UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 20212022

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 000-15746

VIEWBIX INC.

(Exact Name of Registrant As Specified In Its Charter)

Registrant’s Telephone Number, Including Area Code: +972 9-774-1505

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐ No ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes ☐ No ☒

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes ☐ No☒

 ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $815,277273,000 as of June 30, 2021,2022, based upon the closing price of the common stock on that date, which was $0.0401.

As of March 17, 2022, there were 34,753,669 shares of common stock, par value $0.0001 per share (“Common Stock”) on that date, which was $0.70.

As of March 20, 2023, there were 14,783,964 shares of Common Stock outstanding.

TABLE OF CONTENTS

Cautionary Statement regarding Forward-Looking Statements

This Annual Report on Form 10-K includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Registrant has based these forward-looking statements on its current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about the Registrant that may cause its actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “could”, “would”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “continue”, or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in this Annual Report on Form 10-K and in the Registrant’s other Securities and Exchange Commission filings.

PART I

ITEM 1. DESCRIPTION OF BUSINESS

Overview and recent developments

Viewbix Inc. (f/k/a Virtual Crypto Technologies, Inc., f/k/a Emerald Medical Applications Corp.) (the “Registrant”, “Viewbix” or the “Company”) was incorporated in the State of Ohio in 1989Delaware on August 16, 1985, under a predecessor name, Zaxis International, Inc.The InFerGene Company (“Zaxis”InFerGene Company”). On August 25, 1995, Zaxisa wholly owned subsidiary of InFerGene Company merged with a subsidiary of TheZaxis International, Inc., an Ohio corporation, which following such merger, the surviving entity, InFerGene Company, a Delaware corporation, which entity changed its name to Zaxis International, Inc. and the Company was reincorporated in Delaware under the name of(“Zaxis”).

On March 16, 2015, Zaxis International, Inc. On December 30, 2014, Zaxis entered into an agreement withand Emerald Medical Applications Ltd., a private limited liability company organized under the laws of the State of Israel (“Emerald Israel”).

On March 16, 2015, Zaxis and Emerald Israel executed a share exchange agreement, which closed on July 14, 2015, and Emerald Israel became the Company’s wholly-owned subsidiary. Accordingly, on September 14, 2015, the Company changed its name to Emerald Medical Applications Corp. Emerald Israel was engaged in the business of developing Emerald Israel’s DermaCompare technology and the development, sale and service of imaging solutions utilizing its DermaCompare software for use in derma imaging and analytics for the detection of skin cancer. On January 29, 2018, the Company ceased the DermaCompare operations of its former subsidiary.On May 2, 2018, the District Court of Lod, Israel issued a winding-up order for Emerald Israel and appointed an Israeli attorney as special executor for Emerald Israel.

On January 17, 2018, the Company formed a new wholly-owned subsidiary under the laws of the State of Israel, Virtual Crypto Technologies Ltd. (the “VCT Israel”), to develop and market software and hardware products facilitating and supporting the purchase and/or sale of cryptocurrencies through ATMs, tablets, personal computers (“PCs”) and/or mobile devices. On February 12,22, 2018, the Registrant filed a definitive information statement to change itsCompany’s name was changed from Emerald Medical Applications Corp. to Virtual Crypto Technologies, Inc. to reflect its new operations and business focus, and, effective as of March 7, 2018, the Financial Industry Regulatory Authority (“FINRA”) approved the Registrant’s name change and its trading symbol was changed from “MRLA” to “VRCP” on the OTCQB.

Transaction with Gix Internet Ltd.

On February 7, 2019, the Registrant entered into a share exchange agreement (the “Share Exchange Agreement”) with Gix Internet Ltd., formerly known as Algomizer Ltd. (TASE:GIX), a company organized under the laws of the State of Israel (“Gix Internet” or “Parent Company”), pursuant to which on July 25, 2019 (the “Closing Date”) Gix Internet assigned, transferred and delivered its 99.83% holdings in Viewbix Ltd. (“Viewbix Israel”) to the Company in exchange for shares of restricted Common Stock, representing 65% of the issued and outstanding share capital of the Company on a fully diluted basis as of the Closing Date, following the conversion of certain convertible notes of the Company and excluding certain warrants to purchase shares of the Common Stock expiring in 2020 and additional warrants as further described below (the “Fully Diluted Share Capital”). In addition, upon the earlier of: (a) the launch of a live video product to an American consumer in the United States by Viewbix Israel, or (b) the launch of an interactive television product to an American consumer in the United States by Viewbix Israel, the Company will issue to Gix Internet an additional 1,642,193 shares of restricted Common Stock of the Company representing 5% of the Fully Diluted Share Capital immediately following the Closing Date.

On July 24, 2019, the Company filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of Delaware reflecting its name change from Virtual Crypto Technologies, Inc. to Viewbix Inc. to reflect its new operations and business focus and, effective on August 7, 2019, FINRA approved the Registrant’s name change and its trading symbol was changed from “VRCP” to “VBIX” on the OTCQB.

On the Closing Date, (i) the Company issued 20,281,085 shares of its Common Stock to Gix Internet in exchange for consideration consisting of 99.83% holdings in Viewbix Israel, and (ii) convertible notes representing 3,434,889 shares of Common Stock then currently issued to holders were converted. The shares of Common Stock were issued under Regulation S. The Company also issued a total of 7,298,636 warrants to Gix Internet to purchase shares of Common Stock, whereby (i) 3,649,318 of such warrants were issued with an exercise price of $0.48, and (ii) 3,649,318 of such warrants were issued with an exercise price of $0.80.

Following the Closing Date, Viewbix Israel became a subsidiary of the Registrant. Viewbix Israel was incorporated in February 2006 in Israel.

focus. On January 27, 2020, VCT Israel was sold to a third party for NIS 50,000 ($14,459).

On February 7, 2019, the Company entered into a share exchange agreement (the “Recapitalization Transaction”) with Gix Internet Ltd. (formerly known as Algomizer Ltd.), a company organized under the laws of the State of Israel (“Gix Internet” or “parent company”), pursuant to which, Gix Internet assigned, transferred and delivered 99.83% of its holdings in Viewbix Ltd., a company organized under the laws of the State of Israel (“Viewbix Israel”), to the Company in exchange for shares of restricted common stock, par value $0.0001 per share (“Common Stock”) of the Company, which resulted in Viewbix Israel becoming a subsidiary of the Company. In connection with the Recapitalization Transaction, effective as of July 26, 2019, the Company’s name was changed from Virtual Crypto Technologies, Inc. to Viewbix Inc.

MergerReorganization Transaction with Gix Media Ltd.

On December 5, 2021, the Company entered into a certain Agreement and Plan of Merger (the “Merger Agreement”“Reorganization Transaction”) with Gix Media Ltd., an Israeli company and the majority-owned subsidiary of Gix Internet, in the field of MarTech (Marketing Technology) solutions, primarily search and content monetization (“Gix Media”) and Vmedia Merger Sub Ltd., an Israeli company and wholly-owned subsidiary of the Company (“Merger Sub”), pursuant to which, following the Merger (as defined herein)Reorganization Transaction, and upon satisfaction of additional closing conditions, Merger Sub will merge with and into Gix Media, with Gix Media being the surviving entity and wholly-owned subsidiary of the Company. Prior to the closing of the Reorganization Transaction, Gix Media was a majority-owned subsidiary of Gix Internet, which held approximately 58% of the Common Stock of the Company, (the “Gix Merger”).on a fully diluted basis.

Subject toOn September 19, 2022, the termsReorganization Transaction, was consummated (the “Closing”) and, conditions of the Merger Agreement, at the Merger Effective Date (as defined in the Merger Agreement)as a result, all outstanding ordinary shares of Gix Media, having no par value (the “Gix Media Shares”) will be converted intowere exchanged for shares of the Company’s Common Stock such that immediately followingGix Media became a wholly owned subsidiary of the Gix Merger,Company. Following the Reorganization Transaction, holders of the Gix Media Shares will holdheld 90% of the Company’s capital stockCommon Stock on a fully diluted basis, with Gix Internet holding 76.67% of the Common Stock on a fully diluted basis.

The Merger Agreement also contains customary representations, warranties and covenants made by eachfollowing diagram illustrates the associated corporate structure of the Company Gix Mediaprior to and Merger Sub.following the Reorganization Transaction.

Following the Gix Merger, the board of directorsclosing of the Reorganization Transaction, the Company is expectedbegan to consist of six (6) directorsintegrate Gix Media’s technology into its operations aiming to expand its growth potential in the search and will be comprised of four (4) new directors to be appointed bycontent monetization space. Gix Media, who will join the Company’s two currently-serving directors, Amihay Hadad and Alon Dayan.

On December 21, 2021, the shareholders of each of Gix Media and Merger Sub approved the Merger Agreement. Consummation of the Gix Merger is subject to certain additional closing conditions, including, among other things,Media’s business operations include both (i) the Company filing an amendment to its certificateprovision of incorporation to change the Company’s name to “Gix Media, Inc.”, (ii) obtaining approval from certain third parties, including the approval of Bank Leumi due to certain liens registered in its favor against ordinary shares of Gix Media; (iii) conversion of the Company’s outstanding convertible instruments into restricted shares of Common Stock and (iv) obtaining a tax pre-ruling from the Israeli Tax Authority relatingservices to the Agreement.world’s leading search engines through the development, marketing and distribution of free software to many Internet users, and (ii) editing and marketing of content in different languages to different target markets, for the purpose of monetizing advertisements on digital marketing and advertising platforms.

In connection with Gix Merger, on February 13,the Closing, effective as of August 31, 2022, the requisite majorityCompany adopted an Amended and Restated Certificate of Incorporation (“Certificate of Incorporation”), pursuant to which the Company’s stockholders approved certain amendments to the Company’s certificate of incorporation, including, but not limited to (i) a name change from “Viewbix Inc.” to “Gix Media, Inc.”, (ii)Company, among other things, effected a reverse stock split of the Company’s commonits Common Stock at a ratio of 1-for-28 (the “Planned“Reverse Split”) and an Amended and Restated Bylaws (“Bylaws”). All descriptions of our stock capital, including share amounts and per share amounts in this Annual Report, are presented after giving effect to the Reverse Split”), (iii) a staggered board structure, and (iv) certain other provisions therein. The Company intends to effect the foregoing amended and restated certificate of incorporation upon the closing of the Gix Merger. Additionally, on February 25, 2022, the Company filed a Schedule 14C Information Statement with the SEC, whereby it reported the foregoing approvals by the requisite majority of the Company’s stockholders.

Viewbix Business OverviewSplit.

Acquisition of Cortex Media Group Ltd.

On October 13, 2021, Gix Media acquired 70% (on a fully diluted basis) of the share capital of Cortex Media Group Ltd. (“Cortex” and the “Cortex Acquisition”, respectively), an Israeli private company operating in the field of online media and advertising. In consideration for the Cortex Acquisition, Gix Media paid NIS 35 million in cash (approximately $11 million), out of which an amount of $0.5 million was deposited in trust for a period of 12 months from the closing date. The Cortex Acquisition also includes the obligation and right of Gix Media to acquire 30% of Cortex’s share capital in three equal tranches, each at the beginning of 2023, 2024 and 2025 (“Remaining Balance Shares”), such that following the acquisition of all of the Remaining Balance Shares, Gix Media will hold 100% of Cortex’s share capital on a fully diluted basis. On January 23, 2023, Gix Media purchased an additional 10% of Cortex’s share capital.

In connection with the Cortex Acquisition, on October 13, 2021, Gix Media entered into a financing agreement with Bank Leumi Le Israel Ltd (“Leumi”), for the provision of a line of credit in the total amount of up to $3.5 million and a long-term loan totaling $6 million, which Gix Media used to finance the Cortex Acquisition (the “Financing Agreement”). On July 25, 2022, Gix Media and Leumi entered into an addendum to the Financing Agreement according to which Leumi will provide Gix Media with a loan of up to $1,500,000 to be withdrawn at the discretion of Gix Media by no later than January 31, 2023 (the “Additional Loan”). The Additional Loan was withdrawn in connection with the purchase of the additional 10% of Cortex’s share capital on January 17, 2023.

Viewbix Business Overview

Viewbix is an interactive video technology and dataa digital advertising platform that provides its client with deep insights into theirdevelops 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 messaging. Viewbix allows companiesclients with digital video properties the ability to adduse its platforms in a layer of interactive content on top of a videoway that allows viewers to engage and interact with the video. The platformVideo Advertising Platform measures exactly when a viewer takes anperforms a specific action while watching a video and collects and reports the results to the client.

Viewbix developed the interactive video platform based on a Software as a Service (“SaaS”) business model with interactive elements, and the ability to collect and analyze information about each interactive action performed during the viewing of the video clip. The interactive elements and information gathered allows the client to analyze user viewing habits and optimize in real-time throughout the campaign, while increasing the effectiveness of online and live video marketing.

Viewbix has adapted its technology platform to work on most nonproprietary platforms on the Internet, including, but not limited to, online video campaigns, brand and image videos, online tutorials, live and real-time video streaming (e.g. music concerts and sporting events), video presentations, and more. Using the Viewbix platform, video creators can integrate advances features into their videos, specifically the inclusion of “click” buttons that trigger a particular action, into a given video, like the insertion of a smart form for retrieving the contact information of the viewer. Viewbix then collects all the data around the cross section of the viewing data and engagement data and offers its clients the opportunity to download and analyze the results. Viewbix also offers a full service option where the Viewbix account managers will analyze the data and report results and suggestions to its clients.

Notwithstanding the foregoing, the Company initiated certain cost reduction measures during fiscal year-ended December 31, 2020. On January 1, 2020, each of the Company’s former Chief Executive Officer and Chief Operating Officer tendered their resignations from their respective positions. Moreover, However, due to the Company’s failure to meet predetermined sales targets which were set forthpursuant to the Recapitalization Transaction, in the Share Exchange Agreement,January 2020, the Company determined to reduce its operations and the size of its sales team and likewise, the R&D team was replacedin the Digital Advertising Platform.

The Company, through its subsidiaries Gix Media and Cortex, expanded its digital advertising operations across two additional main pillars: ad search and digital content (the “Search Platform” and the “Content Platform”, respectively”). Gix Media and Cortex develop and market a variety of technological software solutions that automate, optimize and monetize online campaigns. Cortex also creates, edits and markets content in various languages to different target audiences in order to generate revenues from advertisements displayed together with the content, which are posted on digital content, marketing and advertising platforms. These technological tools enable advertisers and website owners to earn more from their advertising campaigns and generate additional profits from their sites.

Through its Search Platform, the Company provides services to leading search engines worldwide (“Search Engines”) by developing, marketing and distributing software products to internet users. The operations and activity on this platform are powered by Gix Media.

Through the Content Platform, the Company provides editing and marketing services of content in different languages and to different target audiences with the goal of generating revenues from advertising employed in such content, which is based on digital content marketing and advertising platforms. The operations and activity on this platform are powered by Cortex.

Search Platform

Gix Media’s Search Platform allows for the referral of user traffic (i.e., searches that are performed by internet users) to Search Engines, such as Yahoo and Bing, where the Search Engines display the ads of their customers. The Search Engines pay Gix Media for the searches that were referred by it, based on the amount of consideration that the Search Engine receives from the advertisers for the user traffic generated, less a more cost-effective consultant. These decisions,certain percentage from the revenues attributed to the Search Engine. Since the customers of Gix Media are the Search Engines, and future decisionsnot the advertisers, Gix Media recognizes revenues for the actual amount received from the Search Engines, and not from the advertisement revenue itself.

The referral of user traffic by Gix Media to the Search Engines is possible after users download Gix Media’s products, which are browser add-ons, usually from the browser stores (mostly Google Chrome browsers) and by downloading desktop software products, free of charge, for the Apple operating system (for Mac computers) and for the Microsoft operating system (for PC computers). When downloading Gix Media’s products, the users grant permission to Gix Media to refer the searches performed while using Gix Media’s products to the Search Engines.

In addition, Gix Media provides user traffic referral services to Search Engines through the referral of traffic of browsers who engage content generated by Gix Media. This content is displayed on ad spaces that are purchased by the Company by content recommendation companies (such as Yahoo!, Outbrain, Taboola and Gemini). When occasional users click on such content, Gix Media transfers user traffic to a Search Engine which contains search words that are related to cost-reduction measures,the advertising content.

