What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-11-22 compared with 2018-07-31 · 1106 added, 697 removed, 17 unchanged (99% of the section changed)

FINANCIAL STATEMENTS

Balance Sheets as of March 31, 2018 (Unaudited) and December 31, 2017

Statements of Comprehensive Loss for the Three Months Ended March 31, 2018 and 2017 (Unaudited)

Statements of Changes in Stockholders’

Equity (Deficit) for the Three Months Ended March 31, 2018 (Unaudited) and Year Ended December 31, 2017

Statements of Cash Flows for the Three Months Ended March 31, 2018 and 2017 (Unaudited)

Notes to Unaudited Interim Financial Statements

Crypto Technologies, Inc.

Emerald Medical Applications Corp)

March 31, 2018

December 31, 2017

CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Interim Condensed Consolidated Balance Sheets (unaudited)

Interim Condensed Consolidated Statements of Operations (unaudited)

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

Interim Condensed Consolidated Statements of Cash Flows (unaudited)

Notes to the Interim Condensed Consolidated Financial Statements

CONSOLIDATED BALANCE SHEETS (Unaudited)

dollars in thousands (except share data)

CURRENT ASSETS

Cash and cash equivalents

Restricted deposits

Accounts receivable

Loan to parent company

Other receivables

Assets held for sale (Note 6)

Total current assets

Restricted cash

Fixed assets, net of accumulated depreciation of $26,120 at December 31, 2017

Liabilities and Stockholders’

Equity (Deficit)

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.

CONSOLIDATED BALANCE SHEETS (Unaudited) (Cont.)

dollars in thousands (except share data)

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES

Accounts payable and accrued liabilities

Accounts payable - related party

Deferred revenues

Employee payable

Accrued interest payable (Note 3)

Short term portion of convertible notes (Note 3)

Liabilities held for sale(*) (Note 6)

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

Convertible notes (Note 3)

Total liabilities

Stockholders’

Preferred stock, $0.0001 par value;

10,000,000 shares authorized;

none and 529 Series A shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively.

Common stock, $0.0001 par value;

490,000,000 shares authorized;

22,543,008 and 59,205,162 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively.

Accumulated other comprehensive income

Additional paid-in capital (Note 4)

Receipt on account of shares (Note 4)

NON-CURRENT LIABILITIES

Accrued severance pay

Long-term loan

Operating lease liabilities - long term

Deferred taxes

Total non-current liabilities

SHAREHOLDERS’ EQUITY

Share Capital

Common stock of $ 0.0001 par

value - Authorized:

490,000,000 shares;

Issued and outstanding:

14,783,964 shares

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

Additional paid-in capital

Accumulated deficit

Total stockholders’

equity (deficit)

Total liabilities and stockholders’

equity (deficit)

Includes $82.331 payable to a related party.

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

Crypto Technologies, Inc.

Emerald Medical Applications Corp)

of Comprehensive Loss

the Three Months ended March 31, 2018 and 2017

March 31, 2017

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.c)

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

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

dollars in thousands (except share data)

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

Sales and marketing

Selling and marketing

General and administrative

Total operating expenses

Loss from continuing operations

Finance expense.

(19,374,082 )

Net loss from continuing operations

$ (20,802,376 )

Loss from discontinued operations (Note 6)

Net loss from continuing operations

$ (20,802,376 )

Basic and diluted net loss per share

From continuing operations

From discontinued operations

Total basic and diluted net loss per share

Weighted average shares outstanding - basic and diluted

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

Crypto Technologies, Inc.

Emerald Medical Applications Corp)

of Changes in Stockholders’

Equity (Deficit)

the Three Months Ended March 31, 2018 and the Year Ended December 31, 2017

Additional Paid-in

Receipt on Account of

Other Comprehensive

Total stockholders’

Balance as of December 31, 2016

$ (15,046,513)

$ (1,236,899 )

Common stock issued for cash

Cashless exercise of Warrants

Conversion of Convertible Note to shares

Issuance of Ordinary Shares

Issuance of Preferred Stock

Receipt on Account of Shares

Depreciation and amortization

Other expenses

Operating income (loss)

Financial income (expenses), net

Income before income taxes

Taxes on income

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 (*) – Diluted:

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.c)

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

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

dollars in thousands (except share data)

to the company’s

Balance as of January 1, 2022

Net income (loss)

Adjustment to ultimate parent’s carrying values (see note

Share-based compensation

Net loss for the year

Balance as of December 31, 2017

$ (16,620,419 )

$ (1,588,576 )

Common stock and warrants issued for cash

Common stock issued for services

Warrants issued for services

Exercise of stock options

Issuance of new convertible note with a beneficial conversion feature

Partial conversion of new convertible notes to shares

Change is the terms of Convertible Note

Partial conversion of convertible note to shares

Cancellation of Preferred Shares

Receipt on Account of Shares

Issuance of Shares in respect of proceeds received during 2017

Net loss for the period

(20,802,376 )

Balance as of March 31, 2018

$ (37,422,795 )

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

Crypto Technologies Inc (Formerly Emerald Medical Applications Corp)

of Cash Flows

the Three Months Ended March 31, 2018 and 2017

March 31, 2018

March 31, 2017

Operating Activities:

