What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-13 compared with 2026-05-14 · 223 added, 146 removed, 337 unchanged (52% of the section changed)

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

statements as of March 31, 2026 and 2025, and the related statements of statement operation, statement of changes in shareholders’

statements as of June 30, 2026 and 2025, 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

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

ability to achieve milestones, and/or technological advancements, including with respect to executing on our technology roadmap and

developing practical applications;

potential of quantum computing and estimated market size and market growth including with respect to our long-term business strategies

for quantum computing as a service;

early-stage and rapidly evolving nature of the quantum computing industry;

regarding the scalability, reliability and practical application of quantum technologies;

expectations regarding the development, commercialization and adoption of quantum computing technologies;

ability and timeline to monetize our investments in quantum computing, if at all,

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

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ability to realize the benefits of our acquisitions of Quantum Israel and Metagramm;

early-stage and rapidly evolving nature of the quantum computing industry;

regarding the scalability, reliability and practical application of quantum technologies;

expectations regarding the development, commercialization and adoption of quantum computing technologies;

research and development efforts, anticipated technological advancements, strategic partnerships, market opportunities, competitive

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established internet and technology companies and potential technological obsolescence of our offered platforms;

ability to implement our strategic initiatives, expansion plans and continue to innovate our existing products and services;

ability to grow and manage growth profitably, maintain relationships with customers and suppliers and retain our management and key

ability to maintain the listing of our common stock on the Nasdaq Capital Market;

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and communications challenges, burdens and costs of compliance with foreign laws and political and economic instability in each jurisdiction;

federal, state and local government regulation, in the United States, Europe or Israel and other foreign jurisdictions, including, but

not limited to changes in governmental policies, regulations or funding priorities related to quantum computing and advanced technologies;

federal, state and local government regulation, in the United States, Europe or Israel and other foreign jurisdictions, including,

but not limited to changes in governmental policies, regulations or funding priorities related to quantum computing and advanced

technologies;

macroeconomic

conditions, including global economic and geopolitical conditions, military conflicts, government shutdowns, disruptions to and volatility

and uncertainty in the credit and financial markets, uncertainty in levels of future economic activity, inflation and interest rates;

economic and military conditions in Israel, including the current security situation in Israel, as well as the war’s potential

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in quantum processors.

Computing- Cold Atom Architecture

A quantum computer based on cold atom architecture for high-performance quantum processing unit.

Quantum X Labs activity whose platform leverages advanced laser cooling technology combined with dynamically reconfigurable optical tweezer arrays.

This architecture enables rapid, high-fidelity loading of large- scale qubit registers, extended coherence times, and native support

for high-performance Rydberg-mediated two-qubit gates.

quantum-enhanced algorithmic platforms for biomedical research and clinical trials.

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next-generation quantum-based cyber and communication security.

Security, a 40%-owned affiliate of Quantum X Labs, builds quantum-native security technologies that leverage quantum principles to

enhance protections for communications, data systems, and critical infrastructure.

The subsidiary operates from a foundation of Quantum

X Labs’ error correction IP and broader quantum algorithm knowledge, aiming to strengthen cybersecurity against both classical

and future quantum threats.

Security, a 40%-owned affiliate of Quantum X Labs, builds quantum-native security technologies that leverage quantum principles to enhance

protections for communications, data systems, and critical infrastructure.

The subsidiary operates from a foundation of Quantum X Labs’

error correction IP and broader quantum algorithm knowledge, aiming to strengthen cybersecurity against both classical and future quantum

Atom Accuracy

high-precision quantum timing and sensing systems.

Atom Accuracy, a 40%-owned affiliate of Quantum X Labs, concentrates on quantum-level measurement and timing technologies —

platforms that push beyond classical limits in precision and stability.

While details on products are emerging, this unit contributes

to timing, synchronization, and high-resolution measurement capabilities that can be applied in communications, sensing systems, and

advanced research

Atom Accuracy, a 40%-owned affiliate of Quantum X Labs, concentrates on quantum-level measurement and timing technologies — platforms

that push beyond classical limits in precision and stability.

While details on products are emerging, this unit contributes to timing,

synchronization, and high-resolution measurement capabilities that can be applied in communications, sensing systems, and advanced research

quantum centric supercomputing for advanced nuclear engineering.

