Quantum X Labs Inc.: Form 10-Q for the period ended Jun 30, 2026

Special Note Regarding Forward-Looking Statements

The following management’s discussion and analysis section should be read in conjunction with the Company’s unaudited financial statements as of June 30, 2026 and 2025, and the related statements of statement operation, statement of changes in shareholders’ equity and statements of cash flows for the three months then ended, and the related notes thereto contained in this Quarterly Report on Form 10-Q (this “Quarterly Report”).

Our reporting currency and functional currency is the U.S. dollar. Unless otherwise expressly stated or the context otherwise requires, references in this prospectus to “NIS” are to New Israeli Shekels, and references to “dollars” or “$” mean U.S. dollars.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements,” which include information relating to future events, future financial performance, strategies, expectations, competitive environment and regulation, including revenue growth. Words such as “may,” “will,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” and similar expressions, as well as statements in future tense, identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and may not be accurate indications of when such performance or results will be achieved. Forward-looking statements are based on information we have when those statements are made or our management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to:

• our ability to achieve milestones, and/or technological advancements, including with respect to executing on our technology roadmap and developing practical applications;
• the potential of quantum computing and estimated market size and market growth including with respect to our long-term business strategies for quantum computing as a service;
• the early-stage and rapidly evolving nature of the quantum computing industry;
• uncertainty regarding the scalability, reliability and practical application of quantum technologies;
• our expectations regarding the development, commercialization and adoption of quantum computing technologies;
• our ability and timeline to monetize our investments in quantum computing, if at all,
• 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 service;
• our ability to generate enough cash flow to meet our debt obligations or fund our other liquidity needs, and substantial doubt regarding our ability to continue as a going concern;
• our need to raise additional capital to meet our business requirements in the future and such capital raising may be costly or difficult to obtain and could dilute out shareholders’ ownership interests;
• our ability to receive credit facility to fund our operations, at favorable terms, or at all;
• our ability to pay our obligations when they become due, including the contemplated debt restructuring program currently under negotiation with our credit and debtholders;
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• our subsidiaries’ future performance, including our ability to instill potential measures to assist Gix Media Ltd. (“Gix Media”), Metagramm Software Ltd. (“Metagramm”) and Quantum X Labs Ltd. (“Quantum Israel”) in mitigating future economic harm;
• our ability to realize the benefits of our acquisitions of Quantum Israel and Metagramm;
• our research and development efforts, anticipated technological advancements, strategic partnerships, market opportunities, competitive positioning, and our future financial performance, including revenue growth, operating expenses and capital requirements;
• entry of new competitors and products, including competition from larger, more established technology companies, the impact of large and established internet and technology companies and potential technological obsolescence of our offered platforms; and
• our ability to implement our strategic initiatives, expansion plans and continue to innovate our existing products and services;
• our ability to grow and manage growth profitably, maintain relationships with customers and suppliers and retain our management and key employees;
• our ability to maintain the listing of our common stock on the Nasdaq Capital Market;
• changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements and the impact of such policies on us, our customers and suppliers, and the global economic environment;
• the fact that we conduct business in multiple foreign jurisdictions, exposing us to foreign currency exchange rate fluctuations, logistical and communications challenges, burdens and costs of compliance with foreign laws and political and economic instability in each jurisdiction;
• adverse federal, state and local government regulation, in the United States, Europe or Israel and other foreign jurisdictions, including, but not limited to changes in governmental policies, regulations or funding priorities related to quantum computing and advanced technologies;
• macroeconomic conditions, including global economic and geopolitical conditions, military conflicts, government shutdowns, disruptions to and volatility and uncertainty in the credit and financial markets, uncertainty in levels of future economic activity, inflation and interest rates;
• political, economic and military conditions in Israel, including the current security situation in Israel, as well as the war’s potential impact on our business and operation.

The foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or risk factors that we are faced with which may cause our actual results to differ from those anticipated in our forward-looking statements. For a discussion of these and other risks that relate to our business and investing in our common stock, you should carefully review the risks and uncertainties described in this Quarterly Report, and those contained in section captioned “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the Securities and Exchange Commission (the “SEC”) on March 27, 2026 (the “Annual Report”). The Company’s actual results could differ materially from those contemplated in these forward-looking statements as a result of these factors. The Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report.

Overview and Background

Quantum X Labs Inc. (the “Registrant”, “Quantum X Labs” or the “Company”) and its subsidiaries are focused on quantum technology, digital advertising and computing and enterprise artificial intelligence (AI) solutions. Quantum Israel is focused on developing and promoting quantum algorithms for the transportation, drug discovery and security segments as well as developing quantum- based GPS replacement and quantum atom accuracy solutions. Gix Media develops a variety of technological software solutions, which perform automation, optimization and monetization of internet campaigns, for the purposes of acquiring and routing internet user traffic to its customers. Metagramm is a developer of grammatical error correction software and offers tools for writing and reviewing, grammar, spelling, punctuation and style features, as well as translation and multilingual dictionaries, using artificial intelligence and machine learning technology.

