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Item 1. Financial Statements

2024-05-20 compared with 2023-11-14 · 403 added, 496 removed, 185 unchanged (83% of the section changed)

FINANCIAL STATEMENTS

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Interim Condensed Consolidated Balance Sheets (unaudited)

3 unchanged sentences

Notes to the Interim Condensed Consolidated Financial Statements (unaudited)

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

dollars in thousands (except share data)

7 unchanged sentences

NON-CURRENT ASSETS

Severance pay funds

Deferred taxes

3 unchanged sentences

Total non-current assets

The accompanying notes are an integral part

of these Interim Condensed Consolidated financial statements.

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited) (Cont.)

accompanying notes are an integral part of these Interim Condensed Consolidated financial statements.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Cont.)

dollars in thousands (except share data)

8 unchanged sentences

NON-CURRENT LIABILITIES

Accrued severance pay

Long-term loans, net of current maturities

7 unchanged sentences

Issued and outstanding:

14,920,585 and 14,783,964 shares as of September 30, 2023 and December 31, 2022, respectively.

14,920,585 shares as of March 31, 2024, and December 31, 2023.

Additional paid-in capital

3 unchanged sentences

Total liabilities and shareholders’ equity

The accompanying notes are an integral part

of these Interim Condensed Consolidated financial statements.

INTERIM CONDENSED CONSOLIDATED STATEMENTS

OF OPERATIONS (Unaudited)

accompanying notes are an integral part of these Interim Condensed Consolidated financial statements.

CONDENSED 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,

For the three months ended March 31,

Costs and Expenses:

5 unchanged sentences

Other expenses

Operating income (loss)

Operating loss

Financial expense, net

Income (loss) before income taxes

Income tax expense (benefit)

Net income (loss)

Loss before income taxes

Income tax expense

net income (loss) attributable to non-controlling interests

Net loss attributable to shareholders of Viewbix Inc.

Net loss per share – Basic and diluted attributed to shareholders

Net income per share – Basic and diluted attributed to shareholders:

Weighted average number of shares – Basic and diluted:

14,783,964 (*)

Share and per share data in these financial statements have been retrospectively adjusted to reflect a number of shares that is equivalent to the number of shares of the Company post the Reorganization Transaction (see note 1.B).

The accompanying notes are an integral part

of these Interim Condensed Consolidated financial statements.

INTERIM CONDENSED CONSOLIDATED STATEMENTS

OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

dollars in thousands (except share data)

to the company’s

Balance as of January 1, 2023

Share-based compensation (see note 8.A)

Issuance of shares upon RSUs vesting (see note 8.D)

Transaction with non-controlling interests (see note 1.C)

Dividend declared to non-controlling interests

Balance as of September 30, 2023

to the company’s

Balance as of July 1, 2023

Share-based compensation (see note 8.A)

Issuance of shares upon RSUs vesting (see note 8.D)

Balance as of September 30, 2023

Represents an amount less than $1.

The accompanying notes are an integral part

of these Interim Condensed Consolidated financial statements.

INTERIM CONDENSED CONSOLIDATED STATEMENTS

OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

accompanying notes are an integral part of these Interim Condensed Consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

dollars in thousands (except share data)

Common stock (*)

to the company’s

Balance as of January 1, 2024

Net income (loss)

Share-based compensation

Adjustment to ultimate parent’s carrying values

Dividend distributed to shareholders

Dividend declared to non-controlling interests

Balance as of September 30, 2022

Common stock (*)

Balance as of March 31, 2024

to the company’s

Balance as of July 1, 2022

Balance as of January 1, 2023

Net income (loss)

Share-based compensation

Dividend distributed to shareholders

Dividend distributed to non-controlling interests

Balance as of September 30, 2022

The accompanying notes are an integral part

of these Interim Condensed Consolidated financial statements.

INTERIM CONDENSED CONSOLIDATED STATEMENTS

OF CASH FLOWS (Unaudited)

Transaction with the non-controlling interests (see note 1.C)

Balance as of March 31, 2023

accompanying notes are an integral part of these Interim Condensed Consolidated financial statements.

CONDENSED 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,

For the three months ended March 31,

Cash flows from Operating Activities

Net income (loss)

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

Depreciation and amortization

Depreciation and amortizations

Share-based compensation

2 unchanged sentences

Interest income

Exchange rate differences on loans

Amortization of loan discount

Changes in assets and liabilities items:

Decrease in accounts receivable

Decrease (increase) in other receivables

Decrease in operating lease right-of-use assets

Decrease in other current assets

Decrease in operating lease right-of-use asset

Decrease in severance pay, net

Increase (decrease) in accounts payable

Decrease in other payables

Decrease in accounts payable

Increase (decrease) in other payables

Decrease in operating lease liabilities

Increase in loan from parent company

Net cash provided by (used in) operating activities

The accompanying notes are an integral part

of these Interim Condensed Consolidated financial statements.

INTERIM CONDENSED CONSOLIDATED STATEMENTS

OF CASH FLOWS (Unaudited) (Cont.)

Net cash provided by operating activities

accompanying notes are an integral part of these Interim Condensed Consolidated financial statements.

CONDENSED 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,

For the three months ended March 31,

Cash flows from Investing Activities

Purchase of property and equipment

Capitalization of software development costs

Net cash used in investing activities

4 unchanged sentences

Receipt of long-term bank loan

Repayment of long-term loan

Repayment of long-term bank loans

Payment of dividend to non-controlling interests

Payment of dividend to shareholders (see note 8.E.1)

Payment of dividend to shareholders

Increase in loan to parent company

7 unchanged sentences

Total Cash paid during the period

Substantial non-cash activities:

Dividend declared

The accompanying notes are an integral part

of these Interim Condensed Consolidated financial statements.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (Unaudited)

accompanying notes are an integral part of these Interim Condensed Consolidated financial statements.

