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NOTE 8 - LOANS:
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a. |
As a result of the COVID
pandemic, the US and Israeli governments offered different programs of financial aid. The Company participated in the following programs: |
On July 1, 2020, the Company received Economic Injury Disaster Loan
(the “EIDL Loan”) from an American Bank under the Small Business Administration COVID19 Program in the total of $150. The
loan matures in June, 2050 and bears interest of 3.75% per annum, payable monthly commencing on January 1, 2023, unless forgiven per program
regulations. As of December 31, 2025, the total loan balance outstanding was $150.
| | b) | On August 26, 2025, the Company entered into a $400 short-term loan
agreement with Mizrahi Tefahot Bank Ltd., bearing variable interest at TERM SOFR + 7% (annual rate 11.2227%, effective cost 16.9781%),
matured on November 26, 2025 with a single payment of principal and interest. |
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| | c) | The Company entered into a bridge loan agreement with Bank Mizrahi-Tefahot
on December 3, 2025, pursuant to which it received a loan in the principal amount of $350. The loan bears effective interest rate 9.63%
and is repayable under the conditions set out in the agreement. The proceeds were used for the general working capital requirements of
Actelis Networks, Inc. and are presented under short-term borrowings in the Company’s financial statements. The company has the
right to repay the loan anytime until six months. |
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| | d) | On January 15, 2024, the Subsidiary entered into a credit agreement with Bank Mizrahi-Tefahot. The Credit Agreement provides for a $1,500 credit facility available to be used by the Subsidiary (“New Credit Line”). Under the New Credit Line, which will be secured by the Subsidiary’s customer receivables, the Subsidiary will pay an annual fixed interest at a Federal SOFR rate plus 5.5% on any amount withdrawn under the New Credit Line. |
Under the Credit Agreement, the Company
is permitted to draw upon the New Credit Line for customer invoices that meet the following conditions:
| | (a) | Throughout the duration of the New Credit Line, the Company may present customer receivables and receive credit financing that does not exceed 80% of the aggregate amount of the open customer invoices securing the New Credit Facility; The credit financing is to be repaid within 90 days. |
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(b) |
Customer invoices are payable
within 90 days from the date of the Company’s monthly report to the Lender; and |
| | (c) | No single customer of the Company may account for open customer invoices securing over 30% of the total borrowed amount under the New Credit Line. |
The Credit Line balance drawn will be examined
every month and adjusted up to every three months and Repayment of the Credit Line will be made up to every three months subject to the
expiration of the financing period for the invoices that were financed. The Company may refinance newly issued invoices at any time up
to the Credit Line limit and subject to the terms of the Credit Line.
As of December 31, 2025, the closing
balance of credit line is $479.
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