Quantum X Labs Inc.: Form 10-K for the period ended Dec 31, 2024

Overview and Recent Developments

Viewbix Inc. (the “Registrant”, “Viewbix” or the “Company”) was incorporated in the State of Delaware on August 16, 1985, under a predecessor name, The InFerGene Company (“InFerGene Company”). On August 25, 1995, a wholly owned subsidiary of InFerGene Company merged with Zaxis International, Inc., an Ohio corporation, which following such merger, the surviving entity, InFerGene Company, changed its name to Zaxis International, Inc. (“Zaxis”). Our principal executive offices are located at 11 Derech Menachem Begin Street, Ramat Gan, Israel 5268104. Our website address is https://view-bix.com/ and our telephone number is + 972 9-774-1505. Information contained on, or that can be accessed through, our website does not constitute a part of this Annual Report and is not incorporated by reference herein. We have included our website address in this Annual Report solely for informational purposes. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers, such as we, that file electronically, with the SEC at www.sec.gov (http://www.sec.gov).

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

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

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

Reorganization Transaction with Gix Media Ltd.

On December 5, 2021, the Company entered into a certain Agreement and Plan of Merger with Gix Media Ltd. (“Gix Media”), an Israeli company and the majority-owned (77.92%) subsidiary of Gix Internet, the Parent Company and Vmedia Merger Sub Ltd., an Israeli company and wholly-owned subsidiary of the Company (“Merger Sub”), pursuant to which, Merger Sub merged with and into Gix Media, with Gix Media being the surviving entity and a wholly-owned subsidiary of the Company (the “Reorganization Transaction”).

On September 19, 2022, the Reorganization Transaction was consummated and as a result, all outstanding ordinary shares of Gix Media, having no par value (the “Gix Media Shares”) were delivered to the Company in exchange for the Company’s shares of Common Stock. As a result of the Reorganization Transaction, the former holders of Gix Media Shares, who previously held approximately 68% of the Company’s Common Stock, held approximately 97% of the Company’s Common Stock, and Gix Media became a wholly owned subsidiary of the Company.

June 2024 Facility Agreement

On July 22, 2024, we entered into an amended and restated facility agreement (the “June 2024 Facility Agreement”) for a $1 million (the “June 2024 Facility Loan Amount”) credit facility (the “June 2024 Credit Facility”) with the 2023 Loan Lenders and certain lenders set forth therein (the “June 2024 Lenders”) that amends and restates the prior facility agreement entered into on June 18, 2024 between the Company and the June 2024 Lenders (the “Prior June 2024 Facility Agreement”). In addition to the June 2024 Facility Loan Amount, the June 2024 Facility Agreement contemplates the inclusion of an additional $530,657 of outstanding debt owed by the Company to the June 2024 Lenders (the “June 2024 Prior Loan Amount”, and together with the June 2024 Facility Loan Amount, the “June 2024 Loan Amount”), which June 2024 Prior Loan Amount is entitled to certain rights under the June 2024 Credit Facility.

The term (the “June 2024 Facility Term”) of the June 2024 Credit Facility expires 12 months following the date of the June 2024 Facility Agreement (the “Initial Maturity Date”), provided that, if the effectiveness of an uplisting of our shares of Common Stock to Nasdaq securities exchange (the “Uplist”) occurs prior to the Initial Maturity Date, the June 2024 Facility Term shall expire 12 months following the effective date of the Uplist. The June 2024 Facility Agreement sets forth a drawdown schedule as follows: (i) an aggregate of $350,000 was drawn down on the date of the Prior June 2024 Facility Agreement, (ii) an aggregate of $150,000 was drawn down upon the filing of the Registration Statement (as defined below) and (iii) an aggregate of $500,000 drawn down upon the effectiveness of the Uplist.

The June 2024 Credit Facility accrues interest at a rate of 12% per annum, and we will also pay such interest on the June 2024 Prior Loan Amount, which is equal to $183,679 (the “June 2024 Facility Interest”). The June 2024 Facility Interest was paid in advance for the first year of the June 2024 Facility in (i) shares of our Common Stock at a conversion rate of $1.00 for each U.S. dollar of June 2024 Facility Interest accrued on the respective June 2024 Loan Amount, equal to an aggregate of 183,679 shares of Common Stock (the “June 2024 Facility Shares”) and (b) a warrant to purchase a number of shares of Common Stock equal to the June 2024 Facility Shares (the “June 2024 Facility Warrant”).

Immediately following the effectiveness of an Uplist, if any, (i) $662,957 of the June 2024 Loan Amount will convert into shares of common stock at a conversion rate equal to $1.00 per share of our common stock (the “June 2024 Convertible Stock”) and (ii) we will issue a warrant in substantially the same form and on substantially the same terms as a June 2024 Facility Warrant to purchase a number of shares of our common stock equal to the June 2024 Convertible Stock with an exercise price of $1.00 per share (the “June 2024 Conversion Warrant”, and (i) and (ii), collectively a “June 2024 Conversion Unit”). Such portion of the June 2024 Loan Amount that is not converted into a June 2024 Conversion Unit will remain outstanding and will not convert following the Uplist. For the duration of the June 2024 Facility Term of the June 2024 Credit Facility, the June 2024 Lenders may elect to convert such unconverted portion of the June 2024 Loan Amount into additional June 2024 Conversion Units or, upon the expiration of the June 2024 Facility Term, such unconverted portion of the June 2024 Loan Amount will be repaid in accordance with the terms of the June 2024 Facility Agreement.

The June 2024 Facility Warrants were exercisable upon issuance at an exercise price of $1.00 per share of Common Stock, subject to certain beneficial ownership limitations and price adjustments set forth therein, and have a three-year term from the issuance date.

In addition and in connection with the June 2024 Credit Facility, we agreed to pay L.I.A. Pure Capital Ltd. (the “June 2024 Lead Lender”) a commission consisting of (i) 50,000 shares of Common Stock, (ii) a warrant in substantially the same form and on substantially the same terms as the June 2024 Facility Warrant to purchase 50,000 shares of Common Stock with an exercise price of $1.00 per share (the “June 2024 Lead Lender Warrant”) and (iii) a warrant to purchase 625,000 shares of Common Stock with an exercise price of $4.00 per share, representing an aggregate exercise amount of $2.5 million, subject to beneficial ownership limitations and adjustments (the “June 2024 Lead Lender Fee Warrant” and together with the June 2024 Lead Lender Warrant and the June 2024 Facility Warrants, the “June 2024 Warrants”).

The June 2024 Lead Lender Fee Warrants were exercisable upon issuance and have a three-year term from the issuance date. Following the closing of the Private Placement (as defined below), the exercise price of the June 2024 Lead Lender Fee Warrant was adjusted to $0.472, which is the effective price per share of Common Stock in the Private Placement, or the June 2024 Lead Lender Fee Warrant Adjusted Exercise Price, and the number of shares of Common Stock issuable upon the exercise of the June 2024 Lead Lender Fee Warrant was also adjusted to a total 5,296,610 shares, or the June 2024 Lead Lender Fee Warrant Adjusted Shares, such that the product of the June 2024 Lead Lender Fee Warrant Adjusted Exercise Price and the June 2024 Lead Lender Fee Warrant Adjusted Shares is equal to an aggregate exercise amount of $2.5 million. The June 2024 Lead Lender Fee Warrant was recognized at fair value and as of December 31, 2024, was classified as additional paid-in capital on the Company’s condensed consolidated balance sheets (see also note 10.E to our audit financial statements for the year ended December 31, 2024 included elsewhere in this Annual Report.)

We undertook to file a registration statement with the SEC to register, inter alia, the resale by the June 2024 Lenders of the shares of Common Stock underlying the June 2024 Credit Facility, the June 2024 Warrants and the June 2024 Conversion Units, which we filed on July 31, 2024.

On September 13, 2024, we submitted an application to uplist to the Nasdaq. The timing of the uplisting process depends on a variety of factors, including, but not limited to, overall market conditions. No assurance can be given that our application will be approved or that a trading market will develop.

Private Placement

On July 3, 2024, we entered into a definitive securities purchase agreement (the “Purchase Agreement”) with a global investment firm (the “Lead Investor”) for the purchase and sale in a private placement (the “Private Placement”) of units (the “Units”) consisting of (i) 256,875 shares of our Common Stock (the “PIPE Shares”) and (ii) Common Stock purchase warrants (the “PIPE Warrants”) to purchase up to 385,332 shares of our Common Stock (the “PIPE Warrant Shares”) to the Lead Investor and other investors (collectively, the “Investors”) acceptable to the Lead Investor and us. The Private Placement closed on July 3, 2024. The purchase price per Unit was $1.00. The aggregate gross proceeds to us from the Private Placement were $256,875.

The PIPE Warrants were exercisable upon issuance at an exercise price of $1.00 per share, subject to certain adjustments and certain anti-dilution protection set forth therein, and have a three-year term from the issuance date. In addition, the PIPE Warrants are subject to an automatic exercise provision in the event that our shares of Common Stock are approved for listing on the Nasdaq Capital Market.

In connection with the Private Placement, we entered into a registration rights agreement (the “Registration Rights Agreement”) with the Investors. Pursuant to the Registration Rights Agreement, we are required to file a resale registration statement (the “PIPE Registration Statement”) with the SEC to register for resale of the PIPE Shares issued in the Private Placement and the PIPE Warrant Shares issuable upon exercise of the PIPE Warrants, within 30 days of the date of the Purchase Agreement, and to have such PIPE Registration Statement declared effective within 30 days following the filing date of the PIPE Registration Statement in the event the PIPE Registration Statement is not reviewed by the SEC, or 60 days following the filing date of the PIPE Registration Statement in the event the PIPE Registration Statement is reviewed by the SEC. We will be obligated to pay certain liquidated damages if we fail to file the PIPE Registration Statement when required, fail to cause the PIPE Registration Statement to be declared effective by the SEC when required, or if we fail to maintain the effectiveness of the PIPE Registration Statement. On July 31, 2024 we filed the PIPE Registration Statement.

The Purchase Agreement and the Registration Rights Agreement also contain representations, warranties, indemnification and other provisions customary for transactions of this nature. In addition, pursuant to the Purchase Agreement, we agreed to abide by certain customary standstill restrictions for a period of 30 days following the effective date of the PIPE Registration Statement. In addition, while the PIPE Warrants are outstanding, the Investors shall not, and shall cause its affiliates to not enter into or effect, directly or indirectly, hedging transactions that establish a net short position. Upon the closing of the Private Placement, we reimbursed the Lead Investor $10,000 for actual and documented fees and expenses incurred. In addition, we paid a commission to the Lead Investor of (i) a cash fee of $12,844 and (ii) 12,844 shares of our Common Stock.

First July 2024 Facility Agreement

On July 22, 2024, we entered into an amended and restated facility agreement, as amended on July 25, 2024 (as amended, the “First July 2024 Facility Agreement”) for a $2.5 million (the “First July 2024 Facility Loan Amount”) credit facility (the “First July 2024 Credit Facility”) with a certain lender (the “First July 2024 Lender”) that amends and restates the prior facility agreement entered into on July 4, 2024 between the Company and the July 2024 Lender (the “Prior First July 2024 Facility Agreement”).

The First July 2024 Facility Loan Amount will remain available until the earliest to occur of (a)(i) it is drawn down in full, (ii) the 36-month anniversary of the First July 2024 Facility Agreement and (b) upon such date that the Company completes a $2.0 million financing transaction (the “First July 2024 Facility Term”). In the event the First July 2024 Facility Term lapses, the First July 2024 Facility Loan Amount shall be repaid to the First July 2024 Lender immediately thereafter.