TO INTERIM 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., subsequent

to which the Company, through its subsidiarity, was engaged in the development of technology for use in detection of skin cancer.

29, 2018, the Company ceased its business operations in this field.

On January 17, 2018, the Company formed

a new wholly owned subsidiary under the laws of the State of Israel, Virtual Crypto Technologies Ltd.

(“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.

(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., subsequent to which the Company, through its subsidiarity, was engaged in the development of technology for use in

detection of skin cancer.

On January 29, 2018, the Company ceased its business operations in this field.

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

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

sale of cryptocurrencies.

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

to Virtual Crypto Technologies, Inc.

ceased its business operation in 2019 and prior to consummation of the Recapitalization Transaction.

On January 27, 2020, VCT Israel was

sold to a third party for NIS 50 thousand (approximately $ 13 ).

On 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.

VCT Israel ceased its business operation in 2019 and prior to consummation of the Recapitalization

On January 27, 2020, VCT Israel was sold to a third party for NIS 50 thousand (approximately $ 13 ).

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.

to Viewbix Inc.

Reorganization Transaction

On December 5, 2021, the Company entered

into a certain Agreement and Plan of Merger with Gix Media Ltd.

(“Gix Media”), an Israeli company and the majority-owned ( 77.92 %)

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”).

On 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 in exchange for the Company’s shares of common stock, par

value $ 0.0001 per share (“Common Stock”).

As a result of the Reorganization Transaction, the former holders of Gix Media Shares,

who previously held approximately 68% of the Company’s Common Stock, hold approximately 97% of the Company’s Common Stock,

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

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (Unaudited)

December 5, 2021, the Company entered into a certain Agreement and Plan of Merger with Gix Media Ltd.

(“Gix Media”), an Israeli

company and the majority-owned ( 77.92 %) 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 in exchange for

the Company’s shares of common stock, par value $ 0.0001 per share (“Common Stock”).

As a result of the Reorganization

Transaction, the former holders of Gix Media Shares, who previously held approximately 68% of the Company’s Common Stock, hold

approximately 97% of the Company’s Common Stock, and Gix Media became a wholly owned subsidiary of the Company.

TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

GENERAL (Cont.)

Reorganization Transaction

As the Company and Gix Media Ltd.

consolidated both by the Parent Company 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.

Accordingly, the 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 Parent Company, for all periods

preceding March 1, 2022, the date the Ultimate Parent obtained a controlling interest in the Parent Company and as it is reflected in

the consolidated financial statements of the Ultimate Parent for all periods subsequent to March 1, 2022.

Share and per share data in these financial

statements have been retrospectively adjusted, for the nine and three months ended September 30, 2022, to reflect a number of shares that

is equivalent to the number of shares of the Company post the Reorganization Transaction.

Reorganization Transaction (Cont.)

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 .

the Company and Gix Media Ltd.

were consolidated both by the Parent Company 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

Accordingly, the 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 Parent Company, for all periods preceding March 1, 2022, the date the Ultimate Parent obtained a controlling interest

in the Parent Company and as it is reflected in the consolidated financial statements of the Ultimate Parent for all periods subsequent

to March 1, 2022.

Business Overview

The Company and its subsidiaries (the

“Group”), Gix Media and Cortex Media Group Ltd.

(“Cortex”), operate in the field of digital advertising.

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

the search segment and the digital content segment.

The search segment develops a variety

of technological software solutions, which perform automation, optimization, and monetization of internet campaigns, for the purposes

of obtaining and routing internet user traffic to its customers.

The search segment activity is conducted by Gix Media.

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 and route internet

user traffic for its customers.

Company and its subsidiaries (the “Group”), Gix Media and Cortex Media Group Ltd.

(“Cortex”), operate in the

field of digital advertising.

The Group has two main activities that are reported as separate operating 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 obtaining and routing internet user traffic to its customers.

The search segment activity is conducted

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 and route internet user traffic for its customers.

The digital content segment activity is conducted by Cortex.

As of December 31, 2022, Gix Media

held 70 % of Cortex’s share capital.

On January 23, 2023, Gix Media acquired

an additional 10 % of the share capital of Cortex, increasing its holdings to 80 % in consideration for $ 2,625 (the “Subsequent Purchase”).

The Subsequent Purchase was financed by Gix Media’s existing cash balances and by a long-term bank loan received on January 17,

2023, in the amount of $ 1,500 .

The Subsequent Purchase was recorded

as a transaction with non-controlling interests in the Company’s statement of changes in shareholders equity for the nine month

period ended September 30, 2023.

Reverse Stock Split

In 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 the

nine and three months ended September 30, 2022.

January 23, 2023, Gix Media acquired an additional 10 % of the share capital of Cortex, increasing its holdings to 80 % in consideration

for $ 2,625 (the “Subsequent Purchase”).

The Subsequent Purchase was financed by Gix Media’s existing cash balances

and by a long-term bank loan received on January 17, 2023, in the amount of $ 1,500 (see also note 6.B).

Subsequent Purchase was recorded as a transaction with non-controlling interests in the Company’s statement of changes in shareholders

equity for the three months ended March 31, 2023.

TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

GENERAL (Cont.)

Impact of the “Iron Swords” War on Israel

October 7, 2023, following the brutal attacks on Israel by Hamas, a terrorist organization located in the Gaza Strip that infiltrated

Israel’s southern border and conducted a series of attacks on civilian and military targets, Israel’s security cabinet declared

war (the “War”).