$ (20,802,376 )

Shares issued for services

Finance loss arising from change in terms of convertible notes

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

Increase in net liabilities for sale

Increase (Decrease) in accounts payable and accrued expenses

Decrease in employees payable

Decrease in amounts due from related party

Increase in deferred revenues

Increase (decrease) in accrued interest

Increase (decrease) in other receivables

Net cash used in continuing operating activities

Net change in non-cash working capital items relating to discontinued operations

Net change in investment activities relating to discontinued operation

Financing Activities:

Proceeds from sale of common stock and warrants (net of issuance expenses)

Exercise of options

Issuance of Shares in respect of proceeds received during 2017

Issuance of convertible note

Net cash provided by financing activities

Net increase in cash

Cash and cash equivalents - beginning of period

Cash and cash equivalents - end of period

Non-cash transactions:

Conversion to shares of convertible loans

Cancellation of preferred shares

accompanying notes are an integral part of these financial statements.

Crypto Technologies, Inc.

Emerald Medical Applications Corp)

the Three Months Ended March 31, 2018 and 2017

to Financial Statements

The Company and Significant Accounting Policies.

Organizational

Crypto Technologies, Inc.

(f/k/a Emerald Medical Applications Corp) (the “Company,”

“Registrant,”

“we,”

“us”

or “our”), was incorporated in the State of Ohio in 1989 under a predecessor name, Zaxis International

(“Zaxis”).

On August 25, 1995, Zaxis merged with a subsidiary of The InFerGene Company, a Delaware corporation,

which entity changed its name to “Zaxis International, Inc.”

and the Company was reincorporated in Delaware as Zaxis.

On December 30, 2014, Zaxis entered into a Memorandum of Understanding with Emerald Medical Applications Ltd., which was then

a private limited liability company incorporated under the laws of the State of Israel (“Emerald Israel”

or “Emerald”).

On March 16, 2015, Zaxis and Emerald Israel executed the Share Exchange Agreement, which closed on July 14, 2015 (the “Share

Exchange Agreement”), and the Company continued the operations of Emerald Israel as it sole operating activities under its

then current name “Zaxis International, Inc.”

During the fourth quarter of 2015, in connection with such share exchange,

the Company changed its name to “Emerald Medical Applications Corp.”

The Share Exchange Agreement was accounted for

as a reverse recapitalization.

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

financial statements of Emerald Israel.

Business Developments

Dividend declared to shareholders

Dividend distributed to non-controlling interests

Balance as of September 30, 2022

Balance as of January 1, 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.c)

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

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

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 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.

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

(the “Subsidiary”), 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.

of Former Operations

January 29, 2018, the Company ceased the DermaCompare operations of its former subsidiary, Emerald Israel, and on May 2, 2018,

the District Court of Lod gave a winding-up order for Emerald Israel and nominated an Israeli advocate as a special executor to

Emerald Israel.

To the extent that the liquidation procedure yields proceeds in excess of Emerald Israel’s current obligations,

the first $250,000 will be distributed to the previous shareholders of the Company’s preferred stock (see Note 3) and any

excess thereafter, to the Company.

However, based on the Company’s current best estimate, it is not anticipated that such

excess proceeds will be achieved.

Discontinued Operations.

Company has incurred significant operating losses and negative cash flows from operating activities in relation to its DermaCompare

operations, since incorporation.

The Company raised approximately $1.9 million in the first quarter of 2018, however, it will

be required to obtain additional liquidity resources in order to support the commercialization of its new operations and maintain

its research and development activities.

The Company is addressing its liquidity needs by seeking additional funding from public

and/or private sources.

There are no assurances, however, that the Company will be able to obtain an adequate level of financial

resources that are required for the short and long-term requirements.

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

The consolidated financial

statements do not include any adjustments to reflect the possible future effects on recoverability and classification of assets

or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

of Presentation and Significant Accounting Policies:

accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiary,

the Subsidiary, prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”)

and with the instructions to Form 10-Q.

The financial statements presented herein have not been audited by an independent registered

public accounting firm but include all material adjustments (consisting of normal recurring adjustments) which are, in the opinion

of management, necessary for a fair statement of the financial condition, results of operations and cash flows for the period.

However, these results are not necessarily indicative of results for any other interim period or for the full fiscal year.

preparation of financial statements in conformity with GAAP requires us to make certain estimates and assumptions for the reporting

periods covered by the financial statements.

These estimates and assumptions affect the reported amounts of assets, liabilities,

revenues and expenses.

Actual amounts could differ from these estimates.

information and footnote disclosures normally included in financial statements in accordance with generally accepted accounting

principles have been omitted pursuant to the rules of the Securities and Exchange Commission (“SEC”).

The accompanying

unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes

thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017, filed with the SEC on April 17,

2018 (the “Annual Report”).

Accounting Pronouncements

Company assesses the adoption impacts of recently issued accounting standards by the Financial Accounting Standards Board on its

financial statements.

Following are newly issued standards or material updates to the Company’s previous assessments from

its Annual Report:

May 2014, the Financial Accounting Standards Board (the “FASB”) issued a new standard to achieve a consistent application

of revenue recognition within the U.S., resulting in a single revenue model to be applied by reporting companies under GAAP.

the new model, recognition of revenue occurs when a customer obtains control of the promised goods or services in an amount that

reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

In addition, the

new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows

arising from contracts with customers.

