QUANTUM X LABS INC.
For the period ended Dec 31, 2024. Filed Mar 21, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 21, 2025
QXL$3.69+4.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-25.
0001493152-24-011132
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND PLAN OF OPERATIONCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-21.
0001493152-25-011100
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND PLAN OF OPERATIONThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 65 previous paragraphs and 64 current paragraphs.
32 unchanged; 19 reworded; 13 added; 14 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
Revenues for the year ended December 31, 2024, were $26,941 thousand as compared to $79,613 thousand for the year end December 31, 2023.
Current report
Our revenues from Cortex’s Content Platform were $21,972 thousand for the year ended December 31, 2024, a decrease of $37,172 as compared to $59,144 thousand during the year end December 31, 2023. The reason for the decrease during the year ended December 31, 2024. The reason for the decrease during the year ended December 31, 2024, is due to the Cortex Adverse Effect. The Company expects that the Content Platform will focus its operations on and revenue growth from the RSOC model.
Current report
Our revenues from Gix Media’s Search Platform for the year ended December 31, 2024, totaled $4,969 thousand, representing a decrease of $15,500 thousand compared to $20,469 thousand for the year ended December 31, 2023.
Current report
Our revenue from Gix Media’s Search Platform’s direct model was $3,200 thousand for the year ended December 31, 2024, compared to $4,094 thousand for the year ended December 31, 2023. During the year ended December 31, 2024, the number of search referrals to the Gix Major Customer conducted by users from the direct model was 55.1 million, compared to 93.5 million for the year ended December 31, 2023. The decrease in user search referrals is primarily due to changes and updates in internet browsers’ technology, which have reduced the scale of distribution of the Company’s products through the direct model. The Company anticipates that its revenues from add-ons to internet browsers will continue to decrease due to changes and updates in internet browsers’ technology while its revenues from the Search to Search model will increase.
Current report
Our revenue from Gix Media’s Search Platform’s indirect model was $1,847 thousand for the year ended December 31, 2024, compared to $16,375 thousand for the year ended December 31, 2023. During the year ended December 31, 2024, the number of search referrals to the Gix Major Customer conducted by users from the indirect model was 42.1 million, as compared to 243.0 million for the year ended December 31, 2023. The decrease in user search referrals through the indirect model is primarily due to: (i) a decrease in the number of searches received from Gix Media’s third-party strategic partners through the indirect model mainly as a result of decrease in the credit received from third-party strategic partners and (ii) global changes in a main Search Engine which led to reductions in search base advertising budgets of Gix Media’s customers. In order to increase the revenues from the Search Platform’s indirect model, the Company is planning to renew the credit received from third-party strategic partners.
Current report
Research and development expenses for the year ended December 31, 2024, were $1,879 thousand as compared to $2,893 thousand for the year ended December 31, 2023. The reason for the decrease in the year ended December 31, 2024 is due to the expense reduction in both the Content and Search Platforms during the year ended December 31, 2024.
Current report
General and administration expenses for the year ended December 31, 2024, were $2,268 thousand as compared to $2,877 thousand for the year ended December 31, 2023. The reason for the decrease in the year ended December 31, 2024, is due to the expense reduction primarily in salaries, rental and headquarters expenses in the year ended December 31, 2024, as compared to the year ended December 31, 2023.
Current report
Our other expenses were $34 thousand for the year ended December 31, 2024, compared to $0 during the year ended December 31, 2023. In the year ended December 31, 2024, the Company’s recorded other expenses mainly due to professional expenses incurred in connection with the Company’s planned Uplist which was offset by other income mainly due to Gix Media and Cortex receiving governmental grants from the Israel Tax Authority in relation to the “Iron Swords” war.