Content Platform

Cortex’s Content Platform produces engaging content and marketing material in various languages to various target audiences, in order to generate revenues from advertisements displayed together with the content, which are posted on digital content, marketing and advertising platforms. Cortex acts as a digital content platform that publishes content written by creative writers and editors which it employs. The content is displayed on several different content websites owned by Cortex, covering various subjects including culture, history, trips, pets, entertainment and leisure, food, etc. (the “Cortex Websites”). Cortex developed capabilities that enables it and its customers to profit from the original content which it publishes by advertising the content on leading international websites. Readers are exposed to the articles and may impactchoose to read them by clicking an ad, after which readers are directed automatically to the Company’s abilityCortex Websites where the content is posted.

The technological tools developed by Cortex allow businesses in the digital advertising market (search engines, ad exchanges, advertisers, content owners and brand owners) to sellearn more from their advertising campaigns and supportgenerate additional profit from their websites, both from its content and from its advertising.

Advertisers display ads on the different platforms for potential customers (internet users and readers). In order to help maximize the effectiveness of advertising, Cortex developed different advertising systems and tools for content management, content distribution and campaigns and measurement of performance on the various platforms that display the content.

Business Model

The Search and Content Platform are operated through two models, direct and indirect:

Direct Model

Gix Media operates its Search Platform using a direct model whereby it refers searches that are conducted by users of its products, which are thereafter distributed to Search Engines directly by Gix Media.

Additionally, through the direct model Gix Media refers user traffic to the Search Engines by purchasing advertising space on leading publishing websites around the world using content recommendation companies such as Taboola and Outbrain, such that user traffic referred by it to the Search Engines is created by users on the websites where the ad is displayed.

The revenues generated by Gix Media from the Search Platform applying this model, constituted approximately 7% and 15% of the total revenues of Gix Media for the fiscal year-ended December 31, 2022 and December 31, 2021, respectively.

Cortex operates its Content Platform using the direct model through an Artificial Intelligence (“AI”) based system developed by Cortex, which connects user traffic and advertisers (the end customers of Cortex) who advertise on the Cortex Websites through online, algorithmic, and customized advertising. See “Item 1. Description of Business – Business Overview – Products and Services – Content Platform”, for further information on the AI system and other systems devolved by Cortex.

The revenues generated by Cortex from the Content Platform are entirely from the direct model.

Indirect Model

Gix Media also operates its Search Platform using an indirect model, whereby it refers searches that are conducted by users of products developed by third party strategic partners (in contrast to users of its own products as conducted through the direct model), which are thereafter distributed to Search Engines by Gix Media. Gix Media engages with strategic partners who have similar products and allow these strategic partners to integrate Gix Media’s technological tools into their own products in order to refer searches conducted by resulting users to the futurecustomers of Gix Media. Using this model, Gix Media shares revenues received from Search Engines with its strategic partners.

The revenues generated by Gix Media from the Search Platform applying this model, constituted approximately 93% and accordingly, may materially impact85% of the Company’s business operations.total revenues of Gix Media for the fiscal year-ended December 31, 2021 and December 31, 2022, respectively.

Growth Strategy

Products and Services

Search Platform

The process of referring searches to Search Engines starts with the purchase of ad space in leading content publishing websites by content recommendation platforms (such as Gemini, Yahoo!, Taboola and Outbrain). Such ad space displays content ads of ours on various subjects. The ad will offer the user a link to receive information or content on a specific subject. Users who click these content ads will be directed to the webpage of the Search Engine’s results that includes relevant content from the Search Engines, based on the search terms related to the ad content.

When purchasing these ad spaces, we receive assistance from Search Ads, a system that we developed for the purpose of managing the purchase process. These self-designed systems will then find an optimal combination designed to yield maximum profits at a given time in relation to specified variables, such as: the costs of the ad space, the payment that we will receive as a result of user traffic that was referred by our content ads on this ad space, the amount of available user traffic for the different search terms and the click percentage of each such search. In addition, our self-designed system can also stop a purchase and change prices for the purpose of maximizing performance.

Industry OverviewSearch Systems:

Video marketing remainsThe technological backbones of our Search Platform involves the following key systems:

The BI system allows us to have real time control over critical events occurring on our systems by sending alerts directly to our employees with the relevant information, including assistance to customers in purchasing media, reports about malfunctions and the discovery of any irregular online behavior. In addition, the BI system also sends automated reports to us and to our different partners (providers/customers), which present data on a weekly/quarterly/monthly or on a cumulative basis to be used by management and finance departments.

Content Platform

Our Content Platform operations primarily focus on the development of an AI-based software that connects internet and mobile users (the “Users”) who browse on the Cortex Websites (the “Readers”) to advertisers and who pay Cortex to display ads with the content published by Cortex on the Cortex Websites with online customized advertisements (the “Software”).

The Software that Cortex develops is primarily based on nine technological components: (1) monitoring and Big Data, (2) campaign management, (3) content monetization, (4) targeted AI tools to predict Google monetization, (5) campaign launching, (6) digital content management, (7) digital content index and labeling, (8) bidding management and ad optimization, and (9) an A/B testing for performance comparison.

The Software operates as one integral system that enables a smart connection between the traffic of Users and advertisers which are Cortex’s customers.

The business model used by Cortex on the fastest growing industries,Content Platform is the direct model. The revenues from the Content Platform are generated from the consideration Cortex receives from the advertisers, either based on the number of views the ads receive or based on the number of Users who clicked on the ads and accordingly is increasingly crowdedwere re-directed to the advertisers’ websites.

The following illustration describes the Readers’ traffic acquisition process:

The Software manages the traffic activities of Users to the Cortex Websites by re-directing their traffic from various online platforms (such as Yahoo, AOL, Zamenta and Outbrain). By using machine learning and AI, the Software analyzes the properties of a given User and compares the data to the historical data of other Users and then analyzes the probability that the given User’s interaction with competition. Accordingthe promoted content will advance to a study publishedconversion process, by Cisco,either viewing the promoted ad on the Cortex Websites or by 2022 online videos will represent 82% of online consumer traffic. Globally, three trillion minutes (or five million years) of video content will crossclicking on the Internet each month by 2022, which is the equivalent of 1.1 million minutes of video streamed or downloaded every second.promoted ad (“Conversion”).

According to an additional study publishedboth the probability of Conversion calculated by Statista,the Software and the maximum predicted profit from the Conversion actions of the User, the Software determines the optimal purchase price for the traffic, in order to maximize ad spending is expectedrevenues from Readers’ interactions.

The algorithms that we develop help analyze the historical results of a User’s Conversions with respect to show an annual growth rate of 11%, resultingeach advertiser and factor them together with the price per Reader that each advertiser pays. According to this analysis, the algorithm then decides which ad to display to each Reader in order to maximize the probability that the Reader’s interaction will reach a projected market volume of $162,242 million by 2026. In the video advertising segment, it is expected that $136,486 million will be generated through mobileConversion, and, in 2026.turn, maximize ad revenues.

CompetitionContent Systems:

While thereThe nine technological components of the Content Platform are as follows:

In addition, the Software identifies which advertisements were delivered to the Reader, the payment amount that the advertisers paid to Cortex for each ad read by the Reader, the length of time the Reader viewed the ad, and whether the Reader clicked the ad or not. This monitoring system allows us to accumulate and analyze such data about any User in an optimal manner.

The vast number of Users who visit the Cortex Websites (which can reach up to one million Users per day) and the extensive information that Cortex collects in response, generate substantial traffic from the Users’ browser to the Cortex servers. Cortex developed a backend infrastructure to receive this traffic, process it, and document it in a manner to enable Cortex to assess such data in an effective and efficient manner.

Our big data servers are responsible for processing the information transmitted to them by the monitoring system and are responsible for regulating the rate of updates to the databases. Cortex has a backup system in the event that one of its servers fails. This system collects and summarizes the information in tabular form for further analysis, in accordance with data processing regulations.

The price quotations that we submit for traffic is critical; a price that is too high (higher than the proceeds obtained for this traffic) will result in a loss, and a price that is too low will result in a loss in bids for ad spaces and a decrease in the volume of activity. The optimal price is a function of the revenues obtained from each Reader, however in light of the fact that we first pay for the Users and only thereafter generate revenues, we aim to set an accurate price in order to predict, as accurately as possible, the revenues from each User.

The AI system that Cortex developed seeks to manage all of these campaigns without any human involvement, which contributes to our revenues and the economic success of the campaign. This system manages up to 100,000 campaigns simultaneously, and each campaign runs in different ad spaces (Yahoo, MSN, FOX, CNN and others). The system is required to predict accurately, and at any given moment, the behavior of the targeted Users, and predict the amount of bids that competing advertisers will place for such ad space.

As described above, in order to make effective recommendations, our technology must first predict a User’s interaction with a given promoted content. Our systems processes a significant number of records from the User databases and the data from our monetization system (as described further below), which allows us to determine which campaigns should be promoted and which campaigns should be halted, as well as the optimal value of each campaign.

The purpose of the AI system for the valuation and prediction of the monetization is to predict the bids of the advertisers, according to a number of parameters, including the content of the article, the User, the day in the week and the time of day.

The system is connected by an application programming interface (“API”) to tens of systems of advertisers who work with Cortex in the ad exchange. In light of the fact that hundreds of thousands of ad bids are held at any given hour, the system simultaneously runs through thousands of advertisers’ systems and retrieves accessible and relevant data.

Additionally, algorithms analyze the historic data of the Reader’s behavior, the current data received from advertisers, and data regarding the results of the bids from the monitoring system, after which, the algorithms predict the demand of advertisers and the price that advertisers would pay for a future Reader. This prediction is performed on an individual level according to the User’s data, the type of article and the ad location.

In addition, a special tool that was developed by the AI system, scans all the campaigns that were launched in the past two years, identifies new opportunities on a daily basis, and launches the campaigns automatically as long as the campaigns are profitable.

The creation of an ad campaign in a certain network requires specialization in the network and extensive work on each campaign. Cortex developed a dashboard that enables the Creative Team to focus only on the creative aspects of the campaign and later select in a simplified matter, based on data presented to it in the dashboard, which interfaces, countries and networks to present the campaign in, and when to launch the campaign. With this process, it is possible to launch up to hundreds of campaigns within minutes, an action that, without using the system, may have taken a number of days of manual work.

The dashboard that is used by the Creative Team to launch the campaign appears as such:

Cortex developed a system to manage these articles, which includes version tracking, logs of changes, full back-up of the articles, and options to edit photos and text. This system is only used for internal purposes.

The index system scans each article that was posted on the Cortex Websites, and labels the content and photos associated with it in a database that is user-friendly, in such manner that the content writers can search for articles based on search words or phrases, in order to use information and relevant photos for new articles.

This bidding system is an important tool for the Cortex monetization system. All of Cortex’s customers use this system and our development team updates the interfaces a number of times a year, based on the technological developments of the advertisers, the browsers and applicable privacy restrictions.

Cortex developed an A/B testing system which runs several A/B tests simultaneously to produce versatile data which enables Cortex to (i) run bids between selected sub-groups of advertisers, (ii) display different ads, (iii) compare different partners of Google, (iv) check the contribution to the profit of a specific advertiser or ad, and (v) compare the performance of different configurations and designs of the web-pages in terms of performance.

Customers

Search Platform

As of the date of this Annual Report, the customers of Gix Media in the Search Platform are Search Engines. These Search Engines engage with their customers who are different advertisers, in advertising and promotion agreements.

Gix Media engages with Search Engines according to customary industry conditions, through either the direct business model or indirect business model. The average distribution of the revenue sharing between Gix Media and Search Engines is between 70% -80% (in favor of Gix Media).

As of December 31, 2022, Gix Media has one major customer, a reputable international Search Engine (“Gix Major Customer”). Gix Media has generated revenues of approximately $16.2 million from the Gix Major Customer, constituting approximately 71% of the total revenues of Gix Media during the year ended December 31, 2022. Our relationship with this Gix Major Customer originated in 2013 upon the signing of an exclusive cooperation agreement, which is extended from time to time. In March 2020, an extension of the foregoing agreement was signed, whereby the term of the agreement was extended until October 26, 2023,and will be automatically renewed for additional one year periods, unless either party gives notice of non-renewal 90 days’ in advance.

Content Platform

Cortex’s customers in the Content Platform include advertising companies that are active in the digital advertising market.

Generally, our sales are performed by marketing and advertising agents and advertising agencies (“Bidders”), who represent end customers and receive advertising budgets from the end customers and purchase ad spaces with these budgets.

All of the Bidders are repeat customers and the vast majority of the clusters are North American companies.

As of the date of this Annual Report, Cortex has one major customer from its Content Platform operations, Google, which it engages with through Total Media Ltd. (“Total Media”). Since August 2017 Cortex and Total Media have collaborated through a services agreement that can be extended from time to time. Each party can terminate the agreement with 48 hours’ advance notice. The other aspects of Cortex’s engagement with Google, such as the interfaces with Google, are directly with Google. Cortex has generated revenues of approximately $17.4 million from Total Media, constituting approximately 24% of the total revenues of Cortex during the year ended December 31, 2022.

Marketing and Distribution

We have a wide variety of products, and each product requires specific, tailor-made marketing and distribution models. We have advanced BI systems that improve constantly, which assist in distributing different products online, with a goal of maximum customization of the product to the end user. These BI systems were developed in-house by Gix Media and Cortex.

Gix Media also designs and implements an advanced self-service marketing and launch campaigns which market its products directly across the internet, in various languages and countries.

To support our sales force, our team participates at industry conferences, invests in public relations, utilizes existing commercial relationships in order to build brand awareness and acquire new customers and creates meetings online and in-person with key industry players.

Competition

The competition in the digital advertising market is fierce. There are many players in all areas of the market: both a large number of advertisers and content owners, a large number of software products and algorithms, many advertising platforms and technologies. New players appear frequently in all of these areas. We compete with many companies that offer hostingsolutions for advertisers and streamingwebsite owners, including in the pillar of ad search, and with tools that allow internet users to change the default search settings on their browsers. There is a large number of digital content companies and ad search companies that offer services Viewbix focusesthat are similar to those provided by us. Our products compete on providing expanded value to its clientslimited budgets of advertisers and on an inventory of ad spaces from website owners. Some of our competitors are companies that reaches beyondare considerably bigger than the hosting and streaming platforms. Viewbix has several direct competitors, including Hapyak, which operates primarily via websites, and Innovid, which focuses on advertisements. Additionally, video hosting companies,Company with considerably higher budgets, such as WistiaGoogle, Meta, and Vidyard, both offer certain interactive elements similar to Viewbix. However, Viewbix’s proprietary componentMicrosoft. In light of the fact that a major part of the Company’s revenues is its focus on interactivitygenerated from a supply of searches, the Company also competes with the providers of the Search Engines themselves, such as Google, Microsoft, IAC and deep data, whose results can thereafter be analyzedVerizon Media. Many of the present and applied.potential competitors of the Company have financial, R&D, analytical systems, production resources and sales and marketing systems that are significantly larger in scope than those of the Company.

Search Platform

As of the date of this Annual Report, there are companies that develop different types of software products which enable, in a partial manner, the performance of some of the actions performed by Gix Media’s Search Platform. There is intense competition in the digital advertising market, and Gix Media has many competitors from various fields. As of the date of this Annual Report, the Company cannot estimate its size and positioning compared to its other competitors and its size in the ad search market. Our main competitors in this market include: Ironsource, Perion, FireArc, Spigot, IAC and AOL.

Content Platform

As of the date of this Annual Report, there are companies that develop different types of software products, which enable partial performance of the operations that are performed by the Content Platform of Cortex. As of the date of this Annual Report, the Company cannot estimate its size and positioning with relation to its other competitors and its size in the digital content market. Our main competitors in this market include: Perion, Buzz Feed, Pub+, Novelty, Hive Media and Kueez.

Competition Management

We focus our competition management on developing advanced technological tools and receive updates from time to time regarding new technologies that can be used to gain an advantage against our competitors. We also maintain high-quality and professional human capital with many years of experience in order to maintain a competitive advantage.

We maintain the ongoing creation of content in different languages, to various audiences and geographic areas and focus on constant improvement of our technology that enables better competition of the Company in bids for the purchase of ad spaces in leading websites to post Cortex Websites’ articles, such as Yahoo and CNN.

We act continuously to improve the user experience and improve our distribution methods so that we can reach a higher number of users and continue to keep a critical mass of customers that will allow us to continue and promote its products and tools, and all in conformance to the requirements and the existing and future platforms in the market.

Industry Trends and Seasonality

The digital advertising market is generally not materially affected by seasonality. Nevertheless, there is a seasonality trend reflected during the fourth quarter of each fiscal year that is characterized by a higher volume of activity compared to the average, while the first quarter is characterized by a lower volume of activity compared to the average. In general, advertising campaigns are performed throughout the year in high intensity, and therefore the phenomenon of seasonality is not material in this market.

