QUANTUM X LABS INC.

Previous wording

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

Current wording

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

Previous wording

Our revenues from Gix Media’s Search Platform for the three months ended March 31, 2026, totaled $343 thousand, as compared to $529 thousand during the same period in the prior year.

Current wording

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

Previous wording

During the three months ended March 31, 2026, the number of search referrals to Gix Media’s major customer conducted by users from the direct model was 3.7 million, as compared to 6.3 million during the three months ended March 31, 2025. 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. During the three months ended March 31, 2026, the number of search referrals to the Gix Media’s major customer conducted by users from the indirect model was 2.1 million, as compared to zero during the three months ended March 31, 2025. While Gix Media’s revenues from the direct model will continue to decrease its revenues from the search to search model, traffic referral services to search engines through the referral of traffic of users who engage search ads generated by Gix Media, and its revenues from indirect model will increase.

Current wording

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

Previous wording

Our research and development expenses were $0 thousand for the three months ended March 31, 2026, as compared to $16 thousand during the same period in the prior year. The reason for the decrease in the three months ended March 31, 2026 is due to the expense reduction primarily in salaries and professional services during the three months ended March 31, 2026.

Current wording

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

Previous wording

Our selling and marketing expenses decreased to $25 thousand for the three months ended March 31, 2026, a slight increase as compared to $20 thousand during the same period in the prior year. The slight increase was immaterial and primarily reflects normal period-to-period fluctuations.

Current wording

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

Previous wording

Our general and administrative expenses were $500 thousand for the three months ended March 31, 2026, as compared to $197 thousand during the same period in the prior year. The reason for the increase is due to higher professional services expenses in the period following the uplisting to the Nasdaq Capital Market in June 2025 (the “Uplist”) in the three months ended March 31, 2026, as compared to the same period in the prior year.

Current wording

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

Previous wording

Our traffic-acquisition and related costs were $132 thousand for the three months ended March 31, 2026, a slight decrease as compared to $134 thousand during the same period in the prior year. The slight decrease was immaterial and primarily reflects normal period-to-period fluctuations.

Current wording

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

Previous wording

Our other expenses for the three months ended March 31, 2026, were $22 compared to $44 during the three months ended March 31, 2025. Other expenses for the three months ended March 31, 2026, were primarily related to costs incurred in connection with the Quantum Israel acquisition. Other expenses for the three months ended March 31, 2025, were primarily related to costs incurred in connection with the Uplist and registrations for the resale of the Company’s common stock with the SEC.

Current wording

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

Previous wording

Our net financial expenses were $71 thousand for the three months ended March 31, 2026, as compared to $2,867 thousand net financial expenses during the same period in the prior year. The decrease during the three months ended March 31, 2026, is mainly attributable to financing expenses during the three months ended March 31, 2025, related to financial instruments arising from the Company’s facility agreements, which are measured at fair value.

Current wording

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

Previous wording

Our income tax benefit was $16 thousand for the three months ended March 31, 2026, as compared to an income tax expenses of $42 thousand during the same period in the prior year. The reason for the decrease in our income tax expense during the three months ended March 31, 2026, is due to the decrease in income before tax in the Search Platform.

Current wording

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

Previous wording

Net loss from discontinued operations was $0 thousand in the three months ended March 31, 2026, as compared to $880 thousand for the three months ended March 31, 2025. For further details regarding the amounts recorded in respect of discontinued operations in the three months ended March 31, 2025, please refer to note 3 to our Interim consolidated financial statements for the three months ended March 31, 2026.

Current wording

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

Previous wording

Our depreciation and amortization expenses for the three months ended March 31, 2026, were $224 thousand as compared to $173 thousand during the same period in the prior year. The increase in depreciation and amortization expenses is attributable to the increase in depreciation and amortization related to the acquisition of Metagramm on March 24, 2025. During the three months ended March 31, 2026, the depreciation and amortization expenses were recorded in full, compared to partial recognition during the same period prior year.

Current wording

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

Previous wording

As of March 31, 2026, we had current assets of $2,894 thousand, consisting of $1,793 thousand in cash and cash equivalents, $45 thousand restricted deposits, $355 thousand in accounts receivable, $377 thousand in other current assets and $324 thousand in related parties.

Current wording

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

Previous wording

As of March 31, 2026, we had non-current assets of $24,813 thousand, consisting of $9 thousand in deferred taxes, $44 thousand in property and equipment net, $3,442 thousand in intangible assets, net, $600 thousand in financial assets measured at cost method and $20,718 thousand in goodwill, of which $14,326 thousand arose from the acquisition of Quantum Israel.

Current wording

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

Previous wording

As of March 31, 2026, we had $4,243 thousand in current liabilities consisting of $1,111 thousand in accounts payable, $391 thousand in government authorities, $268 thousand in earn-out payable, $500 thousand in other payables, $1,048 thousand in short term loans and current maturities of long-term loans, $58 thousand in related parties and $867 thousand in short-term convertible loans.

Current wording

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

Previous wording

As of March 31, 2026, we had $1,779 thousand in non-current liabilities consisting of $663 thousand in deferred taxes, $390 thousand in long term loans and $726 thousand in earn-out liability which arose from the acquisition of Metagramm.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

We had a negative working capital of $1,349 thousand as compared to a negative working capital of $2,411 thousand as of March 31, 2026, and December 31, 2025, respectively.

Current wording

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

Previous wording

During the three months ended March 31, 2026, we had a negative cash flow from operating activities from continuing operations of $604 thousand as compared to a positive cash flow from operations of $191 thousand during the same period in the prior year. The decrease in the three months ended March 31, 2026 is mainly due to a decrease in changes in assets and liabilities items in an amount of $224 thousand during the three months ended March 31, 2026, as compared an increase in the amount of $234 thousand during the three months ended March 31, 2025 mainly due to higher payments to the Company’s accounts payables during the three month period ended March 31, 2026, as compared to the same period prior year.

Current wording

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

Previous wording

During the three months ended March 31, 2026, we had a positive cash flow from investment activities of $193 thousand which arose from the acquisition of Quantum Israel, as compared to $12 thousand during the same period in the prior year.

Current wording

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

Previous wording

During the three months ended March 31, 2026, we had $1,211 thousand positive cash flow from financing activities as compared to $188 thousand negative cash flow from financing activities during the same period in the prior year. The increase in the three months ended March 31, 2026, was primarily due to $1,400 received under the November 2025 Purchase Agreement.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

As a result of such decreases, for the three months ended March 31, 2026, we recorded an operating loss from continuing operations of $550 thousand compared to $55 thousand during the three months ended March 31, 2025, and a net loss of $605 thousand compared to $3,844 thousand during the three months ended March 31, 2025. As of March 31, 2026, we had cash and cash equivalents $1,793 thousand, bank loans and convertible loans of $2,305 thousand and an accumulated deficit of $46,652 thousand. 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 three months ended March 31, 2026.

Current wording

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

Previous wording

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

Current wording

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