Following the commencement of the War, hostilities also intensified between Israel and Hezbollah, a terrorist

organization located in Lebanon.

This may escalate in the future into a greater regional conflict.

The War led to a reduction of business

activities in Israel, evacuation of residences located in the northern and southern borders of Israel, a significant call up of military

reserves and lower availability of work force.

Group’s activities are not directly affected by the War, as its customers are predominantly from the US or Europe, markets that

were not influenced by the War.

However, as a result of the War, the Group’s operations were affected due to the recruitment of

some of the Group’s senior employees to reserves, including the CEO of Gix Media.

The absence of senior employees for an extended

period affected customer relationship and operational and functional continuity and delayed some of the Company’s plans for the

fourth quarter of 2023.

These effects indirectly contributed to a decline in the Company’s revenues, profitability, and cash flow.

Company has hired skilled employees to replace those who were recruited to military reserves.

however, there is no assurance that future

developments of the War will not have any impact for reasons beyond the Company’s control such as expansion of the War to additional

regions and the recruitment of more senior employees.

The Company has business continuity procedures in place, and will continue to follow

developments, assessing potential impact, if any, on the Company’s business, financials and operations.

Going Concern

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 the balance sheet date (see note 10), 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 these financial statements.

These prevailing conditions raise substantial doubt about the Company’s ability to continue as a going

plans in light of these uncertainties include negotiating the terms of its debt instrument with Bank Leumi (see note 6) 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.

These interim financial statements do not include any adjustments relating

to the recoverability and classification of assets, carrying amounts or the amount and classification of liabilities that may be required

should the Company be unable to continue as a going concern.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (Unaudited)

Company experienced a decrease in its revenues from the digital content and search segments as a result of a decrease in user

traffic acquired from third party advertising platforms, an industry-wide decrease in advertising budget, changes and updates to

internet browsers’ technology and other changes in the online advertising industry during the second half of 2023 and the

three months ended March 31, 2024.

As a result of the foregoing, during the three months ended March 31, 2024, the Company recorded

an operating loss of $ 1,011 compared

to an operating loss of $ 76 in

the same period last year.

Additionally, the Company recorded a net loss of $ 1,175 compared

the same period last year.

As of March 31, 2024, the Company had cash and cash equivalents of $ 1,284 , bank loans of $ 8,427 and

accumulated deficit of $ 11,660 .

Additionally, subsequent to the balance sheet date, a significant customer notified Cortex it will stop advertising on

Cortex’s websites (see also note 10).

subsequent to the balance sheet date Cortex has successfully taken steps to implement certain adjustments to its business model in response

to such conditions, the decline in revenues and other circumstances described above raise substantial doubts about the Company’s

ability to continue as a going concern during the 12-month period following the issuance date of these financial statements.

plans in response to these conditions include reducing operating expenses, creating new income sources, seeking additional liquidity

opportunities to ensure the Company’s continued operations and raising funds through issuance of debt or equity from various potential

However, there is significant uncertainty as to whether the Company will succeed in implementing its plans, or be able to

secure sufficient funds when needed.

These financial statements do not include any adjustments that might be

necessary if the Company is unable to continue as a going concern.

TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

dollars in thousands (except share data)

1 unchanged sentence

Unaudited Interim Financial Statements

The accompanying unaudited interim

condensed financial statements have been prepared in accordance with U.S.

generally accepted accounting principles (“GAAP”)

for interim financial information and with the instructions to Form 10-Q and Article 10 of U.S.

Securities and Exchange Commission Regulation

Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete

financial statements.

In the opinion of management, all adjustments considered necessary for a fair presentation have been included (consisting

only of normal recurring adjustments except as otherwise discussed).

For further information, reference is made to the consolidated financial

statements and footnotes thereto included in the Group’s Annual Report on Form 10-K for the year ended December 31, 2022.

accompanying unaudited interim condensed financial statements have been prepared in accordance with U.S.

generally accepted accounting

principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of U.S.

and Exchange Commission Regulation S-X.

Accordingly, they do not include all the information and footnotes required by generally accepted

accounting principles for complete financial statements.

In the opinion of management, all adjustments considered necessary for a fair

presentation have been included (consisting only of normal recurring adjustments except as otherwise discussed).

For further information,

reference is made to the consolidated financial statements and footnotes thereto included in the Group’s Annual Report on Form

10-K for the year ended December 31, 2023.

Principles of Consolidation

The accompanying condensed consolidated

financial statements include the accounts of the Company and its wholly owned subsidiaries.

All intercompany balances and transactions

have been eliminated in consolidation.

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

All intercompany

balances and transactions have been eliminated in consolidation.

Use of estimates

The preparation of financial statements

in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities,

the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue

and expenses during the reporting period.

The Company evaluates on an ongoing basis its assumptions, including those related to contingencies,

deferred taxes, inventory impairment, stock-based compensation, as well as in estimates used in applying the revenue recognition policy.

preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the

reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial

statements and the reported amounts of revenue and expenses during the reporting period.

The Company evaluates on an ongoing basis its

assumptions, including those related to contingencies, deferred taxes, inventory impairment, stock-based compensation, as well as in

estimates used in applying the revenue recognition policy.

Actual results may differ from those estimates.

Significant Accounting Policies

The significant accounting policies

followed in the preparation of these unaudited interim condensed consolidated financial statements are identical to those applied in the

preparation of the latest annual financial statements.

significant accounting policies followed in the preparation of these unaudited interim condensed consolidated financial statements are

identical to those applied in the preparation of the latest annual financial statements.