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transaction closed on March 4, 2026 (the “Quantum Closing Date”) and resulted in us acquiring 100% of Quantum Israel’s

issued and outstanding share capital on a fully diluted and post-closing basis and Quantum Israel becoming a majority-owned subsidiary

issued and outstanding share capital on a fully diluted and post-closing basis and Quantum Israel becoming a wholly-owned subsidiary

of the Company.

of June 30, 2026, 2,438,088 Exchange Pre-Funded Warrants were exercised into 2,438,087 shares of our common stock.

November 5, 2025, we entered into a securities purchase agreement (the “Original SPA”) with certain accredited investors

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result in an additional $1.68 million of gross proceeds.

November 9, 2025, Gix Media, Cortex Media Group Ltd.

(“Cortex”), and certain founders of Cortex (the “Founders”)

entered into a Share Purchase Agreement (the “Cortex Purchase Agreement”) with Pro Sportority (Israel) Ltd.

Sportority”), a subsidiary of Minute Media Inc.

(the “Minute Media”).

Pursuant to the Cortex Purchase Agreement, Pro

Sportority acquired 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, which resulted in Pro Sportority 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.

As a result, Cortex became a wholly-owned subsidiary of Pro Sportority and Cortex ceased being

a majority-owned direct subsidiary of Gix Media and an indirect subsidiary of the Company.

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 Minute Media (the “Minute Media Shares”), the most senior class of preferred shares of

Minute Media.

Minute Media retains a call option to repurchase the Minute Media Shares from Gix Media under certain conditions, including

insolvency or a change of control of Gix Media.

Media is subject to a two-year non-compete and non-solicitation covenant following the Cortex Closing.

a result of the Cortex Sale, Cortex is presented as discontinued operations in our consolidated financial statements for the three months

ended March 31, 2025.

of June 30, 2026, 297,143 November 2025 Common Warrants were exercised for aggregate gross proceeds of approximately $0.78

of June 2024 Credit Facility

July 29, 2026, we issued 588,553 shares of our common stock and warrants to purchase 588,553 shares of our common stock to certain

lenders in connection with the conversion of an aggregate of $589 thousand of outstanding principal under a credit facility

agreement entered into in June 2024.

As a result of the conversion and issuance of the shares, $73 thousand remains outstanding

under the credit facility.

The warrants have an exercise price of $1.00 per share and a term of three years from the date of issuance.

were incorporated in the State of Delaware on August 16, 1985, under a predecessor name, The InFerGene Company (“InFerGene Company”).

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of Operations

of Operations During the Three Months Ended March 31, 2026 as Compared to the Three Months Ended March 31, 2025

revenues were $353 thousand for the three months ended March 31, 2026, as compared to $529 thousand during the same period in the prior

revenues from Gix Media’s Search Platform for the three months ended March 31, 2026, totaled $343 thousand, as compared

to $529 thousand during the same period in the prior year.

the three months ended March 31, 2026, the number of search referrals to Gix Media’s major customer conducted by users from

the direct model was 3.7 million, as compared to 6.3 million during the three months ended March 31, 2025.

The decrease in user

search referrals is primarily due to changes and updates in internet browsers’ technology, which have reduced the scale of

distribution of the Company’s products through the direct model.

The Company anticipates that its revenues from add-ons to

internet browsers will continue to decrease due to changes and updates in internet browsers’ technology.

During the three

months ended March 31, 2026, the number of search referrals to the Gix Media’s major customer conducted by users from the

indirect model was 2.1 million, as compared to zero during the three months ended March 31, 2025.

While Gix Media’s revenues

from the direct model will continue to decrease its revenues from the search to search model, traffic referral services to search

engines through the referral of traffic of users who engage search ads generated by Gix Media, and its revenues from indirect model

will increase.

traffic-acquisition and related costs were $132 thousand for the three months ended March 31, 2026, a slight decrease as compared to

of Operations During the Three Months Ended June 30, 2026 as Compared to the Three Months Ended June 30, 2025

revenues were $293 thousand for the three months ended June 30, 2026, as compared to $370 thousand during the same period in the prior

revenues from Gix Media’s Search Platform for the three months ended June 30, 2026, totaled $283 thousand, as compared to $354

thousand during the same period in the prior year.

