Ein Shlishit: How 2026 Is Really Being Funded Between the Bank Line, Suppliers, and EDGE
The main article identified working-capital pressure, but this follow-up maps the full chain: in 2025, NIS 8.93 million was absorbed by inventory and customer-side exposure, suppliers stretched by NIS 6.81 million, and the bank carried NIS 11.52 million of order-backed credit while EDGE cash was still waiting to close.
The main article already made the broad point: 2025 proved demand, but it still did not prove cash economics. This follow-up isolates the 2026 funding bridge itself: who carried the gap between order, production, and recognition, and where that chain is still tight.
The first important number is not orders. It is cash. Ein Shlishit ended 2025 with only NIS 1.13 million of cash, after NIS 10.27 million of cash used in operating activities and another NIS 2.41 million used in investing activities. At the same time, working capital remained positive by only about NIS 1.4 million, and equity by only about NIS 3.3 million. 2026 is not opening from a position of comfortable liquidity. It is opening from a position of active bridge management.
That is also the right context for the auditors' emphasis paragraph. This was not a qualified opinion, but it did underline that the 15 month liquidity view rests on a cash-flow forecast and on the assumption that investor proceeds will arrive soon, not on cash that is already sitting on the balance sheet. That is the starting point of this follow-up.
Where The Cash Really Got Stuck
The first link in the chain is working capital. In 2025, inventory jumped from NIS 4.716 million to NIS 11.488 million, an increase of NIS 6.772 million. This was not only a components story. Work in progress alone rose from NIS 1.666 million to NIS 7.233 million. In other words, a meaningful part of the cash moved into production before it became revenue.
The second link is less obvious on a quick read. If someone looks only at trade receivables, they may think the picture improved, because open invoices fell from NIS 6.257 million to NIS 4.838 million. That reading is incomplete. In the same year, contract assets rose from NIS 5.508 million to NIS 9.085 million. Together, receivables plus contract assets increased from NIS 11.765 million to NIS 13.923 million, exactly the same NIS 2.158 million increase that appears in the cash-flow statement. Cash did not really get released from the customer side. It only changed form, from open invoice to contract asset.
The chart shows why 2026 is relying on a chain rather than on one clean source. Customer-side exposure increased, inventory surged, and cash shrank. The party that closed most of the gap inside 2025 was first of all suppliers. Open supplier balances jumped from NIS 2.187 million to NIS 9.0 million, an increase of NIS 6.813 million, almost one for one against the inventory build. That is the key point. Before EDGE, and before any additional equity layer, suppliers were already financing the ramp in practice.
That leads directly to the practical conclusion. If 2026 still requires inventory build and work in progress before delivery, the company will need either faster conversion of contract assets into collections, or more time from the bank and from suppliers. Without one of those two, inventory will keep sitting on cash faster than revenue comes in.
The Bank Line Is Execution Finance, Not Spare Cash
The bank line is the third link, and it matters precisely because it is easy to misread. At year-end 2025, short-term bank credit stood at NIS 11.519 million. That sounds like a large jump in liquidity. In practice, it is focused financing against orders and invoices, not spare cash that management can freely redirect.
On May 6, 2025, the subsidiary opened a NIS 10 million credit agreement, and on November 24, 2025, an additional NIS 3.5 million line was added. The terms make the real nature of the facility clear:
| Item | Facility terms |
|---|---|
| Size | NIS 10 million, later expanded by NIS 3.5 million |
| First use | Financing of up to 50% of order value for 180 days |
| Second use | Invoice financing for 90 days |
| Pricing | Prime + 3.35% for orders, or Prime + 2.6% for invoices |
| Immediate security | About NIS 1.2 million of bank deposit |
| Collateral | First-ranking floating charge over the group's assets, plus fixed charges over unallocated shares, goodwill, fixed assets, IP, and rights to receive cash from customers |
| Post-balance-sheet status | Renewed for another year in March 2026 |
This changes the reading because the bank is not stepping in as a substitute for the market. It is stepping into the timing gap between order, production, and collection. The cash-flow statement sharpens that point. In 2025, the company drew NIS 11.519 million of short-term bank credit, but at the same time it paid NIS 3.0 million to repay another lender, NIS 410 thousand to repay shareholder loans, NIS 829 thousand on lease liabilities, and NIS 1.415 million of cash interest. That is why net financing cash flow ended at only NIS 5.865 million.
