# Quantum X Labs Inc.: Form 10-Q for the period ended Mar 31, 2025

- Company: [Quantum X Labs Inc.](/companies/qxl.md) (CIK 797542)
- Form: 10-Q
- Filed: 2025-05-14
- Accepted by EDGAR: May 13, 2025, 21:46 ET
- Period: 2025-03-31
- Accession: 0001641172-25-010059
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/797542/000164117225010059/form10-q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/797542/000164117225010059/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $2.7m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Research and development | 3 months, 2025-01-01 to 2025-03-31 | $147.0k | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | −$969.0k | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | −$28.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | −$3.7m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | $0.68 | us-gaap:EarningsPerShareDiluted |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 5,414,548 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | −$409.0k | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2025-03-31 | $181.0k | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $6.5m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $26.4m | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $15.4m | us-gaap:LiabilitiesCurrent |
| Current portion of debt | at 2025-03-31 | $2.9m | us-gaap:LongTermDebtCurrent |
| Short-term borrowings | at 2025-03-31 | $2.9m | us-gaap:ShortTermBorrowings |
| Shareholders' equity | at 2025-03-31 | $7.3m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 32,212 characters.

### 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 March 31, 2025 and 2024, 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.*

*On July 10, 2024, our board of directors approved to effect a one-for-four consolidation of our share capital, pursuant to which holders of our shares of common stock will receive one share of common stock for every four shares of common stock held (the “Reverse Stock Split”). The Reverse Stock Split became effective on March 14, 2025, following the process and announcement by FINRA. Unless the context expressly indicates otherwise, all references to share and per share amounts referred to herein reflect the amounts after giving effect to the Reverse Stock Split.*

#### Forward-Looking Statements

This management discussion and analysis section contains forward-looking statements, such as statements of the Company’s plans, objectives, expectations, and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect” and the like, and/or future tense or conditional constructions “will,” “may,” “could,” “should,” etc., or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. 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:

- 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 retain and attract a programmatic advertiser, and the associated payments received from such programmatic advertisers’ ads on websites which have been categorized as “Made for Advertising”;
- 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 common stock may not be approved for listing on the Nasdaq Stock Market LLC (“Nasdaq”) or another recognized national exchange and many potential investors may be unwilling to purchase our common stock;
- our ability to receive credit facility or utilize existing credit facilities, to fund our operations, at favorable terms, or at all;
- our ability to pay our obligations when they become due, including our loan and facility agreements and Financing Agreement (as defined below);
- uncertainties regarding the petition to commence insolvency proceedings filed against Gix Media Ltd. (“Gix Media”), a wholly-owned subsidiary of the Company, and the impact of such proceedings on the Company’s business and financial condition;
- our subsidiaries’ future performance, including our ability to instill potential measures to assist Cortex and Gix Media in mitigating future economic harm;
- entry of new competitors and products, the impact of large and established internet and technology companies and potential technological obsolescence of our offered platforms; and
- conditions in Israel, including Israel’s conflicts with Hamas and other parties in the region, as well as political and economic instability 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, 2024, filed with the Securities and Exchange Commission (the “SEC”) on March 21, 2025 (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

Viewbix Inc. (the “Registrant”, “Viewbix” or the “Company”) 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 measures 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 (as defined in note 1.A to the interim condensed consolidated financial statements) with Gix Internet Ltd., in January 2020, the Company determined to reduce its operations and the size of its sales and R&D team in the Video Advertising Platform.

The Company, through its subsidiaries, Gix Media and Cortex Media Group Ltd. (“Cortex”), expanded its digital advertising operations across two 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.

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 posted 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 the 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 provides user traffic referral services to Search Engines through the referral of traffic of browsers who engage content generated by Gix Media, or the “Seach to Search” model. These ads are displayed on the 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”). In order to advertise its content on Third Party Platforms, Cortex purchases ad spaces (media) on the Third Party Platforms. 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.

Cortex’s previously focused its Content Platform on publishing content written by creative writers and editors which it employs, which is then 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”). 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.

In response to the MFA changes and in order to minimize the Cortex Adverse Effect (as defined below), 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” (“RSOC”), which is the current primary focus of its Content Platform. 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.

### Recent Developments

### Filing of Insolvency Petition Against Gix Media

On March 27, 2025, a petition (the “Petition”) was filed with the District Court of Tel Aviv-Jaffa for a court order to commence insolvency proceedings under the Insolvency and Economic Rehabilitation Law, 5778 - 2018, against Gix Media.