Quantum Technology

The Company, through its subsidiary Quantum Israel, is focused on developing foundational and applied innovations across quantum computing, sensing, navigation, and security. Its mission is to research, develop, and own quantum technology intellectual property that addresses major challenges emerging as the quantum revolution scales into commercial and industrial use. Quantum Israel combines deep academic research with practical engineering to create deployable quantum solutions.

Quantum Israel maintains a portfolio of five dedicated operating subsidiaries, each targeting distinct applications in quantum technology — a structure that allows for focused research and development, faster innovation cycles, and clearer path to potential commercialization across markets that range from defense navigation to biomedical computing. Through its multi-subsidiary structure, it simultaneously tackles multiple markets while retaining shared intellectual property and research advantages with an aim to bridge cutting-edge research with real-world impact.

Quantum technology generally comprises three principal areas: quantum computing, quantum communication, and quantum sensing. Quantum computing applies principles of quantum mechanics to perform certain computational tasks more efficiently than classical systems and to address problems that are not practically solvable using conventional computing. Quantum communication focuses on the transmission of information using quantum methods and is designed to enhance the security of data exchange. Quantum sensing involves the use of quantum-based systems to measure physical phenomena, such as electromagnetic fields, gravity, and time, with significantly greater sensitivity than traditional sensors

Quantum X Labs benefits from strong ties to leading Israeli academic institutions, which support a multidisciplinary approach combining advanced theoretical research with applied engineering. Members of its team and management have academic backgrounds and research affiliations with institutions, such as Tel Aviv University, Hebrew University of Jerusalem, Technion – Israel Institute of Technology, and the Weizmann Institute of Science. These academic connections contribute to its ability to integrate research across mathematics, physics, and computer science, and to translate foundational quantum concepts into practical algorithms, intellectual property, and technology development relevant to next-generation quantum computing platforms.

Strategy

Quantum X Labs’ model of distinct subsidiaries under one umbrella is designed to:

• Isolate technical risk: Each quantum domain has unique challenges and development cycles. The portfolio approach mitigates risk by diversifying across applications rather than concentrating in a single technology stack.
• Improve potential commercialization velocity: Dedicated operating companies can focus on tailored product roadmaps, partnerships, and market entry strategies, accelerating potential path to market for each line.
• Build reusable IP: Core innovations, such as quantum error correction cores, quantum algorithms, and foundational processing toolchains, can be shared across subsidiaries, creating cross-domain synergies.
• Enable strategic partnerships: Structuring teams as independent operating entities facilitates collaborations with academic institutions, government labs, and industry partners across different verticals.
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Portfolio Companies and Segments

• Quantum Transportation

Focus: quantum error correction and decoding infrastructure for quantum hardware.

Quantum Transportation, a 30%-owned affiliate of Quantum X Labs, develops tools that help quantum hardware teams accelerate research and choose efficient quantum error correction schemes tailored to their systems. The subsidiary supports labs and smaller companies that lack in-house quantum error correction expertise. Its platform includes simulators and research environments that improve error tolerance and robustness in quantum processors.

• Quantum Computing- Cold Atom Architecture

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

A Quantum X Labs activity whose platform leverages advanced laser cooling technology combined with dynamically reconfigurable optical tweezer arrays. This architecture enables rapid, high-fidelity loading of large- scale qubit registers, extended coherence times, and native support for high-performance Rydberg-mediated two-qubit gates.

• CliniQuantum

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

CliniQuantum, a 46%-owned affiliate of Quantum X Labs, is developing quantum-accelerated computing methods, including a provisional patent filed for quantum-enhanced Markov Chain Monte Carlo (MCMC) sampling to improve complex probability sampling in clinical research. This technology aims to reveal hidden structures in biological and patient data, enabling faster and more efficient clinical trial modeling, personalization of treatment response, and broader insights across high-dimensional biological datasets

• Quantum Gyro

Focus: quantum inertial navigation systems and gyroscope technologies.

Quantum Gyro, a 40%-owned affiliate of Quantum X Labs, focuses on developing chip-scale nuclear magnetic resonance (NMR) gyroscope sensors that detect rotation based on shifts in quantum precession frequencies. These systems aim for ultra-low drift and high stability, crucial for navigation where GPS signals are unavailable or jammed (e.g., subterranean, underwater, or defense environments).

• QuantumQ Security

Focus: next-generation quantum-based cyber and communication security.

QuantumQ Security, a 40%-owned affiliate of Quantum X Labs, builds quantum-native security technologies that leverage quantum principles to enhance protections for communications, data systems, and critical infrastructure. The subsidiary operates from a foundation of Quantum X Labs’ error correction IP and broader quantum algorithm knowledge, aiming to strengthen cybersecurity against both classical and future quantum threats.

• Quantum Atom Accuracy

Focus: high-precision quantum timing and sensing systems.

