QUANTUM X LABS INC. 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS Special Note Regarding Forward-Looking Statements The following management’s discussion and analysis section should be read in conjunction with the Company’s unaudited financial statements as of September 30, 2025 and 2024, and the related statements of statement operation, statement of changes in shareholders’ equity and statements of cash flows for the three months then ended, and the related notes thereto contained in this Quarterly Report on Form 10-Q (this “Quarterly Report”). Our reporting currency and functional currency is the U.S. dollar. Unless otherwise expressly stated or the context otherwise requires, references in this prospectus to “NIS” are to New Israeli Shekels, and references to “dollars” or “$” mean U.S. dollars. On July 10, 2024, our board of directors approved to effect a one-for-four consolidation of our share capital, pursuant to which holders of our shares of common stock will receive one share of common stock for every four shares of common stock held (the “Reverse Stock Split”). The Reverse Stock Split became effective on March 14, 2025, following the process and announcement by FINRA. Unless the context expressly indicates otherwise, all references to share and per share amounts referred to herein reflect the amounts after giving effect to the Reverse Stock Split. 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. 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 services; ● our ability to retain and attract a programmatic advertiser, and the associated payments received from such programmatic advertisers’ ads on websites which have been categorized as “Made for Advertising”; ● 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 receive credit facility to fund our operations, at favorable terms, or at all; ● our ability to pay our obligations when they become due, including the contemplated debt restructuring program currently under negotiation with our credit and debtholders; ● our subsidiaries’ future performance, including our ability to instill potential measures to assist Gix Media in mitigating future economic harm; ● entry of new competitors and products, the impact of large and established internet and technology companies and potential technological obsolescence of our offered platforms; and ● political, economic and military conditions in Israel, including the current security situation in Israel, as well as the war’s potential impact on our business and operation. - 46 - 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, and those contained in section captioned “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the Securities and Exchange Commission (the “SEC”) on March 21, 2025 (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 Viewbix Inc. (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 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. The Company, through its subsidiary, Gix Media Ltd. (“Gix Media”), is focused on digital advertising operations for ad search (the “Search Platform”). Gix Media develops and markets a variety of technological software solutions that automate, optimize and monetize online campaigns. These technological tools enable advertisers and website owners to earn more from their advertising campaigns and generate additional profits from their sites. Through the 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. As of September 30, 2025, in addition to Gix Media’s Search Platform, the Company, through a previous majority-owned subsidiary of Gix Media, Cortex Media Group Ltd. (“Cortex”), operated a digital content platform, which produced 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. Following the Cortex Sale (as defined below), the Company only operates the Search Platform. For additional information, see “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments—Sale of Cortex” below. In addition, the Company, through its subsidiary, Metagramm Software Ltd. (“Metagramm”), is focused on artificial intelligence (AI) and natural language processing (NLP) communication-based solutions. Metagramm specializes in developing advanced writing assistance tools that leverage artificial intelligence, machine learning and natural language processing technologies. Metagramm’s main product, “Bubbl” is a writing tool designed to provide personalized and customized text tailored to the user’s unique expression and can translate various languages into English. Metagramm licenses its products on a subscription basis to businesses and individual customers. Search Platform Gix Media’s Search Platform allows for the referral of user traffic (i.e., searches that are performed by internet users) to the 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. Gix Media provides user traffic referral services to Search Engines through the referral of traffic of browsers who engage content generated by Gix Media, or the “Seach to Search” model. These ads are displayed on the Search Engines’ result pages (SERP) that are purchased by the Company from other Search Engines (such as Yahoo, Bing / Microsoft Ads and Google). When such user clicks on these search ads, Gix Media refers the user to a paid offering from a Search Engine which contains ads that are related to the initial ad made by Gix media (the Company buys ad space from Search Engines and sell them to other search ads while profiting from the price difference). - 47 - Recent Developments Sale of Cortex On November 9, 