This seasonality stems, among others, from changes in the major advertising budgets, usually towards the end of each quarter, and even more so towards the end of each year. In addition, the last quarter of the year includes many events and dates that lead to an increase in the advertisement budgets and in the volume of online traffic.

Intellectual Property and Other Proprietary Rights

Our commercial success depends, in part, on obtaining and maintaining patent and other intellectual property protection, in the United States and internationally, for the technologies used in our products. We cannot be sure that any of our patents will be commercially useful in protecting our technology. Our commercial success also depends in part on our non-infringement of the patents or proprietary rights of third parties. The patent positions can be highly uncertain and involve complex and evolving legal and factual questions.

We have four patents that have been granted to us in the U.S. which we consider material to our business and operating success, including the following::

We also protect our proprietary technology and processes, in part, by confidentiality and invention assignment agreements with our employees, consultants, scientific advisors and other contractors. These agreements may be breached, and we may not have adequate remedies for any breach. We also rely on trade secrets to protect our product candidates. However, our trade secrets may otherwise become known or be independently discovered by competitors. To the extent that our employees, consultants, scientific advisors or other contractors use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.

Product Development

ViewbixGix Media focuses its R&D efforts in the Search Platform on improving existing products and their technologies, and on continuing the expansiondevelopment and optimization of the inter-organizational systems used in its interactive live capabilities by collecting the engagement data for each session and relating back to a live stream, which is aimed to enhance clients’ feedback on its stream for both real time and future stream optimizations.activity.

During the years ended December 31, 2022, and December 31, 2021, the total R&D expenses of the Company in the Search Platform, through Gix Media, were $1.7 million and $2.2 million, respectively.

Employees

We estimate that during the twelve months following the date of this Annual Report, we will invest a total amount of approximately $2.3 million in R&D expenses in the Search Platform, primarily to improve our existing services and technologies in this platform.

Cortex focuses its R&D efforts in the Content Platform on improving its algorithm and AI, and on preparing work and monitoring tools for the creators of the digital advertising.

During the year ended December 31, 2022, the total R&D expenses of the Company in the Content Platform were $2.1 million.

We estimate that during the twelve months following the date of this Annual Report, we will invest a total amount of approximately $2.5 million in R&D expenses in the Content Platform, primarily to improve our existing services and technologies in this platform.

Government Regulation

We are subject to a number of U.S. federal and state laws and foreign laws and regulations that affect companies conducting business on the internet. The manner in which existing laws and regulations will be applied to the internet in general, and how they will relate to our business in particular is unclear. Accordingly, we cannot be certain how existing laws will be interpreted or how they will evolve in areas such as user privacy, data protection, content, use of “cookies,” access changes, “net neutrality,” pricing, advertising, distribution of “spam,” intellectual property, distribution, protection of minors, consumer protection, taxation and online payment services.

For example, we are subject to U.S. federal and state laws regarding copyright infringement, privacy and protection of user data, many of which are subject to regulation by the Federal Trade Commission. These laws include the California Consumer Privacy Act, which provides data privacy rights for consumers and operational requirements for companies and the CPRA which imposes additional notice and opt out obligations, including an obligation to provide an opt-out for behavioral advertising. The Digital Millennium Copyright Act, which aims to reduce the liability of online service providers for listing or linking to third-party websites that include materials that infringe copyrights or the rights of others, and other federal laws that restrict online service providers’ collection of user information on minors as well as distribution of materials deemed harmful to minors. Many U.S. states, such as California, have adopted or are planning to adopt statutes that require online service providers to report certain security breaches of personal data and to report to consumers when personal data will be disclosed to direct marketers. There are also a number of legislative proposals pending before the U.S. Congress and various state legislative bodies concerning data protection which could affect us. The interpretation of data protection laws, and their application to the internet, is unclear and in a state of flux. There is a risk that these laws may be interpreted and applied in conflicting ways and in a manner that is not consistent with our current data protection practices.

Foreign data protection, privacy and other laws and regulations may affect our business, and such laws can be more restrictive than those in the United States. For example, in Israel, privacy laws require that any request for personal information for use or retention in a database, be accompanied by a notice that indicates: whether a person is legally required to disclose such information or that such disclosure is made at such person’s free will and consent; the purpose for which the information is requested; and to whom the information is to be delivered and for which purposes. A breach of privacy under such laws is considered a civil wrong and subject to administrative fines as well as civil damages. Certain violations of the law are considered criminal offences punishable by imprisonment. In the European Union, similar data protection rules exist as well was privacy legislation restricting the use of cookies and similar technologies. Subject to some limited exceptions, the storing of information, or the gaining of access to information already stored, in the terminal equipment of a subscriber or user is only allowed on condition that the subscriber or user concerned has given his or her informed consent. Moreover, the GDPR, the General Data Protection Regulation (“GDPR”) presumably has an even wider territorial scope, broadened the definition of personal data to include location data and online identifiers, and imposes more stringent user consent requirements. Further, it includes stringent operational requirements for companies that process personal data and will contain significant penalties for non-compliance. Also in other relevant subject matters, such as cyber security, e-commerce, copyright and cookies, new European initiatives have been announced by the European regulators. To further complicate matters in Europe, to date, member States have some flexibility when implementing European Directives and certain aspects of the GDPR, which can lead to diverging national rules.

Because our services are accessible worldwide, certain foreign jurisdictions may claim that we are required to comply with their laws, including in jurisdictions where we have no local entity, employees or infrastructure.

These regulations result in significant compliance costs and could result in restricting the growth and profitability of the Company’s business.

Human Capital Management

As of December 31, 2021, Viewbix has twoMarch 9, 2023, we employ 51 full-time employees or consultants. Of these employees, 15 are primarily engaged in search activities for Gix Media, 28 are primarily engaged in digital content activities for Cortex and 8 are primarily engaged in general administrative, business development and financial consulting. None of our employees are members of a union or subject to the terms of a collective bargaining agreement.

We believe that our future success will depend, in part, on our continued ability to attract, hire and retain qualified personnel. In particular, we depend on the skills, experience and performance of our senior management and financecustomer service and research personnel. We compete for qualified personnel with other ad-tech companies.

The success of our business is fundamentally connected to the well-being of our people. Accordingly, we are committed to the environmental, health and safety of our employees (EHS). The keys to our EHS success are a workforce that is engaged and a management team who supports and invests in Israel. Additionally, Viewbix retainsemployees’ wellbeing.

We consider our employees to be a key factor to our success and we are focused on attracting and retaining the servicesbest employees at all levels of two R&D service providers.our business. We employ people based on relevant qualifications, demonstrated skills, performance and other job-related factors. We do not tolerate unlawful discrimination related to employment, and strive to ensure that employment decisions related to recruitment, selection, evaluation, compensation, and development, among others, are not influenced by race, color, religion, gender, age, ethnic origin, nationality, sexual orientation, marital status, or disability. We are committed to creating a trusting environment where all ideas are welcomed and employees feel comfortable and empowered to draw on their unique experiences and backgrounds.

We consider our relations with our employees to be good.

Employment Agreements

Our non-executive employees are employed under written employment agreements, based on global monthly salary or on an hourly basis. Some employees receive base salaries and commissions contingent on targets based on the position they fill. The terms of employment generally include, senior employees’ insurance or a pension fund, study fund, loss of working capacity insurance, vacation days and recuperation pay. The Company may participate in employees’ car and mobile phone expenses, under the conditions set out in their individual employment agreements, and also reimburses certain business expenses. The employment agreements are generally for an unlimited period of time and each side is entitled to terminate the agreement with advance notice. Our employment agreements also include an undertaking of confidentiality and non-competition by our employees.

The Company’s employees’ employment terms are generally subject to the terms and conditions of the compensation policy of Gix Internet, our parent company.

ITEM 1A. RISK FACTORS

The shares of our Common Stock are highly speculative in nature, involve a high degree of risk and should be purchased only by persons who can afford to lose their entire amount invested in the Common Stock. Accordingly, prospective investors should carefully consider, along with other matters referred to herein, the following risk factors in evaluating our business before purchasing any shares of Common Stock. If any of the following risks actually occurs, our business, financial condition or operating results could be materially adversely affected. In such case, you may lose all or part of your investment. You should carefully consider the risks described below and the other information in this Prospectus before investing in our Common Stock.

Summary Risk Factors

Our business is subject to numerous risks and uncertainties, including those highlighted in the section titled “Risk Factors” immediately following this prospectus summary. These risks include, among others, the following:

Risks Related to our Competition

Risks Related to our Intellectual Property

Risks Related to Data Protection Regulation

Risks Related to Our Common Stock

Risks Related to our Operations in Israel

Risks Associated with Our Business and Industry

We initiated certain cost-reduction measures during the previous fiscal year, which could have long-term adverse effects on our business and we may not realize the operational or financial benefits from such actions.

We initiated certain cost-reduction measures during the previous fiscal year, and we may engage in similar activities in the future. This decision may distract management, could slow improvements in our platform and limit our ability to attract customers. It remains unclear how and to what extent this decision will impact our future business and operating success.

The COVID-19 pandemic may negatively impact the global economy in a significant manner for an extended period of time, and also adversely affect our business and operating results.

The COVID-19 pandemic has resulted in a widespread health crisis that has adversely affected businesses, economies and financial markets worldwide, placed constraints on the operations of businesses, decreased consumer mobility and activity, and caused significant economic volatility in the United States, Israel and international capital markets. The COVID-19 pandemic has caused an economic recession, high unemployment rates and other disruptions, both in the United States, Israel and the rest of the world. The COVID-19 pandemic has not yet currently adversely affected our business, however, any of these impacts, including the prolonged continuation of these impacts, could in the future, adversely affect our business and operating results and heighten many of the other risks described in these “Risk Factors.”

Our success depends, in part, upon the continued demand of videodigital advertising as an integral part of corporate marketing and internal communications plans and the continued growth and acceptance of videosdigital content as effective alternatives to traditional online and offline marketing products and services.

We provide a platform that allows companies to understand what messages are resonating with their video viewers and how to leverage that data to enrich and empower a more effective video experience.digital advertising platforms. Our revenues are derived from the sale of our platform.platforms. If the demand for videodigital advertising does not continue to grow or customers do not embrace our platform,platforms, this could have a material adverse effect on our business and financial condition.

Our success also depends, in part, on our ability to compete for a share of available video advertising/marketing expenditures as more traditional offline and emerging media companies continue to enter the online advertising/marketingdigital advertising market, as well as on the continued growth and acceptance of onlinedigital advertising generally. If for any reason onlinedigital advertising is not perceived as effective (relative to traditional advertising), web browsers, software programs and/or other applications that limit or prevent advertising from being displayed become commonplace and/or the industry fails to effectively manage click fraud, the market for onlinedigital advertising will be negatively impacted. Any lack of growth in the market for online advertising/marketing (particularly for paid listings)digital advertising could adversely affect our business, financial condition and results of operations.

DueOnline platform updates, including operating systems, search engines, browsers and social media might affect our ability to our evolving business model and rapid changes in the Internet and the nature of services, it is difficult to accurately predict our future performance and may be difficult to increase revenuegenerate revenues, temporarily or profitability.permanently.

We developedcomply with certain guidelines promulgated by online platforms for the use of the respective brands and services. Online platforms may unilaterally update their policies and guidelines, which could, in turn, require modifications to, or prohibit and/or render obsolete certain of our platform based on a SaaS business model. We do notadvertising solutions, products, services and practices, which could be costly to address or otherwise have an extensive history of ongoing operations in usingadverse effect on our business, model from whichour financial condition and results of operations. Noncompliance with platforms’ guidelines, whether by us or by third parties we work with, if not cured, could result in such online platforms’ suspension of some or all of their services to predict our future performance, and making such predictions, particularly with regardus, or to the websites of third parties we work with, or the reimbursement of funds paid to us, or the imposition of additional restrictions on our advertising abilities or the termination of certain advertising agreements with our customers.

Should the providers of internet browsers, advertisement platforms and Search Engines further regulate, constrain or limit our ability to offer advertising services, or materially change their guidelines, technology or the way they operate, our ability to generate revenue from advertising could be significantly reduced.

As we provide our services through the internet, we are reliant on our ability to work with the different internet browsers, search engines and advertisement platforms. If Microsoft, Google, Apple, Facebook or other companies that provide internet browsers, advertisement platforms and search engines, effectively further restrict, discourage or otherwise hamper companies, like us, from offering or advertising services, this would continue to cause a material adverse effect on our revenue and our financial results.

Large and established internet and technology companies, such as Google, Facebook and Amazon, play a substantial role in the digital advertising market and may significantly harm our ability to operate in this industry.

Google, Facebook and Amazon are substantial players in the digital advertising market and account for a large portion of the digital advertising budgets, along with other smaller players. Such high concentration causes us to be subject to any unilateral changes they may make with respect to advertising on their respective platforms, which may be more lucrative than alternative methods of advertising or partnerships with other publishers that are not subject to such changes. Furthermore, we could have limited ability to respond to, and adjust for, changes implemented by such players.

These companies, along with other large and established internet and technology companies, may also leverage their power to make changes to their web browsers, operating systems, platforms, networks or other products or services in a way that impacts the entire digital advertising marketplace. Such changes could affect our revenues as it will be required to make technological changes and business adjustments, which might cause the retirement of certain products and services or changes in their profitability.

This, together with other advertisement-blocking technologies incorporated in or compatible with leading internet browsers and operating systems, could impact our advertising business (as well as those of our efforts to aggressively increasecompetitors). These changes could materially impact the distributionway we do business, and profitability is very complexif we or our advertisers and challenging. Ifthird parties we work with are unable to continuously improve our platform, thisquickly and effectively adjust and provide solutions to those changes, there could have a negativebe an adverse effect on our competitivenessrevenue and performance.

The use of third-party software solutions for the purpose of blocking ads and / or alerts may cause our business to suffer.

Digital advertising may be blocked by third-party providers. As a result, we may lose both existing and potential new customers and our ability to servicegenerate revenue will be negatively impacted.

We depend on supply sources to provide us with advertising inventory in order for us to deliver advertising campaigns in a cost-effective manner.

We rely on a diverse set of publishers including direct publishers, advertising exchange platforms, social networks and attractother platforms, that aggregate advertising inventory, to provide us with high-quality digital advertising inventory on which we deliver ads, collectively referred to as “supply sources”. The future growth of our advertising business will depend, in part, on our ability to maintain, expand and further develop successful business relationships in order to increase the network of our supply sources.

Our supply sources typically make their advertising inventory available to us on a non-exclusive basis and are not required to provide any minimum amounts of advertising inventory to us or to provide us with a consistent supply of advertising inventory, at any predetermined price or through real time bidding. Supply sources often maintain relationships with various sources of demand that compete with us, and it is easy for supply sources to quickly shift their advertising inventory among these demand sources, or to shift inventory to new demand sources, without notice or accountability. Supply sources may also seek to change the terms at which they offer inventory to us, or they may allocate their advertising inventory to our competitors who offer more favorable economic terms, better solutions and advanced technology. Supply sources may also elect to sell all, or a portion, of their advertising inventory directly to advertisers and agencies, or they may develop their own competitive offerings, which could diminish the demand for our solutions. In addition, significant supply sources within the industry may enter into exclusivity arrangements with our competitors, which could limit our access to a meaningful supply of inventory. As a result of all of these factors, our supply sources may not supply us with sufficient amounts of high-quality digital advertising inventory in order for us to fulfill the demands of our advertising customers. If

Because of these factors, we seek to expand and diversify our supply sources; nonetheless, if our supply sources terminate or reduce our access to their advertising inventory, increase the price of inventory or place significant restrictions on the sale of their advertising inventory, or if platforms or exchanges terminate our access to them and we are unsuccessful in doing so in a timely fashion,establishing or maintaining our relationships with supply sources on commercially reasonable terms, we may not be able to achievereplace this with inventory from other supply sources that satisfy our requirements in a timely and cost-effective manner. If any of these happens, our revenue growthcould decline or our cost of acquiring inventory could increase, which, in turn, could lower our profitability.operating margins and materially adversely affect our advertising business.

Reliance upon our top customers may adversely affect our revenue and operating results.

Our top ten customers represented approximately 68% and 88% of our consolidated revenue for the years ended December 31, 2022 and 2021, respectively on a pro forma basis. It is likely that we will depend on a relatively small number of customers for a significant portion of our revenue in the future. If a top customer fails to pay us, cash flow from operations would be impacted and our operating results and financial condition could be harmed. Additionally, if we were to lose a material customer, we may not be able to offer our services at similar utilization or pricing levels and such loss could have an adverse effect on our business until the services are offered at similar utilization or pricing levels.

