Quarterly report pursuant to Section 13 or 15(d)

Loans

v3.23.3
Loans
 9 Months Ended
Sep. 30, 2023
Loans [Abstract]  
LOANS

NOTE 6 – LOANS:

 

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 funding from an American Bank under the Small Business

 

Administration COVID19 EIDL Program in the total of $150. The loan bears interest of 3.75% per annum, the principal shall be repaid in 360 equal monthly payments starting January 1, 2023, unless forgiven per program regulations (the “EIDL Loan”).

 

b. On December 9, 2020, the Company signed a new loan agreement with an Israeli based financial institution for a loan of up to 20 million NIS (“New Israeli Shekel”) (an amount of $6,000) (the “New Loan”). The Company received $3,000 on December 2020, and additional $2,000 in January 2021. The loan bears interest of 9.6% per annum. The interest shall first be paid in 12 payments starting February 1, 2021. Starting February 1, 2022, the loan principal and interest shall be repaid in 72 equal payments, plus a one-time interest payment after the 36th month.

 

As part of the loan agreement, the Company issued the New Lender warrants to acquire common stock in the amount of $1,500 (see Note 9 regarding the warrants granted).

 

In November 2021, the Company received additional funding in the amount of $1,000 from the New Lender. The loan bears interest of 9.6% per annum. Starting February 1, 2022, the loan principal and interest shall be repaid in 72 equal monthly payments, plus a onetime interest payment after the 24th month. The Company increased the value of the warrant issued to the New Lender to $1,800 (see also Note 9). As of September 30, 2023, the total loan balance outstanding was $4,249 (including $1,220 current maturities).

 

The loan covenants (the “covenants”) include a debt to EBITDA minimum ratio or a coverage ratio of the loan by current assets.

 

On December 21, 2022, pursuant to the terms of the loan Agreement, the Company deposited $2 million to a Company-owned interest-bearing bank account, or the “designated account” (as defined in the Agreement), to satisfy the required obligation associated with the loan agreement. An additional $2 million was deposited in the designated account during the nine months ended September 30, 2023.

 

As of September 30, 2023, the Company was in compliance with the covenants.

 

As of September 30, 2023, future payments are summarized as follows:

 

          New Loan     New Loan  
    EIDL Loan     from
December
2020 and
January 2021-
In NIS *		     from
November
2021
- In NIS *		  
2023 (**)   2       921($241)       234($61)  
2024   9       5,567($1,456)       1,080($282)  
2025   9       3,684($963)       704($184)  
2026   9       3,684($963)       704($184)  
2027   9       3,684($963)       704($184)  
2028 and thereafter   130       307($80)       59($15)  
Less- accumulated interest   (12)       (4,123)($1,077)       (961)($250)  
Total   156       13,724($3,589)       2,524($660)  

 

* The exchange rate used in translation is $1 – 3.824 NIS.
** excluding the nine months ended September 30, 2023.