What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-11-14 compared with 2023-08-14 · 317 added, 239 removed, 41 unchanged (93% of the section changed)

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 June 30, 2023 and 2022, and the related statements of statement operation, statement of changes in shareholders’

equity and statements of cash flows for the six and three months then ended, and the related notes thereto contained in this Quarterly

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

Forward-Looking

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

expectations, and intentions.

DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS

Special Note Regarding Forward-Looking

The following

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

as of September 30, 2023 and 2022, and the related statements of statement operation, statement of changes in shareholders’ equity

and statements of cash flows for the nine and three months then ended, and the related notes thereto contained in this Quarterly Report

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

Forward-Looking Statements

This management

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

and intentions.

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

When used, the

words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,”

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

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

These forward-looking statements

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

by the forward-looking statements.

Forward-looking statements are based on information we have when those statements are made or our

management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could

cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements.

factors that could cause such differences include, but are not limited to:

continued demand of digital advertising as an integral part of corporate marketing and internal communications plans and the continued

growth and acceptance of digital advertising as effective alternatives to traditional offline marketing products and service;

ability to generate enough cash flow to meet our debt obligations or fund our other liquidity needs;

need to raise additional capital to meet our business requirements in the future and such capital raising may be costly or difficult

to obtain and could dilute out shareholders’ ownership interests;

ability to adequately protect our intellectual property;

ability to successfully integrate the business of Gix Media Ltd.

(“Gix Media”), our wholly owned subsidiary, and Cortex

Media Group Ltd.

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

Forward-looking statements are based on information we have when those statements are made or our management’s good

faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance

or results to differ materially from those expressed in or suggested by the forward-looking statements.

Important factors that could cause

such differences include, but are not limited to:

the continued demand of digital advertising as an integral part of corporate marketing and internal communications plans and the continued growth and acceptance of digital advertising as effective alternatives to traditional offline marketing products and service;

our ability to generate enough cash flow to meet our debt obligations or fund our other liquidity needs, and substantial doubt regarding our ability to continue as a going concern;

our need to raise additional capital to meet our business requirements in the future and such capital raising may be costly or difficult to obtain and could dilute out shareholders’ ownership interests;

our ability to adequately protect our intellectual property;

our ability to successfully integrate the business of Gix Media Ltd.

(“Gix Media”), our wholly owned subsidiary, and Cortex Media Group Ltd.

(“Cortex”), our majority owned subsidiary;

subsidiaries’ future performance;

of new competitors and products, the impact of large and established internet and technology companies and potential technological

obsolescence of our offered platforms.

foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or

risk factors that we are faced with which may cause our actual results to differ from those anticipated in our forward-looking statements.

For a discussion of these and other risks that relate to our business and investing in our common stock, you should carefully review

the risks and uncertainties described in this Quarterly Report on Form 10-Q, and those contained in section captioned “Risk Factors”

of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission (the

“SEC”) on March 24, 2023 (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.

and Background

our subsidiaries’ future performance;

entry of new competitors and products, the impact of large and established internet and technology companies and potential technological obsolescence of our offered platforms;

political, economic and military conditions in Israel, including the recent attack by Hamas and other terrorist organizations from the Gaza Strip and elsewhere in the region and Israel’s war against them, as well as the war’s potential impact on our business and operations.

The foregoing

does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or risk factors

that we are faced with which may cause our actual results to differ from those anticipated in our forward-looking statements.

For a discussion

of these and other risks that relate to our business and investing in our common stock, you should carefully review the risks and uncertainties

described in this Quarterly Report on Form 10-Q, and those contained in section captioned “Risk Factors” of our Annual Report

on Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission (the “SEC”) on

March 24, 2023 (the “Annual Report”).

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

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

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

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

Overview and Background

(the “Registrant”, “Viewbix” or the “Company”) is a digital advertising platform that develops

and markets a variety of technological platforms that automate, optimize and monetize digital online campaigns.

Viewbix’s operations

were previously focused on analysis of the video marketing performance of its clients as well as the effectiveness of their messaging

(“Video Advertising Platform”).

With the Video Advertising Platform, Viewbix allowed its clients with digital video properties

the ability to use its platforms in a way that allows viewers to engage and interact with the video.

The Video Advertising Platform measures

when a viewer performs a specific action while watching a video and collects and reports the results to the client.

However, due to the

Company’s failure to meet predetermined sales targets which were set pursuant to the Recapitalization Transaction (as defined below),

in January 2020, the Company determined to reduce its operations and the size of its sales and R&D team in the Digital Advertising

Company, through its subsidiaries Gix Media and Cortex, expanded its digital advertising operations across two additional main sectors:

ad search and digital content (the “Search Platform” and the “Content Platform”, respectively”).

and Cortex develop and market a variety of technological software solutions that automate, optimize and monetize online campaigns.

also creates, edits and markets content in various languages to different target audiences in order to generate revenues from advertisements

displayed together with the content, which are posted on digital content, marketing and advertising platforms.

