What changed in this filing

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Item 1A. Risk Factors

2025-08-19 compared with 2025-05-14 · 117 added, 119 removed, 3 unchanged (99% of the section changed)

Our business faces many risks,

a number of which are described under the caption “Risk Factors” in our Annual Report.

Other than as set forth below, there

have been no material changes from the risk factors previously disclosed in our Annual Report.

The risks described in our Annual Report

and below may not be the only risks we face.

Other risks of which we are not yet aware, or that we currently believe are not material,

may also materially and adversely impact our business operations or financial results.

If any of the events or circumstances described

in the risk factors contained in our Annual Report or described below occurs, our business, financial condition or results of operations

could be adversely impacted and the value of an investment in our securities could decline.

Investors and prospective investors should

consider the risks described in our Annual Report and below, and the information contained under the caption “Forward-Looking Statements”

and elsewhere in this Quarterly Report on Form 10-Q before deciding whether to invest in our securities.

We may not realize the anticipated benefits of the acquisition

In March 2025, we acquired

Metagramm, a Company that specializes in developing advanced writing assistance tools and licenses its products on a subscription basis.

business faces many risks, a number of which are described under the caption “Risk Factors” in our Annual Report.

as set forth below, there have been no material changes from the risk factors previously disclosed in our Annual Report.

The risks described

in our Annual Report and below may not be the only risks we face.

Other risks of which we are not yet aware, or that we currently believe

are not material, may also materially and adversely impact our business operations or financial results.

If any of the events or circumstances

described in the risk factors contained in our Annual Report or described below occurs, our business, financial condition or results

of operations could be adversely impacted and the value of an investment in our securities could decline.

Investors and prospective investors

should consider the risks described in our Annual Report and below, and the information contained under the caption “Forward-Looking

Statements” and elsewhere in this Quarterly Report on Form 10-Q before deciding whether to invest in our securities.

may not realize the anticipated benefits of the acquisition of Metagramm

March 2025, we acquired Metagramm, a company that specializes in developing advanced writing assistance tools and licenses its

products on a subscription basis.

Metagramm’s products and revenue model differs from those of our current platforms.

We may not be able to assimilate or integrate

the acquired personnel, operations, products, services, and technologies of Metagramm successfully or effectively manage the business

of Metagramm and our management may be distracted from operating our business.

We also may not achieve the anticipated benefits from the

acquisition of Metagramm due to a number of factors, including, without limitation, unanticipated costs or liabilities associated with

the acquisition and difficulty of incorporating Metagramm’s technology into our platforms.

If the acquisition of Metagramm fails

to meet our expectations, our operating results, business, and financial condition may suffer.

Our common stock may

never be listed on a recognized national exchange

Our common stock trades on

the OTCQB Pink Sheets.

You should not assume that any effort to uplist the trading of our common stock to a recognized national exchange

would be successful, or if successful, that compliance with the listing requirements of such recognized national exchange will be maintained,

including but not limited to requirements associated with maintenance of a minimum net worth, minimum stock price, minimum number of

shareholders, and ability to establish a sufficient number of market makers.

A failure or inability to uplist the trading of our common

stock to a recognized national exchange, or any failure to maintain compliance with the listing requirements of such recognized national

exchange, may materially adversely affect our Company and the trading price of our common stock.

In addition, failure to uplist

to a recognize national exchange may adversely impact our ability to finance our operations through investments, which may in turn may

impact our ability to pay our obligations, including under our financing agreements, loan agreements and credit facilities, when they

The foregoing risks may have

a material adverse effect on our Company and the trading price of our common stock.

Unless and until our

common stock is approved for listing on a recognized national exchange, many potential investors may be unwilling to purchase our common

Our common stock currently

trades on the OTCQB Pink Sheets.

Many funds and other potential investors are unable or unwilling to purchase stocks on the OTCQB Pink

Sheets, being required or simply preferring to purchase stocks that have been approved for listing on a recognized national exchange,

such as the Nasdaq or the NYSE.

Recognizing this situation, on September 13, 2024, we submitted an application to uplist to the Nasdaq.

The timing of the Nasdaq uplisting process will depend on a variety of factors, including, but not limited to, overall market conditions.

No assurance can be given that our application will be approved or that a trading market will develop.

Unless and until we successfully

uplist, potential investor interest in our common stock may be muted, which may adversely affect our company and the trading price of

our common stock.

The foregoing risks may have a material adverse effect on our Company and the trading price of our common stock.

We may not be able

to retain and attract programmatic advertisers, and the associated payments received from such programmatic advertisers’ ads on

websites which have been categorized as “Made for Advertising” may be adversely affected.

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 negatively impacted Cortex’s business and operations.

In connection with the foregoing,

a significant customer of Cortex has decided to stop advertising on Cortex’s sites.

Additional advertising customers of Cortex

may opt to stop advertising on Cortex’s sites, which will impact Cortex’s, and as a result thereof, the Company’s current

and future revenue streams and results of operations.