Recent Accounting Pronouncements

Management does not believe that any

recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Group’s

condensed consolidated financial statements.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (Unaudited)

does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect

on the Group’s interim condensed consolidated financial statements.

TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited

dollars in thousands (except share data)

1 unchanged sentence

SCHEDULE OF LOAN FROM TO PARENT COMPANY

September 30 2023

March 31 2024

December 31 2023

Loan to Parent Company

The balance with the Parent Company

represents a balance of an intercompany loan under a loan agreement signed between Gix Media and the Parent Company 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 parties.

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

Parent Company 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 parties.

The amount of the loan is in U.S.

On November 20, 2022, the Company,

Gix Media and the Parent Company agreed to restructure loan agreements between the parties (see note 15 in the 2022 annual financial statements)

such that the Company fully repaid the loan to the Parent Company by offsetting its amount from the loan owed by the Parent Company to

As a result, as of September 30, 2023, and December 31, 2022, the Company has no further obligations under the loan agreement

with the Parent Company.

For the nine months ended September

30, 2023, and the year ended 2022, Gix Media recognized interest income in the amount of $ 64 and $ 143 , respectively.

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

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.

Weighted-average remaining lease term

and discount rate were as follows:

SCHEDULE OF WEIGHTED AVERAGE REMAINING LEASE TERMS AND DISCOUNT RATES

September 30 2023

On March 20, 2024, the Company’s board of directors approved to extend the loan between Gix Media and the Parent Company by 6 months

until July 1, 2024.

All other terms and conditions of the loan remained unchanged.

the three months ended March 31, 2024 and 2023, Gix Media recognized interest income in the amount of $ 39 and $ 21 , respectively.

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 the lease period 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.

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

In December 2023,

the Company exercised the option to extend the lease period for an additional term of 24 months (from March 1, 2024, to February 28,

Weighted-average

remaining lease term and discount rate were as follows:

OF WEIGHTED AVERAGE REMAINING LEASE TERMS AND DISCOUNT RATES

March 31 2024

Operating leases weighted average remaining lease term (in years)

3 unchanged sentences

Operating leases weighted average discount rate

Operating lease expenses amounted to

$ 82 and $ 31 for the nine and three months ended September 30, 2023, respectively.

Operating lease expenses amounted to $ 77 and $ 26 for

the nine and three months ended September 30, 2022, respectively.

lease expenses amounted to $ 28 and $ 26 for the three months ended March 31, 2024 and 2023, respectively.

TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited

1 unchanged sentence

GOODWILL AND INTANGIBLE ASSETS, NET

SCHEDULE OF GOODWILL AND INTANGIBLE ASSETS

Software ( * )

OF GOODWILL AND INTANGIBLE ASSETS

Internal-use Software

Customer Relations

Balance as of January 1, 2024

Adjustments to Ultimate Parent company carrying values (see note 1.B)

Balance as of September 30, 2023

Balance as of March 31, 2024

Accumulated amortization:

Balance as of January 1, 2024

Adjustments to Ultimate Parent company carrying values (see note 1.B)

Amortization recognized during the period

Balance as of September 30, 2023

Amortized cost:

As of September 30, 2023

Software ( * )

Customer Relations

Balance as of January 1, 2022

Beginning balance

Adjustments to Ultimate Parent company carrying values (see note 1.B)

Balance as of December 31, 2022

Ending balance

Accumulated amortization:

Balance as of January 1, 2022

Beginning balance

Adjustments to Ultimate Parent company carrying values (see note 1.B)

Amortization recognized during the year

Balance as of December 31, 2022

Ending balance

Balance as of March 31, 2024

Amortized cost:

As of March 31, 2024

as of January 1, 2023

as of December 31, 2023

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

Gix Media capitalized its developments costs until March 1, 2022 and from this date the Software became available for use.

Accordingly, Gix Media recognized amortization expenses over the estimated useful life of the Software determined to be three years.

For the nine months ended September 30, 2023, and the period from March 1, 2022, until December 31, 2022, Gix Media recorded amortization expenses of $ 102 and $ 122 , respectively.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (Unaudited)

amortization:

as of January 1, 2023

recognized during the year

as of December 31, 2023

of December 31, 2023

of December 31, 2023, the Company recognized indicators of impairment of the digital content reporting unit.

As a result, the

Company performed an impairment test which included a quantitative analysis of the fair value of the reporting unit and compared the

fair value of the reporting unit to its carrying amount.

As the carrying amount exceeded the fair value, the Company recognized an

impairment loss of $ 5,107 .

The assessment of impairment loss was not impacted by subsequent events that occurred in April 2024 (see note 10),

which may result in an additional goodwill impairment loss during the second quarter of 2024.

TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited

dollars in thousands (except share data)

Bank Financing for Cortex’s

capital shares additional Purchase:

On January 23, 2023, Gix Media acquired

an additional 10% of Cortex’s capital shares (see note 1.C) which was financed by Gix Media’s existing cash balances and by

a long-term bank loan received on January 17, 2023, in the amount of $ 1,500 to be repaid in 42 monthly payments at an annual interest

rate of SOFR + 5.37% .

Cortex’s Loan Agreement:

On September 21, 2022, Cortex and Bank

Leumi Le Israel Ltd (“Leumi”) entered into an addendum to an existing loan agreement between the parties, dated August 15,

2020 (“Cortex Loan Agreement”).

As part of the addendum to the Cortex Loan Agreement, Leumi provided Cortex with a monthly

renewable credit line of $ 1,500 (the “Cortex Credit Line”).