The slight decrease was immaterial and primarily reflects normal period-to-period

fluctuations.

research and development expenses were $0 thousand for the three months ended March 31, 2026, as compared to $16 thousand during the

the three months ended June 30, 2026, our revenues from the direct model were $207 thousand, as compared to $354 thousand during the

three months ended June 30, 2025.

The decrease in revenues from the direct model is primarily due to changes and updates in internet

browsers’ technology, which have reduced the scale of distribution of the Company’s products through the direct model.

Company anticipates that its revenues from add-ons to internet browsers will continue to decrease due to changes and updates in internet

browsers’ technology.

During the three months ended June 30, 2026, our revenues from the indirect model were $76 thousand, as compared

to $0 thousand during the three months ended June 30, 2025.

The increase in revenues from the indirect model is due to an increase in

our revenues from third party strategic partners.

traffic-acquisition and related costs were $134 thousand for the three months ended June 30, 2026, as compared to $50 thousand during

the same period in the prior year.

The increase in the traffic-acquisition and related costs is primarily due to the increase in our

revenues from third party strategic partners and search to search model.

research and development expenses were $185 thousand for the three months ended June 30, 2026, as compared to $20 thousand during the

same period in the prior year.

The reason for the decrease in the three months ended March 31, 2026 is due to the expense reduction primarily

in salaries and professional services during the three months ended March 31, 2026.

selling and marketing expenses decreased to $25 thousand for the three months ended March 31, 2026, a slight increase as compared to

The reason for the increase in the three months ended June 30, 2026 is due to the consolidation of Quantum

Israel’s financial statements following our acquisition of Quantum Israel in March 2026.

selling and marketing expenses were $26 thousand for the three months ended June 30, 2026, a slight decrease as compared to $30 thousand

during the same period in the prior year.

general and administrative expenses were $1,015 thousand for the three months ended June 30, 2026, as compared to $558 thousand during

the same period in the prior year.

The reason for the increase is due to higher professional services expenses in the period following

the uplisting to the Nasdaq Capital Market in June 2025 (the “Uplist”) in the three months ended June 30, 2026, as compared

to the same period in the prior year and the consolidation of Quantum Israel’s financial statements following our acquisition of

Quantum Israel in March 2026.

depreciation and amortization expenses for the three months ended June 30, 2026, were $228 thousand a slight decrease as compared to

$235 thousand during the same period in the prior year.

The slight increase was immaterial and primarily reflects normal period-to-period

fluctuations.

general and administrative expenses were $500 thousand for the three months ended March 31, 2026, as compared to $197 thousand during

other expenses for the three months ended June 30, 2026, were $100 thousand compared to $500 thousand during the three months ended June

Other expenses for the three months ended June 30, 2026, were primarily related to costs incurred in connection with the Quantum

Israel acquisition.

Other expenses for the three months ended June 30, 2025, were primarily related to costs incurred in connection with

the Uplist and registrations for the resale of the Company’s common stock with the SEC.

gain from deconsolidation of a subsidiary for the three months ended June 30, 2026, was $3,831 thousand as compared to $0 thousand

during the same period in the prior year.

The gain from deconsolidation of a subsidiary recognized during the three months ended

June 30, 2026, resulted from the loss of control of CliniQuantum following the sale by certain CliniQuantum shareholders of

approximately 54.01% of CliniQuantum’s outstanding equity to a third party in J une

For further details please refer to note 6.D to our interim consolidated financial statements for the six months

ended June 30, 2026.

net financial expenses were $113 thousand for the three months ended June 30, 2026, as compared to $7,661 thousand net financial expenses

during the same period in the prior year.

The decrease during the three months ended June 30, 2026, is mainly attributable to financing

expenses during the three months ended June 30, 2025, related to financial instruments arising from the Company’s facility agreements,

which are measured at fair value.

tax benefit was $94 thousand for the three months ended June 30, 2026, as compared to $67 thousand during the

same period in the prior year.

