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What changed in Viewbix Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Viewbix Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+317 added−218 removedSource: 10-K (2024-03-25) vs 10-K (2023-03-24)

Top changes in Viewbix Inc.'s 2023 10-K

317 paragraphs added · 218 removed · 167 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

56 edited+50 added−7 removed88 unchanged
Biggest changeSearch 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.
Biggest changeMany of the present and 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. 18 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.
In addition, these add-ons allow us to refer the searches of these users to the customers of the Search Engines. ● Desktop and mobile apps (referral of searches directly and indirectly). Free software products for the Apple and PC computers provide users services similar to the add-ons of the internet browsers.
In addition, these add-ons allow us to refer the searches of these users to the customers of the Search Engines. ● Desktop and mobile apps (referral of searches directly and indirectly). Free software products for Apple and PC computers provide users services similar to the add-ons of the internet browsers.
This process is used as a predictive tool in order to predict the amount that Google will pay for future campaigns with us. This tool is regularly updated in real time, with new information that updates its predictive accuracy. Cortex successfully achieves such predictions at an accuracy level of more than 95%. ● Campaign launch system.
This process is used as a predictive tool in order to predict the amount that Google will pay for future campaigns with us. This tool is regularly updated in real time, with new information that updates its predictive accuracy. Cortex successfully achieves such predictions at an accuracy level of more than 95%. 15 ● Campaign launch system.
Patent No. 9,792,645: the granted patent provides a unique method to facilitate video interactions between a publisher and end users, and measures the data produced through that interaction. 20 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.
Patent No. 9,792,645: the granted patent provides a unique method to facilitate video interactions between a publisher and end users, and measures the data produced through that interaction. 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.
This system runs various platforms and includes modules for measurement of campaign performance, Business Intelligence (“BI”) tools, and general management of campaigns for different customers. The system enables optimization and automation of internet campaigns by data and recommendations provided by the BI system. These systems are based on predictive models that were developed by Gix Media. ● AI systems .
This system runs various platforms and includes modules for measurement of campaign performance, Business Intelligence (“BI”) tools, and general management of campaigns for different customers. The system enables optimization and automation of internet campaigns by data and recommendations provided by the BI system. These systems are based on predictive models that were developed by Gix Media. ● Optimization systems .
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.
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. 23 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.
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. 16 The dashboard that is used by the Creative Team to launch the campaign appears as such: ● Digital content management system.
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: ● Digital content management system.
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.: ● U.S.
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. 19 We have four patents that have been granted to us in the U.S.: ● U.S.
The addition of new languages is part of our strategy to enter into international markets outside the United States (“Go Global”). For this purpose, we plan to allocate resources for the production and development of high-quality content in additional languages, and to enter into agreements with advertisement specialists in select countries. ● Collaborations.
The addition of new languages is part of our strategy to enter into international markets outside the United States (“Go Global”). For this purpose, we plan to allocate resources for the production and development of high-quality content in additional languages, and to enter into agreements with advertisement specialists in select countries.
At the end of the bidding process, the system selects the winning bid, which is then sent to the Google ads server in order to receive a competing bid from Google. The ad from the winning bid is delivered to the Reader and displayed on the web-page. 17 This bidding system is an important tool for the Cortex monetization system.
At the end of the bidding process, the system selects the winning bid, which is then sent to the Google ads server in order to receive a competing bid from Google. The ad from the winning bid is delivered to the Reader and displayed on the web-page. This bidding system is an important tool for the Cortex monetization system.
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. ● Digital content index and label system.
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. 16 ● Digital content index and label system.
Gix Media developed AI systems which are used for the optimization of the appearance of the content displayed to users, including landing pages and the creation of landing pages. This system periodically analyzes and assesses the effectiveness of the content displayed to users.
Gix Media developed systems which are used for the optimization of the appearance of the content displayed to users, including landing pages and the creation of landing pages. This system periodically analyzes and assesses the effectiveness of the content displayed to users.
This prediction is performed on an individual level according to the User’s data, the type of article and the ad location. 15 ● Targeted AI tools to predict Google monetization.
This prediction is performed on an individual level according to the User’s data, the type of article and the ad location. ● Targeted AI tools to predict Google monetization.
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 Conversion, and, in turn, maximize ad revenues. Content Systems: The nine technological components of the Content Platform are as follows: ● Monitoring and Big Data Systems.
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 Conversion, and, in turn, maximize ad revenues. Content Systems: The ten technological components of the Content Platform are as follows: ● Monitoring and Big Data Systems.
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. ● Content monetization system.
Our systems process 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. ● Content monetization system.
In addition, our self-designed system can also stop a purchase and change prices for the purpose of maximizing performance. Search Systems: The technological backbones of our Search Platform involves the following key systems: ● Online campaign management .
In addition, our self-designed system can also stop a purchase and change prices for the purpose of maximizing performance. Search Systems: The technological backbones of our Search Platform involve the following key systems: ● Online campaign management .
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”).
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, 2023, Gix Media has one major customer, a reputable international Search Engine (“Gix Major Customer”).
These AI systems extract and analyz e data from our intelligence and fraud detection systems and automatically recommend the most effective and efficient content in real- time. 11 ● “Intelligence” system .
These systems extract and analyz e data from our intelligence and fraud detection systems and automatically recommend the most effective and efficient content in real- time. 11 ● Fraud detection system .
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. ● Automatic creation .
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. ● Website Management System.
In 2023 we intend to focus on the expansion of our product range by the development and distribution of new products in attractive yet related sectors.
In 2024 we intend to focus on the expansion of our product range by the development and distribution of new products in attractive yet related sectors.
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.
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. ● AI system for managing and translating articles.
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.
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 digital advertising. During the year ended December 31, 2023, the total R&D expenses of the Company in the Content Platform were $1.4 million.
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.
We estimate that during the twelve months following the date of this Annual Report, we will invest a total amount of approximately $1.7 million in R&D expenses in the Search Platform, primarily to improve our existing services and technologies in this platform.
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.
We estimate that during the twelve months following the date of this Annual Report, we will invest a total amount of approximately $1.4 million in R&D expenses in the Content Platform, primarily to improve our existing services and technologies in this platform.
The revenues generated by Gix Media from the Search Platform applying this model, constituted approximately 93% and 85% of the total revenues of Gix Media for the fiscal year-ended December 31, 2021 and December 31, 2022, respectively. Growth Strategy ● Growth through Mergers and Acquisitions.
The revenues generated by Gix Media from the Search Platform applying this model, constituted approximately 80% and 93% of the total revenues of Gix Media for the fiscal year-ended December 31, 2022 and December 31, 2023, respectively. Growth Strategy ● Growth through Mergers and Acquisitions.
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 that Cortex develops is primarily based on ten 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, (9) an A/B testing for performance comparison and (10) an AI system for managing and translating articles.
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.
During the years ended December 31, 2023, and December 31, 2022, the total R&D expenses of the Company in the Search Platform, through Gix Media, were $1.5 million and $1.7 million, respectively.
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.
