Midas Investments in the First Quarter: Cash Fell and December Debt Still Depends on NIS 60 Million
Midas entered the second quarter with only NIS 3.3 million of solo cash and a 2026 cash plan that assumes NIS 60 million from asset sales or new debt. Vericast and Norton add asset value, but they still do not solve the parent-level December funding event.
The first quarter did not change the direction of Midas Investments, but it made the story more measurable and more time-sensitive: the assets are still there, some are improving, yet the parent company entered April with very little cash against near-term maturities. Solo cash fell to NIS 3.3 million after NIS 5.6 million of investing cash use and another negative operating cash flow, while the cash forecast through the end of 2026 already assumes NIS 60 million from asset sales or new debt. That is not a technical detail, because the same window includes NIS 40.2 million of bond principal repayment, NIS 6.4 million of bond interest, and NIS 2.9 million of further investments in investees and assets. The U.S. Vericast assets supported accounting and operating results, and Norton adds exposure to a logistics asset with a long lease, but material cash reaching the parent is still barely visible. The question after the first quarter is therefore not whether Midas owns assets with value, but whether it can turn those assets into enough cash before December 2026 stops being a distant date and becomes a funding event. The next proof point is not another appraisal, but a signed cash source: a disposal, a debt raise, or refinancing that lowers parent-level pressure.
Cash Fell, and the 2026 Plan Needs One Large Source
The important first-quarter number is not the NIS 2.8 million net loss, which was broadly similar to the comparable quarter. The number that frames the story is cash flexibility after all actual cash uses. Consolidated cash fell from NIS 11.6 million at year-end 2025 to NIS 3.5 million at the end of March 2026. At the solo level, the layer that services the bonds, cash fell from NIS 9.6 million to NIS 3.3 million.
This is where reported profit and all-in cash flexibility need to be separated. Consolidated operating cash flow was negative by NIS 0.6 million, but the larger use was investing activity: NIS 7.5 million, mainly the Mydas Norton investment. There was no positive financing cash flow in the quarter to cover the gap. The solo picture is similar: negative operating cash flow of NIS 0.7 million, NIS 5.6 million used in investing activity, and no financing inflow.
The cash forecast makes this quarter an important timestamp. The issue is not only that working capital is negative. Consolidated working capital deficit is NIS 60.7 million, and solo working capital deficit is NIS 60.2 million. The April to December 2026 plan starts with NIS 3.3 million of cash and assumes NIS 60 million from asset sales or debt raising. Against that stand NIS 4.1 million of operating expenses, NIS 6.4 million of bond interest, NIS 2.9 million of investments in investees and assets, and NIS 40.2 million of bond principal repayment.
The implication is that the company cannot rely on high asset values staying on paper. It needs one relatively large source, or several smaller sources that close on time. The comparison with market value sharpens the point: around the late-May trading level, the equity market cap was roughly NIS 42 million, close to the size of the December 2026 principal repayment. This is not a recommendation or a share-price conclusion. It is a risk screen: the market is likely to read Midas through its ability to pass the near-term debt event, not only through the asset list.
U.S. Assets Add Value, but Not Enough Parent Cash
The positive side of the quarter comes mostly from the United States. The Vericast portfolio, held through Mydascity US, reported investment property value of USD 39.2 million at the end of March, compared with USD 37.4 million at year-end 2025. The two assets, Durham and Livonia, were 100% occupied, and the main valuation assumptions include NOI of USD 1.2 million for Durham and USD 1.286 million for Livonia. At Midas level, Vericast contributed NIS 1.4 million of equity-method profit in the quarter, up from a lower contribution in the comparable quarter.
That is also where the distinction between asset value and accessible cash matters. Vericast distributed only NIS 139 thousand of dividends to the group in the quarter. The accounting profit matters, and the attached appraisals support the view that these are real assets rather than only a narrative. But that does not replace a parent-level cash source. In Livonia, for example, the asset is fully leased to Vericast until September 2032, but the appraisal also lists the tenant’s credit rating, the decline in the direct-mail industry, and the age of the building as risk factors. Even the signed floor in the portfolio is not frictionless.