The new standard is effective with respect to the Company beginning in the first quarter

early adoption is prohibited.

The new standard is required to be applied retrospectively to each prior reporting period

presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application.

As the Company has not incurred revenues to date, it does not expect the new standard to have a material impact on its consolidated

(“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.

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

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

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

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 Overview

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 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.

The search segment activity is operated by Gix Media.

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

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

utilizing such content to obtain internet user traffic for its customers.

The 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)

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.

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 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.

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 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 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.

February 2016, the FASB issued a new lease accounting standard requiring the recognition of lease assets and liabilities on the

balance sheet.

This standard is effective beginning in the first quarter of 2019;

early adoption is permitted.

The Company does

not expect the adoption of this standard to have a material impact on its consolidated financial statements.

As the Company currently

is not a party to any leasing arrangement, it does not expect the new standard to have a material impact on its consolidated financial

June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses:

Measurement of Credit Losses on Financial

Instruments.”

With respect to assets measured at amortized cost, such as held-to-maturity assets, the update requires presentation

of the amortized cost net of a credit loss allowance.

The update eliminates the probable initial recognition threshold that was

previously required prior to recognizing a credit loss on financial instruments.

The credit loss estimate can now reflect an entity’s

current estimate of all future expected credit losses as opposed to the previous standard, when an entity only considered past

events and current conditions.

With respect to available for sale debt securities, the update requires that credit losses be presented

as an allowance rather than as a write-down.

The update is effective beginning in the first quarter of 2020;

early adoption is

As the Company has insignificant receivable balances, the Company does not expect the adoption of this standard to

have a material impact on its consolidated financial statements.

July 2017, the FASB issued ASU 2017-11, which includes Part I “Accounting for Certain Financial Instruments with Down Round

Features”

and Part II “Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of

Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-Controlling Interests With a Scope Exception”.

makes limited changes to the Board’s guidance on classifying certain financial instruments as either liabilities or equity.

The ASU’s objective is to improve (1) the accounting for instruments with “down-round”

provisions and (2) the

readability of the guidance in ASC 480 on distinguishing liabilities from equity by replacing the indefinite deferral of certain

pending content with scope exceptions.

This standard is effective beginning in the first quarter of 2019;

early adoption is permitted.

The Company early adopted the standard, retrospectively, for each prior period presented in the financial statements included

elsewhere herein.

Deferred Revenues.

January 24, 2018, the Company’s subsidiary, entered into a binding term sheet (the “Chiron Term Sheet”) with

Chiron Refineries Ltd.

(“Chiron”), a public company listed on the Tel-Aviv Stock Exchange (TASE:

the Chiron Term Sheet, (i) Virtual Crypto Israel shall appoint a wholly-owned subsidiary of Chiron, under the laws of the Turkish

Republic of Northern Cyprus, as the exclusive distributor of Virtual Crypto Israel’s Products in the territory of the Republic

of Turkey, including the territory of Turkish Republic of Northern Cyprus (the “Territory”);

and (ii) such distributor

shall have the right to appoint sub-distributors within the Territory.

The appointment of the Chiron subsidiary as distributor

is subject to the payment by the distributor of $250,000 to the Company as an appointment fee, of which $150,000 shall be deemed

an advance payment by the distributor made on account of future purchases of our Products.

the three months ended March 31, 2018, the Company received $50,000 on account of the appointment fee, which has been recorded

as deferred revenues on our balance sheets.

Notes Payable.

payable and accrued interest as of March 31, 2018 and December 31, 2017 are as follows:

March31, 2018

December 31, 2017

Accrued interest

of convertibles notes during the first quarter of 2018

January 16,2018 through January 23, 2018, the Company received from certain third parties an aggregate amount of $100,000 as consideration

for the Company’s issuance of convertible promissory notes in the aggregate principal amount of $100,000 (the “Notes”)

(i) bearing interest at the rate of 1% per annum;

(ii) with a conversion price of $0.01 per share of common stock;

and (iii) repayable

through to January 15, 2019.

The beneficial conversion feature was valued at $100,000, which resulted in a $100,000 discount recorded

as a reduction of debt and an increase to additional paid in capital in the Statement of Shareholders’

Equity (Deficit).

The discount is amortized to finance expenses in the Statement of Comprehensive Loss over the term of the Notes.

On January 23,

2018, $3,000 of the Notes was converted at $0.01 per share into 300,000 shares, based upon the Notes conversion price of $0.01

per share of common stock.

and change of ownership of convertible notes during the first quarter of 2018

January 24, 2018, Alpha Anstalt Capital (“Alpha”), Chi Squared Capital (“Chi”), Firstfire Global Opportunities

Fund LTC, Goldmed Ltd, Ilan Malca and Maz Partners (together the “Sellers”) sold their convertible notes totaling

$956,209 (the “January 2018 Convertible Notes”) to certain new third-party investors (“New Investors”).

On the same day, the Company and the New Investors agreed to(i) amend the conversion price of the January 2018 Convertible Notes

from $0.014 to $0.01 (ii) to cancel the Class A warrants and Class B warrants issued together with the January 2018 Convertible

Notes (the “Cancelled Warrants”) (see Note 4.