The Petition was filed by a primary service provider (the “Service Provider”) alleging that Gix Media owes it approximately $260,000 (excluding linkage differentials and interest) and that Gix Media is unable to repay its debts to the Service Provider. The Petition requests, among other things, that the court appoint a trustee for Gix Media to implement insolvency proceedings, vest its assets for the sole purpose of paying past debts and expenses of the insolvency proceedings, and freeze all legal proceedings against Gix Media. On May 8, 2025, a preliminary hearing was held and the district court directed the parties to reach a mutual settlement and set an additional hearing for May 22, 2025.

As of the date of this Quarterly Report, Gix Media had outstanding loans from Bank Leumi Le Israel (“Leumi”), as further disclosed in the Company’s Annual Report, and, due to the filing of the Petition, Leumi may demand immediate repayment of such loans. The Company cannot currently assess the likelihood of success of the Petition or its potential impact on the Company’s business.

### Financing Agreement

Effective as of January 29, 2025, Gix Media and Leumi entered into a fifth addendum, to a certain 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 acquisition of Cortex Acquisition on October 13, 2021 (the “Financing Agreement”), which was effective as of January 29, 2025, 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 (the “Investment Amount”), which in any event shall be no later than March 31, 2025 (the “Deposit Date”); (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. On March 30, 2025, Gix Media and Leumi entered into a sixth additional addendum to the Financing Agreement, which extended the Deposit Date until May 20, 2025.

### Securities Exchange Agreement

On March 24, 2025, the Company entered into a securities exchange agreement (the “Metagramm Agreement”) with Metagramm Software Ltd., an Israeli company (“Metagramm”), and all of the shareholders of Metagramm (the “Metagramm Shareholders”), pursuant to which the Company issued to the Metagramm Shareholders an aggregate of 19.99% of its issued and outstanding capital stock on a post-closing, pro rata basis, equal to 1,323,000 shares of the Company’s common stock, in exchange for 100% of Metagramm’s issued and outstanding share capital, equal to 718,520 ordinary shares of Metagramm (the “Metagramm Acquisition”). The Metagramm Acquisition was completed on March 24, 2025, resulting in Metagramm becoming a wholly-owned subsidiary of the Company.

The Company also agreed to pay the Metagramm Shareholders cash earn-out payments of up to $2.0 million in the aggregate on a pro rata basis, contingent upon the achievement of certain financing and revenue milestones during the three-year period following the closing date. In connection with entering into the Metagramm Agreement, the Company and Metagramm mutually agreed to terminate the securities exchange agreement previously entered into on July 31, 2024.

Metagramm specializes in developing advanced writing assistance tools that leverage artificial intelligence, machine learning and natural language processing technologies. Metagramm’s main product, “Bubbl” is a writing tool designed to provide personalized and customized text tailored to the user’s unique expression and can translate various languages into English. Metagramm licenses its products on a subscription basis to businesses and individual customers.

### 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, par value $0.0001 per share (the “Common Stock”). 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, 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 Quarterly Report, are presented after giving effect to the Reverse Stock Split.

### Cortex Adverse Effect

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.

### 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.

Our principal executive offices are located at: 3 Hanehoshet St, Building B, 7th floor, Tel Aviv, Israel and our telephone number is +972-9-774-1505. Our website address is *www.view-bix.com*. 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 March 31, 2025 as Compared to the Three Months Ended March 31, 2024

Our revenues were $2,733 thousand for the three months ended March 31, 2025, compared to $10,002 thousand during the same period in the prior year.

Our revenues from the Content Platform were $2,204 thousand for the three months ended March 31, 2025, a decrease of $5,326 as compared to $7,530 thousand during the same period in the prior year. The decrease during the three months ended March 31, 2025, is due to the Cortex Adverse Effect.

Our revenues from Gix Media’s Search Platform for the for the three months ended March 31, 2025, totaled $529 thousand, representing a decrease of $1,943 thousand compared to $2,472 thousand during the same period in the prior year.

Our revenue from Gix Media’s Search Platform’s direct model was $529 thousand for the three months ended March 31, 2025, as compared to $1,095 thousand during the same period in the prior year. During the three months ended March 31, 2025, the number of search referrals to the Gix Major Customer conducted by users from the direct model was 6.3 million, compared to 24.7 million during the three months ended March 31, 2024. 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.

We have no revenue from Gix Media’s Search Platform’s indirect model for the three months ended March 31, 2025, compared to $1,377 thousand for the same period in the prior year. The decrease during the three months ended March 31, 2025 is due to the decrease in user search referrals through the indirect model, which is primarily due to a decrease in the credit received from third-party strategic partners. 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.

Our traffic-acquisition and related costs were $2,323 thousand for the three months ended March 31, 2025, a decrease of $5,892 compared to $8,215 thousand during the same period in the prior year. The decrease in the three months ended March 31, 2025, is due to the decrease in revenues from both the Content and Search Platforms during the three months ended March 31, 2025, as mentioned above.

