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Item 1. Financial Statements

2022-11-21 compared with 2022-08-15 · 1028 added, 323 removed, 91 unchanged (94% of the section changed)

2 unchanged sentences

Interim Condensed Consolidated Balance Sheets (unaudited)

Interim Condensed Consolidated Statements of Comprehensive Loss (unaudited)

Interim Condensed Consolidated Statements of Operations (unaudited)

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

3 unchanged sentences

dollars in thousands (except share data)

As of December 31

CURRENT ASSETS

Cash and cash equivalents

Trade receivables

Other accounts receivable

Prepaid expenses

Restricted deposits

Accounts receivable

Loan to parent company

Other receivables

Total current assets

NON-CURRENT ASSETS

Severance pay funds

Deferred taxes

Property and equipment, net

Operating lease right-of-use assets

Intangible assets, net

Total non-current assets

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

1 unchanged sentence

dollars in thousands (except share data)

As of December 31

LIABILITIES AND STOCKHOLDERS’ DEFICIT

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES

Trade payables

Other accounts payables and accrued liabilities

Parent company loan

Short term loan

Current maturities of long-term loan

Loan from parent company

Accounts payable

Other payables

Short-term loans

Operating lease liabilities - short term

Total current liabilities

STOCKHOLDERS’ DEFICIT

NON-CURRENT LIABILITIES

Accrued severance pay

Long-term loan

Operating lease liabilities - long term

Deferred taxes

Total non-current liabilities

SHAREHOLDERS’ EQUITY

Share Capital

Ordinary shares of $ 0.0001 par value - Authorized:

490,000,000 shares;

Common stock of $ 0.0001

par value - Authorized:

Issued and outstanding:

34,753,669 shares as of June 30, 2022;

and December 31, 2021

shares as of September 30, 2022 and December 31, 2021, respectively (*)

Additional paid-in capital

Accumulated deficit

Total stockholders’ deficit

Total liabilities and stockholders’ deficit

Equity attributed to the company’s shareholders

Non-controlling interests

Total liabilities and shareholders’ equity

Retroactively

adjusted to reflect the reverse stock split effected on August 31, 2022 (see note 1.d) for all periods presented and to reflect the

equivalent number of shares corresponding to the combined financial information of the Company and Gix Media Ltd.

for all periods

preceding the Reorganization Transaction (see note 1.b)

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

AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

dollars in thousands (except share data)

the six months ended

the three months ended

Cost of revenues

Operating expenses:

For the nine months

ended September 30

For the three months

ended September 30

Costs and Expenses:

Traffic-acquisition and related costs

Research and development

1 unchanged sentence

General and administrative

Depreciation and amortization

Other expenses

Operating loss

Financial expenses, net

Loss before tax

Operating income (loss)

Financial income (expenses), net

Income before income taxes

Taxes on income

Loss per share - basic and diluted

Weighted average number of ordinary shares outstanding used in the computations of loss per share

Net income (loss)

Net income (loss) for the period is attributable to:

Non-controlling interests

Net income (loss)

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

Weighted average number of shares (*) – Basic:

Weighted average number of shares (*)

Retroactively

adjusted to reflect the reverse stock split effected on August 31, 2022 (see note 1.d) for all periods presented and to reflect the

equivalent number of shares corresponding to the combined financial information of the Company and Gix Media Ltd.

for all periods

preceding the reorganization transaction (see note 1.b)

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

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT (Unaudited)

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

dollars in thousands (except share data)

Ordinary shares

Additional paid-in

Total shareholders’

to the company’s

Balance as of January 1, 2022

Net loss for the period

Balance as of June 30, 2022

Ordinary shares

Additional paid-in

Total shareholders’

Balance as of April 1, 2022

Net loss for the period

Balance as of June 30, 2022

Ordinary shares

Additional paid-in

Total shareholders’

Net income (loss)

Adjustment to ultimate parent’s carrying values (see note

Share-based compensation

Dividend declared to shareholders

Dividend distributed to non-controlling interests

Balance as of September 30, 2022

Balance as of July 1, 2022

Net income (loss)

Share-based compensation

Dividend declared to shareholders

Dividend distributed to non-controlling interests

Balance as of September 30, 2022

Balance as of January 1, 2021

Net loss for the period

Balance as of June 30, 2021

Ordinary shares

Additional paid-in

Total shareholders’

Balance as of April 1, 2021

Net loss for the period

Balance as of June 30, 2021

Balance as of September

Balance as of July 1, 2021

Net income (loss)

Share-based compensation

Balance as of September 30, 2021

Retroactively

adjusted to reflect the reverse stock split effected on August 31, 2022 (see note 1.d) for all periods presented and to reflect the

equivalent number of shares corresponding to the combined financial information of the Company and Gix Media Ltd.

for all periods

preceding the reorganization transaction (see note 1.b)

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

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

dollars in thousands

the six months ended

the three months ended

flows from operating activities

loss for the period

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

expenses on loans

in assets and liabilities:

in trade receivables

(increase) in prepaid expenses

(increase) in other accounts receivable

(decrease) in trade payables

in other accounts payable and accrued liabilities

in parent company loan

cash used in operating activities

flows from investing activities

cash provided by Investing activities

flows from financing activities

cash provided by financing activities

in cash and cash equivalents

and cash equivalents at the beginning of the period

and cash equivalents at the end of the period

dollars in thousands (except share data)

For the nine months

ended September 30

For the three months

ended September 30

Cash flows from Operating Activities

Net income (loss)

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

Depreciation and amortizations

Share-based compensation

Deferred taxes

Accrued interest, net

Fair value revaluation and exchange rate differences on loans

Adjustment total

Changes in assets and liabilities items:

Decrease in accounts receivable

Decrease (increase) in other receivables

Decrease in operating lease right-of-use assets

Increase (decrease) in severance pay, net

Increase (decrease) in accounts payable

Decrease in other payables

Decrease in operating lease liabilities

Increase in parent company loan

Increase (Decrease) in

Operating Capital

Net cash provided by operating activities

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

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Cont.)

dollars in thousands (except share data)

For the nine months

ended September 30

For the three months

ended September 30

Cash flows from Investing Activities

Purchase of property and equipment

Capitalization of software development costs

Net cash used in investing activities

Cash flows from Financing Activities

Receipt of short-term loan

Repayment of short-term loan

Increase in loan to parent company

Repayment of long-term loan

Payment of dividend to non-controlling interests

Net cash used in financing activities

Increase in cash and cash equivalents and restricted cash

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

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

Supplemental Disclosure of Cash Flow Activities:

Cash paid and received during the period

Interest paid

Total Cash paid and received during the

Substantial non-cash activities:

Right of use assets obtained in exchange for operating lease liabilities

Dividend declared

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

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

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.

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.