2025, Gix Media, a wholly-owned subsidiary of the Company, Cortex, and certain founders of Cortex (the “Founders”) entered into a Share Purchase Agreement (the “Purchase Agreement”) with Pro Sportority (Israel) Ltd. (the “Purchaser”), a subsidiary of Minute Media Inc. (the “Parent”). Pursuant to the Purchase Agreement, the Purchaser agreed to acquire from Gix Media all of the issued and outstanding share capital of Cortex held by Gix Media, constituting 80% of Cortex’s issued and outstanding share capital, and, together with similar agreements entered into with the other shareholders of Cortex and the cancellation of all outstanding options, warrants, and other convertible securities of the Cortex, will result in the Purchaser owning 100% of Cortex’s issued and outstanding share capital on a fully diluted basis (the “Cortex Sale”). The Cortex Sale was signed and closed on November 9, 2025 (the “Closing”). As a result, Cortex became a wholly-owned subsidiary of the Purchaser. The aggregate consideration payable to Gix Media is $800,000, consisting of (i) $200,000 in cash, and (ii) $600,000 in the form of 5,161 newly issued Preferred J Shares of the Parent (the “Parent Shares”), the most senior class of preferred shares of the Parent. The consideration is subject to customary tax withholding provisions and delivery mechanics as set forth in the Purchase Agreement. The Parent retains a call option to repurchase the Parent Shares from Gix Media under certain conditions, including insolvency or a change of control of Gix Media. Gix Media is subject to a two-year non-compete and non-solicitation covenant following the Closing. Non-Binding Termsheet for Acquisition On November 5, 2025, Viewbix Inc. (the “Company”) announced that it entered into a non-binding term sheet with Quantum X Labs Ltd., an Israeli company (“Quantum”), a cutting-edge quantum computing and AI company focusing on advancing technologies in quantum algorithmics and quantum physics, and all of the shareholders of Quantum (the “Quantum Shareholders”) with respect to a strategic transaction to acquire 100% of Quantum’s issued and outstanding share capital on a fully diluted and post-closing basis. On November 13, 2025, the Company entered into a new non-binding term sheet (the “Term Sheet”) with Quantum and the Quantum Shareholders pursuant to which the Company would acquire (the “Quantum Acquisition”) 100% of Quantum’s issued and outstanding share capital on a fully diluted and post-closing basis in exchange for the issuance of 40.0% of the Company’s issued and outstanding capital stock, including the shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) to be issued by the Company pursuant to the securities purchase agreement, dated November 5, 2025, between the Company and each purchaser identified on the signature pages thereto (the “Private Placement Shares” and the “Private Placement Offering”), on post-closing basis of the Quantum Acquisition and the Private Placement Offering consisting of (i) shares of the Company’s Common Stock representing 19.99% of the Company’s issued and outstanding capital stock (the “Exchange Shares), including the Private Placement Shares issued in the Private Placement Offering, and (ii) pre-funded warrants to purchase shares of Common Stock representing the balance of the 40.0% less the Exchange Shares (the “Exchange Pre-Funded Warrants” and together with the Exchange Shares, the “Viewbix Exchange Securities”). In addition, pursuant to the Term Sheet, the Company may issue additional shares of the Company’s Common Stock and/or pre-funded warrants to purchase shares of Common Stock (collectively, the “Earn Out Securities”), which shall not represent in the aggregate more than 65.0% of the Company’s issued and outstanding capital stock, including the Viewbix Exchange Securities and the Private Placement Shares issued in the Private Placement Offering, on a post-closing basis, upon the achievement of certain milestones as follows: (i) the issuance of a number of Earn-Out Securities equal to 6% of the Company’s issued and outstanding capital stock on a post-closing basis if Quantum completes the first phase of developing its prototype and either enters into a binding collaboration agreement with a recognized quantum hardware provider or files a patent with a recognized patent authority within 18 months from the closing date of the Quantum Acquisition (the “Closing Date”), (ii) the issuance of a number of Earn-Out Securities equal to an additional 8% of the Company’s issued and outstanding capital stock on a post-closing basis if Quantum completes the second phase of developing its prototype and either completes a technical validation report from a recognized design partner confirming successful beta performance or files an additional patent with a recognized patent authority within 30 months of the Closing Date; and (iii) the issuance of a number of Earn-Out Securities equal to an additional 11% of the Company’s issued and outstanding capital stock on a post-closing basis if Quantum reaches beta testing of its platform with partners and/or files an additional patent with a recognized patent authority within 36 months of the Closing Date. The completion of the Quantum Acquisition and the issuance of Viewbix Exchange Securities is subject to final due diligence, the execution of definitive agreements, regulatory approvals, the approval of the Company’s stockholders in accordance with applicable rules or regulations of the Nasdaq Stock