The First July 2024 Facility Agreement sets forth a drawdown schedule as follows: (i) an aggregate of $50,000 was drawn down on the effective date of the Prior First July 2024 Facility Agreement, (ii) an aggregate of $50,000 shall be drawn down upon the effectiveness of the Uplist, and (iii) following the Uplist, an aggregate of $200,000 shall be drawn down on a quarterly basis until the First July 2024 Facility Loan Amount is exhausted.

The First July 2024 Credit Facility accrues interest at a rate of 12% per annum (the “First July 2024 Facility Interest”). The First July 2024 Facility Interest was paid in advance for the first year of the First July 2024 Facility in (i) 300,000 shares of our Common Stock at a conversion rate of $1.00 for each U.S. dollar of First July 2024 Facility Interest accrued on the respective First July 2024 Facility Loan Amount, and (ii) 300,000 warrants to purchase a number of shares of our Common Stock at a conversion rate of $1.00 for each U.S. dollar of First July 2024 Facility Interest accrued on the respective First July 2024 Facility Loan Amount (the “First July 2024 Facility Warrants”). The First July 2024 Facility Warrants were exercisable upon issuance at an exercise price of $1.00 per share of Common Stock, subject to certain beneficial ownership limitations and price adjustments set forth therein, and have a three-year term from the issuance date.

Immediately following the effectiveness of the Uplist, (i) $100,000 of the First July 2024 Facility Loan Amount will convert in shares of common stock at a conversion rate of $1.00 per share (such amount of shares converted, the “First July 2024 Convertible Stock”), and, (ii) we will issue a warrant to purchase such amount of First July 2024 Convertible Stock, with an exercise price of $1.00 per share (the “First July 2024 Conversion Warrant”, and together with the First July 2024 Convertible Stock, a “First July 2024 Conversion Unit”, and collectively the “First Uplist Conversion”). The remaining First July 2024 Facility Loan Amount outstanding and not converted following the First Uplist Conversion shall remain available for the duration of the First July 2024 Facility Term, whereby, upon the lapse of the First July 2024 Facility Term, such amount shall be repaid to such First July 2024 Lender.

In addition and in connection with the First July 2024 Credit Facility, we agreed to pay the First July 2024 Lender a one-time fee consisting of: (i) 125,000 shares of our Common Stock, representing five percent (5%) of the First July 2024 Facility Loan Amount at a conversion rate of $1.00 and (ii) a warrant to purchase 250,000 shares of our Common Stock with an exercise price of $1.00 per share (the “First July 2024 Facility Fee Warrant” and together with the First July 2024 Facility Warrants, the “First July 2024 Warrants”).

We undertook to file a registration statement with the SEC to register, inter alia, the resale by the First July 2024 Lender of shares of Common Stock underlying the First July 2024 Credit Facility, the First July 2024 Warrants and the First July 2024 Conversion Units, which we filed on July 31, 2024.

Second July 2024 Facility Agreement

On July 28, 2024, we entered into a facility agreement (the “Second July 2024 Facility Agreement”) for a $3.0 million (the “Second July 2024 Facility Loan Amount”) credit facility (the “Second July 2024 Credit Facility”) with certain lenders (the “Second July 2024 Lenders”).

The Second July 2024 Facility Loan Amount will remain available until the earliest to occur of (a)(i) its drawing down in full, (ii) the 40-month anniversary of the Second July 2024 Facility Agreement and (b) upon such date that the Company completes a $2.5 million financing transaction (the “Second July 2024 Facility Term”). In the event the Second July 2024 Facility Term lapses, the Second July 2024 Facility Loan Amount shall be repaid to the Second July 2024 Lenders immediately thereafter.

The Second July 2024 Facility Agreement sets forth a drawdown schedule as follows: (i) an aggregate of $80,000 was drawn down on the effective date of the Second July 2024 Facility Agreement, (ii) an aggregate of $80,000 shall be drawn down upon the effectiveness of the Uplist, and (iii) following the Uplist, an aggregate of $80,000 shall be drawn down on a monthly basis until the Second July 2024 Facility Loan Amount is exhausted.

The Second July 2024 Credit Facility accrues interest at a rate of 12% per annum (the “Second July 2024 Facility Interest”). The Second July 2024 Facility Interest was paid in advance for the first year of the Second July 2024 Facility in (i) 360,000 shares of our Common Stock at a conversion rate of $1.00 for each U.S. dollar of Second July 2024 Facility Interest accrued on the respective Second July 2024 Facility Loan Amount, and (ii) 360,000 warrants to purchase a number of shares of our Common Stock at a conversion rate of $1.00 for each U.S. dollar of Second July 2024 Facility Interest accrued on the respective Second July 2024 Facility Loan Amount (the “Second July 2024 Facility Warrants”). At the second-year anniversary of the Second July 2024 Credit Facility, the Second July 2024 Facility Interest will be paid by us in cash to the Second July 2024 Lenders. The Second July 2024 Facility Warrants were exercisable upon issuance at an exercise price of $1.00 per share of Common Stock, subject to certain beneficial ownership limitations and price adjustments set forth therein, and have a three-year term from the issuance date.

Immediately following the effectiveness of the Uplist, (i) $160,000 of the Second July 2024 Facility Loan Amount will convert into shares of Common Stock at a conversion rate of $1.00 per share (such amount of shares converted, the “Second July 2024 Convertible Stock”), and (ii) we will issue a warrant to purchase such amount of Second July 2024 Convertible Stock, with an exercise price of $1.00 per share (the “Second July 2024 Conversion Warrant”, and together with the Second July 2024 Convertible Stock, a “Second July 2024 Conversion Unit”, and collectively the “Second Uplist Conversion”). The remaining Second July 2024 Facility Loan Amount outstanding and not converted following the Second Uplist Conversion shall remain available for the duration of the Second July 2024 Facility Term, whereby, upon the lapse of the Second July 2024 Facility Term, such amount shall be repaid to such Second July 2024 Lender.

In addition and in connection with the Second July 2024 Credit Facility, we agreed to pay the Second July 2024 Lenders a one-time fee consisting of 150,000 shares of our common stock, representing five percent (5%) of the Second July 2024 Facility Loan Amount at a conversion rate of $1.00.

We undertook to file a registration statement with the SEC to register, inter alia, the resale by the Second July 2024 Lenders of shares of Common Stock underlying the Second July 2024 Credit Facility, the Second July 2024 Facility Warrants and the Second July 2024 Conversion Units, which we filed on July 31, 2024.

Metagramm Securities Exchange Agreement

On July 31, 2024, we entered into an amended and restated securities exchange agreement, or the 2024 SEA, with Metagramm Software Ltd., or Metagramm, pursuant to which we agreed to issue to Metagramm 9.99% of our issued and outstanding capital stock on a post-closing basis in exchange for 19.99% of Metagramm’s issued and outstanding share capital on a post-closing basis. The transactions contemplated by the 2024 SEA are expected to close following the Uplist, subject to satisfaction of customary closing conditions.

Services Agreements

On July 14, 2024 and July 25, 2024, we entered into consulting agreements (the “Consultant Agreements”) with certain consultants (the “Consultants”) pursuant to which the Consultants agreed to provide certain services to us. As partial compensation, we issued 120,000 shares of our Common Stock (the “Consultant Shares”) to the Consultants.

Amendment to Certificate of Incorporation

On July 15, 2024, the Company filed an Amendment to its Certificate of Incorporation (the “Amendment”) to effect a 1-for-4 reverse stock split of the Company’s Common Stock, (the “Common Stock” and the “Reverse Stock Split”). The Amendment became effective upon filing, and the Reverse Stock Split became effective at market open on March 14, 2025, following the process and announcement by FINRA. As a result of the Reverse Stock Split, every four (4) outstanding shares of the Company’s Common Stock were converted into one (1) share of the Company’s Common Stock. The Reverse Stock Split did not change the par value of the Common Stock or the number of authorized shares of Common Stock, which is 490,000,000 shares of Common Stock. Consequently, the number of shares of the Company’s Common Stock that may be purchased upon the exercise of outstanding warrants, options, or other securities convertible into, or exercisable or exchangeable for, shares of our Common Stock, and the exercise or conversion prices for these securities, have been ratably adjusted in accordance with their terms. All descriptions of our capital stock, including share amounts and per share amounts in this Annual Report, are presented after giving effect to the Reverse Stock Split.

Recent Developments Regarding Cortex

On October 13, 2021, Gix Media acquired 70% (on a fully diluted basis) of the share capital of Cortex (the “Cortex Acquisition”), an Israeli private company operating in the field of online media and advertising. In consideration for the Cortex Acquisition, Gix Media paid NIS 35 million in cash (approximately $11 million), out of which an amount of $0.5 million was deposited in trust for a period of 12 months from the closing date. The Cortex Acquisition also includes the obligation and right of Gix Media to acquire 30% of Cortex’s share capital in three equal tranches, each at the beginning of 2023, 2024 and 2025 (“Remaining Balance Shares”), such that following the acquisition of all of the Remaining Balance Shares, Gix Media will hold 100% of Cortex’s share capital on a fully diluted basis. On January 23, 2023, Gix Media purchased an additional 10% of Cortex’s share capital. In January 2024 and January 2025, Gix Media did not purchase an additional 10% of Cortex’s share capital, as Cortex did not meet certain Key Performance Indicators (KPIs), as conditioned in the definitive agreements of the Cortex Acquisition.

In connection with the acquisition of Cortex on October 13, 2021 (the “Cortex Acquisition”), Gix Media entered into a financing agreement with Bank Leumi Le Israel (“Leumi”), for the provision of a line of credit in the total amount of up to $3.5 million and a long-term loan totaling $6 million, which Gix Media used to finance the Cortex Acquisition (the “Financing Agreement”). On July 25, 2022, Gix Media and Leumi entered into an addendum to the Financing Agreement according to which Leumi will provide Gix Media with a loan of up to $1,500,000 to be withdrawn at the discretion of Gix Media by no later than January 31, 2023 (the “Additional Loan”). The Additional Loan was withdrawn in connection with the purchase of the additional 10% of Cortex’s share capital on January 17, 2023. On October 10, 2023, Gix Media and Leumi entered into a second addendum to the Financing Agreement (the “Second Addendum”), according to which, effective as of September 26, 2023, certain provisions, including among others, the conditions of the financial covenants contained therein and the interest rate quote, were amended according to the agreed terms between the parties.

In April 2024, the Company was informed by Cortex, that certain recent developments relating to publishers that are categorized by a number of programmatic advertisers as “Made for Advertising” (“MFA”) sites, including decisions made by leading media programmatic advertisers to prioritize different media categories and implement publishing restrictions in connection with MFA, have materially affected Cortex’s business and operations. In connection with the foregoing, a significant customer of Cortex notified Cortex that in light of the foregoing changes relating to MFA that customer decided to stop advertising on Cortex’s Websites, which decision significantly and negatively impacted Cortex’s future revenue streams (the “Cortex Adverse Effect”). Upon receipt of this update, the Company’s board of directors convened a meeting to discuss the implications on the Company as well as potential measures to assist Cortex in mitigating any future economic harm to Cortex and the Company, including (inter alia), assisting with reducing operating expenses, helping identify new revenues sources for Cortex, participating in any negotiations with Cortex’s and Gix Media’s bank regarding the terms of its outstanding loans and business plans in an effort to provide additional liquidity and ensure continued compliance with Cortex’s and Gix Media’s obligations towards the bank, and assisting with fundraising prospects in debt or equity capital in order to help enable Cortex’s and Gix Media’s continued business and operations.

On July 13 2024, Gix Media and Leumi entered into a third addendum to the Financing Agreement according to which, inter alia, effective as of May 15, 2024 and until August 31, 2024: (i) the Company is obligated to transfer to Gix Media $600,000; (ii) a new covenant, measured by reference to positive EBTIDA was implemented; (iii) all payments due to the long-term bank loan from Leumi were deferred to August 31, 2024 and from September 1, 2024, payments will be repaid as schedule until the end of the long-term bank loan; (iv) a new $350,000 loan was granted to Gix Media on June 13, 2024, to be repaid until August 30, 2024, alongside the existing credit facility to Gix Media, which remains equal to 80% of Gix Media’s customer balance and (v) Gix Media is obligated to perform a reduction in expenses, including reduction in force.