Current report
During the fiscal year ended December 31, 2024, we had positive cash flow from operations of $1,543 thousand as compared to positive cash flow from operations of $934 thousand during the year ended December 31, 2023. The reason for the increase in the year ended December 31, 2024 is due to: (i) an increase in changes in assets and liabilities items in an amount of $1,546 thousand during the year ended December 31, 2024 as compared to the year ended December 31, 2023 due to improvement in customer collection days, mainly in the Content Platform; (ii) an increase in the net loss for the year ended December 31, 2024 in an amount of $5,419 thousand as compared to the year ended December 31, 2023 due to the decrease in the company’s revenues; and (iii) an increase in adjustments to reconcile net income to net cash provided by operating activities in an amount of $4,482 thousand during the year ended December, 31 2024 as compared to the year ended December 31 2023 mainly due to increase in goodwill impairment in amount of $2,568 thousand as compare to the year ended December 31, 2023 and due to a loss from loan modifications in the amount of $1,914 thousand during the year ended December 31, 2024.
Current report
During the fiscal year ended December 31, 2024, we had $2,783 thousand negative cash flow from financing activities as compared to $3,376 thousand negative cash flow from financing activities during the year ended December 31, 2023. The reason for the decrease in the year ended December 31, 2024 is due to: (i) repayment of long-term bank loans in the amount of $510 thousand during the year ended December 31, 2024 as compared to $1,811 thousand during the year ended December 31, 2023, due to the fact that in the year ended December 31, 2024 certain payments in connection with the Financing Agreement were deferred; (ii) a decrease due to the fact that in the year ended December 31, 2023 an amount of $2,625 thousand was paid by Gix Media to non-controlling interests in connection with the purchase of 10% of Cortex’s share capital; (iii) negative changes net in the Company’s short-term bank loans in amount of $3,032 thousand during the year ended December 31, 2024 as compared to $0 thousand during the year ended December 31, 2023 and (iv) an increase of $630 thousand due to the receipt of short-term convertible loans under the Company’s existing credit facilities and the issuance of shares and warrants in connection with the Private Placement in amount of $198 thousand during the year ended December 31, 2024.
Current report
During the period ended December 31 2024, we experienced a decrease in revenues from digital content due to Cortex Adverse Effect, in addition decrease in revenues from search segment due lower user traffic acquired from third party advertising platforms, an industry-wide reduction in advertising budgets, changes and updates to internet browsers, which adversely impacted our ability to acquire traffic in the search segment, and a decrease in revenues from routing of traffic acquired from third-party strategic partners in the search segment, due to lack of availability of supplier credit from such partners.
Current report
As a result of such decreases, for the year ended December 31, 2024, we recorded an operating loss of $11,555 compared to $7,442 during the year ended December 31, 2023, and a net loss of $14,106 compared to $8,687 during the year ended December 31, 2023. As of 31 December, 2024, we had cash and cash equivalents $624, bank loans of $5,528 and an accumulated deficit of $22,714. Such a decline in revenues raise a substantial doubt about our ability to continue as a going concern during the 12-month period following the issuance date of our consolidated financial statements for the year ended December 31, 2024.
Current report
Our management’s plans to address these conditions include reducing salaries and operating expenses, cutting professional services, creating new revenues sources and forming new partnerships. During the period from June to August 2024, we raised $887 through a private placement and facility agreements. In addition, we also plan to uplist our common stock to a national securities exchange, which, in accordance with these agreements, it expected to provide additional funding. Furthermore, our subsidiaries entered into an addendum to a loan agreement with Bank Leumi, deferring loan repayments and securing short-term credit lines. However, there is significant uncertainty whether we will be successful in accomplishing our plans or we will be able to obtain sufficient funds when needed.
Removed paragraphs (14)
Previous report
Reincorporation in Nevada
Previous report
On September 27, 2023, our stockholders approved to grant to the Board of Directors the power to effect the Reincorporation of the Company from the State of Delaware to the State of Nevada by way of a parent-subsidiary merger. Upon the consummation of the Reincorporation, the Company will cease its legal existence as a Delaware corporation, and the Surviving Corporation will continue the Company’s business as the surviving corporation under the name “Viewbix Inc.” succeeding to all of the Company’s rights, assets, liabilities and obligations, except that its affairs will cease to be governed by the Delaware General Corporation Law and will be subject to the Nevada Revised Statutes. As of the date of this Annual Report, the Board of Directors has not effected the Reincorporation.