The foregoing issues could lead to decreased advertiser interest in Cortex’s

sites, potentially resulting in lower bids for ad space, and as a result thereof, lower revenues from Cortex’s business, and decrease

in the Company’s results of operation.

Insolvency proceedings

filed against Gix Media may adversely affect our financial condition and operations

The Petition filed against

Gix Media for the court to issue an order to commence insolvency proceedings, may harm the ability of Gix Media to carry out its business

as usual, meet its obligations or pay its debt as they come due.

Furthermore, due to the filing of the Petition, Leumi may demand immediate

repayment of the loans outstanding under the Financing Agreement.

We are currently unable to predict the outcome of the legal proceedings.

In the event that the Petition is granted in part or in full, or an order is issued, our business, financial condition, or results of

operations may be adversely affected.

We may not be able

to receive credit facility to fund our operations, on favorable terms, or at all.

We generally finance our

operations primarily through a combination of cash flow generated from operations and borrowings under our credit facilities, loans,

and through credit with our vendors.

Our ability to access capital through our existing credit facilities and raise additional capital

by expanding our credit facilities on economically favorable terms (including available borrowing line and the rate of interest charged

thereunder) or at all, or if we are in violation of our financial covenants in the future and do not receive a waiver, depends on our

ability to stay in compliance with the Financing Agreement.

The Financing Agreement poses certain limitations, as explained elsewhere

in this Quarterly Report.

In addition, and as a result of the decrease in the Company’s revenues, our financial performance has

been negatively impacted, which may affect the terms on which we are able to obtain credit facilities and loans.

If adequate capital is not

available at the time we need it, we may have to curtail future growth or change our expansion plans, which could have a material adverse

effect on us.

If borrowing under our existing

credit facilities is reduced, or otherwise becomes unavailable, or we are unable to arrange substitute financing facilities or other

sources of capital, our ability to fund our operations would be impaired, which would have a material adverse effect on our results of

We may be unable to

pay our obligations when they become due, including under the Financing Agreement.

We have financed our acquisitions

principally through the raising of debt, credit facilities, and our operations through credit with our vendors.

Our ability to continue

our operations and to pay our obligations, including under the Financing Agreement and credit facilities (as described elsewhere in this

Quarterly Report), when they become due is contingent upon obtaining additional financing.

Furthermore, due to the filing of the Petition,

Leumi may demand immediate repayment of the loans outstanding under the Financing Agreement.

During August 2024, we renegotiated

the terms of the Financing Agreement and entered into the Fifth and Sixth Addendum to the Financing Agreement.

The availability of the

credit facilities to Gix Media is subject to us depositing the Investment Amount by the Deposit Date with Gix Media.

If the Company,

Cortex and Gix Media cannot maintain compliance with the terms and covenant of the Financing Agreement, or if we are unable to obtain

sufficient amounts of additional capital, we may be required to reduce the scope of our planned operations, and/or consider reductions

in personnel costs or other operating costs, in addition to the measures currently contemplated pursuant to the Financing Agreement.

UNREGISTERED SALES OF EQUITY SECURITIES

AND USE OF PROCEEDS

not be able to assimilate or integrate the acquired personnel, operations, products, services, and technologies of Metagramm

successfully or effectively manage the business of Metagramm and our management may be distracted from operating our business.

also may not achieve the anticipated benefits from the acquisition of Metagramm due to a number of factors, including, without

limitation, unanticipated costs or liabilities associated with the acquisition and difficulty of incorporating Metagramm’s

technology into our platforms.

If the acquisition of Metagramm fails to meet our expectations, our operating results, business, and

financial condition may suffer.

has concluded that there is substantial doubt about our ability to continue as a going concern, and our condensed financial statements

for the quarter ended June 30, 2025 include an explanatory paragraph as to our ability to continue as a going concern, which could prevent

us from obtaining new financing on reasonable terms or at all.

we have had recurring losses and negative cash flows from operating activities, substantial doubt exists regarding our ability to remain

as a going concern at the same level at which we are currently performing.

Accordingly, our condensed financial statements for the quarter

ended June 30, 2025 include an explanatory paragraph as to our potential inability to continue as a going concern.

The doubts regarding

our potential ability to continue as a going concern may adversely affect our ability to obtain new financing on reasonable terms or

in Israel, including Israel’s conflicts with Hamas and other parties in the region, as well as political and economic instability,

may impede our ability to operate and harm our financial results.

all of our operations are conducted in Israel and all members of our board of directors and management as well as all of our employees

and consultants, including employees of our service providers, are located in Israel, our business and operations are directly affected

by economic, political, geopolitical and military conditions in Israel.

Since the establishment of the State of Israel in 1948 and in

recent years, armed conflicts between Israel and its neighboring countries and terrorist organizations active in the region have involved

missile strikes, hostile infiltrations, terrorism against civilian targets in various parts of Israel, and recently abduction of soldiers

and citizens.

the October 7th attacks by Hamas terrorists in Israel’s southern border, Israel declared war against Hamas and since then, Israel

has been involved in military conflicts with Hamas, Hezbollah, a terrorist organization based in Lebanon, and Iran, both directly and

through proxies like the Houthi movement in Yemen and armed groups in Iraq and other terrorist organizations.

