Arika Carmel: The Aigen loan, offsets, and the related-party web in the balance sheet
Arika Carmel’s balance sheet shows a receivable from Aigen, but once the supplier offsets, deferred compensation to the controlling shareholder, and interest-bearing deferrals are connected, that asset mostly disappears. This is not extra liquidity for shareholders, but an internal web that buys the company time.
The main article already showed that Arika Carmel’s 2025 operating improvement did not build a new cash cushion. This follow-up isolates the balance-sheet knot that matters most for real liquidity: Aigen, the controlling shareholder, and family-related balances appear at the same time as receivables, suppliers, and deferred amounts owed by the company. Once those lines are connected, the NIS 2.6 million that Aigen owes Arika no longer looks like a free asset for shareholders.
That is the core point: on a one-line reading, Arika looks like a lender to Aigen. On a full reading, this is almost an internal financing loop. Part of Aigen’s debt is offset against Arika’s payable to Aigen, part of the liquidity pressure is pushed out through deferred salary and adaptation pay owed to the controlling shareholder, and part of the cost shows up as interest. A reader who does not connect those notes misses the real balance-sheet picture.
What is left of the “asset” once the full web is connected
The story starts before note 26. In section 4.1 of the board report, the company explains that receivables and other debit balances increased by about NIS 1.8 million in 2025, mainly because a loan to a related company includes principal of about NIS 1.3 million that is due in June 2026. In other words, part of the improvement in current assets came from the clock, not from cash.
Note 26 shows why that matters. At the end of 2025, the company had NIS 1.396 million of receivables from a company controlled by the controlling shareholder, plus NIS 1.199 million of long-term receivables from the same layer. That is NIS 2.595 million in total. But on the same date, the company also carried NIS 1.944 million of suppliers payable to that same related company, and another NIS 1.171 million of payables to controlling shareholders and their relatives.
When those lines are connected, the picture changes materially:
| Item in the related-party web | 2024 | 2025 | Why it matters |
|---|---|---|---|
| Debt owed to Arika by a company controlled by the controlling shareholder | 2.482 | 2.595 | In 2025 the balance is already split between current and long-term |
| Debt owed by Arika to that same related company in suppliers | 1.589 | 1.944 | This is not an ordinary trade payable because it is linked to the loan repayment schedule |
| Payables to controlling shareholders and relatives | 1.458 | 1.171 | Deferred salary, adaptation pay, and unpaid compensation |
| Simple net position against the control group | (0.565) | (0.520) | On a basic analytical netting, the gross asset is almost fully erased |
That table is the heart of the continuation thesis. Even after the 2025 operating improvement, and even after the Aigen distribution agreement ended in May 2025, the balance sheet did not actually unwind the related-party web. The simple net position against the control group stayed negative by roughly half a million shekels in both 2024 and 2025. That is not a new asset cushion for common shareholders. It is a structure in which one internal balance keeps offsetting another.
This chart shows why the balance sheet can mislead. A reader who looks only at the receivable from Aigen sees NIS 2.6 million. A reader who connects the whole other side of the same structure sees that the asset is almost fully absorbed by liabilities to the same control layer.
Aigen is not just a borrower, it is also a supplier and a repayment mechanism
The Aigen relationship is not a clean loan. Under the note, the original financing agreement carried interest at prime plus 3.5% and was supposed to be repaid in five annual installments between June 2023 and June 2027. But around that loan, an additional layer was built: the distribution agreement allowed Arika to defer and reduce payments that it itself owed to Aigen, and those deferred amounts could later be treated as repayments on the loan.
That is the economic point: Aigen did not sit only on the debtor side. It also sat on the supplier side, and on the side of a mechanism that eased the company’s liquidity pressure.
That framework went through several revisions. In March 2023, Arika received the right to defer NIS 100,000 per month from what it owed Aigen. In September 2023, trigger formulas were added: if cash and cash equivalents together with short-term investments stayed below NIS 10 million for 45 days, the reduction would rise to NIS 200,000 per month; if those balances exceeded NIS 15 million for 45 days, the reduction would stop and accumulated deferred amounts would be repaid to Aigen, subject to board approval that no material liquidity problem existed. In March 2024 the arrangement was extended, and for the January to June 2025 period the agreement already said that, in principle, no further deferrals would be allowed and the company would pay Aigen NIS 150,000 per month against the accumulated reduction amount, unless the tested balances remained below NIS 12 million for 45 days.
That matters because the year-end liquidity picture was nowhere near those trigger levels. At the end of 2025, Arika had only about NIS 4.1 million in cash and short-term investments. Without claiming that any specific 45-day trigger was or was not met, the filing makes clear how distant the NIS 10 million, NIS 12 million, NIS 14 million, and NIS 15 million thresholds were from the company’s actual liquid balance. The offset agreement was therefore not just a technical clause. It functioned as a financing layer.