Congress and various state legislative bodies concerning various data protection topics, including, privacy, children data, data brokers, which could affect us. The interpretation of data protection laws, and their application to the internet, is unclear and in a state of flux.
The system includes models, content creation, additions of applications and distribution of content. 12 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”).
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 that pay Cortex to display ads with the content published by Cortex on the Cortex Websites with online customized advertisements (the “Software”).
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.
Gix Media has generated revenues of approximately $12.3 million from the Gix Major Customer, constituting approximately 60% of the total revenues of Gix Media during the year ended December 31, 2023. 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.
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.
Cortex has generated revenues of approximately $11.3 million from Total Media and Google, constituting approximately 19% of the total revenues of Cortex during the year ended December 31, 2023. Marketing and Distribution We have a wide variety of products, and each product requires specific, tailor-made marketing and distribution models.
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.
These laws include the California Consumer Privacy Act and its regulations, as amended by the California Privacy Rights Act of 2020 (the “CCPA”), which provides data privacy rights for consumers and operational requirements for companies and imposes additional notice and opt out obligations, including an obligation to provide an opt-out for behavioral advertising.
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 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.
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.
For example, in Israel, the Protection of Privacy Law, 5741-1981 (and the regulations thereunder, together, the “Israeli Privacy Protection Law”) requires that any request for personal data for use or retention in a database, be accompanied by a notice that indicates whether a person is legally required to disclose such data or that such disclosure is made at such person’s free will and consent; the purpose for which the data is requested; and to whom the data is to be delivered and for which purposes.
We compete with many companies that offer solutions for advertisers and website 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 that are similar to those provided by us.
We compete with many companies that offer solutions for advertisers and website owners, including in the pillar of ad search and digital content, and with tools that allow internet users to change the default search settings on their browsers.
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.
In March 2020, an extension of the foregoing agreement was signed, whereby the term of the agreement was extended until October 26, 2023, was automatically renewed for an additional one year period until October 26, 2024, and will continue to be automatically renewed for additional one year periods, unless either party gives notice of non-renewal 90 days’ in advance. 17 Content Platform Cortex’s customers in the Content Platform include advertising companies that are active in the digital advertising market.
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.
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.
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.
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.
In light of the fact that a major part of the Company’s revenues is generated from a supply of searches, the Company also competes with the providers of the Search Engines themselves, such as Google, Microsoft, IAC and Verizon Media.
Some of our competitors are companies that are considerably bigger than the Company with considerably higher budgets, such as Google, Meta, and Microsoft. Since a major part of the Company’s revenues is generated from a supply of searches, the Company also competes with the providers of the Search Engines themselves, such as Google, Microsoft, IAC and Verizon Media.
We plan to do this by recruiting additional human capital that will support the expansion of our product base and increase the amount of content that is produced. ● Expansion of Product Range, Content Platform . We intend to focus on increasing the amount of content that we publish in order to increase the typical reader’s visit on our websites.
We plan to do this by recruiting additional human capital that will support the expansion of our product base and increase the amount of content that is produced.
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.
Many U.S. states, such as California, Colorado, Connecticut, Virginia, and Utah, have adopted statutes that require online service providers to report certain security breaches of personal data, to inform to consumers when personal data will be disclosed to direct marketers.
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.
Moreover, the GDPR, presumably has an even wider territorial scope, as well as a broad definition of personal data which includes geolocation data and online identifiers, the collection and processing of which imposes more stringent user consent requirements. Further, the GDPR includes stringent operational requirements for companies that process personal data and contains significant penalties for non-compliance.
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 customer service and research personnel.
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 customer service and research personnel. We compete for qualified personnel with other ad-tech companies.
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.
A breach of privacy under the Israeli Privacy Protection Law is considered a civil tort and subject to administrative fines as well as civil damages. Certain violations of the Israeli Privacy Protection Law are considered criminal offences punishable by imprisonment.
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.
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.
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. 21 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.
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.
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.
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. Furthermore, new laws and regulations (including privacy and AI) pose additional and new risks, including, without limitation, data privacy and security risks.
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.
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.
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.
The Digital Millennium Copyright Act (the “DMCA”), which aims to reduce the liability of online service providers in certain situations if their users engage in copyright infringement, and other federal laws, for example Children’s Online Privacy Protection Rule that restrict online service providers’ collection of user data on minors as well as distribution of materials deemed harmful to minors.
The keys to our EHS success are a workforce that is engaged and a management team who supports and invests in employees’ wellbeing . 22 We consider our employees to be a key factor to our success and we are focused on attracting and retaining the best employees at all levels of our business.
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 employees’ wellbeing .
Our main competitors in this market include: Perion, Buzz Feed, Pub+, Novelty, Hive Media and Kueez. 19 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.
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.
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.
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.
All of the Bidders are repeat customers and the vast majority of the clusters are North American companies. 18 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”).
As of the date of this Annual Report, Cortex has one major customer from its Content Platform operations, Google, which it engages directly through a services agreement by and between its subsidiary Samyo Technologies Ltd. and Google Ireland Limited. (“Google”).
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.
According to the General Data Protection Regulation (“GDPR”), the processing and collection of personal data, or the gaining access to personal data is only allowed on condition that the subscriber or user concerned has given his or her informed consent, or that a different legal basis for such processing or collection exists.
Our products compete on limited budgets of advertisers and on an inventory of ad spaces from website owners. Some of our competitors are companies that are considerably bigger than the Company with considerably higher budgets, such as Google, Meta, and Microsoft.
There is a large number of digital content companies and ad search companies that offer services that are similar to those provided by us. Our products compete on limited budgets of advertisers and on an inventory of ad spaces from website owners.
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.
In addition, new European initiatives have been announced by the European regulators relating to cyber security, e-commerce, data, copyright, artificial intelligence and cookies.
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This system automatically selects landing pages through a self-designed optimization tool from various web pages, specifically those treated as most applicable, in real time in order to improve the conversion rate of users’ views to product installations. ● Fraud detection system .
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Additionally, we intend to focus on developing new products aimed at expanding the scope of user traffic referrals to Search Engines and website publishers, through our ad content. ● Expansion of Product Range, Content Platform . We intend to focus on increasing the amount of content that we publish in order to increase the typical reader’s visit on our websites.
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This system, known as Tabzmania, allows users to create browser add-ons such as backgrounds, and, by using its extension, can create different types of add-ons for content websites.
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In addition, we are expanding and intend to continue to expand, the use of AI technology to enable the translation of our digital content articles from English into multiple languages, streamline our article management to support our digital content departments, and enhance our ability to generate articles and creative media content. ● Collaborations.
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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.
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The free software, such as the desktop apps, mobile apps and browser add-ons owned by Gix Media, are marketed in some cases through dedicated websites.
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Many of the present and 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.
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This system enables two main functions: ● Management and design of websites, including choosing the types of websites, defining texts, designing, and selecting images. ● Adoption of the website according to the functionality of each free software or browser add-on. ● Landing Page and Companion Information Management System.
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We also maintain high-quality and professional human capital with many years of experience in order to maintain a competitive advantage.