Additionally, following

the fall of the Assad regime in Syria, Israel has conducted limited military operations targeting the Syrian army, Iranian military assets

and infrastructure linked to Hezbollah and other Iran-supported groups.

Although certain ceasefire agreements have been reached, and

some Iranian proxies have declared a halt to their attacks, there is no assurance that these agreements will be upheld, military activity

and hostilities continue to exist at varying levels of intensity, and the situation remains volatile, with the potential for escalation

into a broader regional conflict involving additional terrorist organizations and possibly other countries.

In June 2025, in light of

continued nuclear threats and intelligence assessments indicating imminent attacks, Israel launched a preemptive strike directly targeting

military and nuclear infrastructure inside Iran, aimed at disrupting Iran’s capacity to coordinate or launch further hostilities

against Israel, as well as to degrade its nuclear program.

In response, Iran launched multiple waves of drones and ballistic missiles

at Israeli cities.

While most of these attacks were intercepted, several caused civilian casualties and damage to infrastructure.

Israeli military conducted additional operations against Iranian assets.

While a ceasefire was reached between Israel and Iran in June

2025 after 12 days of hostilities, the situation remains volatile.

A broader regional conflict involving additional state and non-state

actors remains a significant risk.

Iran is also believed to have a strong influence among extremist groups in the region, such as Hamas

in Gaza, Hezbollah in Lebanon, the Houthi movement in Yemen and various rebel militia groups in Syria and Iraq.

These situations may

potentially escalate in the future to more violent events which may affect Israel and us.

our facilities have not been damaged during the current war, the hostilities with Hamas, Hezbollah, Iran and its proxies and others have

caused and may continue to cause damage to private and public facilities, infrastructure, utilities, and telecommunication networks,

and potentially disrupting our operations and supply chains.

In addition, Israeli organizations, government agencies and companies have

been subject to extensive cyber attacks.

This could lead to increased costs, risks to employee safety, and challenges to business continuity,

with potential financial losses.

The continuation of the war has also led to a deterioration of certain indicators of Israel’s

economic standing, for instance, a downgrade in Israel’s credit rating by rating agencies (such as by Moody’s, S&P Global,

connection with the ongoing war, several hundred thousand Israeli military reservists were drafted to perform immediate military service,

and military reservists are expected to perform long reserve duty service in the coming years.

As of date of this Quarterly Report on

Form 10-Q, none of our employees or consultants in Israel have been called to reserve duty and there has been no material impact on our

business from past reserve services.

However, certain of our employees and consultants in Israel, in addition to employees of our service

providers located in Israel, may be called, for service in the current or future wars or other armed conflicts with Hamas, as well as

the other pending or future armed conflicts in which Israel is or may become engaged, and such persons may be absent for an extended

period of time.

As a result, our operations may be disrupted by such absences, which disruption may materially and adversely affect our

business, prospects, financial condition and results of operations.

Additionally, the absence of employees of our Israeli suppliers and

contract manufacturers due to their military service in the current or future wars or other armed conflicts may disrupt their operations,

which in turn may materially and adversely affect our ability to deliver or provide products and services to customers.

commercial insurance does not cover losses that may occur as a result of events associated with war and terrorism.

Although the Israeli

government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot

assure you that this government coverage will be maintained or that it will sufficiently cover our potential damages.

Any losses or damages

incurred by us could have a material adverse effect on our business.

global perception of Israel and Israeli companies, influenced by actions by international judicial bodies, may lead to increased sanctions

and other negative measures against Israel, as well as Israeli companies and academic institutions.

There is also a growing movement

among countries, activists, and organizations to boycott Israeli goods, services and academic research or restrict business with Israel,

which could affect business operations.

If these efforts become widespread, along with any future rulings from international tribunals

against Israel, they could significantly and negatively impact business operations.

of the date of this Quarterly Report on Form 10-Q, the Company’s revenues have not been directly negatively affected by the ongoing

hostilities in the region, as the primary source of its revenues is predominantly from the U.S.

or European markets, that have been not

significantly impacted by the ongoing hostilities in Israel.

As a result, as of the date of this Quarterly Report on Form 10-Q the Company’s

abilities to deliver or provide products and services to its customers have not been materially affected.

prior to the October 2023 war, the Israeli government pursued changes to Israel’s judicial system and has recently renewed its

efforts to effect such changes.

In response to the foregoing developments, certain individuals, organizations, and institutions, both

within and outside of Israel, voiced concerns that such proposed changes, if adopted, may negatively impact the business environment

Such proposed changes may also lead to political instability or civil unrest.

If such changes to Israel’s judicial system

are pursued by the government and approved by the parliament, this may have an adverse effect on our business, results of operations,

and ability to raise additional funds, if deemed necessary by our management and board of directors.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

DEFAULTS UPON SENIOR SECURITIES

MINE SAFETY DISCLOSURE

Not applicable.

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 1A. Risk Factors