Effective as of August 30, 2024, Gix Media and Leumi entered into a fourth addendum to the Financing Agreement, pursuant to which, inter alia: (i) subject to the receipt of at least $2,000,000 from the Company by no later than January 1, 2025, the existing credit facility to Gix Media shall be extended until February 27, 2025 and (ii) the repayment of the outstanding principal amounts of the long-term bank loans of Gix Media under the Financing Agreement and an additional loan in the amount of $160,000, will be deferred until December 31, 2024 and from January 1, 2025, all due payments will be repaid as schedule until the end of the term of the long term bank loans (see also note 10.B to our audit financial statements for the year ended December 31, 2024).

Effective as of January 29, 2025, Gix Media and Leumi entered into a fifth addendum to the Financing Agreement, pursuant to which, inter alia: (i) the existing credit facility to Gix Media was extended to March 31, 2025; (ii) the repayment schedule of all outstanding obligations under the long term bank loans of Gix Media under the Financing Agreement, was deferred until the actual deposit by the Company in Gix Media’s account of an investment account equal to the amounts of the deferred long term bank loans owned by Gix Media, which in any event shall be no later than March 31, 2025; (iii) upon such deposit date, all deferred payments shall be immediately repaid using the deposited amounts and any remaining amounts from any other sources; (iv) all remaining future due payments will be repaid as scheduled until the end of the updated terms of each long term bank loan.

Viewbix Business Overview

Viewbix is a digital advertising platform that develops and markets a variety of technological platforms that automate, optimize and monetize digital online campaigns. Viewbix’s operations were previously focused on analysis of the video marketing performance of its clients as well as the effectiveness of their messaging (“Video Advertising Platform”). With the Video Advertising Platform, Viewbix allowed its clients with digital video properties the ability to use its platforms in a way that allows viewers to engage and interact with the video. The Video Advertising Platform measured when a viewer performs a specific action while watching a video and collects and reports the results to the client. However, due to the Company’s failure to meet predetermined sales targets which were set pursuant to the Recapitalization Transaction, in January 2020 the Company determined to reduce its operations and the size of its sales and R&D team in the Digital Advertising Platform.

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

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

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

Search Platform

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

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

Gix Media also provides traffic referral services to Search Engines through the referral of traffic of users who engage search ads generated by Gix Media, or the “Seach to Search” model. These ads are displayed on SERP’s Search Engines’ result pages (SERP) that are purchased by the Company from other Search Engines (such as Yahoo! Bing / Microsoft Ads and Google). When such user clicks on these search ads, Gix Media refers the user to a paid offering from a Search Engine which contains ads that are related to the initial ad made by Gix media (the Company buys ad space from Search Engines and sell them to other search ads while profiting from the price difference).

Content Platform

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

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

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

Business Model

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

Direct Model

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

Additionally, through the direct model Gix Media operates its Search to Search model and provides traffic referral services to the Search Engines through the referral of traffic of users who engage search ads generated by Gix Media.

The revenues generated by Gix Media from the Search Platform applying this model, constituted approximately 64% and 20% of the total revenues of Gix Media for the fiscal year-ended December 31, 2024 and December 31, 2023, respectively.

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

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

Indirect Model

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

The revenues generated by Gix Media from the Search Platform applying this model, constituted approximately 37% and 80% of the total revenues of Gix Media for the fiscal year-ended December 31, 2024 and December 31, 2023, respectively.

Growth Strategy

• Growth through Mergers and Acquisitions. We continue to identify attractive opportunities in the digital advertising market and examine different options to perform additional acquisitions. We will focus on companies that operate in emerging industries and which present considerable commercial potential. We believe that we can expand our footprint in our industry through mergers and acquisitions, which will also lead to the recruitment of additional human capital thereby supporting existing and new customer needs.
• Expansion of Product Range, Search Platform. In 2025 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 addition we intend to develop new products and enter into new collaborations that will focus on increasing the number of search referrals to Search Engines, and in particular we intend to focus on new products for the Search to Search model.

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• Expansion of Product Range, Content Platform. We intend to expand the RSOC (as defined below) model to cover additional languages such as German, French, Spanish and Portuguese. In addition, we are expanding and intend to continue to expand, by the use of AI technology, the amount of content and the reach of our content to new categories and verticals. We also will focus on increasing our media purchases on current Third Party Platforms and to enter into new Third Party Platforms, including by technological developments and studying the characteristics of the Third Party Platforms.

Products and Services

Search Platform

• Add-ons to internet browser (referral of searches directly and indirectly). Internet users download free browser add-ons, usually from browser stores. These browser add-ons enhance browser capabilities when activated by the user, and offer users services such as file converters, video players, radio players, games, safe internet usage, different designs of backgrounds, different calculators and more. 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. After the users download these software products, they grant permission to us to refer the searches performed on these products to the Search Engines.
• Searches to Search (referral of searches directly). The process of referring searches to Search Engines starts with the purchase of search results ads on Search Engines’ result pages (such as Yahoo!, Bing, Microsoft Ads and Google). The ad will offer the user a link to receive information or content on a certain subject. Users who click these ads will be directed to the result page of the Search Engine that displays relevant content from the Search Engines, based on the search terms related to the search result ad. This process involves acquiring search result ads that appear on Search Engines’ results pages in response to relevant user queries. The monetization process of the “Search to Search” activities of Gix Media occurs through advertising on Search Engines, where the generated user traffic is directed to search result ads on other Search Engines’ result pages, creating a cycle of buying and selling search-based advertisements. of ad buying and selling.

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Stage A: Search result ads purchased by Gix Media are displayed on a Search Engine’s result page.

• Stage B: Search results are displayed to the user after the user clicked the ad content.

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

Search Systems:

The technological backbones of our Search Platform involve the following key systems:

• Online campaign management. 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. 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. These systems extract and analyze data from our intelligence and fraud detection systems and automatically recommend the most effective and efficient content in real- time.
• Fraud detection system. This system detects, through the use of an algorithm, fraud attempts to flood our systems with misinformation, including, for example, misinformation regarding the installation attempts of browser add-ons.
• Proprietary BI system. This system was developed by Gix Media and includes three layers:

(i) Infrastructure. This layer allows transmission of statistical data regarding various events according to certain criteria and/or requirements set by us, including: performance of online searches, performance of any action on ads, performance of an installation, etc. The infrastructure collects a wide variety of background data on any event and dozens of parameters that are registered and collected (while complying with privacy protection laws that apply to our operations), which allows the performance of business and technical optimizations.

(ii) Data processing and storage. This layer allows us to process the big-data we gather on our platforms and to divide such data into interim tables based on different parameters. This stage is performed daily, by a tool that was developed by Gix Media. Vast amount of data is accumulated on a daily basis, which requires a secure, easy to access storage that can be cost-effectively analyzed thereafter. For this purpose, Gix Media uses a combination of in-house technology and external tools of leading companies, such as Microsoft and Google.

(iii) Data presentation. This layer presents the data to Gix Media’s customers in an easy, fast, and convenient manner, while combining other layers of information and integrating statistical models that were developed by Gix Media. The presentation tool that we use is Sisense, a popular BI platform, which is a tool used by leading companies in the industry around the world and ranked highly by the Gartner Company.

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

• Data matching with external platforms. This layer receives data from external partners – mainly costumers while combining other layers of information from media suppliers and integrating statistical models that were developed by Gix Media. Later on, these enriched data sets are sent back to our suppliers to optimize and accurate or media buying goals so we can lower media cost and increase sale value of purchased ads. This feature is mainly used for the Search to Search model.
• Website Management System. 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. 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.

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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”). 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.

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.

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

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

The following illustration describes the Readers’ traffic acquisition process for the Cortex Websites:

The Software manages the traffic activities of Users to the Cortex Websites by re-directing their traffic from Third Party Platforms (such as Yahoo, AOL, Zamenta and Outbrain). By using machine learning and AI, the Software analyzes the properties of a given User and compares the data to the historical data of other Users and then analyzes the probability that the given User’s interaction with the promoted content will advance to a conversion process, by either viewing the promoted ad on the Cortex Websites or by clicking on the promoted ad (“Conversion”).

According to both the probability of Conversion calculated by the Software and the maximum predicted profit from the Conversion actions of the User, the Software determines the optimal purchase price for the traffic, in order to maximize ad revenues from Readers’ interactions.

The algorithms that we develop help analyze the historical results of a User’s Conversions with respect to each advertiser and factor them together with the price per Reader that each advertiser pays. According to this analysis, the algorithm then decides which ad to display to each Reader in order to maximize the probability that the Reader’s interaction will reach a Conversion, and, in turn, maximize ad revenues.

Collaboration with Third Party Websites

We collaborate with third party websites, which allows us to extend the Content Platform’s business model to more websites, in addition to the Cortex Websites. These collaborations generate a sub-domain (a “Third-party Sub-Domain”) on such third party website which features a selection of Cortex’s digital content, managed and operated by Cortex’s employees. Advertisers generally prefer to advertise on the Third-Party Sub-Domains due to their relatively high reputation and familiarity, typically leading to higher advertising rates and increased revenue from the Third-Party Sub-Domains. In accordance with this model, Cortex shares the profits generated from the traffic on the Third-Party Sub-Domains, with the third party website owners.

The following illustration describes the collaboration with third party websites:

Content to Google Search (RSOC)

In response to the MFA changes and in order to minimize the Cortex Adverse Effect, Cortex expanded its revenue strategy through the development of a new business model, which directs searches through content to Google’s search platform called “related search for content” or RSOC. The process of directing the search to Google is enabled by Cortex’s algorithm and begins with the purchase of targeted advertisements (media) on Third Party Platforms (such as Facebook, Outbrain, Taboola) with the aim of engaging users in specific categories (such as health, insurance, cars, etc.). After users click on the advertisements, they are directed to the additional content on the Cortex Websites related to those advertisements, which include selected search terms. Clicking on these terms leads to Google’s search results page. Google, in turn, displays ads from its clients, who are various advertisers. For searches directed by Cortex to Google, a payment is made by Google, which constitutes part of the amount Google receives from the advertisers. Cortex’s capabilities in digital content creation and campaign management enable the direct cooperation with Google on the RSOC platform.

The following illustration describes the RSOC model:

Content Systems:

The ten technological components of the Content Platform are as follows:

• Monitoring and Big Data Systems. An important element in our online ad campaign management and monitoring its performance results is an accurate log of the activities on the Cortex Websites. When a Reader is directed from other media outlets to the Cortex Websites, this system measures and documents in automated codes the properties of the Reader, such as the Reader’s IP address, geographic location, type of device used by the Reader and the Reader’s operating system, all in a manner which is in compliance with the applicable privacy rules and regulations. An average session of a Reader on the Cortex Websites generates approximately 1,000 different records. The system checks, inter alia, the types of web-pages viewed by the Reader, the length of time the Reader spent on each page, the types of advertisements the Reader viewed, the length of time the Reader viewed these advertisements, and whether the Reader is a returning Reader.

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

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

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

• Campaign management system. We purchase Readers’ traffic through paid campaigns for the Cortex Websites, which in turn generates revenues by the exposure of the Readers to the ads. Accordingly, advertisers pay us for each Reader exposed to the ads on the Cortex Websites.

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

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

As described above, in order to make effective recommendations, our technology must first predict a User’s interaction with a given promoted content. Our systems 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. Cortex works with dozens of advertisers that promote ads, display native ads, and videos on the Cortex Websites. The ads are displayed pursuant to a real-time bidding process for each User who browses on one of the Cortex Websites.