These technological tools

enable advertisers and website owners to earn more from their advertising campaigns and generate additional profits from their sites.

Reorganization

Transaction with Gix Media Ltd.

December 5, 2021, the Company entered into a certain Agreement and Plan of Merger (the “Reorganization Transaction”) with

Gix Media., an Israeli company and the majority-owned subsidiary of Gix Internet, in the field of MarTech (Marketing Technology) solutions,

primarily search and content monetization and Vmedia Merger Sub Ltd., an Israeli company and wholly-owned subsidiary of the Company (“Merger

operations were previously focused on analysis of the video marketing performance of its clients as well as the effectiveness of

their messaging (“Video Advertising Platform”).

With the Video Advertising Platform, Viewbix allowed its clients with

digital video properties the ability to use its platforms in a way that allows viewers to engage and interact with the video.

Video Advertising Platform measures when a viewer performs a specific action while watching a video and collects and reports the

results to the client.

However, due to the Company’s failure to meet predetermined sales targets which were set pursuant to

the recapitalization transaction with Gix Internet Ltd., in January 2020, the Company determined to reduce its

operations and the size of its sales and R&D team in the Digital Advertising Platform.

through its subsidiaries Gix Media and Cortex, expanded its digital advertising operations across two additional main sectors:

and digital content (the “Search Platform” and the “Content Platform”, respectively”).

Gix Media and Cortex

develop and market a variety of technological software solutions that automate, optimize and monetize online campaigns.

Cortex also creates,

edits and markets content in various languages to different target audiences in order to generate revenues from advertisements displayed

together with the content, which are posted on digital content, marketing and advertising platforms.

These technological tools enable

advertisers and website owners to earn more from their advertising campaigns and generate additional profits from their sites.

Through its Search Platform,

the Company provides services to leading search engines worldwide (“Search Engines”) by developing, marketing and distributing

software products to internet users.

The operations and activity on this platform are powered by Gix Media.

Through the Content Platform,

the Company provides editing and marketing services of content in different languages and to different target audiences with the goal

of generating revenues from advertising employed in such content, which is based on digital content marketing and advertising platforms.

The operations and activity on this platform are powered by Cortex.

Search Platform

Gix Media’s Search Platform

allows for the referral of user traffic (i.e., searches that are performed by internet users) to Search Engines, such as Yahoo and Bing,

where the Search Engines display the ads of their customers.

The Search Engines pay Gix Media for the searches that were referred by it,

based on the amount of consideration that the Search Engine receives from the advertisers for the user traffic generated, less a certain

percentage from the revenues attributed to the Search Engine.

Since the customers of Gix Media are the Search Engines, and not the advertisers,

Gix Media recognizes revenues for the actual amount received from the Search Engines, and not from the advertisement revenue itself.

The referral of user traffic

by Gix Media to the Search Engines is possible after users download Gix Media’s products, which are browser add-ons, usually from

the browser stores (mostly Google Chrome browsers) and by downloading desktop software products, free of charge, for the Apple operating

system (for Mac computers) and for the Microsoft operating system (for PC computers).

When downloading Gix Media’s products, the

users grant permission to Gix Media to refer the searches performed while using Gix Media’s products to the Search Engines.

In addition, Gix Media provides

user traffic referral services to Search Engines through the referral of traffic of browsers who engage content generated by Gix Media.

This content is displayed on ad spaces that are purchased by the Company by content recommendation companies (such as Yahoo!, Outbrain,

Taboola and Gemini).

When occasional users click on such content, Gix Media transfers user traffic to a Search Engine which contains search

words that are related to the advertising content.

Content Platform

Cortex’s Content Platform

produces engaging content and marketing material in various languages to various target audiences, in order to generate revenues from

advertisements displayed together with the content, which are posted on digital content, marketing and advertising platforms.

as a digital content platform that publishes content written by creative writers and editors which it employs.

The content is displayed

on several different content websites owned by Cortex, covering various subjects including culture, history, trips, pets, entertainment

and leisure, food, etc.

(the “Cortex Websites”).

Cortex developed capabilities that enable it and its customers to profit

from the original content which it publishes by advertising the content on leading international third-party websites and online ad platforms

(the “Third Party Platforms”).

Readers are exposed to the articles on the Third-Party Platforms and may choose to read them

by clicking an ad, after which readers are directed automatically to the Cortex Websites where the content is posted.

