NOTE 6: BUSINESS COMBINATION

A. Cortex Acquisition and Sale

On October 13, 2021, Gix Media acquired 70% (on a fully diluted basis) of the shares of Cortex (the “Cortex Transaction”), a private company operating in the field of online media and advertising. In consideration for the Cortex Transaction, Gix Media paid NIS 35 million in cash (approximately $11 million). The Cortex Transaction was financed by Gix Media’s existing cash balances and substantially by debt through a bank financing in the aggregate amount of $9.5 million, that consists of a line of credit of up to $3.5 million and a long-term loan of $6 million (see note 7.B). On January 23, 2023, Gix Media acquired an additional 10% of Cortex, increasing its holdings to 80% of the share capital of Cortex in consideration for $2.6 million.

On November 9, 2025 (the “Cortex Closing Date”), Gix Media, Cortex, and certain founders of Cortex entered into a share purchase agreement (the “Cortex Sale Agreement”) with Pro Sportority (Israel) Ltd. (the “Purchaser”), a subsidiary of Minute Media Inc. (the “Parent”). Pursuant to the Cortex Sale Agreement, the Purchaser acquired from Gix Media all of its holdings in Cortex, representing 80% of Cortex’s issued and outstanding share capital.

The aggregate consideration paid to Gix Media was $800, consisting of (i) $200 in cash, and (ii) $600 in the form of 5,161 newly issued Preferred J Shares of the Parent (the “Parent Shares”), the most senior class of preferred shares of the Parent.

The Parent retains a call option to repurchase the Parent Shares from Gix Media under certain conditions, including insolvency or a change of control of Gix Media. In addition, Gix Media is subject to a two-year non-compete and non-solicitation covenant following the Cortex Closing Date.

B. Metagramm Acquisition:

On March 24, 2025 (the “Closing Date”), the Company entered into a securities exchange agreement with Metagramm and all of the shareholders of Metagramm (the “2025 SEA”). Pursuant to the 2025 SEA, the Company acquired 100% of Metagramm’s shares in exchange for consideration of $5,159. The consideration was paid to Metagramm’s shareholders in the form of 1,323,000 shares of common stock of the Company, representing 19.99% of the Company’s issued and outstanding share capital immediately following the acquisition (the “Metagramm Acquisition”).

In addition, the Company agreed to pay Metagramm’s shareholders cash earn-out payments on a pro rata basis of up to a cumulative sum of $2.0 million, contingent on achieving certain financing and revenue milestones within 3 years following the Closing Date (see notes 10.C, 10.D).

QUANTUM X LABS INC. (formerly known as Viewbix Inc.)

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

NOTE 6: BUSINESS COMBINATION (Cont.)

B. Metagramm Acquisition: (Cont.)

Fair Value of Metagramm’s Identifiable Assets and Liabilities:

 SCHEDULE OF FAIR VALUE OF ASSETS AND LIABILITIES

The total consideration has been allocated between assets acquired and liabilities assumed based on estimated fair values, with the residual of the total consideration recorded as goodwill.

The goodwill that arose from the acquisition consists of synergies expected from the activities of the Company and Metagramm. The estimation of the fair value of these intangible assets was determined using the income approach, which is based on the present value of the future cash flows attributable to each identifiable intangible asset. The estimation of the fair value of the earn-out liability was calculated based on Monte Carlo method.

Other current assets were estimated to have fair values that approximate their carrying values due to the short-term maturities of these instruments.

The estimated useful lives for the acquired technology and customer relations of Metagramm Acquisition are 5 years and 2.5 years, respectively. The goodwill will not be deductible for income tax purposes.

C. Quantum Israel Acquisition:

On December 15, 2025, the Company entered into a securities exchange agreement (the “Quantum Exchange Agreement”) with Quantum Israel and certain shareholders of Quantum Israel (the “Quantum Israel Shareholders”) pursuant to which the Company agreed to issue to the Quantum Israel Shareholders an aggregate amount of up to 40.0% of the Company’s issued and outstanding capital stock as of December 15, 2025, inclusive of 800,000 shares of the Company’s common stock issuable by the Company in a private placement offering (the “Private Placement Shares”) that the Company entered into in January 2026 (see also note 10.D), consisting of (i) up to 2,666,000 shares of the Company’s common stock, representing 19.99% of the Company’s issued and outstanding capital stock (the “Exchange Shares”), inclusive of the Private Placement Shares, and (ii) pre-funded warrants to purchase up to 4,447,595 shares of the Company’s common stock, representing the balance of up to the 40.0%, as of December 15, 2025, less the Exchange Shares, in exchange for up to 100%, but not less than 85%, of Quantum Israel’s issued and outstanding share capital on a fully diluted and post-closing basis, equal to an amount up to 589,319 of Quantum Israel’s ordinary shares (the “Quantum Israel Acquisition”).