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This system allows for adjustments between a variety of landing pages and companion information for each of Gix Media’s products. The adjustments generated by the system vary according to the type of product, regulatory requirements, operating systems, and type of browser.
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Human Capital Management As of March 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.
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The system supports landing pages for the distribution of browser add-ons and free software for Apple operating systems and for Microsoft operating systems. This system consists of two main modules: ● A system for managing and defining various landing pages for different products.
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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).
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In this module, a wide selection of landing page types can be defined, along with defining texts, design, and selecting images.
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The system includes a collection of logical commands that allow for quick action. ● A landing page submission system which presents the landing page and the relevant companion information with the appropriate functionality for each free software or browser add-on. 12 ● Distribution Management System.
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This system is an automated management interface based on a collection of logical commands that distributes the traffic routes from internet users to various Search Engines. This system predefines the desired country and the desired portion of traffic to be routed to that country.
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Our Software, powered with the assistance of AI, translates articles from English into multiple languages, provides an assistant tool for article management to our digital content departments, and we expect that in the future it will be able to generate articles and creative media content.
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Cortex developed an AI system which translates articles from English into multiple languages and provides an assistant tool for article management tools to the digital content department. As of the date of this Annual Report, Cortex is developing a function which would enable this AI system the ability to generate articles and creative media content.
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The services agreement was entered into on July 31, 2023 and is effective for two years and thereafter will automatically be renewed for additional one year periods, unless either party gives notice of non-renewal 60 days’ in advance. Prior to the services agreement directly with Google, Cortex engaged with Google through a services agreement with Total Media Ltd. (“Total Media”).
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Government Regulation Our ability, and the ability of other marketing technology companies, to collect, augment, analyze, use and share data relies upon the ability to uniquely identify devices across websites and applications, and to collect data about user interactions with those devices for purposes such as serving relevant ads and measuring the effectiveness of ads.
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The processes used to identify devices are governed by U.S. and foreign laws and regulations and are dependent upon their implementation within the industry ecosystem.
Added
Such laws, regulations, and industry standards change frequently, including those relating to the level of consumer notice, consent and/or choice required when a company uses data for certain purposes, including advertising, or employs cookies or other electronic tools to collect data about interactions with users online.
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Regulators around the world have adopted or proposed requirements regarding the collection, use, transfer, security, storage, destruction, and other processing of personal data. 20 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.
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In many respects, these state laws focus on advertising activities, mandating that businesses that engage in certain advertising uses of consumer personal data to offer and honor an opt-out of such activities, including, in some states, through browser or device-based preference signals.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRegulations, 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; and ● We rely on third-party Internet, mobile, and other products and services to deliver our mobile and web applications our customers, and any disruption of, or interference with, our use of those services could adversely affect our business, financial condition, results of operations, and customers.
Biggest changeRisks Related to Data Protection Regulation ● We may not be able to protect our systems, technology and infrastructure from cyberattacks; ● A failure in our technology infrastructure may adversely affect our business and financial condition and disrupt our customers’ businesses; ● 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 platforms and cause us to lose customers and revenue; ● 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; 25 ● We rely on third-party Internet, mobile, and other products and services to deliver our mobile and web applications our customers, and any disruption of, or interference with, our use of those services could adversely affect our business, financial condition, results of operations, and customers; and ● As the regulatory framework for artificial intelligence evolves, including with respect to unintentional bias and discrimination, our business, financial condition, and results of operations may be adversely affected.
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; and ● The digital advertising market is highly competitive.
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; ● The digital advertising market is highly competitive.
Advertisers might change their preferences relating to their willingness to work with certain technologies and certain advertising platforms, which might reduce our activities and harm our business operations. A loss of the services of our technology vendors could adversely affect execution of our business strategy.
Advertisers might change their preferences relating to their willingness to work with certain technologies and certain advertising platforms, which might reduce our activities and harm our business operations. A loss of the services of our technology vendors could adversely affect the execution of our business strategy.
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.
In response to the foregoing developments, individuals, organizations and institutions, both within and outside of Israel, 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.
We cannot assure you that management will not additionally determine in the future that our internal control over financial reporting is not effective 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.
We cannot assure you that management will not determine in the future that our internal control over financial reporting is not effective 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.
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.
However, certain amount of our expenses is 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.
Holders of options and warrants may exercise these securities at a time when we could obtain additional capital on terms more favorable. 33 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.
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.
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.
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 a single supplier and/or service provider for the services we offer our customers.
The occurrence of any of these events could adversely affect our business. 30 Patent terms may be inadequate to protect our competitive position for an adequate amount of time. Patents have a limited lifespan.
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.
Furthermore, we could have limited ability to respond to, and adjust for, changes implemented by such players. 26 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.
Furthermore, we could have limited ability to respond to, and adjust for, changes implemented by such players. 27 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.
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.
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 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 with our practices.
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. 29 The digital advertising market is highly competitive.
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. 30 The digital advertising market is highly competitive.
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. 37 We expect to incur expenses and to devote resources to Section 404 compliance on an ongoing basis.
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. 39 We expect to incur expenses and to devote resources to Section 404 compliance on an ongoing basis.
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 platforms.
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 services.
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. 36 Our share price has fluctuated significantly and could continue to fluctuate significantly.
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. 38 Our share price has fluctuated significantly and could continue to fluctuate significantly.
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, we cannot be sure that we will be able to provide the services we need on satisfactory terms. Any increase in costs could reduce our revenues and harm our gross margins.
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.
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 conduct business.
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, 2022.
In addition, issuances of large numbers of shares of Common Stock may adversely affect the market price of our Common Stock. 36 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, 2023.
If any of these happens, our revenue could decline or our cost of acquiring inventory could increase, which, in turn, could lower our operating margins and materially adversely affect our advertising business. 27 Reliance upon our top customers may adversely affect our revenue and operating results.
If any of these happen, our revenue could decline or our cost of acquiring inventory could increase, which, in turn, could lower our 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.
Our top ten customers represented approximately 65% and 68% of our consolidated revenue for the years ended December 31, 2023 and 2022, 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.
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.
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, which could be costly and cause reputational harm.
For 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.
For 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, vendors and service providers, leads and consumers.
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. Our 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.
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. 37 Our Common Stock is quoted on 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.
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; ● We are subject to compliance with securities law, which exposes us to potential liabilities, including potential rescission rights; ● 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 have never paid cash dividends and do not anticipate doing so in the foreseeable future; ● 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; ● Our 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 market for penny stocks has experienced numerous frauds and abuses, which could adversely impact investors in our stock; ● Shares of Common Stock eligible for future sale may adversely affect the market; ● Our share price has fluctuated significantly and could continue to fluctuate significantly; ● If we fail to maintain effective internal controls over financial reporting, the price of our Common Stock may be adversely affected; ● 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; and ● Delaware law contains provisions that could discourage, delay or prevent a change in control of our company, prevent attempts to replace or remove current management and reduce the market price of our stock.