The reason for the increase in our tax benefit during the three months ended June 30, 2026, is

due to the decrease in income before tax in the Search Platform.

loss from discontinued operations was $0 thousand for the three months ended June 30, 2026, as compared to $3,801 thousand for the three

months ended June 30, 2025.

For further details regarding the amounts recorded in respect of discontinued operations in the three months

ended June 30, 2025, please refer to note 3 to our interim consolidated financial statements for the six months ended June 30, 2026.

of Operations During the Six Months Ended June 30, 2026 as Compared to the Six Months Ended June 30, 2025

revenues were $646 thousand for the six months ended June 30, 2026, as compared to $899 thousand during the same period in the prior

revenues from Gix Media’s Search Platform for the six months ended June 30, 2026, totaled $626 thousand, as compared to $883 thousand

during the same period in the prior year.

the six months ended June 30, 2026, our revenues from the direct model were $453 thousand, as compared to $883 thousand during the six

months ended June 30, 2025.

The decrease in revenues from the direct model is primarily due to changes and updates in internet browsers’

technology, which have reduced the scale of distribution of the Company’s products through the direct model.

The Company anticipates

that its revenues from add-ons to internet browsers will continue to decrease due to changes and updates in internet browsers’

During the six months ended June 30, 2026, our revenues from the indirect model were $173 thousand, as compared to $0 thousand

during the six months ended June 30, 2025.

The increase in revenues from the indirect model is due to an increase in our revenues from

third party strategic partners.

traffic-acquisition and related costs were $266 thousand for the six months ended June 30, 2026, as compared to $184 thousand during

the same period in the prior year.

The increase in the traffic-acquisition and related costs is primarily due to the increase in our

revenues from third party strategic partners and search to search mode.

research and development expenses were $185 thousand for the six months ended June 30, 2026, as compared to $36 thousand during the same

period in the prior year.

The reason for the increase in the six months ended June 30, 2026, is due to the consolidation of Quantum Israel’s

financial statements following our acquisition of Quantum Israel in March 2026.

selling and marketing expenses slightly increased to $51 thousand for the six months ended June 30, 2026, as compared to $50

thousand during the same period in the prior year.

general and administrative expenses were $1,515 thousand for the six months ended June 30, 2026, as compared to $755 thousand during

the same period in the prior year.

The reason for the increase is due to higher professional services expenses in the period following

the uplisting to the Nasdaq Capital Market in June 2025 (the “Uplist”) in the three months ended March 31, 2026, as compared

to the same period in the prior year.

depreciation and amortization expenses for the three months ended March 31, 2026, were $224 thousand as compared to $173 thousand during

the Uplist in the six months ended June 30, 2026, as compared

to the same period in the prior year and the consolidation of Quantum Israel’s financial statements following our acquisition of

Quantum Israel in March 2026.

depreciation and amortization expenses for the six months ended June 30, 2026, were $452 thousand as compared to $408 thousand during

the same period in the prior year.

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and amortization related to the acquisition of Metagramm on March 24, 2025.

During the three months ended March 31, 2026, the depreciation

During the six months ended June 30, 2026, the depreciation

and amortization expenses were recorded in full, compared to partial recognition during the same period prior year.

other expenses for the three months ended March 31, 2026, were $22 compared to $44 during the three months ended March 31, 2025.

expenses for the three months ended March 31, 2026, were primarily related to costs incurred in connection with the Quantum Israel acquisition.

Other expenses for the three months ended March 31, 2025, were primarily related

to costs incurred in connection with the Uplist and registrations for the resale of the Company’s common stock with the SEC.

net financial expenses were $71 thousand for the three months ended March 31, 2026, as compared to $2,867 thousand net financial expenses

other expenses for the six months ended June 30, 2026, were $122 thousand compared to $544 thousand during the six months ended June

Other expenses for the six months ended June 30, 2026, were primarily related to costs incurred in connection with the Quantum

Israel acquisition.

Other expenses for the six months ended June 30, 2025, were primarily related to costs incurred in connection with

the Uplist and registrations for the resale of the Company’s common stock with the SEC.

gain from deconsolidation of a subsidiary for the six months ended June 30, 2026, was $3,831 thousand as compared to $0 thousand during

the same period in the prior year.