Our Search Platform depends heavily upon revenue generated from the material agreement with our Gix Major Customer, and any adverse change in that agreement could adversely affect our business, financial condition and results of operations.

We are highly dependent on the material agreement with our Gix Major Customer. If this material agreement is terminated or substantially amended (not on favorable terms), we would experience a material decrease in our revenue from our Search Platform or the profits it generates and would be forced to seek alternative customers, at less competitive terms or accelerate the business we have with the current Search Engines. There are few companies in the market that provide internet search and search advertising services with whom we can directly engage with in the same manner which we are engaged with our Gix Major Customer. Such companies are substantially the only participants in western markets, and competitors do not offer as much coverage through sponsored links or searches. We may divert our operations and user traffic to other third-party partners which provide search feed to Search Engines, however we cannot guarantee that we will be successful. If we fail to quickly locate, negotiate and finalize alternative arrangements or otherwise expedite current operations we have with such alternative search providers, or if we do, but the alternatives do not provide for terms that are as favorable as those currently provided and utilized, we would experience a material reduction in our revenue and, in turn, our business, financial condition and results of operations would be adversely affected.

Reliance upon material suppliers may adversely affect our revenue and operating results.

We are dependent on certain material suppliers and service providers for some of the services we render. In certain cases, we rely on single supplier and/or service provider for the services we offer our customers. In most cases we do not have long term contracts with these suppliers, and even in the cases where we do the contracts include significant qualifications that would make it extremely difficult for us to force the supplier or service provider to provide us with their services, should they choose not to do so. We are therefore subject to the risk that these third-parties we work with will not be able or willing to continue to provide us with services that meet our specifications, quality standards and delivery schedules. Factors that could impact these third parties’ willingness and ability to continue to provide us with the required services include disruption at or affecting their facilities, such as work stoppages or natural disasters, adverse weather or other conditions that affect their supply, their financial conditions and / or deterioration in our relationships with these third parties. In addition, we cannot be sure that we will be able the services we need on satisfactory terms. Any increase in costs could reduce our revenues and harm our gross margins. In addition, any loss of a material supplier and / or service provider may permanently cause a change in one or more of our services that may not be accepted by our customers or cause us to eliminate that product altogether.

We may not be able to generate enough cash flow to meet our debt obligations or fund our other liquidity needs.

Our ability to pay the principal and interest of our Financing Agreement (as defined below) and to satisfy our other liabilities will depend upon future performance and our ability to repay or refinance our debt as it becomes due. Our future operating performance and ability to refinance will be affected by economic and capital market conditions, results of operations and other factors, many of which are beyond our control. Our ability to meet our debt obligations also may be impacted by changes in prevailing interest rates, as borrowings under our loans bear interest at floating rates. Failure to pay our loans might result in immediate repayment and / or realization of secured assets under the Financing Agreement, which include a floating lien on Gix Media’s assets, bank account, rights under the Cortex Transaction (as defined below), Gix Media’s intellectual property and holdings in Cortex.

Our customers maysuccess is dependent on the preferences of consumers, internet users and advertisers.

Our services rely on the digital devices used by consumers and users. To the extent that users change their consumption habits, or to the extent that traffic does not grow, our activities might decrease and our business operations might be harmed.

A change in advertisers’ preferences could also affect our operations. Advertisers might change their preferences relating to their willingness to work with certain technologies and certain advertising platforms, which might reduce or terminate theirour activities and harm our business relationship with us at any time. If customers representing a significant portionoperations.

A loss of the services of our revenue reduce ortechnology vendors could adversely affect execution of our business strategy.

Should some of our technology vendors terminate their relationship with us, itour ability to continue the development of some of our platforms could have a material adverse effectbe adversely affected, until such time that we find adequate replacement for these vendors, or until such time that we can continue the development on our business, results of operations and financial condition.own.

We generally engage with two typesGlobal pandemics such as the continued outbreak of customers: small companies who change from time tothe COVID-19 pandemic may negatively impact the global economy in a significant manner for an extended period of time, and a number of large companies with whom the engagement is for shorter periods of time. We do not enter into long-term contracts with our customers, and such customers do business with us on a non-exclusive basis. Accordingly,also adversely affect our business is highly vulnerable to adverse economic conditions, market evolution and development of new or more compelling offerings by our competitors, which could either lead to reduced advertising spend generally or motivate our current or potential customers to migrate to our competitors. Any reduction in spending by, or loss of, existing or potential customers would negatively impact our revenue and operating results.results.

Furthermore,The outbreak of a global pandemic such as the discretionary, non-exclusive nature of our relationships with customers subjects us to increased pricing pressure. Although we believe our rates are competitive, our competitorsCOVID-19 pandemic may be able to offer more favorable pricing or other advantageous terms. Asresult in a widespread health crisis that may adversely affect businesses, economies and financial markets worldwide, and as a result we may be compelled to reduceplacing constraints on the operations of businesses, decreased consumer mobility and activity, and significant economic volatility in international capital markets. For example, the COVID-19 pandemic has caused an economic recession, high unemployment rates and other disruptions, both in the United States, Israel and the rest of the world. While the COVID-19 pandemic has not adversely affected our rates or offerbusiness, an additional outbreak of the COVID-19 and other incentivesglobal pandemics and any of these impacts, including the prolonged continuation of these impacts, could in order to maintainthe future, adversely affect our current customersbusiness and attract new customers. If a significant numberoperating results and heighten many of customers are able to compel us to charge lower rates or provide rate concessions or incentives, there is no assurance that we would be able to compensate for such price reductions or conserve our profit margins.the other risks described in these “Risk Factors.”

Risks Related to our Competition

Large and established internet and technology companies, such as Google and Facebook, play a substantial role in the digital advertising market and may significantly impair our ability to operate in this industry.

Google is a substantial player in the digital advertising market along with other players such as Microsoft. In addition, a small number of social network companies, such as Facebook, account for a large portion of digital advertising budgets. The high concentration of power among Google, Facebook and some other large market participants causes us to be subject to any unilateral changes they may make with respect to advertising on their respective platforms, which may be more lucrative than alternative methods of advertising or partnerships with other publishers that are not subject to such changes. Furthermore, we could have limited ability to respond to, and adjust for, changes implemented by large market participants.

These companies, along with other large and established Internet and technology companies, may also leverage their power to make changes to their web browsers, operating systems, platforms, networks or other products or services in a way that impacts the entire digital advertising marketplace.

The advertising/marketing industrydigital advertising market is highly competitive. If we cannot compete effectively in this market, our revenues are likely to decline.

We face intense competition in the marketplace. We operate in a dynamic market that is subject to rapid development and introduction of new technologies, products and solutions, changing branding objectives, evolving customer demands and industry guidelines, all of which affect our ability to remain competitive. There are a large number of companies and advertising technology companies that offer products or services similar to ours and that compete with us for finite advertising budgets. There is also a large number of niche companies that are competitive with us, as they provide a subset of the services that we provide. Some of our existing and potential competitors may be better established, benefit from greater name recognition, may offer solutions and technologies that we do not offer or that are more evolved than ours, and may have significantly more financial, technical, sales and marketing resources than we do. In addition, some competitors, particularly those with a larger and more diversified revenue base and a broader offering, may have greater flexibility than we do to compete aggressively on the basis of price and other contract terms as well as respond to market changes. Additionally, companies that do not currently compete with us in this space may change their services to be competitive if there is a revenue opportunity, and new or stronger competitors may emerge through consolidations or acquisitions. If our platform isplatforms are not perceived as competitively differentiated or we fail to develop adequately to meet market evolution, we could lose customers and market share or be compelled to reduce our prices and harm our operational results.

Risks Related to our Intellectual Property

If we cannot enforce and protect our intellectual property rights, our business could be adversely affected.

We rely on patents, copyright, trademark, domain name and trade secret laws in the United States and similar laws in other countries, as well as licenses and other agreements with our employees, and other parties, to establish and maintain our intellectual property rights in the technology, products and services used in our operations. These laws and agreements may not guarantee that our intellectual property rights will be protected and our intellectual property rights could be challenged or invalidated. Amendments to or interpretations of U.S. patent laws or new rulings around U.S. patent laws may adversely impact our ability to protect our new technologies, content, products and services and to defend against claims of patent infringement. In addition, such intellectual property rights may not be sufficient to permit us to take advantage of current industry trends or otherwise to provide competitive advantages, which could result in costly redesign efforts, discontinuance of offerings, decreased traffic and associated revenue or otherwise adversely affect our business.

We may in the future be, subject to claims of intellectual property infringement that could adversely affect our business.

Many companies (including patent holding companies) and individuals own patents, copyrights, trademarks, and trade secrets and frequently enter into litigation based on allegations of infringement or other violations of intellectual property rights. As we develop and offer our platformplatforms through various distribution channels we may experience an increase in the number of intellectual property claims against us. These claims, whether meritorious or not, may result in litigation, may be time-consuming and costly to resolve, and may require expensive changes in our methods of doing business. These intellectual property infringement claims may require us to enter into royalty or licensing agreements on unfavorable terms or to incur substantial monetary liability. Additionally, these claims may result in our being enjoined preliminarily or permanently from further use of certain intellectual property or may require us to cease or significantly alter certain of our operations.

Some of our commercial agreements may require us to indemnify third parties against intellectual property infringement claims, which may require us to use substantial resources to defend against or settle such claims or, potentially, to pay damages. These third parties may also discontinue the use of our platform,platforms, as a result of injunctions or otherwise, which could result in loss of revenues and adversely impact our business. Additionally, we may be exposed to liability or substantially increased costs if a commercial partner does not honor its contractual obligation to indemnify us for intellectual property infringement claims made by third parties or if any amounts received are not adequate to cover our liabilities or the costs associated with defense of such claims. The occurrence of any of these events could adversely affect our business.

Patent terms may be inadequate to protect our competitive position for an adequate amount of time.

Patents have a limited lifespan. In the United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest U.S. non-provisional or international patent application filing date. Various extensions may be available, but the life of a patent, and the protection it affords, is limited. Even if patents covering our products are obtained, once the patent life has expired, we may be open to competition from competitive products, including generics. As a result, our patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.

Risks Related to Cyber and Data CollectionProtection Regulation

We may not be able to protect our systems, technology and infrastructure from cyberattacks.

We may be under attack by perpetrators of malicious technology-related events, such as the use of botnets, malware or other destructive or disruptive software, distributed denial of service attacks, phishing, attempts to misappropriate user information and other similar malicious activities. The incidence of events of this nature (or any combination thereof) is on the rise worldwide. While we continuously develop and maintain systems designed to detect and prevent events of this nature from impacting our platform,platforms, we have invested (andand continue to invest)invest, heavily in these efforts. These efforts are costly and require ongoing monitoring and updating as technologies change and efforts to overcome preventative security measures become more sophisticated.

Any event of this nature that we experience could damage our systems, technology and infrastructure, prevent us from providing our services, compromise the integrity of our services, damage our reputation and/or be costly to remedy, as well as subject us to investigations by regulatory authorities, fines and/or litigation that could result in liability to third parties.

A failure in our technology infrastructure may adversely affect our business and financial condition and disrupt our customers’ businesses.

We utilize “Cloud” servers, which are not immune to failures, which could affect our activities, including its media-purchasing and processing capabilities.

Regulations, legislation, or self-regulation developments relating to privacy, data collection and protection, e-commerce, and internet advertising, privacy and data collection and protection, and uncertainties regarding the application or interpretation of existing or newly adopted laws and regulations, could harm our business and subject us to significant legal liability for non-compliance. Our business depends on our ability to collect and use data, and any limitation on the collection and use of this data could significantly diminish the value of our platformplatforms and cause us to lose customers and revenue.

Our business is conducted through the internet and therefore, among other things, we are subject to the laws and regulations that apply to e-commerce and online businesses around the world. These laws and regulations are becoming more prevalent in the United States, Europe, Israel, Canada and elsewhere and may impede the growth of the internet and consequently our services. These regulations and laws may cover privacy, data collection and protection, location of data storage and processing, cybersecurity, e-commerce, content, use of “cookies,” access changes, “net neutrality,” pricing, advertising, distribution of “spam” copyright and other intellectual property, libel, marketing, distribution of products, protection of minors, consumer protection, taxation and online payment services. Our platform receives,platforms receive, collects, stores, processes, transfers and uses certain data about how viewers engaged with videos and helps companies to leverage that data to become a better story tellerstoryteller and optimize the videos. Our ability to access and utilize such data is crucial.

Our ability to either collect or use data could be restricted by new laws or regulations. We are subject to numerous federal, state, local, and international laws, directives and regulations regarding privacy, data protection, and data security and the collection, storing, sharing, use, processing, transfer, disclosure and protection of personal information and other data, the scope of which are changing, subject to differing interpretations, and may be inconsistent among jurisdictions or conflict with other legal and regulatory requirements. We are also subject to certain contractual obligations to third parties related to privacy, data protection and data security. We strive to comply with our applicable policies and applicable laws, regulations, contractual obligations and other legal obligations relating to privacy, data protection and data security to the extent possible. However, the regulatory framework for privacy, data protection and data security worldwide is, and is likely to remain for the foreseeable future, uncertain and complex, and it is possible that these or other actual or alleged obligations may be interpreted and applied in a manner that we do not anticipate or that is inconsistent from one jurisdiction to another and may conflict with other legal obligations or our practices. Further, any significant change to applicable laws, regulations or industry practices regarding the collection, use, retention, security or disclosure of data, or their interpretation, or any changes regarding the manner in which the consent of users or other data subjects for the collection, use, retention or disclosure of such data must be obtained, could increase our costs and require us to modify our services and features, possibly in a material manner, which we may be unable to complete, and may limit our ability to store and process user data or develop new services and features.

If we were found in violation of any applicable laws or regulations relating to privacy, data protection or security, our business may be materially and adversely affected and we would likely have to change our business practices and potentially the services and features available through our platform.platforms. In addition, these laws and regulations could impose significant costs on us and could constrain our ability to use and process data in manners that may be commercially desirable. In addition, if a breach of data security were to occur or to be alleged to have occurred, if any violation of laws and regulations relating to privacy, data protection or data security were to be alleged, or if we had any actual or alleged defect in our safeguards or practices relating to privacy, data protection, or data security, our solutions may be perceived as less desirable and our business, prospects, financial condition and results of operations could be materially and adversely affected.

We also expect that there will continueFor example, we collect, use, maintain and otherwise process certain data about our customers (including, without limitation, customers’ clients or users), partners, candidates and employees, consultants, leads and consumers. Our ability to collect, use, maintain or otherwise process personal data has been, and could be further, restricted by existing and new laws and regulations relating to privacy and industry standards concerning privacy, data collection and protection, and information security proposed and enacted in various jurisdictions. For example,including the European Union’s (“EU”), data protection landscape is currently unstable, resulting in possible significant operational costs for internal compliance and risks to our business. The EU has adopted the General Data Protection Regulation (“GDPR”2016/679 (the “GDPR”), the California Consumer Privacy Act (the “CCPA”) and the California Privacy Rights Act (the “CPRA”), the Israeli Privacy Protection Law, 1981 and the regulations thereunder (the “Israeli Privacy Law”) as well as other laws. These laws and regulations generally define personal data to include location data and online identifiers, which became effectiveare commonly used and collected parameters in May 2018,digital advertising and, among other things, impose stringent user consent requirements and permit data subjects to request we discontinue using certain data. In addition, some countries are considering or have enacted legislation requiring local storage and processing of data that could increase the cost and complexity of delivering our services.

Additionally, the GDPR has a wide territorial scope and contains numeroussignificant penalties for non-compliance. The GDPR, among other things, imposes requirements to provide detailed and changes from previously existing EU laws, including more robust obligations ontransparent disclosures about how personal data processorsis collected and heavier documentation requirementsprocessed, grants rights for data protection compliance programs by companies. Among other requirements,subjects to access, delete or object to the GDPR regulatesprocessing of their personal data, provides for a mandatory breach notification to supervisory authorities (and in certain cases, affected individuals) of certain data breaches, sets limitations on the transferretention of personal data subjectand outlines significant documentary requirements to demonstrate compliance through policies, procedures, training and audits. Additionally, supervisory authorities in the member states have some flexibility when implementing European Directives and certain aspects of the GDPR, which can lead to third countriesdiverging national rules. European supervisory authorities have been very active in terms of enforcing data protection rules, including with respect to cookie-related matters. Regulation of cookies and similar technologies, and any decline of cookies or similar online tracking technologies as a means to identify and potentially target individuals, may lead to broader restrictions and impairments on our business activities, may negatively impact our efforts to understand users, and, as a result of us being able to process less data, make our automated decisioning process less accurate.

