organized under the laws of the State of Israel (“Gix”), pursuant

to which, Gix assigned, transferred and delivered its 99.83 % holdings in Viewbix Ltd., a company organized under the laws of the State

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

in Viewbix Israel becoming a subsidiary of the Company.

In connection with the Share Exchange Agreement, effective as of August 7, 2019,

the Company’s name was changed from Virtual Crypto Technologies, Inc.

to Viewbix Inc.

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 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.)

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

December 5, 2021, the Company entered into a certain Agreement and Plan of Merger (the “Merger Agreement” or the “Gix

Merger”) with Gix Media Ltd., an Israeli company and the majority-owned subsidiary of Gix (“Gix Media”) and Vmedia

Merger Sub Ltd., an Israeli company and wholly-owned subsidiary of the Company (“Merger Sub”), pursuant to which, following

the Gix Merger and upon satisfaction of the closing conditions listed in the Merger Agreement, Merger Sub will merge with and into Gix

Media, with Gix Media being the surviving entity and wholly-owned subsidiary of the Company.

As of the reporting date, the closing conditions

of the Merger Agreement have not been fulfilled yet the Gix Merger has not been consummated.

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

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.

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”

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.

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

Medical Applications Ltd.

Medical Applications Ltd., the Company’s wholly-owned subsidiary (“Emerald Israel”) was engaged in the business of

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

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

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

of its former subsidiary.

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.

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.)

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

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 .

of Common Stock were issued to the Investors pursuant to Regulation S of the Securities Act of 1933, as amended.

with Gix Media Ltd.

December 5, 2021, the Company entered into the Merger Agreement with Gix Media and Merger Sub, pursuant to which, following the Gix Merger,

and upon satisfaction of additional closing conditions, Merger Sub will merge with and into Gix Media, with Gix Media being the surviving

entity and wholly-owned subsidiary of the Company.

As of the reporting date, the closing conditions of the Merger Agreement have not

been fulfilled yet and the Gix Merger has not been consummated (see Note 15).

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, 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.

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.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

in which it operates.

In accordance with ASC 830, “Foreign Currency Matters”

(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.)

Company has incurred $ 386 in net loss for the year ended December 31, 2021 and 443 in net loss for the year ended December 31,2020, has

$ 2,280 stockholders’ deficit as of December 31, 2021 and $ 2,078 in total stockholders’ deficit as of December 31, 2020 and

$ 74 in negative cash flows from operations for the year ended December 31, 2021 and 53 in negative cash flows from operations for the

year ended December 31, 2020.

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.

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.

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.

to Consolidated Financial Statements

dollars in thousands (except share and per share data)

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 in

which it operates.

In accordance with ASC 830, “Foreign Currency Matters” (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.

For foreign currency

transactions included in the statement of operations, the exchange rates applicable on the relevant transaction dates are used.

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

of consolidation

3 unchanged sentences

and cash equivalents

Group considers all short-term investments, which are highly liquid investments with original maturities of three months or less

at the date of purchase, to be cash equivalents.

and equipment

Property and equipment are stated at cost, net of accumulated depreciation.

Depreciation is calculated using the straight-line

method over the estimated useful lives of the assets.

When an asset is retired or otherwise disposed of, the related carrying

value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from

disposition is reflected in the statements of operations.

Rates of depreciation:

and office equipment

of long-lived assets

Company’s long-lived assets are reviewed for impairment in accordance with ASC 360, “Property, Plant and Equipment”,

whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability

of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows

expected to be generated by the asset.

If such asset is considered to be impaired, the impairment to be recognized is measured

by the amount by which the carrying amount of the asset exceeds its fair value.

To date the Group did not incur any material impairment

(Formerly known as Virtual Crypto Technologies, Inc.)

Company considers all short-term investments, which are highly liquid investments with original maturities of three months or less at

the date of purchase, to be cash equivalents.

value of financial instruments

carrying values of Company’s financial assets and liabilities, including cash and cash equivalents, restricted cash, other current

assets, trade payables, other accounts payable and financing provided by the Parent Company approximate their fair value due to the short-term

maturity of these instruments.

to Consolidated Financial Statements

1 unchanged sentence

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

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

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

Income available to common stockholders shall be computed

by deducting both the dividends declared in the period on preferred stock (whether or not paid) from income from continuing operations

(if that amount appears in the income statement) and also from net income.