Quantum Atom Accuracy, a 40%-owned affiliate of Quantum X Labs, concentrates on quantum-level measurement and timing technologies — platforms that push beyond classical limits in precision and stability. While details on products are emerging, this unit contributes to timing, synchronization, and high-resolution measurement capabilities that can be applied in communications, sensing systems, and advanced research

• Nuclear Quantum

Focus: quantum centric supercomputing for advanced nuclear engineering.

Nuclear Quantum, a 40%-owned subsidiary of Quantum X Labs, integrates quantum algorithms into established nuclear engineering workflows to overcome the computational bottlenecks that slow reactor design, licensing, and long term operation. Nuclear Quantum develops quantum ready algorithms and hybrid frameworks that accelerate the core numerical problems inside nuclear simulation and optimization.

Digital Advertising

Quantum X Labs also operates a digital advertising platform that develops and markets a variety of technological platforms that automate, optimize and monetize digital online campaigns. The Company, through its subsidiary, Gix Media, is focused on digital advertising operations for ad search (the “Search Platform”). Gix Media develops and markets a variety of technological software solutions that automate, optimize and monetize online campaigns. These technological tools enable advertisers and website owners to earn more from their advertising campaigns and generate additional profits from their sites. Through the Search Platform, the Company provides services to leading Search Engines worldwide by developing, marketing and distributing software products to internet users. The operations and activity on this platform are powered by Gix Media.

Until November 2025, in addition to Gix Media’s Search Platform, the Company, through a previous majority-owned subsidiary of Gix Media, Cortex, operated a digital content platform, which produced 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. Following the Cortex Sale (as defined below), the Company only operates the Search Platform.

Enterprise AI

The Company, through its wholly-owned subsidiary, Metagramm, specializes in developing advanced writing assistance tools that leverage artificial intelligence, machine learning, and natural language processing technologies. Their flagship product, Bubbl, is an innovative writing tool designed to provide personalized and customized text tailored to the user’s unique expression. Unlike common AI writing tools that often produce machine-like results, Bubbl offers a more human-like writing experience. It supports various modes, including an interactive re-write floating window mode, interactive inline mode, and a grammar-only mode. Additionally, Bubbl caters to different writing needs with specialized profiles for business, medical, academic, and blogging, each incorporating tailored assistance tools to facilitate the writing process.

Recent Developments

Name and Ticker Symbol Change

Effective April 30, 2026, the Company changed its name from “Viewbix Inc.” to “Quantum X Labs Inc.” and its trading symbol on the Nasdaq Capital Market from “VBIX” to “QXL.”

Quantum Israel Acquisition

On December 15, 2025, we entered into a securities exchange agreement (the “Quantum Exchange Agreement”) with Quantum Israel and certain of the shareholders of Quantum Israel (the “Quantum Israel Shareholders”) pursuant to which we agreed to issue to the Quantum Israel Shareholders an aggregate of up to 40.0% of our issued and outstanding capital stock as of December 15, 2025, inclusive of the 800,000 shares of our common stock issuable by us in a private placement offering that we entered into in November 2025 (the “Private Placement Shares”), consisting of (i) up to 2,666,000 shares of our common stock, representing 19.99% of our issued and outstanding capital stock (the “Exchange Shares”), inclusive of the Private Placement Shares, and (ii) pre-funded warrants to purchase up to 4,447,595 shares of our common stock, representing the balance of up to the 40.0%, as of December 15, 2025, less the Exchange Shares (the “Exchange Pre-Funded Warrants”), in exchange for up to 100%, but not less than 85%, of Quantum Israel’s issued and outstanding share capital on a fully diluted and post-closing basis, equal to an amount up to 589,319 of Quantum Israel’s ordinary shares.

In addition, pursuant to the Quantum Exchange Agreement, we may issue up to 12,702,847 additional shares of our common stock or pre-funded warrants to purchase shares of our common stock (collectively, the “Earn-Out Securities”), upon the achievement of certain milestones as follows: (i) the issuance of up to 1,975,998 Earn-Out Securities upon the submission of five (5) patent applications including provisional applications in total, across at least three (3) distinct sub-fields within the quantum sector, by Quantum Israel or any of its Portfolio Companies (as defined in the Quantum Exchange Agreement) during the 18-month period following the Quantum Closing Date (as defined below), (ii) the issuance of up to 3,436,519 Earn-Out Securities upon the closing of listing, public offering, or an M&A Transaction (as defined in the Quantum Exchange Agreement) of any Portfolio Company of Quantum Israel, at a pre-money valuation of no less than $20 million during the twenty four-month period following the Quantum Closing Date, and (iii) the issuance of up to 7,290,330 Earn-Out Securities upon the earlier of: (1) a capital raise of at least $10 million into either the Company or Quantum Israel at a pre-money valuation of no less than $250 million; or (2) closing of any M&A Transaction of Quantum Israel, at a pre-money valuation not less than $250 million during the 48-month period following the Quantum Closing Date. Pursuant to the Quantum Exchange Agreement, the Earn-Out Securities may become issuable to the Quantum Israel Shareholders only following the 12-month anniversary of the Quantum Closing Date, and only upon achievement of the applicable earn-out milestones set forth above.