Norton adds another layer. Midas indirectly acquired 10% of a company that owns a logistics center in Massachusetts, with approximately 42,600 square meters of rentable built area, a partial lease to a U.S. corporation for about 15 years, and annual rent of approximately USD 4.5 million with 3% annual increases. This is an asset with a long contract, but it also required Midas to contribute about USD 2.2 million of equity in a transaction where total property cost, including costs, reserves and tenant improvements, is approximately USD 65 million against a local bank loan of about USD 43 million.
The simple reading is that Norton is another asset expanding the U.S. base. The more cautious reading is that, in a quarter when solo cash fell to NIS 3.3 million, Midas chose to invest more in expanding the asset portfolio. That can prove value-creating if the asset starts releasing cash, but in the short term it increases the importance of another financing or disposal source arriving on time.
| Business layer | What happened in the first quarter | Economic meaning |
|---|---|---|
| Midas solo | NIS 3.3 million cash and a plan for NIS 60 million of sources by year-end 2026 | The funding pressure sits mainly at the parent company |
| Vericast | USD 39.2 million property value, 100% occupancy, NIS 139 thousand dividend to the group | Real asset value and operations, but limited cash upstreaming |
| Norton | 10% acquisition in a logistics asset with annual rent of about USD 4.5 million | Portfolio expansion, but also a cash use in a sensitive period |
| Virginia | USD 52.5 million value and 61% occupancy, with no material fair-value change in the quarter | Upside still depends on lease-up |
| MidasCity and Momentum | Revenue rose, but a NIS 77.4 million bank loan still depends on a written extension | Operating improvement does not replace debt resolution |
Momentum Improved, but Its Debt Still Needs a Written Deal
Coverage continuity matters here. In the prior analysis of Momentum, the asset already looked better operationally, but the question was whether the improvement was enough to turn its debt into stable financing. The first quarter gives only a partial answer. MidasCity, which holds Momentum, reported revenue of NIS 1.26 million versus NIS 0.96 million in the comparable quarter, and operating profit rose to NIS 0.66 million from NIS 0.31 million. The loss narrowed to NIS 0.53 million from NIS 1.02 million.
Those are positive signs, but the debt is still larger than the improvement. MidasCity has NIS 77.4 million of bank loans, and the original agreement set a February 2026 maturity. As of the report approval date, the company had received oral bank consent to extend the maturity by 14 months, and the written agreement was expected to be signed in the coming days. That is better than having no consent at all, but it is still not the same level of certainty as signed financing.
This gap also matters for the parent company. If Momentum resolves its debt on the basis of the asset itself, pressure on Midas declines. If the process is delayed or signed on tougher terms, even an operationally improving asset can continue to consume attention, collateral, or financing flexibility. Momentum is therefore not only an Israeli income-producing asset. It is a gauge of how much of Midas’s asset value is already bankable enough to stand on its own.
December 2026 Is the Near-Term Event
Midas is in compliance with the bond financial covenants, but the room is not wide. Equity in the covenant tables is NIS 42 million. For Series E and Series 2, the interest step-up threshold is NIS 40 million. Net financial debt to net CAP stands at 77%, compared with an 80% interest step-up threshold and an 85% event-of-default threshold. The company is not in a covenant event, but another weak quarter, a negative revaluation, or a delayed cash source would matter.
Kiryat Anavim and Herbert Samuel do not currently change the picture for the better. Kiryat Anavim reported first-quarter revenue of NIS 271 thousand and a loss of NIS 1.3 million, mainly because of finance expenses. Herbert Samuel remains land inventory of NIS 86.7 million, but its related NIS 23.1 million loan is one of the factors behind the working-capital deficit and matures in December 2026.
The conclusion for the coming quarters is clear enough: Midas has enough asset substance to keep the value story alive, but not enough cash to calm the near-term debt story. 2026 is a financing bridge year. It will look better if the company reports a signed disposal, debt expansion, or refinancing that covers a material part of the NIS 60 million assumed in the cash plan. It will look weaker if more cash is used before a funding source arrives, if the MidasCity loan extension is not signed, or if the U.S. upside remains mostly in appraisals rather than moving up to the parent.
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