Stockholders’

for accounting treatment of the Cancelled

Warrants), (iii) to amend the interest rate from 8% to 1% per annum under the January 2018 Convertible Notes;

(iv) to extend the

repayment date to January 23, 2019, and (iv) to cancel the option granted to Alpha and Chi in July 2016 (“Alpha Chi Option”).

change in terms of the January 2018 Convertible Notes, including the cancellation of the warrants was accounted for as an extinguishment

of the convertible notes and the issuance of new convertible notes.

The Company recorded a finance expense in the amount of 18,415,471in

the Statement of Comprehensive Loss and an increase to Additional Paid-in Capital in the Statement of Shareholder’

(Deficit) of $21.6 million as a result of the transaction.

Company further concluded that the post amended convertible notes contain a beneficial conversion feature equal to the par value

of the January 2018 Convertible Notes ($956,209) and accordingly recorded a discount on the January 2018 Convertible Notes, to

be amortized to finance expense in the Statement of Comprehensive Loss over the term of the January 2018 Convertible Notes.

Company accounted for the Alpha Chi Option as derivative liabilities that are measured at their far value at each period end,

with changes in fair value recorded as finance expense or income.

The fair value of the Alpha Chi Option at December 31, 2017

was nil, and at the date of cancellation was $2,186,629.

The Company recorded a finance loss of $2,186,629 during the period from

December 31, 2017 through the extinguishment date of the Alpha Chi Option as a result of the change in the fair value of the derivative

January 24, 2018, $73,000 of the January 2018 Convertible Notes were converted at a conversion price of $0.01 per share into 7,300,000

shares of the Company’s common stock and on March 19, 2018, a further $9,218 of the January 2018 Convertible Loans were

converted at a conversion price of $0.01 per shares into 921,800 shares of the Company’s common stock.

Non-convertible

July 8, 2014, the Company issued a convertible note to Axel Springer Plug & Play Accelerator GmbH in the amount of $29,719.

Accrued interest as of March 31, 2018 and December 31, 2017 amounted to $3,316.

In terms of the original agreement, as of March

31, 2018 and December 31, 2017, the convertible note is no longer convertible.

Stockholders’

of the Company’s common stock confer upon their holders the right to receive notice to participate and vote in general meetings

of shareholders of the Company, the right to receive dividends, if declared, and the right to receive a distribution of any surplus

of assets upon liquidation of the Company.

of the Company’s preferred stock confer upon their holders the right to receive dividends when paid to holders of common

stock of the Company on an as-converted basis, and the right to receive a distribution of any surplus of assets upon liquidation

of the Company before any distribution or payment shall be made to the holders of any common stock.

in Shares of Preferred Stock During the First Quarter of 2018

January 4, 2018, the Company, Emerald Israel, Alpha Capital Ansalt (“Alpha”) and Chi Squared Inc.

(“Chi,”

and Alpha and Chi together, the “Preferred Shareholders”), entered into an agreement pursuant to which the Preferred

Shareholders agreed to cancel their shares of Series A Preferred Convertible Stock in return for the receipt of up to $250,000

of proceeds from the liquidation of Emerald Israel, to the extent that such liquidation yields net positive proceeds (“Excess

Net Assets”).

As such, as of March 31, 2018, there were no shares of Series A Preferred Convertible Stock outstanding.

Management’s

best estimate of the potential value of the Excess Net Assets at the date of the cancellation of the shares of Series A Preferred

Convertible Stock was $150,000 and therefore, the Company recorded a charge to Additional Paid-in Capital in the Statement of

Changes in Shareholders’

Equity (Deficit) with a corresponding credit to liabilities.

Management’s best estimate of

the potential value of the Excess Net Assets as of March 31, 2018, was nil.

Accordingly, the Company recorded a finance income

of $150,000 in its Statement of Comprehensive Loss a result of the reversal of the relating liability.

of Shares of Common Stock During the First Quarter of 2018

the first quarter of 2018, the Company received the aggregate amount of $1,673,800 from “accredited investors”

consideration for the issuance of 23,876,427 units (the “Units”) at an offering price of $0.07 per Unit, with each

Unit consisting of:

(i) one share of the Company’s common stock (the “Shares”);

(ii) one common stock purchase

warrant exercisable for a period of twelve months to purchase one additional Share at an exercise price of $0.14per share (“Class

F Warrant”);

and (iii) one (1) common stock purchase warrant exercisable for a period of twelve months to purchase one additional

Share at an exercise price of $0.28 per share (“Class G Warrant”) (the “$0.07 Unit Offering”).

and sale of the Units, without registration under the Securities Act of 1933, as amended (the “Act”), was made in

reliance upon the exemption provided by Section 4(2) of the Act and/or Regulation S and Regulation D promulgated thereunder.

addition, during March 2018, an additional $117,150 was received from other “accredited investors”

under the $0.07

Unit Offering, who subscribed for 571,429 Units, which were issued in April 2018 and are reflected as Receipt on Account of Shares

in the Statement of Changes in Stockholders’

Equity as of March 31, 2018.