The technological tools developed

by Cortex allow businesses in the digital advertising market (search engines, ad exchanges, advertisers, content owners and brand owners)

to earn more from their advertising campaigns and generate additional profit from their websites, both from its content and from its advertising.

Advertisers display ads on

various platforms for potential customers (internet users and readers).

In order to help maximize the effectiveness of advertising,

Cortex developed different advertising systems and tools for content management, content distribution and campaigns and measurement of

performance on the various platforms that display the content.

Recent Developments

Reorganization Transaction

with Gix Media Ltd.

5, 2021, the Company entered into a certain Agreement and Plan of Merger (the “Reorganization Transaction”) with Gix Media.,

an Israeli company and the majority-owned subsidiary of Gix Internet, in the field of MarTech (Marketing Technology) solutions, primarily

search and content monetization and Vmedia Merger Sub Ltd., an Israeli company and wholly-owned subsidiary of the Company (“Merger

Sub”), pursuant to which, following the Reorganization Transaction, and upon satisfaction of additional closing conditions, Merger

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of the common stock of the Company, par value $0.0001 per share (“Common Stock”), on a fully diluted basis.

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

shares of Gix Media, having no par value (the “Gix Media Shares”) were exchanged for shares of the Company’s Common

Stock such that Gix Media became a wholly owned subsidiary of the Company.

Following the Reorganization Transaction, holders of the Gix

Media Shares held 90% of the Company’s Common Stock on a fully diluted basis, with Gix Internet holding 76.67% of the Common Stock

on a fully diluted basis.

following diagram illustrates the associated corporate structure of the Company prior to and following the Reorganization Transaction.

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

of Gix Media, having no par value (the “Gix Media Shares”) were exchanged for shares of the Company’s Common Stock such

that Gix Media became a wholly owned subsidiary of the Company.

Following the Reorganization Transaction, holders of the Gix Media Shares

held 90% of the Company’s Common Stock on a fully diluted basis, with Gix Internet holding 76.67% of the Common Stock on a fully

diluted basis.

The following

diagram illustrates the associated corporate structure of the Company prior to and following the Reorganization Transaction.

the closing of the Reorganization Transaction, the Company began to integrate Gix Media’s technology into its operations aiming

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of monetizing advertisements on digital marketing and advertising platforms.

connection with the Closing, effective as of August 31, 2022, the Company adopted an Amended and Restated Certificate of Incorporation

(“Certificate of Incorporation”), pursuant to which the Company, among other things, effected a reverse stock split of its

Common Stock at a ratio of 1-for-28 (the “Reverse Split”) and an Amended and Restated Bylaws (“Bylaws”).

descriptions of our capital stock, including share amounts and per share amounts in this Quarterly Report, are presented after giving

effect to the Reverse Split.

of Cortex Media Group Ltd.

October 13, 2021, Gix Media acquired 70% (on a fully diluted basis) of the share capital of Cortex (the “Cortex Acquisition”),

an Israeli private company operating in the field of online media and advertising.

In connection

with the Closing, effective as of August 31, 2022, the Company adopted an Amended and Restated Certificate of Incorporation (“Certificate

of Incorporation”), pursuant to which the Company, among other things, effected a reverse stock split of its Common Stock at a ratio

of 1-for-28 (the “Reverse Split”) and an Amended and Restated Bylaws (“Bylaws”).

All descriptions of our capital

stock, including share amounts and per share amounts in this Quarterly Report, are presented after giving effect to the Reverse Split.

Acquisition of Cortex Media

13, 2021, Gix Media acquired 70% (on a fully diluted basis) of the share capital of Cortex (the “Cortex Acquisition”), an

Israeli private company operating in the field of online media and advertising.

In consideration for the Cortex Acquisition, Gix Media

6 unchanged sentences

On January 23, 2023, Gix Media purchased an additional 10% of Cortex’s share capital.

connection with the Cortex Acquisition, on October 13, 2021, Gix Media entered into a financing agreement with Bank Leumi Le Israel Ltd

(“Leumi”), 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 Acquisition (the “Financing Agreement”).

On 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 up to $1,500,000

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

The Additional

Loan was withdrawn in connection with the purchase of the additional 10% of Cortex’s share capital on January 17, 2023.

were 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.

principal executive offices are located at 11 Derech Menachem Begin Street, Ramat Gan, Israel, 5268104 and our telephone number is +972

Our website address is www.viewbix.com .

of Operations

of Operations During the Three Months Ended June 30, 2023 as Compared to the Three Months Ended June 30, 2022

revenues were $27,154 thousand for the three months ended June 30, 2023, compared to $22,902 thousand during the same period in the prior

revenues from Cortex’s Content Platform were $21,312 thousand for the three months ended June 30, 2023, an increase of $4,272 as

compared to $17,040 thousand during the same period in the prior year.