Market LLC and customary closing conditions. November 2025 Private Placement On November 5, 2025, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain accredited investors pursuant to which the Company agreed to sell and issue in a private placement (the “Private Placement Offering”) an aggregate of 800,000 shares of common stock (the “Private Placement Shares”) or pre-funded warrants to purchase shares of common stock (the “Pre-Funded Warrants”) in lieu of the Private Placement Shares. Each Private Placement Share and Pre-Funded Warrant will be sold together with a number of warrants equal to the aggregate number of Private Placement Shares and Pre-Funded Warrants sold in the Private Placement Offering, or in total warrants to purchase up to an aggregate of 800,000 shares of common stock (the “Common Warrants” and together with the Pre-Funded Warrants, the “Warrants”, and the Warrants together with the Private Placement Shares, the “Securities”), at a combined purchase price of $3.75 per Private Placement Share and accompanying Common Warrant and $3.7499 per Pre-Funded Warrant and accompanying Common Warrant. - 48 - The Private Placement Offering and the issuance of the Securities is expected to close during December 2025, subject to the satisfaction of customary closing conditions, receipt of the Stockholder Approval and the execution of definitive agreements related to the Quantum Acquisition. The Private Placement Offering was made without an underwriter, placement agent, broker, or dealer. The Pre-Funded Warrants will be immediately exercisable upon issuance at an exercise price of $0.0001 per share and will not expire until exercised in full. The Common Warrants will be immediately exercisable upon issuance at an exercise price of $5.625 per share, subject to adjustment as set forth therein, and will expire five years from the issuance date. The Common Warrants may be exercised on a cashless basis if there is no effective registration statement registering the shares of common stock underlying the Common Warrants. A holder of the Warrants will not have the right to exercise any portion of its Warrants if the holder (together with such holder’s affiliates, and any persons acting as a group together with such holder or any of such holder’s affiliates or any other persons whose beneficial ownership of shares of common stock would be aggregated with the holder’s or any of the holder’s affiliates), would beneficially own shares of common stock in excess of 4.99% of the number of shares of common stock outstanding immediately after giving effect to such exercise. In connection with the Purchase Agreement, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with each investor. Pursuant to the Registration Rights Agreement, the Company is required to file a resale registration statement (the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”) to register for resale the Private Placement Shares and the shares of common stock issuable upon exercise of the Warrants within thirty (30) calendar days after the Closing Date (the “Filing Date”), and to have such Registration Statement declared effective within sixty (60) calendar days after the Filing Date in the event the Registration Statement is not reviewed by the SEC, or ninety (90) calendar days of the Filing Date in the event the Registration Statement is reviewed by the SEC. If, due to a shutdown or suspension of operations of the U.S. federal government or the SEC, the Registration Statement cannot be declared effective, the Company shall not be deemed to be in breach of the Registration Rights Agreement for failure to cause such Registration Statement to be declared effective during such period. The Purchase Agreement and the Registration Rights Agreement contain representations, warranties, indemnification and other provisions customary for transactions of this nature. The Company also entered into an advisory agreement (the “Advisory Agreement”) with L.I.A. Pure Capital Ltd. (“the Advisor”) pursuant to which the Advisor agreed to provide advisory services in connection with the Private Placement Offering. The Company agreed to pay a commission to the Advisor of (i) a cash fee of $150,000 and (ii) a warrant to purchase 40,000 shares of common stock (the “Advisor Warrant”). Payment of the commission is conditioned upon the closing of the Private Placement Offering. The Advisor Warrant will have the same terms as the Common Warrants issued in the Private Placement Offering. In addition, in connection with the closing of the Private Placement Offering, the Company shall repay the outstanding loan amount owed to the Advisor pursuant to that certain Amended and Restated Facility Agreement, dated July 22, 2024, by and between the Company and by and between such lenders set forth in Schedule 1 thereto, including the Advisor, which as of November 5, 2025, is approximately $529,510, which includes the principal portion and accrued interest as of such date. Aggregate gross proceeds to the Company in respect of the Private Placement Offering are expected to be approximately $3.0 million, before deducting fees payable to the Advisor and other offering expenses payable by the Company. If the Warrants are exercised in cash in full this would result in an additional $4.5 million of gross proceeds. July 2025 Private Placement On July 11, 2025, the Company entered into a securities purchase agreement (the “July 2025 Purchase Agreement”) with certain accredited investors pursuant to which