The computation of diluted EPS is similar to the computation

of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding

if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from

common shares issuable through contingent shares issuance arrangement, stock options or warrants.

Company applies the provisions of Accounting Standards Codification (or “ASC”) 606, Revenue from Contracts with Customers

(“ASC 606”).

The Company adopted the provisions of ASC 606 effective January 1, 2018 using the modified retrospective

application method for all uncompleted contracts as of that date.

The adoption of ASC 606 did not have a material impact on the

Company’s consolidated financial statements.

In addition, the adoption of ASC 606 had no impact on the Company’s trade

receivables, deferred revenues and accumulated deficit balances balance as of December 31, 2018 or on the Company’s revenues,

cost of revenues or its operating expenses during 2018, compared to ASC 605.

Company generates revenues primarily by granting customers the right to access software products through the Company’s cloud-based

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.

Income available to common stockholders shall be computed by deducting

both the dividends declared in the period on preferred stock (whether or not paid) from income from continuing operations (if that amount

appears in the income statement) and also from net income.

The computation of diluted EPS is similar to the computation of basic EPS

except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive

potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable

through contingent shares issuance arrangement, stock options or warrants.

Company applies the provisions of Accounting Standards Codification (or “ASC”) 606, Revenue from Contracts with Customers

Company generates revenues primarily by granting customers the right to access software products through the Company’s cloud-based

SaaS subscription offerings.

2 unchanged sentences

SaaS subscription services are a single performance

obligation satisfied over time, and associated revenue is generally recognized ratably over the contract term once the software

is made available to the customer.

The SaaS subscription offerings are typically sold with one year subscription terms, generally

invoiced in advance of each annual subscription period, and are non-cancelable during the committed subscription term.

and development expenses, net:

obligation satisfied over time, and associated revenue is generally recognized ratably over the contract term once the software is made

available to the customer.

The SaaS subscription offerings are typically sold with one year subscription terms, generally invoiced in

advance of each annual subscription period, and are non-cancelable during the committed subscription term.

and development expenses :

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

(Formerly known as Virtual Crypto Technologies, Inc.)

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

ASC 740 prescribes

the use of the asset and liability method whereby deferred tax asset and liability account balances are determined based on differences

between the financial reporting and tax bases of assets and liabilities and for carry forward tax losses.

Deferred taxes are measured

using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

The Company records a valuation

allowance, if necessary, to reduce deferred tax assets to their estimated realizable value if it is more-likely-than-not that some portion

or all of the deferred tax asset will not be realized.

addition, ASC 740 prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of

a tax position taken or expected to be taken in a tax return.

The first step is to evaluate the tax position taken or expected to be

taken in a tax return.

This is done by determining if the weight of available evidence indicates that it is more-likely-than-not that,

on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or

litigation processes.

The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized

upon ultimate settlement.

to Consolidated Financial Statements

1 unchanged sentence

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)

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

prescribes the use of the asset and liability method whereby deferred tax asset and liability account balances are determined

based on differences between the financial reporting and tax bases of assets and liabilities and for carry forward tax losses.

Deferred taxes are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

The Company records a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value if

it is more-likely-than-not that some portion or all of the deferred tax asset will not be realized.

addition, ASC 740 prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement

of a tax position taken or expected to be taken in a tax return.

The first step is to evaluate the tax position taken or expected

to be taken in a tax return.

This is done by determining if the weight of available evidence indicates that it is more-likely-than-not

that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related

appeals or litigation processes.

The second step is to measure the tax benefit as the largest amount that is more than 50% likely

to be realized upon ultimate settlement.

Contingencies :

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

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.

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.

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 incurred.

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.)

December 2019, the Financial Accounting Standards Board issued Accounting Standards Update No.

ASU 2019-12, “Simplifying the Accounting

for Income Taxes”.

This ASU amends Accounting Standards Codification (“ASC”) 740 by removing certain exceptions to

the general principles, clarifying and amending existing guidance.

This guidance is effective for fiscal years, and interim periods within

those years, beginning after December 15, 2020.

The Company adopted this standard in the first quarter of 2021.