The Cortex Credit Line is determined every month at the level

of 70% of Cortex’s customers’ balance .

The amounts that are drawn from the Cortex 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).

On April 27, 2023, Leumi increased

the Cortex Credit Line by $ 1,000 , which was fully withdrawn by Cortex as of September 30, 2023.

In September 2023, Cortex and Leumi

entered into an additional addendum to the Cortex Loan Agreement, in which Leumi extended the Cortex Credit Line of $ 2,500 by one year

which will expire on September 20, 2024 .

The amounts that are drawn from the Cortex Credit Line (from October 2024), bear an annual interest

of SOFR + 4.08% .

As of September 30, 2023, the Cortex

Credit Line of $ 2,500 was fully withdrawn by Cortex.

Composition of long-term loans,

short-term loans, and credit lines of the Group:

The following is the composition of

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

SCHEDULE OF COMPOSITION OF THE BALANCE OF THE GROUP’S LOANS

of long-term and short-term loans of the Group:

OF COMPOSITION OF BALANCE OF GROUP’S LOANS

Interest rate

September 30, 2023

March 31, 2024

December 31, 2023

Short-term loan – the Company

Short-term bank loan – Gix Media

LIBOR + 3.20 %

SOFR + 4.08 %

Short-term bank loan – Cortex

3 unchanged sentences

Long-term bank loan, including current maturity – Gix Media (received on October 13, 2021)

LIBOR + 4.12 %

Long-term bank loan, including current maturity – Gix Media (received on January 17, 2023)

SOFR + 4.12 %

Long-term bank loan

Long-term bank loan, including current maturity – Gix Media (received on January 17, 2023)

SOFR + 5.37 %

(*) The LIBOR interest

rate was published until end of June 2023 and from July 2023 was replaced by the Secured Overnight Financing Rate (“SOFR”).

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (Unaudited)

Long-term loan – Viewbix Israel

Long-term loan

Financing for Cortex’s capital shares additional Purchase:

January 23, 2023, Gix Media acquired an additional 10 % of Cortex’s capital shares which was financed by Gix Media’s existing

cash balances and by a long-term bank loan received on January 17, 2023, in the amount of $ 1,500 to be repaid in 42 monthly payments

at an annual interest rate of SOFR + 5.37 %.

Loan Agreement:

September 21, 2022, Cortex and Leumi entered into an addendum to an existing loan agreement between the parties, dated August 15, 2020

(“Cortex Loan Agreement”).

As part of the addendum to the Cortex Loan Agreement, Leumi provided Cortex with a monthly renewable

credit line of $ 1,500 (the “Cortex Credit Line”).

The Cortex Credit Line is determined every month at the level of 70 % of

Cortex’s customers’ balance.

The amounts that are drawn from the Cortex Credit Line bear an annual interest of SOFR + 3.52 %.

April 27, 2023, Leumi increased the Cortex Credit Line by $ 1,000 .

In September 2023, Cortex and Leumi entered into an additional addendum

to the Cortex Loan Agreement, in which Leumi extended the Cortex Credit Line of $ 2,500 by one year which will expire on September 20,

The amounts that are drawn from the Cortex Credit Line bear an annual interest of SOFR + 4.08 %.

of March 31, 2024, Cortex has drawn $ 1,300 of the Cortex Credit Line.

TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited

dollars in thousands (except share data)

LOANS (Cont.)

Short term loan:

On December 18, 2020, the Company entered

into a loan agreement and Stock Subscription Agreement with certain Investors, pursuant to which the Investors lent an aggregate amount

of $ 69 at an annual interest rate of 8 % (the “Loan”).

In January 2023, the Company reached an agreement with the investors

that the Loan received will be repaid in 3 equal monthly payments.

In April 2023, the Loan was fully repaid by the Company.

term loan and issuance of warrants:

November 15, 2023, Viewbix Israel entered into a Loan Agreement (the “2023 Loan”) with certain lenders (the “Lenders”)

whereby the Lenders provided Viewbix Israel with loans in the aggregate amount of $ 480 , of which, $ 200 was provided by the Ultimate Parent.

In accordance with the terms of the 2023 Loan, the principal amount bears an annual interest at a rate of 9 % and will be repaid over

the course of two years following January 1, 2024 (the “Repayment Period”).

During the Repayment Period, for the first 12

months, Viewbix Israel will repay the interest on a quarterly basis and for the remaining 12 months, Viewbix Israel will repay the principal

amount on a quarterly basis (in 4 equal payments) along with the interest.

If Viewbix Israel fails to repay all or part of the 2023 Loan

amount, the Lenders have the option to convert the outstanding 2023 Loan amount into shares of Common Stock of the Company.

connection with the 2023 Loan, the Company issued to each lender a warrant to purchase shares of Common Stock (the “2023 Warrants”).

The 2023 Warrants are exercisable to 480,000 shares, at an exercise price of $ 0.50 per share and will expire and cease to be exercisable

on December 31, 2025 .

The Company recorded the 2023 Warrants as an equity instrument.

Company allocated the total amount of $ 480 in respect of the warrants issued and the 2023 Loan extended based on their relative fair

As a result of the allocation, a discount of $ 55 was attributed as the fair value of the 2023 Warrants.

The discount is amortized

over the term of the Loan as finance expense.

allocation of the total proceeds of $ 480 to the liability and equity components was as follows:

OF FAIR VALUE DISTRIBUTION OF LIABILITY AND EQUITY COMPONENTS

composition of long-term loan balance as of the transaction is as follows:

OF COMPOSITION OF LONG TERM LOAN

Long term loan, net

the three months ended March 31, 2024, the Company recorded amortization expenses of $ 2 as financial expenses in the consolidated statements

of operations.

TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited

dollars in thousands (except share data)

COMMITMENTS AND CONTINGENCIES

On September 19, 2022, as part of the

Reorganization Transaction terms, 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 Leumi of all of Gix Media’s obligations and undertakings to Leumi unlimited

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

(3) A first ranking all asset charge over all of the assets of the

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

Gix Media has provided several liens

under the Financing Agreement with Leumi in connection with the Cortex Transaction, as follows:

(1) a floating lien on Gix Media’s

September 19, 2022, as part of the Reorganization Transaction terms, 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;

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 accounts.

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

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 Gix Media’s full holdings in Cortex.

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

Media restricted deposits in the amount of $ 52 as of March 31, 2024, are used as a security in respect of credit cards, bank guaranties,

office lease agreement and hedge transactions on the USD exchange rate.

Cortex has a restricted deposit in the amount of $ 34 as of March

31, 2024, is used as a security in respect of its leased offices.

SHAREHOLDERS’ EQUITY

Shares of Common Stock:

Shares of Common Stock confer the rights

(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.

On May 18, 2023, the Company’s

Board of Directors (the “Board”) approved to issue and grant 111,111 shares of restricted Common Stock (“Equity Grant”)

to one of the Company’s directors (the “Director”).

The Equity Grant was granted for consulting services provided to

the Company by the Director, specifically in connection with securing favorable terms for a bank financing.

The Company recorded a share-based

compensation expense of $ 34 in general and administrative expenses with connection to the Equity Grant.

The following table summarizes information

of outstanding warrants as of September 30, 2023 and December 31, 2022:

SUMMARY OF OUTSTANDING WARRANTS

of Common Stock confer the rights 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.

May 18, 2023, the Company’s Board of Directors (the “Board”) approved to issue and grant 111,111 shares of restricted

Common Stock (“Equity Grant”) to one of the Company’s directors (the “Director”).

The Equity Grant was

granted for consulting services provided to the Company by the Director, specifically in connection with securing favorable terms for

a bank financing.

The Company recorded a share-based compensation expense of $ 34 in general and administrative expenses in connection

to the Equity Grant.

following table summarizes information of outstanding warrants as of March 31, 2024:

OF OUTSTANDING WARRANTS

Exercise Price

1 unchanged sentence

Class K Warrants

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (Unaudited)

2023 Warrants (see note 6.D)

December 2025

TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited

dollars in thousands (except share data)

SHAREHOLDERS’ EQUITY (Cont.)

Reverse Stock Split:

On August 31, 2022, the Company filed

the Amended COI with the Secretary of State of Delaware to affect a 28 to 1 reverse stock split of the Company’s outstanding shares

of Common Stock.

All share and per share data in these financial statements have been retrospectively adjusted for the nine and three

months ended September 30, 2022, to reflect the reverse stock split.

Share option plan

In 2017, after 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 are traded on Tel-Aviv Stock Exchange.

On March 2, 2023, the Board approved

the adoption of the 2023 Stock Incentive Plan (the “2023 Plan”).

The 2023 Plan permits the issuance of up to (i) 2,500,000

shares of Common Stock, plus (ii) an annual increase equal to the lesser of (A) 5 % of the Company’s outstanding capital stock on

the last day of the immediately preceding calendar year;

and (B) such smaller amount as determined by the Board, provided that no more

than 2,500,000 shares of Common Stock may be issued upon the exercise of Incentive Stock Options.

If any outstanding awards expire, are

canceled or are forfeited, the underlying shares would be available for future grants under the 2023 Plan.

As of the date of approval

of the financial statements, the Company had reserved 2,500,000 shares of Common Stock for issuance under the 2023 Plan.

The 2023 Plan provides for the grant

of stock options, restricted stock, restricted stock units, stock or other stock-based awards, under various tax regimes, including, without

limitation, in compliance with Section 102 and Section 3(i) of the Israeli Income Tax Ordinance (New Version) 5271-1961, and for awards

granted to United States employees or service providers, including those who are deemed to be residents of the United States for tax purposes,

Section 422 and Section 409A of the United States Internal Revenue Code of 1986.

In connection with the adoption of

the 2023 Plan, on March 7, 2023, the Company entered into certain intercompany reimbursement agreements with two of its subsidiaries,

Viewbix Israel and Gix Media (the “Recharge Agreements”).

The Recharge Agreements provide for the offer of awards under the

2023 Plan to service providers of Viewbix Israel and Gix Media (the “Affiliates”) under the 2023 Plan.

Under the Recharge

Agreements, the Affiliates will each bear the costs of awards granted to its service providers under the 2023 Plan and will reimburse

the Company upon the issuance of shares of Common Stock pursuant to an award, for the costs of shares issued, but in any event not prior

to the vesting of an award.

The reimbursement amount shall be equal to the lower of (a) the book expense for such award as recorded on

the financial statements of one of the respective Affiliates, determined and calculated according to U.S.

GAAP, or any other financial

reporting standard that may be applicable in the future, or (b) the fair value of the shares of Common Stock at the time of exercise of

an option or at the time of vesting of an RSU, as applicable.

On July 20, 2023, the Company granted

51,020 restricted share units (the “RSUs”) under the 2023 Plan to Gix Media’s CEO, as part of his employment terms,

(the “Grantee”) under the following terms and conditions:

(1) 51,020 of Common Stock underlying the grant of RSUs (2) Vesting

Commencement Date:

2017, after the completion of Gix Media’s acquisition by the Parent Company, the Parent Company granted options to Gix Media’s

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

March 2, 2023, the Board approved the adoption of the 2023 Stock Incentive Plan (the “2023 Plan”).

