Nexentis Technologies Inc. Debt Disclosure
NOTE 7 – INVESTMENT AND LOAN TO SOLTERRA
| 1. | On June 30, 2024, the Company entered into a 24 months Loan Agreement (the “Loan Agreement”) with Solterra Renewable Energy Ltd. (“Solterra”) and certain other lenders (collectively, the “Lenders”) pursuant to which the Lenders committed to loan Solterra the aggregate principal amount of € 500 thousands (approximately $542) (€ 375 thousands (approximately $406) of which was committed by the Company) with interest accruing on the principal at the rate of 7% per annum, to be paid annually beginning June 30, 2025 until the repayment of the loan Solterra shall have the option to convert the Loan Agreement to the shares of Solterra Energy Ltd (“SE”) (formerly AI Conversation Systems Ltd.) an Israeli company (which merger was closed at November 24, 2024) at a price which is the lowest price per share of SE under which it raises capital in in the period starting the date of the Loan Agreement and the loan conversion. In the event the loan is not converted or repaid in full within 9 months from the closing date of the merger then the interest rate shall increase from 7% to 12% per year. On July 8, 2024, the Company transferred €375 thousands (approximately $406). The Company estimated the fair value of the Loan Agreement using a third-party appraiser by discounting the principal and interest at a discount rate of market interest for similar loans. The interest rate was determined, among other things, based on the other similar loans granted to Solterra, at 32.7% as of December 31, 2024. The Company calculated the fair value of the Loan Agreement at $350 as of December 31, 2024. |
The Company’s chairman of the board of directors is also a director of SE.
| 2. | On November 27, 2024, the Company acquired shares of SE for a total consideration of NIS 300 thousands (approximately $82). Subsequently, on December 31, 2024, the Company acquired an additional shares of SE for a total consideration of NIS 501 thousands (approximately $137). |
As of December 31, 2024, the Company recorded gain from the increase in the fair value of the shares in the amount of $88.
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.