Recent rulings by the Court of Justice of the European Union and directives from European data protection authorities may additionally limit our use of the IAB Transparency Platform, which our solutions are reliant upon, and curtail the use of online tracking technologies that have not been foundwe use to provide adequate protection to such personal data, including the United States.safeguard against fraud and personalize feeds and advertisements. Failure to comply with the GDPR couldadhere to applicable guidance from European data protection authorities may result in penalties for noncompliance.substantial fines, significant increases in costs, or damage to our reputation.

In addition to the GDPR, the European Commission has another draft regulation in the approval process that focuses on a person’s right to conduct a private life. The proposed legislation, known as the Regulation of Privacy and Electronic Communications (“ePrivacy Regulation”), would replace the current the current ePrivacy Directive. Originally planned to be adopted and implemented at the same time as the GDPR, the ePrivacy Regulation is still being negotiated.

In addition, the U.K.’s General Data Protection Regulation (the “UK GDPR”), impose robust obligations for the collection, control, use, sharing, disclosure and other processing of personal data and contains documentation and accountability requirements for data protection compliance. The UK GDPR exposes us to two parallel regimes (GDPR and UK GDPR), each of which authorizes similar fines and may subject us to increased compliance risk based on differing, and potentially inconsistent or conflicting, interpretation and enforcement by regulators and authorities (particularly, if the laws are amended in the future in divergent ways). Failure to comply with these obligations can result in significant fines and other liability under applicable law. In particular, under the GDPR, fines of up to EUR 20 million (or GBP 17.5 million under the UK GDPR) or up to 4% of the annual global revenue of the noncompliant company, whichever is greater, could be imposed for violations of certain of the GDPR’s requirements. The GDPR requirements apply not only to third-party transactions, but also to transfers of information between us and our subsidiaries, including employee information.

Additionally,Similarly, there have been laws and regulations adopted throughout the United States that impose new obligations in June 2018, California passedareas such as privacy, in particular protection of personal information and implementing adequate cybersecurity measures to protect such information. In the California Consumer Privacy Act (“CCPA”United States, privacy and data security laws are also complex and changing rapidly, these laws are not consistent, and compliance with them in the event of a widespread data breach is complex and costly. Both federal and state legislation also govern the collection, use and other processing of personal data, and the advertising industry has been subject to review by the Federal Trade Commission (the “FTC”), whichU.S. Congress, and individual states. For example, the CCPA provides new data privacy rights for consumersCalifornia residents and new operational requirements for covered companies. Specifically,Among other things, companies covered by the CCPA provides that covered companies must provide new disclosures to California consumersresidents and afford such consumers new abilitiesresidents the ability to opt-out of certain sales of personal information. The CCPA became operative January 1, 2020. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. We cannot fully predictIn addition, the impact ofCPRA, which took effect in January 2023, has expanded the rights granted under the CCPA and impose additional notice and opt out-obligations, including an obligation to provide California residents with the ability to opt-out to the processing of personal information for purposes of behavioral advertising, adds restrictions on our businessthe “sale” or operations, but“share” of personal information (which it maydefines broadly under the CCPA), and creates new data privacy rights for California residents and carries significant enforcement penalties for non-compliance. Additional U.S. states have implemented, or are in the process of implementing, similar new laws or regulation (for example, the Virginia Consumer Data Protection Act (“VCDPA”) that has entered into effect on January 1, 2023 and the Colorado Privacy Act (“CPA”) which will go into effect on July 1, 2023) that impose new privacy rights and obligations which resembles the CCPA and CPRA. Further, laws in all 50 states require usbusinesses to modify ourprovide notice to consumers whose personal information has been disclosed as a result of a data practices and policies and to incur substantial costs and expenses in an effort to comply. Somebreach. More generally, some observers have noted that the CCPA, CPRA, VCDPA, and CPA could mark the beginning of a trend toward more stringent United States federal privacy legislation, in the United States, which could increase our potential liability and adversely affect our business. Further

The CCPA, and eventually the CPRA, VCDPA, CPA, and other legal and regulatory changes, are making it easier for certain individuals to opt-out of having their personal data processed and disclosed to third parties through various opt-out mechanisms, which could result in March 2017, the United Kingdom (“U.K.”) formally notified the European Council of its intentionan increase to leave the EU pursuantour operational costs to Article 50 of the Treaty on European Union (“Brexit”). The U.K. ceased to be an EU Member State on January 31, 2020, but enacted, a Data Protection Act substantially implementing the GDPR, effective in May 2018, which was further amended to align more substantiallyensure compliance with the GDPR following Brexit. It is unclear how U.K. data protection laws or regulations will develop in the medium to longer termsuch legal and how data transfers to and from the U.K. will be regulated. In addition, some countries are considering or have enacted legislation requiring local storage and processing of data that could increase the cost and complexity of delivering our services.regulatory changes.

In addition, failure to comply with the Israeli Privacy Protection Law 1981, and its regulations as well as the guidelines of the Israeli Privacy Protection Authority, may expose us to administrative fines, civil claims (including class actions) and in certain cases criminal liability. Current pending legislation may result in a change of the current enforcement measures and sanctions.

Any failure or perceived failure by us to comply with our posted privacy policies, our privacy-related obligations to users or other third parties, or any other legal obligations or regulatory requirements relating to privacy, data protection or data security may result in governmental investigations or enforcement actions, litigation, claims or public statements against us by consumer advocacy groups or others and could result in significant liability, cause our users to lose trust in us, and otherwise materially and adversely affect our reputation and business. Furthermore, the costs of compliance with, and other burdens imposed by, the laws, regulations, other obligations and policies that are applicable to the businesses of our users may limit the adoption and use of, and reduce the overall demand for our platform.platforms. Additionally, if third parties we work with violate applicable laws, regulations or contractual obligations, such violations may put our users’ data at risk, could result in governmental investigations or enforcement actions, fines, litigation, claims, or public statements against us by consumer advocacy groups or others and could result in significant liability, cause our users to lose trust in us and otherwise materially and adversely affect our reputation and business. Further, public scrutiny of, or complaints about, technology companies or their data handling or data protection practices, even if unrelated to our business, industry or operations, may lead to increased scrutiny of technology companies, including us, and may cause government agencies to enact additional regulatory requirements, or to modify their enforcement or investigation activities, which may increase our costs and risks.

Due to rapid changes in technology and the inconsistent interpretations of privacy and data collection and protection laws and regulations, we may be required to materially change the way we do business. The challenges imposed by the ongoing need to remain compliant with such laws and regulations, as well the need to implement any changes required based on newly introduced laws and regulations, may slow our growth, and if we are not able to cope with these challenges as effectively as other companies, we will be competitively disadvantaged. Any limitation on our ability to collect and utilize data, including personal data, would make it more difficult for us to be able to optimize ad placement for the benefit of our advertisers and publishers, which could render our solutions less valuable and potentially result in loss of clients and a decline in revenue. For example, we may need to adapt our advertising solution to a “cookie-less” environment and introduce alternative solutions which may not provide the targeting capabilities provided by cookies.

We rely on third-party Internet, mobile, and other products and services to deliver our mobile and web applications to users, and any disruption of, or interference with, our use of those services could adversely affect our business, financial condition, results of operations, and customers.

Our services continuing and uninterrupted performance is critical to our success. Our services are dependent on the performance and reliability of internet, mobile, and other infrastructure services that are not under our control. For example, we currently host our services and support our operations using a third-party provider of cloud infrastructure services. While we have engaged reputable vendors to provide these products or services, we do not have control over the operations of the facilities or systems used by our third-party providers. These facilities and systems may be vulnerable to damage or interruption from natural disasters, cybersecurity attacks, human error, terrorist attacks, power outages, pandemics, and similar events or acts of misconduct. In addition, any changes in one of our third-party service provider’s service levels may adversely affect our ability to meet the requirements of our customers. While we believe we have implemented reasonable backup and disaster recovery plans, we expect that in the future we may experience interruptions, delays and outages in service and availability from time to time due to a variety of factors, including infrastructure changes, human or software errors, website hosting disruptions, capacity constraints, or external factors beyond our control. Sustained or repeated system failures would reduce the attractiveness of our offerings and could disrupt our customers’ businesses. It may become increasingly difficult to maintain and improve our performance, especially during peak usage times, as we expand our products and service offerings. Any negative publicity or user dissatisfaction arising from these disruptions could harm our reputation and brand, may adversely affect the usage of our offerings, and could harm our business, financial condition and results of operation.

Risks Related to Our Common Stock

Shares of Common Stock issuable upon the conversion of warrants may substantially increase the number of shares of Common Stock available for sale in the public market and depress the price of our Common Stock.

As of December 31, 2021,2022, we had outstanding: (i) Class J Warrants exercisable to purchase 3,649,318130,333 shares of Common Stock at an exercise price of $0.48$13.44 per share of Common Stock; and (ii) Class K Warrants exercisable to purchase 3,649,318130,333 shares of Common Stock, at an exercise price of $0.80$22.40 per share of Common Stock.

To the extent any of these warrants are exercised and any additional warrants are issued and subsequently exercised, there will be further dilution to our stockholders. Until the warrants expire, these warrant holders will have an opportunity to profit from any increase in the market price of our Common Stock without assuming the risks of ownership. Holders of options and warrants may exercise these securities at a time when we could obtain additional capital on terms more favorable.

The exercise price of the warrants will dilute the voting interest of the owners of presently outstanding shares of Common Stock by adding a substantial number of additional shares of our Common Stock. We have reserved shares of Common Stock for issuance upon the exercise of the warrants and may increase the shares reserved for these purposes in the future.

The shares of our Common Stock, which are issuable upon the exercise of any outstanding warrants may be sold in the public market pursuant to Rule 144, if applicable. The sale of our Common Stock issued or issuable upon the exercise of the warrants and options described above, or the perception that such sales could occur, may adversely affect the market price of our Common Stock.

Our Planned Reverse Split may not result in a proportional increase in the per share price of our Common Stock.

We intend to effect the Planned Reverse Split with the primary intent of increasing the price of our Common Stock in order to meet the initial listing requirements of the Nasdaq Capital Market. The effect of the Planned Reverse Split on the market price for our Common Stock cannot be accurately predicted. In particular, we cannot assure you that the proportionate increase in the price of our common stock immediately after the Planned Reverse Split from the price for shares of our Common Stock immediately before the Planned Reverse Split will be maintained for us to meet the initial listing requirements of the Nasdaq Capital Market or that the such market prices will be maintained for a substantial period of time. It is not uncommon for the market price of a company’s common stock to decline in the period following a reverse stock split. If the market price of our Common Stock declines following the Planned Reverse Split, the percentage decline may be greater than would occur in the absence of the Planned Reverse Split. The market price of our Common Stock may also be affected by other factors which may be unrelated to the Planned Reverse Split or the number of shares outstanding.

Moreover, because some investors may view the Planned Reverse Split negatively, we cannot assure you that the Planned Reverse Split will not adversely impact the market price of our Common Stock. Accordingly, our total market capitalization after the Planned Reverse Split may be lower than the market capitalization before the Planned Reverse Split.

We are subject to compliance with securities law, which exposes us to potential liabilities, including potential rescission rights.

We have offered and sold our Common Stock to investors pursuant to certain exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Act”) as well as those of various state securities laws. The basis for relying on such exemptions is factual; that is, the applicability of such exemptions depends upon our conduct and that of those persons contacting prospective investors and making the offering. We have not received a legal opinion to the effect that any of our prior offerings were exempt from registration under any federal or state law. Instead, we have relied upon the operative facts as the basis for such exemptions, including information provided by investors themselves.

If any prior offering did not qualify for such exemption, an investor would have the right to rescind its purchase of the securities if it so desired. It is possible that if an investor should seek rescission, such investor would succeed. A similar situation prevails under state law in those states where the securities may be offered without registration in reliance on the partial preemption from the registration or qualification provisions of such state statutes. If investors were successful in seeking rescission, we would face severe financial demands that could adversely affect our business and operations. Additionally, if we did not in fact qualify for the exemptions upon which it has relied, we may become subject to significant fines and penalties imposed by the U.S. Securities and Exchange Commission (the “SEC”) and state securities agencies.

The availability of a large number of authorized but unissued shares of Common Stock may, upon their issuance, lead to dilution of existing stockholders.

We are authorized to issue 490,000,000 shares of Common Stock, of which, as of December 31, 2021, 34,753,6692022, 14,783,964 shares of Common Stock were outstanding. Additional shares of Common Stock may be issued by our boardBoard of directorsDirectors without further stockholder approval. The issuance of large numbers of shares, possibly at below market prices, is likely to result in substantial dilution to the interests of other stockholders. In addition, issuances of large numbers of shares of Common Stock may adversely affect the market price of our Common Stock.

Our Certificate of Incorporation authorizes 10,000,000 shares of preferred stock, par value $0.0001 per share of which none were issued and outstanding as of December 31, 2021.2022. The boardBoard of directorsDirectors is authorized to provide for the issuance of these unissued shares of preferred stock in one or more series, and to fix the number of shares and to determine the rights, preferences and privileges thereof. Accordingly, the boardBoard of directorsDirectors may issue preferred stock which may convert into large numbers of shares of common stock and consequently lead to further dilution of other stockholders.

We have never paid cash dividends and do not anticipate doing so in the foreseeable future.

We have never declared or paid cash dividends on our Common Shares. We currently plan to retain any earnings to finance the growth of our business rather than to pay cash dividends. Payments of any cash dividends in the future will depend on our financial condition, results of operations and capital requirements, as well as other factors deemed relevant by our boardBoard of directors.Directors.

Our Common Stock is subject to the “Penny Stock” rules of the SEC and the trading market in our stock is limited, which makes transactions in our stock cumbersome and may reduce the value of an investment.

The SEC has adopted Rule 15g-9 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:

In order to approve a person’s account for transactions in penny stocks, the broker or dealer must:

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form:

Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our Common Stock and cause a decline in the market value of our Common Stock.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

Since our Common StockOur common stock has been downgraded to the OTC Markets, Pink Tier and is thinly traded, and as a result the sale of your holding may take a considerable amount of time.

The OTC Markets Group has downgraded trading in the Company’s shares of Common Stock to the OTC Markets, Pink Tier from its trading on the OTCQB Markets on November 7, 2022. The shares of our Common Stock are thinly-traded on the OTCQB Market, meaning that the number of persons interested in purchasing our Common Stock at or near bid prices at any given time may be relatively small or non-existent. This situation is attributable to a number of factors, including the fact that we are a small company that is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price.

In the absence of an active trading market, investors may have difficulty buying and selling or obtaining market quotations, market visibility for shares of our Common Stock may be limited, and a lack of visibility for shares of our Common Stock may have a depressive effect on the market price for shares of our Common Stock. The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. The lack of an active market may also reduce the fair market value of your shares. An inactive market may also impair our ability to raise capital to continue to fund operations by selling shares.

We cannot give you any assurance that a broader or more active public trading market for our Common Stock will develop or be sustained, or that current trading levels will be sustained. Due to these conditions, we can give you no assurance that you will be able to sell your shares at or near bid prices or at all if you need money or otherwise desire to liquidate your shares. Furthermore, because of the limited market and generally low volume of trading in our Common Stock, the price of our Common Stock could more likely be affected by broad market fluctuations, general market conditions, fluctuations in our operating results, changes in the markets’ perception of our business, and announcements made by us, our competitors, or parties with whom we have business relationships.

The market for penny stocks has experienced numerous frauds and abuses, which could adversely impact investors in our stock.

The OTC Markets, Pink Tier securities are frequent targets of fraud or market manipulation, both because of their generally low prices and because the OTC Markets, Pink Tier reporting requirements are less stringent than those of a national securities stock exchanges such as the Nasdaq Stock Market LLC (the “Nasdaq”).

Patterns of fraud and abuse include:

● Control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;

● Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;

● “Boiler room” practices involving high pressure sales tactics and unrealistic price projections by inexperienced sales persons;

● Excessive and undisclosed bid-ask differentials and mark-ups by selling broker-dealers; and

● Wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses.

Shares of Common Stock eligible for future sale may adversely affect the market.

From time to time, certain of our stockholders may be eligible to sell all or some of their shares of Common Stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144 promulgated under the Act, subject to certain limitations. In general, pursuant to amended Rule 144, non-affiliate stockholders may sell freely after six months, subject only to the current public information requirement. Affiliates may sell after six months, subject to the Rule 144 volume, manner of sale (for equity securities), current public information and notice requirements. Any substantial sales of our common stock pursuant to Rule 144 may have a material adverse effect on the market price of our Common Stock.