February 8, 2018, the Company issued 571,429 units to two accredited investors in respect of $80,000 which was received in August

2017 (the “August 2017 Financing”).

Each Unit comprised (i) one share of the Company’s common stock;

Class A warrant exercisable into one shares of the Company’s common stock at a price of $0.14 per share within 12 months

for the issuance date;

and (iii) one Class B warrant exercisable into one share of the Company’s common stock at a price

of $0.14 per share within 24 months for the issuance date.

March 12, 2018, the Company issued a total of 3,629,999 restricted shares of its common stock to certain consultants in connection

with services rendered during the first quarter of 2018, which shares were valued at $901,902, based on the closing share price

on the day prior to each of the issuances.

The above-mentioned amount was recorded as a charge to the Company’s Statement

of Comprehensive Loss, with a corresponding credit to Additional Paid in Capital in the Company’s Statement of Changes in

Stockholders’

March 20, 2018, the Company issued a total of 62,500 restricted shares of its common stock in consideration for the exercise of

a stock option at an exercise price of $0.01 per share, which options were granted in connection with services rendered in October

The Company recorded the proceeds on the exercise of the stock option in Additional Paid-in Capital in its Statement of

Comprehensive Equity (Deficit).

described in Note 3.

Notes Payable, the Company issued a total of 8,521,800 shares of its common stock in respect of the conversion

of $3,000 of the Notes and $73,000 and $9,218 of the January 2018 Convertible Notes.

described in Note 3.

Notes Payable, 6,334,626 Class A warrants and 5,400,478 Class B warrants were cancelled during the first

quarter of 2018 (“Cancelled Warrants”), in connection with the change in terms of the convertible notes.

described above in this Note 4.

Stockholders’

Equity, the Company issued 23,867,427 Class F and 23,867,427, Class G warrants

in respect of the $0.07 Unit Offering.

January 26, 2018, the Company signed a consulting agreement with Maz Partners, pursuant to which they are to provide investment

and corporate finance advice to the Company in consideration for 200,000 Class H warrants.

Each Class H warrant is exercisable

into one share of the Company’s common stock at an exercise price of $0.14 per share and the warrants expire on January

The period of the agreement is two years the effective date.

The fair value of the Class H Warrants at the issuance date

was $43,829 and was charged to General and administration expenses in the Statement of Comprehensive Loss with a corresponding

credit to Additional Paid-in Capital in the Statement of Changes in Stockholders’

Equity (Deficit).

described above in this Note 4.

Stockholders’

Equity, on February 8, 2018, the Company issued 571,429 Class B warrants and

571,429 Class B warrants in respect of the August 2017 Financing.

following table summarizes information of outstanding warrants issued to investors and consultants in exchange for their services

as of March 31, 2018:

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)

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.d 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 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

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)

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)

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)

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 line.

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.

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 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)

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.

taxes are comprised of the following components:

SCHEDULE OF DEFERRED INCOME TAXES

Deferred tax assets

Deferred research and development expenses

Employee compensation and benefits

Operating loss carryforward

Operating lease right of use asset

Accrued severance pay

Total deferred tax assets

Deferred tax liabilities:

Differences between tax basis and carrying values of loans

Operating lease right of use liability

Intangible assets associated with business combinations

Total deferred tax liabilities

Net deferred tax assets before valuation allowance

Valuation allowance

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.

of approximately $ 19,000 .

Net operating losses in the U.S.

available through 2035 .

Utilization of U.S.

net operating losses may be subject to substantial annual limitation due to the “change

in ownership” provisions of the Internal Revenue Code of 1986 and similar state provisions.

The annual limitation may result in

the expiration of net operating losses before utilization.

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)

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

Investors –

Class A Warrants

Investors –

Class B Warrants

Alimi Ahmed - Class E Warrants

Investors –

Class F Warrants

Investors –

Class G Warrants

Investors - Class H Warrants

During 2015, a total of 2,700,000 Class E Warrants were issued by the Company to Lior Wayn pursuant to the terms of the Share

Exchange Agreement and were exercisable in three equal tranches of 900,000 Shares each (the “Tranches”) at an exercise

price of $0.0001 per share of the Company’s common stock, subject to and within 45 days of the Company achieving the milestones

defined in the Share Exchange Agreement.

On December 16, 2016, the Company terminated Lior Wayn’s employment agreements

with the Company and Emerald Israel, and removed him as an executive officer and director.

During 2017, Mr.

Wayn transferred,

sold and assigned his 5,212,878 shares of the Company’s common stock and 900,000 Class E Warrants that were fully-vested

to an entity controlled by Mr.

Alimi Ahmed, then a member of the Company’s Board of Directors.

Effective as of December

31, 2016, the remaining 1,800,000 Class E Warrants that had been issued to Mr.

Wayn were canceled.