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; ● We are subject to compliance with securities law, which exposes us to potential liabilities, including potential rescission rights; ● 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 have never paid cash dividends and do not anticipate doing so in the foreseeable future; ● 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; ● Our Common Stock is quoted on 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 market for penny stocks has experienced numerous frauds and abuses, which could adversely impact investors in our stock; ● Shares of Common Stock eligible for future sale may adversely affect the market; ● Our share price has fluctuated significantly and could continue to fluctuate significantly; ● If we fail to maintain effective internal controls over financial reporting, the price of our Common Stock may be adversely affected; ● 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; ● Delaware law contains provisions that could discourage, delay or prevent a change in control of our Company, prevent attempts to replace or remove current management and reduce the market price of our stock; and ● Our planned Reincorporation to the State of Nevada could have significant legal, tax, and governance implications for us and our stockholders, could expose us to additional risks and uncertainties and we may not realize the expected benefits of the Reincorporation.
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.
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 SEC and state securities agencies.
These risks include, among others, the following: Risks Associated with Our Business and Industry ● Our success depends, in part, upon the continued demand of digital advertising as an integral part of corporate marketing and internal communications plans and the continued growth and acceptance of digital advertising as effective alternatives to traditional offline marketing products and services; ● Online platform updates, including operating systems, search engines, browsers and social media might affect our ability to generate revenues, temporarily or permanently; and ● Should the providers of internet browsers, advertisement platforms and Search Engines further regulate, constrain or limit our ability to offer digital advertising platforms, or materially change their guidelines, technology or the way they operate, our ability to generate revenue from advertising could be significantly reduced. 23 ● 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; ● The use of third-party software solutions for the purpose of blocking ads and / or alerts may cause our business to suffer; ● We depend on supply sources to provide us with advertising inventory in order for us to deliver advertising campaigns in a cost-effective manner; ● Reliance upon our top customers may adversely affect our revenue and operating results; ● 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; ● Reliance upon material suppliers may adversely affect our revenue and operating results; ● We may not be able to generate enough cash flow to meet our debt obligations or fund our other liquidity needs; ● Our success is dependent on the preferences of consumers, internet users and advertisers; ● A loss of the services of our technology vendors could adversely affect execution of our business strategy; and ● The outbreak of a global pandemic may adversely affect our business, financial condition, liquidity and results of operations.
These risks include, among others, the following: Risks Associated with Our Business and Industry ● Our success depends, in part, upon the continued demand of digital advertising as an integral part of corporate marketing and internal communications plans and the continued growth and acceptance of digital advertising as effective alternatives to traditional offline marketing products and services; ● Online platform updates, including operating systems, search engines, browsers and social media might affect our ability to generate revenues, temporarily or permanently; ● Should the providers of internet browsers, advertisement platforms and Search Engines further regulate, constrain or limit our ability to offer digital advertising platforms, or materially change their guidelines, technology or the way they operate, our ability to generate revenue from advertising could be significantly reduced; ● 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; ● The use of third-party software solutions for the purpose of blocking ads and/or alerts may cause our business to suffer; ● We depend on supply sources to provide us with advertising inventory in order for us to deliver advertising campaigns in a cost-effective manner; ● Reliance upon our top customers may adversely affect our revenue and operating results; 24 ● 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; ● Reliance upon material suppliers may adversely affect our revenue and operating results; ● We may not be able to generate enough cash flow to meet our debt obligations or fund our other liquidity needs; ● Our success is dependent on the preferences of consumers, internet users and advertisers; ● A loss of the services of our technology vendors could adversely affect execution of our business strategy; ● The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern, which could prevent us from obtaining new financing on reasonable terms or at all; and ● The outbreak of a global pandemic may adversely affect our business, financial condition, liquidity and results of operations.
Dollar may negatively affect our earnings; ● Political, economic and military instability in Israel may impede our ability to operate and harm our financial results; and ● It 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. securities laws claims in Israel or to serve process on our officers and directors and these experts. 25 Risks Associated with Our Business and Industry Our success depends, in part, upon the continued demand of digital advertising as an integral part of corporate marketing and internal communications plans and the continued growth and acceptance of digital content as effective alternatives to traditional offline marketing products and services.
Dollar may negatively affect our earnings; and ● It 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. securities laws claims in Israel or to serve process on our officers and directors and these experts. 26 Risks Associated with Our Business and Industry Our success depends, in part, upon the continued demand of digital advertising as an integral part of corporate marketing and internal communications plans and the continued growth and acceptance of digital content as effective alternatives to traditional offline marketing products and services.
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 subject to numerous federal, state, local, and international laws, directives and regulations regarding privacy, data protection, and data security and the collection, storing, sharing, processing, transferring, disclosure requirements and protection of personal data. The scope of these regulations is changing, subject to differing interpretations, and may be inconsistent among jurisdictions or conflict with other legal and regulatory requirements.
In connection with the preparation 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 connection with the preparation and issuance of our financial statements for the year ended December 31, 2022, our management identified a material weakness in our internal control over financial reporting.
Current pending legislation may result in a change of the current enforcement measures and sanctions. 32 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.
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.
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, 2022, 14,783,964 shares of Common Stock were outstanding.
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, 2023, 14,920,585 shares of Common Stock were outstanding.
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.
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.
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.
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. 31 We may in the future be subject to claims of intellectual property infringement that could adversely affect our business.
As of December 31, 2022, we had outstanding: (i) Class J Warrants exercisable to purchase 130,333 shares of Common Stock at an exercise price of $13.44 per share of Common Stock; and (ii) Class K Warrants exercisable to purchase 130,333 shares of Common Stock, at an exercise price of $22.40 per share of Common Stock.
As of December 31, 2023, we had outstanding: (i) Class J Warrants exercisable to purchase 130,333 shares of Common Stock at an exercise price of $13.44 per share of Common Stock; and (ii) Class K Warrants exercisable to purchase 130,333 shares of Common Stock, at an exercise price of $22.40 per share of Common Stock and (iii) 2023 Warrants exercisable to purchase 480,000 shares of Common Stock, at an exercise price of $0.50 per share of Common Stock.
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.
Sustained or repeated system failures would reduce the attractiveness of our platforms and services. It may become increasingly difficult to maintain and improve our performance, especially during peak usage times, as we expand our platforms and service offerings.
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. 28 Our success is dependent on the preferences of consumers, internet users and advertisers.
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 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.
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. 29 A change in advertisers’ preferences could also affect our operations.
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. 31 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 platforms.
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.
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.
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.
If our platforms 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.
If our platforms 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.
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 platforms, we have invested and continue to invest, heavily in these efforts.
While we continuously develop and maintain systems designed to detect and prevent events of this nature from impacting our platforms, we have invested and continue to invest heavily in these efforts.
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.
These efforts are costly and require ongoing monitoring and updating as technologies change and efforts to overcome preventative security measures become more sophisticated. 32 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.
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. 35 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.
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.
The shares of our Common Stock are thinly-traded 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.
On November 7, 2022, the OTC Markets Group downgraded the quotation of our Common Stock from the OTCQB Markets to the OTC Markets, Pink Tier. The shares of our Common Stock are thinly-traded 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.
