AI infrastructure firm SQream enters insolvency process as losses top $100 million
Court filing details debts across wages, taxes, rent, and royalties.
The veteran high-tech company Scailium (formerly SQream) has accumulated debts of over 13.6 million shekels ($4.69 million) and on Monday filed an application with the Tel Aviv District Court requesting an order to open proceedings to examine the possibility of economic rehabilitation, along with the appointment of a temporary trustee.
According to the filing, “the applicant company has accumulated losses of over 300 million shekels ($103.45 million) as of 2023, and debts totaling 13.6 million shekels ($4.69 million), and is unable to meet its current and future obligations.”
The request notes that SQream has developed significant technology in the field of AI infrastructure and has raised tens of millions of shekels from investors. Founded in 2010, the company operates in data processing and high-performance computing infrastructure, particularly for large-scale data analytics and artificial intelligence applications.
In the filing submitted through attorneys Idan Adler Reis and David Zanani of Furth, Wilensky, Mizrachi, Knaani, the company states it has developed GPU-based technology designed to accelerate data processing and improve efficiency in advanced computing systems, especially in environments where traditional architectures create bottlenecks and underutilized compute resources.
In recent years, SQream has focused on licensing its database and analytics software, with headquarters in Israel and commercial activity primarily in North America and South Korea.
The company argues that the ongoing war in Israel over the past two and a half years has also made it more difficult to raise capital from foreign investors. Given its cash flow constraints and the risk of further asset erosion, management concluded it had no choice but to turn to court in order to preserve assets and enable an orderly sale process.
The filing further states that by 2024, the group had accumulated losses estimated at approximately $145 million (≈420.5 million shekels).
Total debts are reported at over $4.6 million (≈13.34 million shekels), including:
- Approximately $827,600 (≈2.4 million shekels) owed to employees
- Approximately $139,700 (≈405,000 shekels) in unpaid pension contributions
- A debt of $514,500 (≈1.492 million shekels) to Mizrahi Tefahot Bank
- Approximately $114,800 (≈333,000 shekels) in unpaid income tax deductions
- Approximately $101,700 (≈295,000 shekels) in National Insurance contributions
- Approximately $172,400 (≈500,000 shekels) owed to suppliers and service providers
- Approximately $103,400 (≈300,000 shekels) in unpaid rent obligations
- Approximately $137,900 (≈400,000 shekels) in royalties owed to the Israel Innovation Authority
The application also states that the company attempted efficiency measures, strategic changes, rebranding, fundraising, and a potential sale, but was unable to secure capital or a buyer.
“The company is currently facing a breaking point and can no longer continue its operations. Its total liabilities exceed its assets, and it is insolvent both in balance sheet and cash flow terms,” the filing states.
On May 7, 2026, employees were informed of the suspension of operations and placed on unpaid leave due to severe cash flow constraints and inability to meet payroll obligations.
The company said in response that it had recently pursued capital raising and strategic alternatives until the last moment, but these efforts did not result in a binding agreement. It added that there is interest in its technology and assets, and that the court process is intended to maximize value in an orderly manner.