Our share price has fluctuated significantly and could continue to fluctuate significantly.

The market price for our Common Stock, as well as the prices of shares of other technology and ad-tech companies, has been volatile. The following factors may cause significant fluctuations in the market price of our Common Stock:

In addition, share prices of many technology companies in general and ad-tech companies in particular fluctuate significantly for reasons that may be unrelated or disproportionate to operating results. The factors discussed above may depress or cause volatility to our share price, regardless of our actual operating results.

If we fail to maintain effective internal controls over financial reporting, the price of our Common Stock may be adversely affected.

We identified a material weakness in our period and our financial reporting process. Our internal control over financial reporting may have material weaknesses and conditions that could require correction or remediation, the disclosure of which may have an adverse impact on the price of our Common Stock. We are required to establish and maintain appropriate internal controls over financial reporting. Failure to establish those controls, or any failure of those controls once established, could adversely affect our public disclosures regarding our business, prospects, financial condition or results of operations. In addition, management’s assessment of internal controls over financial reporting may identify material weaknesses and conditions that need to be addressed in our internal controls over financial reporting or other matters that may raise concerns for investors. Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting or disclosure of management’s assessment of our internal controls over financial reporting may have an adverse impact on the price of our Common Stock.

Management evaluated the effectiveness of the Company’s disclosure controls and procedures as of December 31, 2022 and concluded that although the material weakness previously identified in our Annual Report on Form 10-K for the year ended December 31, 2021 has been remediated, the Company’s disclosure controls and procedures were not effective as of the end of December 31, 2022, and pursuant to the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013), as the assets of an acquired business, which have been excluded from management’s assessment of internal control over financial reporting, constitute substantially all of the Company’s assets as of December 31, 2022. This could lead investors to question the reliability and accuracy of our reported financial information and could adversely impact the market price of our Common Stock.

We are required to comply with certain provisions of Section 404 of the Sarbanes-Oxley Act of 2002 and if we fail to comply in a timely manner, our business could be harmed and our stock price could decline.

Rules adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 require an annual assessment of internal controls over financial reporting, and for certain issuers an attestation of this assessment by the issuer’s independent registered public accounting firm. The standards that must be met for management to assess the internal controls over financial reporting as effective are complex, and require significant documentation, testing, and possible remediation to meet the detailed standards.

We expect to incur expenses and to devote resources to Section 404 compliance on an ongoing basis. It is difficult for us to predict how long it will take or costlyhow much will it will becosts to complete the assessment of the effectiveness of our internal control over financial reporting for each year and to remediate any deficiencies in our internal control over financial reporting. As a result, we may not be able to complete the assessment and remediation process on a timely basis. In addition, although attestation requirements by our independent registered public accounting firm are not presently applicable to us, we could become subject to these requirements in the future, and we may encounter problems or delays in completing the implementation of any resulting changes to internal controls over financial reporting.

In connection with the eventpreparation of our financial statements for the year ended December 31, 2021, our management identified a material weakness in our internal control over financial reporting. In response to that material weakness, we implemented a remediation plan and reviewed our Chief Executive Officerexisting processes and Chief Financial Officer, which currently iscontrols in order to identify additional control deficiencies and designed new controls or adjusted the same individual, determinesdesign of our existing controls in order to improve our processes and controls. Although management determined that the material weakness in connection with the Company’s internal controls over financial reporting for the year ended December 31, 2021 has been remediated, our management concluded that the Company’s disclosure controls and procedures were not effective as of the end of December 31, 2022. We cannot assure you that management will not additionally determine in the future that our internal control over financial reporting is not effective as defined under Section 404,and we cannot predict how the market prices of our shares of Common Stock will be affected; however, we believe that there is a risk that investor confidence and share value may be negatively affected.

Our annual and quarterly results may fluctuate, which may cause substantial fluctuations in our Common Stock price.

Our annual and quarterly operating results may in the future fluctuate significantly depending on factors including the timing of purchase orders, new product releases by us and other companies, gain or loss of significant customers, price discounting of our product, the timing of expenditures, product delivery requirements and economic conditions. Revenues related to our product are required to be recognized upon satisfaction of all applicable revenue recognition criteria. The recognition of revenues from our product is dependent on a number of factors, including, but not limited to, the terms of any license agreement and the timing of implementation of our products by our customers.

Any unfavorable change in these or other factors could have a material adverse effect on our operating results for a particular quarter or year, which may cause downward pressure on our common stock price. We expect quarterly and annual fluctuations to continue for the foreseeable future.

Delaware law contains provisions that could discourage, delay or prevent a change in control of our company,Company, prevent attempts to replace or remove current management and reduce the market price of our stock.

Provisions in our certificateCertificate of incorporationIncorporation and bylawsBylaws may discourage, delay or prevent a merger or acquisition involving us that our stockholders may consider favorable. For example, our certificateCertificate of incorporationIncorporation authorizes our boardBoard of directorsDirectors to issue up to ten million shares of “blank check” preferred stock. As a result, without further stockholder approval, the boardBoard of directorsDirectors has the authority to attach special rights, including voting and dividend rights, to this preferred stock. With these rights, preferred stockholders could make it more difficult for a third party to acquire us.

We are also subject to the anti-takeover provisions of the Delaware General Corporation Law (the “DGCL”). Under these provisions, if anyone becomes an “interested stockholder,” we may not enter into a “business combination” with that person for three years without special approval, which could discourage a third party from making a takeover offer and could delay or prevent a change in control of us. An “interested stockholder” is, generally, a stockholder who owns 15% or more of our outstanding voting stock or an affiliate of ours who has owned 15% or more of our outstanding voting stock during the past three years, subject to certain exceptions as described in the DGCL.

Risks Related to our Operations in Israel

Exchange rate fluctuations between foreign currencies and the U.S. Dollar may negatively affect our earnings.

Our reporting and functional currency is the U.S. dollar. Our revenues are currently primarily payable in U.S. dollars and we expect our future revenues to be denominated primarily in U.S. dollars and Euros. However, certain amount of our expenses are in NIS and as a result, we are exposed to the currency fluctuation risks relating to the recording of our expenses in U.S. dollars. We may, in the future, decide to enter into currency hedging transactions. These measures, however, may not adequately protect us from material adverse effects.

Political, economic and military instability in Israel may impede our ability to operate and harm our financial results.

Our offices and management team are located in the Tel-Aviv metropolitan area, Israel. Accordingly, political, economic, and military conditions in Israel and the surrounding region may directly affect our business and operations. In recent years, Israel has been engaged in sporadic armed conflicts with Hamas, an Islamist terrorist group that controls the Gaza Strip, with Hezbollah, an Islamist terrorist group that controls large portions of southern Lebanon, and with Iranian-backed military forces in Syria. In addition, Iran has threatened to attack Israel and may be developing nuclear weapons. Some of these hostilities were accompanied by missiles being fired from the Gaza Strip against civilian targets in various parts of Israel, including areas in which our employees and some of our consultants are located, and negatively affected business conditions in Israel. Any hostilities involving Israel or the interruption or curtailment of trade between Israel and its trading partners could adversely affect our operations and results of operationsoperations. Our 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. Any armed conflicts or political instability in the region would likely negatively affect business conditions and could harm our results of operations.

Further, in the past, the State of Israel and Israeli companies have been subjected to economic boycotts. Several countries still restrict business with the State of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on our operating results, financial condition or the expansion of our business. A campaign of boycotts, divestment and sanctions has been undertaken against Israel, which could also adversely impact our business.

The Israeli government is currently pursuing extensive changes to Israel’s judicial system. In response to the foregoing developments, individuals, organizations and institutions, both within and outside of Israel, have voiced concerns that the proposed changes may negatively impact the business environment in Israel including due to reluctance of foreign investors to invest or transact business in Israel as well as to increased currency fluctuations, downgrades in credit rating, increased interest rates, increased volatility in security markets, and other changes in macroeconomic conditions. To the extent that any of these negative developments do occur, they may have an adverse effect on our business, our results of operations and our ability to raise additional funds, if deemed necessary by our management and Board of Directors.

In addition, many Israeli citizens are obligated to perform several days, and in some cases more, of annual military reserve duty each year until they reach the age of 40 (or older, for reservists who are military officers or who have certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases in terrorist activity, there have been periods of significant call-ups of military reservists. It is possible that there will be military reserve duty call-ups in the future. Our operations could be disrupted by such call-ups, which may include the call-up of members of our management. Such disruption could materially adversely affect our business, prospects, financial condition and results of operations.

Exchange rate fluctuations between foreign currenciesIt may be difficult to enforce a judgment of a U.S. court against us, our officers and directors or the Israeli experts named in our reports filed with the SEC in Israel or the United States, to assert U.S. Dollar may negatively affectsecurities laws claims in Israel or to serve process on our earnings.officers and directors and these experts.

Our reportingdirectors reside outside of the United States, and functional currency ismost of the assets of our directors are located outside of the United States. Therefore, a judgment obtained against us, or our directors, including a judgment based on the civil liability provisions of the U.S. dollar. Our revenues are currently primarily payablefederal securities laws, may not be collectible in the United States and may not be enforced by an Israeli court. It may also be difficult for you to effect service of process on our directors in the United States or to assert U.S. dollarssecurities law claims in original actions instituted in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not the most appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and we expect our future revenuesnot U.S. law is applicable to the claim. If U.S. law is found to be denominated primarily inapplicable, the content of applicable U.S. dollars and Euros. However, certain amount of our expenses are in NIS andlaw must be proven as a fact by expert witnesses, which can be a time consuming and costly process. Certain matters of procedure will also be governed by Israeli law.

There is little binding case law in Israel that addresses the matters described above. As a result we are exposed toof the currency fluctuation risks relating to the recording of our expensesdifficulty associated with enforcing a judgment against us in U.S. dollars. We may, in the future, decide to enter into currency hedging transactions. These measures, however,Israel, you may not adequately protect us from material adverse effects.be able to collect any damages awarded by either a U.S. or foreign court.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

None.We currently conduct the operations of our Search Platform from our offices in Ramat Gan, which we have been occupying since June 2021. We pay a monthly fee of $10,000 for the lease of the offices. The first term of the lease is thirty-six (36) months, until March 1, 2024, with an option to extend for four (4) additional years. We have a bank deposit as a guarantee in the amount of approximately $21,000 the purpose of ensuring payment of the rent for our offices. We currently conduct the operations of our Content Platform from our offices in Ramat Hachayal Tel Aviv, which we have been occupying since September 1, 2016. We pay a monthly fee of $14,000 for the lease of these offices, which we rent on a monthly basis.

ITEM 3. LEGAL PROCEEDING

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations, except as set forth below.operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of the Company, threatened against or affecting the Company, our Common Stock, our officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect, other than as set forth below.effect.

In June 2017, a lawsuit was filed with the Regional Labor Court in Tel Aviv (the “Tel Aviv Court”) against Emerald Israel, and other defendants, claiming certain damages in the total amount of approximately $225,000, under the assertion of wrongful termination by Emerald Israel. We filed our response with the Tel Aviv Court in October of 2017. The dispute was initially heard by the Tel Aviv Court on February 13, 2020. In a supplemental hearing on February 11, 2021, the plaintiff provided a certified confirmation of payment of approximately $14,668 by the National Insurance Institute of Israel for one month’s prior notice of termination, redemption of 16.8 days of vacation and severance pay. On June 3, 2021, and after the plaintiff and the defendants filed their summaries, the lawsuit against Emerald Israel was dismissed.

ITEM 4. MINE SAFETY DISCLOSURES

None.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASE OF EQUITY

Market Information

Our Common Stock is currently quoted on the OTCQB marketOTC Markets, Pink Tier under the symbol VBIX. We planVBIX, since November 7, 2022. In connection with the Reorganization Transaction, the Company filed an Amended and Restated Certificate of Incorporation with the Secretary of State of Delaware, effective as of August 31, 2022, pursuant to effectwhich the PlannedCompany, among other things, effected the Reverse Split and, accordingly, share amounts, per share data, share prices, exercise prices or conversion rates in this annual report on Form 10-K are subject to change following the effectiveness of the Planned Reverse Split. The Planned Reverse Split will not change the authorized numberits Common Stock at a ratio of shares or the par value of our common stock.1-for-28.

Holders of Common Stock

As of December 31, 2021,2022, there were approximately 2,6922,689 stockholders of record of our Common Stock and 34,753,66914,783,964 shares of our Common Stock outstanding.

Our transfer agent is Transfer Online, 512 SE Salmon Street, Portland, OR 97214-3444, Phone:telephone: (503) 227-2950.

Dividends

Holders of Common Stock are entitled to dividends if declared by our boardBoard of directors,Directors, out of funds legally available therefore. We have never declared cash dividends on our Common Stock and our boardBoard of directorsDirectors does not anticipate paying cash dividends in the foreseeable future as it intends to retain future earnings to finance the growth of our businesses.

Outstanding Warrants

The following table summarizes information of outstanding warrants as of December 31, 2021:2022:

In connection with the Share Exchange Agreement, upon the earlier of: (a) the launch of a live video product to an American consumer in the United States by Viewbix Israel, or (b) the launch of an interactive television product to an American consumer in the United States by Viewbix Israel, we will issue to Gix Internet an additional 1,642,193 shares of restricted Common Stock of the Company.

Securities Authorized for Issuance Underunder Equity Compensation Plans

As of the date of this Annual Report, the Company has authorized 2,500,000 shares of Common Stock for issuance under our 2023 Stock Incentive Plan (the “2023 Plan”). We do not grant options under our 2017 Employee Incentive Plan (the “2017 Plan”)as it was superseded by the 2023 Plan.

The following table summarizes information of outstanding options as of December 31, 2021:2022:

2023 Stock Incentive Plan

The maximum number of shares of Common Stock available for issuance under the 2023 Plan is equal to the sum of (i) 2,500,000 shares of Common Stock plus (ii) an annual increase on the first day of each year beginning in 2024 and on January 1st of each calendar year thereafter and through January 1, 2034, equal to the lesser of (A) 5% of our outstanding capital stock on the last day of the immediately preceding calendar year; and (B) such smaller amount as determined by our Board of Directors if so determined prior to January 1 of a calendar year in which the increase will occur, provided that no more than 2,500,000 shares of Common Stock may be issued upon the exercise of Incentive Stock Options.

Administration. The Board of Directors, or a committee established or appointed by the Board of Directors to administer the 2023 Plan (the “Administrator”), administers the 2023 Plan. Under the 2023 Plan, the Administrator has the authority, subject to applicable law, to interpret the terms of the 2023 Plan and any award agreements or awards granted thereunder, designate recipients of awards, determine and amend the terms of awards, including the exercise price of an option award, the fair market value of our Common Stock, the time and vesting schedule applicable to an award or the method of payment for an award, accelerate or amend the vesting schedule applicable to an award, prescribe the forms of agreement for use under the 2023 Plan and take all other actions and make all other determinations necessary for the administration of the 2023 Plan.

The Administrator also has the authority to approve the conversion, substitution, cancellation or suspension under and in accordance with the 2023 Plan of any or all option awards or shares of Common Stock, and the authority to modify option awards to eligible individuals who are foreign nationals or are individuals who are employed outside Israel or the United State of America to recognize differences in local law, tax policy or custom, in order to effectuate the purposes of the 2023 Plan but without amending the 2023 Plan. The Administrator also has the authority to amend and rescind rules and regulations relating to the 2023 Plan or terminate the 2023 Plan at any time. No termination or amendment of the 2023 Plan shall affect any then outstanding award unless expressly provided by the Administrator.

Eligibility. The 2023 Plan provides for granting awards under various tax regimes, including, without limitation, in compliance with Section 102 of the Israeli Income Tax Ordinance (New Version) 5271-1961 (the “Ordinance”), and Section 3(i) of the Ordinance and for awards granted to our United States employees or service providers, including those who are deemed to be residents of the United States for tax purposes, Section 422 of the United States Internal Revenue Code of 1986 (the “Code”) and Section 409A of the Code.

Section 102 of the Ordinance allows employees, directors and officers who are not controlling stockholders and are considered Israeli residents to receive favorable tax treatment for compensation in the form of shares or options under certain terms and conditions. Any non-employee service providers and controlling stockholders who are considered Israeli residents may only be granted options under section 3(i) of the Ordinance, which does not provide for similar tax benefits. Section 102 includes two alternatives for tax treatment involving the issuance of options or shares to a trustee for the benefit of the grantees and also includes an additional alternative for the issuance of options or shares directly to the grantee. Section 102(b)(2) of the Ordinance, the most favorable tax treatment for the grantee, permits the issuance to a trustee under the “capital gain track”.