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.
Additionally, these claims may result in us 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.
In response to that material weakness, we implemented a remediation plan and reviewed our existing processes and controls in order to identify additional control deficiencies and designed new controls or adjusted the design of our existing controls in order to improve our processes and controls.
In response to that material weakness, we implemented a remediation plan and reviewed our existing processes and controls in order to identify additional control deficiencies and designed new controls or adjusted the design of our existing controls in order to improve our processes and controls and have subsequently remediated such material weakness in connection with the preparation of the financial statements for the year ended December 31, 2023.
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 platforms and cause us to lose customers and revenue.
Such failures and risks, if materialized, could affect our activities, including its ad space-purchasing and processing capabilities. 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 platforms and cause us to lose customers and revenue.
Risks Related to Data Protection 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.
These systems, whether operated internally or externally, may be subject to attacks 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.
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.
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. 28 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.
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.
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. 33 Regulations, legislation, or self-regulation developments relating to privacy, data collection and protection and internet advertising, 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.
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.
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 platforms through various distribution channels we may experience an increase in the number of intellectual property claims against us.
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.
Moreover, concerns about our collection, use, sharing, handling and other processing of data or other privacy related matters, even if unfounded, could harm our reputation and operating results. 34 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.
Such disruption could materially adversely affect our business, prospects, financial condition and results of operations.
As a result, our operations may be disrupted by such absences, which disruption may materially and adversely affect our business, prospects, financial condition and results of operations.
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.
Management evaluated the effectiveness of the Company’s disclosure controls and procedures as of December 31, 2023 and concluded that the material weakness previously identified in our Annual Report on Form 10-K for the year ended December 31, 2022 has been remediated and the Company’s disclosure controls and procedures were effective as of the end of December 31, 2023.
Any armed conflicts or political instability in the region would likely negatively affect business conditions and could harm our results of operations. 38 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.
Any armed conflicts or political instability in the region would likely negatively affect business conditions and could harm our results of operations.
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 data collection and protection, including the EU General Data Protection Regulation 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.
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 data collection and protection.
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.
Further, the cost of complying with such laws or regulations could be significant and would increase our operating expenses, which could adversely affect our business, financial condition and results of operations. 35 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.
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 operations. Our commercial insurance does not cover losses that may occur as a result of events associated with war and terrorism.
Our commercial insurance does not cover losses that may occur as a result of events associated with war and terrorism.
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 Board of Directors. 34 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.
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.
As we develop and offer our platforms 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 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.
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.
However, if we identify future material weaknesses in our disclosure controls and procedures and if we are unable to implement any of the required changes to our disclosure controls and procedures effectively, it 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.
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.
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 Recent state privacy laws and regulations issued pursuant to those laws address and expand on requirements for honoring browser-based or similar technical signals for consumers to opt out of the sale and the use of personal data for targeted advertising purposes.
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.
A failure in our technology infrastructure may adversely affect our business and financial condition and disrupt our customers’ businesses.
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 significant penalties for non-compliance.
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. European supervisory authorities have been very active in terms of enforcing data protection rules, including with respect to cookie-related matters.
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.
If such changes to Israel’s judicial system are again pursued by the government and approved by the parliament, this 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. 42 Exchange rate fluctuations between foreign currencies and the U.S.
We currently plan to retain any earnings to finance the growth of our business rather than to pay cash dividends.
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 Board of Directors.
Our 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 storyteller 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.
Our ability to access and utilize such data is crucial to the success of our business and operations. Such ability to either collect or use data could be restricted by new laws or regulations.
If we cannot compete effectively in this market, our revenues are likely to decline.
If we cannot compete effectively in this market, our revenues are likely to decline; and ● Our implementation and use of artificial intelligence technologies may not be successful, which may impair our ability to compete effectively, result in reputational harm and have an adverse effect on our business.
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.
Risks Related to our Operations in Israel Political, economic and military conditions in Israel, including the recent attack by Hamas and other terrorist organizations from the Gaza Strip and elsewhere in the region and Israel’s war against them, may impede our ability to operate and harm our financial results.
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.
We are highly dependent on the material agreement with our Gix Major Customer.
Risks Related to Data Protection Regulation ● We may not be able to protect our systems, technology and infrastructure from cyberattacks; ● A failure in our technology infrastructure may adversely affect our business and financial condition and disrupt our customers’ businesses; 24 ● 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 platforms and cause us to lose customers and revenue.
Risks Related to Data Protection Regulation We may not be able to protect our systems, technology and infrastructure from cyberattacks. We rely on information technology systems to operate and manage our business and to process, maintain, and safeguard information, including information related to our customers, partners, and personnel.
Risks Related to our Operations in Israel ● Exchange rate fluctuations between foreign currencies and the U.S.
Risks Related to our Operations in Israel ● Political, economic and military instability in Israel, including the recent attack by Hamas and other terrorist organizations from the Gaza Strip and elsewhere in the region surrounding Israeli’s borders and Israel’s war against them, may impede our ability to operate and harm our financial results; ● Exchange rate fluctuations between foreign currencies and the U.S.
Removed
These efforts are costly and require ongoing monitoring and updating as technologies change and efforts to overcome preventative security measures become more sophisticated.
Added
Our success is dependent on the preferences of consumers, internet users and advertisers. Our services rely on the digital devices used by consumers and users.
Removed
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.
Added
The report of our independent registered public accounting firm contains an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern, which could prevent us from obtaining new financing on reasonable terms or at all.
Removed
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.
Added
The report of our independent registered public accounting firm on our audited consolidated financial statements for the year ended December 31, 2023, contains an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern.
Removed
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.
Added
Our audited consolidated financial statements do not include any adjustments that might result from the outcome of the uncertainty regarding our ability to continue as a going concern. This going concern opinion could materially limit our ability to raise additional funds through the issuance of equity or debt securities or otherwise.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe 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.
Biggest changeThe first term of the lease is thirty-six (36) months, until March 1, 2024, which was extended until March 1, 2026, with an option to extend for two (2) additional years. We have a bank deposit as a guarantee in the amount of approximately $21,000 for 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.
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. 44

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 4. MINE SAFETY DISCLOSURES None. 39 PART II
Biggest changeITEM 4. MINE SAFETY DISCLOSURES None. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

10 edited+5 added−5 removed34 unchanged
Biggest changeIn 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. 43 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.
Biggest changeIn 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. 48 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”).
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.
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”. 46 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.
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.
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.
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. 42 Transferability.
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.
The following table summarizes information of outstanding options as of December 31, 2022: Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance Plan Category Equity compensation plans approved by security holders (2017 Plan) - - 133,333 Equity compensation plans not approved by security holders (2023 Plan) 2,500,000 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.
We do not grant options under our 2017 Employee Incentive Plan (the “2017 Plan”) as it was superseded by the 2023 Plan. 45 The following table summarizes information of outstanding options as of December 31, 2023: Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance Plan Category Equity compensation plans approved by security holders (2017 Plan) - - 133,333 Equity compensation plans approved by security holders (2023 Plan) 51,020 3,246,000 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.