the Company issued and sold in a private placement, (the “July 2025 Private Placement”) an aggregate of 848,763 shares of common stock, pre-funded warrants to purchase up to 77,160 shares of common stock and common warrants to purchase up to an aggregate of 925,923 shares of common stock, at an offering price of $4.86 per share of common stock and associated common warrant and an offering price of $4.8599 per pre-funded warrant and associated common warrant. - 49 - The pre-funded warrants were immediately exercisable upon issuance at an exercise price of $0.0001 per share and will not expire until exercised in full. The common warrants were immediately exercisable upon issuance at an exercise price of $4.74 per share, subject to adjustment as set forth therein, and will expire five and a half years from the issuance date. The common warrants may be exercised on a cashless basis if there is no effective registration statement registering the shares of shares of common stock underlying the common warrants. In connection with the July 2025 Purchase Agreement, we entered into a registration rights agreement (the “July 2025 Registration Rights Agreement”) with each investor. Pursuant to the July 2025 Registration Rights Agreement, the Company was required to file a resale registration statement with the SEC (the “July 2025 PIPE Registration Statement”) to register for resale the shares of common stock issued in the July 2025 Private Placement and the shares of common stock issuable upon exercise of the pre-funded warrants and common warrants issued in the July 2025 Private Placement within fourteen (14) trading days of the signing date of the July 2025 Purchase Agreement (the “July 2025 PIPE Signing Date”) and to have such July 2025 PIPE Registration Statement declared effective within sixty (60) calendar days after the July 2025 PIPE Signing Date in the event the July 2025 PIPE Registration Statement is not reviewed by the SEC, or ninety (90) calendar days of the July 2025 PIPE Signing Date in the event the July 2025 PIPE Registration Statement is reviewed by the SEC. The Company filed the July 2025 PIPE Registration Statement on July 23, 2025, which was declared effective by the SEC on July, 31, 2025. In connection with the July 2025 Private Placement, the Company also entered into a letter agreement (the “July 2025 Placement Agent Agreement”) with Aegis Capital Corp., as placement agent (the “Placement Agent”) dated July 11, 2025, pursuant to which the Placement Agent agreed to serve as the placement agent for in connection with the July 2025 Private Placement. The Company paid the Placement Agent a cash placement fee equal to 7.0% of the gross proceeds received in the July 2025 Private Placement and $50,000 for reasonable legal fees and disbursements for the Placement Agent’s counsel. In addition, pursuant to the July 2025 Placement Agent Agreement, the Company agreed to abide by certain customary standstill restrictions for a period of thirty (30) days following the later of the closing of the July 2025 Private Placement and the date that the July 2025 PIPE Registration Statement is declared effective by the SEC. Aggregate gross proceeds to the Company in respect of the July 2025 Private Placement were approximately $4.5 million, before deducting fees payable to the Placement Agent and other offering expenses payable by us. If the warrants are exercised in cash in full this would result in an additional $4.4 million of gross proceeds. Filing of Insolvency Petition Against Gix Media On March 27, 2025, a petition (the “Petition”) was filed with the District Court of Tel Aviv-Jaffa (the “Court”) for a court order to commence insolvency proceedings under the Insolvency and Economic Rehabilitation Law, 5778 – 2018 against Gix Media. The Petition was filed by a primary service provider (the “Service Provider”) of Gix Media claiming that Gix Media owes it approximately $260,000 (excluding linkage differentials and interest) and that Gix Media is unable to repay its debts to the Service Provider. On July 16, 2025, the Court approved a settlement agreement entered into between Gix Media, the Service Provider and other creditors of Gix Media that joined the Petition (collectively, the “Service Providers”) with respect to the debts owed by Gix Media to the Service Providers. In connection with the settlement agreement, the Company agreed to provide a guarantee for the debts owed by Gix Media to the Service Providers. On July 22, 2025, pursuant to the terms of the settlement agreement, Gix Media paid approximately $1.13 million to the Service Providers as payment in full of the debts owed to the Service Providers. As a result of such payment in full by Gix Media to the Service Providers, the Petition was dismissed. - 50 - Financing Agreement Effective as of January 29, 2025, Gix Media and Leumi entered into a fifth addendum, to a certain financing agreement with 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 acquisition of Cortex on October 13, 2021 (the “Cortex Acquisition” and “Financing Agreement”), which was effective as of January 29, 2025, pursuant to which, inter alia: (i) the existing credit facility to Gix Media was extended to March 31, 2025; (ii) the repayment schedule of all outstanding obligations under the long term bank loans of Gix Media under the Financing Agreement, was deferred until the actual deposit by the Company in Gix Media’s account of an investment account equal to the amounts of the deferred long term