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

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

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

• Targeted AI tools to predict Google monetization. Cortex developed an AI tool that is capable of predicting the price that Google will pay for ads in a specific space, as a function of several features, including the campaign itself, Users’ properties, the time of day, and the day in the week. When the tool sends bids to Google, it also sends encrypted third party data, which enables us to re-identify the bids. Using this encrypted data, the tool that Cortex developed then aggregates the data and reverse analyzes the amount that Google paid us for each campaign. 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. While our AI system manages automated campaigns from start to finish, without human intervention, the creation of the campaigns still requires human intervention as campaigns of advertisers requires human-generated creative content in order to attracting Readers to interact with the promoted ads. The dashboard provides the campaigns’ manager for each advertiser (the “Creative Team”) data regarding the success of previous campaigns.

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

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

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

• Digital content management system. Cortex engages with creative content writers who produce dozens of articles for the Cortex Websites each week, publishing hundreds of articles a year that are read by hundreds of millions of Users. The articles are reviewed, proofed, and edited by a chief editor.

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 tool that allows to re-use previously developed content of Cortex, which was saved in its databases, including the media that was already posted to the Cortex Websites and for which the copyright payments were already paid for. This tool saves time and reduces costs relating to digital content creation and also allows to reuse materials for new articles.

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

• Bidding management system and ad optimization. Readers browsing the Cortex Websites are exposed to various ads, which are delivered to each Reader by our advertising bid system. In order to maximize our revenues, we hold real time bidding campaigns between advertisers, for each ad that is displayed on the Cortex Websites. The winning bidder is chosen based on various criteria, such as: price, payments, preferences of certain advertisers based on the types of deals and terms of payment. According to this criteria, our bidding system selects which type of ads to display on the Cortex Websites and which advertisers to include in each bid. When a Reader browses a web-page on the Cortex Websites, the bidding system holds a bidding campaign between the selected advertisers, in order to choose the ads to deliver to the Reader. 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. All of Cortex’s customers use this system and our development team updates the interfaces a number of times a year, based on the technological developments of the advertisers, the browsers and applicable privacy restrictions.

• A/B testing system for performance comparison. Due to the frequent changes involved in the digital advertising market, it is difficult to predict the optimal price and performance of digital market campaigns. Our profit maximization depends on Readers’ preferences and the response of advertisers, elements that, due to their nature, we cannot predict. There are numerous trade-offs involved in ad delivery optimization, including, for example, that more advertisers that participate in a bid may increase revenues but may also increase the load on the Reader’s browser thereby affecting the user experience, the bidding performance and the display of content on the website.

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 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.

Customers

Search Platform

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

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

As of December 31, 2024, Gix Media has one major customer, a reputable international Search Engine (“Gix Major Customer”). Gix Media has generated revenues of approximately $4.4 million from the Gix Major Customer, constituting approximately 88% of the total revenues of Gix Media during the year ended December 31, 2024. Our relationship with this Gix Major Customer originated in 2013 upon the signing of an exclusive cooperation agreement, which is extended from time to time. In March 2020, an extension of the foregoing agreement was signed, whereby the term of the agreement was extended until October 26, 2023, 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.

Content Platform

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

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

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

As of the date of this Annual Report, Cortex has one major customer from its Content Platform operations, Google, which it engages directly through a services agreement by and between its subsidiary Samyo Technologies Ltd. and Google Ireland Limited. (“Google”). 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”). Cortex has generated revenues of approximately $5.5 million from Total Media and Google, constituting approximately 25% of the total revenues of Cortex during the year ended December 31, 2024.

Marketing and Distribution

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

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

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

Competition

The competition in the digital advertising market is fierce. There are many players in all areas of the market: both a large number of advertisers and content owners, a large number of software products and algorithms, many advertising platforms and technologies. New players appear frequently in all of these areas. We compete with many companies that offer 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. 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. 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. 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.

Search Platform

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

Content Platform

As of the date of this Annual Report, there are companies that develop different types of software products, which enable partial performance of the operations that are performed by the Content Platform of Cortex. As of the date of this Annual Report, the Company cannot estimate its size and positioning with relation to its other competitors and its size in the digital content market. Our main competitors in this market include: Aporia, Tonic, System One, Spike Media, Front Story, Predicto and Kueez.

Competition Management

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

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

Industry Trends and Seasonality

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

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

Intellectual Property and Other Proprietary Rights

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

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

Product Development

Gix Media focuses its R&D efforts in the Search Platform on improving existing products and their technologies, and on continuing the development and optimization of the inter-organizational systems used in its activity.

During the years ended December 31, 2024 and December 31, 2023, the total R&D expenses of the Company in the Search Platform, through Gix Media, were $0.8 million and $1.5 million, respectively.

We estimate that during the twelve months following the date of this Annual Report, we will invest a total amount of approximately $0.5 million in R&D expenses in the Search Platform, primarily to improve our existing services and technologies on this platform.

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

During the year ended December 31, 2024, the total R&D expenses of the Company in the Content Platform were $1.0 million.

We estimate that during the twelve months following the date of this Annual Report, we will invest a total amount of approximately $0.5 million in R&D expenses in the Content Platform, primarily to improve our existing services and technologies on this platform.

Government Regulation

Our ability, and the ability of other marketing technology companies, to collect, augment, analyze, use, process 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. 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. 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. Legislators and Regulators around the world have adopted or proposed requirements regarding the collection, use, transfer, security, storage, destruction, and other processing of personal data, and regarding the use of analytic tools, tracking technologies and cookies

We may be 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 remain unclear and subject to change. Accordingly, we cannot be certain how existing laws will be interpreted or how they will evolve in areas such as user privacy, data protection, content, use of “cookies,” access changes, “net neutrality,” pricing, advertising, distribution of “spam,” intellectual property, distribution, protection of minors, consumer protection, taxation and online payment services.

For example, in the United States various federal laws have been passed, imposing obligations regarding the processing of personal data. This trend began with the California Consumer Privacy Act (“CCPA”) which came into force on 1 January 2020. Since then, several US states have passed similar privacy laws regulating the processing of personal data. The most recent data privacy legislation includes the Delaware Personal Data Privacy Act (“DPDPA”), the Iowa Consumer Data Protection Act (“ICDPA”), the Nebraska Consumer Data Privacy Act (“NCDPA”), the New Hampshire Privacy Act (NHPA”) and the New Jersey Data Privacy Act (“NJDPA”), all of which came into effect on January 1, 2025. This laws and others like them create numerous obligations for the businesses and service providers as well as rights for data subjects and individuals. 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. 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. These state privacy laws also provide consumers other rights, such as to access, correct or delete their personal data (subject to certain limitations), opt out of certain processing of their personal data, and impose special rules on the collection of data from minors, as well as transparency and data governance obligations. Additionally, various states have in recent years passed laws containing registration and transparency requirements for data brokers and other requirements. Such a wide range of obligations under privacy and related legislation and regulation could increase our potential liability and adversely affect our business. Furthermore, there are also a number of legislative proposals pending before the U.S. Congress and various state legislative bodies concerning various data protection topics, including, privacy, children data, data brokers, which could affect us. Several federal laws such as the Controlling the Assault of Non-Solicited Pornography and Marketing (“CAN-SPAM”) Act, the Children’s Online Privacy Protection Act (“COPPA”) or the Federal Trade Commission (“FTC”) Act could also be applicable to some of our activities.

The interpretation of data protection laws and related laws and regulations, and their application to the internet, is unclear and in a state of flux. There is a risk that these laws may be interpreted and applied in conflicting ways and in a manner that is not consistent with our current data protection or business practices.

These complex laws may be implemented, interpreted, or enforced in a non-uniform or inconsistent way across jurisdictions, and we may not be aware of every development that impacts our business. These laws may also require us to make additional changes to our services in order for us or our customers to comply with such legal requirements. It may also increase our potential liability as a result of higher potential penalties for non-compliance and could reduce our ability to gather personal data used in the context of our services. As a consequence of these new laws, our customers could require us to take on more onerous obligations in our contracts and restrict our ability to store, transfer and process personal data. In some cases, it may impact our ability, or our customers’ ability to, offer our services in certain locations, to deploy our solutions, to reach current and prospective customers, or to derive insights from data globally.

Foreign data protection, privacy and other laws and regulations may affect our business, and such laws can be more restrictive than those in the United States. For example, in Israel, the Protection of Privacy Law, 5741-1981 (and the regulations thereunder, together, the “Israeli Privacy Protection Law”) impose obligations regarding processing, transferring and securing of personal data, such as the requirement to properly notify data subjects, prior to collecting their personal data, regarding the nature and purposes of the collection and use of their personal data and whether the provision of such data is a legal requirement or subject to their free will and consent; the requirement to obtain valid informed consent from data subjects prior to collecting and using their personal data; conditions with respect to transfer of personal data outside Israeli borders; conditions and restrictions regarding the use of any personal data for direct mailing; obligations to meet certain data subject rights (such as access, rectification and deletion right; as well as data security obligations under Privacy Protection Regulations (Data Security) 2017. In addition, in 2023, the Privacy Protection Regulations (Provisions Regarding Information Transferred to Israel from the European Economic Area), 2023 (“EU Regulations”) were enacted and consequently provide, in certain cases, additional rights to data subjects from the EEA and Israel.

Lack of compliance with the Israeli Privacy Protection Law could result in enforcement actions, litigation (including class actions), fines and penalties. Material amendment to the Israeli Privacy Protection Law was approved by the Israeli Parliament in August 2024 and will take effect on August 14, 2025 (“Amendment 13”). Among other things, Amendment 13 expands the Privacy Protection Authority investigation authority and the monetary sanctions that can be imposed for breach of the Israeli Privacy Protection Law, to substantial amounts that may reach in certain cases millions of NIS.

In the European Union, similar data protection rules exist, as well as privacy legislation restricting the use of cookies and similar technologies (for example, the ePrivacy Directive discussed below). According to the General Data Protection Regulation (“GDPR”), of personal data is only allowed on condition that the data subject has given his or her informed consent, or that a different legal basis for such processing or collection exists and justifies the processing of the personal data in question. Moreover, the GDPR, has a wide territorial scope, as well as a broad definition of personal data which may include geolocation data and online identifiers, the collection and processing of which imposes more stringent legal requirements. Further, the GDPR includes stringent operational, legal and administrative requirements for companies that process personal data and contains significant penalties for non-compliance. These laws and regulations generally define personal data to include location data and online identifiers, which are commonly used and collected parameters in digital advertising and, among other things, impose stringent user consent requirements and permit data subjects to request we discontinue using certain data. In addition, some countries are considering or have enacted legislation requiring local storage and processing of data that could increase the cost and complexity of delivering our services. In addition, new European initiatives have been announced by the European legislators and regulators relating to, or that could impact cybersecurity, e-commerce, non-personal data, copyright, artificial intelligence or cookies and tracking technologies. Notable recent initiatives include the Digital Operational Resilience Act (“DORA”) applicable as of 17 January 2025 or the Data Act, whose obligations will mostly be applicable from September 2025 onwards.

Additionally, in the EU, the EU Directive 2002/58/EC (as amended by Directive 2009/136/EC), commonly referred to as the ePrivacy or Cookie Directive, directs EU member states to ensure that accessing data on an internet user’s computer, such as through a cookie and other similar technologies, is allowed only if the internet user has been informed about such access, and provided consent. A replacement for the ePrivacy Directive is currently under discussion by EU member states to complement and bring electronic communication services in line with the GDPR and force a harmonized approach across EU member states. Although it remains under debate, the proposed ePrivacy Regulation may further raise the bar for the use of cookies, and the fines and penalties for breach may be significant and could affect our services, business and revenues. We cannot yet determine the impact such future laws, regulations and standards may have on our business.

