Bull Trade: How Series B Captures the Cash and What Is Left Above It
Series B sits on a near-total cash sweep: quarter-end cash and any cash pile of NIS 4 million are redirected to bondholders, less only a narrow expense buffer. The waiver through June 30, 2026 bought time, but the forecast cash bridge, the valuation gaps, and the creditor-control moves show how little is still left above the bond layer.
Who Actually Sits on the Cash
The main article focused on whether Bull Trade can keep the runoff going without breaking operationally or regulatorily. This follow-up isolates the layer beneath that question. Even if collections continue, almost every free shekel no longer truly belongs to the company. It belongs first to Series B.
That is the core of the story because the capital structure is now unusually simple. As of year-end 2025 the company had no bank loans or other financial debt left, apart from Series B. The question is therefore not who ranks ahead of whom inside a crowded debt stack. The question is how much cash can remain at all after the waterfall that serves Series B, and how much, if anything, is still accessible above it.
The right frame here is not accounting profit and not portfolio value on paper. It is all-in cash flexibility: how much cash remains after the real uses that have already been hardwired into the structure. From that perspective, the Series B deed does not wait for the June 2027 maturity. It pulls cash out along the way.
| Trigger | What goes to bondholders | What may remain in the company | Why it matters |
|---|---|---|---|
| End of each quarter | All cash in the company and in controlled entities | An expense buffer of NIS 1.0 million or a higher amount set by the supervising accountant, up to NIS 1.25 million | Cash does not build up at the company. It is cleared out at almost every time checkpoint |
| Cash pile of at least NIS 4 million | Early redemption within 14 days, again on all cash in the box | The same expense buffer | Even fast collections between quarter-end dates do not create a free cash reservoir above the bond |
| Amount available for distribution below NIS 3 million | The money is still transferred to the trustee in trust for the next redemption | No release back to the company | Even small balances do not turn into spare cash for equity holders |
This is no longer theoretical. During 2025 the company executed five mandatory early redemptions totaling NIS 26.15 million par value. In other words, the mechanism has already proved that it works. Collections do not stay inside the company to rebuild the equity layer. They flow outward to the bond. For shareholders, that means the real question is not only whether the portfolio can still be collected, but who captures the cash on the way.
The Waiver Delayed the Test, Not the Waterfall
In December 2025 Series B holders granted a specific waiver of an immediate-acceleration trigger tied to the quarterly collection target, from December 31, 2025 through June 30, 2026. The next test date for that collection trigger therefore moved to September 30, 2026. That bought time. It did not change the allocation of power over the cash.
The more important point is that the company itself now says two blunt things. It does not expect to meet the collection target on September 30, 2026, and it does not believe the bonds will be repaid in full in the future. The waiver is therefore not a solution. It is only a technical delay of the enforcement moment.
The forecast itself is not built on a hard base. The company explains that gross customer receivables at the end of 2025 stood at roughly NIS 130 million, of which roughly NIS 124 million, about 95%, were already Stage 3. More importantly, the expected receipts from future arrangements are based only on the company's preliminary estimates, not fully on signed arrangements, and the company itself notes that some customers who sign arrangements do not comply with them.
That uncertainty is not a boilerplate warning. The company also published a comparison between the forecast it had issued for 2025 and what actually happened, and the comparison shows that collections came in weaker than expected:
| Item | Published 2025 forecast | Actual 2025 | Gap |
|---|---|---|---|
| Operating cash flow | NIS 37.767 million | NIS 29.761 million | Negative NIS 8.006 million |
| Series B repayment | NIS 42.259 million | NIS 29.049 million | Negative NIS 13.210 million |
| Ending cash | NIS 1.0 million | NIS 6.204 million | Positive NIS 5.204 million |
Higher ending cash is not good news here. It mainly reflects the fact that less cash was collected, and therefore less cash was swept out to the bond. That is exactly why it is wrong to read a momentary cash balance as if it were surplus value above Series B. As long as collection pace is weak, cash that remains temporarily is, at best, a waystation before a later redemption or before an enforcement event.
The All-in Cash Flexibility Picture
To understand what is actually left above the bond, the right place to look is the framework the company itself provides. The forecast cash flow for 2026-2027 already includes wages, legal expenses, professional fees, and rent inside operating cash flow. Against that operating flow stands one large financing use: repayment of Series B.