bank loans owned by Gix Media (the “Investment Amount”), which in any event shall be no later than March 31, 2025 (the “Deposit Date”); (iii) upon such deposit date, all deferred payments shall be immediately repaid using the deposited amounts and any remaining amounts from any other sources; (iv) all remaining future due payments will be repaid as scheduled until the end of the updated terms of each long term bank loan. On March 30, 2025, Gix Media and Leumi entered into a sixth additional addendum to the Financing Agreement, which extended the Deposit Date until May 20, 2025. On July 8, 2025, Gix Media and Leumi entered into an agreement in respect of the Financing Agreement (the “July 2025 Repayment and Financing Agreement”), which further extended the Deposit Date until October 1, 2025. In connection with the July 2025 Repayment Financing Agreement, Gix Media agreed to repay $2.4 million to Leumi by October 1, 2025. In addition, in connection with the July 2025 Repayment Financing Agreement, as of October 1, 2025, Bank Leumi shall grant to Gix Media a loan in an amount equal to Gix Media’s then-current outstanding principal portion of the loan plus interest, fees and expenses. The loan shall accrue interest at Bank Leumi’s applicable rate as of October 1, 2025, shall be repaid on a monthly basis and shall have a term of 24 months. During July 2025, Gix Media repaid a total of $2.4 million to Bank Leumi in accordance with the July 2025 Repayment and Financing Agreement. Cortex Adverse Effect On November 9, 2025, Gix Media completed the Cortex Sale, which resulted in Cortex ceasing to be a consolidated indirect subsidiary of the Company and a direct, majority-owned subsidiary of Gix Media. For additional information, see “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments—Sale of Cortex” above. Prior to the Cortex Sale, in April 2024, the Company was informed by Cortex, that certain recent developments relating to publishers that are categorized by a number of programmatic advertisers as “Made for Advertising” (“MFA”) sites, including decisions made by leading media programmatic advertisers to prioritize different media categories and implement publishing restrictions in connection with MFA, have materially affected Cortex’s business and operations. In connection with the foregoing, a significant customer of Cortex notified Cortex that in light of the foregoing changes relating to MFA that customer decided to stop advertising on Cortex’s Websites, which decision significantly and negatively impacted Cortex’s future revenue streams (the “Cortex Adverse Effect”). 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: 3 Hanehoshet St, Building B, 7th floor, Tel Aviv, Israel and our telephone number is +972-9-774-1505. Our website address is www.view-bix.com . The information contained on, or that can be accessed through, our websites is not incorporated by reference into this prospectus and is intended for informational purposes only. Results of Operations Results of Operations During the Three Months Ended September 30, 2025 as Compared to the Three Months Ended September 30, 2024 Our revenues were $2,717 thousand for the three months ended September 30, 2025, compared to $6,281 thousand during the same period in the prior year. - 51 - Our revenues from Cortex’s content platform were $2,371 thousand for the three months ended September 30, 2025, a decrease of $3,121 as compared to $5,492 thousand during the same period in the prior year. The reasons for the decrease during the three months ended September 30, 2025 are due to the Cortex Adverse Effect. Our revenues from Gix Media’s Search Platform were $342 thousand for the three months ended September 30, 2025, a decrease of $447 as compared to $789 thousand during the same period in the prior year. The reasons for the decrease during the three months ended September 30, 2025, is due to a decrease in the amount of search referrals conducted by users, provided by Gix Media to Search Engines, caused primarily by changes and updates to internet browsers’ technology, which have caused a decrease in revenues from the direct model. Our traffic-acquisition and related costs were $2,133 thousand for the three months ended September 30, 2025, a decrease of $3,012 compared to $5,145 thousand during the same period in the prior year. The reason for the decrease in the three months ended September 30, 2025, is due to the decrease in revenues from both the Content and Search Platforms during the three months ended September 30, 2025 as mentioned above. Our research and development expenses were $115 thousand for the three months ended September 30, 2025, as compared to $338 thousand during the same period in the prior year. The reason for the decrease in the three months ended September 30, 2025, is due to the expense reduction in both the Content and Search Platforms during the three months ended September 30, 2025, as compared to the same period in the prior year. Our selling and marketing expenses decreased to $173 thousand for the three months ended September 30, 2025, as compared to $329 thousand during the same period in the prior year. The reason for the decrease in the three months ended September 30, 2025, is due to the expense reduction primarily in salaries in both the Content and Search Platforms during the three months ended September 30, 2025, as compared to the same period in the prior year. Our general and administrative expenses were $619 thousand for the three months