Grants. All awards granted pursuant to the 2023 Plan will be evidenced by an award agreement, in a form approved, from time to time, by the Administrator in its sole discretion. The award agreement will set forth the terms and conditions of the award, including the type of award, number of shares subject to such award, vesting schedule and conditions (including performance goals or measures) and the exercise price, if applicable. Certain awards under the 2023 Plan may constitute or provide for a deferral of compensation, subject to Section 409A of the Code, which may impose additional requirements on the terms and conditions of such awards.

Unless otherwise determined by the Administrator and stated in the award agreement, and subject to the conditions of the 2023 Plan, awards vest and become exercisable under the following schedule: 25% of the shares covered by the award on the first anniversary of the vesting commencement date determined by the Administrator (and in the absence of such determination, the date on which such award was granted) and 6.25% of the shares covered by the award at the end of each subsequent three-month period thereafter over the course of the following three years; provided that the grantee remains continuously as an employee or provides services to us throughout such vesting dates. Each award will expire seven years from the date of the grant thereof, unless such shorter term of expiration is otherwise designated by the Administrator.

Awards. The 2023 Plan provides for the grant of stock options (including Incentive Stock Options and nonqualified stock options), shares of Common Stock, restricted stock, RSUs and other stock-based awards. To the extent required by applicable law, the exercise price of an option may not be less than the par value of the shares (if the shares bear a par value) for which such option is exercisable.

Options granted under the 2023 Plan to our employees who are U.S. residents may qualify as Incentive Stock Options, or may be non-qualified stock options. The exercise price of a non-qualified stock option shall not be less than 100% of the fair market value of a share on the date of grant of such option or such other amount as may be required pursuant to the section 409A of the Code. Notwithstanding the foregoing, a non-qualified stock option may be granted with an exercise price lower than the minimum exercise price set forth above if such Award is granted pursuant to an assumption or substitution for another option in a manner qualifying under the provisions of that complies with section 424(a) of the Code 1.409A-1(b)(5)(v)(D) of the U.S. Treasury Regulations or any successor guidance. The exercise price of an Incentive Stock Option may not be less than 100% of the fair market value of the underlying share on the date of grant or such other amount as may be required pursuant to the Code. Notwithstanding the foregoing, an Incentive Stock Option may be granted with an exercise price lower than the minimum exercise price set forth above if such award is granted pursuant to an assumption or substitution for another option in a manner that complies with the provisions of Section 424(a) of the Code. In the case of Incentive Stock Options granted to a ten percent stockholder, (i) the exercise price shall not be less than 110% of the fair market value of the underlying share on the date of grant, and (ii) the exercise period shall not exceed five (5) years from the effective date of grant of such grant.

Exercise. An award under the 2023 Plan may be exercised by providing us with a written or electronic notice of exercise and full payment of the exercise price for such shares underlying the award, if applicable, in such form and method as may be determined by the Administrator and permitted by applicable law. An award may not be exercised for a fraction of a share. With regard to tax withholding, exercise price and purchase price obligations arising in connection with awards under the 2023 Plan, the Administrator may, in its discretion, accept cash, provide for net withholding of shares in a net exercise mechanism or direct a securities broker to sell shares and deliver all or a part of the proceeds to us or the trustee.

Transferability. Other than by will, the laws of descent and distribution or as otherwise provided under the 2023 Plan or by the Administrator, neither the options nor any right in connection with such options are assignable or transferable.

Termination of Employment. In the event of termination of a grantee’s employment or service with us or any of our affiliates, all vested and exercisable awards held by such grantee as of the date of termination may be exercised within three months after such date of termination, unless otherwise determined by the Administrator, but in no event later than the date of expiration of the award as set forth in the award agreement. After such three-month period, all such unexercised awards will terminate and the shares covered by such awards shall again be available for issuance under the 2023 Plan.

In the event of termination of a grantee’s employment or service with us or any of our affiliates due to such grantee’s death or permanent disability, or in the event of the grantee’s death within the three month period (or such longer period as determined by the Administrator) following his or her termination of service, all vested and exercisable awards held by such grantee as of the date of termination may be exercised by the grantee or the grantee’s legal guardian, estate or by a person who acquired the right to exercise the award by bequest or inheritance, as applicable, within one year after such date of termination, unless otherwise provided by the Administrator, but in no event later than the date of expiration of the award as set forth in the award agreement. Any awards which are unvested as of the date of such termination or which are vested but not then exercised within the one-year period following such date, will terminate and the shares covered by such awards shall again be available for issuance under the 2023 Plan. In the event that the employment or service of a grantee shall terminate on account of such grantee’s retirement, all awards of such grantee that are exercisable at the time of such retirement may, unless earlier terminated in accordance with their terms, be exercised at any time within the three-month period after the date of such retirement (or such different period as the Administrator shall prescribe). Notwithstanding any of the foregoing, if a grantee’s employment or services with us or any of our affiliates is terminated for “cause” (as defined in the 2023 Plan), all outstanding awards held by such grantee (whether vested or unvested) will terminate on the date of such termination and the shares covered by such awards shall again be available for issuance under the 2023 Plan.

Voting Rights. Except with respect to restricted stock awards, grantees will not have the same rights as a shareholder with respect to any of our shares covered by an award until the award has vested and/or the grantee has exercised such award, paid any exercise price for such award and becomes the record holder of the shares. With respect to restricted stock awards, grantees will possess all incidents of ownership of the restricted shares, including the right to vote and receive dividends on such shares.

Dividends. Grantees holding restricted share awards will be entitled to receive dividends and other distributions with respect to the shares underlying the restricted share award. Any stock split, stock dividend, combination of shares or similar transaction will be subject to the restrictions of the original restricted stock award. Grantees holding RSUs will not be eligible to receive dividend but may be eligible to receive dividend equivalents.

Transactions. In the event of a stock split, reverse stock split, stock dividend, recapitalization, combination or reclassification of our stock, the Administrator in its sole discretion may, without the need for a consent of any holder of an award, make an appropriate adjustment in order to adjust (i) the number and class of shares reserved and available for grants of awards, (ii) the number and class of stock covered by outstanding awards, (iii) the exercise price per share covered by any award, (iv) the terms and conditions concerning vesting and exercisability and the term and duration of the outstanding awards, (v) the type or class of security, asset or right underlying the award (which need not be only that of ours, and may be that of the surviving corporation or any affiliate thereof or such other entity party to any of the above transactions), and (vi) any other terms of the award that in the opinion of the Administrator should be adjusted; provided that any fractional shares resulting from such adjustment shall be rounded to the nearest whole share unless otherwise determined by the Administrator and the company shall have no obligation to make any cash or other payment with respect to such fractional shares. In the event of a distribution of a cash dividend to all shareholders, the Administrator may determine, without the consent of any holder of an award, that the exercise price of an outstanding and unexercised award shall be reduced by an amount equal to the per share gross dividend amount distributed by us, subject to applicable law.

In the event of a merger or consolidation of our business or a sale of all, or substantially all, of our stock or assets or other transaction having a similar effect on us, or change in the composition of the Board of Directors, or liquidation or dissolution, or such other transaction or circumstances that our Board of Directors determines to be a relevant transaction, then without the consent of the grantee and without any prior notice requirement, (i) unless otherwise determined by the Administrator, any outstanding award will be assumed or substituted by us, or such successor corporation, or by any parent or affiliate thereof, or (ii) regardless of whether or not awards are assumed or substituted (a) provide the grantee with the option to exercise the award as to all or part of the shares, and may provide for an acceleration of vesting of unvested awards, (b) cancel the award and pay in cash, our shares, the acquirer or other corporation which is a party to such transaction or other property as determined by the Administrator as fair in the circumstances, or (c) provide that the terms of any award shall be otherwise amended, modified or terminated, as determined by the Administrator to be fair in the circumstances.

Intercompany Agreements

In connection with the adoption of our 2023 Plan, on March 7, 2023 we entered into certain intercompany agreements with two of our subsidiaries, Viewbix Israel and Gix Media (the “Intercompany Agreements”).

The Intercompany Agreements provide for the offer of awards under our 2023 Plan to service providers of Viewbix Israel and Gix Media, as our affiliates under the 2023 Plan (“Affiliates”). Under the Intercompany Agreements, our Affiliates will each bear the costs of awards granted to its service providers under the 2023 Plan and will reimburse the Company upon the issuance of shares of our Common Stock pursuant to an award, but in any event not prior to the vesting of an award, for the costs of the shares issued to its service providers participating in the 2023 Plan. The reimbursement amount shall be equal to the lower of (a) the book expense for such award as recorded on the financial statements of the respective Affiliate, determined and calculated according to either IFRS, U.S. GAAP, or any other financial reporting standard that may be applicable in the future, or (b) the fair value of the shares of our Common Stock at the time of exercise of an option or at the time of vesting of an RSU, as applicable.

Recent Sales of Unregistered Securities

On December 18, 2020, we entered into a Stock Subscription Agreement (the “Subscription”) with certain investors (the “Investors”) in connection withUpon the saleClosing of the Reorganization Transaction and issuancepursuant to the terms of an aggregate of 3,000,000the agreement thereof, the Company issued 13,540,167 shares of Common Stock at a purchase priceto shareholders of US$0.01 per share, andGix Media in consideration for an aggregate purchase price of US$30,000. In addition, and on the same date, we entered into a Loan Agreement (the “Loan Agreement”) with the Investors, pursuant to which the Investors lent an aggregate of $69,000 (the “Principal Amount”). In accordance with the terms100% of the Loan Agreement, we repaid the interest on the Principal Amount (8% compounded annually) to the Investors in the formoutstanding share capital of an issuance of an aggregate of 552,000 shares of Common Stock, at a price per share of $0.01.Gix Media. The shares of Common Stock were issued to the Investors pursuant tounder Regulation SS.See “Item 1. Description of the Securities Act of 1933, as amended. In January 2022, the Investors expressed their intention to convert the remaining sum of the Principal Amount to shares of our Common Stock and accordingly, we agreed to extend the repayment date.Business – Reorganization Transaction with Gix Media Ltd.”, for further information.

ITEM 6. SELECTED FINANCIAL DATA

Not required for smaller reporting companies.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND PLAN OF OPERATION

Overview

The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our consolidated financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like believe, expect, estimate, anticipate, intend, project and similar expressions, or words which refer to future events. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.

Organizational Background

The Registrant was incorporated in the State of Ohio in 1989Delaware on August 16, 1985, under a predecessor name, Zaxis International, Inc.InFerGene Company. On August 25, 1995, a wholly owned subsidiary of InFerGene Company merged with Zaxis International, Inc. merged with a subsidiary of The, which following such merger, the surviving entity, InFerGene Company, a Delaware corporation, which entity changed its name to Zaxis International, Inc. and the Company was reincorporated in Delaware under the name of Zaxis International, Inc. On December 30, 2014, Zaxis entered into an agreement with Emerald Medical Applications Ltd., a private limited liability company organized under the laws of the State of Israel.

Emerald Medical Applications Ltd.

On March 16, 2015, Zaxis and Emerald Israel executed a share exchange agreement, which closed on July 14, 2015, and Emerald Israel became the Company’s wholly-owned subsidiary. Emerald Israel was engaged in the business of developing Emerald Israel’s DermaCompare technology and the development, sale and service of imaging solutions utilizing its DermaCompare software for use in derma imaging and analytics for the detection of skin cancer. On January 29, 2018,Accordingly, on September 14, 2015, the Company ceased the DermaCompare operations ofchanged its former subsidiary.

On January 29, 2018, the Company ceased the DermaCompare operations ofname to Emerald Israel and onMedical Applications Corp. On May 2, 2018, the District Court of Lod, Israel issued a winding-up order for Emerald Israel and appointed an Israeli attorney to serve as special executor for Emerald Israel.

Virtual Crypto Technologies Ltd.

On January 17, 2018, the Company formed VCT Israela new wholly-owned subsidiary, VCT. On February 22, 2018, the Company’s name was changed from Emerald Medical Applications Corp. to developVirtual Crypto Technologies, Inc. to reflect its new operations and market software and hardware products facilitating, allowing and supporting purchase and/or sale of cryptocurrencies through ATMs, tablets, personal computers (“PCs”) and/or mobile devices.business focus. On January 27, 2020, VCT Israel was sold to a third party for NIS 50,000 ($14,459).

Recapitalization Transaction with Gix (the “Recapitalization Transaction”)

On February 7, 2019, the Company entered into the Share Exchange AgreementRecapitalization Transaction with Gix Internet, pursuant to which, on Closing Date, Gix Internet assigned, transferred and delivered 99.83% of its 99.83% holdings in Viewbix Israel, to the Company in exchange for Common Stock representing 65% of the issued and outstanding share capitalCompany, which resulted in Viewbix Israel becoming a subsidiary of the Company. In connection with the Recapitalization Transaction, effective as of July 26, 2019, the Company’s name was changed from Virtual Crypto Technologies, Inc. to Viewbix Inc.

Reorganization Transaction

On September 19, 2022, the Company consummated the Reorganization Transaction with Gix Media pursuant to which Gix Media Shares were exchanged for shares of the Company’s Common Stock, which resulted in Gix Media becoming a wholly owned subsidiary of the Company. Prior to the closing of the Reorganization Transaction, Gix Media was a majority-owned subsidiary of Gix Internet, which held approximately 58% of the Common Stock of the Company, on a fully diluted basis asbasis. Following the Reorganization Transaction, holders of the Closing Date,Gix Media Shares held 90% of the Company’s Common Stock on a fully diluted basis, with Gix holding 76.67% of the Common Stock on a fully diluted basis.

Cortex Acquisition

On October 13, 2021, Gix Media acquired 70% (on a fully diluted basis) of the share capital of Cortex. In consideration for the Cortex Acquisition, Gix Media paid NIS 35 million in cash (approximately $11 million), out of which an amount of $0.5 million was deposited in trust for a period of 12 months from the closing date. The Cortex Acquisition also includes the obligation (and right) of Gix Media to acquire 30% of Cortex’s Remaining Balance Shares, such that following the conversion of certain convertible notescompletion of the acquisition of all the Remaining Balance Shares, Gix Media will hold 100% of Cortex’s share capital on a fully diluted basis. In January 2023, the Company and excluding certain warrants to purchase sharesacquired an additional 10% of Common Stock expiring in 2020 and additional warrants as further described below (the “Fully Diluted Share Capital”). Cortex’s share capital.

In addition, uponconnection with the earlier of: (a)Cortex Acquisition, at the launchclosing date, Gix Media entered into the Financing Agreement with Leumi for the provision of a live video product to an American consumerline of credit in the United States by Viewbix Israel, or (b)total amount of up to $3.5 million and a long-term loan totaling $6 million, which Gix Media used to finance the launch of an interactive television product to an American consumer in the United States by Viewbix Israel, the Company agreed to issue to Gix Internet an additional 1,642,193 shares of restricted Common Stock representing 5% of the Fully Diluted Share Capital immediately following the Closing Date.Cortex Acquisition.

On July 24, 2019, and in connection with the Share Exchange Agreement, the Company filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of Delaware reflecting its name change from Virtual Crypto Technologies, Inc. to Viewbix Inc. to reflect its new operations and business focus. On August 7, 2019, FINRA approved the Registrant’s name change and its trading symbol was changed from “VRCP” to “VBIX” on the OTCQB.

On the Closing Date, (i) the Company issued 20,281,085 shares of Common Stock to Gix Internet in exchange for consideration consisting of 99.83% holdings in Viewbix Israel, and (ii) convertible notes representing 3,434,889 shares of Common Stock then currently issued to holders were converted. The shares of Common Stock were issued under Regulation S. The Company also issued a total of 7,298,636 warrants to purchase shares of Common Stock to Gix Internet, whereby (a) 3,649,318 of such warrants to purchase shares of Common Stock were issued with an exercise price of $0.48, and (b) 3,649,318 of such warrants to purchase shares of Common Stock were issued with an exercise price of $0.80.

Following the Closing Date, Viewbix Israel became a subsidiary of the Registrant. Viewbix Israel was incorporated in February 2006 in Israel.

On June 6, 2020, Algomizer Ltd. changed its name to Gix Internet Ltd.

On January 1, 2020, the Company announced certain cost reduction measures due the Company not achieving certain revenues goals. In connection with these cost reduction measures, on January 1, 2020, Mr. Jonathan Stefansky, the Company’s then chief executive officer and member of the Company’s board of directors, tendered his resignation from the Board, and on the same date the sides reached a mutual understanding whereby Mr. Stefansky would step down as chief executive officer, effective March 1, 2020. On the same date, the Company and Mr. Hillel Scheinfeld, the Company’s then chief operating officer, reached a similar mutual understanding and agreed he would step down, also effective March 1, 2020. Mr. Amihay Hadad, the Company’s chief financial officer, was appointed to the Company’s board of directors on January 1, 2020, and, effective as of March 1, 2020, he was also appointed as the Company’s chief executive officer as well.