QUANTUM X LABS INC. (formerly known as Viewbix Inc.)

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

NOTE 6: BUSINESS COMBINATION (Cont.)

C. Quantum Israel Acquisition: (Cont.)

In addition, pursuant to the Quantum Exchange Agreement, the Company may issue to the Quantum Israel Shareholders up to 12,702,847 additional shares of the Company’s common stock or pre-funded warrants to purchase shares of the Company’s common stock (collectively, the “Earn-Out Securities”), only following the 12-month anniversary of the closing date of the Quantum Israel Acquisition and upon the achievement of specified post-closing milestones as defined in the Quantum Exchange Agreement.

On March 4, 2026, the Company closed the Quantum Israel Acquisition (the “Quantum Closing Date”), pursuant to which the Company acquired 100% of Quantum Israel’s issued and outstanding share capital on a fully diluted, post-closing basis and Quantum Israel became a wholly owned subsidiary of the Company. On the Quantum Closing Date, the Company issued to the Quantum Israel Shareholders 1,866,000 shares of its common stock and pre-funded warrants to purchase 4,447,595 shares of its common stock. The pre-funded warrants were exercisable upon issuance at an exercise price of $0.0001 per share and will not expire until exercised in full.

Fair Value of Quantum Israel’s Identifiable Assets and Liabilities:

 SCHEDULE OF FAIR VALUE OF ASSETS AND LIABILITIES

The total consideration was allocated to the fair value of assets acquired and liabilities assumed as of the Quantum Closing Date, with the excess purchase price recorded as goodwill. The goodwill will not be deductible for income tax purposes.

Management’s estimate of the fair value of the acquired in-process research and development and the contingent consideration to be paid upon achieving certain milestones assumed as of the Quantum Closing Date is preliminary and subject to change and is based on established and accepted valuation techniques performed with the assistance of third-party valuation specialists. Changes to amounts will be recorded as adjustments to the provisional amounts recognized as of the Quantum Closing Date and may result in a corresponding adjustment to goodwill during the remainder of the measurement period, which will not exceed twelve months from the Quantum Closing Date.

The estimation of the fair value of in-process research and development was determined using the income approach, which is based on the present value of the future cash flows attributable to the identifiable intangible asset. The contingent consideration of $4,501 represents the estimated fair value of the contingent consideration to be paid in Earn-Out Securities to the Quantum Israel Shareholders upon the achievement of certain milestones during the 12-month anniversary of the Quantum Closing Date.

QUANTUM X LABS INC. (formerly known as Viewbix Inc.)

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

NOTE 6: BUSINESS COMBINATION (Cont.)

D. Deconsolidation of CliniQuantum

As of the Quantum Closing Date, CliniQuantum Ltd. (“CliniQuantum”) was a subsidiary of Quantum Israel. On June 3, 2026, a third-party completed the acquisition of 54.01% of the issued and outstanding ordinary shares of CliniQuantum from certain CliniQuantum shareholders, following which Quantum Israel lost control of CliniQuantum.

Upon loss of control, Quantum Israel determined that it exercised significant influence over CliniQuantum. Accordingly, the investment in CliniQuantum was accounted for under the equity method and measured at its fair value of $3,840. The fair value of the investment in CliniQuantum was determined based on a valuation that reflects transactions in CliniQuantum shares. As a result, the Company recognized a gain from deconsolidation of $3,831 in the condensed consolidated statements of operations for the six months ended June 30, 2026.

Quantum Israel is in the process of allocating the difference between the carrying amount of its investment in CliniQuantum and its proportionate share of CliniQuantum’s underlying net assets to the identifiable assets and liabilities of CliniQuantum. While Quantum Israel used its best estimates and assumptions as part of this allocation process to accurately value the CliniQuantum’s assets and liabilities, these estimates are inherently uncertain and subject to refinement as the guidance allows a measurement period of up to one year from June 3, 2026, to make adjustments to this preliminary allocation. Since Quantum Israel elected to recognize the proportionate share of its equity method, there was no impact from these allocations on the Company’s condensed consolidated statements of operations for the six months ended June 30, 2026.