ended September 30, 2025, as compared to $435 thousand during the same period in the prior year. The reason for the increase in the three months ended September 30, 2025, is due to increase in our professional services expenses incurred by us following the uplisting of our shares of common stock to the Nasdaq Capital Market, which was effected in June 2025 (the “Uplist”), as compared to the same period in the prior year. Our depreciation and amortization expenses for the three months ended September 30, 2025, were $791 thousand as compared to $727 thousand during the same period in the prior year. An intangible assets and goodwill impairment loss of $2,375 thousand was recorded during the three months ended September 30, 2025, compared to $0 during the three months ended September 30, 2024. Intangible assets and goodwill impairment losses recognized during the three months ended September 30, 2025, were related to Cortex’s content platform (see also note 5.B to our interim condensed consolidated financial statements ended September 30, 2025). Our other expenses for the three months ended September 30, 2025, were $144 thousand, compared to $213 thousand during the three months ended September 30, 2024. Other expenses for the three months ended September 30, 2025 were primarily related to costs incurred in connection with the registration for the resale of the Company’s common stock while other expenses for the three months ended September 30, 2024, were primarily related to costs incurred in connection with the Uplist. Our net financial expenses were $668 thousand for the three months ended September 30, 2025, compared to $152 thousand net financial income during the same period in the prior year. The reason for the increase during the three months ended September 30, 2025, is mainly attributable to financing expenses related to facility agreements entered into during July 2024, as compared to financial income during the three months ended September 30, 2024, related to financial instruments arising from the facility agreements which are measured at fair value (see also note 8 to our interim condensed consolidated financial statements ended September 30, 2025). Our income tax benefit was $348 thousand for the three months ended September 30, 2025, as compared to $59 thousand during the same period in the prior year. The reason for the increase during the three months ended September 30, 2025, was primarily attributable to an income tax benefit recognized in connection with the impairment of intangible assets related to the content platform. - 52 - Results of Operations During the Nine Months Ended September 30, 2025 as Compared to the Nine Months Ended September 30, 2024 Our revenues were $7,731 thousand for the nine months ended September 30, 2025, compared to $23,616 thousand during the same period in the prior year. Our revenues from Cortex’s content platform were $6,486 thousand for the nine months ended September 30, 2025, a decrease of $12,754 as compared to $19,240 thousand during the same period in the prior year. The reasons for the decrease during the nine months ended September 30, 2025 are due to the Cortex Adverse Effect. Our revenues from Gix Media’s Search Platform were $1,225 thousand for the nine months ended September 30, 2025, a decrease of $3,151 thousand as compared to $4,376 thousand during the same period in the prior year. The reasons for the decrease during the nine months ended September 30, 2025, is due to: (1) decrease in the amount of search referrals conducted by users, provided by Gix Media to Search Engines, caused primarily by changes and updates to internet browsers’ technology, which have caused a decrease in revenues from the direct model, and (2) a decrease in the number of searches received from Gix Media’s third-party strategic partners in the indirect model mainly as a result of decrease in the credit lines received from third-party strategic partners. Our traffic-acquisition and related costs were $6,336 thousand for the nine months ended September 30, 2025, a decrease of $12,878 compared to $19,214 thousand during the same period in the prior year. The reason for the decrease in the nine months ended September 30, 2025, is due to the decrease in revenues from both the Content and Search Platforms during the nine months ended September 30, 2025, as mentioned above. Our research and development expenses were $387 thousand for the nine months ended September 30, 2025, compared to $1,600 thousand during the same period in the prior year. The reason for the decrease in the nine months ended September 30, 2025, is due to the expense reduction in both the Content and Search Platforms, primarily in salaries and technological services. Our selling and marketing expenses were $579 thousand for the nine months ended September 30, 2025, as compared to $1,440 thousand during the same period in the prior year. The reason for the decrease in the nine months ended September 30, 2025, is due to the expense reduction primarily in salaries both the Content and Search Platforms during the nine months ended September 30, 2025, as compared to the same period in the prior year. Our general and administrative expenses were $1,448 thousand for the nine months ended September 30, 2025, as compared to $1,737 thousand during the same period in the prior year. The reason for the decrease in the nine months ended September 30, 2025, is due to the expense reduction primarily in salaries in both the Content and Search