On January 27, 2020, the Company entered into an agreement with a third-party to sell Virtual Crypto Technologies Ltd. for NIS 50,000 ($14, 459), which transaction was consummated on February 12, 2020.

Results of Operations during the year ended December 31, 20212022, as compared to the year ended December 31, 20202021

Revenues for the year ended December 31, 2021 was $412022, were $96,603 thousand as compared to $96$45,224 thousand for the year end December 31, 2020.2021. The reason for the decreaseincrease during the fiscal year ended December 31, 20212022, is due to the Company’s cost-reduction measures implemented beginningCortex Acquisition on January 1, 2021.

CostOctober 13, 2021, therefore, the financial statements of revenuesthe Company for the year ended December 31, 2022, include Cortex’s financial results for the full fiscal year, compared to the financial statements of the Company for the year ended December 31, 2021, was $0 which isinclude Cortex’s financial results for approximately only two and a slight decreasehalf months, since the date of the Cortex Acquisition.

Traffic acquisition and related costs for the year ended December 31, 2022, were $83,011 thousand as compared to $5$37,442 thousand for the year endended December 31, 2020.2021. The reason for the increase in the year ended December 31, 2022, is due to the inclusion of Cortex’s financial results for different periods of time in the financial statements of the Company for the years ended December 31, 2022, and 2021, as explained above.

Research and development costs for the year ended December 31, 20212022, was $64$3,255 thousand as compared to $108$2,369 thousand for the year endended December 31, 2020.2021. The reason for the decrease duringincrease in the fiscal year ended December 31, 20212022, is due to the Company’s cost-reduction measures implemented beginning on January 1, 2020, though despite these measures, the Company hired the servicesinclusion of an R&D team during the fiscal year ended December 31, 2021.Cortex’s financial statements.

Sales and marketing expenses for the year ended December 31, 20212022, was $2$2,479 thousand as compared to $8$1,345 thousand for the year end December 31, 2020. The reason for the decrease during the year ended December 31, 20212021. The reason for the increase in the year ended December 31, 2022, is due to the Company’s cost-reduction measures implemented beginning on January 1, 2020.inclusion of Cortex’s financial statements.

General and Administrationadministration expenses for the year ended December 31, 20212022, was $304$2,157 thousand as compared to $437$1,384 thousand for the year endended December 31, 2020.2021. The reason for the decreaseincrease in 2021the year ended December 31, 2022, is due to certainthe inclusion of Cortex’s financial statements.

Our depreciation and amortization expenses for the year ended December 31, 2022, were $2,809 thousand, as compared to $1,941 thousand during the same period in the prior year. The reason for the increase, is due to the Company’s recording depreciation and amortization expenses in connection with the Cortex Acquisition on October 13, 2021 and the Reorganization Transaction on September 19, 2022, reflecting the historical cost reduction measures initiated byand depreciation expenses of all intangible assets as reflected in the Company asconsolidated financial statements of Medigus Ltd. (see Note 1b of our audited and consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K).

Our business acquisition and related costs were $166 thousand for the beginning of January 2020.year ended December 31, 2022, compared to $222 thousand during the year ended December 31, 2021. In the year ended December 31, 2022, the Company’s recorded business acquisition and related costs were in connection with the Reorganization Transaction in the year ended December 31, 2021, the Company’s business acquisition and related costs were in connection with the Cortex Acquisition.

Our net financial expense was $30$1,456 thousand for the year ended December 31, 2021,2022, compared to net financial income of $13$140 thousand for the year endended December 31, 2020.2021. The reason for the increase in financial expenses in 2021 is due to the loan agreement with Pure Capital and other lenders entered into on December 18, 2020, which interest expenses were recognized in the year ended December 31, 2021.2022, is primarily due to financial expenses in connection with the Financing Agreement as part of the Cortex Acquisition on October 13, 2021, the increase of the USD to NIS exchange rate and the increased interest on the Company’s bank loans which due to the significant increases in the market’s interest rates during the year ended December 31, 2022.

Our taxes on income was $2tax expenses were $153 thousand for the year ended December 31, 2021 and2022, as compared to $90 thousand tax expenses for the year ended December 31, 2020.2021. The reason for the increase in the year ended December 31, 2022, is due to the inclusion of Cortex’s financial statements.

Liquidity and Capital Resources

As of December 31, 2022, we had current assets of $29,841 thousand consisting of $4,196 thousand in cash and cash equivalents, $185 thousand in restricted deposits, $20,945 thousand in accounts receivables, $973 thousand in other current receivables and $3,542 thousand in the loan to our parent company, in accordance with the Second Loan Agreement, as defined below.

As of December 31, 2022, we had non-current assets of $33,854 thousand consisting of $52 thousand in severance pay funds, $340 thousand in deferred taxes, $486 thousand in operating lease right-of-use assets, $302 thousand in property and equipment net, $15,313 thousand in intangible assets, net and $17,361 thousand in goodwill.

As of December 31, 2022, we had $28,522 thousand in current liabilities consisting of $19,782 thousand in accounts payable, $2,084 thousand in other payables, $6,569 thousand in short term loans and current maturities of a long-term loan and $87 thousand in operating lease liabilities.

As of December 31, 2022, we had $5,274 thousand in non-current liabilities consisting of $152 thousand in accrued severance pay, $2,881 thousand long-term loan, $388 thousand in operating lease liabilities - long term and $1,853 thousand in deferred taxes.

As of December 31, 2021, we had current assets of $156$29,245 thousand consisting of $74$5,208 thousand in cash and cash equivalents, $8$234 thousand in traderestricted deposits, $16,415 thousand in accounts receivables, $30$1,004 thousand in other accounts receivables and $44$6,384 thousand in prepaid expenses.loan to Gix Internet, according to the Second Loan agreement.

As of December 31, 2021, we had non-current assets of $22,016 thousand consisting of $83 thousand in severance pay funds, $133 thousand in deferred taxes, $569 thousand in operating lease right-of-use assets, $334 thousand in property and equipment net, $8,414 thousand in intangible assets, net and $12,483 thousand in goodwill.

As of December 31, 2021, we had $2,436$26,796 thousand in current liabilities consisting of $9$16,676 thousand in trade payables, $242accounts payable, $1,317 thousand in other accounts payable and accrued liabilities, $69 Shortpayables, $6,569 thousand in short term loan and current maturities of long-term loan, $91 thousand in operating lease liabilities and a $2,116 payablethousand in loan from Gix Internet, according to our Parent Company.the First Loan agreement, as defined below.

As of December 31, 2020,2021, we had current assets of $225$5,975 thousand in non-current liabilities consisting of $148$188 thousand in cash and cash equivalents and restricted cash, $15accrued severance pay, $4,270 thousand long-term loan, $491 thousand in trade receivables, $20operating lease liabilities - long term and $1,026 thousand in other receivables and $42 thousand in prepaid expenses. We had $2,303 thousand in current liabilities, which consisted of $177 in accounts payable and accrued liabilities and $22 trade payable, $50 Short term loan, and $2,054 payable to our Parent Company.deferred taxes.

We had a negativepositive working capital of $2,280$1,319 thousand and $2,078$2,476 thousand as of December 31, 20212022 and December 31, 2020,2021, respectively.

Our total liabilities as ofDuring the fiscal year ended December 31, 2021 were $2,4362022, we had positive cash flow from operations of $3,237 thousand comparedwhich was mainly the result of a $1,117 thousand in net income, $3,233 thousand from positive adjustments to $2,303 thousand as of December 31, 2020.operating activities, offset by $1,113 negative changes in assets and liabilities items.

During the fiscal year ended December 31, 2021, we had negativepositive cash flow from operations of $74$4,366 thousand which was mainly the result of a $591 thousand in net loss of $386income, $1,406 thousand offset by decreasefrom positive adjustments to operating activities, and $2,369 positive changes in working capital of $312 thousand.assets and liabilities items.

During the fiscal year ended December 31, 2020,2022, we had $74 thousand negative cash flow from operations of $53investing activities as compared to $10,765 thousand negative cash flow from investing activities during the year ended December 31, 2021, which was primarily in connection with the Cortex Acquisition.

During the fiscal year ended December 31, 2022, we had $4,224 thousand negative cash flow from financing activities which was mainly the result of a net lossrepayment of $443long-term bank loan in amount of $1,389 thousand, depreciation expensepayment of $5dividend to non-controlling interests in amount of $1,689 thousand offset by gains from the saleand increase in loan to parent company in amount of a subsidiary and decrease in working capital of $385$1,073 thousand.

During the fiscal year ended December 31, 2021, we had no cash flow from investing activities as compared to a positive cash flow effect from investing activities of $13$8,277 thousand as during the year ended December 31, 2020.

During the fiscal year ended December 31, 2021, we had no cash flow from financing activities as compared to a positive cash flow from financing activities which was mainly the result of $99$9,500 thousand during the fiscal year ended December 31, 2020, which relatedreceipt of long-term and short-term bank loans in connection with Cortex Acquisition, offset by repayment of short-term and long-term bank loans in amount of 830$ thousand, payment of dividend to the Loan Agreementnon-controlling interests in amount of $194 thousand and issuanceincrease in loan to parent company in amount of shares we have made during the fiscal year ended December 31, 2020. In January 2022, the repayment date under the Loan Agreement was extended per the Investors’ request. The Investors also expressed their intention to convert the remaining sum of the Principal Amount to shares of our Common Stock, however, if we are required to repay the Principal Amount in cash, we will be able to receive cash flow for the repayment from our Parent Company. The Gix Loan along with any accrued interest is due on December 31, 2022, unless extended upon mutual consent of the Company and Gix Internet.$199 thousand.

There are no limitations in the Company’s 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. The Company’s limited resources and lack of having cash-generating business operations may make it difficult to borrow funds or raise capital. The Company’s limitations to borrow funds or raise funds through the issuance of restricted capital stock required to effect or facilitate a business combination may have a material adverse effect on the Company’s financial condition and future prospects, including the ability to complete a business combination.

Until such time as the Company can generate substantial revenues, the Company expects to finance its cash needs through a combination of the sale of its equity and/or convertible debt securities, debt financing and strategic alliances, collaborations, and funds from its Parent Company. To the extent that the Company raises additional capital through the sale of its equity and/or convertible debt securities, the ownership interest of its shareholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common shareholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. To the extent that debt financing ultimately proves to be available, any borrowing will subject us to various risks traditionally associated with indebtedness, including the risks of interest rate fluctuations and insufficiency of cash flow to pay principal and interest, including debt of an acquired business. If the Company raises funds through additional collaborations or strategic alliances with third parties, we may have to relinquish valuable rights to our future revenue streams and/or distribution arrangements. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. If the Company is unable to raise additional funds through equity and/or debt financings when needed or on attractive terms, the Company may be required to delay, limit, reduce or terminate the operations of some or all of its business segments.

Going ConcernOn December 18, 2020, we entered into a Loan Agreement (the “Loan Agreement”) with certain investors pursuant to which the investors lent us an aggregate of $69,000 (the “Principal Amount”). In accordance with the terms of the Loan Agreement, we repaid the interest on the Principal Amount (8% compounded annually) to the investors by issuing 19,715 shares of Common Stock, at a price per share of $0.01. The shares of Common Stock were issued to the investors pursuant to Regulation S of the Securities Act of 1933, as amended. In January 2023 we agreed to repay the outstanding Principal Amount to the investors in three equal monthly payments. As of the date of this Annual Report, we delivered two (2) payments of $23,000 each.

Gix Media has provided several liens under the Financing Agreement with Leumi in connection with the Cortex Transaction, as follows: (1) a floating lien on Gix Media’s 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.

The Company has incurred $386 thousandalso provided several liens under the Financing Agreement with Leumi in net losses forconnection with the year ended December 31, 2021, has $2,280 thousand shareholders’ deficitCortex Transaction, as follows: (1) a guarantee to Leumi of December 31, 2021all of Gix Media’s obligations and $2,078 thousandundertakings to Leumi unlimited in total shareholders’ deficit asamount; (2) a subordination letter signed by the company to Leumi; (3) A first ranking all asset charge over all of December 31, 2020the assets of the Company; and $74 thousand negative cash flows from operations for(4) a Deposit Account Control Agreement over the year ended December 31, 2021, and $53 thousand negative cash flows from operations for the year ended December 31, 2020. Management expects the Company to continue to generate substantial operating losses and to continue to fund its operations primarily through utilization of its current financial resources and through additional raises of capital.Company’s bank accounts.

Such conditions raise substantial doubts about the Company’s ability to continue as a going concern. Management’s plan includes raising funds from outside potential investors. However, there is no assurance such funding will be availableAccording to the Company or that it will be obtained on terms favorable to the Company or will provide the Company with sufficient fundsFinancing Agreement, Gix Media undertook to meet its objectives. Thesefinancial covenants over the life of the loans as follows: (1) the ratio of debt to EBITDA, based on the Gix Media’s consolidated financial statements doin all 4 consecutive quarters, will not include any adjustments relating toexceed 2.4 in the recoverabilityfirst two years and classificationwill not exceed 1.75 in the following two years. As of assets, carrying amounts orDecember 31, 2022, Gix Media is in compliance with the amount and classification of liabilities that may be required shouldfinancial covenants in connection with the Company be unable to continue as a going concern.Financing Agreement.

Availability of Additional Capital

Our potential financing transactions may include the issuance of equity and/or debt securities including convertible debt, obtaining credit facilities, or other financing mechanisms. In the event that we seek to raise funds through additional private placements of equity or convertible debt, the trading price of our common stock could be adversely affected. Further, any adverse conditions in the financial markets could make it more difficult to obtain future financing through the issuance of equity or debt securities when and if needed. Even if we are able to raise a sufficient amount of funds that may be required, it is possible that we could incur unexpected costs and expenses or experience unexpected cash requirements that would force us to seek additional and/or alternative financing. Further, if we issue additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of our common stock. If additional financing is not available or is not available on acceptable terms, we may have to curtail our plan of operations.

The Company has only limited capital. Additional financing is necessary for the Company to continue as a going concern. Our independent auditors have issued an unqualified audit opinion for the year ended December 31, 2021 with an explanatory paragraph on going concern.

In view of these matters, realization of a major portion of the assets in the accompanying balance sheet is dependent upon continued operations of the Company. Management believes that actions presently being taken to obtain additional equity financing will provide the opportunity to continue as a going concern.

Contractual Obligations and Commitments

As of December 31, 2021, and 2020, we did not have any contractual obligations.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the U.S. The preparation of our consolidated financial statements and disclosures requires us to make judgments, estimates, and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported revenue and expenses during the reporting periods. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions and conditions.

Our significant accounting policies are describedsummarized in more detailNote 2 to our consolidated financial statements. We identify here a number of policies that entail significant judgments or estimates by management.

Business Combination - Reorganization Transaction

See Note 1B to out consolidated financial statements.

The Company allocates the purchase price of tangible and intangible assets acquired, and liabilities assumed by the Ultimate Parent as of March 1, 2022, based on estimated fair values, with any residual of the purchase price recorded as goodwill. Third party appraisal firms and other consultants are engaged to assist management in determining the fair values of certain assets acquired and liabilities assumed. Different valuations approaches are used to value different types of intangible assets. The Company primarily uses the income approach in the notesvaluation of intangible assets. The income approach to our audited consolidated financial statements appearing elsewhere in this Annual Reportvaluation is based on Form 10-K.the present value of future cash flows attributable to each identifiable intangible asset. This approach to valuation requires management to make significant estimates and assumptions including but not limited to: discount rates, future cash flows, technology, and customer relationships. These estimates are based on historical experience and information obtained from the management of the acquired companies and are inherently uncertain.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Not required for smaller reporting companies.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Viewbix Inc.VIEWBIX INC.

Index to Consolidated Financial StatementsCONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2022

CONTENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of Viewbix Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Viewbix Inc. and its subsidiarysubsidiaries (the “Company”) as of December 31, 20212022, and 20202021 and the related consolidated statements of comprehensive loss, stockholder’s deficitoperations, shareholder’s equity and cash flows for each of the two years in the period ended December 31, 2021,2022, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20212022, and 2020,2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2021,2022, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1.E to the consolidated financial statements, the Company’s substantial net losses, shareholder’s deficit and negative cash flows from operations raise substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 1.E to the financial statements. The financial statements do not include any adjustments that might result from the outcome of’ these uncertainties

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.