Organizational Background

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

16, 1985, under a predecessor name, The InFerGene Company (“InFerGene Company”).

On August 25, 1995, a wholly owned subsidiary

of InFerGene Company merged with Zaxis International, Inc., an Ohio corporation, which following such merger, the surviving entity, InFerGene

Company, changed its name to Zaxis International, Inc (“Zaxis”).

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

5 unchanged sentences

to reflect its new operations and business focus.

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

On January 27, 2020, VCT Israel was sold

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

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

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

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

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.

Transaction”) with Gix Internet Ltd., a company organized under the laws of the State of Israel (“Gix” or “Parent

Company’’), pursuant to which, Gix assigned, transferred and delivered its 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 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.

these financial statements:

Company – Viewbix Inc.

Group – Viewbix Inc.

and its subsidiaries

Parent Company or Gix – Gix Internet Ltd.

Media – Gix Media Ltd.

– Cortex Media Group Ltd.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

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 price per

share of $ 0.01 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.

with Gix Media Ltd.

On December 5, 2021, the Company entered into a certain Agreement and Plan

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

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

(“Merger Sub”).

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 June 30, 2022, the closing conditions of the Merger Agreement have not been

fulfilled yet (see note 12).

GENERAL (Cont.)

Reorganization Transaction

December 5, 2021, the Company entered into a certain Agreement and Plan of Merger with Gix Media, an Israeli company and the majority-owned

subsidiary of Gix, the Parent Company and Vmedia Merger Sub Ltd., an Israeli company and wholly-owned subsidiary of the Company (“Merger

Sub”), pursuant to which, Merger

Sub merged with and into Gix Media, with Gix Media being the surviving entity and a wholly-owned subsidiary of the Company (the “Reorganization

Transaction”).

September 19, 2022, (the “Closing Date”) the Reorganization Transaction was consummated and as a result, all outstanding

ordinary shares of Gix Media, having no par value (the “Gix Media Shares”) were delivered to the Company’s in

exchange for the Company’s shares of common stock.

Prior to the closing of the Reorganization Transaction, Gix Media was a

majority-owned subsidiary of Gix.

As a result of

the Reorganization Transaction, the former holders of Gix Media Shares, who previously held

approximately 69% of the Company’s shares on a fully diluted basis, hold 90% of the Company’s Common Stock on a fully diluted basis, and

Gix Media became a wholly-owned subsidiary of the Company , which holds 100% of its share capital.

the Company and Gix Media Ltd.

were consolidated by the same parent and ultimate parent, Gix Internet Ltd.

and Medigus Ltd., respectively,

before and after the Reorganization Transaction, the Reorganization Transaction was accounted for as a transaction between entities under

common control.

Accordingly, the combined financial information of the Company and Gix Media Ltd.

is presented in these financial statements,

for all periods presented, reflecting the historical cost of the Company and Gix Media Ltd., as it is reflected in the consolidated financial

statements of the direct parent, Gix Internet Ltd., for all periods preceding March 1, 2022, the date Medigus Ltd.

obtained control in

Gix Internet Ltd., and as it is reflected in the consolidated financial statements of Medigus Ltd.

for all periods subsequent to March

and per share data in these financial statements have been retrospectively adjusted, for all periods preceding the Reorganization Transaction,

to reflect the equivalent number of shares of the Company corresponding to the combined financial information of the Company and Gix

Business Operations

Group, through its subsidiaries Gix Media Ltd.

and Cortex Media Group Ltd., operates in the field of digital advertising.

has two main activities that are reported as separate business segments:

the search segment and the digital content segment.

search segment activity is operated by Gix Media.

search segment develops a variety of technological software solutions, which perform automation, optimization and monetization of internet

campaigns, for the purposes of acquiring and routing internet user traffic to its customers.

digital content segment is engaged in the creation and editing of content, in different languages, for different target audiences,

for the purposes of generating revenues from leading advertising platforms, including Google, Facebook, Yahoo and Apple, by

utilizing such content to obtain internet user traffic for its advertisers.The digital content activity is operated by Cortex.

Media holds 70 % of Cortex’s share capital.

Group’s technological tools allow advertisers and website owners to earn more from their advertising campaigns and generate additional

profits from their websites.

Reverse Stock Split

connection with the Closing of the Reorganization Transaction, the Company filed an Amended and Restated Certificate of

Incorporation (the “Amended COI”) with the Secretary of State of Delaware, effective as of August 31, 2022, pursuant to

which, concurrently with the effectiveness of the Amended COI, the Company, among other things, effected a reverse stock split of its

Common Stock at a ratio of 1-for-28.

Share and per share data in these financial statements have been retrospectively adjusted to reflect the reverse

stock split for all periods presented.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

Company has incurred $ 337 in net loss for the six months ended June 30, 2022 and $ 159 in net loss for the six months ended June 30, 2021.

The Company has $ 2,617 stockholders’ deficit as of June 30, 2022 and $ 2,237 in stockholders’ deficit as of June 30, 2021.

The Company has a negative cash flow from operating activities of $ 47 for the six months ended June 30, 2022 and a negative cash flow

from operating activities of $ 22 for the six months ended June 30, 2021.

Since January 2020, the Company has significantly reduced its

operations and expenses of Viewbix Israel.

Management expects the Company to continue to generate substantial operating losses and to

continue to fund its operations primarily through utilization of its current financial resources and through additional raises of capital.

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.

ACCOUNTING POLICIES

of Presentation and Principles of Consolidation:

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”).

SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation:

accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries

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

intercompany accounts and transactions have been eliminated in consolidation.

Interim Financial Information

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”).

Unaudited Interim Financial Information

Company’s unaudited condensed consolidated financial statements have been prepared in accordance with U.S.

GAAP and pursuant to

the rules and regulations of the Securities and Exchange Commission (the “SEC”).

Certain information and footnote disclosures

normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as is permitted

by such rules and regulations.

Accordingly, these condensed consolidated financial statements should be read in conjunction with the

audited financial statements as of and for the year ended December 31, 2021 and the notes thereto included in the Company’s Annual

Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 17, 2022 (the “2021 Annual Report”).

normally included in financial statements prepared in accordance with U.S .GAAP have been condensed or omitted from this report, as is

permitted by such rules and regulations.

Accordingly, these condensed consolidated financial statements should be read in conjunction

with the audited financial statements as of and for the year ended December 31, 2021 and the notes thereto included in the Company’s

Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 17, 2022 (the “2021 Annual Report”).

The results for any interim period are not necessarily indicative of results for any future period.

unaudited condensed consolidated financial statements have been prepared on the same basis as the audited financial statements.