The adoption of this

ASU did not impact our financial statements or the related disclosures.

issued accounting pronouncements

Instruments – Credit Losses

June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses

on Financial Instruments” (“ASU 2016-13”).

ASU 2016-13 replaces the current incurred loss model guidance with a new

method that reflects expected credit losses.

Under this guidance, an entity would recognize an allowance for credit losses equal to its

estimate of expected credit losses on financial assets measured at amortized cost.

In November 2019, the FASB extended the effective

date of ASU 2016-13 for smaller reporting companies.

As a result, ASU 2016-13 is effective for fiscal years, and interim periods within

those years, beginning after December 15, 2022, with early adoption permitted.

The standard is not expected to have a significant impact

on the Company’s consolidated financial statements.

August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives

and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an

Entity’s Own Equity” (“ASU 2020-06”).

ASU 2020-06 simplifies the accounting for convertible instruments by removing

certain separation models in Accounting Standards Codification (“ASC”) 470-20, “Debt—Debt with Conversion and

Other Options,” (“ASC 470-20”) for convertible instruments.

Under ASU 2020-06, the embedded conversion features no

longer are separated from the host contract for convertible instruments with conversion features that are not required to be accounted

for as derivatives under ASC 815, “Derivatives and Hedging,” or that do not result in substantial premiums accounted for

as paid-in capital.

For smaller reporting companies, ASU 2020-06 is effective for fiscal years, and interim periods within those years,

beginning after December 15, 2023, with early adoption permitted for fiscal years beginning after December 15, 2020.

The Company is currently

assessing the impact of this update on the Company’s consolidated financial statements.

to Consolidated Financial Statements

dollars in thousands (except share and per share data)

Other Accounts receivables

Government authorities

and equipment

Computers and related equipment

Office furniture and equipment

Accumulated depreciation

Net book value

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont.)

October 28, 2021, the FASB issued ASU 2021-08, which amends ASC 805 to “require acquiring entities to apply Topic 606 to recognize

and measure contract assets and contract liabilities in a business combination.” Under current GAAP, an acquirer generally recognizes

such items at fair value on the acquisition date.

According to the FASB, this Update is intended “to improve the accounting for

acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to

the following:

of an acquired contract liability

terms and their effect on subsequent revenue recognized by the acquirer.

2021-08 06 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

currently assessing the impact of this update on the Company’s consolidated financial statements.

May 2021, the Financial Accountings Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-04,

“Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation

(Topic 718), and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815- 40):

Issuer’s Accounting

for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options” (“ASU 2021-04”).

guidance is effective for the Company on January 1, 2022.

The Company is currently evaluating the impact of adopting this standard

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

OF OTHER ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Other payables and deferred revenues

Accrued liabilities

(Formerly known as Virtual Crypto Technologies, Inc.)

Total other accounts payables

to Consolidated Financial Statements

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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.

OF RELATED PARTY TRANSACTIONS

– 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.

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.

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 2021 and 2020.

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.)

Company entered into an agreement with Gix, its parent company, pursuant to which, effective as of December 31, 2021, the parent company

payable was modified into a loan, which may be increased from time to time, upon the written mutual consent of the Company and Gix (the

“Gix Loan”) .The Gix Loan bears interest at a rate equivalent to the minimal interest rate recognized and attributed by the

Israel Tax Authority and will be repaid, together with the accrued interest, in one payment until December 31, 2022, unless extended

upon mutual consent of the Company and Gix Internet.

Company accounted for the modification as an extinguishment of the parent company payable and the issuance of a new debt.

recorded at its fair value of $ 2,115,853 as of the modification date, with the difference of $ 184,103 between the fair value of the loan

and the carrying value of the payable to the Parent Company recorded in the Company’s Consolidated Statement of Changes in Stockholders’

Deficit as a deemed contribution to the Company by the Parent Company, with a corresponding discount on the loan, to be amortized as

finance expense in the Company’s Consolidated Statements of Comprehensive Loss over the term of the loan.

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:

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 1c, pursuant to which the Investors lent an aggregate amount of $ 69,000 (the “Principal Amount”).

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 theirrelative fair values.

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.