Our research and development expenses were $147 thousand for the three months ended March 31, 2025, as compared to $730 thousand during the same period in the prior year. The decrease in the three months ended March 31, 2025, is due to the expense reduction in both the Content and Search Platforms during the three months ended March 31, 2025, as compared to the same period in the prior year.

Our selling and marketing expenses decreased to $216 thousand for the three months ended March 31, 2025, as compared to $658 thousand during the same period in the prior year. The decrease in the three months ended March 31, 2025, is due to the expense reduction primarily in salaries in the Content Platforms during the three months ended March 31, 2025, as compared to the same period in the prior year.

Our general and administrative expenses were $253 thousand for the three months ended March 31, 2025, as compared to $656 thousand during the same period in the prior year. The decrease in the three months ended March 31, 2025, is primarily due to reductions in salaries, rent, and headquarters-related expenses in the three months ended March 31, 2025, as compared to the same period in the prior year.

Our depreciation and amortization expenses for the three months ended March 31, 2025, were $719 thousand as compared to $734 thousand during the same period in the prior year.

Our other expenses for the three months ended March 31, 2025, were $44 compared to $20 during the three months ended March 31, 2024. The increase in our other expenses during the three months ended March 31, 2025, is mainly due to professional expenses incurred in connection with the Company’s planned Uplist.

Our net financial expenses were $2,903 thousand for the three months ended March 31, 2025, compared to $163 thousand net financial expenses during the same period in the prior year. The increase during the three months ended March 31, 2025, is due to financing expenses arising from net changes in the fair value of embedded derivatives associated with the Company’s credit facilities.

Our income tax benefit was $28 thousand for the three months ended March 31, 2025, as compared to a $1 thousand tax expenses during the same period in the prior year.

#### Liquidity and Capital Resources

As of March 31, 2025, we had current assets of $6,514 thousand, consisting of $181 thousand in cash and cash equivalents, $59 thousand restricted deposits, $1,037 thousand in accounts receivable, $1,224 thousand in other current assets and $4,013 thousand in a loan to our Parent Company.

As of March 31, 2025, we had non-current assets of $19,898 thousand, consisting of $48 thousand in deferred taxes, $129 thousand in property and equipment net, $10,017 thousand in intangible assets net and $9,704 thousand in goodwill, of which $5,125 thousand arose from the Metagramm Acquisition.

As of March 31, 2025, we had $15,356 thousand in current liabilities consisting of $4,957 thousand in accounts payable, $1,027 thousand in other payables and $5,830 thousand in short term loans and current maturities of long-term loans, $2,752 thousand in embedded derivatives and $790 thousand in short-term convertible loans.

As of March 31, 2025, we had $2,231 thousand in non-current liabilities consisting of $1,221 thousand in deferred taxes and $1,010 thousand in earn-out liability which arose from the Metagramm Acquisition.

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.

As of December 31, 2024, we had non-current assets of $14,214 thousand consisting of $56 thousand in deferred taxes, $27 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 $1,530 thousand in non-current liabilities consisting of $496 thousand long-term loans and $1,034 thousand in deferred taxes.

We had a negative working capital of $8,842 thousand as compared to a negative working capital of $5,177 thousand as of March 31, 2025, and December 31, 2024, respectively.

During the three months ended March 31, 2025, we had a negative cash flow from operating activities of $409 thousand as compared to a positive cash flow from operations of $107 thousand during the same period in the prior year. The decrease in the three months ended March 31, 2025 is mainly due to an increase in the Company’s operating loss.

During the three months ended March 31, 2025, we had a positive cash flow from investment activities of $12 thousand which arose from the Metagramm Acquisition, as compared to $0 thousand during the same period in the prior year.

During the three months ended March 31, 2025, we had $45 thousand negative cash flow from financing activities as compared to $660 thousand negative cash flow from financing activities during the same period in the prior year. The decrease in the three months ended March 31, 2025, was primarily due to lower net repayments of bank loans which totaled $51 thousand as compared to $643 thousand in the same period in the prior year.

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, including: (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.

As of March 31, 2025, the Company has also provided several liens under Financing Agreement with Leumi in connection with the Cortex Acquisition, 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 on behalf of the Company to Leumi; (3) a first ranking 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 financial covenants over the life of the loans, including positive EBITDA. As of March 31, 2025, Gix Media is in compliance with the financial covenants in connection with the Financing Agreement.

#### Going Concern

The Company experienced a decrease in its revenues from the Content and Search Platforms, 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, as a result of 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.