Platforms during the nine months ended September 30, 2025, and professional services during the period before the Uplist as compared to the same period in the prior year. Our depreciation and amortization expenses for the nine months ended September 30, 2025, were $2,291 thousand as compared to $2,282 thousand during the same period in the prior year. An intangible assets and goodwill impairment loss of $5,525 thousand was recorded during the nine months ended September 30, 2025, compared to $4,739 during the nine months ended September 30, 2024. Both intangible assets and goodwill impairment losses recognized during the nine months ended September 30, 2025, and September 30, 2024 were related to Cortex’s content platform (see also note 5.B to our interim condensed consolidated financial statements ended September 30, 2025). Our other expenses were $688 thousand for the nine months ended September 30, 2025, compared to $0 thousand other expenses during the nine months ended September 30, 2024. Other expenses for the nine months ended September 30, 2025, were primarily related to costs incurred in connection with the Uplist and registration for the resale of the Company’s common stock. Other expenses for the nine months ended September 30, 2024, were primarily related to costs incurred in connection with the Uplist which were offset by other income attributable to governmental grants received by Gix Media and Cortex from the Israel Tax Authority in connection with the war in Israel. Our net financial expenses were $11,193 thousand for the nine months ended September 30, 2025, compared to $2,755 thousand during the same period in the prior year. The reason for the increase during the nine months ended September 30, 2025 is mainly attributable to financing expenses related to financial instruments arising from facility agreements entered into during June and July 2024, which are measured at fair value (see also note 8 to our interim condensed consolidated financial statements ended September 30, 2025). - 53 - Our income tax benefit was $501 thousand for the nine months ended September 30, 2025, as compared to $82 thousand during the same period in the prior year. The reason for the increase during the nine months ended September 30, 2025, was primarily attributable to an income tax benefit recognized in connection with the impairment of intangible assets related to the content platform. Liquidity and Capital Resources As of September 30, 2025, we had current assets of $4,103 thousand, consisting of $2,165 thousand in cash and cash equivalents, $206 thousand restricted deposits, $1,327 thousand in accounts receivable and $405 thousand in other current assets. As of September 30, 2025, we had non-current assets of $12,781 thousand, consisting of $28 thousand in deferred taxes, $81 thousand in property and equipment net, $6,464 thousand in intangible assets net and $6,208 thousand in goodwill. As of September 30, 2025, we had $8,552 thousand in current liabilities consisting of $4,736 thousand in accounts payable, $845 thousand in other payables and $2,104 thousand in short term loans and current maturities of long-term loans, and $867 thousand in short-term convertible loans. As of September 30, 2025, we had $2,534 thousand in non-current liabilities consisting of $743 thousand in deferred taxes, $781 thousand in long term loans and $1,010 thousand in earn-out liability which arose from the Metagramm Acquisition. As of December 31, 2024, we had current assets of $7,752 thousand consisting of $624 thousand in cash and cash equivalents, $58 thousand in restricted deposits, $1,832 thousand in accounts receivable, $1,257 thousand in other current assets and $3,981 thousand in the loan to our Parent Company. As of December 31, 2024, we had non-current assets of $14,214 thousand consisting of $56 thousand in deferred taxes, $27 thousand in property and equipment net, $9,552 thousand in intangible assets net and $4,579 thousand in goodwill. As of December 31, 2024, we had $12,929 thousand in current liabilities consisting of $5,935 thousand in accounts payable, $812 thousand in other payables, $5,374 thousand in short term loans and current maturities of a long-term loans, $29 thousand in embedded derivatives and $779 thousand in short-term convertible loans. As of December 31, 2024, we had $1,530 thousand in non-current liabilities consisting of $496 thousand long-term loans and $1,034 thousand in deferred taxes. We had a negative working capital of $4,449 thousand and $5,177 thousand as of September 30, 2025, and December 31, 2024, respectively. During the three months ended September 30, 2025, we had a negative cash flow from operating activities of $1,715 thousand as compared to a positive cash flow from operations of $534 thousand during the same period in the prior year. The decrease in the three months ended September 30, 2025 is mainly due to an increase in the Company’s operating loss and decrease in changes in operating asset and liability items, which was mainly caused as a result of repayment of debts to suppliers and service providers. During the nine months ended September 30, 2025, we had a negative cash flow from operating activities of $2,551 thousand as compared to a positive cash flow from operations of $1,990 thousand during the same period in the prior year. The decrease in the nine months ended September 30, 2025 is mainly due to an increase in the Company’s operating loss and decrease in changes in operating asset