Previous report
Revenues for the year ended December 31, 2023, were $ 79,613 thousand as compared to $96,603 thousand for the year end December 31, 2022.
Previous report
Our revenues from Cortex’s Content Platform were $59,144 thousand for the year ended December 31, 2023, a decrease of $14,713 as compared to $73,857 thousand during the year end December 31, 2022. The reason for the decrease during the year ended December 31, 2023, is due to a decrease of user traffic acquisition from the Third-Party Platforms, primarily resulting from technological changes and content policy changes on such Third-Party Platforms, causing a lower amount of users to reach the Cortex Websites and thus decreasing the exposures to the ads displayed on the Cortex Websites. In response to the technological and policy changes, Cortex updated and adjusted its platform to adapt to these changes, partially restoring the amount of user traffic acquisition, which mitigated the scope of the decrease.
Previous report
Our revenues from Gix Media’s Search Platform were $20,469 thousand for the year ended December 31, 2023, a decrease of $2,277 thousand as compared to $22,746 thousand during the year end December 31, 2022. The reasons for the decrease during the year ended December 31, 2023, are due to the decrease in the amount of search referrals conducted by users, provided by Gix Media to search engines, caused primarily by a decrease in the number of searches received from Gix Media’s third-party strategic partners, including a significant strategic partner of Gix Media. In response to this decrease, Gix Media expanded its user traffic resources during the year ended December 31, 2023, by engaging with new strategic partners, which in turn mitigated the scope of the decrease.
Previous report
Research and development costs for the year ended December 31, 2023, were $2,893 thousand as compared to $3,255 thousand for the year ended December 31, 2022. The reason for the decrease in the year ended December 31, 2023, is the reduction of expenses in the Search Platform, primarily in salaries and technological services.
Previous report
General and administration expenses for the year ended December 31, 2023, were $2,877 thousand as compared to $2,157 thousand for the year ended December 31, 2022. The reason for the increase in the year ended December 31, 2023, is due to the increase in salary and related costs following the Reorganization Transaction with Gix Media on September 19, 2022, which led to the expansion of the Company’s management team, which included, among other things, the appointment of a chairman of the board in June 2022 and a full-time chief financial officer in July 2022. In addition, during year ended December 31, 2023, there was an increase in professional services and consultant costs following the Reorganization Transaction, as compared to the year ended December 31, 2022.
Previous report
Our business acquisition and related costs were $0 for the year ended December 31, 2023, compared to $166 thousand during the year ended December 31, 2022. In the year ended December 31, 2022, the Company’s recorded business acquisition and related costs were in connection with the Reorganization Transaction.
Previous report
During the fiscal year ended December 31, 2023, we had positive cash flow from operations of $934 thousand which was mainly the result of a $8,687 thousand in net loss, $7,973 thousand from positive adjustments to operating activities, and $1,648 positive changes in assets and liabilities items.
Previous report
During the fiscal year ended December 31, 2022, we had positive cash flow from operations of $3,237 thousand which was mainly the result of a $1,117 thousand in net income, $3,233 thousand from positive adjustments to operating activities, offset by $1,113 negative changes in assets and liabilities items.
Previous report
During the fiscal year ended December 31, 2023, we had $3,376 thousand negative cash flow from financing activities which was the result of repayment of long-term and short term loans in amount of $3,080 thousand, cash paid to non-controlling interests in connection to the purchase of the additional 10% of Cortex’s shares in amount of $2,625 thousand, payment of dividend by Cortex to non-controlling interests in amount of $598 thousand, payment of dividend by Gix Media to its shareholders in amount of $130 thousand, an increase in the loan to our parent company in amount of $123 thousand offset by receipt of long-term loans in amount of $1,980 thousand and receipt of short term bank loans in amount of $1,200 thousands.