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

OF FAIR VALUE DISTRIBUTION OF LIABILITY AND EQUITY COMPONENTS

% of total fair

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

OF COMPOSITION OF SHORT TERM LOAN

Principal amount

1 unchanged sentence

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

to Consolidated Financial Statements

dollars in thousands (except share and per share data)

STOCKHOLDERS’ DEFICIT .

shares confer the right to:

(i) participate in the general meetings, to one vote per share for any purpose, to an equal part, on share

basis, (ii) in distribution of dividends and (iii) to equally participate, on share basis, in distribution of excess of assets and funds

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

1 unchanged sentence

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

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 accordance with the terms of the Loan, the company repaid

the interest on the Principal Amount 8 % compounded annually to the Investors in the form of an issuance of an aggregate of 552,000 shares

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

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

S of the Securities Act of 1933, as amended.

For more details, please see note 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.

The preferred shares would have automatically

converted into ordinary shares if (a) the holders of at least (i) 67% (sixty seven percent) of the issued and outstanding Preferred

C/C-1 shares, (ii) a majority of the issued and outstanding Preferred B shares, and (iii) a majority of the issued and outstanding

Preferred A shares, so agree in writing;

or (b) in the event of an IPO.

conversion price for any class or series of preferred would have been subject to adjustment, as follows:

at any time, upon each

issuance or deemed issuance by the Company of any new securities at a price per share less than the applicable conversion price

in effect on the date of and immediately prior to the issuance of such new securities, the conversion price shall be reduced.

shares had priority in the distribution of dividends and upon liquidation in accordance with the Company’s Articles of Association

(“AOA”).

These rights may be changed if a meeting of the Company’s stockholders gather up and decides on a change

of regulations in this context.

preference mechanism for liquidation and the distribution of dividends gave priority to the most recent preferred stockholders.

preferred shares were convertible into 16,199,520 ordinary shares of the Company.

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

In the event of a liquidation

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

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

Although the preferred shares are not redeemable, in

the event of certain “deemed liquidation events”

that are not solely within the Company’s control

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

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

previous paragraph) and hence effectively redeeming the preference amount.

In accordance with ASR 268 and ASC 480

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

stockholders’

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

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

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.

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

Securities Act of 1933, as amended.

For more details, please see note 1c.

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

SUMMARY OF OUTSTANDING WARRANTS

Exercise Price

4 unchanged sentences

(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

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.)

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.

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

During 2020, 50,000 class H warrants , 38,095 class

I warrants and 142,857 Class G warrants expired.

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.

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.

SCHEDULE OF REVENUES

Year ended December 31,

2 unchanged sentences

RESEARCH AND DEVELOPMENT EXPENSES .

SCHEDULE OF 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.

Subcontractors

SALES AND MARKTING EXPENSES .

SCHEDULE OF SALES AND MARKETING EXPENSES

Year ended December 31,

1 unchanged sentence

GENERAL AND ADMINISTRATIVE EXPENSES .

SCHEDULE OF GENERAL AND ADMINISTRATIVE EXPENSES

Year ended December 31,

1 unchanged sentence

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.)

and administrative expenses

to Consolidated Financial Statements

dollars in thousands (except share and per share data)

FINANCIAL EXPENSES (INCOME), NET .

OF FINANCIAL (EXPENSES) INCOME, NET

Year ended December 31,

Exchange rate differences

Interest expenses

INCOME TAXES .

3 unchanged sentences

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.

Israel and Israeli subsidiaries are taxed according to Israeli tax laws.

The Israeli corporate tax rate is 23% in the years 2020,

2019 and onwards.

enacted the Tax Cuts and Jobs Act (the “Act”), which

among other provisions, reduced the U.S.

corporate tax rate from 35% to 21%, effective January 1, 2018.Viewbix Israel and Israeli subsidiaries

are taxed according to Israeli tax laws.

The Israeli corporate tax rate is 23 % in the years 2021, 2020 and onwards.

income taxes:

1 unchanged sentence

reporting purposes and the amounts used for income tax purposes.

Significant components of the Company’s deferred tax assets

are as follows:

Significant components of the Company’s deferred tax assets are

SCHEDULE OF DEFERRED INCOME TAXES

Deferred R&D expenses

Operating loss carryforward

Differences between tax basis and carrying values of loans

Net deferred tax asset before valuation allowance

1 unchanged sentence

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

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.

to Consolidated Financial Statements

dollars in thousands (except share and per share data)

INCOME TAXES.

of December 31, 2021, the Company has provided valuation allowances of $ 3,909 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

carryforward tax losses:

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, 2021, Viewbix Israel incurred operating losses in Israel of approximately $ 14,624 which may be carried forward and offset

against taxable income in the future for an indefinite period.

of December 31, 2021 the Company generated net operating losses in the U.S.

of approximately $18,452 Net operating losses in the

of approximately $ 18,615 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.