Stock Options

summary of the Company’s activity related to issuances of options to the Company’s employees, executives, directors

and consultants and related information is as follows:

the three month period ended

the year ended

average exercise price

intrinsic value

average exercise price

intrinsic value

at beginning of year

at the end of period

and expected-to-vest at end of period

aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the fair market value

of the Company’s shares of common stock on March 31, 2018 and December 31, 2017, respectively, and the exercise price, multiplied

by the number of in-the-money stock options on those dates) that would have been received by the stock option holders had all

stock option holders exercised their stock options on those dates.

stock options outstanding as of March 31, 2018, and December 31, 2017, have been separated into exercise prices, as follows:

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

Stock options outstanding as of

Weighted average remaining contractual life –

Stock options exercisable as of

March 31, 2018

December 31, 2017

March 31, 2018

December 31, 2017

March 31, 2018

December 31, 2017

expense recorded by the Company in respect of its stock-based employee compensation awards in accordance with ASC 718-10 for the

three month period ended March 31, 2018 and 2017 was nil and $58,650, respectively.

Related Party Transactions.

than transactions and balances related to cash and share based compensation to the Company’s officers and directors, the

issuances of convertible debt and warrants to Alpha and as otherwise set forth herein, the Company did not have any transactions

and balances with related parties and executive officers during the three months ended March 31, 2018 and 2017.

a result of the issuance of the Notes (see Note 2) and the acquisition by the New Investors of certain convertible notes (see

Note 2), certain New Investors may hold convertible notes allowing them to convert the notes in excess of 5% of the Company’s

issued and outstanding shares of common stock.

Accordingly, such New Investors may be deemed to be related parties under Item

404(a) of Regulation S-K.

In addition, certain New Investors receive fees for consulting services provided to the Company, none

of which were incurred during the first quarter ended March 31, 2018.

Discontinued Operations.

January 29, 2018, the Company ceased the DermaCompare operations of its former subsidiary, Emerald Israel, and on May 2, 2018,

the District Court of Lod gave a winding-up order for Emerald Israel and nominated an Israeli advocate as a special executor to

Emerald Israel.

To the extent that the liquidation procedure yield proceeds in excess of Emerald Israel’s current obligations,

the first $250,000 will be distributed to the previous shareholders of the Company’s preferred stock (see Note 3.

Payable) and any excess thereafter, to the Company.

However, based on the Company’s current best estimate, it is not anticipated

that such excess proceeds will be achieved.

such, financial results of Emerald Israel are presented as net loss from discontinued operations on the Consolidated Statements

of Comprehensive Loss for the three months ended March 31, 2018 and 2017;

and assets and liabilities of Emerald Israel to be disposed

of are presented as Assets held for sale and Liabilities held for sale on the Consolidated Balance Sheet as of March 31, 2018.

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

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

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)

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)

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 customers.

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

April 20, 2018, the Company issued 700,000 shares of its common stock to two former directors in respect of services provided

by during the second quarter ended June 30, 2018.

MANAGEMENT’S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS

Note Regarding Forward-Looking Statements

following management’s discussion and analysis section should be read in conjunction with the Company’s unaudited

financial statements as of March 31, 2018 and 2017, and the related statements of comprehensive loss, statement of changes

in stockholders’

equity (deficit) and statements of cash flows for the three months then ended, and the related notes thereto

contained in this Quarterly Report on Form 10-Q (this “Quarterly Report”).

This management’s discussion and

analysis section contains forward-looking statements, such as statements of the Company’s plans, objectives, expectations

and intentions.

Any statements that are not statements of historical fact are forward-looking statements.

When used, the words

“believe,”

“plan,”

“intend,”

“anticipate,”

“target,”

“estimate,”

“expect”

and the like, and/or future tense or conditional constructions “will,”

“may,”

“could,”

“should,”

etc., or similar expressions, identify certain of these forward-looking statements.

These forward-looking

statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed

or implied by the forward-looking statements.

These factors include those contained in section captioned “Risk Factors”

of the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on

April 17, 2018 (the “Annual Report”).

The Company’s actual results could differ materially from those contemplated

in these forward-looking statements as a result of these factors.

The Company does not undertake any obligation to update forward-looking

statements to reflect events or circumstances occurring after the date of this Quarterly Report.

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

(the “Subsidiary”), 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.

On January 29, 2018, the Company ceased the DermaCompare operations of its former subsidiary, Emerald Israel, and on May 2, 2018,

the District Court of Lod gave a winding-up order for Emerald Israel and nominated an Israeli advocate as a special executor to

Emerald Israel.

March 2018, the Company changed its name from “Emerald Medical Applications Corp.”

to “Virtual Crypto Technologies,

to reflect its new operations and business focus, and the Company’s trading symbol changed from MRLA to VRCP

on the OTCQB.

of Operations and Recent Developments

following plan of operation provides information which management believes is relevant to an assessment and understanding of the

Company’s results of operations and financial condition.

The discussion should be read along with the Company’s financial

statements and notes thereto included elsewhere in this Quarterly Report.

January 17, 2018, the Company formed Virtual Crypto Technologies Ltd.

as a new wholly-owned subsidiary under the laws of the State

of Israel (“Virtual Crypto Israel”) and reported the appointment of Mr.

Alon Dayan as CEO of the new subsidiary.

Crypto Israel was formed 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 (the “Products”).

March 2018, the Company changed its name from “Emerald Medical Applications Corp.”

to “Virtual Crypto Technologies,

to reflect its new operations and business focus, and the Company’s trading symbol changed from MRLA to VRCP

on the OTCQB.

Company, through its fully owned Israeli subsidiary Virtual Crypto Israel, has developed the NetoBit Trader, a proprietary, Cryptographic

algorithmic technology that it is able to confirm in real-time the purchase or sale of any cryptocurrency.