The 2023 Plan permits

the issuance of up to (i) 2,500,000 shares of Common Stock, plus (ii) an annual increase equal to the lesser of (A) 5 % of the Company’s

outstanding capital stock on the last day of the immediately preceding calendar year;

and (B) such smaller amount as determined by the

Board, provided that no more than 2,500,000 shares of Common Stock may be issued upon the exercise of Incentive Stock Options.

outstanding awards expire, are canceled or are forfeited, the underlying shares would be available for future grants under the 2023 Plan.

As of the date of approval of the financial statements, the Company had reserved 2,500,000 shares of Common Stock for issuance under

the 2023 Plan.

2023 Plan provides for the grant of stock options, restricted stock, restricted stock units, stock or other stock-based awards, under

various tax regimes, including, without limitation, in compliance with Section 102 and Section 3(i) of the Israeli Income Tax Ordinance

(New Version) 5271-1961, and for awards granted to United States employees or service providers, including those who are deemed to be

residents of the United States for tax purposes, Section 422 and Section 409A of the United States Internal Revenue Code of 1986.

connection with the adoption of the 2023 Plan, on March 7, 2023, the Company entered into certain intercompany reimbursement agreements

with two of its subsidiaries, Viewbix Israel and Gix Media (the “Recharge Agreements”).

The Recharge Agreements provide for

the offer of awards under the 2023 Plan to employees or service providers of Viewbix Israel and Gix Media (the “Affiliates”)

under the 2023 Plan.

Under the Recharge Agreements, the Affiliates will each bear the costs of awards granted to its employees or its

service providers under the 2023 Plan and will reimburse the Company upon the issuance of shares of Common Stock pursuant to an award,

for the costs of shares issued, but in any event not prior to the vesting of an award.

The reimbursement amount will be equal to the

lower of (a) the book expense for such award as recorded on the financial statements of one of the respective Affiliates, determined

and calculated according to U.S.

GAAP, or any other financial reporting standard that may be applicable in the future, or (b) the fair

value of the shares of Common Stock at the time of exercise of an option or at the time of vesting of an RSU, as applicable.

July 20, 2023, the Company granted 51,020 restricted share units (the “RSUs”) under the 2023 Plan to Gix Media’s CEO,

as part of his employment terms, (the “Grantee”) under the following terms and conditions:

(1) 51,020 of Common Stock underlying

the grant of RSUs (2) Vesting Commencement Date:

July 1, 2023 (3) vesting schedule:

50% of the RSUs will vest immediately upon the Vesting

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (Unaudited)

Commencement Date (the “First Tranche”) and the remaining 50% of the RSUs will vest 12 months after the Vesting Commencement

Date, provided, in each case, that the Grantee remains continuously as a Service Provider (as defined under the 2023 Plan) of Gix Media

or its affiliates throughout each such vesting date (the “Grant”).

TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited

dollars in thousands (except share data)

1 unchanged sentence

Share option plan (Cont.)

Commencement Date (the “First

Tranche”) and the remaining 50% of the RSUs will vest 12 months after the Vesting Commencement Date, provided, in each case, that

the Grantee remains continuously as a Service Provider (as defined under the 2023 Plan) of Gix Media or its affiliates throughout each

such vesting date (the “Grant”).

In July 2023, following the Grant and

upon the vesting of the First Tranche, the Company issued 25,510 shares of Common Stock to the Grantee.

The Company recorded a share-based

compensation expense of $ 25 in general and administrative expenses with connection to the issuance of shares upon the vesting of the First Tranche.

On September 14, 2022, Gix Media declared a dividend to its shareholders prior to the consummation of the Reorganization Transaction in the amount of $ 1,000 , of which an amount of $ 83 was paid as tax to the Israeli Tax Authority.

During 2022 Gix Media distributed an amount of $ 787 out of the remaining amount of $ 917 , which an amount of $ 714 that was distributed to the Parent Company, was offset from the loan to Parent Company (see also note 3).

July 2023, following the Grant and upon the vesting of the First Tranche, the Company issued 25,510 shares of Common Stock to the Grantee.

The Company recorded a share-based compensation expense of $ 25 in general and administrative expenses with connection to the issuance

of shares upon the vesting of the First Tranche.

September 14, 2022, Gix Media declared a dividend to its shareholders prior to the consummation of the Reorganization Transaction in

the amount of $ 1,000 , of which an amount of $ 83 was paid as tax to the Israeli Tax Authority.

During 2022 Gix Media distributed an amount

of $ 787 out of the remaining amount of $ 917 , which an amount of $ 714 that was distributed to the Parent Company, was offset from the

loan to Parent Company.

The remaining amount of $ 130 was distributed by Gix Media in January 2023.

On December 25, 2022, Cortex declared a dividend in the total amount of $ 445 to the non-controlling interests.

The amount was distributed by Cortex to non-controlling interests in two payments of $ 219 and $ 226 in February and March 2023, respectively.

On June 29, 2023, Cortex declared and distributed a dividend in the total amount of $ 153 to the non-controlling interests.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (Unaudited)

December 25, 2022, Cortex declared a dividend in the total amount of $ 445 to the non-controlling interests.

The amount was distributed

by Cortex to non-controlling interests in two payments of $ 219 and $ 226 in February and March 2023, respectively.

dividends were distributed during the three-month period ending March 31, 2024.

TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited

dollars in thousands (except share data)

SEGMENT REPORTING

The Group operates in two different

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

Search segment - the search segment

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

for the purposes of obtaining and routing internet user traffic to its customers.