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:

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.

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

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

For the year ended December 31

LOSS PER SHARE-BASIC AND DILUTED

SCHEDULE OF LOSS PER SHARE-BASIC AND DILUTED

For the year ended December 31

Basic and diluted:

Net loss attributable to ordinary stockholders

1 unchanged sentence

Loss per share-basic and diluted

to Consolidated Financial Statements

dollars in thousands (except share and per share data)

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

COVID-19 pandemic which originated in China in late 2019, has resulted in a widespread health crisis that has adversely affected businesses,

economies and financial markets worldwide, placed constraints on the operations of businesses, decreased consumer mobility and activity,

and caused significant economic volatility in the United States, Israel and international capital markets.

The COVID-19 pandemic has

caused an economic recession, high unemployment rates and other disruptions, both in the United States, Israel and the rest of the world.

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

the various stakeholders.

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

including government-imposed restrictions, market by market.

The COVID-19 pandemic has not yet currently adversely affected our business,

however, it is not possible at this time to estimate the full impact that the COVID-19 pandemic, the continued 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.

SUBSEQUENT EVENTS .

January 2022, the Investors under the Loan Agreement expressed their intention to convert the Principal Amount to the Company’s

shares of Common Stock, and accordingly, the Company agreed to extend the repayment date (see note 5).

December 5, 2021, the Company entered into the Merger Agreement with Gix Media and Merger Sub, pursuant to which, following the Gix Merger,

and upon satisfaction of additional closing conditions, Merger Sub will merge with and into Gix Media, with Gix Media being the surviving

entity and wholly-owned subsidiary of the Company.

As of the reporting date, the closing conditions of the Merger Agreement have not

been fulfilled yet.

to the terms and conditions of the Merger Agreement, at the Merger Effective Date (as defined in the Merger Agreement) all outstanding

ordinary shares of Gix Media, having no par value (the “Gix Media Shares”) will be converted into shares of Common Stock,

such that immediately following the Gix Merger, holders of Gix Media Shares will hold 90% of the Company’s capital stock on a fully

diluted basis.

The Merger Agreement contains customary representations, warranties and covenants made by each of the Company, Gix Media

and Merger Sub.

December 21, 2021, the shareholders of each of Gix Media and Merger Sub approved the Merger Agreement.

Consummation of the Gix Merger

is subject to certain additional closing conditions, including, among other things, (i) the Company filing an amendment to its certificate

of incorporation to change the Company’s name to “Gix Media, Inc.”, (ii) obtaining approval from certain third parties,

including the approval of Bank Leumi due to certain liens registered in its favor against ordinary shares of Gix Media;

(iii) conversion

of the Company’s outstanding convertible instruments into restricted shares of Common Stock and (iv) obtaining a tax pre-ruling

from the Israeli Tax Authority relating to the Agreement.

to Consolidated Financial Statements

dollars in thousands (except share and per share data)

SUBSEQUENT EVENTS.

connection with the Gix Merger, on February 13, 2022, the requisite majority of the Company’s stockholders approved certain amendments

to the Company’s certificate of incorporation, including, but not limited to (i) a name change from “Viewbix Inc.”

to “Gix Media, Inc.”, (ii) a reverse stock split of the Company’s common Stock at a ratio of 1-for-28 (the “Planned

Reverse Split”), (iii) a staggered board structure, and (iv) certain other provisions therein.

Pursuant to the Planned Reverse

Stock Split, each twenty-eight (28) shares of the Company’s common stock will be automatically converted, without any further action

by the stockholders, into one share of the Company’s common stock.

No fractional shares will be issued as the result of the reverse

Instead, each stockholder will be entitled to receive one share of common stock in lieu of the fractional share that would

have resulted from the reverse stock split.

Company intends to effect the foregoing amended and restated certificate of incorporation upon the closing of the Gix Merger, thus, as

of the reporting date the Planned Reverse Stock Split has not been effected.

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