The Company’s

NetoBit products dramatically improve the cryptocurrency trading experience with faster execution and lower costs, setting a new

time to transaction standard, trading in seconds rather the industry norm of 20 minutes.

Because of its speed, the Company’s

customers enjoy the best crypto exchange rate at the point of transaction.

The Company is marketing its NetoBit Trader software

and hardware products for the purchase and sale of cryptocurrencies through ATMs, tablets, PCs and/or mobile devices (collectively,

the “VC Products”).

The Company further believes that the ability to immediately confirm cryptocurrency transactions

in real-time should be a major competitive breakthrough in making the purchase and sale of cryptocurrencies user friendly.

Company filed a Current Report on Form 8-K on January 24, 2018, reporting that through Virtual Crypto Israel subsidiary, it entered

into a binding term sheet (the “Chiron Term Sheet”) with Chiron Refineries Ltd.

(“Chiron”), a public company

listed on the Tel-Aviv Stock Exchange (TASE:

Pursuant to the Chiron Term Sheet (i) Virtual Crypto Israel, shall appoint

a wholly-owned subsidiary of Chiron, under the laws of the Turkish Republic of Northern Cyprus, as the exclusive distributor of

Virtual Crypto Israel’s Products in the territory of the Republic of Turkey, including the territory of Turkish Republic

of Northern Cyprus (the “Territory”);

and (ii) the distributor shall have the right to appoint sub-distributors within

the Territory.

The appointment of the Chiron subsidiary as distributor is subject to the payment by the distributor to Virtual

Crypto Israel of $250,000 as an appointment fee, of which $150,000 shall be deemed an advance payment by the distributor made

on account of future purchases of the Company’s Products.

Company further granted such distributor an option, exercisable by the Distributor within 12 months from the date on which the

ATM Product, including the related software and hardware, is fully tested and ready for installation and operation, to be appointed

as an exclusive distributor of the Products for the Federal Republic of Nigeria.

If the option is exercised, the distributor shall

pay Virtual Crypto Israel an appointment fee not higher than $250,000.To date, $50,000 has been paid by such distributor to Virtual

Crypto Israel.

appointment of such distributor is subject to the payment by the distributor to Virtual Crypto Israel of US$250,000 (the “Appointment

An amount of $150,000 of the total Appointment Fee shall be deemed an advance payment by the Distributor, made on

account of future purchases of the Company’s Products and related services.

a result of the foregoing, the disclosure under “Results of Operations During the Three Months Ended March 31, 2018 As Compared

to the Three Months Ended March 31, 2017”

is not comparable and should not be relied upon in evaluating or understanding

Reference is made to the disclosure under “Note 11.

Subsequent Events”

included in the Company’s

of Operations During the Three Months Ended March 31, 2018 As Compared to the Three Months Ended March 31, 2017

research and development expenses were $54,011 for the three months ended March 31, 2018, as compared to nil during the same period

in the prior year.

The increase was due to research and development expenses in the development for our virtual crypto products.

general and administrative expenses increased to $1,064,283 for the three months ended March 31, 2017 as compared to $68,650 during

the same period in the prior year.

The significant increase was due to non-cash consulting expenses paid by way of issuances of

the Company’s shares and warrants to certain consultants who assisted in the establishment of the new business.

expense increased to $19,374,082 for the three months ended March 31, 2018, as compared $198,450 during the same period in the

The significant increase during the period in 2018 was primarily as a result of the changes of the terms of certain

convertible notes that occurred during the three months ended March 31, 2018.

Activities During the Three-Month Period Ended March 31, 2018

of equity during the three-month period ended March 31, 2018

the first quarter of 2018, the Company received the aggregate amount of $1,673,800 from “accredited investors”

consideration for the issuance of 23,876,427 of the Company’s units (the “Units”), at an offering price of $0.07

per Unit, with each Unit consisting of:

(i) one share of the Company’s common stock (the “Shares”);

common stock purchase warrant exercisable for a period of twelve months to purchase one additional Share at an exercise price

of $0.14 per share (“Class F Warrant”);

and (iii) one common stock purchase warrant exercisable for a period of twelve

months to purchase one additional Share at an exercise price of $0.28 per share (“Class G Warrant”) (the “$0.07

Unit Offering”).

The offer and sale of the Units, without registration under the Securities Act of 1933, as amended (the

“Act”), was made in reliance upon the exemption provided by Section 4(2) of the Act and/or Regulation S and Regulation

D promulgated thereunder.

addition, during March 2018, an additional $117,150 was received from other “accredited investors”

under the $0.07

Unit Offering, who subscribed from 571,429 Units, which were issued in April 2018 and are reflected as Receipt on Account of Shares

in the Statement of Changes in Stockholders’

Equity as of March 31, 2018.

February 8, 2018, the Company issued 571,429 units of the Company’s securities to two accredited investors in respect of

$80,000 which was received in August 2017 (“August 2017 Financing”).

Each unit was comprised of (i) one share of the

Company’s common stock;

(ii) one Class A warrant exercisable into one share of the Company’s common stock, at a price

of $0.14 per share, within 12 months for the issuance date;

and (iii) one Class B warrant exercisable into one share of the Company’s

common stock, at a price of $0.14 per share, within 24 months for the issuance date.

