Overview

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

Organizational Background

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

Emerald Medical Applications Ltd.

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

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

Virtual Crypto Technologies Ltd.

On January 17, 2018, the Company formed VCT Israel to develop and market software and hardware products facilitating, allowing and supporting purchase and/or sale of cryptocurrencies through ATMs, tablets, personal computers ("PCs") and/or mobile devices. On January 27, 2020, VCT Israel was sold to a third party for NIS 50,000 ($14,459).

Transaction with Gix (the "Recapitalization Transaction")

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



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

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

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

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

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

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

Results of Operations during the year ended December 31, 2021 as compared to the year ended December 31, 2020

Revenues for the year ended December 31, 2021 was $41 thousand as compared to $96 thousand for the year end December 31, 2020. The reason for the decrease during the fiscal year ended December 31, 2021 is due to the Company's cost-reduction measures implemented beginning on January 1, 2021.

Cost of revenues for the year ended December 31, 2021 was $0 which is a slight decrease to $5 thousand for the year end December 31, 2020.

Research and development costs for the year ended December 31, 2021 was $64 thousand as compared to $108 thousand for the year end December 31, 2020. The reason for the decrease during the fiscal year ended December 31, 2021 is due to the Company's cost-reduction measures implemented beginning on January 1, 2020, though despite these measures, the Company hired the services of an R&D team during the fiscal year ended December 31, 2021.

Sales and marketing expenses for the year ended December 31, 2021 was $2 thousand as compared to $8 thousand for the year end December 31, 2020. The reason for the decrease during the year ended December 31, 2021 is due to the Company's cost-reduction measures implemented beginning on January 1, 2020.



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General and Administration expenses for the year ended December 31, 2021 was $304 thousand as compared to $437 thousand for the year end December 31, 2020. The reason for the decrease in 2021 is due to certain cost reduction measures initiated by the Company as of the beginning of January 2020.

Our net financial expense was $30 thousand for the year ended December 31, 2021, compared to net financial income of $13 thousand for the year end December 31, 2020. The reason for the increase in financial expenses in 2021 is due to the loan agreement with Pure Capital and other lenders entered into on December 18, 2020, which interest expenses were recognized in the year ended December 31, 2021.

Our taxes on income was $2 thousand for the year ended December 31, 2021 and for the year ended December 31, 2020.

Liquidity and Capital Resources

As of December 31, 2021, we had current assets of $156 thousand consisting of $74 thousand in cash and cash equivalents, $8 thousand in trade receivables, $30 thousand in other accounts receivables and, $44 thousand in prepaid expenses.

As of December 31, 2021, we had $2,436 thousand in current liabilities consisting of $9 in trade payables, $242 in other accounts payable and accrued liabilities, $69 Short term loan, and $2,116 payable to our Parent Company.

As of December 31, 2020, we had current assets of $225 thousand consisting of $148 thousand in cash and cash equivalents and restricted cash, $15 thousand in trade receivables, $20 thousand in other receivables and $42 thousand in prepaid expenses. We had $2,303 thousand in current liabilities, which consisted of $177 in accounts payable and accrued liabilities and $22 trade payable, $50 Short term loan, and $2,054 payable to our Parent Company.

We had a negative working capital of $2,280 thousand and $2,078 thousand as of December 31, 2021 and December 31, 2020, respectively.

Our total liabilities as of December 31, 2021 were $2,436 thousand compared to $2,303 thousand as of December 31, 2020.

During the fiscal year ended December 31, 2021, we had negative cash flow from operations of $74 thousand which was mainly the result of a net loss of $386 thousand, offset by decrease in working capital of $312 thousand.

During the fiscal year ended December 31, 2020, we had negative cash flow from operations of $53 thousand which was mainly the result of a net loss of $443 thousand, depreciation expense of $5 thousand, offset by gains from the sale of a subsidiary and decrease in working capital of $385 thousand.

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

During the fiscal year ended December 31, 2021, we had no cash flow from financing activities as compared to a positive cash flow from financing activities of $99 thousand during the fiscal year ended December 31, 2020, which related to the Loan Agreement and issuance of shares we have made during the fiscal year ended December 31, 2020. In January 2022, the repayment date under the Loan Agreement was extended per the Investors' request. The Investors also expressed their intention to convert the remaining sum of the Principal Amount to shares of our Common Stock, however, if we are required to repay the Principal Amount in cash, we will be able to receive cash flow for the repayment from our Parent Company. The Gix Loan along with any accrued interest is due on December 31, 2022, unless extended upon mutual consent of the Company and Gix Internet.

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



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

Going Concern

The Company has incurred $386 thousand in net losses for the year ended December 31, 2021, has $2,280 thousand shareholders' deficit as of December 31, 2021 and $2,078 thousand in total shareholders' deficit as of December 31, 2020 and $74 thousand negative cash flows from operations for the year ended December 31, 2021, and $53 thousand negative cash flows from operations for the year ended December 31, 2020. Management expects the Company to continue to generate substantial operating losses and to continue to fund its operations primarily through utilization of its current financial resources and through additional raises of capital.

Such conditions raise substantial doubts about the Company's ability to continue as a going concern. Management's plan includes raising funds from outside potential investors. However, there is no assurance such funding will be available to the Company or that it will be obtained on terms favorable to the Company or will provide the Company with sufficient funds to meet its objectives. These financial statements do not include any adjustments relating to the recoverability and classification of assets, carrying amounts or the amount and classification of liabilities that may be required should the Company be unable to continue as a going concern.

Availability of Additional Capital

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

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



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

Contractual Obligations and Commitments

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

Critical Accounting Policies

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

Our significant accounting policies are described in more detail in the notes to our audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.

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