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LOANS - PARENT COMPANY
 12 Months Ended
Dec. 31, 2022
Related Party Transactions [Abstract]  
LOANS - PARENT COMPANY

NOTE 15: LOANS - PARENT COMPANY

 

A. Loan to Parent Company:

 

  

As of

December 31

  

As of

December 31

 
   2022   2021 
           
Loan to Parent Company  $3,542   $6,384 

 

The balance with the Parent Company represents a balance of an intercompany loan under a loan agreement signed between Gix Media and the Parent Company on March 22, 2020 (the “First Loan”). The First Loan bears interest at a rate to be determined from time to time in accordance with Section 3(j) of the Income Tax Ordinance, new version, and the Income Tax Regulations (Determination of Interest Rate for the purposes of Section 3(j), 1986) or according to a market interest rate decision as agreed between the parties.

 

For the years ended December 31, 2022, and 2021, Gix Media recognized interest income in respect of the First Loan in the amount of $143 and $151, respectively.

 

During 2022, Gix Media distributed dividend to the Parent Company in the amount of $714, which was offset from the First Loan (see note 13.E).

 

B. Loan from Parent Company:

  

As of

December 31

  

As of

December 31

 
   2022   2021 
           
Loan from Parent Company  $-   $2,116 

 

The balance with the Parent Company represents certain expenses with respect to the Company’s ongoing operation (mainly salary expenses and other general and administrative expenses) which were financed by the Parent Company (the “Intercompany Balance”).

 

The Company entered into an agreement with the Parent Company, pursuant to which, effective as of December 31, 2021 (“Modification Date”), the Intercompany Balance was modified into a loan (the “Second Loan” and together with the First Loan, the “Loan Agreements”), which may be increased from time to time, upon the written mutual consent between the Company and the Parent Company. The Second Loan bears interest at a rate equivalent to the minimal interest rate recognized and attributed by the Israel Tax Authority and will be repaid, together with the accrued interest, in one payment until December 31, 2022, unless extended upon mutual consent of the Company and the Parent Company.

 

The Company accounted for the modification as an extinguishment of the Intercompany Balance and the issuance of a new debt. The Second Loan was recorded at its fair value of $2,116 as of the Modification Date, with the difference of $184 between the fair value of the loan and the carrying value of the payable to the Parent Company recorded in the Company’s consolidated statement of changes in shareholders’ equity as a deemed contribution to the Company by the Parent Company, with a corresponding discount on the Second Loan, to be amortized as finance expense in the Company’s consolidated statements of operations over the term of the Second Loan.

 

C. Restructure of Loan Agreements

 

On November 20, 2022, the Company, Gix Media and the Parent Company agreed to restructure the Loan Agreements, such that the Company fully repaid the Second Loan to the Parent Company, by offsetting its amount from the First Loan owed by the Parent Company to Gix Media. As a result, as of December 31, 2022, the Company has no further obligations under the Second Loan.

 

 

VIEWBIX INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

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