The Exchange Shares and the shares of common stock issuable upon the exercise of the Exchange Pre-Funded Warrants issuable to the Quantum Israel Shareholders will be subject to a 12-month lock-up period following the Quantum Closing Date, subject to certain exceptions. The Exchange Pre-Funded Warrants and the pre-funded warrants issuable as Earn-Out Securities are, or will be, immediately exercisable upon issuance at an exercise price of $0.0001 per share and will not expire until exercised in full.

The transaction closed on March 4, 2026 (the “Quantum Closing Date”) and resulted in us acquiring 100% of Quantum Israel’s issued and outstanding share capital on a fully diluted and post-closing basis and Quantum Israel becoming a wholly-owned subsidiary of the Company.

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

November 2025 PIPE

On November 5, 2025, we entered into a securities purchase agreement (the “Original SPA”) with certain accredited investors (the “Investors”) in connection with a private placement (the “November 2025 Private Placement”). The Original SPA as a closing condition had that we shall have entered into a definitive and binding agreement to acquire 100% of the share capital on a fully diluted basis of Quantum Israel. As of January 1, 2026, we had entered into a definitive and binding agreement to acquire only 85.01% of the share capital on a fully diluted basis of Quantum Israel. Accordingly, we and the Investors have amended certain terms of the November 2025 Private Placement.

On January 1, 2026, we entered into an amended and restated securities purchase agreement (the “November 2025 Purchase Agreement”) with the Investors pursuant to which we issued and sold an aggregate of 800,000 shares of our common stock (the “November 2025 Private Placement Shares”). Each November 2025 Private Placement Share was sold together with a number of warrants equal to the 80% of the total number of November 2025 Private Placement Shares sold in the November 2025 Private Placement, or in total warrants to purchase up to an aggregate of 640,000 shares of our common stock (the “November 2025 Common Warrants” and together with the November 2025 Private Placement Shares, the “November 2025 PIPE Securities”), at a combined purchase price of $1.75 per November 2025 Private Placement Share and accompanying November 2025 Common Warrant. The November 2025 Private Placement closed on March 4, 2026 (the “Closing Date”).

The November 2025 Common Warrants are immediately exercisable upon issuance at an exercise price of $2.625 per share, subject to adjustment as set forth therein, and will expire five years from the issuance date. The November 2025 Common Warrants may be exercised on a cashless basis if there is no effective registration statement registering the shares of our common stock underlying the November 2025 Common Warrants. A holder of the November 2025 Common Warrants will not have the right to exercise any portion of its November 2025 Common Warrants if the holder (together with such holder’s affiliates, and any persons acting as a group together with such holder or any of such holder’s affiliates or any other persons whose beneficial ownership of shares of our common stock would be aggregated with the holder’s or any of the holder’s affiliates), would beneficially own shares of common stock in excess of 4.99% of the number of shares of common stock outstanding immediately after giving effect to such exercise.

In connection with the November 2025 Purchase Agreement, we entered into a registration rights agreement on November 5, 2025 (the “November 2025 Registration Rights Agreement”) with the Investors. Pursuant to the November 2025 Registration Rights Agreement, we are required to file a resale registration statement (the “November 2025 Registration Statement”) with the SEC to register for resale the November 2025 Private Placement Shares and the shares of our common stock issuable upon exercise of the November 2025 Common Warrants within thirty (30) calendar days after the Closing Date (the “Filing Date”), and to have such Registration Statement declared effective within sixty (60) calendar days after the Filing Date in the event the Registration Statement is not reviewed by the SEC, or ninety (90) calendar days of the Filing Date in the event the November 2025 Registration Statement is reviewed by the SEC. If, due to a shutdown or suspension of operations of the U.S. federal government or the SEC, the Registration Statement cannot be declared effective, the Corporation shall not be deemed to be in breach of the Registration Rights Agreement for failure to cause such Registration Statement to be declared effective during such period.

We also entered into an advisory agreement (the “Advisory Agreement”) with L.I.A. Pure Capital Ltd. (“the Advisor”) pursuant to which the Advisor provided advisory services in connection with the November 2025 Private Placement. We paid a commission to the Advisor of (i) a cash fee of $70,000 and (ii) a warrant to purchase 32,000 shares of our common stock (the “Advisor Warrant”), which was conditioned upon the closing of the November 2025 Private Placement. The Advisor Warrant has the same terms as the November 2025 Common Warrants. In addition, in connection with the closing of the November 2025 Private Placement, we repaid $200,000 of the outstanding loan amount owed to the Advisor pursuant to that certain Amended and Restated Facility Agreement, dated July 22, 2024, by and between the Company and by and between certain lenders including the Advisor.

Aggregate gross proceeds to us in respect of the November 2025 Private Placement were approximately $1.4 million, before deducting fees payable to the Advisor and other offering expenses payable by us. If the November 2025 Common Warrants are exercised in cash in full this would result in an additional $1.68 million of gross proceeds.