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

Data privacy legislation restricts the cross-border transfer of personal data. Specifically, the GDPR, and the U.K. GDPR, generally prohibit the transfer of personal data from the Europe and U.K., to third countries unless the transfer is to an entity established in a country deemed to provide adequate protection (such as Israel or the U.K.) or the parties to the transfer have implemented specific safeguards to protect the transferred personal data, such as the EU or UK Standard Contractual Clauses (“SCCs”) or a certification under the EU-US Data Privacy Framework (“DPF”). The European Data Protection Board (“EDPB”) released a comment on the supplementary measures that companies may use to ensure an ‘EU level’ of data protection - such as conducting impact assessment for data transfers, which assess the use of SCCs on a case-by-case basis, taking into account the legal regime applicable in the destination country, and in particular applicable surveillance laws and rights of individuals as well as considering additional technical and organizational measures and/or contractual provisions that may be needed to be put in place. On June 4, 2021, the European Commission issued a new set of SCCs under the GDPR for data transfers. These modernized SCCs replace the three sets of SCCs that were adopted under the previous Data Protection Directive 95/46. In addition, on February 2, 2022, the Secretary of State of the U.K. laid before the Parliament the international data transfer agreement (IDTA) and the international data transfer addendum to the European Commission’s standard contractual clauses for international data transfers (Addendum), which came into force on March 21, 2022, following Parliamentary approval. Contracts involving data processing which are based on the old EU SCCs and concluded on or before September 21, 2022, continued to provide appropriate safeguards under the U.K. GDPR until March 21, 2024. In some jurisdictions like the EU, UK and Israel, the law and guidance on data transfers is rapidly developing and recent developments will require us to review and may require us to amend or supplement the legal mechanisms by which we make and/or receive personal data transfers.

On November 1, 2022, the Digital Markets Act, (the “DMA”), entered into force and on November 16, 2022, the Digital Services Act (the “DSA”), followed. For the DSA, most provisions became applicable on February 17, 2024. The DSA and the DMA focus on creating a safer digital space, protecting fundamental rights of all users of digital services, and establishing a level playing field for businesses and consumers with regards to online platforms. As further guidance is issued and interpretation of both the DSA and the DMA evolves, it is difficult to assess the impact of the DSA and DMA on our business or operations, but, to the extent applicable, it may require us to modify our practices and policies and we could incur substantial costs as a result.

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. Threats could include potential data leaks, social engineering attacks, and decision-making based on manipulated information. Growing regulatory requirements for information security and data protection add to the challenge (whether related to privacy or data protection or not, such as those related to AI, data, or digital services). Moreover, attackers may leverage AI and exploit vulnerabilities in AI systems.

These laws and regulations result in significant compliance costs and could result in restricting the growth and profitability of the Company’s business by impeding the development of new services. The cost of complying with existing or new data privacy or data protection laws and regulations may limit our ability to gather the personal data needed to provide our services. It could negatively impact the use or adoption of our services, reduce overall demand for our services, make it more difficult for us to meet expectations from or commitments to our clients, lead to significant fines, penalties, or liabilities for noncompliance, or impact our reputation, any of which could harm our business.

We may incur substantial fines if we violate any laws or regulations relating to the collection or use of personal data. Our actual or alleged failure to comply with applicable privacy or data protection laws, regulations, and policies, or to protect personal data, could result in enforcement actions and significant penalties against us, which could result in negative publicity and costs, subject us to claims or other remedies, and have a material adverse effect on our business, financial condition, and results of operations. See “Item 1.A Risk Factors - Risks Related to Data Protection Regulation,” for further information.

Human Capital Management

As of March 18, 2025, we (either directly through Viewbix, or through either Gix Media or Cortex) employ 21 full-time employees or consultants. Of these employees or consultants, 3 are employed or engaged by Gix Media, 14 are employed or engaged by Cortex and 4 primarily perform general administrative, business development and financial consulting tasks for Viewbix, Gix Media or Cortex. 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 compete for qualified personnel with other ad-tech companies.

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

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. We employ people based on relevant qualifications, demonstrated skills, performance and other job-related factors. We do not tolerate unlawful discrimination related to employment, and strive to ensure that employment decisions related to recruitment, selection, evaluation, compensation, and development, among others, are not influenced by race, color, religion, gender, age, ethnic origin, nationality, sexual orientation, marital status, or disability. We are committed to creating a trusting environment where all ideas are welcomed and employees feel comfortable and empowered to draw on their unique experiences and backgrounds.

We consider our relations with our employees to be good.

Employment Agreements

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

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

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

Summary Risk Factors

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

Risks 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;
• 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; and
• 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.

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. 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.

Risks Related to our Intellectual Property

• If we cannot enforce and protect our intellectual property rights, our business could be adversely affected; and
• We may in the future be subject to claims of intellectual property infringement that could adversely affect our business.

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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;
• 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;
• 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 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;
• The availability of a large number of authorized but unissued shares of Common Stock may, upon their issuance and sale, lead to dilution of existing stockholders or adversely affect the market;
• 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;
• Our share price has fluctuated significantly and could continue to fluctuate significantly;
• 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 Operations in Israel

• Conditions in Israel, including Israel’s conflicts with Hamas and other parties in the region, as well as political and economic instability, may impede our ability to operate and harm our financial results;
• Exchange rate fluctuations between foreign currencies and the U.S. 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.

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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 provide digital advertising platforms. Our revenues are derived from the sale of our platforms. If the demand for digital advertising does not continue to grow or customers do not embrace our platforms, this could have a material adverse effect on our business and financial condition.

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

Online platform updates, including operating systems, search engines, browsers and social media might affect our ability to generate revenues, temporarily or permanently.

We comply with certain guidelines promulgated by online platforms for the use of the respective brands and services. Online platforms may unilaterally update their policies and guidelines, which could, in turn, require modifications to, or prohibit and/or render obsolete certain of our advertising solutions, products, services and practices, which could be costly to address or otherwise have an adverse effect on our business, our financial condition and results of operations. Noncompliance with platforms’ guidelines, whether by us or by third parties we work with, if not cured, could result in such online platforms’ suspension of some or all of their services to us, or to the websites of third parties we work with, or the reimbursement of funds paid to us, or the imposition of additional restrictions on our advertising abilities or the termination of certain advertising agreements with our customers.

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

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

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

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

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

This, together with other advertisement-blocking technologies incorporated in or compatible with leading internet browsers and operating systems, could impact our advertising business (as well as those of our competitors). These changes could materially impact the way we do business, and if we or our advertisers and third parties we work with are unable to quickly and effectively adjust and provide solutions to those changes, there could be an adverse effect on our revenue and performance.

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

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

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

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

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

Because of these factors, we seek to expand and diversify our supply sources; nonetheless, if our supply sources terminate or reduce our access to their advertising inventory, increase the price of inventory or place significant restrictions on the sale of their advertising inventory, or if platforms or exchanges terminate our access to them and we are unsuccessful in establishing or maintaining our relationships with supply sources on commercially reasonable terms, we may not be able to replace this with inventory from other supply sources that satisfy our requirements in a timely and cost-effective manner. 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 79% and 65% of our consolidated revenue for the years ended December 31, 2024 and 2023, respectively on a pro forma basis. It is likely that we will depend on a relatively small number of customers for a significant portion of our revenue in the future. If a top customer fails to pay us, cash flow from operations would be impacted and our operating results and financial condition could be harmed. Additionally, if we were to lose a material customer, we may not be able to offer our services at similar utilization or pricing levels and such loss could have an adverse effect on our business until the services are offered at similar utilization or pricing levels.

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

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

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

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

We may not be able to receive credit facility to fund our operations, on favorable terms, or at all.

We generally finance our operations primarily through a combination of cash flow generated from operations and borrowings under our credit facilities, loans, and through credit with our vendors. Our ability to access capital through our existing credit facilities and raise additional capital by expanding our credit facilities on economically favorable terms (including available borrowing line and the rate of interest charged thereunder) or at all, or if we are in violation of our financial covenants in the future and do not receive a waiver, depends on our ability to stay in compliance with the Financing Agreement. The Financing Agreement poses certain limitations, as explained elsewhere in this Annual Report. In addition, and as a result of the decrease in the Company’s revenues, our financial performance has been negatively impacted, which may affect the terms on which we are able to obtain credit facilities and loans.

If adequate capital is not available at the time we need it, we may have to curtail future growth or change our expansion plans, which could have a material adverse effect on us.

If borrowing under our existing credit facilities is reduced, or otherwise becomes unavailable, or we are unable to arrange substitute financing facilities or other sources of capital, our ability to fund our operations would be impaired, which would have a material adverse effect on our results of operations.

We may be unable to pay our obligations when they become due, including under the Financing Agreement.

We have financed our acquisitions principally through the raising of debt, credit facilities, and our operations through credit with our vendors. Our ability to continue our operations and to pay our obligations, including under the Financing Agreement and credit facilities (as described elsewhere in this Annual Report), when they become due is contingent upon obtaining additional financing.

In addition, during August 2024, we renegotiated the terms of the Financing Agreement and entered into the Fourth Addendum to the Financing Agreement. The availability of the credit facilities to Gix Media is subject to us successfully raising additional capital and depositing at least $2,000,000 with Gix Media. If the Company, Cortex and Gix Media cannot maintain compliance with the terms and covenant of the Financing Agreement, or if we are unable to obtain sufficient amounts of additional capital, we may be required to reduce the scope of our planned operations, and/or consider reductions in personnel costs or other operating costs, in addition to the measures currently contemplated pursuant to the Financing Agreement.

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. To the extent that users change their consumption habits, or to the extent that traffic does not grow, our activities might decrease and our business operations might be harmed.

A change in advertisers’ preferences could also affect our operations. Advertisers might change their preferences relating to their willingness to work with certain technologies and certain advertising platforms, which might reduce our activities and harm our business operations.

We may not be able to retain and attract programmatic advertisers, and the associated payments received from such programmatic advertisers’ ads on websites which have been categorized as “Made for Advertising” may be adversely affected.

Certain recent developments relating to publishers that are categorized by a number of programmatic advertisers as “Made for Advertising” (MFA) sites, including decisions made by leading media programmatic advertisers to prioritize different media categories and implement publishing restrictions in connection with MFA, have negatively impacted Cortex’s business and operations. In connection with the foregoing, a significant customer of Cortex has decided to stop advertising on Cortex’s sites. Additional advertising customers of Cortex may opt to stop advertising on Cortex’s sites, which will impact Cortex’s, and as a result thereof, the Company’s current and future revenue streams and results of operations. The foregoing issues could lead to decreased advertiser interest in Cortex’s sites, potentially resulting in lower bids for ad space, and as a result thereof, lower revenues from Cortex’s business, and decrease in the Company’s results of operation.

A loss of the services of our technology vendors could adversely affect the execution of our business strategy.

Should some of our technology vendors terminate their relationship with us, our ability to continue the development of some of our platforms could be adversely affected, until such time that we find adequate replacement for these vendors, or until such time that we can continue the development on our own.

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.

The report of our independent registered public accounting firm on our audited consolidated financial statements for the year ended December 31, 2024, contains an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. 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. Further reports on our consolidated financial statements may include an explanatory paragraph with respect to our ability to continue as a going concern. Until we can generate significant recurring cash flow, we expect to satisfy our future cash needs through debt or equity financing. We cannot be certain that additional funding will be available to us on acceptable terms, if at all. If funds are not available, we may be required to delay or reduce the scope of our operations.

Global pandemics may negatively impact the global economy in a significant manner for an extended period of time, and also adversely affect our business and operating results.