The reasons for the increase during the three months ended June

30, 2023 are due to:

(1) operational growth of the advertising platforms used by Cortex for its reader traffic acquisition process;

an increase in the amount of readers exposed to Cortex’s digital content websites (the “Cortex Websites”) as result

of the increase in the content displayed on the Cortex Websites;

and (3) the successful increase of digital content published in Spanish,

and launch of digital content published in new languages such as Portuguese and German.

revenues from Gix Media’s Search Platform were $5,842 thousand for the three months ended June 30, 2023, a slight decrease as compared

to $5,862 thousand during the same period in the prior year.

traffic-acquisition and related costs were $24,050 thousand for the three months ended June 30, 2023, an increase of $4,400 compared

connection with the Cortex Acquisition, on October 13, 2021, Gix Media entered into a financing agreement with Bank Leumi Le Israel

Ltd (“Leumi”), 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 Acquisition (the “Financing Agreement”).

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 up to $1,500,000 to be withdrawn at the discretion of Gix Media by no later than January 31, 2023 (the “Additional

The Additional Loan was withdrawn in connection with the purchase of the additional 10% of Cortex’s share

capital on January 17, 2023.

On October 10, 2023, Gix Media and Leumi entered into a second addendum to the Financing Agreement (the

“Second Addendum”), according to which, effective as of September 26, 2023, certain provisions, including among others,

the conditions of the financial covenants contained therein and the interest rate quote, were amended according to the agreed terms

between the parties (see notes 6 and 10 of our consolidated financial statements appearing elsewhere in this Quarterly Report on Form

Corporate Information

We were 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.

Our principal executive offices

are located at 11 Derech Menachem Begin Street, Ramat Gan, Israel, 5268104 and our telephone number is +972 9-774-1505.

Our website address

is www.viewbix.com .

Results of Operations

Results of Operations During

the Three Months Ended September 30, 2023 as Compared to the Three Months Ended September 30, 2022

were $15,715 thousand for the three months ended September 30, 2023, compared to $22,778 thousand during the same period in the prior

revenues from Cortex’s Content Platform were $10,074 thousand for the three months ended September 30, 2023, a decrease of $7,002

as compared to $17,076 thousand during the same period in the prior year.

The reason for the decrease during the three months ended September

30, 2023 is due to a decrease of user traffic acquisition from the Third-Party Platforms, primarily resulting from technological changes

and content policy changes on such Third-Party Platforms, causing a lower amount of users to reach the Cortex Websites and thus decreasing

the exposures to the ads displayed on the Cortex Websites.

In response to the technological and policy changes, Cortex updated

and adjusted its platform to adapt to these changes, partially restoring the amount of user traffic acquisition, which mitigated the scope

of the decrease.

from Gix Media’s Search Platform were $5,641 thousand for the three months ended September 30, 2023, a slight decrease as compared

to $5,702 thousand during the same period in the prior year.

The reason for the increase in the three months ended June 30, 2023, is

due to the increase in the Content Platform’s revenues.

research and development expenses were $717 thousand for the three months ended June 30, 2023, as compared to $793 thousand during the

same period in the prior year.

The reason for the decrease in the three months ended June 30, 2023, is due to the reduction of expenses

in the Search Platform, primarily in salaries and technological services.

selling and marketing expenses increased to $715 thousand for the three months ended June 30, 2023, as compared to $605 thousand during

the same period in the prior year.

The reason for the increase in the three months ended June 30, 2023, is due to the increase of selling

and marketing expenses incurred in connection with the increase in the content displayed on the Cortex Websites and an increase primarily

in salaries in the Search Platform.

general and administrative expenses increased to $688 thousand for the three months ended June 30, 2023, as compared to $329 thousand

Our traffic-acquisition

and related costs were $14,526 thousand for the three months ended September 30, 2023, a decrease of $5,121 compared to $19,647 thousand

during the same period in the prior year.

The reason for the increase in the three months ended June 30, 2023, is due to the increase

in salary and related costs following the Reorganization Transaction with Gix Media on September 19, 2022, which led to the expansion

of the Company’s management team, which included, among other things, the appointment of a chairman in June 2022 and a full-time

chief financial officer in July 2022.

In addition, during the three months ended June 30, 2023, there was an increase in professional

services and consultant costs following the Reorganization Transaction, as compared to the three months ended June 30, 2022.

depreciation and amortization expenses for the three months ended June 30, 2023, were $734 thousand as compared to $729 thousand during

The reason for the decrease in the three months ended September 30, 2023, is due to the decrease

in user traffic acquisition from the main online ad platforms.

and development expenses were $700 thousand for the three months ended September 30, 2023, compared to $804 thousand during the same period

in the prior year.