Digital 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.

The segments’ results include

items that directly serve and/or are used by the segment’s business activity and are directly allocated to the segment.

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.

Segments’ assets and liabilities

are not reviewed by the Group’s chief operating decision maker and therefore were not reflected in the segment reporting.

Segments revenues and operating

SCHEDULE OF SEGMENTS REVENUES AND OPERATING RESULTS

Search segment

Digital content segment

For the nine months ended September 30, 2023

Search segment

Digital content segment

Revenues from external customers

Depreciation and amortization

Segment operating income (loss)

Financial expenses, net

Segment income (loss), before income taxes

Search segment

Digital content segment

For the nine months ended September 30, 2022

Search segment

Digital content segment

Revenues from external customers

Depreciation and amortization

Segment operating income

Financial expenses, net

(*) ( 1,274 )

Segment Income (loss), before income taxes

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (Unaudited)

dollars in thousands (except share data)

SEGMENT REPORTING (Cont.)

Search segment

Digital content segment

For the three months ended September 30, 2023

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 obtaining 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 Group’s chief operating decision maker and therefore were not reflected in the segment

revenues and operating results:

OF SEGMENTS REVENUES AND OPERATING RESULTS

Search segment

Digital content segment

For the three

March 31, 2024

Revenues from external customers

1 unchanged sentence

Segment operating income (loss)

Financial expenses, net

Financial (expenses) income, net

Segment Income (loss), before income taxes

1 unchanged sentence

Digital content segment

For the three months ended September 30, 2022

Search segment

Digital content segment

For the three

March 31, 2023

Revenues from external customers

1 unchanged sentence

Segment operating income (loss)

Financial expenses, net

Financial (expenses) income, net

Segment Income (loss), before income taxes

Mainly consist of financial expenses from the Financing Agreement of bank loans taken for business combinations (see note 6).

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (Unaudited)

consist of financial expenses from the Financing Agreement of bank loans taken for business

combinations (see note 6).

TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited

dollars in thousands (except share data)

SEGMENT REPORTING (Cont.)

The “adjustment” column

for segment operating income includes unallocated selling, general, and administrative expenses and certain items which management excludes

from segment results when evaluating segment performance, as follows:

SCHEDULE OF RECONCILIATION BETWEEN SEGMENTS OPERATING RESULTS

September 30, 2023

“adjustment” column for segment operating income includes unallocated selling, general, and administrative expenses and certain

items which management excludes from segment results when evaluating segment performance, as follows:

OF RECONCILIATION BETWEEN SEGMENTS OPERATING RESULTS

For the three

September 30, 2023

March 31, 2024

Depreciation and amortization expenses not attributable to segments (**)

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

September 30, 2022

For the three

September 30, 2022

March 31, 2023

Depreciation and amortization expenses not attributable to segments (**)

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

Mainly consist of technology and customer relations amortization costs from business combinations.

Mainly consist of salary and related expenses and professional consulting expenses.

consist of financial expenses from the Financing Agreement of bank loans taken for business combinations (see note 6).

consist of technology and customer relations amortization costs from business combinations.

consist of salary and related expenses and professional consulting expenses.

SUBSEQUENT EVENTS

On October 7, 2023, subsequent to the reporting period, the State of Israel suffered a surprise attack,

which led to the declaration of the ‘Iron Swords’ War (the “War”).

The War is on-going as of the issuance date

of these financial statements.

Consequently, the Company’s operations were disrupted due to the recruitment of some of the Company’s

employees, including Gix Media’s CEO, to the army reserves.

Based on its assessment, the Company

expects a negative effect on its results of operations in the fourth quarter of 2023 due to the War, which its extent cannot be estimated

at this stage.

On October 10, 2023, Gix Media and Leumi entered into an

addendum to an existing loan agreement between the parties, dated October 13, 2021.

As part of the addendum to the loan agreement,

Leumi extended an existing monthly renewable credit line of $ 3,500

(the “Gix Media Credit Line”) by one year which will expire on October

The amounts that are drawn from the Gix Media Credit Line bear an annual interest of SOFR

April 2024, the Company was informed by Cortex that a significant customer of Cortex recently notified Cortex it will stop advertising

on Cortex’s sites, as part of its policy decision to cease advertising on Made for Advertising (“MFA”) sites (the “Cortex Adverse Effect”).

Adverse Effect, which has materially affected Cortex’s business and operations, has occurred following certain recent developments

relating to publishers that are categorized by a number of on-line advertisers as MFA, including decisions made by leading media on-line

advertisers to prioritize different media categories and implement publishing restrictions in connection with MFA.

the Cortex Adverse Effect, the Company and the bank in which Cortex’s and Gix Media’s accounts, credit facilities, and loans

are maintained approved on May 20, 2024 a debt restructuring program pursuant to which, inter alia, the credit lines to Cortex were increased

to 80% of the balance of Cortex’s customers (up to a limit of $ 2 million), as opposed to the 70% limitation imposed prior to the

restructuring program, Gix Media’s monthly revolving credit lines were increased by an additional $ 300 thousand, the Company committed

to perform cost-cutting measures, including a reduction in head count, the Company will raise up to $ 1.25 million by means of issuance

of equity or debt, the covenants under the original loan agreements as of March 31, 2024 were waived and a new covenant, measured by

reference to EBTIDA, was implemented, and a grace in relation to a portion of the monthly loan repayments was given.

The debt restructuring

program will be in effect until August 2024, after which it will be renegotiated between the Company and the bank.

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

What changed 10-Q

Item 1. Financial Statements