Annual report pursuant to Section 13 and 15(d)

Loans

v3.24.1
Loans
 12 Months Ended
Dec. 31, 2023
Loans [Abstract]  
LOANS

NOTE 8 - 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 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 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. As of December 31, 2023, the total loan balance outstanding was $148 (including $2 current maturities).

 

  b. On December 9, 2020, the Company signed a new loan agreement with an Israeli based financial institution (“Migdalor”) 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 in December 2020, and an 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 onetime interest payment after the 36th month.

 

As part of the loan agreement, the Company issued to Migdalor warrants to acquire common stock in the amount of $1,500 (see Note 13 regarding the warrants granted). The warrants were exercised, pursuant to the loan agreement, upon the Company’s IPO in May 2022.

 

In November 2021, the Company received additional funding in the amount of $1,000 from Migdalor. 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 Migdalor to $1,800 (see also Note 13). As of December 31, 2023, the total loan balance outstanding was $4,339 (including $1,333 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 year ended December 31, 2023. These balances are included in Restricted Bank deposits and Restricted Cash in the Consolidated Balance Sheet.

 

As a result of the above deposits, as of December 31, 2023, the Company was in compliance with the covenants of the Migdalor loan.

 

As of December 31, 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 *  
2024     9       5,567($1,535)       1,080($298)
2025     9       3,684($1,016)       704($194)
2026     9       3,684($1,016)       704($194)
2027     9       3,684($1,016)       704($194)
2028 and thereafter     225       305($84)       59($16)
Less- accumulated interest     (113 )     (3,635)($1,003)       (804)($221)
Total     148       13,289($3,664)       2,447($675)

 

* The exchange rate used in translation is $1 – 3.627 New Israeli Shekel.