The reason for the decrease in the three months ended September 30, 2023, is due to the reduction of expenses in the

Search Platform, primarily in salaries and technological services.

and marketing expenses increased to $680 thousand for the three months ended September 30, 2023, a slight increase compared to $628 thousand

during the same period in the prior year.

and administrative expenses increased to $727 thousand for the three months ended September 30, 2023, as compared to $450 thousand during

the same period in the prior year.

other expenses for the three months ended June 30, 2023 were $0 thousand, compared to $35 thousand during the three months ended June

The decrease in our other expenses during to the three months ended June 30, 2023 is due to expenses incurred during the three

months ended June 30, 2022, in connection with the Reorganization Transaction which was consummated on September 19, 2022.

net financial expenses were $246 thousand for the three months ended June 30, 2023, compared to $736 thousand net financial expenses

The reason for the increase in the three months ended September 30, 2023, is due to the increase in

salary and related costs following the Reorganization Transaction with Gix Media on September 19, 2022, which led to the expansion of

the Company’s management team, which included, among other things, the appointment of a chairman in June 2022 and a full-time chief

financial officer in July 2022.

In addition, during the three months ended September 30, 2023, there was an increase in professional services

and consultant costs following the Reorganization Transaction, as compared to the three months ended September 30, 2022.

Our depreciation

and amortization expenses for the three months ended September 30, 2023, were $734 thousand as compared to $736 thousand during the same

period in the prior year.

Our other expenses for the

three months ended September 30, 2023 were $0 thousand, compared to $86 thousand during the three months ended September 30, 2022.

decrease in our other expenses during the three months ended September 30, 2023 is due to expenses incurred during the three months ended

September 30, 2022, in connection with the Reorganization Transaction which was consummated on September 19, 2022.

net financial expenses were $260 thousand for the three months ended September 30, 2023, a slight decrease as compared

to $301 thousand net financial expenses during the same period in the prior year.

Our income tax benefit was

$131 thousand for the three months ended September 30, 2023, as compared to a $55 thousand tax expense during the same period in the prior

The reason for the decrease in income tax expenses during the three months ended September 30, 2023, is due to the fact that during

the three months ended September 30, 2023, the Company recorded a loss before tax on income from the Content Platform, which retroactively

decreased the income tax expenses recorded for the previous quarters.

Results of Operations During the Nine Months

Ended September 30, 2023 as Compared to the Nine Months Ended September 30, 2023

Our revenues were $63,731

thousand for the nine months ended September 30, 2023, compared to $66,115 thousand during the same period in the prior year.

Our revenues from Cortex’s

Content Platform were $47,138 thousand for the nine months ended September 30, 2023, a slight decrease as compared to $48,515 thousand

during the same period in the prior year.

The reason for the decrease during the three months ended June 30, 2023, is mainly due to the

decrease in the financial expenses relating to the USD to NIS exchange rate, as compared to the three months ended June 30, 2022, which

was partially offset by the increase in interest expenses related to the Company’s bank loans due to increases in the market’s

interest rates during the three months ended June 30, 2023.

income tax expenses were $87 thousand for the three months ended June 30, 2023, as compared to a $23 thousand tax benefit during the

same period in the prior year.

The reason for the increase during the three months ended June 30, 2023, is due to the fact that during

the three months ended June 30, 2022, Gix Media recorded a tax benefit from previous years.

of Operations During the Six Months Ended June 30, 2023 as Compared to the Six Months Ended June 30, 2023

revenues were $48,016 thousand for the six months ended June 30, 2023, compared to $43,337 thousand during the same period in the prior

revenues from Cortex’s Content Platform were $37,064 thousand for the six months ended June 30, 2023, an increase of $5,625 as

compared to $31,439 thousand during the same period in the prior year.

The reasons for the increase during the six months ended June

30, 2023 are due to:

(1) operational growth of the advertising platforms used by Cortex for its reader traffic acquisition process;

an increase in the amount of readers exposed to the Cortex Websites as result of the increase in the content displayed on the Cortex

and (3) the successful increase of digital content published in Spanish, and launch of digital content published in new languages

such as Portuguese and German.

revenues from Gix Media’s Search Platform were $10,952 thousand for the six months ended June 30, 2023, a decrease of $946 as compared

to $11,898 thousand during the same period in the prior year.

The reasons for the decrease during the six months ended June 30, 2023,

are due to the decrease in the amount of search referrals conducted by users, provided by Gix Media to search engines, caused primarily

by a decrease in the number of searches received from Gix Media’s third party strategic partners, including a significant strategic

partner of Gix Media.

In response to this decrease, Gix Media expanded its user traffic resources during the six months ended June 30,

Our revenues from Gix Media’s

Search Platform were $16,593 thousand for the nine months ended September 30, 2023, a decrease of $1,007 as compared to $17,600 thousand

during the same period in the prior year.