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

Conversion of June 2024 Credit Facility

On July 29, 2026, we issued 588,553 shares of our common stock and warrants to purchase 588,553 shares of our common stock to certain lenders in connection with the conversion of an aggregate of $589 thousand of outstanding principal under a credit facility agreement entered into in June 2024. As a result of the conversion and issuance of the shares, $73 thousand remains outstanding under the credit facility. The warrants have an exercise price of $1.00 per share and a term of three years from the date of issuance.

Corporate Information

We were 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. On February 7, 2019, the Company entered into a share exchange agreement (the “Recapitalization Transaction”) with Gix Internet Ltd. (formerly known as Algomizer Ltd.) (“Gix Internet”), pursuant to which, Gix Internet assigned, transferred and delivered 99.83% of its holdings in Viewbix Ltd. (“Viewbix Israel”), to the Company in exchange for shares of restricted 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. On December 15, 2025, the Company entered into a securities exchange agreement with Quantum X Labs Ltd. and certain of the shareholders of Quantum Israel pursuant to which the Company acquired 100% of Quantum’s issued and outstanding share capital on a fully diluted, post-closing basis and Quantum Israel became a wholly owned subsidiary of the Company. The transaction closed on March 4, 2026. On April 30, 2026, the Company changed its name to Quantum X Labs Inc.

Our principal executive offices are located at: 2 Jabotinsky St, Atrium Tower, 18th floor, Ramat Gan, Israel 5252903 and our telephone number is +972-9-774-1505. Our website address is https://quantumxlabs.xyz/. The information contained on, or that can be accessed through, our websites is not incorporated by reference into this prospectus and is intended for informational purposes only.

Results of Operations

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

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

Our revenues from Gix Media’s Search Platform for the three months ended June 30, 2026, totaled $283 thousand, as compared to $354 thousand during the same period in the prior year.

During the three months ended June 30, 2026, our revenues from the direct model were $207 thousand, as compared to $354 thousand during the three months ended June 30, 2025. The decrease in revenues from the direct model is primarily due to changes and updates in internet browsers’ technology, which have reduced the scale of distribution of the Company’s products through the direct model. The Company anticipates that its revenues from add-ons to internet browsers will continue to decrease due to changes and updates in internet browsers’ technology. During the three months ended June 30, 2026, our revenues from the indirect model were $76 thousand, as compared to $0 thousand during the three months ended June 30, 2025. The increase in revenues from the indirect model is due to an increase in our revenues from third party strategic partners.

Our traffic-acquisition and related costs were $134 thousand for the three months ended June 30, 2026, as compared to $50 thousand during the same period in the prior year. The increase in the traffic-acquisition and related costs is primarily due to the increase in our revenues from third party strategic partners and search to search model.

Our research and development expenses were $185 thousand for the three months ended June 30, 2026, as compared to $20 thousand during the same period in the prior year. The reason for the increase in the three months ended June 30, 2026 is due to the consolidation of Quantum Israel’s financial statements following our acquisition of Quantum Israel in March 2026.

Our selling and marketing expenses were $26 thousand for the three months ended June 30, 2026, a slight decrease as compared to $30 thousand during the same period in the prior year.

Our general and administrative expenses were $1,015 thousand for the three months ended June 30, 2026, as compared to $558 thousand during the same period in the prior year. The reason for the increase is due to higher professional services expenses in the period following the uplisting to the Nasdaq Capital Market in June 2025 (the “Uplist”) in the three months ended June 30, 2026, as compared to the same period in the prior year and the consolidation of Quantum Israel’s financial statements following our acquisition of Quantum Israel in March 2026.

Our depreciation and amortization expenses for the three months ended June 30, 2026, were $228 thousand a slight decrease as compared to $235 thousand during the same period in the prior year.

Our other expenses for the three months ended June 30, 2026, were $100 thousand compared to $500 thousand during the three months ended June 30, 2025. Other expenses for the three months ended June 30, 2026, were primarily related to costs incurred in connection with the Quantum Israel acquisition. Other expenses for the three months ended June 30, 2025, were primarily related to costs incurred in connection with the Uplist and registrations for the resale of the Company’s common stock with the SEC.

Our gain from deconsolidation of a subsidiary for the three months ended June 30, 2026, was $3,831 thousand as compared to $0 thousand during the same period in the prior year. The gain from deconsolidation of a subsidiary recognized during the three months ended June 30, 2026, resulted from the loss of control of CliniQuantum following the sale by certain CliniQuantum shareholders of approximately 54.01% of CliniQuantum’s outstanding equity to a third party in June 2026. For further details please refer to note 6.D to our interim consolidated financial statements for the six months ended June 30, 2026.

Our net financial expenses were $113 thousand for the three months ended June 30, 2026, as compared to $7,661 thousand net financial expenses during the same period in the prior year. The decrease during the three months ended June 30, 2026, is mainly attributable to financing expenses during the three months ended June 30, 2025, related to financial instruments arising from the Company’s facility agreements, which are measured at fair value.