The gain from deconsolidation of a subsidiary recognized during the six months ended June 30, 2026

resulted from the loss of control of CliniQuantum following the sale by certain CliniQuantum shareholders of approximately 54.01%

of CliniQuantum’s outstanding equity to a third party in June 2026.

For further details please refer to note 6.D to our interim consolidated financial statements for the six months

ended June 30, 2026.

net financial expenses were $184 thousand for the six months ended June 30, 2026, as compared to $10,528 thousand net financial expenses

during the same period in the prior year.

The decrease during the three months ended March 31, 2026, is mainly attributable to financing

expenses during the three months ended March 31, 2025, related to financial instruments arising from the Company’s facility agreements,

The decrease during the six months ended June 30, 2026, is mainly attributable to financing

expenses during the six months ended June 30, 2025, related to financial instruments arising from the Company’s facility agreements,

which are measured at fair value.

income tax benefit was $16 thousand for the three months ended March 31, 2026, as compared to an income tax expenses of $42 thousand

during the same period in the prior year.

The reason for the decrease in our income tax expense during the three months ended March 31,

2026, is due to the decrease in income before tax in the Search Platform.

loss from discontinued operations was $0 thousand in the three months ended March 31, 2026, as compared to $880 thousand for the

three months ended March 31, 2025.

For further details regarding the amounts recorded in respect of discontinued operations in the

three months ended March 31, 2025, please refer to note 3 to our Interim consolidated financial statements for the three months ended

March 31, 2026.

tax benefit was $110 thousand for the six months ended June 30, 2026, as compared $25 thousand during the

same period in the prior year.

The reason for the increase in our tax benefit during the six months ended June 30, 2026, is due

to the decrease in income before tax in the Search Platform.

loss from discontinued operations was $0 thousand for the six months ended June 30, 2026, as compared to $4,681 thousand for the six months

ended June 30, 2025.

For further details regarding the amounts recorded in respect of discontinued operations in the six months ended

June 30, 2025, please refer to note 3 to our interim consolidated financial statements for the six months ended June 30, 2026.

and Capital Resources

of March 31, 2026, we had current assets of $2,894 thousand, consisting of $1,793 thousand in cash and cash equivalents, $45 thousand

of June 30, 2026, we had current assets of $3,497 thousand, consisting of $2,435 thousand in cash and cash equivalents, $48 thousand

restricted deposits, $281 thousand in accounts receivable, $394 thousand in other current assets and $339 thousand in related parties.

of March 31, 2026, we had non-current assets of $24,813 thousand, consisting of $9 thousand in deferred taxes, $44 thousand in property

and equipment net, $3,442 thousand in intangible assets, net, $600 thousand in financial assets measured at cost method and $20,718 thousand

in goodwill, of which $14,326 thousand arose from the acquisition of Quantum Israel.

of March 31, 2026, we had $4,243 thousand in current liabilities consisting of $1,111 thousand in accounts payable, $391 thousand in

government authorities, $268 thousand in earn-out payable, $500 thousand in other payables, $1,048 thousand in short term loans

and current maturities of long-term loans, $58 thousand in related parties and $867 thousand in short-term convertible loans.

of March 31, 2026, we had $1,779 thousand in non-current liabilities consisting of $663 thousand in deferred taxes, $390 thousand in

long term loans and $726 thousand in earn-out liability which arose from the acquisition of Metagramm.

of June 30, 2026, we had non-current assets of $27,670 thousand, consisting of $5 thousand in deferred taxes, $205 thousand in property

and equipment net, $2,299 thousand in intangible assets net, $600 thousand in investment in equity securities and $20,721 thousand

in goodwill and $3,840 thousand arose from Investments accounted for using the equity method.

of June 30, 2026, we had $4,047 thousand in current liabilities consisting of $1,146 thousand in accounts payable, $368 thousand in government

authorities, $268 thousand in earn-out payable, $472 thousand in other payables, $1,043 thousand in short term loans and current maturities

of long-term loans, $83 thousand in related parties and $667 thousand in short-term convertible loans.

of June 30, 2026, we had $1,337 thousand in non-current liabilities consisting of $416 thousand in deferred taxes, $195 thousand in long

term loans and $726 thousand in earn-out liability which arose from the acquisition of Metagramm.