The reasons for the decrease during the nine months ended September 30, 2023, are due to the

decrease in the amount of search referrals conducted by users, provided by Gix Media to search engines, caused primarily by a decrease

in the number of searches received from Gix Media’s third party strategic partners, including a significant strategic partner of

In response to this decrease, Gix Media expanded its user traffic resources during the nine months ended September 30, 2023,

by engaging with new strategic partners, which in turn mitigated the scope of the decrease.

traffic-acquisition and related costs were $42,031 thousand for the six months ended June 30, 2023, an increase of $4,766 compared to

$37,265 thousand during the same period in the prior year.

The reason for the increase in the six months ended June 30, 2023, is due

to the increase in the Content Platform’s revenues.

research and development expenses were $1,513 thousand for the six months ended June 30, 2023, compared to $1,641 thousand during the

same period in the prior year.

The reason for the decrease in the three months ended June 30, 2023, is due to the reduction of expenses

in the Search Platform, primarily in salaries and technological services.

selling and marketing expenses were $1,438 thousand for the six months ended June 30, 2023, which is an increase of $213 thousand as

Our traffic-acquisition and

related costs were $56,557 thousand for the nine months ended September 30, 2023, a slight decrease

compared to $56,912 thousand during the same period in the prior year.

The increase of selling and marketing expenses during the six months

ended June 30, 2023, is due to expenses incurred in connection with the increase in the content displayed on the Cortex Websites and

an increase primarily in salaries in the Search Platform.

general and administrative expenses were $1,392 thousand for the six months ended June 30, 2023, an increase of $516 as compared to $876

thousand during the same period in the prior year.

The reason for the increase in the six months ended June 30, 2023, is due to the increase

in salary and related costs following the Reorganization Transaction with Gix Media on September 19, 2022, which led to the expansion

of the Company’s management team, which included, among other things, the appointment of a chairman of the board in June 2022 and

a full-time chief financial officer in July 2022.

In addition, during the six months ended June 30, 2023, there was an increase in professional

services and consultant costs following the Reorganization Transaction, as compared to the six months ended June 30, 2022.

depreciation and amortization expenses increased to $1,468 thousand for the six months ended June 30, 2023, as compared to $1,315 thousand

Our research and development

expenses were $2,213 thousand for the nine months ended September 30, 2023, compared to $2,445 thousand during the same period in the

The reason for the decrease in the nine months ended September 30, 2023, is the reduction of expenses in the Search Platform,

primarily in salaries and technological services.

Our selling and marketing

expenses were $2,118 thousand for the nine months ended September 30, 2023, which is an increase of $265 thousand compared to $1,853 thousand

during the same period in the prior year.

The reason for the increase in the six months ended June 30, 2023, is due to reflection of

the historical cost and depreciation expenses of all intangible assets as reflected in the consolidated financial statements of Medigus

Ltd., due to the Reorganization Transaction on September 19, 2022.

As the Company and Gix Media were consolidated both

by Gix Internet and Medigus Ltd., the ultimate parent, before and after the Reorganization Transaction, the Reorganization Transaction

was accounted for as a transaction between entities under common control (see Note 1b of our consolidated financial statements appearing

elsewhere in this Quarterly Report on Form 10-Q).

other expenses were $0 thousand for the six months ended June 30, 2023, compared to $35 thousand during the six months ended June 30,

The decrease in our other expenses during the six months ended June 30, 2023 is due to expenses incurred during the six months

ended June 30, 2023, in connection with the Reorganization Transaction which was consummated on September 19, 2022.

net financial expenses were $431 thousand for the six months ended June 30, 2023, compared to $1,073 thousand during the same period

in the prior year.

The reason for the decrease during the six months ended June 30, 2023, is mainly due to the decrease in financial

expenses relating to the USD to NIS exchange rate, as compared to the six months ended June 30, 2022, which was partially offset by the

increase in interest expenses related to the Company’s bank loans due to increases in the market’s interest rates during

the six months ended June 30, 2023.

income tax expenses were $171 thousand for the six months ended June 30, 2023, as compared to $8 thousand during the same period in the

The reason for the increase during the six months ended June 30, 2023, is due to the fact that during the six months ended

June 30, 2022, Gix Media recorded a tax benefit from previous years.

The increase of selling and marketing expenses during the nine months ended September 30, 2023,

is due to expenses incurred in connection with the increase in the content displayed on the Cortex Websites and an increase primarily

in salaries in the Search Platform.

Our general and administrative

expenses were $2,119 thousand for the nine months ended September 30, 2023, an increase of $793 as compared to $1,326 thousand during

the same period in the prior year.