March 12, 2018, the Company issued a total of 3,629,999 restricted shares to certain consultants in connection with services rendered

during the first quarter of 2018, which shares were valued at $901,902, based on the closing share price on the day prior to each

of the issuances.

The above-mentioned amount was recorded as a charge to the Company’s Statement of Comprehensive Loss,

with a corresponding credit to Additional Paid in Capital in the Company’s Statement of Changes in Stockholders’

March 20, 2018, the Company issued a total of 62,500 restricted shares of its common stock in consideration for the exercise of

a stock option at an exercise price of $0.01 per share, which option was granted in connection of certain services rendered in

October 2016.

March 2018, the Company issued a total of 921,800 shares of its common stock in respect of the conversion of $9,218 of the January

2018 Convertible Notes.

of new convertible notes during the three-month period ended March 31, 2018

January 16,2018 through January 23, 2018, the Company received an aggregate amount of $100,000 as consideration for the issuance

of the Company’s convertible promissory notes with an aggregate principal amount of $100,000 (the “Notes”) (i)

bearing interest at the rate of 1% per annum;

(ii) with a conversion price of $0.01 per share of the Company’s common stock;

and (iii) repayable through to January 15, 2019.

3,000 of the Notes were converted at a conversion price of $0.01 per share into

300,000 shares.

and Capital Resources

balance sheet as of March 31, 2018 reflects current assets of $1,478,498 consisting of cash of $1,449,795 and assets held for

sale in respect of our discontinued operations of $28,703.

We also have $921,270in current liabilities consisting of $206,304

in accounts payable and accrued liabilities, $50,000 of deferred revenues, $16,667 employee payable, $1,922 in accrued interest,

short-term portion of convertible notes of $186,412 and liabilities held of sale in respect of our discontinued operations of

As of December 31, 2017, we had current assets of $15,181 consisting of $2,959 in cash and other receivables of $12,222.

As of December 31, 2017, we had fixed assets, net of $14,290, $1,011,941 in current liabilities consisting of $445,653 in accounts

payable and accrued liabilities, $82,331 in accounts payable to related party, $98,476 employee payable, $67,846 in accrued interest,

and short-term portion of convertible notes of $317,635.

had working capital of $557,228as of March 31, 2018, as compared to negative working capital of $996,760 at December 31, 2017.

Our total liabilities as of March 31, 2018 were $921,270, as compared to $1,618,106 at December 31, 2017.

the period ended March 31, 2018, we had negative cash flow from continuing operations of $345,449, which was the result of a net

loss of $20,802,376, increase in accrued interest and amortization of discount on convertible notes of $20,165,406 and $892,300shares

and warrants issued for services, offset by net changes in working capital of $600,799.

the three months ended March 31, 2018, we had no cash flow effect from investing activities.

the period ended March 31, 2018, we had positive cash flow from financing activities of $1,792,185, which was the result of $1,574,972

proceeds from issuance of equity, $117,150 of receipt on account of shares, $100,000 from the issuance of convertible notes and

$63 for the eservice of options.

are no limitations in the Company’s Certificate of Incorporation on the Company’s ability to borrow funds or raise

funds through the issuance of shares of its common stock to affect a business combination.

The Company’s limited resources

and lack of having cash-generating business operations may make it difficult to borrow funds or raise capital.

The Company’s

limitations to borrow funds or raise funds through the issuance of restricted capital stock required to effect or facilitate a

business combination may have a material adverse effect on the Company’s financial condition and future prospects, including

the ability to complete a business combination.

such time as the Company can generate substantial revenues, the Company expects to finance its cash needs through a combination

of the sale of its equity and/or convertible debt securities, debt financing and strategic alliances and collaborations.

does not have any committed external source of funds.

To the extent that the Company raises additional capital through the sale

of its equity and/or convertible debt securities, the ownership interest of its stockholders will be diluted, and the terms of

these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders.

financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions,

such as incurring additional debt, making capital expenditures or declaring dividends.

To the extent that debt financing ultimately

proves to be available, any borrowing will subject us to various risks traditionally associated with indebtedness, including the

risks of interest rate fluctuations and insufficiency of cash flow to pay principal and interest, including debt of an acquired

If the Company raises funds through additional collaborations or strategic alliances with third parties, we may have

to relinquish valuable rights to our future revenue streams and/or distribution arrangements.

No assurance can be given that any

future financing will be available or, if available, that it will be on terms that are satisfactory to the Company.

If the Company

is unable to raise additional funds through equity and/or debt financings when needed or on attractive terms, the Company may

be required to delay, limit, reduce or terminate the operations of some or all of its business segments.

Company has only limited capital.

Additional financing is necessary for the Company to continue as a going concern.

The Company’s

independent auditors have unqualified audit opinion for the period ended December 31, 2017 with an explanatory paragraph on going

view of these matters, realization of a major portion of the assets in the accompanying balance sheet is dependent upon continued

operations of the Company.

Management believes that actions presently being taken to obtain additional equity financing will provide

the opportunity to continue as a going concern.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

required for smaller reporting companies.

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/A

Item 1. Financial Statements