The decline in revenues and other circumstances described above raise substantial doubts about the Company’s 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 entered into the facility agreements and a private placement, through which it has raised capital. Additionally, the Company plans to effect the Uplist and submitted an application to the Nasdaq, after which, if the Uplist is successful, in accordance with the terms of the aforesaid private placement and facility agreements, the Company is expected to receive additional funds. Furthermore, the Company’s subsidiaries entered into an addendum to the loan agreement with Bank Leumi pursuant to which loans repayments were deferred while short term credit lines with Bank Leumi continued to be utilized. However, there is significant uncertainty as to whether the Company will further succeed to implement its plans or be able to secure additional funds when needed

## Controls and procedures

As filed, 1,155 characters.

A. *Evaluation of Disclosure Controls and Procedures*

As of March 31, 2025, the Company’s chief executive officer 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 chief executive officer 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 March 31, 2025.

B. *Changes in Internal Control over Financial Reporting*

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 March 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 9,369 characters.

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

### We may not realize the anticipated benefits of the acquisition of Metagramm

In March 2025, we acquired Metagramm, a Company that specializes in developing advanced writing assistance tools and licenses its products on a subscription basis. Metagramm’s products and revenue model differs from those of our current platforms. We may not be able to assimilate or integrate the acquired personnel, operations, products, services, and technologies of Metagramm successfully or effectively manage the business of Metagramm and our management may be distracted from operating our business. We also may not achieve the anticipated benefits from the acquisition of Metagramm due to a number of factors, including, without limitation, unanticipated costs or liabilities associated with the acquisition and difficulty of incorporating Metagramm’s technology into our platforms. If the acquisition of Metagramm fails to meet our expectations, our operating results, business, and financial condition may suffer.

### Our common stock may never be listed on a recognized national exchange

Our common stock trades on the OTCQB Pink Sheets. You should not assume that any effort to uplist the trading of our common stock to a recognized national exchange would be successful, or if successful, that compliance with the listing requirements of such recognized national exchange will be maintained, including but not limited to requirements associated with maintenance of a minimum net worth, minimum stock price, minimum number of shareholders, and ability to establish a sufficient number of market makers. A failure or inability to uplist the trading of our common stock to a recognized national exchange, or any failure to maintain compliance with the listing requirements of such recognized national exchange, may materially adversely affect our Company and the trading price of our common stock.

In addition, failure to uplist to a recognize national exchange may adversely impact our ability to finance our operations through investments, which may in turn may impact our ability to pay our obligations, including under our financing agreements, loan agreements and credit facilities, when they become due.

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

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

Our common stock currently trades on the OTCQB Pink Sheets. Many funds and other potential investors are unable or unwilling to purchase stocks on the OTCQB Pink Sheets, being required or simply preferring to purchase stocks that have been approved for listing on a recognized national exchange, such as the Nasdaq or the NYSE. Recognizing this situation, on September 13, 2024, we submitted an application to uplist to the Nasdaq. The timing of the Nasdaq uplisting process will depend on a variety of factors, including, but not limited to, overall market conditions. No assurance can be given that our application will be approved or that a trading market will develop. Unless and until we successfully uplist, potential investor interest in our common stock may be muted, which may adversely affect our company and the trading price of our common stock. The foregoing risks may have a material adverse effect on our Company and the trading price of our common stock.

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

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

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

The Petition filed against Gix Media for the court to issue an order to commence insolvency proceedings, may harm the ability of Gix Media to carry out its business as usual, meet its obligations or pay its debt as they come due. Furthermore, due to the filing of the Petition, Leumi may demand immediate repayment of the loans outstanding under the Financing Agreement. We are currently unable to predict the outcome of the legal proceedings. In the event that the Petition is granted in part or in full, or an order is issued, our business, financial condition, or results of operations may be adversely affected.

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

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

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

If borrowing under our existing credit facilities is reduced, or otherwise becomes unavailable, or we are unable to arrange substitute financing facilities or other sources of capital, our ability to fund our operations would be impaired, which would have a material adverse effect on our results of 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 Quarterly Report), when they become due is contingent upon obtaining additional financing. Furthermore, due to the filing of the Petition, Leumi may demand immediate repayment of the loans outstanding under the Financing Agreement.

During August 2024, we renegotiated the terms of the Financing Agreement and entered into the Fifth and Sixth Addendum to the Financing Agreement. The availability of the credit facilities to Gix Media is subject to us depositing the Investment Amount by the Deposit Date with Gix Media. If the Company, Cortex and Gix Media cannot maintain compliance with the terms and covenant of the Financing Agreement, or if we are unable to obtain sufficient amounts of additional capital, we may be required to reduce the scope of our planned operations, and/or consider reductions in personnel costs or other operating costs, in addition to the measures currently contemplated pursuant to the Financing Agreement.

Filed May 14, 2025.
Source: SEC EDGAR, the filing index for accession 0001641172-25-010059. Last ingested by Listed: Oct 24, 2026, 14:57 ET. No prices; not investment advice.