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, 2022 are not necessarily indicative of the results for the year ending December 31, 2022,

The results for the nine months ended September 30, 2022, are not necessarily indicative of the results for the year ending December

31, 2022, or for any future period.

of June 30, 2022, there have been no material changes in the Company’s significant accounting policies from those that were disclosed

in the 2021 Annual Report.

of September 30, 2022, following the retrospective presentation of the combined financial information of the Company and Gix Media

Ltd., the Company adopted the significant accounting policies described in Note 2 in these unaudited condensed consolidated

financial statements.

Other than these significant accounting policies, there have been no material changes in the Company’s

significant accounting policies from those that were disclosed in the 2021 Annual Report.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

ACCOUNTS RECEIVABLE

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Use of Estimates

preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates, judgments and assumptions

that affect the amounts reported of assets and liabilities and disclosure at the date of the consolidated financial statements and

the reported amounts of income and expense during the reporting period.

The Company evaluates on an ongoing basis its assumptions,

including those related to contingencies, income taxes, deferred taxes, share-based compensation and leases.

Actual results could

differ from those estimates.

Functional Currency and Foreign Currency Transactions

of the revenues of the Company are received in U.S.

In addition, a substantial portion of the costs of the Company are incurred

Therefore, the Company’s management believes that the U.S.

dollar is the currency of the primary economic environment

in which the Company and each of its subsidiaries operates.

Thus, the functional and reporting currency of the Company is the U.S.

monetary balances denominated in currencies other than the U.S.

dollar are re-measured into U.S.

dollars in accordance with Statement

of the Accounting Standard Codification (“ASC”) No.

830 “Foreign Currency Matters” (“ASC No.

and balances originally denominated in U.S.

dollars are presented at their original amounts.

Balances in non U.S.

dollar currencies are

translated into U.S.

dollars using historical and current exchange rates for non-monetary and monetary balances, respectively.

dollar transactions and other items in the statements of operations (indicated below), the following exchange rates are used:

transactions exchange rates at transaction dates and (ii) for other items (derived from non-monetary balance sheet items such as depreciation

and amortization) historical exchange rates.

Currency transaction gains and losses are presented in the financial income or expenses,

as appropriate

Cash and cash equivalents

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.

Restricted Deposits

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

Accounts receivable and allowance for credit losses

receivables are recorded at the invoiced amount, net of an allowance for credit losses.

The Group evaluates its outstanding accounts

receivables and establishes an allowance for credit losses based on information available on their credit condition, current aging, historical

experience, future economic and market conditions.

These allowances are reevaluated and adjusted periodically as additional information

is available.

Changes in the allowance for expected credit losses are recorded under general and administrative expenses in the condensed

consolidated statements of income.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

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

Depreciation is calculated using the straight-line basis over the

estimated useful lives, at the following annual rates:

OF ESTIMATED USEFUL LIVES

Computers and peripherals equipment

Office furniture and equipment

Leasehold improvements

Over the shorter of the lease term (including options if any

that are reasonably certain to be exercised estimated useful life).

accordance with ASC No.

842 “Leases”, the Company determines if an arrangement is a lease at inception.

If an arrangement

is a lease, the Company determines whether it is an operating lease or a finance lease at the lease commencement date.

Operating leases

are included in operating lease assets, operating lease liabilities – current, and non-current operating lease liabilities in the

Company’s condensed consolidated balance sheets.

lease assets represent the Company’s right to control the use of an underlying asset for the lease term and lease liabilities represent

the Company’s obligation to make lease payments arising from the estimated lease.

lease assets and liabilities are recognized on the commencement date based on the present value of lease payments over the lease term.

Company uses its incremental borrowing rate based on the information available at the commencement date to determine the present value

of the lease payments.

The incremental borrowing rate is estimated based on factors such as the lease term, credit standing and the economic

environment of the location of the lease.

lease payments, including payments based on an index or a rate, are expensed as incurred and are not included within the operating lease

asset and operating lease liabilities.

The Company does not separate non-lease components from lease components for its leases of real

Company’s lease terms are the noncancelable periods, including any rent-free periods provided by the lessor, and include options

to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

At lease inception, and in

subsequent periods as necessary, the Company estimates the lease term based on its assessment of extension and termination options that

are reasonably certain to be exercised.

Lease costs are recognized on a straight-line basis over the lease term.

Company does not recognize operating lease asset and operating lease liabilities for leases with terms shorter than 12 months.

costs for short-term leases are recognized on a straight-line basis over the lease term.

Company has material non-functional currency leases.

Lease liabilities in respect of leases denominated in a foreign currency

are remeasured using the exchange rate at each reporting date.

Lease assets are measured at historical rates,

which are not affected by subsequent changes in the exchange rates.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Revenue Recognition

described in note 1(a) the Company generates revenues from obtaining internet user traffic and routing such traffic to its customers.

The Company is entitled to receive consideration for its service upon each individual internet user traffic that was routed to and is

monetized by its customers.

Company’s revenues are measured according to the ASC 606, “Revenue from Contracts with Customers” (“ASC 606”).

Under ASC 606, revenues are measured according to the amount of consideration that the Company expects to be entitled in exchange for

transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties, such as VAT taxes.

are presented net of VAT.

The Company’s payments terms are less than one year.

Therefore, no finance component is recognized.

Company recognizes revenues upon routing of internet users’ traffic that is monetized by its customers.

As the Company

operates as the primary obligor in its arrangements and has sole discretion in determining to which of its customers internet user

traffic is to be routed, revenues are presented on a gross basis.

Traffic-acquisition and related costs

Traffic acquisition and related costs consist primarily of fees paid to

suppliers in connection with the Company’s internet traffic sources, as well as internal costs incurred in connection with the acquisition

of such traffic.

Traffic acquisition costs are expensed as incurred.

Research and development expenses

and development costs are charged to the condensed consolidated statements of income as incurred, except for certain costs relating to

internally developed software, which are capitalized.

Company capitalizes certain internal software development costs, consisting of direct subcontractors’ costs associated with creating

the internally developed software.

Software development projects generally include three stages:

(i) the preliminary project stage (all

costs expensed as incurred);

(ii) the application development stage (costs are capitalized) and (iii) the post implementation/operation

stage (all costs expensed as incurred).

costs capitalized in the application development stage primarily include the costs of designing the application, coding and testing of

Capitalized costs are amortized using the straight-line method over the estimated useful life of the software, once it is

ready for its intended use.

Company believes that the straight-line recognition method best approximates the manner in which the expected benefit will be derived.

Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances

occur that could impact the recoverability of these assets.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

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.

tax positions are accounted for in accordance with the provisions of ASC 740-10, under which a company may recognize the tax benefit

from an uncertain tax position claimed or expected to be claimed on a tax return only if it is more likely than not that the tax position

will be sustained on examination by the taxation authorities, based on the technical merits of the position, at the largest benefit that

has a greater than fifty percent likelihood of being realized upon ultimate settlement.