of December 31, 2025, we had current assets of $1,652 thousand consisting of $1,018 thousand in cash and cash equivalents, $20 thousand

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of December 31, 2025, we had non-current assets of $9,105 thousand consisting of $12 thousand in deferred taxes, $56 thousand in property

and equipment net, $600 thousand in financial assets measured at cost method, $2,045 thousand in intangible assets net and $6,392 thousand

of December 31, 2025, we had $4,063 thousand in current liabilities consisting of $1,204 thousand in accounts payable, $355 thousand in government authorities, $201 thousand in earn-out payable, $395 thousand

in other payables, $1,041 thousand in short term loans and current maturities of a long-term loans and $867 thousand in short-term convertible

and equipment net, $600 thousand in investment in equity securities, $2,045 thousand in intangible assets net and $6,392 thousand

of December 31, 2025, we had $4,063 thousand in current liabilities consisting of $1,204 thousand in accounts payable, $355 thousand

in government authorities, $201 thousand in earn-out payable, $395 thousand in other payables, $1,041 thousand in short term loans and

current maturities of a long-term loans and $867 thousand in short-term convertible loans.

of December 31, 2025, we had $1,705 thousand in non-current liabilities consisting of $586 thousand long-term loans, $793 thousand in

earn out liability and $326 thousand in deferred taxes.

had a negative working capital of $1,349 thousand as compared to a negative working capital of $2,411 thousand as of March 31, 2026,

and December 31, 2025, respectively.

the three months ended March 31, 2026, we had a negative cash flow from operating activities from continuing operations of $604 thousand

as compared to a positive cash flow from operations of $191 thousand during the same period in the prior year.

The decrease in the three

months ended March 31, 2026 is mainly due to a decrease in changes in assets and liabilities items in an amount of $224 thousand during

the three months ended March 31, 2026, as compared an increase in the amount of $234 thousand during the three months ended March 31,

2025 mainly due to higher payments to the Company’s accounts payables during the three month period ended March 31, 2026, as compared

to the same period prior year.

the three months ended March 31, 2026, we had a positive cash flow from investment activities of $193 thousand which arose from the acquisition

of Quantum Israel, as compared to $12 thousand during the same period in the prior year.

the three months ended March 31, 2026, we had $1,211 thousand positive cash flow from financing activities as compared to $188 thousand

negative cash flow from financing activities during the same period in the prior year.

The increase in the three months ended March 31,

2026, was primarily due to $1,400 received under the November 2025 Purchase Agreement.

had a negative working capital of $550 thousand as compared to a negative working capital of $2,411 thousand as of June 30, 2026, and

December 31, 2025, respectively.

During the three months ended

June 30, 2026, we had a negative cash flow from operating activities from continuing operations of $1,062 thousand as compared to $480

thousand during the same period in the prior year.

The increase during the three months ended June 30, 2026, is mainly attributable to

higher payments of accounts payable, as compared to the same period in the prior year.

During the six months ended June

30, 2026, we had a negative cash flow from operating activities from continuing operations of $1,666 thousand as compared to $289 thousand

during the same period in the prior year.

The increase during the six months ended June 30, 2026, is mainly attributable to higher payments

of accounts payable, as compared to the same period in the prior year.

During the three months ended

June 30, 2026, we had a negative cash flow from investment activities from continuing operations of $306 thousand, mainly used for the

purchase of property and equipment, as compared to $0 during the same period in the prior year.

During the six months ended June

30, 2026, we had a negative cash flow from investment activities from continuing operations of $113 thousand, primarily due to the purchase

of property and equipment, partially offset by the acquisition of Quantum Israel, as compared to a positive cash flow from investment

activities from continuing operations of $12 thousand during the same period in the prior year, which arose from the Metagramm Acquisition.

During the three months ended

June 30, 2026, we had $2,013 thousand positive cash flow from financing activities from continuing operations as compared to $2,321 thousand

during the same period in the prior year.

The decrease during the three months ended June 30, 2026, was primarily due to lower amount

of net bank loans receipt during the three months period ended June 30, 2026, as compared to the same period prior year.