Our tax benefit was $94 thousand for the three months ended June 30, 2026, as compared to $67 thousand during the same period in the prior year. The reason for the increase in our tax benefit during the three months ended June 30, 2026, is due to the decrease in income before tax in the Search Platform.

Net loss from discontinued operations was $0 thousand for the three months ended June 30, 2026, as compared to $3,801 thousand for the three months ended June 30, 2025. For further details regarding the amounts recorded in respect of discontinued operations in the three months ended June 30, 2025, please refer to note 3 to our interim consolidated financial statements for the six months ended June 30, 2026.

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

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

Our revenues from Gix Media’s Search Platform for the six months ended June 30, 2026, totaled $626 thousand, as compared to $883 thousand during the same period in the prior year.

During the six months ended June 30, 2026, our revenues from the direct model were $453 thousand, as compared to $883 thousand during the six months ended June 30, 2025. The decrease in revenues from the direct model is primarily due to changes and updates in internet browsers’ technology, which have reduced the scale of distribution of the Company’s products through the direct model. The Company anticipates that its revenues from add-ons to internet browsers will continue to decrease due to changes and updates in internet browsers’ technology. During the six months ended June 30, 2026, our revenues from the indirect model were $173 thousand, as compared to $0 thousand during the six months ended June 30, 2025. The increase in revenues from the indirect model is due to an increase in our revenues from third party strategic partners.

Our traffic-acquisition and related costs were $266 thousand for the six months ended June 30, 2026, as compared to $184 thousand during the same period in the prior year. The increase in the traffic-acquisition and related costs is primarily due to the increase in our revenues from third party strategic partners and search to search mode.

Our research and development expenses were $185 thousand for the six months ended June 30, 2026, as compared to $36 thousand during the same period in the prior year. The reason for the increase in the six months ended June 30, 2026, is due to the consolidation of Quantum Israel’s financial statements following our acquisition of Quantum Israel in March 2026.

Our selling and marketing expenses slightly increased to $51 thousand for the six months ended June 30, 2026, as compared to $50 thousand during the same period in the prior year.

Our general and administrative expenses were $1,515 thousand for the six months ended June 30, 2026, as compared to $755 thousand during the same period in the prior year. The reason for the increase is due to higher professional services expenses in the period following the Uplist in the six months ended June 30, 2026, as compared to the same period in the prior year and the consolidation of Quantum Israel’s financial statements following our acquisition of Quantum Israel in March 2026.

Our depreciation and amortization expenses for the six months ended June 30, 2026, were $452 thousand as compared to $408 thousand during the same period in the prior year. The increase in depreciation and amortization expenses is attributable to the increase in depreciation and amortization related to the acquisition of Metagramm on March 24, 2025. During the six months ended June 30, 2026, the depreciation and amortization expenses were recorded in full, compared to partial recognition during the same period prior year.

Our other expenses for the six months ended June 30, 2026, were $122 thousand compared to $544 thousand during the six months ended June 30, 2025. Other expenses for the six months ended June 30, 2026, were primarily related to costs incurred in connection with the Quantum Israel acquisition. Other expenses for the six months ended June 30, 2025, were primarily related to costs incurred in connection with the Uplist and registrations for the resale of the Company’s common stock with the SEC.

Our gain from deconsolidation of a subsidiary for the six months ended June 30, 2026, was $3,831 thousand as compared to $0 thousand during the same period in the prior year. The gain from deconsolidation of a subsidiary recognized during the six months ended June 30, 2026 resulted from the loss of control of CliniQuantum following the sale by certain CliniQuantum shareholders of approximately 54.01% of CliniQuantum’s outstanding equity to a third party in June 2026. For further details please refer to note 6.D to our interim consolidated financial statements for the six months ended June 30, 2026.

Our net financial expenses were $184 thousand for the six months ended June 30, 2026, as compared to $10,528 thousand net financial expenses during the same period in the prior year. The decrease during the six months ended June 30, 2026, is mainly attributable to financing expenses during the six months ended June 30, 2025, related to financial instruments arising from the Company’s facility agreements, which are measured at fair value.

Our tax benefit was $110 thousand for the six months ended June 30, 2026, as compared $25 thousand during the same period in the prior year. The reason for the increase in our tax benefit during the six months ended June 30, 2026, is due to the decrease in income before tax in the Search Platform.

Net loss from discontinued operations was $0 thousand for the six months ended June 30, 2026, as compared to $4,681 thousand for the six months ended June 30, 2025. For further details regarding the amounts recorded in respect of discontinued operations in the six months ended June 30, 2025, please refer to note 3 to our interim consolidated financial statements for the six months ended June 30, 2026.

Liquidity and Capital Resources

As of June 30, 2026, we had current assets of $3,497 thousand, consisting of $2,435 thousand in cash and cash equivalents, $48 thousand restricted deposits, $281 thousand in accounts receivable, $394 thousand in other current assets and $339 thousand in related parties.