Interest and penalties, if any, related to unrecognized

tax benefits, are recognized in tax expense.

Fair Value of Financial Instruments

carrying amounts of cash and cash equivalents, restricted deposits, accounts receivable, loan to parent company, other current assets,

current maturities of long-term loan, accounts payable, other payables and short-term loans approximate their fair value due to

the short-term maturities of such instruments.

carrying amount of the variable interest rate long-term loan is approximates to its fair value as it bears interest at

approximate market rate.

Business Combinations

Company accounts for its business combinations in accordance with ASC 805, “Business Combinations” (“ASC 805”).

ASC 805 specifies the accounting for business combinations and the criteria for recognizing and reporting intangible assets apart from

ASC 805 requires recognition of assets acquired, liabilities assumed and any non-controlling interest at the acquisition date,

measured at their fair values as of that date.

Acquisition-related

intangible assets result from the Company’s acquisitions of businesses accounted for under the purchase method and consist of the

fair value of identifiable intangible assets including customer relations, technology, as well as goodwill.

Goodwill is the amount by

which the acquisition cost exceeds the fair values of identifiable acquired net assets on the date of purchase.

Acquisition-related definite

lived intangible assets are reported at cost, net of accumulated amortization.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Company’s goodwill reflects the excess of the consideration paid or transferred including the fair value of contingent consideration

over the fair values of the identifiable net assets acquired.

is not amortized but instead is tested for impairment, in accordance with ASC 350, “Intangibles – Goodwill and Other”

(“ASC 350”), at the reporting unit level, at least annually at December 31 each year, or more frequently if events or changes

in circumstances indicate that the carrying value may be impaired.

goodwill impairment test is performed by evaluating an initial qualitative assessment of the likelihood of impairment.

If this step indicates

that the qualitative assessment does not result in a more likely than not indication of impairment, no further impairment testing is

If it does result in a more likely than not indication of impairment, the impairment test is performed.

the impairment test, the Company compares the fair value of the reporting unit to the carrying value of the reporting unit.

value of the reporting unit exceeds the carrying value of the net assets allocated to that unit, goodwill is not impaired, and no further

testing is required.

If the fair value is less than the carrying value of the reporting unit, then the second step of the impairment

test is performed to measure the amount of the impairment.

Intangible assets, other than goodwill

assets are identifiable non-monetary assets that have no physical substance.

Intangible assets with indefinite useful lives are not amortized

and are tested for impairment once a year, or whenever there is a sign indicating that impairment may have occurred, in accordance with

An estimate of the useful life of intangible assets with an indefinite useful life is examined at the end of each reporting

A change in the estimated useful life of an intangible asset that changes from indefinite to defined is treated prospectively.

assets with a defined useful life are amortized in a straight line over their estimated useful life subject to impairment testing.

change in the estimated useful life of an intangible asset with a defined useful life is treated prospectively.

useful life used to amortize intangible assets with a defined useful life is as follows:

OF AMORTIZE INTANGIBLE ASSETS

Customer relations

Internal software

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Impairment of long-lived assets

Company’s long-lived assets to be held or used, including property and equipment, right of use assets and intangible assets subject

to amortization are reviewed for impairment in accordance with ASC 360, “Property, Plants and Equipment” (“ASC 360”),

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

Recoverability of assets

is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the

If such asset is considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount

of the asset exceeds the fair value of the asset.

Severance Pay

Company’s liability for severance pay for some of its Israeli employees is calculated pursuant to Israeli Severance Pay Law, 1963

(the “Israeli Severance Pay Law”) based on the most recent salary of the employee multiplied by the number of years of employment,

as of the balance sheet date.

These employees are entitled to one month’s salary for each year of employment or a portion thereof.

The Company records the liability as if it were payable at each balance sheet date on an undiscounted basis.

The liability is classified

based on the expected date of settlement and therefore is usually classified as a long-term liability unless the cessation of the employees

is expected during the upcoming year.

Company’s liability for these Israeli employees is partially covered by monthly deposits for insurance policies and the remainder

by an accrual.

The deposited funds for these policies are recorded as an asset in the Company’s balance sheet and include profits

and losses accumulated up to the balance sheet date.

The deposited funds may be withdrawn only upon the fulfillment of the obligation

pursuant to the Israeli Severance Pay Law or labor agreements.

The value of the deposited funds is based on the cash redemption value

of these policies.

respect to other Israeli employees, the Company acts pursuant to the general approval of the Israeli Ministry of Labor and Welfare, pursuant

to the terms of Section 14 of the Israeli Severance Pay Law (“Section 14”), according to which the current deposits with

the pension fund and/or with the insurance company exempt the Company from any additional obligation to these employees for whom the

said depository payments are made.

As a result, the Company does not recognize any liability for severance pay due to these employees

and the deposits under Section 14 are not recorded as an asset in the Company’s balance sheet.

expenses for the nine months ended September 30, 2022, and September 30, 2021, amounted to $ 101

respectively.

Share-based compensation

Company accounts for share-based compensation in accordance with ASC 718, “Stock Compensation” (“ASC 718”), which

requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model.

of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods, which is

generally the vesting period, in the Company’s condensed consolidated statement of income.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Share-based compensation (Cont.)

Company selected the Black-Scholes option pricing model as the most appropriate fair value method for its share-options awards.

The option-pricing

model requires several assumptions, of which the most significant are the expected share price volatility and the expected option term.

Company accounts for forfeitures as they occur.

Net earnings per share

accordance with ASC 260, “Earnings Per Share” (“ASC 260”), basic net earnings per share is computed by dividing

net earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

net earnings per share reflects the potential dilution that could occur if share options, warrants or other commitments to issue ordinary

shares were exercised or equity awards vested, resulting in the issuance of ordinary shares that could share in the net earnings of the

Segment reporting

Company reports financial and descriptive information about its reportable segments.

Reportable segments are operating segments or aggregations

of operating segments that meet specified criteria as defined in ASC 280, “Segments Reporting”.

segments are distinguishable components of an entity for each of which a separate financial information is available and is reported

in a manner consistent with the internal reporting provided to the entity’s Chief Operating Decision Maker (“CODM”)

in making decisions about how to allocate resources and in assessing performance.

The review of the CODM is carried out according to the results of the segment’s

His review does not include certain expenses that are not related specifically to the activity of each of the segments.

expenses are presented as reconciliation between segments operating results to total operating results in financial statements.

Recent accounting pronouncements

2019-12, Income Taxes

December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes.

The amendments in

this ASU simplify the accounting for income taxes, eliminates certain exceptions to the general principles in Topic 740 and clarifies

certain aspects of the current guidance to improve consistent application among reporting entities.