Section 21.3 of the board report shows how the company itself already reads this through a credit lens. It describes average supplier credit of about NIS 9.6 million, of which about NIS 2.6 million was owed to the Chinese manufacturer, including storage charges and monthly interest on the balance. The same section adds that the debt to Aigen stood at about NIS 1.9 million at year-end 2025 and was offset according to the repayment schedule of the loan that Arika had granted Aigen. So the suppliers line is no longer a pure working-capital line. It already contains both external financing economics and related-party financing economics.
In practice, the same knot appears in three places: as a loan from Arika to Aigen, as a debt from Arika to Aigen, and as a route through which a commercial payable can turn into loan repayment. That structure creates time, but it does not create clean liquidity.
Even the controlling shareholder’s compensation became bridge financing
The Aigen relationship is only half the picture. The other half sits in the employment arrangements with Michael Shlosser. The company states that his salary was first cut by 50% and then by 100%, and that the reduction was temporary and did not constitute a waiver. Later, repayment mechanisms were put in place that look very similar to the Aigen logic: monthly repayments of NIS 100,000, but only if cash and short-term investments stayed above certain thresholds for 45 days. At first the threshold was NIS 14 million, and later, for the period between April and September 2025, NIS 12 million. For that deferral period only, the controlling shareholder was also entitled to interest.
At the signing date of the financial statements, the deferred amounts and adaptation pay had still not been paid, and the company’s obligation to the controlling shareholder on that line stood at about NIS 1.1 million. For a company that ended 2025 with only about NIS 4.1 million in cash and short-term investments, that is a meaningful number. Once viewed this way, the deferred compensation can no longer be treated as merely a remuneration detail. It is another financing layer provided by the controlling shareholder.
The broader compensation picture still shows how involved the family layer remained in 2025. The company recorded wage expense of NIS 235,000 to the controlling shareholder and NIS 671,000 to relatives of controlling shareholders. At the same time, the year-end balances included NIS 55,000 of payables to relatives of the controlling shareholder. That is not the main balance-sheet issue, but it reinforces the same conclusion: what looks from the outside like a small operating balance sheet is in practice a balance sheet supported by the flexibility of the controlling circle.
This chart is not meant to create an accounting netting that the financial statements do not present. It is meant to show why the gross related-party receivable should not be read as spare liquidity. Once the full web of offsets, deferrals, and payables is connected, the gross asset almost disappears.
Even the interest line does not translate cleanly into cash
There is one more reason to avoid a superficial reading: the financing layer itself is not presented in an intuitive one-line way. Note 26(b) shows NIS 226,000 of finance income in 2025 from a company owned by the controlling shareholder. Inside note 26(d)(1), the company also states explicitly that from January through December 2025 it recorded about NIS 131,000 of interest income on the deferred amounts. But in note 25, under finance income, interest on loans to related parties stands at only NIS 37,000.
This does not necessarily mean an accounting contradiction. It does mean something else: a reader who tries to translate related-party interest directly into available cash will struggle to do so through a single finance line. Part of the interest sits on the loan, part of it sits on the deferral mechanics, and part of it is disclosed inside the related-party transactions note. This is exactly the kind of case where the reported financing income should not be treated as a clean proxy for liquid interest receipts from Aigen.
| Where the financing element appears | 2025 | Analytical meaning |
|---|---|---|
| Finance income from a company owned by the controlling shareholder, note 26(b) | NIS 226k | The Aigen relationship runs through the financing line, not only through receivables and suppliers |
| Interest on deferred reduction amounts, note 26(d)(1) | about NIS 131k | The deferred payment itself became interest-bearing |
| Interest on loans to related parties, note 25 | NIS 37k | The main finance-income line does not, by itself, capture the whole picture |
This sounds small, but it changes how the balance sheet should be read. If the same related-party web generates finance income, supplier balances, and deferred compensation, then the related-party asset cannot be treated as spare liquidity. At most, it shows that the company bought time, and part of that time carried an interest cost.
Conclusion
The main article argued that Arika’s operating improvement still did not create a real margin of safety. This continuation shows why. Inside the balance sheet sits a related-party web in which Aigen is at the same time a borrower, a supplier, and an offset route, while the controlling shareholder is both a creditor for deferred salary and adaptation pay and a party that provided interest-bearing liquidity flexibility.
So the right question is not whether Aigen “owes” Arika NIS 2.6 million. The right question is what remains accessible to shareholders once the offsets, supplier balances, deferred compensation, and interest layers are all connected. As of year-end 2025, that answer is far less comfortable than the receivables line suggests. This is not an extra cash cushion. It is an internal system that gives the company more time, as long as related parties continue to carry part of the load.
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