The two-year picture is close to fully closed. The company starts 2026 with NIS 3.303 million of cash, expects operating cash flow of NIS 20.087 million in 2026 and NIS 4.671 million in 2027, and expects to repay NIS 22.390 million to Series B in 2026 and another NIS 5.671 million in 2027. The result is only NIS 1.0 million of cash at the end of 2026 and zero cash at the end of 2027.
This is exactly the difference between a normalized cash read and an all-in cash read. The question here is not how much the book might produce in a clean theoretical world. The question is how much cash remains after the expenses already embedded in the forecast and after the debt-service burden imposed by the deed. On that basis, there is no visible free-cash layer above Series B right now. There is only a narrow operating cushion, and even that cushion exists to keep collections going, not to create value that equity can actually access.
Carrying Value, Market Value, and Contractual Debt Are Not the Same Thing
Another classic mistake in a story like this is to assume that one number captures the whole picture. In practice there are at least five different languages describing the same debt:
The year-end exchange market value of Series B was NIS 24.081 million. The carrying value in the financial statements was NIS 45.323 million. Contractual principal stood at NIS 80.269 million, and with 15% interest through that date the debt reached NIS 95.501 million. At the same time, the company's total assets were only NIS 41.014 million and equity had already fallen to a negative NIS 5.078 million.
Those gaps say several things at once. The market value says the market is pricing a partial recovery. The carrying value is an accounting number, not a free cash pocket waiting above the bond. And the contractual claim is far larger than both numbers. Put simply, anyone looking only at the carrying value and concluding that there is still a safe layer above Series B is missing both the price the market gives the bond and the size of the contractual claim.
Accounting also deepens the gap. In 2025 the company recorded NIS 25.064 million of finance expense on the bonds, at an effective annual rate of 104.56%, even though the contractual rate is 15%. That is a consequence of the structure of the debt arrangement and its accounting measurement. So neither the finance line nor the carrying value is a good way to understand what is truly left for equity. The mechanism that decides that question is the collection-and-redemption waterfall, not the measurement model.
January Through March: Bondholders Moved Into Control Mode
If December 2025 provided a waiver, January through March 2026 showed how bondholders were preparing to manage the decision point:
| Date | Step | Economic meaning |
|---|---|---|
| 5.1.2026 | Appointment of a representative to examine and advance proposals to acquire the company's activity or its shares under Section 10.1.32 of the deed | Bondholders want to control a possible sale path rather than wait for passive collections |
| 11.3.2026 | Consultation meeting on a request to appoint a receiver over all company assets and on a proposal to appoint CPA Aliza Sharon as receiver and trustee | The bond layer is already evaluating a full enforcement route, not just arrangement management |
| 1.12.2025 through 31.5.2026 | Request to approve an extension of the supervising accountant's payment, NIS 50 thousand per month plus VAT | Oversight of the cash box continues to cost money, but it is also preserved as a control tool for bondholders |
These moves are connected. A representative empowered to review sale proposals, a discussion about appointing a receiver over all assets, and continued payment to a supervising accountant with joint-signature powers are three expressions of the same shift. The right over the cash box and over the realization process is moving in practice toward Series B.
The cost of the supervising accountant matters too, not because of its size alone but because of where it sits in the waterfall. A six-month extension at NIS 50 thousand per month adds another NIS 300 thousand plus VAT to the supervision cost layer. That is small relative to the debt, but it sits exactly inside the allowed expense cushion. It is therefore another reminder that even the management of the process itself comes first out of the same narrow layer above the bond.
Bottom Line
Series B is not a claim waiting quietly at the end of the road. It is already sitting on the cash box, through quarterly redemptions, through the NIS 4 million trigger, and through a mechanism that transfers even small amounts to the trustee instead of leaving them in the company. That means the question of what remains above it is not an accounting question. It is a recovery question.
As of year-end 2025, and based on the company's own forecast, there is very little visible free cash above Series B. The waiver through June 30, 2026 bought more time, but the company already warns that the September 2026 target is not expected to be met either. At the same time, the appointment of a representative, the receiver discussion, and the continued supervising-accountant oversight show that bondholders are no longer just watching from the side.
The practical conclusion is sharp. Any value that may still emerge above Series B depends either on collections surprising to the upside versus current assumptions, or on a sale process that delivers a better recovery than the current path. Without one of those two things, Series B keeps absorbing most of the cash and the layer above it remains very thin.
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