As of June 30, 2026, we had non-current assets of $27,670 thousand, consisting of $5 thousand in deferred taxes, $205 thousand in property and equipment net, $2,299 thousand in intangible assets net, $600 thousand in investment in equity securities and $20,721 thousand in goodwill and $3,840 thousand arose from Investments accounted for using the equity method.

As of June 30, 2026, we had $4,047 thousand in current liabilities consisting of $1,146 thousand in accounts payable, $368 thousand in government authorities, $268 thousand in earn-out payable, $472 thousand in other payables, $1,043 thousand in short term loans and current maturities of long-term loans, $83 thousand in related parties and $667 thousand in short-term convertible loans.

As of June 30, 2026, we had $1,337 thousand in non-current liabilities consisting of $416 thousand in deferred taxes, $195 thousand in long term loans and $726 thousand in earn-out liability which arose from the acquisition of Metagramm.

As of December 31, 2025, we had current assets of $1,652 thousand consisting of $1,018 thousand in cash and cash equivalents, $20 thousand in restricted deposits, $315 thousand in accounts receivable and $299 thousand in other current assets.

As of December 31, 2025, we had non-current assets of $9,105 thousand consisting of $12 thousand in deferred taxes, $56 thousand in property and equipment net, $600 thousand in investment in equity securities, $2,045 thousand in intangible assets net and $6,392 thousand in goodwill.

As of December 31, 2025, we had $4,063 thousand in current liabilities consisting of $1,204 thousand in accounts payable, $355 thousand in government authorities, $201 thousand in earn-out payable, $395 thousand in other payables, $1,041 thousand in short term loans and current maturities of a long-term loans and $867 thousand in short-term convertible loans.

As of December 31, 2025, we had $1,705 thousand in non-current liabilities consisting of $586 thousand long-term loans, $793 thousand in earn out liability and $326 thousand in deferred taxes.

We had a negative working capital of $550 thousand as compared to a negative working capital of $2,411 thousand as of June 30, 2026, and December 31, 2025, respectively.

During the three months ended June 30, 2026, we had a negative cash flow from operating activities from continuing operations of $1,062 thousand as compared to $480 thousand during the same period in the prior year. The increase during the three months ended June 30, 2026, is mainly attributable to higher payments of accounts payable, as compared to the same period in the prior year.

During the six months ended June 30, 2026, we had a negative cash flow from operating activities from continuing operations of $1,666 thousand as compared to $289 thousand during the same period in the prior year. The increase during the six months ended June 30, 2026, is mainly attributable to higher payments of accounts payable, as compared to the same period in the prior year.

During the three months ended June 30, 2026, we had a negative cash flow from investment activities from continuing operations of $306 thousand, mainly used for the purchase of property and equipment, as compared to $0 during the same period in the prior year.

During the six months ended June 30, 2026, we had a negative cash flow from investment activities from continuing operations of $113 thousand, primarily due to the purchase of property and equipment, partially offset by the acquisition of Quantum Israel, as compared to a positive cash flow from investment activities from continuing operations of $12 thousand during the same period in the prior year, which arose from the Metagramm Acquisition.

During the three months ended June 30, 2026, we had $2,013 thousand positive cash flow from financing activities from continuing operations as compared to $2,321 thousand during the same period in the prior year. The decrease during the three months ended June 30, 2026, was primarily due to lower amount of net bank loans receipt during the three months period ended June 30, 2026, as compared to the same period prior year.

During the six months ended June 30, 2026, we had $3,224 thousand positive cash flow from financing activities from continuing operations as compared to $2,133 thousand during the same period in the prior year. The increase during the six months ended June 30, 2026, was primarily due to $1,400 thousand received under the November 2025 Purchase Agreement.

There are no limitations in the Company’s Amended and Restated 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.

In addition, in connection with the Cortex Sale, Gix Media provided Leumi a lien on the Minute Media Shares and Leumi released its lien on the shares of Cortex sold by Gix Media.

According to the Financing Agreement, Gix Media undertook to meet a financial covenant over the life of the loans. As of June 30, 2026, Gix Media is in compliance with the financial covenant in connection with the Financing Agreement.

Going Concern

During the years ended December 31, 2024, and 2025 and the six months ended June 30, 2026, we experienced a decrease in our revenues from the Search Platforms and Cortex’s digital content platform as a result of the Cortex Adverse Effect, a decrease in user traffic acquired from third party advertising platforms, an industry-wide decrease in advertising budget, changes and updates to internet browsers’ technology, which adversely impacted the Company’s ability to acquire traffic in the Search Segment and a decrease in revenues from routing of traffic acquired from third-party strategic partners in the Search Segment, following the lack of availability of suppliers credit from such third party strategic partners. As a result of the foregoing, the Company’s operations were adversely affected.