The implication is straightforward: the bank line did not create NIS 11.5 million of fresh room. It recycled the 2025 funding structure into something better aligned with actual orders, but still with a price, with collateral, and with trapped cash. The balance sheet shows that liquidity cost as well, a current restricted deposit of NIS 1.23 million alongside another NIS 521 thousand of long-term restricted deposit.
The lease layer reinforces the same conclusion. The move into the new offices and production site created NIS 4.316 million of lease additions in 2025, and total lease liabilities rose to NIS 4.131 million. Of that amount, NIS 845 thousand is current, and the contractual maturity table shows NIS 1.092 million of lease cash flows due within a year. So even if the bank line was organized around orders, it did not remove the fixed-use layer created by the physical expansion.
EDGE Is Supposed To Shorten The Chain, But It Had Not Carried It Yet
This is where the fourth link enters, EDGE. In January 2025, the company signed an investment agreement of about USD 10 million in exchange for an allocation of 30% to 32% of the fully diluted share capital. After year-end, in February 2026, shareholders approved the deal, and by the report date the stock exchange had also approved the share issuance.
But the wording matters more than the headline. Note 26 says the shares will be allotted immediately upon receipt of the remaining consideration, and note 1 on the group's business condition says management expects to receive the investor payment soon. The company does not quantify how much of the consideration had already been received by the publication date. So at the reporting point, EDGE still was not the link that funded 2025. It was the link expected to ease the pressure afterward.
That is also why the auditors' emphasis needs a precise reading. When management says the group has sufficient liquidity for 15 months, it is not looking only at NIS 1.13 million of year-end cash. It is looking at a forecast, at renewed bank credit, and at the expectation that investor funds will arrive soon. That is a possible read, but it is very different from saying the balance sheet alone had already solved 2026.
The March 11, 2026 follow-on order only makes that clearer. On the demand side, it is positive news, another roughly NIS 4 million from a domestic defense customer, with expected realization over about half a year and a possibility of additional orders during the year. On the funding side, it is exactly the same chain. The company explicitly says the amount is not yet revenue as long as the order can still be cancelled. So even after the balance-sheet date, the sequence remains the same: first the order, then execution finance, only then recognition.
The Equity Layer Did Not Disappear, But It Is Not A Clean Cash Bridge Either
Dilution is not sitting at the center of this bridge, but it still sits around it. At the end of 2025, employees, advisers, and officers held 1.923 million cumulative options, of which 1.022 million were exercisable, plus 118,351 RSUs. During 2025, another 499,623 options and 40 thousand RSUs were granted.
The point here is not to estimate how much cash the company might receive if some options are exercised. The company does not provide clean all-series proceeds detail here. The point is different: the equity layer remains open at the same time that the company still depends on the bank, on suppliers, and on the arrival of EDGE funds. So if 2026 improves, it first has to improve through faster cash conversion and better recognition, not through hope that another equity layer will solve the issue by itself.
The Bottom Line
In 2025, Ein Shlishit did not fund the move into serial production from cash generated by the business. It funded it through one connected chain: inventory and work in progress absorbed cash, receivables and contract assets kept money on the commercial side, suppliers provided almost the same amount of breathing room as the inventory build, and the bank laid out a bridge tied to orders and invoices. EDGE is the link supposed to ease that whole chain, but at the reporting point it still was not the link carrying it.
The reasonable counter-thesis is that the peak pressure may already be behind the company. If 2025 and 2026 orders convert into revenue and collections faster, if the bank line remains available, and if EDGE funds arrive on time, then the whole 2025 picture may later look like a typical transition bulge on the way into serial production. That is absolutely possible.
But until that happens, the practical read on 2026 remains clear. The decisive question is not whether demand exists. It is who is financing the months between order and cash. For Ein Shlishit, as of year-end 2025 and the post-balance-sheet disclosures, that answer is still split between suppliers, the bank, and EDGE, rather than already sitting in the company's own cash balance.
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