The outbreak of a global pandemic, may result in a widespread health crisis that may adversely affect businesses, economies and financial markets worldwide, and as a result placing constraints on the operations of businesses, decreased consumer mobility and activity, and significant economic volatility in international capital markets. For example, during the years 2020-2021, the COVID-19 pandemic caused an economic recession, high unemployment rates and other disruptions, both in the United States, Israel and the rest of the world. While the COVID-19 pandemic has not adversely affected our business, an outbreak of other global pandemics and any of these impacts, including the prolonged continuation of these impacts, could in the future, adversely affect our business and operating results and heighten many of the other risks described in these “Risk Factors.”

Risks Related to our Competition

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

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

These companies, along with other large and established Internet and technology companies, may also leverage their power to make changes to their web browsers, operating systems, platforms, networks or other products or services in a way that impacts the entire digital advertising marketplace. If we fail to comply or adopt to such changes, on the same level as our competitors, it may harm our ability to compete effectively in our market and operate in our market.

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

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

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.

We use artificial intelligence technologies throughout our business and are making investments to continuously improve our use of such technologies. For example, we use artificial intelligence technologies to translate articles from English into multiple languages on our Content Platform. As with many technological innovations, there are significant risks and challenges involved in developing, maintaining and deploying these technologies and there can be no assurance that the usage of such technologies will always enhance our products or services or be beneficial to our business, including to our efficiency or profitability. In addition, the market for artificial intelligence technologies is rapidly evolving and remains unproven in many industries, including our own. We cannot be sure that the market will continue to grow or that it will grow in ways we anticipate.

We are in varying stages of development of our systems which utilize artificial intelligence, and we may not be successful in our ongoing development of these technologies in the face of novel and evolving technical, reputational and market factors. The development, maintenance and operation of our artificial intelligence technologies is expensive and complex, and may involve unforeseen difficulties including material performance problems, undetected defects or errors. We may encounter technical obstacles, and it is possible that we may discover additional problems that may prevent our technologies from operating properly, which could adversely affect our business, customer relationships and reputation.

We face significant competition from other companies in our industry in relation to the development and deployment of artificial intelligence technologies. Those other companies may develop artificial intelligence technologies that are similar or superior to ours and/or are more cost-effective and/or quicker to develop and deploy. If we cannot develop, offer or deploy new artificial intelligence technologies as effectively, as quickly and/or as cost-efficiently as our competitors, we could experience a material adverse effect on our operating results of operation, customer relationships and growth.

Risks Related to our Intellectual Property

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

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

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

Many companies (including patent holding companies) and individuals own patents, copyrights, trademarks, and trade secrets and frequently enter into litigation based on allegations of infringement or other violations of intellectual property rights. As we develop and offer our 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 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 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.

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

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

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

Risks Related to 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. This information is stored and managed within our internal information technology infrastructure or, in certain instances, on platforms maintained by third-party service providers. 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. The incidence of events of this nature (or any combination thereof) is on the rise worldwide. Since the beginning of the war between Israel and Hamas which began on October 7, 2023, Israeli and Israeli associated companies have become more frequently the target of cyberattacks. As such, the risk of a cyberattack against our platforms may become heightened. 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. These efforts are costly and require ongoing monitoring and updating as technologies change and efforts to overcome preventative security measures become more sophisticated.

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

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

We utilize “Cloud” servers, which are not immune to failures and is not without substantial risk, particularly at a time when businesses of almost every kind are finding themselves subject to an ever-expanding range of privacy, data collection and processing and cybersecurity laws and regulations, document retention requirements, and other standards of accountability. 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.

Our services receive, collect, store, analyze, process, transfer and use certain data about the identification of devices across websites and applications and user interactions with those devices for various purposes for our Search and Digital Platform, such as serving relevant ads and measuring the effectiveness of ads. 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. 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.

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. 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. These laws and regulations generally define personal data to include location data and online identifiers, which are commonly used and collected parameters in digital advertising and, among other things, impose stringent user consent requirements and permit data subjects to request we discontinue using certain data. In addition, some countries are considering or have enacted legislation requiring local storage and processing of data that could increase the cost and complexity of delivering our services.

European supervisory authorities have been very active in terms of enforcing data protection rules, including with respect to cookie-related matters. Regulation of cookies and similar technologies, and any decline of cookies or similar online tracking technologies as a means to identify and potentially target individuals, may lead to broader restrictions and impairments on our business activities, may negatively impact our efforts to understand users, and, as a result of us being able to process less data, make our automated decisioning process less accurate. 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. If use of the “Global Privacy Control” or similar signals is adopted by many Internet users or if such a standard is imposed by even more states or by federal or foreign legislation or is agreed upon by standard setting groups, we may have to change our business practices, our clients may reduce their use of our platform and related offerings, and our business, financial condition and results of operations could be adversely affected. In addition, we may be required to implement physical, administrative and technological security measures that differ from those we have now, such as different data access controls or encryption technology. 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.

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.

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. Further, any significant change to applicable laws, regulations or industry practices regarding the collection, use, retention, security or disclosure of data, or their interpretation, or any changes regarding the manner in which the consent of users or other data subjects for the collection, use, retention or disclosure of such data must be obtained, could increase our costs and require us to modify our services and features, possibly in a material manner, which we may be unable to complete, and may limit our ability to store and process user data or develop new services and features.

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

Any failure or perceived failure by us to comply with our posted privacy policies, our privacy-related obligations to users or other third parties, or any other legal obligations or regulatory requirements relating to privacy, data protection or data security may result in governmental investigations or enforcement actions, litigation, claims or public statements against us by consumer advocacy groups or others and could result in significant liability, cause our users to lose trust in us, and otherwise materially and adversely affect our reputation and business. Furthermore, the costs of compliance with, and other burdens imposed by, the laws, regulations, other obligations and policies that are applicable to the businesses of our users may limit the adoption and use of and reduce the overall demand for our services.

Additionally, if third parties we work with violate applicable laws, regulations or contractual obligations, such violations may put our users’ data at risk, could result in governmental investigations or enforcement actions, fines, litigation, claims, or public statements against us by consumer advocacy groups or others and could result in significant liability, cause our users to lose trust in us and otherwise materially and adversely affect our reputation and business. Further, public scrutiny of, or complaints about, technology companies or their data handling or data protection practices, even if unrelated to our business, industry or operations, may lead to increased scrutiny of technology companies, including us, and may cause government agencies to enact additional regulatory requirements, or to modify their enforcement or investigation activities, which may increase our costs and risks.

It is possible that these laws and regulations may be interpreted and applied in a manner that is inconsistent with our data collection, use, preservation and other processing practices or that it may be argued that our practices do not comply with certain countries’ privacy and data collection and protection laws and regulations. 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. The challenges imposed by the ongoing need to remain compliant with such laws and regulations, as well the need to implement any changes required based on newly introduced laws and regulations, may slow our growth, and if we are not able to cope with these challenges as effectively as other companies, we will be competitively disadvantaged.

Compliance with such existing and new laws and regulations can be costly and can delay, or impede the development of new services, any and failure or perceived failure to comply with such laws and regulations could result in negative publicity, increase our operating costs, require significant management time and attention and subject us to inquiries or investigations, litigation (including class actions), claims, or other remedies, including penalties, fines, sanctions and criminal and civil liabilities, or demands or orders that we modify or cease existing business practices, each of which could materially affect our operating results and our business. 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.

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

Our services continuing and uninterrupted performance is critical to our success. Our services are dependent on the performance and reliability of internet, mobile, and other infrastructure services that are not under our control. For example, we currently host our services and support our operations using a third-party provider of cloud infrastructure services. While we have engaged reputable vendors to provide these products or services, we do not have control over the operations of the facilities or systems used by our third-party providers. These facilities and systems may be vulnerable to damage or interruption from natural disasters, cybersecurity attacks, human error, terrorist attacks, power outages, pandemics, and similar events or acts of misconduct. In addition, any changes in one of our third-party service provider’s service levels may adversely affect our ability to meet the requirements of our customers.

While we believe we have implemented reasonable backup and disaster recovery plans, we expect that in the future we may experience interruptions, delays and outages in service and availability from time to time due to a variety of factors, including infrastructure changes, human or software errors, website hosting disruptions, capacity constraints, or external factors beyond our control. Sustained or repeated system failures would reduce the attractiveness of our 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. Any negative publicity or user dissatisfaction arising from these disruptions could harm our reputation and brand, may adversely affect the usage of our offerings, and could harm our business, financial condition and results of operation.

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.

Our business increasingly relies on artificial intelligence technologies. The legislative and regulatory framework for this technology is rapidly evolving, and we may not always be able to anticipate how to respond to these laws or regulations. Many federal, state and foreign government bodies and agencies have introduced or are currently considering additional laws and regulations governing the use of such technologies. There is also an increase in litigation in a number of jurisdictions, including the United States, relating to the development, security and use of artificial intelligence.

For example, on May 17, 2024, Colorado enacted the Colorado AI Act. The Colorado AI Act creates duties for developers and for those that deploy AI. There is a specific focus on bias and discrimination. The Act will go into effect on February 1, 2026. Federal artificial intelligence legislation has also been introduced in the U.S. Senate. Such additional regulations may impact our ability to develop, use and commercialize artificial intelligence and machine learning technologies in the future. Furthermore, in October 2023, President Biden issued the Executive Order on Safe, Secure and Trustworthy Artificial Intelligence (“The Order”) with the goal of promoting the “safe, secure, and trustworthy development and use of artificial intelligence in the United States.” The Order established certain new standards for the training, testing and cybersecurity of sophisticated artificial intelligence models, and instructed other federal agencies to promulgate additional regulations. Even though The Order was rescinded by President Trump on January 20, 2025, it may still indicate a trend towards federal AI regulation, which could increase our potential liability and adversely affect our business.

The most comprehensive legislation passed in the area of AI in the European Union is the EU Artificial Intelligence Act (the “EU AI Act”), effective from February 2, 2025, with different provisions becoming gradually applicable on different dates. The EU AI Act contains a list of prohibited practices, classifies certain AI systems as high risk, depending on the level of risk they pose, includes transparency obligations for providers and deployers of certain AI systems, and includes obligations and requirements around general-purpose AI models and general-purpose AI systems. For example, fines for noncompliance include fines of the higher of €35,000,000 or up to 7 percent of a company’s total worldwide annual turnover for non-compliance with prohibited AI practices, or the higher of €7,500,000 or up to 1 percent of a company’s total worldwide annual turnover for the supply of incorrect, incomplete, or misleading information to notified bodies and national competent authorities in certain contexts. Noncompliance with the EU AI ACT could also result in other consequences such as loss of business opportunities or reputational damage.

It is possible that the adoption of new laws and regulations in other jurisdictions, or the interpretation of existing laws and regulations, may affect the operation of our platforms and services and the way in which we use artificial intelligence, including with respect to how we train our models, unintentional bias and discrimination. Failure to comply with such laws or regulations could subject us to legal or regulatory liability. 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.

Risks Related to Our Common Stock

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

As of December 31, 2024, we had outstanding: (i) Class J Warrants exercisable to purchase 32,584 shares of Common Stock at an exercise price of $53.76 per share of Common Stock; (ii) Class K Warrants exercisable to purchase 32,584 shares of Common Stock, at an exercise price of $89.60 per share of Common Stock; (iii) 2023 Warrants exercisable to purchase 120,000 shares of Common Stock, at an exercise price of $2.00 per share of Common Stock; (iv) June 2024 Facility Warrants exercisable to purchase 183,679 shares of Common Stock at an exercise price of $1.00 per share of Common Stock; (v) a June 2024 Lead Lender Warrant exercisable to purchase 50,000 shares of Common Stock at an exercise price of $1.00 per share of Common Stock; (vi) a June 2024 Lead Lender Fee Warrant exercisable to purchase 5,296,610 shares of Common Stock at an exercise price of $0.472 per share of Common Stock; (vii) PIPE Warrants exercisable to purchase 385,332 shares of Common Stock at an exercise price of $1.00 per share of Common Stock; (vii) First July 2024 Facility Warrants exercisable to purchase 300,000 shares of Common Stock at an exercise price of $1.00 per share of Common Stock; (viii) First July 2024 Facility Fee Warrant exercisable to purchase 250,000 shares of Common Stock at an exercise price of $1.00 per share of Common Stock and (ix) Second July 2024 Facility Warrants exercisable to purchase 360,000 shares of Common Stock at an exercise price of $1.00 per share of Common Stock.