Outstanding Warrants The following table summarizes information of outstanding warrants as of December 31, 2022: Warrants Warrant Term Exercise Price Exercisable Class J Warrants 130,333 July 2029 $ 13.44 130,333 Class K Warrants 130,333 July 2029 $ 22.40 130,333 40 Securities Authorized for Issuance under 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”).
Outstanding Warrants The following table summarizes information of outstanding warrants as of December 31, 2023: Warrants Warrant Term Exercise Price Exercisable Class J Warrants 130,333 July 2029 $ 13.44 130,333 Class K Warrants 130,333 July 2029 $ 22.40 130,333 2023 Warrants 480,000 December 2025 $ 0.50 480,000 Securities Authorized for Issuance under Equity Compensation Plans As of the date of this Annual Report, the Company has authorized 3,246,000 shares of Common Stock for issuance under our 2023 Stock Incentive Plan (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.
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. 47 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.
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 OTC Markets, Pink Tier under the symbol VBIX, since November 7, 2022.
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 OTC Markets, Pink Tier under the symbol “VBIX”.
Holders of Common Stock As of December 31, 2022, there were approximately 2,689 stockholders of record of our Common Stock and 14,783,964 shares of our Common Stock outstanding. Our transfer agent is Transfer Online, 512 SE Salmon Street, Portland, OR 97214-3444, telephone: (503) 227-2950.
Holders of Common Stock As of December 31, 2023, there were approximately 2,690 stockholders of record of our Common Stock and 14,920,585 shares of our Common Stock outstanding. Our transfer agent is Transfer Online, 512 SE Salmon Street, Portland, OR 97214-3444, telephone: (503) 227-2950.
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. 41 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.
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 Code and Section 409A of the Code.
Removed
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 which the Company, among other things, effected the Reverse Split of its Common Stock at a ratio of 1-for-28.
Added
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.
Removed
We do not grant options under our 2017 Employee Incentive Plan (the “2017 Plan”) as it was superseded by the 2023 Plan.
Added
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.
Removed
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.
Added
Description of Business – Reorganization Transaction with Gix Media Ltd . ” , for further information. On May 18, 2023, the Company issued 111,111 shares of restricted Common Stock to Amitay Weiss, a director of the Company. The shares of Common Stock were issued as a special bonus equity grant to Mr. Weiss and under Regulation S .
Removed
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”).
Added
In connection with the 2023 Loan, the Company issued to the Lenders, the 2023 Warrants to purchase up to 480,000 shares of Common Stock, for an exercise price per share of Common Stock of $0.50. The 2023 Warrants were issued to the Lenders under Regulation S. See “ Item 1.
Removed
Description of Business – Reorganization Transaction with Gix Media Ltd . ” , for further information.
Added
Description of Business – 2023 Loan Agreement” , for further information. ITEM 6. [RESERVED].

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

26 edited+26 added−8 removed24 unchanged
Biggest changeDuring the fiscal year ended December 31, 2022, we had $4,224 thousand negative cash flow from financing activities which was mainly the result of repayment of long-term bank loan in amount of $1,389 thousand, payment of dividend to non-controlling interests in amount of $1,689 thousand and increase in loan to parent company in amount of $1,073 thousand. 47 During the fiscal year ended December 31, 2021, we had $8,277 thousand positive cash flow from financing activities which was mainly the result of $9,500 thousand receipt of long-term and short-term bank loans in connection with Cortex Acquisition, offset by repayment of short-term and long-term bank loans in amount of 830$ thousand, payment of dividend to non-controlling interests in amount of $194 thousand and increase in loan to parent company in amount of $199 thousand.
Biggest changeDuring the fiscal year ended December 31, 2022, we had $4,224 thousand negative cash flow from financing activities which was the result of repayment of long-term bank loan in amount of $1,389 thousand, payment of dividend by Cortex to non-controlling interests in amount of $1,689 thousand, payment of dividend by Gix Media to its shareholders in an amount of $73 thousand and increase in loan to parent company in amount of $1,073 thousand.
These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions. 44 Organizational Background The Registrant was incorporated in the State of Delaware on August 16, 1985, under a predecessor name, InFerGene Company.
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 Delaware on August 16, 1985, under a predecessor name, InFerGene Company.
Critical Accounting Policies and Estimates Our significant accounting policies are summarized in Note 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.
Critical Accounting Policies and Estimates Our significant accounting policies are summarized in Note 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 our consolidated financial statements.
On August 25, 1995, a wholly owned subsidiary of InFerGene Company merged with Zaxis International, Inc., which following such merger, the surviving entity, InFerGene Company, changed its name to Zaxis International, Inc. Emerald Medical Applications Ltd.
On August 25, 1995, a wholly owned subsidiary of InFerGene Company merged with Zaxis International, Inc., which following such merger, the surviving entity, InFerGene Company, changed its name to Zaxis International, Inc. 49 Emerald Medical Applications Ltd.
During the fiscal year ended December 31, 2022, we had positive cash flow from operations of $3,237 thousand which was mainly the result of a $1,117 thousand in net income, $3,233 thousand from positive adjustments to operating activities, offset by $1,113 negative changes in assets and liabilities items.
During the fiscal year ended December 31, 2022, we had positive cash flow from operations of $3,237 thousand which was mainly the result of a $1,117 thousand in net income, $3,233 thousand from positive adjustments to operating activities, offset by $1,113 negative changes in assets and liabilities items. 52 During the fiscal year ended December 31, 2023, we had $16 thousand negative cash flow from investing activities as compared to $74 thousand negative cash flow from investing activities during the year ended December 31, 2022.
The reason for the increase in the year ended December 31, 2022, is due to the inclusion of Cortex’s financial statements. 46 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 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 receivable, $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.
According to the Financing Agreement, Gix Media undertook to meet financial 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 in all 4 consecutive quarters, will not exceed 2.4 in the first two years and will not exceed 1.75 in the following two years.
According to the Financing Agreement, Gix Media undertook to meet financial 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 in all 4 consecutive quarters (in any given period during the life of the loan), will not exceed 2.4 in the first two years following the execution of the Financing Agreement, which according to the Second Addendum was extended by nine months to June 30, 2024 and thereafter will not exceed 1.75.
During the fiscal year ended December 31, 2021, we had positive cash flow from operations of $4,366 thousand which was mainly the result of a $591 thousand in net income, $1,406 thousand from positive adjustments to operating activities, and $2,369 positive changes in assets and liabilities items.
During the fiscal year ended December 31, 2023, we had positive cash flow from operations of $934 thousand which was mainly the result of a $8,687 thousand in net loss, $7,973 thousand from positive adjustments to operating activities, and $1,648 positive changes in assets and liabilities items.
In connection with the Cortex Acquisition, at the closing date, Gix Media entered into the Financing Agreement with Leumi for the provision of a line of credit in the total amount of up to $3.5 million and a long-term loan totaling $6 million, which Gix Media used to finance the Cortex Acquisition. 45 Results of Operations during the year ended December 31, 2022, as compared to the year ended December 31, 2021 Revenues for the year ended December 31, 2022, were $96,603 thousand as compared to $45,224 thousand for the year end December 31, 2021.