As a result of such decreases, for the six months ended June 30, 2026, we recorded an operating loss from continuing operations of $1,945 thousand compared to $1,078 thousand during the six months ended June 30, 2025. As of June 30, 2026, we had cash and cash equivalents of $2,435 thousand, bank loans and convertible loans of $1,905 thousand and an accumulated deficit of $44,167 thousand. Such a decline in revenues raises a substantial doubt about our ability to continue as a going concern during the 12-month period following the issuance date of this Quarterly Report.

Management’s response to these conditions included reduction of salaries and related expenses and reduction of professional services in the research and development, selling and marketing functions, reduction of other operational expenses, such as lease costs and overheads, as well as creation of new partnerships and other new income sources. In addition, the Company raised funds during 2025, increasing its cash balance, as follows: (1) pursuant to the consummation of the Uplist , the Company received during June and July 2025, aggregate gross proceeds of $2,852 thousand in connection with a private placement and three facility agreements, consisting of $630 thousand from the receipt of additional loans and $2,222 thousand from the exercise of warrants and (2) on July 14, 2025, the Company closed an additional private placement transaction with certain accredited investors, pursuant to which the Company received gross proceeds of $4.5 million. Moreover, on March 4, 2026, the Company closed a private placement transaction with certain accredited investors, pursuant to which the Company received gross proceeds of $1.4 million and during June and July 2026, the Company received total proceeds of $2,413 thousand and $1,505 thousand, respectively from the exercise of warrants. However, there is significant uncertainty as to whether the Company will be able to secure additional funds when needed.

Our Interim 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 way 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.

A. Evaluation of Disclosure Controls and Procedures

As of June 30, 2026, the Company’s co-chief executive officers and chief financial officer, conducted an evaluation (the “Evaluation”) regarding the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act). Based upon the Evaluation, as required by Rules 13a-15 or 15d-15, the Company’s co-chief executive officers and chief financial officer concluded that, and pursuant to the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013), the Company’s disclosure controls and procedures were effective as of the end of June 30, 2026.

B. Changes in Internal Control over Financial Reporting

With the inclusion of the financial information of Quantum Israel beginning in our interim financial statements included in Form 10-Q for the quarterly period ended March 31, 2026, we will be required to implement internal controls over financial reporting with respect to processes and procedures underlying the financial information of Quantum Israel. Other than the aforesaid, there were no changes in our internal control over financial reporting or in other factors identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the quarter ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Our business faces many risks, a number of which are described under the caption “Risk Factors” in our Annual Report. Other than as set forth below, there have been no material changes from the risk factors previously disclosed in our Annual Report. The risks described in our Annual Report and below may not be the only risks we face. Other risks of which we are not yet aware, or that we currently believe are not material, may also materially and adversely impact our business operations or financial results. If any of the events or circumstances described in the risk factors contained in our Annual Report or described below occurs, our business, financial condition or results of operations could be adversely impacted and the value of an investment in our securities could decline. Investors and prospective investors should consider the risks described in our Annual Report and below, and the information contained under the caption “Forward-Looking Statements” and elsewhere in this Quarterly Report on Form 10-Q before deciding whether to invest in our securities.

Management has concluded that there is substantial doubt about our ability to continue as a going concern, and our consolidated financial statements for the quarter ended June 30, 2026 include a going concern disclosure as to our ability to continue as a going concern, which could prevent us from obtaining new financing on reasonable terms or at all.

Because we have had recurring losses and negative cash flows from operating activities, substantial doubt exists regarding our ability to remain as a going concern at the same level at which we are currently performing. Accordingly, our consolidated financial statements for the quarter ended June 30, 2026 include an explanatory paragraph as to our potential inability to continue as a going concern. The doubts regarding our potential ability to continue as a going concern may adversely affect our ability to obtain new financing on reasonable terms or at all.

We may not realize the anticipated benefits of the acquisitions of Quantum X Labs Ltd. or Metagramm.

In March 2026, we acquired Quantum Israel, a company that focuses on developing and promoting quantum algorithms for the transportation, drug discovery and security segments as well as developing quantum- based GPS replacement and quantum atom accuracy solutions, and security whose mission is to research, develop, and own quantum technology intellectual property that addresses major challenges emerging as the quantum revolution scales into commercial and industrial use. In March 2025, we acquired Metagramm, a company that specializes in developing advanced writing assistance tools and licenses its products on a subscription basis. Quantum Israel’s and Metagramm’s products and revenue models differ from those of our current platforms. We may not be able to assimilate or integrate the acquired personnel, operations, products, services, and technologies of Quantum Israel or Metagramm successfully or effectively manage the business of Quantum Israel or Metagramm and our management may be distracted from operating our business. We also may not achieve the anticipated benefits from the acquisition of Quantum Israel or Metagramm due to a number of factors, including, without limitation, unanticipated costs or liabilities associated with the acquisition and difficulty of incorporating Quantum Israel’s or Metagramm’s technologies into our platforms. If the acquisition of Quantum Israel or Metagramm fails to meet our expectations, our operating results, business, and financial condition may suffer.