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

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

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

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

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

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

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

We are authorized to issue 490,000,000 shares of Common Stock, of which, as of December 31, 2024, 5,296,945 shares of Common Stock were outstanding. Additional shares of Common Stock may be issued by our Board of Directors without further stockholder approval. The issuance of large numbers of shares, possibly at below market prices, is likely to result in substantial dilution to the interests of other stockholders. In addition, issuances of large numbers of shares of Common Stock may adversely affect the market price of our Common Stock.

Our Certificate of Incorporation authorizes 10,000,000 shares of preferred stock, par value $0.0001 per share of which none were issued and outstanding as of December 31, 2024. The Board of Directors is authorized to provide for the issuance of these unissued shares of preferred stock in one or more series, and to fix the number of shares and to determine the rights, preferences and privileges thereof. Accordingly, the Board of Directors may issue preferred stock which may convert into large numbers of shares of common stock and consequently lead to further dilution of other stockholders.

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

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

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

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

• That a broker or dealer approve a person’s account for transactions in penny stocks; and
• The broker or dealer receives from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

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

• Obtain financial information and investment experience objectives of the person; and
• Make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

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

• Sets forth the basis on which the broker or dealer made the suitability determination; and
• That the broker or dealer received a signed, written agreement from the investor prior to the transaction.

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

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

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.

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. Although on September 13, 2024, we submitted an application to uplist to the Nasdaq, the timing of the Nasdaq uplisting process will depend on a variety of factors, including, but not limited to, overall market conditions. No assurance can be given that our application will be approved or that a trading market will develop. 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. This situation is attributable to a number of factors, including the fact that we are a small company that is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price.

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

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

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

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

Patterns of fraud and abuse include:

• Control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;
• Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;
• “Boiler room” practices involving high pressure sales tactics and unrealistic price projections by inexperienced sales persons;
• Excessive and undisclosed bid-ask differentials and mark-ups by selling broker-dealers; and
• Wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses.

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

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

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

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

• negative fluctuations in our quarterly revenue and earnings or those of our competitors;
• pending sales into the market due to the sale of large blocks of shares, due to, among other reasons, the expiration of any tax-related or contractual lock-ups with respect to significant amounts of our shares of Common Stock;
• changes in our senior management;
• changes in regulations or in policies of Search Engines or other industry conditions;
• mergers and acquisitions by us or our competitors;
• technological innovations;
• the introduction of new products; and
• the conditions of the securities markets, political, economic and other developments worldwide.

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

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

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

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

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.

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

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

Risks Related to our Operations in Israel

Conditions in Israel, including Israel’s conflicts with Hamas and other parties in the region, as well as political and economic instability, may impede our ability to operate and harm our financial results.

Because all of our operations are conducted in Israel and all members of our board of directors and management as well as all of our employees and consultants, including employees of our service providers, are located in Israel, our business and operations are directly affected by economic, political, geopolitical and military conditions in Israel. Since the establishment of the State of Israel in 1948 and in recent years, armed conflicts between Israel and its neighboring countries and terrorist organizations active in the region have involved missile strikes, hostile infiltrations, terrorism against civilian targets in various parts of Israel, and recently abduction of soldiers and citizens.

Following the October 7th attacks by Hamas terrorists in Israel’s southern border, Israel declared war against Hamas and since then, Israel has been involved in military conflicts with Hamas, Hezbollah, a terrorist organization based in Lebanon, and Iran, both directly and through proxies like the Houthi movement in Yemen and armed groups in Iraq and other terrorist organizations. Additionally, following the fall of the Assad regime in Syria, Israel has conducted limited military operations targeting the Syrian army, Iranian military assets and infrastructure linked to Hezbollah and other Iran-supported groups. Although certain ceasefire agreements have been reached, and some Iranian proxies have declared a halt to their attacks, there is no assurance that these agreements will be upheld, military activity and hostilities continue to exist at varying levels of intensity, and the situation remains volatile, with the potential for escalation into a broader regional conflict involving additional terrorist organizations and possibly other countries. Also, the fall of the Assad regime in Syria may create geopolitical instability in the region.

While our facilities have not been damaged during the current war, the hostilities with Hamas, Hezbollah, Iran and its proxies and others have caused and may continue to cause damage to private and public facilities, infrastructure, utilities, and telecommunication networks, and potentially disrupting our operations and supply chains. In addition, Israeli organizations, government agencies and companies have been subject to extensive cyber attacks. This could lead to increased costs, risks to employee safety, and challenges to business continuity, with potential financial losses. The continuation of the war has also led to a deterioration of certain indicators of Israel’s economic standing, for instance, a downgrade in Israel’s credit rating by rating agencies (such as by Moody’s, S&P Global, and Fitch).

In connection with the ongoing war, several hundred thousand Israeli military reservists were drafted to perform immediate military service, and military reservists are expected to perform long reserve duty service in the coming years. As of date of this Annual Report, none of our employees or consultants in Israel have been called to reserve duty and there has been no material impact on our business from past reserve services. However, certain of our employees and consultants in Israel, in addition to employees of our service providers located in Israel, may be called, for service in the current or future wars or other armed conflicts with Hamas, as well as the other pending or future armed conflicts in which Israel is or may become engaged, and such persons may be absent for an extended period of time. As a result, our operations may be disrupted by such absences, which disruption may materially and adversely affect our business, prospects, financial condition and results of operations. Additionally, the absence of employees of our Israeli suppliers and contract manufacturers due to their military service in the current or future wars or other armed conflicts may disrupt their operations, which in turn may materially and adversely affect our ability to deliver or provide products and services to customers.

Our commercial insurance does not cover losses that may occur as a result of events associated with war and terrorism. Although the Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that this government coverage will be maintained or that it will sufficiently cover our potential damages. Any losses or damages incurred by us could have a material adverse effect on our business.

The global perception of Israel and Israeli companies, influenced by actions by international judicial bodies, may lead to increased sanctions and other negative measures against Israel, as well as Israeli companies and academic institutions. There is also a growing movement among countries, activists, and organizations to boycott Israeli goods, services and academic research or restrict business with Israel, which could affect business operations. If these efforts become widespread, along with any future rulings from international tribunals against Israel, they could significantly and negatively impact business operations.

As of the date of this Annual Report, the Company’s revenues have not been directly negatively affected by the ongoing hostilities in the region, as the primary source of its revenues is predominantly from the U.S. or European markets, that have been not significantly impacted by the ongoing hostilities in Israel. As a result, as of the date of this Annual Report the Company’s abilities to deliver or provide products and services to its customers have not been materially affected.

Finally, prior to the October 2023 war, the Israeli government pursued changes to Israel’s judicial system and has recently renewed its efforts to effect such changes. In response to the foregoing developments, certain individuals, organizations, and institutions, both within and outside of Israel, voiced concerns that such proposed changes, if adopted, may negatively impact the business environment in Israel. Such proposed changes may also lead to political instability or civil unrest. If such changes to Israel’s judicial system are pursued by the government and approved by the parliament, this may have an adverse effect on our business, results of operations, and ability to raise additional funds, if deemed necessary by our management and board of directors.

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

Our reporting and functional currency is the U.S. dollar. Our revenues are currently primarily payable in U.S. dollars and we expect our future revenues to be denominated primarily in U.S. dollars and Euros. However, certain amount of our expenses 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.

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.

Our directors reside outside of the United States, and most of the assets of our directors are located outside of the United States. Therefore, a judgment obtained against us, or our directors, including a judgment based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United States and may not be enforced by an Israeli court. It may also be difficult for you to effect service of process on our directors in the United States or to assert U.S. securities law claims in original actions instituted in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws reasoning that Israel is not the most appropriate forum in which to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law is applicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law must be proven as a fact by expert witnesses, which can be a time consuming and costly process. Certain matters of procedure will also be governed by Israeli law.

There is little binding case law in Israel that addresses the matters described above. As a result of the difficulty associated with enforcing a judgment against us in Israel, you may not be able to collect any damages awarded by either a U.S. or foreign court.

Cybersecurity Risk Management and Strategy

We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. Our cybersecurity risk management program includes a cybersecurity incident response plan.

We are continuously working to ensure that we satisfy generally applicable industry standards for the assessment, identification, and management of risks from cybersecurity threats that may pose a risk to our information technology systems, including from third parties with whom we work with.

Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas. As of the date of this Annual Report, the majority of the Company’s IT systems are computed using leading secure cloud platforms.

Our cybersecurity risk management program includes:

• risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment;
• routine conduct of penetration tests on our computer systems to evaluate the security of the systems and identify weaknesses or vulnerabilities;
• employee training programs regarding cybersecurity risks and protocols;
• the usage of secure software or platforms designed to protect our IT systems against cybersecurity risks, such as two-factor authentication systems, anti-virus and ransomware programs or the usage of secure cloud platforms for computing our IT systems;
• the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; and
• a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents.

We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.

Cybersecurity Governance

Our Board of Directors considers cybersecurity risk as part of its risk oversight function and oversees management’s implementation of our cybersecurity risk management program.

The Board of Directors receives regular reports from management on our cybersecurity risks. In addition, management updates the Board, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential.

Our management team, including our Chief Executive Officer, the VP R&D and Data Protection Officer of Cortex, and our external advisors, is responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants.

Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment.

We currently conduct the operations of our Search Platform and Content Platform from our offices in Ramat Hachayal Tel Aviv, which we have been occupying since September 1, 2016 for our Content Platform and since July 1, 2024 for our Search Platform. We pay a monthly fee of $15,000 for the lease of these offices, which we rent on a monthly basis.

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

Overview

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

Organizational Background

The Registrant was incorporated in the State of Delaware on August 16, 1985, under a predecessor name, InFerGene Company. 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 March 16, 2015, Zaxis and Emerald Israel executed a share exchange agreement, which closed on July 14, 2015, and Emerald Israel became the Company’s wholly-owned subsidiary. Accordingly, on September 14, 2015, the Company changed its name to Emerald Medical Applications Corp. On May 2, 2018, the District Court of Lod, Israel issued a winding-up order for Emerald Israel and appointed an Israeli attorney as special executor for Emerald Israel.

Virtual Crypto Technologies Ltd.

On January 17, 2018, the Company formed a new wholly-owned subsidiary, VCT. On February 22, 2018, the Company’s name was changed from Emerald Medical Applications Corp. to Virtual Crypto Technologies, Inc. to reflect its new operations and business focus. On January 27, 2020, VCT Israel was sold to a third party for NIS 50,000 ($14,459).

Recapitalization Transaction

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

Reorganization Transaction

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

Cortex Acquisition

On October 13, 2021, Gix Media acquired 70% (on a fully diluted basis) of the share capital of Cortex. In consideration for the Cortex Acquisition, Gix Media paid NIS 35 million in cash (approximately $11 million), out of which an amount of $0.5 million was deposited in trust for a period of 12 months from the closing date. The Cortex Acquisition also includes the obligation (and right) of Gix Media to acquire 30% of Cortex’s Remaining Balance Shares, such that following the completion of the acquisition of all the Remaining Balance Shares, Gix Media will hold 100% of Cortex’s share capital on a fully diluted basis. In January 2023, the 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.

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.

Results of Operations during the year ended December 31, 2024, as compared to the year ended December 31, 2023

Revenues for the year ended December 31, 2024, were $26,941 thousand as compared to $79,613 thousand for the year end December 31, 2023.