ASU 2019-12 is effective for annual

periods beginning after January 1, 2022 and interim periods within annual periods beginning after January 1, 2023, and early adoption

was permitted.

Company currently does not expect the adoption of this accounting standard will have a material impact on its consolidated financial

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Recent accounting pronouncements (cont.)

2019-10, Financial Instruments—Credit Losses (Topic 326)

September 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2016-13, “Financial Instruments –

Credit Losses (Topic 326)” (“ASU 2016-13”), which requires the immediate recognition of management’s estimates

of current and expected credit losses.

In November 2018, the FASB issued ASU 2018-19, which makes certain improvements to Topic 326.

In April and May 2019, the FASB issued ASUs 2019-04 and 2019-05, respectively, which adds codification improvements and transition relief

for Topic 326.

In November 2019, the FASB issued ASU 2019-10, which delays the effective date of Topic 326 for Smaller Reporting Companies

to interim and annual periods beginning after December 15, 2022, with early adoption permitted.

In November 2019, the FASB issued ASU

2019-11, which makes improvements to certain areas of Topic 326.

In February 2020, the FASB issued ASU 2020-02, which adds an SEC paragraph,

pursuant to the issuance of SEC Staff Accounting Bulletin No.

119, to Topic 326.

amendments in this update are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal

years, and early adoption is permitted.

The Company currently does not expect that

the adoption of this accounting standard will have a material impact on its consolidated financial statements

2021-08, Business Combinations

October 2021 the FASB issued ASU 2021-08, “Business Combinations (Topic 805) – Accounting for Contract Assets and Contract

Liabilities from Contracts with Customers”.

The amendments in this update require that an entity (acquirer), recognize and measure

contract assets and contract liabilities acquired in a business combination in accordance with Topic 606.

At the acquisition date, an

acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts.

this, an acquirer may assess how the acquiree applied Topic 606 to determine what to record for the acquired revenue contracts.

amendments in this update are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal

years, and early adoption is permitted.

The Company currently does not expect that

the adoption of this accounting standard will have a material impact on its consolidated financial statements

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

OTHER RECEIBALES

SCHEDULE OF OTHER ACCOUNTS RECEIVABLES COMPOSITION

Prepaid expenses

Government authorities

accounts receivable

ACCOUNTS PAYABLES AND ACCRUED LIABILITIES

SCHEDULE OF OTHER ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Other payables

Accrued liabilities

other accounts payables

SCHEDULE OF PAYABLE TO PARENT COMPANY

Parent company loan

to an agreement between the parties, the parent company (“Gix”) financed certain expenses with respect to the Company’s

ongoing operation (mainly salary expenses and other general and administrative expenses).

amounts were repaid by the Company to Gix during 2022 and 2021.

Company entered into an agreement with Gix, pursuant to which, effective as of December 31, 2021 (“Modification Date”), 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.

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

Modification Date, the Gix Loan was recorded at its fair value of $ 2,116 ,

with the difference of $ 184

between its fair value and the carrying value of the payable to Gix.

This difference was 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 Gix Loan, to be amortized as finance expense in the Company’s Consolidated Statements of

Comprehensive Loss over the term of the Gix Loan.

Other receivables

accounts receivables

PROPERTY AND EQUIPMENT, NET

OF PROPERTY AND EQUIPMENT, NET

Computers and peripheral equipment

Office furniture and equipment

Leasehold improvements

accumulated depreciation

Property and equipment, net

expenses totaled to $ 71 and $ 54 for the nine months ended September 30, 2022, and September 30 2021, respectively.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

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 (the “Principal Amount”) to the

Company to be repaid in one lump-sum twelve (12) months following the date of the Loan (i.e., December 18, 2021).

In addition, 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 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.

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:

SCHEDULE OF FAIR VALUE DISTRIBUTION OF LIABILITY AND EQUITY COMPONENTS

% of Fair Value

Allocated amount

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

SCHEDULE OF COMPOSITION OF SHORT TERM LOAN

Principal amount

Discount on Short term loan

Short term loan, Net

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.

As of June 30, 2022, the Company has not repaid

the Principal Amount.

On February 25, 2021, Gix Media entered into a lease agreement for a new corporate office of 479 square meters in

Ramat Gan, Israel, at a monthly rent fee of $ 10 .

The lease period is for 36 months (the “initial lease period”) with an option

by the Company to extend for two additional terms of 24 months each.

In accordance with the lease agreement, the Company made leasehold

improvements in exchange for a rent fee discount of $ 67 which will be spread over the initial lease period.

The Company includes

renewal options that it is reasonably certain to exercise in the measurement of the lease liabilities.

recorded on the balance sheet consist of the following:

SCHEDULE OF LEASE

Right-of-use assets

Operating lease – current

Operating lease – non-current

Total lease liabilities

Weighted-average

remaining lease term and discount rate were as follows:

SCHEDULE OF WEIGHTED AVERAGE REMAINING LEASE TERMS AND DISCOUNT RATES

September 30,

Operating leases weighted average remaining lease term (in years)

Operating leases weighted average discount rate

of operating lease liabilities as of September 30, 2022 and December 31, 2021, are as follows:

OF MATURITIES OF OPERATING LEASE LIABILITIES

Total lease payments

imputed interest

Present value of lease liabilities

lease expenses amounted to $ 77 and $ 60 for the nine months ended September 30, 2022, and September 30, 2021, respectively.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

STOCKHOLDERS’

Stockholders’

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.

Some investors

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

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

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

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

In accordance with the terms of the Loan, the Company repaid

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

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

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

Securities Act of 1933, as amended.

For more details, please see note 1C.

following table summarizes information of outstanding warrants as of June 30, 2022:

SUMMARY OF OUTSTANDING WARRANTS

Exercise Price

Class J Warrants

Class K Warrants

Additionally,

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

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

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

States by Viewbix Israel, the Company will issue to 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.

GOODWILL AND INTANGIBLE ASSETS

OF GOODWILL AND INTANGIBLE ASSETS

Internal Software (*)

Customer Relations

Balance as of January 1, 2022

Adjustments to ultimate parent company earning

values (see note 1.c)

Balance as of September 30, 2022

Accumulated amortization:

Balance as of January 1, 2022

Amortization recognized during the period

Balance as of September 30, 2022

Amortized cost:

As of September 30, 2022

Internal Software (*)

Customer Relations

Balance As of January 1, 2021

beginning balance

Acquisition of Cortex (see note 7)

Balance as of December 31, 2021

ending balance

Accumulated amortization:

Balance as of January 1, 2021

Accumulated amortization:

beginning balance

Amortization recognized during the year

Balance as of December 31, 2021

Accumulated amortization:

ending balance

Amortized cost:

As of December 31, 2021

Amortized cost:

During 2020, Gix Media engaged with a subcontractor for the development of an internal software (the “Software”).