During the six months ended June

30, 2026, we had $3,224 thousand positive cash flow from financing activities from continuing operations as compared to $2,133 thousand

during the same period in the prior year.

The increase during the six months ended June 30, 2026, was primarily due to $1,400 thousand

received under the November 2025 Purchase Agreement.

are no limitations in the Company’s Amended and Restated Certificate of Incorporation on the Company’s ability to borrow

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Control Agreement over the Company’s bank accounts.

In addition, in connection with

the Cortex Sale, Gix Media provided Leumi a lien on the Minute Media Shares and Leumi released its lien on the shares of Cortex sold by

addition, in connection with the Cortex Sale, Gix Media provided Leumi a lien on the Minute Media Shares and Leumi released its lien

on the shares of Cortex sold by Gix Media.

to the Financing Agreement, Gix Media undertook to meet a financial covenant over the life of the loans.

As of March 31, 2026, Gix Media

As of June 30, 2026, Gix Media

is in compliance with the financial covenant in connection with the Financing Agreement.

During the years ended December 31, 2024, and 2025 and the three months ended March 31, 2026, we experienced a decrease in our 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, following the lack of availability of suppliers credit from such third party strategic partners.

a result of the foregoing, the Company’s operations were adversely affected.

a result of such decreases, for the three months ended March 31, 2026, we recorded an operating loss from continuing operations of $550

thousand compared to $55 thousand during the three months ended March 31, 2025, and a net loss of $605 thousand compared to $3,844 thousand

during the three months ended March 31, 2025.

As of March 31, 2026, we had cash and cash equivalents $1,793 thousand, bank loans and

convertible loans of $2,305 thousand and an accumulated deficit of $46,652 thousand.

Such a decline in revenues raise a substantial doubt

about our ability to continue as a going concern during the 12-month period following the issuance date of our consolidated financial

statements for the three months ended March 31, 2026.

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 raised funds during 2025, increasing its cash

balance, as follows:

(1) pursuant to the consummation of the Uplist , the Company received during June and July 2025, aggregate gross

proceeds of $2,852 in connection with a private placement and three facility agreements, consisting of $630 from the receipt of additional

loans and $2,222 from the exercise of warrants and (2) on July 14, 2025, the Company closed an additional private placement transaction

with certain accredited investors, pursuant to which the Company received gross proceeds of $4.5 million.

Moreover, on March 4, 2026,

the Company closed a private placement transaction with certain accredited investors, pursuant to which the Company received gross proceeds

of $1.4 million.

However, there is significant uncertainty as to whether the Company will be able to secure additional funds when needed.

Interim consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to

continue as a going concern.

the years ended December 31, 2024, and 2025 and the six months ended June 30, 2026, we experienced a decrease in our 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, following the 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.

a result of such decreases, for the six months ended June 30, 2026, we recorded an operating loss from continuing operations of $1,945

thousand compared to $1,078 thousand during the six months ended June 30, 2025.

As of June 30, 2026, we had cash and cash equivalents

of $2,435 thousand, bank loans and convertible loans of $1,905 thousand and an accumulated deficit of $44,167 thousand.

Such a decline

in revenues raises a substantial doubt about our ability to continue as a going concern during the 12-month period following the issuance

date of this Quarterly Report.

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 raised funds during 2025,

increasing its cash balance, as follows:

(1) pursuant to the consummation of the Uplist , the Company received during June and July

2025, aggregate gross proceeds of $2,852 thousand in connection with a private placement and three facility agreements, consisting

of $630 thousand from the receipt of additional loans and $2,222 thousand from the exercise of warrants and (2) on July 14, 2025,

the Company closed an additional private placement transaction with certain accredited investors, pursuant to which the Company

received gross proceeds of $4.5 million.

Moreover, on March 4, 2026, the Company closed a private placement transaction with certain

accredited investors, pursuant to which the Company received gross proceeds of $1.4 million and during June and July 2026, the

Company received total proceeds of $2,413 thousand and $1,505 thousand, respectively from the exercise of warrants.

However, there is

significant uncertainty as to whether the Company will be able to secure additional funds when needed.

Interim consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue

as a going concern.

of Additional Capital

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What changed 10-Q

Item 2. Management’s Discussion and Analysis