ViewBix Inc(VBIX) - 2024 Q1 - Quarterly Report

Financial Performance - Revenues for the three months ended March 31, 2024, were $10,002 thousand, a decrease of 52% compared to $20,862 thousand in the same period in 2023[123] - Revenues from Cortex's Content Platform decreased to $7,530 thousand, down $8,222 thousand from $15,752 thousand year-over-year, attributed to reduced user traffic and a decline in advertising budgets[124] - Revenues from Gix Media's Search Platform were $2,472 thousand, a decrease of $2,638 thousand from $5,110 thousand in the prior year, primarily due to changes in internet browser technology affecting search referrals[125] - Traffic-acquisition costs were $8,215 thousand, down $9,766 thousand from $17,981 thousand in the same period last year, reflecting the revenue decline[126] - Research and development expenses were $730 thousand, slightly down from $796 thousand year-over-year[127] Operational Changes - Viewbix reported a significant reduction in operations and sales team size due to failure to meet predetermined sales targets set in January 2020[95] - The company is implementing cost-cutting measures, including a reduction in headcount, to mitigate financial challenges[106] - Management plans to reduce operating expenses and seek additional liquidity to ensure continued operations amid revenue declines[146] Business Developments - The company expanded its digital advertising operations through subsidiaries Gix Media and Cortex, focusing on ad search and digital content platforms[96] - Cortex's recent developments have negatively impacted its business, with a significant customer halting advertising on Cortex's websites, which is expected to significantly reduce future revenue streams[105] - A debt restructuring program was agreed upon with the bank, increasing Cortex's credit facility to 80% of customer balances (up to $2 million) and Gix Media's monthly revolving credit facilities by $300,000[106] - Gix Media acquired 70% of Cortex for approximately $11 million, with plans to acquire the remaining 30% in tranches based on performance metrics[115] - The integration of Gix Media's technology aims to enhance growth potential in search and content monetization[113] - The Reorganization Transaction with Gix Media was completed on September 19, 2022, resulting in Gix Media becoming a wholly-owned subsidiary[110] Financial Position - The company had current assets of $12,805 thousand as of March 31, 2024, including $1,284 thousand in cash and cash equivalents[132] - Current liabilities totaled $15,900 thousand, with $8,407 thousand in accounts payable and $6,422 thousand in short-term loans[134] - The company reported a negative working capital of $5,220 thousand as of March 31, 2024, compared to a negative working capital of $1,968 thousand at the end of 2023[138] - The company is party to a $480,000 loan agreement with a 9% annual interest rate, repayable over two years starting January 1, 2024[143] Market Risks - The company is facing risks related to the demand for digital advertising and potential technological obsolescence of its platforms[93]