Previous report
During the fiscal year ended December 31, 2022, we had $4,224 thousand negative cash flow from financing activities which was the result of repayment of long-term bank loan in amount of $1,389 thousand, payment of dividend by Cortex to non-controlling interests in amount of $1,689 thousand, payment of dividend by Gix Media to its shareholders in an amount of $73 thousand and increase in loan to parent company in amount of $1,073 thousand.
Previous report
We experienced a decrease in user traffic acquired from third party advertising platforms, and consequently in revenues, for the 6-month period ended December 31, 2023. As a result of such decreases, for the year ended December 31, 2023, we generated positive cash flows from operations of $934 compared to positive cash flows from operations of $3,237 generated during the year ended December 31, 2022, and had cash and cash equivalents and a working capital deficit, as of December 31, 2023, of $1,774 and $1,968, respectively. In addition, as of December 31, 2023, we had short-term loans and long-term bank loans amounting to $9,070, in which the Company did not meet its financial debt covenants for the year ended December 31, 2023 (see Note 10 to our consolidated financial statements). While our management expects to continue to generate positive cash flows from our operations, such a decline may reasonably result in our inability to repay our debt obligations during the 12-month period following the issuance date of our consolidated financial statements for the year ended December 31, 2023.
Previous report
Our management’s plans include reducing operating expenses, creating new revenues sources, negotiating with the bank regarding the loans terms in an effort to provide additional liquidity and ensure continued compliance with our obligations, and raising funds in debt or equity capital from various potential investors. However, there is significant uncertainty whether we will be successful in accomplishing our plans or we will be able to obtain sufficient funds when needed.
Reworded paragraphs (19)
Previous wording
Traffic acquisition and related costs for the year ended December 31, 2023, were $70,451 thousand a decrease of $12,560 thousand as compared to $83,011 thousand for the year ended December 31, 2022. The reason for the decrease during the year ended December 31, 2023, is due to a decrease of user traffic acquisition from the Third-Party Platforms, primarily resulting from technological changes and content policy changes on such Third-Party Platforms.
Current wording
Traffic acquisition and related costs for the year ended December 31, 2024, were $21,987 thousand, a decrease of $48,464 thousand as compared to $70,451 thousand for the year ended December 31, 2023. The reason for the decrease in the year ended December 31, 2024, is due to the decrease in revenues from both the Content and Search Platforms as compared to the year ended December 31, 2024, as mentioned above.
Previous wording
Sales and marketing expenses for the year ended December 31, 2023, were $2,805 thousand as compared to $2,479 thousand for the year ended December 31, 2022. The increase of selling and marketing expenses during the year ended December 31, 2023, is due to expenses incurred in connection with the increase in the content displayed on the Cortex Websites and an increase primarily in salaries in the Content Platform.
Current wording
Sales and marketing expenses for the year ended December 31, 2024, were $1,641 thousand as compared to $2,805 thousand for the year ended December 31, 2023. The reason for the decrease in the year ended December 31, 2024, is due to the expense reduction primarily in salaries in the Content Platforms, as compared to the year ended December 31, 2023.
Previous wording
Our depreciation and amortization expenses for the year ended December 31, 2023, were $2,952 thousand, a slight increase as compared to $2,809 thousand during the same period in the prior year.
Current wording
Our depreciation and amortization expenses for the year ended December 31, 2024, were $3,012 thousand, a slight increase as compared to $2,952 thousand during the same period in the prior year.
Previous wording
A goodwill impairment loss of $5,107 thousand was recorded during the year ended December 31, 2023, compared to $0 during the year ended December 31, 2022. The total amount of goodwill impairment loss recognized by the Company, in the year ended December 31, 2023, was related to the Content Platform (see Note 6 to our consolidated financial statements).
Current wording
A goodwill impairment loss of $7,675 thousand was recorded during the year ended December 31, 2024, compared to $5,107 during the year ended December 31, 2023. The total amount of goodwill impairment loss recognized by the Company, in the year ended December 31, 2024, was related to the Content Platform (see note 6 to our consolidated financial statements).