Media capitalized its developments costs.

expenses capitalized as of September 30, 2022, and December 31, 2021, were $ 463 and $ 449 , respectively.

March 1, 2022, the Software is available for use.

Accordingly, Gix Media recognized amortization expenses over the estimated useful

life of the Software determined to be three years.

For the period from March 1, 2022, until September 30, 2022, Gix Media recorded

amortization expenses of $ 85 .

The Company estimates the useful life of the software to be amortized over 36 months.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

EXPENSES, NET

OF FINANCIAL EXPENSES, NET

For the six months ended June 30

Exchange rate differences

Interest on loans

Financial (expenses) income,

For the three months ended June 30

Exchange rate differences

Interest on loans

Financial (expenses) income,

rates applicable to the income of the Company:

BUSINESS COMBINATION

October 13, 2021, Gix Media acquired 70% (on a fully diluted basis) of the shares of Cortex (“Cortex Transaction”), a private

company operating in the field of online media and advertising.

In consideration for Cortex Transaction, Gix Media paid NIS 35 million

in cash (approximately $11 million), out of which an amount of $0.5 million was deposited in trust for a period of 12 months from the

closing date .

Cortex Transaction also included the following main terms:

Media will acquire 30 % of Cortex’s shares in three equal stages, (at the beginning

of 2023, at the beginning of 2024 and at the beginning of 2025) (the “Remaining Balance

Shares”), so that following the completion of the acquisition of all of the Remaining

Balance Shares, Gix Media will hold 100 % of Cortex’s share capital on a fully diluted

obligation (and right) to acquire the Remaining Balance Shares will expire in the event of

an initial public offering of Cortex’s shares or in the event of a 50% or more decrease

in Cortex’s annual net income, for a period of 12 consecutive months, compared to the

net income during the period of 12 months ended July 31, 2021.

As of the date of filling of these financial statements,

this right and obligation has not expired.

Gix Media does not fulfill its obligation to acquire the Remaining Balance Shares, within

90 days from the Designated Acquisition Date as stated above, the selling shareholders of

Cortex (the original shareholders of Cortex) will be released from their obligation not to

sell or transfer their holdings in Cortex to a third party, in relation to the same stage

of the balance of the shares not acquired as aforesaid.

If Gix Media does not fulfilled its

obligation to acquire the Remaining Balance Shares in a certain stage, its right to acquire

the Remaining Balance Shares in the subsequent stage, will be conditioned upon the acquisition

of the Remaining Balance Shares not purchased by it in the previous stage as

well, provided that the Remaining Balance Shares were not transferred or pledged by the selling

shareholders of Cortex to a third party.

Cortex Transaction was financed by Gix Media’s existing cash balances and substantially by debt through a bank financing in

the aggregate amount of $ 9.5

million, that consists of a line of credit of up to $ 3.5

million and a long-term loan of $ 6

million (see note 10).

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

BUSINESS COMBINATION (Cont.)

Acquisition (Cont.)

Value of Cortex’s Identifiable Assets and Liabilities:

OF BUSINESS COMBINATION OF ASSETS AND LIABILITIES

Cash and cash equivalents

Restricted deposits

Trade receivables

Other accounts receivables

Property and Equipment, net

Goodwill arising from the acquisition

Intangible assets

Accounts payables

Short-term loan

Accrued expenses and other current liabilities

Deferred taxes and taxes payable

Non-Controlling Interests

Total liabilities

Total acquisition cost

Media recorded acquisition costs in the amount of $ 197 with respect to Cortex Transaction.

Cash Flow from the Cortex Transaction:

Consideration paid in cash

Less cash and cash equivalents and restricted deposits received from acquisition of Cortex

Total net cash paid

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

ACCOUNTS PAYABLE

OF ACCOUNTS PAYABLE

Trade payables

Accrued expenses

OTHER PAYABLES

OF OTHER ACCOUNTS PAYABLE

Dividend declared

Government authorities

Employees and payroll accruals

Other accounts payable

payable other

the the closing date of the Cortex Transaction, Gix Media entered into a financing agreement with Bank Leumi Le Israel Ltd

(“Leumi”), an Israeli bank, for the provision of a line of credit in the total amount of up to $ 3.5

million and a long-term loan totaling $ 6

million, which Gix Media used to finance the Cortex Transaction (see note 9) (the “Financing Agreement”).

Financing Agreement included the following main terms:

loan of $ 6 million to be provided to Gix Media for a period of 48 months at an annual interest

rate of LIBOR + 4.12 %.

renewable monthly line of credit, of up to $ 3.5

million to be provided to Gix Media, which will be available for utilization for a period of two years and will be determined on a

monthly basis, at 80 %

of Gix Media’s accounts receivable balance (“Line of Credit”).

The amounts that will be withdrawn from the

Line of Credit will bear annual interest of LIBOR

Media undertook to meet financial covenants over the life of the loans as follows:

the ratio of debt to EBITDA, based on the Gix Media’s consolidated financial statements in all 4 consecutive quarters, will

not exceed 2.4 in the first two years and will not exceed 1.75 in the following two years.

As of September 30, 2022, and

December 31, 2021, Gix Media is in compliance with the financial covenants in connection with the Financing Agreement.

part of the Financing Agreement, Gix Media and the Company provided several liens in favor of Leumi (see

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

LOANS (Cont.)

April 7, 2022, Cortex and Leumi entered into an addendum to an existing loan agreement between the parties, dated August 15, 2021.

part of the addendum to the loan agreement, Leumi provided Cortex with a monthly renewable credit line (the “Additional Credit

Line”) in the amount of up to $ 1,000 , which is an addition to the existing credit

line of $ 1,500 .

The aggregate amount of the credit lines is $ 2,500 (the “Total Credit Line”).

The Total Credit Line was available

for utilization by Cortex until September 24, 2022.

The Total Credit Line was determined every month at the level of 70 %

of Cortex’s customers’ balance.

The amounts that were drawn from the Additional Credit Line bear an annual interest of SOFR

+ 3.52% (Overnight Financing Rate Secured, guaranteed

daily interest as determined in accordance with the Federal Bank in New York).

The Additional Credit Line was required for the purpose

of increasing the traffic-acquisition and related costs and as part of the continuation growth trend in Cortex’s business

As of September 30, 2022, the Additional Credit Line was not renewed.

July 25, 2022, Gix Media and Leumi entered into an addendum to the Financing Agreement, according to which, Leumi will provide Gix

Media with a loan of $ 1,500 ,

to be withdrawn at the discretion of Gix Media no later than January 31, 2023 (the “Additional Loan”).

Additional Loan will bear an annual interest of SOFR

+ 5.25% to be repaid in 42 equal monthly payments starting from the date of the Additional Loan’s receipt.