In connection with the Cortex Acquisition, at the closing date, Gix Media entered into the Financing Agreement with Leumi for the provision of a line of credit in the total amount of up to $3.5 million and a long-term loan totaling $6 million, which Gix Media used to finance the Cortex Acquisition.
We had a positive working capital of $1,319 thousand and $2,476 thousand as of December 31, 2022 and December 31, 2021, respectively.
We had a negative working capital of $1,968 thousand as compared to a positive working capital of $1,319 thousand as of December 31, 2023, and December 31, 2022, respectively.
Our tax expenses were $153 thousand for the year ended December 31, 2022, as compared to $90 thousand tax expenses for the year ended December 31, 2021.
Our income tax benefit was $66 thousand for the year ended December 31, 2023, as compared to $153 thousand income tax expenses for the year ended December 31, 2022.
Traffic acquisition and related costs for the year ended December 31, 2022, were $83,011 thousand as compared to $37,442 thousand for the year ended December 31, 2021.
Traffic acquisition and related costs for the year ended December 31, 2023, were $70,451 thousand a decrease of $12,560 thousand as compared to $83,011 thousand for the year ended December 31, 2022.
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.
Our depreciation and amortization expenses for the year ended December 31, 2023, were $2,952 thousand, a slight increase as compared to $2,809 thousand during the same period in the prior year. A goodwill impairment loss of $5,107 thousand was recorded during the year ended December 31, 2023, compared to $0 during the year ended December 31, 2022.
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, 2023, we had non-current assets of $25,477 thousand consisting of $147 thousand in deferred taxes, $397 thousand in operating lease right-of-use assets, $245 thousand in property and equipment net, $12,434 thousand in intangible assets net and $12,254 thousand in goodwill.
As of December 31, 2021, we had $5,975 thousand in non-current liabilities consisting of $188 thousand in accrued severance pay, $4,270 thousand long-term loan, $491 thousand in operating lease liabilities - long term and $1,026 thousand in deferred taxes.
As of December 31, 2023, we had $4,885 thousand in non-current liabilities consisting of $3,064 thousand long-term loans, $304 thousand in operating lease liabilities - long term and $1,517 thousand in deferred taxes.
The reason for the increase in financial expenses in the year ended December 31, 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.
The reason for the decrease during year ended December 31, 2023, is mainly due to the decrease in financial expenses relating to the USD to NIS exchange rate, as compared to the year ended December 31, 2022, which was partially offset by the increase in interest expenses related to the Company’s bank loans due to increases in the market’s interest rates during the year ended December 31, 2023.
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.
In the year ended December 31, 2022, the Company’s recorded business acquisition and related costs were in connection with the Reorganization Transaction. 51 Our net financial expense was $1,281 thousand for the year ended December 31, 2023, as compared to net financial expense of $1,456 thousand for the year ended December 31, 2022.
Research and development costs for the year ended December 31, 2022, was $3,255 thousand as compared to $2,369 thousand for the year ended December 31, 2021. The reason for the increase in the year ended December 31, 2022, is due to the inclusion of Cortex’s financial statements.
Research and development costs for the year ended December 31, 2023, were $2,893 thousand as compared to $3,255 thousand for the year ended December 31, 2022. The reason for the decrease in the year ended December 31, 2023, is the reduction of expenses in the Search Platform, primarily in salaries and technological services.
Sales and marketing expenses for the year ended December 31, 2022, was $2,479 thousand as compared to $1,345 thousand for the year ended December 31, 2021. The reason for the increase in the year ended December 31, 2022, is due to the inclusion of Cortex’s financial statements.
Sales and marketing expenses for the year ended December 31, 2023, were $2,805 thousand as compared to $2,479 thousand for the year ended December 31, 2022.
General and administration expenses for the year ended December 31, 2022, was $2,157 thousand as compared to $1,384 thousand for the year ended December 31, 2021. The reason for the increase in the year ended December 31, 2022, is due to the inclusion of Cortex’s financial statements.
General and administration expenses for the year ended December 31, 2023, were $2,877 thousand as compared to $2,157 thousand for the year ended December 31, 2022.
(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 year ended December 31, 2022, compared to $222 thousand during the year ended December 31, 2021.
The total amount of goodwill impairment loss recognized by the Company, in the year ended December 31, 2023, was related to the Content Platform (see Note 6 to our consolidated financial statements). Our business acquisition and related costs were $0 for the year ended December 31, 2023, compared to $166 thousand during the year ended December 31, 2022.
As of December 31, 2022, Gix Media is in compliance with the financial covenants in connection with the 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.
Our consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. 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.
As of December 31, 2021, we had $26,796 thousand in current liabilities consisting of $16,676 thousand in accounts payable, $1,317 thousand in other payables, $6,569 thousand in short term loan and current maturities of long-term loan, $91 thousand in operating lease liabilities and a $2,116 thousand in loan from Gix Internet, according to the First Loan agreement, as defined below.
As of December 31, 2023, we had $19,773 thousand in current liabilities consisting of $12,359 thousand in accounts payable, $889 thousand in other payables, $6,440 thousand in short term loans and current maturities of a long-term loans and $85 thousand in operating lease liabilities.
In January 2023, the Company acquired an additional 10% of Cortex’s share capital.
In January 2023, the Gix Media acquired an additional 10% of Cortex’s share capital. In January 2024, Gix Media did not purchase an additional 10% of Cortex’s share capital, as Cortex did not meet certain KPIs, as conditioned in the definitive agreements of the Cortex Acquisition.
As of December 31, 2021, we had current assets of $29,245 thousand consisting of $5,208 thousand in cash and cash equivalents, $234 thousand in restricted deposits, $16,415 thousand in accounts receivables, $1,004 thousand in other receivables and $6,384 thousand in loan to Gix Internet, according to the Second Loan agreement.
Liquidity and Capital Resources As of December 31, 2023, we had current assets of $17,805 thousand consisting of $ 1,774 thousand in cash and cash equivalents, $149 thousand in restricted deposits, $11,359 thousand in accounts receivable, $771 thousand in other current assets and $3,752 thousand in the loan to our parent company, in accordance with the Second Loan Agreement, as defined below.
These estimates are based on historical experience and information obtained from the management of the acquired companies and are inherently uncertain.
These estimates are based on historical experience and information obtained from the management of the acquired companies and are inherently uncertain. Impairment test for Goodwill Goodwill is tested for impairment at least annually, and whenever events or changes in circumstances occur indicating that it is “more likely than not”, impairment may be deemed to have been incurred.
Removed
The reason for the increase during the fiscal year ended December 31, 2022, is due to the Cortex Acquisition on October 13, 2021, therefore, the financial statements of the 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, which include Cortex’s financial results for approximately only two and a half months, since the date of the Cortex Acquisition.