Our revenues from Cortex’s Content Platform were $21,972 thousand for the year ended December 31, 2024, a decrease of $37,172 as compared to $59,144 thousand during the year end December 31, 2023. The reason for the decrease during the year ended December 31, 2024. The reason for the decrease during the year ended December 31, 2024, is due to the Cortex Adverse Effect. The Company expects that the Content Platform will focus its operations on and revenue growth from the RSOC model.

Our revenues from Gix Media’s Search Platform for the year ended December 31, 2024, totaled $4,969 thousand, representing a decrease of $15,500 thousand compared to $20,469 thousand for the year ended December 31, 2023.

Our revenue from Gix Media’s Search Platform’s direct model was $3,200 thousand for the year ended December 31, 2024, compared to $4,094 thousand for the year ended December 31, 2023. During the year ended December 31, 2024, the number of search referrals to the Gix Major Customer conducted by users from the direct model was 55.1 million, compared to 93.5 million for the year ended December 31, 2023. The decrease in user search referrals is primarily due to changes and updates in internet browsers’ technology, which have reduced the scale of distribution of the Company’s products through the direct model. The Company anticipates that its revenues from add-ons to internet browsers will continue to decrease due to changes and updates in internet browsers’ technology while its revenues from the Search to Search model will increase.

Our revenue from Gix Media’s Search Platform’s indirect model was $1,847 thousand for the year ended December 31, 2024, compared to $16,375 thousand for the year ended December 31, 2023. During the year ended December 31, 2024, the number of search referrals to the Gix Major Customer conducted by users from the indirect model was 42.1 million, as compared to 243.0 million for the year ended December 31, 2023. The decrease in user search referrals through the indirect model is primarily due to: (i) a decrease in the number of searches received from Gix Media’s third-party strategic partners through the indirect model mainly as a result of decrease in the credit received from third-party strategic partners and (ii) global changes in a main Search Engine which led to reductions in search base advertising budgets of Gix Media’s customers. In order to increase the revenues from the Search Platform’s indirect model, the Company is planning to renew the credit received from third-party strategic partners.

Traffic acquisition and related costs for the year ended December 31, 2024, were $21,987 thousand, a decrease of $48,464 thousand as compared to $70,451 thousand for the year ended December 31, 2023. The reason for the decrease in the year ended December 31, 2024, is due to the decrease in revenues from both the Content and Search Platforms as compared to the year ended December 31, 2024, as mentioned above.

Research and development expenses for the year ended December 31, 2024, were $1,879 thousand as compared to $2,893 thousand for the year ended December 31, 2023. The reason for the decrease in the year ended December 31, 2024 is due to the expense reduction in both the Content and Search Platforms during the year ended December 31, 2024.

Sales and marketing expenses for the year ended December 31, 2024, were $1,641 thousand as compared to $2,805 thousand for the year ended December 31, 2023. The reason for the decrease in the year ended December 31, 2024, is due to the expense reduction primarily in salaries in the Content Platforms, as compared to the year ended December 31, 2023.

General and administration expenses for the year ended December 31, 2024, were $2,268 thousand as compared to $2,877 thousand for the year ended December 31, 2023. The reason for the decrease in the year ended December 31, 2024, is due to the expense reduction primarily in salaries, rental and headquarters expenses in the year ended December 31, 2024, as compared to the year ended December 31, 2023.

Our depreciation and amortization expenses for the year ended December 31, 2024, were $3,012 thousand, a slight increase as compared to $2,952 thousand during the same period in the prior year.

A goodwill impairment loss of $7,675 thousand was recorded during the year ended December 31, 2024, compared to $5,107 during the year ended December 31, 2023. The total amount of goodwill impairment loss recognized by the Company, in the year ended December 31, 2024, was related to the Content Platform (see note 6 to our consolidated financial statements).

Our other expenses were $34 thousand for the year ended December 31, 2024, compared to $0 during the year ended December 31, 2023. In the year ended December 31, 2024, the Company’s recorded other expenses mainly due to professional expenses incurred in connection with the Company’s planned Uplist which was offset by other income mainly due to Gix Media and Cortex receiving governmental grants from the Israel Tax Authority in relation to the “Iron Swords” war.

Our net financial expense was $2,764 thousand for the year ended December 31, 2024, as compared to net financial expense of $1,281 thousand for the year ended December 31, 2023. The reason for the increase during the year ended December 31, 2024, is mainly due to financing expenses recorded due to accounting treatment of financial instruments, created and recorded as part of the June 2024 Credit Facility

Our income tax benefit was $213 thousand for the year ended December 31, 2024, as compared to $66 thousand income tax benefit for the year ended December 31, 2023. The reason for the increase in our income tax benefit during the year ended December 31, 2024, is due to the decrease in income before tax.

Liquidity and Capital Resources

As of December 31, 2024, we had current assets of $7,752 thousand consisting of $624 thousand in cash and cash equivalents, $58 thousand in restricted deposits, $1,832 thousand in accounts receivable, $1,257 thousand in other current assets and $3,981 thousand in the loan to our parent company, in accordance with the Second Loan Agreement, as defined below.

As of December 31, 2024, we had non-current assets of $14,322 thousand consisting of $63 thousand in deferred taxes, $164 thousand in property and equipment net, $9,552 thousand in intangible assets net and $4,579 thousand in goodwill.

As of December 31, 2024, we had $12,929 thousand in current liabilities consisting of $5,935 thousand in accounts payable, $812 thousand in other payables, $5,374 thousand in short term loans and current maturities of a long-term loans, $29 thousand in embedded derivatives and $779 thousand in short-term convertible loans.

As of December 31, 2024, we had $1,638 thousand in non-current liabilities consisting of $496 thousand long-term loans and $1,142 thousand in deferred taxes.

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, $973 thousand in other current receivables and $3,752 thousand in the loan to our parent company, in accordance with the Second Loan Agreement, as defined below.

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, 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 loan and $85 thousand in operating lease liabilities.

As of December 31, 2023, we had $4,885 thousand in non-current liabilities consisting of $3,064 thousand long-term loan, $304 thousand in operating lease liabilities - long term and $1,517 thousand in deferred taxes.

We had a negative working capital of $5,177 thousand as compared to a negative working capital of $1,968 thousand as of December 31, 2024, and December 31, 2023, respectively.

During the fiscal year ended December 31, 2024, we had positive cash flow from operations of $1,543 thousand as compared to positive cash flow from operations of $934 thousand during the year ended December 31, 2023. The reason for the increase in the year ended December 31, 2024 is due to: (i) an increase in changes in assets and liabilities items in an amount of $1,546 thousand during the year ended December 31, 2024 as compared to the year ended December 31, 2023 due to improvement in customer collection days, mainly in the Content Platform; (ii) an increase in the net loss for the year ended December 31, 2024 in an amount of $5,419 thousand as compared to the year ended December 31, 2023 due to the decrease in the company’s revenues; and (iii) an increase in adjustments to reconcile net income to net cash provided by operating activities in an amount of $4,482 thousand during the year ended December, 31 2024 as compared to the year ended December 31 2023 mainly due to increase in goodwill impairment in amount of $2,568 thousand as compare to the year ended December 31, 2023 and due to a loss from loan modifications in the amount of $1,914 thousand during the year ended December 31, 2024.

During the fiscal year ended December 31, 2024, we had $1 thousand negative cash flow from investing activities as compared to $16 thousand negative cash flow from investing activities during the year ended December 31, 2023.

During the fiscal year ended December 31, 2024, we had $2,783 thousand negative cash flow from financing activities as compared to $3,376 thousand negative cash flow from financing activities during the year ended December 31, 2023. The reason for the decrease in the year ended December 31, 2024 is due to: (i) repayment of long-term bank loans in the amount of $510 thousand during the year ended December 31, 2024 as compared to $1,811 thousand during the year ended December 31, 2023, due to the fact that in the year ended December 31, 2024 certain payments in connection with the Financing Agreement were deferred; (ii) a decrease due to the fact that in the year ended December 31, 2023 an amount of $2,625 thousand was paid by Gix Media to non-controlling interests in connection with the purchase of 10% of Cortex’s share capital; (iii) negative changes net in the Company’s short-term bank loans in amount of $3,032 thousand during the year ended December 31, 2024 as compared to $0 thousand during the year ended December 31, 2023 and (iv) an increase of $630 thousand due to the receipt of short-term convertible loans under the Company’s existing credit facilities and the issuance of shares and warrants in connection with the Private Placement in amount of $198 thousand during the year ended December 31, 2024.

There are no limitations in the Company’s Certificate of Incorporation on the Company’s ability to borrow funds or raise funds through the issuance of shares of its common stock to affect a business combination.

Gix Media has provided several liens under the Financing Agreement with Leumi in connection with the Cortex Transaction, as follows: (1) a floating lien on Gix Media’s assets; (2) a lien on Gix Media’s bank account in Leumi; (3) a lien on Gix Media’s rights under the Cortex Transaction; (4) a fixed lien on Gix Media’s intellectual property; and (5) a lien on all of Gix Media’s holdings in Cortex.

The Company has also provided several liens under the Financing Agreement with Leumi in connection with the Cortex Transaction, as follows: (1) a guarantee to Leumi of all of Gix Media’s obligations and undertakings to Leumi unlimited in amount; (2) a subordination letter signed by the company to Leumi; (3) A first ranking all asset charge over all of the assets of the Company; and (4) a Deposit Account Control Agreement over the Company’s bank accounts.

According to the Financing Agreement, Gix Media undertook to meet a financial covenant over the life of the loans. As of December 31, 2024, Gix Media is in compliance with the financial covenant in connection with the Financing Agreement.

Going Concern

During the period ended December 31 2024, we experienced a decrease in revenues from digital content due to Cortex Adverse Effect, in addition decrease in revenues from search segment due lower user traffic acquired from third party advertising platforms, an industry-wide reduction in advertising budgets, changes and updates to internet browsers, which adversely impacted our ability to acquire traffic in the search segment, and a decrease in revenues from routing of traffic acquired from third-party strategic partners in the search segment, due to lack of availability of supplier credit from such partners.

As a result of such decreases, for the year ended December 31, 2024, we recorded an operating loss of $11,555 compared to $7,442 during the year ended December 31, 2023, and a net loss of $14,106 compared to $8,687 during the year ended December 31, 2023. As of 31 December, 2024, we had cash and cash equivalents $624, bank loans of $5,528 and an accumulated deficit of $22,714. Such a decline in revenues raise a substantial doubt about our ability to continue as a going concern during the 12-month period following the issuance date of our consolidated financial statements for the year ended December 31, 2024.

Our management’s plans to address these conditions include reducing salaries and operating expenses, cutting professional services, creating new revenues sources and forming new partnerships. During the period from June to August 2024, we raised $887 through a private placement and facility agreements. In addition, we also plan to uplist our common stock to a national securities exchange, which, in accordance with these agreements, it expected to provide additional funding. Furthermore, our subsidiaries entered into an addendum to a loan agreement with Bank Leumi, deferring loan repayments and securing short-term credit lines. 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.

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

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.

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

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. 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. 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. 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. 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.

As of December 31, 2024, we recorded a goodwill impairment loss in the amount of $7,675 thousand for the Content Platform reporting unit.

A. Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

Our management, including our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of December 31, 2024, the end of the period covered by this Annual Report on Form 10-K. Based on such evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of December 31, 2024.

B. Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with U.S. GAAP.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting on December 31, 2024. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission 2013 framework, in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on that assessment under those criteria, management has determined that, as of December 31, 2024, our internal control over financial reporting was effective.

C. Attestation Report of the Registered Public Accounting Firm

This Annual Report on Form 10-K does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the SEC that permit the Company, as a non-accelerated filer, to provide only management’s report in this annual report on Form 10-K.

D. Changes in Internal Control over Financial Reporting

There were no changes in internal control over financial reporting during the year ended December 31, 2024 that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.