Previous wording
Our net financial expense was $1,281 thousand for the year ended December 31, 2023, as compared to net financial expense of $1,456 thousand for the year ended December 31, 2022. The reason for the decrease during year ended December 31, 2023, is mainly due to the decrease in financial expenses relating to the USD to NIS exchange rate, as compared to the year ended December 31, 2022, which was partially offset by the increase in interest expenses related to the Company’s bank loans due to increases in the market’s interest rates during the year ended December 31, 2023.
Current wording
Our net financial expense was $2,764 thousand for the year ended December 31, 2024, as compared to net financial expense of $1,281 thousand for the year ended December 31, 2023. The reason for the increase during the year ended December 31, 2024, is mainly due to financing expenses recorded due to accounting treatment of financial instruments, created and recorded as part of the June 2024 Credit Facility
Previous wording
Our income tax benefit was $66 thousand for the year ended December 31, 2023, as compared to $153 thousand income tax expenses for the year ended December 31, 2022. The decrease in income tax expenses was mainly due to a decrease in income before income taxes of Cortex and due to an increase in tax benefit in respect of prior years of Gix Media for the year ended December 31, 2023, as compared to the year ended December 31, 2022.
Current wording
Our income tax benefit was $213 thousand for the year ended December 31, 2024, as compared to $66 thousand income tax benefit for the year ended December 31, 2023. The reason for the increase in our income tax benefit during the year ended December 31, 2024, is due to the decrease in income before tax.
Previous wording
As of December 31, 2022, we had current assets of $29,841 thousand consisting of $4,196 thousand in cash and cash equivalents, $185 thousand in restricted deposits, $20,945 thousand in accounts receivable, $973 thousand in other current receivables and $3,542 thousand in the loan to our parent company, in accordance with the Second Loan Agreement, as defined below.
Current wording
As of December 31, 2024, we had current assets of $7,752 thousand consisting of $624 thousand in cash and cash equivalents, $58 thousand in restricted deposits, $1,832 thousand in accounts receivable, $1,257 thousand in other current assets and $3,981 thousand in the loan to our parent company, in accordance with the Second Loan Agreement, as defined below.
Previous wording
As of December 31, 2022, we had non-current assets of $33,854 thousand consisting of $52 thousand in severance pay funds, $340 thousand in deferred taxes, $486 thousand in operating lease right-of-use assets, $302 thousand in property and equipment net, $15,313 thousand in intangible assets, net and $17,361 thousand in goodwill.
Current wording
As of December 31, 2024, we had non-current assets of $14,322 thousand consisting of $63 thousand in deferred taxes, $164 thousand in property and equipment net, $9,552 thousand in intangible assets net and $4,579 thousand in goodwill.
Previous wording
As of December 31, 2022, we had $28,522 thousand in current liabilities consisting of $19,782 thousand in accounts payable, $2,084 thousand in other payables, $6,569 thousand in short term loans and current maturities of a long-term loan and $87 thousand in operating lease liabilities.
Current wording
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.
Previous wording
As of December 31, 2022, we had $5,274 thousand in non-current liabilities consisting of $152 thousand in accrued severance pay, $2,881 thousand long-term loan, $388 thousand in operating lease liabilities - long term and $1,853 thousand in deferred taxes.
Current wording
As of December 31, 2024, we had $1,638 thousand in non-current liabilities consisting of $496 thousand long-term loans and $1,142 thousand in deferred taxes.
Previous wording
As of December 31, 2023, we had current assets of $17,805 thousand consisting of $ 1,774 thousand in cash and cash equivalents, $149 thousand in restricted deposits, $11,359 thousand in accounts receivable, $771 thousand in other current assets and $3,752 thousand in the loan to our parent company, in accordance with the Second Loan Agreement, as defined below.
Current wording
As of December 31, 2023, we had current assets of $17,805 thousand consisting of $1,774 thousand in cash and cash equivalents, $149 thousand in restricted deposits, $11,359 thousand in accounts receivable, $973 thousand in other current receivables and $3,752 thousand in the loan to our parent company, in accordance with the Second Loan Agreement, as defined below.