Added
Reincorporation in Nevada On September 27, 2023, our stockholders approved to grant to the Board of Directors the power to effect the Reincorporation of the Company from the State of Delaware to the State of Nevada by way of a parent-subsidiary merger.
Removed
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.
Added
Upon the consummation of the Reincorporation, the Company will cease its legal existence as a Delaware corporation, and the Surviving Corporation will continue the Company’s business as the surviving corporation under the name “Viewbix Inc.” succeeding to all of the Company’s rights, assets, liabilities and obligations, except that its affairs will cease to be governed by the Delaware General Corporation Law and will be subject to the Nevada Revised Statutes.
Removed
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 and depreciation expenses of all intangible assets as reflected in the consolidated financial statements of Medigus Ltd.
Added
As of the date of this Annual Report, the Board of Directors has not effected the Reincorporation. 50 Results of Operations during the year ended December 31, 2023, as compared to the year ended December 31, 2022 Revenues for the year ended December 31, 2023, were $ 79,613 thousand as compared to $96,603 thousand for the year end December 31, 2022.
Removed
Our net financial expense was $1,456 thousand for the year ended December 31, 2022, compared to net financial income of $140 thousand for the year ended December 31, 2021.
Added
Our revenues from Cortex’s Content Platform were $59,144 thousand for the year ended December 31, 2023, a decrease of $14,713 as compared to $73,857 thousand during the year end December 31, 2022.
Removed
During the fiscal year ended December 31, 2022, we had $74 thousand negative cash flow from investing 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.
Added
The reason for the decrease during the year ended December 31, 2023, is due to a decrease of user traffic acquisition from the Third-Party Platforms, primarily resulting from technological changes and content policy changes on such Third-Party Platforms, causing a lower amount of users to reach the Cortex Websites and thus decreasing the exposures to the ads displayed on the Cortex Websites.
Removed
On 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”).
Added
In response to the technological and policy changes, Cortex updated and adjusted its platform to adapt to these changes, partially restoring the amount of user traffic acquisition, which mitigated the scope of the decrease.
Removed
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.
Added
Our revenues from Gix Media’s Search Platform were $20,469 thousand for the year ended December 31, 2023, a decrease of $2,277 thousand as compared to $22,746 thousand during the year end December 31, 2022.
Removed
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.
Added
The reasons for the decrease during the year ended December 31, 2023, are due to the decrease in the amount of search referrals conducted by users, provided by Gix Media to search engines, caused primarily by a decrease in the number of searches received from Gix Media’s third-party strategic partners, including a significant strategic partner of Gix Media.
Added
In response to this decrease, Gix Media expanded its user traffic resources during the year ended December 31, 2023, by engaging with new strategic partners, which in turn mitigated the scope of the decrease.
Added
The reason for the decrease during the year ended December 31, 2023, is due to a decrease of user traffic acquisition from the Third-Party Platforms, primarily resulting from technological changes and content policy changes on such Third-Party Platforms.
Added
The increase of selling and marketing expenses during the year ended December 31, 2023, is due to expenses incurred in connection with the increase in the content displayed on the Cortex Websites and an increase primarily in salaries in the Content Platform.
Added
The reason for the increase in the year ended December 31, 2023, is due to the increase in salary and related costs following the Reorganization Transaction with Gix Media on September 19, 2022, which led to the expansion of the Company’s management team, which included, among other things, the appointment of a chairman of the board in June 2022 and a full-time chief financial officer in July 2022.
Added
In addition, during year ended December 31, 2023, there was an increase in professional services and consultant costs following the Reorganization Transaction, as compared to the year ended December 31, 2022.
Added
The decrease in income tax expenses was mainly due to a decrease in income before income taxes of Cortex and due to an increase in tax benefit in respect of prior years of Gix Media for the year ended December 31, 2023, as compared to the year ended December 31, 2022.
Added
During the fiscal year ended December 31, 2023, we had $3,376 thousand negative cash flow from financing activities which was the result of repayment of long-term and short term loans in amount of $3,080 thousand, cash paid to non-controlling interests in connection to the purchase of the additional 10% of Cortex’s shares in amount of $2,625 thousand, payment of dividend by Cortex to non-controlling interests in amount of $598 thousand, payment of dividend by Gix Media to its shareholders in amount of $130 thousand, an increase in the loan to our parent company in amount of $123 thousand offset by receipt of long-term loans in amount of $1,980 thousand and receipt of short term bank loans in amount of $1,200 thousands.
Added
As of December 31, 2023, Gix Media was not in compliance with the financial covenants in connection with the Financing Agreement, and received a written letter from Leumi, pursuant to which, subject to certain conditions and until April 16, 2024, Leumi waived its rights under the Financing Agreement with respect to such failure (see Note 10 to our consolidated financial statements).
Added
Going Concern We experienced a decrease in user traffic acquired from third party advertising platforms, and consequently in revenues, for the 6-month period ended December 31, 2023.
Added
As a result of such decreases, for the year ended December 31, 2023, we generated positive cash flows from operations of $934 compared to positive cash flows from operations of $3,237 generated during the year ended December 31, 2022, and had cash and cash equivalents and a working capital deficit, as of December 31, 2023, of $1,774 and $1,968, respectively.
Added
In addition, as of December 31, 2023, we had short-term loans and long-term bank loans amounting to $9,070, in which the Company did not meet its financial debt covenants for the year ended December 31, 2023 (see Note 10 to our consolidated financial statements).
Added
While our management expects to continue to generate positive cash flows from our operations, such a decline may reasonably result in our inability to repay our debt obligations during the 12-month period following the issuance date of our consolidated financial statements for the year ended December 31, 2023. 53 Our management’s plans include reducing operating expenses, creating new revenues sources, negotiating with the bank regarding the loans terms in an effort to provide additional liquidity and ensure continued compliance with our obligations, and raising funds in debt or equity capital from various potential investors.
Added
However, there is significant uncertainty whether we will be successful in accomplishing our plans or we will be able to obtain sufficient funds when needed. Such conditions raise substantial doubts about our ability to continue as a going concern.
Added
We have the option to first assess qualitative factors to determine whether it is “more likely than not” that the fair value of a reporting unit is less than its carrying value as a basis for determining if it is necessary to perform the quantitative goodwill impairment test.
Added
However, if we conclude otherwise, we are required to perform the quantitative impairment test by calculating the fair value of the reporting unit and comparing it against its carrying value. We have two reporting units to which goodwill was allocated: the Search Platform and the Content Platform. For both reporting units, we performed the quantitative impairment test.
Added
In estimating the fair value of our reporting units, we used the income approach, which requires us to make significant estimates and assumptions related to future cash flows and discount rates . Changes in these estimates and assumptions could have a significant impact on the fair value of the reporting units.
Added
If the fair value exceeds the carrying value, no further evaluation is required, and no impairment loss is recognized. An impairment charge would be recognized to the extent the carrying value of the reporting unit exceeds the reporting unit’s fair value.
Added
As of December 31, 2023, we recorded a goodwill impairment loss in the amount of $5,107 thousand for the Content Platform reporting unit.

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