The Additional Loan will be used to

purchase an additional 10 %

of Cortex’s shares in accordance with Cortex Transaction.

As of the date of issuance of these financial statements, no

amounts under the Additional Loan were withdrawn.

of long-term loans, short-term loans and line of credit of the Group:

following is the composition of the balance of the Group’s loans according to their nominal value:

OF COMPOSITION OF THE BALANCE OF THE GROUP’S LOANS

Interest rate (*)

Short-term bank loan – Gix Media

LIBOR + 3.20 %

Short-term bank loan – Cortex

SOFR + 3.52 %

Long-term bank loan, including current maturity – Gix Media

LIBOR + 4.12 %

(*) The LIBOR interest

rate will continue to be published until June 2023 and then will be replaced by the Secured Overnight Financing Rate (“SOFR”).

of the Group’s bank loans as of September 30, 2022, are as follows:

SCHEDULE OF MATURITIES OF DEBT

(*) Includes a sum

of $ 5,000 which is a renewable monthly credit.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

Tax rates applicable to the income of the Company:

is taxed according to U.S.

2 unchanged sentences

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 2022, 2021,

2020 and onwards.

Israel is taxed according to Israeli tax laws.

The Israeli corporate

tax rate is 23 % in the years 2022, 2021 and onwards.

Media and Cortex are recognized as a “Preferred-Technology Enterprise” in accordance with Section 51 of the Encouragement

of Capital Investments Law, 1959 and are taxed at a reduced corporate tax rate of 12 %.

of September 30, 2022, Gix Media has a final tax assessment for tax years prior to and including the tax year ended December 31, 2014.

has a final tax assessment for tax years prior to and including the tax year ended December 31, 2018.

Israel has a final tax assessment for tax years prior to and including the tax year ended December 31, 2015.

2022, the Israeli tax authority commenced a tax assessment of Gix Media for the tax years 2017 to 2020.

As of the date of issuance of these financial statements, tax assessment have not been completed.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

ON INCOME (Cont.)

income taxes:

dollars in thousands (except share data)

TAXES ON INCOME (Cont.)

Deferred taxes are comprised of the following components:

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

taxes are comprised of the following components:

SCHEDULE OF DEFERRED INCOME TAXES

Deferred R&D expenses

Deferred tax assets

Deferred research and development expenses

Employee compensation and benefits

Operating loss carryforward

Differences between tax basis and carrying values of loans (see note 5)

Net deferred tax asset before valuation allowance

Accrued severance pay

Total deferred tax assets

Deferred tax liabilities:

Differences between tax basis and carrying values of loans

Intangible assets associated with business combinations

Total deferred tax liabilities

Net deferred tax assets before valuation allowance

Valuation allowance

Net deferred tax asset

of June 30, 2022, the Company has provided valuation allowances of $ 7,382 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.

carryforward tax losses:

of June 30, 2022 Viewbix Israel incurred operating losses in Israel of approximately $ 14,840 which may be carried forward and offset

against taxable income in the future for an indefinite period.

Net deferred tax liabilities

of September 30, 2022, the Company has recorded a valuation allowance of $ 7,666

in respect of the deferred tax assets resulting primary from tax loss carryforward of Viewbix Inc., as management currently believes these deferred tax assets will not be released in the foreseeable

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

TAXES ON INCOME (Cont.)

tax expenses are comprised as follows:

OF COMPONENTS OF INCOME TAX EXPENSE (BENEFITS)

For the nine months ended

Current tax expenses

Tax benefit in respect of prior years

Deferred tax income

For the three months ended

Current tax expenses

Taxes expenses (benefit) in respect of previous years

Deferred tax income

Total Income tax expenses

Reconciliation of the theoretical tax expenses to the actual tax expenses:

reconciliation between the theoretical tax expense, assuming all income is taxed at the statutory tax rate applicable to income of the

Company, and the actual tax expense as reported in the statement of operations is as follows:

SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION

For the nine months ended

Income before income taxes as reported in the consolidated statements of operations

Statutory tax rate in USA

Theoretical tax expense

Increase (decrease) in tax expenses resulting from:

Lower tax rates for preferred technology enterprises

Non-deductible expenses

Tax benefits in respect of prior years

Change in valuation allowance

Taxes on income

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

TAXES ON INCOME (Cont.)

Available carryforward tax losses:

of September 30, 2022 Viewbix Israel incurred operating losses of approximately $ 15,015 which may be carried forward and offset against

taxable income in the future for an indefinite period.

of June 30, 2022 the Company generated net operating losses in the U.S.

7 unchanged sentences

the expiration of net operating losses before utilization.

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

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

the nine months ended

the three months ended

Total loss before taxes

COMMITMENTS AND CONTINGENCIES

of September 30, 2022, the Company has provided several liens under Gix Media’s Financing Agreement with Leumi in connection

with the Cortex Transaction, as follows:

(1) a guarantee to Bank Leumi of all of Gix Media’s obligations and undertakings to

Bank Leumi unlimited in amount;

(2) a subordination letter signed by the company to Leumi Bank;

(3) A first ranking all asset charge

over all of the assets of the Company;

and (4) a Deposit Account Control Agreement over the Company’s bank

Media has provided several liens under the Financing Agreement with Leumi in connection with the acquisition of Cortex Transaction, as

(1) a floating lien on Gix Media’s assets;

(2) a lien on Gix Media’s bank account in Leumi;

(3) a lien on

Gix Media’s rights under the Cortex Transaction;

(4) a fixed lien on Gix Media’s intellectual property;

and (5) a lien on

Gix Media’s full holdings in Cortex.

Media restricted deposits in the amount of $ 195

are used as a security in respect of

credit cards, bank guaranties, office lease agreement and hedge transactions on the USD exchange rate.

has a restricted deposit in the amount of $ 27 which is used as a security in respect of its leased offices.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

ON INCOME (Cont.)

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

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

For the six months ended

SHAREHOLDERS’ EQUITY

Ordinary Shares:

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 will not confer other privileges unless stated hereunder or in the Companies Law otherwise.

Some investors

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

following table summarizes information of outstanding warrants as of September 30, 2022:

SUMMARY OF OUTSTANDING WARRANTS

Exercise Price

Class J Warrants

Class K Warrants

All of the Company’s warrants meet the U.S.

GAAP criteria for equity

classification.

Reverse Stock Split:

August 31, 2022, the

Company filed the Amended COI with the Secretary of State of Delaware to effect a 28 to 1 reverse stock split of the Company’s

outstanding shares of Common Stock .

As a result of the reverse stock split, every 28 shares of the Company’s

outstanding Common Stock prior to the effect of the amended COI was combined and reclassified into one share of the Company’s

shares of Common Stock.