The reason for the increase in the nine months ended September 30, 2023, is due to the increase in

salary and related costs following the Reorganization Transaction with Gix Media on September 19, 2022, which led to the expansion of

the Company’s management team, which included, among other things, the appointment of a chairman of the board in June 2022 and a

full-time chief financial officer in July 2022.

In addition, during the nine months ended September 30, 2023, there was an increase in

professional services and consultant costs following the Reorganization Transaction, as compared to the nine months ended September 30,

Our depreciation and amortization

expenses increased to $2,202 thousand for the nine months ended September 30, 2023, a slight increase compared to $2,051 thousand during

the same period in the prior year.

Our other expenses were $0

thousand for the nine months ended September 30, 2023, compared to $121 thousand during the nine months ended September 30, 2022.

decrease in our other expenses during the nine months ended September 30, 2023 is due to expenses incurred during the nine months ended

September 30, 2022, in connection with the Reorganization Transaction which was consummated on September 19, 2022.

Our net financial expenses

were $691 thousand for the nine months ended September 30, 2023, compared to $1,374 thousand during the same period in the prior year.

The reason for the decrease during the nine months ended September 30, 2023, is mainly due to the decrease in financial expenses relating

to the USD to NIS exchange rate, as compared to the nine months ended September 30, 2022, which was partially offset by the increase in

interest expenses related to the Company’s bank loans due to increases in the market’s interest rates during the nine months

ended September 30, 2023.

Our income tax expenses were

$40 thousand for the nine months ended September 30, 2023, a slight decrease as compared to $63 thousand

during the same period in the prior year.

and Capital Resources

of June 30, 2023, we had current assets of $26,283 thousand, consisting of $3,304 thousand in cash and cash equivalents, $182 thousand

restricted deposits, $18,415 thousand in accounts receivable, $693 thousand in other current assets and $3,689 thousand in a loan to

our Parent Company.

of June 30, 2023, we had non-current assets of $32,171 thousand, consisting of $211 thousand in deferred taxes, $442 thousand in operating

lease right-of-use asset, $272 thousand in property and equipment net, $13,885 thousand in intangible assets net and $17,361 thousand

of June 30, 2023, we had $26,592 thousand in current liabilities consisting of $17,345 thousand in accounts payable, $1,285 thousand

in other payables, $7,879 thousand in short term loans and current maturities of long-term loans, $83 thousand in operating lease liabilities

– short term.

of June 30, 2023, we had $5,094 thousand in non-current liabilities consisting of $3,128 thousand long-term loans, $334 thousand in operating

lease liabilities - long term and $1,632 thousand in deferred taxes.

of December 31, 2022, we had current assets of $29,841 thousand consisting of $4,196 thousand in cash and cash equivalents, $185 thousand

restricted deposits, $20,945 thousand in accounts receivable, $973 thousand in other current assets and a $3,542 thousand in loan to

our Parent Company.

of December 31, 2022, we had non-current assets of $33,854 thousand consisting of $52 thousand in severance pay funds, $340 thousand

in deferred taxes, $486 thousand in operating lease right-of-use asset, $302 thousand in property and equipment net, $15,313 thousand

in intangible assets net and $17,361 thousand in goodwill.

of December 31, 2022, we had $28,522 thousand in current liabilities consisting of $19,782 thousand in accounts payable, $2,084 thousand

in other payables, $6,569 thousand in short term loans and current maturities of long-term loan, $87 thousand in operating lease liabilities

As of September 30, 2023,

we had current assets of $18,752 thousand, consisting of $2,550 thousand in cash and cash equivalents, $184 thousand restricted deposits,

$11,493 thousand in accounts receivable, $807 thousand in other current assets and $3,718 thousand in a loan to our Parent Company.

of September 30, 2023, we had non-current assets of $ 31,398 thousand, consisting of $ 192 thousand

in deferred taxes, $ 419 thousand in operating lease right-of-use asset, $ 257 thousand

in property and equipment net, $ 13,169 thousand in intangible assets net and $ 17,361 thousand

of September 30, 2023, we had $ 20,605 thousand in current liabilities consisting of $ 11,742

thousand in accounts payable, $ 904 thousand in other payables, $ 7,879

thousand in short term loans and current maturities of long-term loans and $ 80 thousand

in operating lease liabilities – short term.

of September 30, 2023, we had $ 4,515 thousand in non-current liabilities consisting of $ 2,663

thousand long-term loans, $ 306 thousand in operating lease liabilities

- long term and $ 1,546 thousand in deferred taxes.

As of December

31, 2022, we had current assets of $29,841 thousand consisting of $4,196 thousand in cash and cash equivalents, $185 thousand restricted

deposits, $20,945 thousand in accounts receivable, $973 thousand in other current assets and $3,542 thousand in loan to our Parent Company.

