QUANTUM X LABS INC. Segments Disclosure

NOTE 19: SEGMENT REPORTING

 

The Group operates in such a way that each company in the Group represents a 2separate business segment. These business segments currently do not include Metagramm’s operations as they do not meet the segment definition criteria.

 

Search segment - the search segment develops a variety of technological software solutions, which perform automation, optimization and monetization of internet campaigns, for the purposes of obtaining and routing internet user traffic to its customers. The search segment activity is conducted by Gix Media.

 

Digital content segment - the digital content segment was engaged in the creation and editing of content, in different languages, for different target audiences, for the purposes of generating revenues from leading advertising platforms, including Google, Facebook, Yahoo and Apple, by utilizing such content to obtain internet user traffic for its customers. The digital content segment activity was conducted by Cortex until November 9, 2025 (see note 8.B), after which the Group ceased operations in this segment and continued to operate solely in the search segment (see note 3).

 

The segments’ results include items that directly serve and/or are used by the segment’s business activity and are directly allocated to the segment. As such they do not include depreciation and amortization expenses for intangible assets created at the time of the purchase of those companies and financing expenses incurred on loans taken for the purpose of purchasing those companies. Therefore, these items are not allocated to the various segments.

 

The chief executive officer, who is the Company’s chief operating decision maker (“CODM”), assesses performance for these segments and decides how to allocate resources based the segments’ operating income or loss and income or loss before tax. Segments’ assets and liabilities are not reviewed by the CODM and therefore were not reflected in the segment reporting. The significant expense categories comprising segments profit and loss regularly reviewed by the CODM for the years ended December 31, 2025 and 2024 are set forth in the table below.

 

The substantial amount of non-current assets is derived from Israel and the substantial amount of revenues is derived from United States.

 

Segments revenues and operating results:

 SCHEDULE OF SEGMENTS REVENUES AND OPERATING RESULTS

		Search segment				Adjustments and eliminations (See below)				Total
		For the year ended December 31, 2025
		Search Segment				Adjustments and eliminations (See below)				Total
Revenues from external customers			1,543				26				1,569
Traffic-acquisition and related costs			242				55				297
Research and development expenses			69				-				69
Sales and marketing expenses			100				-				100
General and administrative expenses			250				1,375				1,625
Depreciation and amortization			-				848				848
Other expenses (income), net			(144	)			958				814
Segment operating income (loss)			1,026				(3,210	)			(2,184	)
Financial expenses, net			(317	)			(10,936	)(*)			(11,253	)
Segment income (loss), before income taxes			709				(14,146	)			(13,437	)

 

 

VIEWBIX INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

U.S. dollars in thousands (except share data)

 

NOTE 19: SEGMENT REPORTING (Cont.)

 

Segments revenues and operating results: (Cont.)

 

		Search segment				Adjustments and eliminations (See below)				Total
		For the year ended December 31, 2024
		Search Segment				Adjustments and eliminations (See below)				Total
Revenues from external customers			4,969				-				4,969
Traffic-acquisition and related costs			1,989				(259	)			1,730
Research and development expenses			818				12				830
Sales and marketing expenses			304				5				309
General and administrative expenses			549				1,304				1,853
Depreciation and amortization			-				813				813
Other expenses (income), net			(5	)			276				271
Segment operating income (loss)			1,314				(2,151	)			(837	)
Financial expenses, net			(16	)			(2,594	)(**)			(2,610	)
Segment income (loss), before income taxes			1,298				(4,745	)			(3,447	)

 

	(*)	Mainly consist of financial expenses arising from changes in the fair value of financial assets measured at fair value through profit or loss (see note 12).
	(**)	Mainly consist of financial expenses from substantial debt terms modification loss and interest expenses on bank loans in connection with the Financing Agreement (see notes 11.B, 11.C).

 

The “adjustments and eliminations” column for segment operating income includes unallocated selling, general, and administrative expenses and certain items which management excludes from segment results when evaluating segment performance, as follows:

 SCHEDULE OF RECONCILIATION BETWEEN SEGMENTS OPERATING RESULTS

		Year ended December 31, 2025				Year ended December 31, 2024
Depreciation and amortization expenses not attributable to segments (***)			(848	)			(813	)
Revenues, research and development expenses, sales and marketing expenses, general and administrative expenses and other expenses, net not attributable to the segments (****)			(2,362	)			(1,338	)
			(3,210	)			(2,151	)

 

	(*)	Mainly consist of financial expenses arising from changes in the fair value of financial assets measured at fair value through profit or loss (see note 12).
	(**)	Mainly consist of financial expenses from substantial debt terms modification loss and interest expenses on bank loans in connection with the Financing Agreement (see notes 11.B, 11.C).

 

	(***)	Mainly consist of technology and customer relations amortization costs from business combinations.
	(****)	Mainly consist of general and administrative expenses such as salaries and related expenses and professional services.

 

 

VIEWBIX INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

U.S. dollars in thousands (except share data)