and liability items, which was mainly caused as a result of repayment of debts to suppliers and service providers. - 54 - During the three months ended September 30, 2025 and September 30, 2024, we had $0 in cash flow used in investment activities. During the nine months ended September 30, 2025, we had a positive cash flow from investment activities of $12 thousand which arose from Metagramm Acquisition, as compared to $0 during the same period in the prior year. During the three months ended September 30, 2025, we had $1,925 thousand positive cash flow from financing activities as compared to $262 thousand positive cash flow from financing activities during the same period in the prior year. The increase in the three months ended September 30, 2025, was primarily attributable to proceeds of $402 thousand from the exercise of warrants in connection with facility agreements and a private placement, $4,023 thousand received under the July 2025 Purchase Agreement offset by higher net repayments of bank loans and convertible loans, which totaled $2,500 thousand compared to $319 thousand net received of bank loans in the same period of the prior year. During the nine months ended September 30, 2025, we had $4,228 thousand positive cash flow from financing activities as compared to $2,466 thousand negative cash flow from financing activities during the same period in the prior year. The increase in the nine months ended September 30, 2025, was primarily attributable to proceeds of $2,222 thousand from the exercise of warrants in connection with facility agreements and a private placement, $4,023 thousand received under the July 2025 Purchase Agreement and lower net repayments of bank loans and convertible loans, which totaled $2,013 thousand compared to $2,612 thousand in the same period of the prior year. There 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. Gix Media 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; (4) a fixed lien on Gix Media’s intellectual property; and (5) a lien on all of Gix Media’s holdings in Cortex. As of September 30, 2025, the Company has also provided several liens under Financing Agreement with Leumi in connection with the Cortex Acquisition in October 2021, as follows: (1) a guarantee to Leumi of all of Gix Media’s obligations and undertakings to Leumi, unlimited in amount; (2) a subordination letter on behalf of the Company to Leumi; (3) a first ranking asset charge over all of the assets of the Company; and (4) a Deposit Account Control Agreement over the Company’s bank accounts. Subsequent to September 30, 2025, in connection with the Cortex Sale in November 2025, the Company provided Leumi a lien on the Parent Shares received by Gix Media and Leumi no longer had a lien on the shares of Cortex sold by Gix Media to the Purchaser. According to the Financing Agreement, Gix Media undertook to meet financial covenants over the life of the loans, including positive EBITDA. As of September 30, 2025, Gix Media is in compliance with the financial covenants in connection with the Financing Agreement. Going Concern The Company experienced a decrease in its revenues from the Search Platforms and Cortex’s digital content platform as a result of the Cortex Adverse Effect, 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, which adversely impacted the Company’s ability to acquire traffic in the Search Segment and a decrease in revenues from routing of traffic acquired from third-party strategic partners in the Search Segment, as a result of lack of availability of suppliers credit from such third party strategic partners. As a result of the foregoing, the Company’s operations were adversely affected. 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 this Quarterly Report. Management’s response to these conditions included reduction of salaries and related expenses and reduction of professional services in the research and development, selling and marketing functions, reduction of other operational expenses, such as lease costs and overheads, as well as creation of new partnerships and other new income sources. In addition, the company entered into the facility agreements and a private placement, through which it has raised capital. Additionally, following the consummation of the Uplist, the Company received additional funds from the exercise of warrants and the receipt of additional loans in connection with a private placement and facility agreements. Furthermore, on July 14, 2025, the Company closed a private placement transaction with certain accredited investors, pursuant to which the Company received gross proceeds of $4.5 million. In addition, on November 5, 2025, the Company entered into a private placement transaction, subject to the satisfaction of customary closing conditions, receipt of the Stockholder Approval and the execution of definitive agreements related to the Quantum Acquisition. Aggregate gross proceeds to the Company in respect of the November 2025 private placement transaction are expected to be approximately $3.0 million, before deducting fees payable to the Advisor and other offering expenses payable by the Company. For additional information, see “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments—November 2025 Private Placement” above. However, there is significant uncertainty as to whether the Company will be able to secure additional funds when needed. - 55 - ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not required for smaller reporting companies.