The number of authorized share capital of the Company’s Common Stock and par value of the shares

remained unchanged.

All share and stock options information related to the Company, was adjusted to reflect the reverse stock split

on a retroactive basis.

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

SHAREHOLDERS’ EQUITY (Cont.)

Share option plan :

the completion of Gix Media’s acquisition by the Parent Company, the Parent Company granted options to Gix Media’s employees.

These options entitle the employees to purchase ordinary shares of the Parent Company that its shares are traded on Tel-Aviv stock exchange.

summary of Gix Media’s employee share options activity and related information is as follows:

STOCK OPTION ACTIVITY

As of September 30, 2022

As of December 31, 2021

Number of options

Weighted average exercise price

Number of options

Weighted average exercise price

Options outstanding at beginning of the year

Changes during the period:

Expired or forfeited

Outstanding at end of period

Options exercisable at end of period

following tables summarize additional information regarding the Gix Media’s outstanding and exercisable options as of December 31,

SCHEDULE OF OPTION

OUTSTANDING AND EXERCISABLE

Options outstanding

As of September 30, 2022

exercise price

Weighted average

exercise price

average remaining

contractual life (years)

Options Exercisable

As of September 30, 2022

exercise price

Weighted average

exercise price

average remaining

contractual life (years)

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

SHAREHOLDERS’ EQUITY (Cont.)

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

OF STOCK BASED COMPENSATION EXPENSES

For the nine months ended

For the three months ended

Total loss before taxes

PER SHARE-BASIC AND DILUTED

SCHEDULE OF LOSS PER SHARE-BASIC AND DILUTED

the six months ended

Research and development

Selling and marketing

General and administrative

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

September 30, 2022, Gix Media declared a dividend in a total amount of $ 1,000 .

As of September 30, 2022, the dividend was not distributed (see note 9).

ADDITIONAL INFORMATION REGARDING TO PROFIT AND LOSS ITEMS

SCHEDULE OF INFORMATION REGARDING TO PROFIT AND LOSS

Research and development expenses:

the nine months ended

the three months ended

Basic and diluted:

Net loss attributable to ordinary stockholders

Weighted-average ordinary shares

Loss per share-basic and diluted

Salaries and related expenses

Professional services and subcontractors

Share-based compensation

Research and development

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

PANDEMIC IMPLICATIONS

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.

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.

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 (the “ITA”) relating to the Agreement.

June 30, 2022, Gix Media obtained a tax ruling from the ITA, which effectively satisfied the foregoing condition to closing.

30, 2022, the remaining closing conditions of the Merger Agreement have not been fulfilled yet.

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

Sales and marketing expenses:

For the nine months ended

For the three months ended

Salaries and related expenses

Share-based compensation

Advertising and marketing expenses

Sales and marketing expenses:

and administrative expenses:

the nine months ended

the three months ended

Salaries and related expenses

Professional services

Share-based compensation

General and administrative

Financial expenses, net:

For the nine months ended

For the three months ended

Exchange rate differences

Interest income from loan to related party

Financial income

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

EVENTS (Cont.)

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 June 30,2022, the Planned Reverse Stock Split has not been effected.

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

For the nine months ended

For the three months ended

Bank interest and fees

Interest expense from loans

Exchange rate differences

Financial expenses

LOANS - PARENT COMPANY

Loan to Parent Company:

OF LOAN TO PARENT COMPANY

Loan to Parent Company

balance with the Parent Company represents a balance of an intercompany loan under a loan agreement signed between Gix

Media and the Parent Company (the “Loan”) on March 22, 2020.

The Loan bears interest at a rate to be determined from

time to time in accordance with Section 3(j) of the Income Tax Ordinance, new version, and the Income Tax Regulations (Determination

of Interest Rate for the purposes of Section 3(j), 1986) or according to a market interest rate decision as agreed between the

the nine months ended September 30, 2022, and 2021, Gix Media recognized interest income in respect of the Loan in the amount of $ 110

respectively.

Loan from Parent Company:

OF LOAN TO PARENT COMPANY

Loan from Parent Company

balance with the Parent Company represents certain expenses with respect to the Company’s ongoing operation (mainly salary expenses

and other general and administrative expenses) which were financed by the Parent Company (the “Intercompany Balance”).

Company entered into an agreement with the Parent Company, according to which, effective as of December 31, 2021, the Intercompany Balance

was modified into a loan, which may be increased from time to time, upon the written mutual consent between the Company and the Parent

The Parent Company loan bears interest at a rate equivalent to the minimal interest rate recognized and attributed by the Israel

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

consent of the Company and the Parent Company.

of September 30, 2022, no amounts were repaid by the Company to the Parent Company.

MAJOR CUSTOMERS

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

OF TOTAL REVENUES

For the nine months ended

For the three months ended

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

SEGMENT REPORTING

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

segment - the search segment develops a variety of technological software solutions, which perform automation, optimization

and monetization of internet campaigns, for the purposes of acquiring and routing internet user traffic to its customers.

content segment - the digital content segment is engaged in the creation and editing of content,

in different languages, for different target audiences, for the purposes of generating revenues from leading advertising platforms, including

Google, Facebook, Yahoo and Apple, by utilizing such content to obtain internet user traffic for its advertisers.

segments’ results include items that directly serve and/or are used by the segment’s business activity and are directly allocated

to the segment.

As such they do not include depreciation and amortization expenses for intangible assets created at the time of the purchase

of those companies, financing expenses created for loans taken for the purpose of purchasing those companies, and therefore these items

are not allocated to the various segments.

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

Segments revenues and operating results:

OF SEGMENTS REVENUES AND OPERATING RESULTS

content segment

months ended September 30, 2022

Revenues from external customers

Depreciation and amortization

Segment operating income

Financial expenses, net

Segment Income (loss), before income taxes

Taxes on income

Segment net income (loss)

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

SEGMENT REPOTING (Cont.)

Search segment

Digital content segment

Three months ended September 30, 2022

Revenues from external customers

Depreciation and amortization

Segment operating income

Financial expenses, net

Segment Income (loss), before income taxes

Taxes on income

Segment net income (loss)

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

OF RECONCILIATION BETWEEN SEGMENTS OPERATING RESULTS

Nine months ended

Three months ended

Segments total operating results

Depreciation and amortization expenses not attributable to segments (*)

General and administrative and other costs not attributable to the segments (**)

Finance expenses net, not attributable to the segments (***)

Income (expenses), before income taxes

(*) Mainly consist

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

(**) Mainly consist

of salary and related expenses, professional consulting expenses and other expenses in connection with the business combinations and the Reorganization Transaction.

(***) Mainly consist

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

SUBSEQUENT EVENTS

October 2022, Cortex distributed a dividend in the amount of $ 127 to the non-controlling interests.

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-Q

Item 1. Financial Statements