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,
2021 and 2020, and the related statements of comprehensive loss, statement of
changes in stockholders' equity (deficit) 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").
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 short-term and long-term implications caused by our recent cost reduction
efforts, including, but not limited to, our growing inability to secure and
maintain customers on the basis of insufficient capital resources;
? sustained turnover of key management;
? our history of recurring losses and negative cash flows from operating
activities, significant future commitments and the uncertainty regarding the
adequacy of our liquidity to pursue our complete business objectives, 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 stockholders' ownership interests;
? the impact of the COVID-19 pandemic on our business plan and the global
economy;
? our ability to adequately protect our intellectual property; and
? entry of new competitors and products and potential technological obsolescence
of our products.
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 on Form 10-Q, and those contained in section captioned "Risk Factors" of
our Annual Report on Form 10-K for the fiscal year ended December 31, 2020,
filed with the Securities and Exchange Commission (the "SEC") on March 16, 2021
(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. (f/k/a Virtual Crypto Technologies, Inc., f/k/a Emerald Medical
Applications Corp.) (the "Registrant" or the "Company") is an interactive video
technology and data platform that provides its clients with deep insights into
their video marketing performance as well as the effectiveness of its messaging.
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Recent Developments
Share Exchange Agreement
On February 7, 2019, the Company entered into a share exchange agreement (the
"Share Exchange Agreement") with Gix Internet Ltd. (f/k/a Algomizer Ltd.)
(TASE:GIX), a company organized under the laws of the State of Israel ("Gix"),
pursuant to which on July 25, 2019 (the "Closing Date"), Gix assigned,
transferred and delivered its 99.83% holdings in Viewbix Ltd. ("Viewbix Israel")
to the Company in exchange for shares of restricted common stock, par value
$0.0001 per share of the Company (the "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 an additional 1,642,193 shares of restricted Common Stock representing 5% of
the Fully Diluted Share Capital immediately following the Closing Date.
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 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, 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
Results of Operations During the Three Months Ended June 30, 2021 as Compared to
the Three Months Ended June 30, 2020
Our revenues were $17 thousand for the three months ended June 30, 2021,
compared to $33 thousand during the same period in the prior year. The reason
for the decrease in the three months ended June 30, 2021 is due to the fact that
beginning on January 1, 2020, the Company announced and began implementing
certain cost reduction measures.
Our research and development expenses were $12 thousand for the three months
ended June 30, 2021, as compared to $0 thousand during the same period in the
prior year. The reason for the increase in the three months ended June 30, 2021
is due to the fact that the Company hired a new research and development team
during the second half of 2020.
Our general and administrative expenses decreased to $79 thousand for the three
months ended June 30, 2021 as compared to $94 thousand during the same period in
the prior year. The reason for the decrease in the three months ended June 30,
2021 is that beginning on January 1, 2020, the Company announced and began
implementing certain cost reduction measures.
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Our net financial expenses was $4 thousand for the three months ended June 30,
2021, compared to net financial expenses of $32 thousand during the same period
in the prior year. The reason for the decrease in the three months ended June
30, 2021 is due to the US dollar exchange rate decrease during the three months
ended June 30, 2021 as compared the same period in the prior year.
Our tax on income was $1 thousand for the three months ended June 30, 2021,
slightly increase as compared to $0 thousand during the same period in the prior
year.
Results of Operations During the Six Months Ended June 30, 2021 as Compared to
the Six Months Ended June 30, 2020
Our revenues were $25 thousand for the six months ended June 30, 2021, compared
to $70 thousand during the same period in the prior year. The reason for the
decrease in the six months ended June 30, 2021 is due to the fact that beginning
on January 1, 2020, the Company announced and began implementing certain cost
reduction measures.
Our cost of revenues were $0 thousand for the six months ended June 30, 2021,
which is a slight decrease compared to $4 thousand during the same period in the
prior year.
Our research and development expenses were $28 thousand for the six months ended
June 30, 2021, as compared to $59 thousand during the same period in the prior
year. The reason for the decrease in the six months ended June 30, 2021 is due
to the fact that beginning on January 1, 2020, the Company announced and began
implementing certain cost reduction measures.
Our selling and marketing expenses were $2 thousand for the six months ended
June 30, 2021, which is a slight decrease as compared to $7 thousand during the
same period in the prior year.
Our general and administrative expenses increased to $142 thousand for the six
months ended June 30, 2021 as compared to $269 thousand during the same period
in the prior year. The reason for the decrease in the six months ended June 30,
2021 is due to the fact that beginning on January 1, 2020, the Company announced
and began implementing certain cost reduction measures.
Our net financial expenses was $11 thousand for the six months ended June 30,
2021, compared to net financial expenses of $4 thousand during the same period
in the prior year. The reason for the financial increase in the six months ended
June 30, 2021 is due to the US dollar exchange rate increase during the six
months ended June 30, 2021 as compared the same period in the prior year.
Our tax on income was $1 thousand for the six months ended June 30, 2021,
slightly decreased as compared to $2 thousand during the same period in the
prior year.
Liquidity and Capital Resources
As of June 30, 2021, we had current assets of $192 thousand consisting of $126
thousand in cash and cash equivalents, $35 thousand in trade receivables, $15
thousand in other accounts receivables and, $16 thousand in prepaid expenses.
As of June 30, 2021, we had $2,429 thousand in current liabilities consisting of
$199 in other accounts payable and accrued liabilities, $59 Short term loan, and
$2,171 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, $20 thousand in other receivables,
$15 thousand in trade 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, $22 trade payable, $2,054 payable to our parent
company and $50 in Short term loan.
We had a negative working capital of $2,237 thousand and $2,078 thousand as of
June 30, 2021 and December 31, 2020, respectively.
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During the three months ended June 30, 2021, we had negative cash flow from
operations of $8 thousand, which was mainly the result of a net loss of $79
thousand, offset by increase in working capital of $71.
During the six months ended June 30, 2021, we had negative cash flow from
operations of $22 thousand, , which was mainly the result of a net loss of $159
thousand, offset by increase in working capital of $137.
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.
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 and collaborations. The Company does not have any committed external
source of funds. 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 stockholders will be diluted, and the terms of these securities
may include liquidation or other preferences that adversely affect the rights of
our common stockholders. 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 $159 in net losses for the six months ended June 30,
2021, has $2,237 stockholders' deficit as of June 30, 2021 and $2,078 in total
stockholders' deficit as of 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.
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VIEWBIX INC. 