Previous wording
As of December 31, 2023, we had $19,773 thousand in current liabilities consisting of $12,359 thousand in accounts payable, $889 thousand in other payables, $6,440 thousand in short term loans and current maturities of a long-term loans and $85 thousand in operating lease liabilities.
Current wording
As of December 31, 2023, we had $19,773 thousand in current liabilities consisting of $12,359 thousand in accounts payable, $889 thousand in other payables, $6,440 thousand in short term loans and current maturities of a long-term loan and $85 thousand in operating lease liabilities.
Previous wording
As of December 31, 2023, we had $4,885 thousand in non-current liabilities consisting of $3,064 thousand long-term loans, $304 thousand in operating lease liabilities - long term and $1,517 thousand in deferred taxes.
Current wording
As of December 31, 2023, we had $4,885 thousand in non-current liabilities consisting of $3,064 thousand long-term loan, $304 thousand in operating lease liabilities - long term and $1,517 thousand in deferred taxes.
Previous wording
We had a negative working capital of $1,968 thousand as compared to a positive working capital of $1,319 thousand as of December 31, 2023, and December 31, 2022, respectively.
Current wording
We had a negative working capital of $5,177 thousand as compared to a negative working capital of $1,968 thousand as of December 31, 2024, and December 31, 2023, respectively.
Previous wording
During the fiscal year ended December 31, 2023, we had $16 thousand negative cash flow from investing activities as compared to $74 thousand negative cash flow from investing activities during the year ended December 31, 2022.
Current wording
During the fiscal year ended December 31, 2024, we had $1 thousand negative cash flow from investing activities as compared to $16 thousand negative cash flow from investing activities during the year ended December 31, 2023.
Previous wording
According to the Financing Agreement, Gix Media undertook to meet financial covenants over the life of the loans as follows: (1) the ratio of debt to EBITDA, based on the Gix Media’s consolidated financial statements in all 4 consecutive quarters (in any given period during the life of the loan), will not exceed 2.4 in the first two years following the execution of the Financing Agreement, which according to the Second Addendum was extended by nine months to June 30, 2024 and thereafter will not exceed 1.75. As of December 31, 2023, Gix Media was not in compliance with the financial covenants in connection with the Financing Agreement, and received a written letter from Leumi, pursuant to which, subject to certain conditions and until April 16, 2024, Leumi waived its rights under the Financing Agreement with respect to such failure (see Note 10 to our consolidated financial statements).
Current wording
According to the Financing Agreement, Gix Media undertook to meet a financial covenant over the life of the loans. As of December 31, 2024, Gix Media is in compliance with the financial covenant in connection with the Financing Agreement.
Previous wording
Such conditions raise substantial doubts about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Current wording
Our consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Previous wording
For both reporting units, we performed the quantitative impairment test. In estimating the fair value of our reporting units, we used the income approach, which requires us to make significant estimates and assumptions related tofuture cash flows and discount rates. Changes in these estimates and assumptions could have a significant impact on the fair value of the reporting units. If the fair value exceeds the carrying value, no further evaluation is required, and no impairment loss is recognized. An impairment charge would be recognized to the extent the carrying value of the reporting unit exceeds the reporting unit’s fair value.
Current wording
For both reporting units, we performed the quantitative impairment test. In estimating the fair value of our reporting units, we used the income approach, which requires us to make significant estimates and assumptions related to future cash flows and discount rates. Changes in these estimates and assumptions could have a significant impact on the fair value of the reporting units. If the fair value exceeds the carrying value, no further evaluation is required, and no impairment loss is recognized. An impairment charge would be recognized to the extent the carrying value of the reporting unit exceeds the reporting unit’s fair value.
Previous wording
As of December 31, 2023, we recorded a goodwill impairment loss in the amount of $5,107 thousand forthe Content Platform reporting unit.
Current wording
As of December 31, 2024, we recorded a goodwill impairment loss in the amount of $7,675 thousand forthe Content Platform reporting unit.