As of December

31, 2022, we had non-current assets of $33,854 thousand consisting of $52 thousand in severance pay funds, $340 thousand in deferred taxes,

$486 thousand in operating lease right-of-use asset, $302 thousand in property and equipment net, $15,313 thousand in intangible assets

net and $17,361 thousand in goodwill.

As of December

31, 2022, we had $28,522 thousand in current liabilities consisting of $19,782 thousand in accounts payable, $2,084 thousand in other

payables, $6,569 thousand in short term loans and current maturities of long-term loan and $87 thousand in operating lease liabilities

– short term.

of December 31, 2022, we had $5,274 thousand in non-current liabilities consisting of $152 thousand in accrued severance pay, $2,881

thousand in long-term loan, $388 thousand in operating lease liabilities - long term and $1,853 thousand in deferred taxes.

had a negative working capital of $309 thousand compared to positive working capital of $1,319 thousand as of June 30, 2023 and December

31, 2022, respectively.

the three months ended June 30, 2023, we had a positive cash flow from operating activities of $1,003 thousand, which was the result

of $83 thousand in net loss, $723 thousand from positive adjustments to operating activities, and $363 thousands from positive changes

in assets and liabilities items.

the six months ended June 30, 2023, we had positive cash flow from operating activities of $1,015 thousand, which was the result of $428

thousand in net loss, $1,402 thousand from positive adjustments to operating activities, and $41 thousands from positive changes in assets

As of December

31, 2022, we had $5,274 thousand in non-current liabilities consisting of $152 thousand in accrued severance pay, $2,881 thousand in long-term

loan, $388 thousand in operating lease liabilities - long term and $1,853 thousand in deferred taxes.

had a negative working capital of $ 1,853 thousand compared to a positive working capital of $1,319

thousand as of September 30, 2023 and December 31, 2022, respectively.

the three months ended September 30, 2023, we had a negative cash flow from operating activities of $ 276 thousand,

which was the result of $ 1,781 thousand in net loss, $ 682 thousand

from positive adjustments to operating activities, and $ 823 thousands from positive changes in assets

and liabilities items.

are no limitations in the Company’s Amended and Restated 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.

Media has provided several liens under the Financing Agreement with Leumi in connection with the Cortex Transaction, including:

floating lien on Gix Media’s assets;

the nine months ended September 30, 2023, we had positive cash flow from operating activities of $ 739 thousand,

which was the result of $ 2,209 thousand in net loss, $ 2,084 thousand

from positive adjustments to operating activities, and $ 864 thousands from positive changes in assets

and liabilities items.

no limitations in the Company’s Amended and Restated 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.

has provided several liens under the Financing Agreement with Leumi in connection with the Cortex Transaction, including:

(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;

(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 all of Gix Media’s

holdings in Cortex.

of June 30, 2023, the Company has also provided several liens under Financing Agreement with Leumi in connection with the Cortex Acquisition,

and (5) a lien on all of Gix Media’s holdings

As of September

30, 2023, the Company has also provided several liens under Financing Agreement with Leumi in connection with the Cortex Acquisition,

(1) a guarantee to Leumi of all of Gix Media’s obligations and undertakings to Leumi, unlimited in amount;

5 unchanged sentences

to the Financing Agreement, Gix 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 June 30, 2023, Gix Media is in compliance with the financial

covenants in connection with the Financing Agreement.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

required for smaller reporting companies.

the ratio of debt to

EBITDA, based on Gix Media’s consolidated financial statements in all 4 preceding consecutive quarters (in any given period during

the life of the loan), will not exceed 2.4 in the first two years following the execution of the Financing Agreement, which according

to the Second Addendum was extended by nine months to June 30, 2024 and thereafter, will not exceed 1.75.

As of September 30, 2023, Gix

Media is in compliance with the financial covenants in connection with the Financing Agreement.

a result of the decrease in user traffic during the three month period ending September 30, 2023, and the impact of the ongoing

‘Iron Swords’ war in Israel, which commenced subsequent to September 30, 2023, the Company’s operations were

adversely affected.

While management expects the Company to continue to generate positive cash flows from its operations, such a

decline may reasonably result in the Company’s inability to repay its debt obligations during the 12 month period following

the issuance date of the financial statements appearing elsewhere in this Quarterly Report.

These prevailing conditions raise substantial doubt about the Company’s

ability to continue as a going concern.

plans in light of these uncertainties include negotiating the terms of its debt instrument with Bank Leumi or issuing additional equity

or debt instruments in order to raise capital.

However, there can be no assurance that such financing alternatives will consummate or

will be available on terms acceptable to the Company.

QUANTITATIVE AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISK

Not required for smaller reporting

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis