OPERATING AND FINANCIAL REVIEW AND PROSPECTS
Components of Results of Operations
Revenues. We generate revenues primarily from the sale of our products, and, to a lesser extent, services. The final price to the customer
may largely vary based on various factors, including but not limited to the size of a given transaction, the geographic location of the customer, the specific application for which products are sold, the channel through which products are sold, the
competitive environment and the results of negotiation.
Cost of Revenues. Our cost of revenues consists primarily of the prices we pay contract manufacturers for the products they manufacture for us, the costs of
off the shelf parts, accessories and antennas, the costs of our manufacturing and operations facilities, estimated and actual warranty costs, costs related to management of our manufacturers’ activity and procurement of our proprietary and other
product parts, supply chain and shipping, as well as inventory write off costs, depreciation of equipment and amortization of intangible assets. In addition, we pay salaries and related costs to our employees and fees to subcontractors relating to
installation, maintenance, and other professional services.
Significant Expenses
Research and Development Expenses, net. Our research and development expenses, net of government grants, consist primarily of salaries and
related costs for research and development personnel, subcontractors’ costs, costs of materials, costs of R&D facilities and depreciation of equipment. All of our research and development costs are expensed as incurred, except for development
expenses, which are capitalized in accordance with ASC 985-20 and ASC 350-40. We believe that continued investment in research and development is essential to attaining our strategic objectives.
Sales and Marketing Expenses. Our sales and marketing expenses consist primarily of compensation and related costs for sales and marketing
personnel, trade show and exhibit expenses, travel expenses, commissions and promotional materials.
General and Administrative Expenses. Our general and administrative expenses consist primarily of compensation and related costs for executive, finance,
information system and human resources personnel, professional fees (including legal and accounting fees), insurance, maintenance costs for information systems software, provisions for credit loss (doubtful debts), depreciation expenses, and other
general corporate expenses.
Restructuring and related charges. Restructuring expenses consist primarily of costs associated with reduction in workforce, establishment
of new research and development centers in additional countries, consolidation of excess facilities, termination of contracts and the restructuring of certain business functions. Restructuring and related expenses are reported separately in the
consolidated statements of operations.
Acquisition- and integration-related charges. Acquisition-related expenses include those expenses related to acquisitions that would
otherwise not have been incurred by the Company, including professional and services fees, such as legal, audit, consulting, paying agent and other fees. Acquisition-related costs are not included as components of consideration transferred but are
accounted for as expenses in the period in which the costs are incurred.
Integration-related expenses represent incremental costs related to combining the Company and its business acquisitions, such as third-party consulting and other third-party services related to
merging the previously separate companies' systems and processes.
Financial expenses and others, net. Our financial expenses and others, net, consist primarily of gains and losses arising from the
re-measurement of transactions and balances denominated in non-dollar currencies into dollars, gains and losses from our currency hedging activity, interest paid on bank loans and factoring activities, other fees and commissions paid to banks,
actuarial losses, and other expenses.
Taxes. Our taxes on income consist of current corporate tax expenses in various locations and changes in deferred tax assets and
liabilities, as well as changes in reserves for uncertain tax positions.
Results of Operations
The following table presents interim consolidated statement of operations data for the periods indicated and as a percentage of total revenues (in thousands of U.S. dollars).
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Six months ended
June 30, 2024
(Unaudited)
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|
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Six months ended
June 30, 2023
(Unaudited)
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$ |
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|
|
%
|
|
|
$ |
|
|
|
%
|
|
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Revenues
|
|
|
184,586
|
|
|
|
100.0
|
|
|
|
169,560
|
|
|
|
100.0
|
|
|
Cost of revenues
|
|
|
119,057
|
|
|
|
64.5
|
|
|
|
111,028
|
|
|
|
65.5
|
|
|
Gross profit
|
|
|
65,529
|
|
|
|
35.5
|
|
|
|
58,532
|
|
|
|
34.5
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|
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Operating expenses:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Research and development, net
|
|
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17,232
|
|
|
|
9.3
|
|
|
|
15,750
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|
|
|
9.3
|
|
|
Sales and Marketing
|
|
|
22,769
|
|
|
|
12.3
|
|
|
|
19,974
|
|
|
|
11.8
|
|
|
General and administrative
|
|
|
8,158
|
|
|
|
4.4
|
|
|
|
11,542
|
|
|
|
6.8
|
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Restructuring and related charges
|
|
|
1,416
|
|
|
|
0.8
|
|
|
|
897
|
|
|
|
0.5
|
|
|
Acquisition- and integration related-charges
|
|
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1,377
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|
|
|
0.7
|
|
|
|
-
|
|
|
|
-
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Total operating expenses
|
|
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50,952
|
|
|
|
27.5
|
|
|
|
48,163
|
|
|
|
28.4
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|
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Operating income
|
|
|
14,577
|
|
|
|
7.9
|
|
|
|
10,369
|
|
|
|
6.1
|
|
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Financial expenses and others, net
|
|
|
4,777
|
|
|
|
2.6
|
|
|
|
3,344
|
|
|
|
1.9
|
|
|
Taxes on income
|
|
|
1,564
|
|
|
|
0.8
|
|
|
|
2,969
|
|
|
|
1.8
|
|
|
Net income
|
|
|
8,236
|
|
|
|
4.5
|
|
|
|
4,056
|
|
|
|
2.4
|
|
Six months ended June 30, 2024, compared to six months ended June 30, 2023
Revenues. Revenues totaled $184.6 million in the first six months of 2024 as compared to $169.6 million in the first six months of 2023, an increase of $15.0
million, or 8.9%. Revenues in the India region increased to $61.6 million in the first six months of 2024 from $46.9 million in the first six months of 2023. Revenues in the North America region increased to $52.2 million in the first six months of
2024 from $48.6 million in the first six months of 2023. Revenues in the EMEA region increased to $33.9 million in the first six months of 2024 from $32.0 million in the first six months of 2023. Revenues in the Latin America region decreased to
$19.9 million in the first six months of 2024 from $22.5 million in the first six months of 2023. Revenues in the APAC region decreased to $17.0 million in the first six months of 2024 from $19.6 million in the first six months of 2023.
Cost of revenues. Cost of revenues totaled $119.1 million in the first six months of 2024 compared to $111.0 million in the first six
months of 2023, an increase of $8.1 million, or 7.2%. The increase was primarily attributed to:
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• |
Increase of $7.4 million relates to higher material costs, primarily due to the higher volume of revenues;
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• |
Increase of $1.0 million in shipping and storage costs;
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• |
Increase of $0.5 million relates to amortization of acquired intangible assets;
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• |
Increase of $0.2 million in salaries related expenses;
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• |
Increase of $0.2 million in travel and other indirect expenses;
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• |
Decrease of $1.2 million in inventories write-off.
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Gross Margin. Gross profit as a percentage of revenues increased to 35.5% in the first six months of 2024 from 34.5% in the first six
months of 2023. This increase is mainly attributed to increased revenues coupled with improvement in product costs and better control over our fixed costs.
Research and Development Expenses, Net. Research and development expenses, net, totaled $17.2 million in the first six months of 2024
compared to $15.8 million in the first six months of 2023, an increase of $1.5 million, or 9.4%. The increase was primarily attributed to higher salary and employee-related expenses of $1.6 million, and an increase of $0.4 million in other research
and development expenses, offset by an increase of $0.5 million in IIA (Israeli Innovation Authority) grants. Research and development expenses, net for the first six months of 2024, included Siklu's expenses for a complete six-month period for the
first time. Our research and development efforts are a key element of our strategy and are essential to our success. We intend to maintain our focus on research and development initiatives, and we foresee that an increase or a decrease in our total
revenue would not necessarily result in a proportional increase or decrease in the levels of our research and development expenditures.
Sales and Marketing Expenses. Sales and Marketing expenses totaled $22.8 million in the first six months of 2024 compared to $20.0 million
in the first six months of 2023, an increase of $2.8 million or 14.0%. This increase was primarily attributed to higher salary and employee-related expenses of $1.4 million, an increase of $0.8 million in trade shows, and marketing events and
expenses, an increase of $0.5 million in agents' commissions, and an increase of $0.4 million in amortization of acquired intangible assets, offset by a decrease in sales commissions expenses of $0.3 million. Sales and Marketing expenses for the
first six months of 2024 included Siklu's expenses for a complete six-month period for the first time.
General and Administrative Expenses. General and administrative expenses totaled $8.2 million in the first six months of 2024 compared to
$11.5 million in the first six months of 2023, a decrease of $3.3 million, or 29.3%. The decrease was primarily attributed to a decrease of $4.5 million in doubtful debts, which included a $4.0 million benefit related to an initial collection from a
$12.0 million debt settlement agreement reached with a South American customer. These are offset by an increase of $0.7 million in share-based compensation and an increase of $0.5 million in salary and employee-related expenses. General and
administrative expenses for the first six months of 2024 included Siklu's expenses for a complete six-month period for the first time.
Restructuring and related charges. Restructuring and related charges totaled $1.4 million in the first six months of 2024 as compared to
$0.9 million in the first six months of 2023, an increase of $0.5 million. The increase was primarily attributed to termination severance pay and other related costs for the impacted employees.
Acquisition- and integration-related charges. Acquisition- and integration-related charges totaled
$1.4 million in the first six months of 2024, whereas there were no Acquisition- and integration-related charges in the first six months of 2023. The increase was primarily attributed to the acquisition and integration expenses associated with the
acquisition of Siklu, which would otherwise not have been incurred by the Company, including professional and services fees, such as legal, audit, consulting, paying agent and other fees as well as incremental costs related to combining the Company
and Siklu, such as third-party consulting, facilities consolidation costs and other third-party services related to merging Siklu’s systems and processes.
Financial expenses and others, Net. Financial expenses and others, net, totaled $4.8 million in the first six months of 2024 as compared
to $3.3 million in the first six months of 2023, an increase of $1.5 million. This increase was mainly attributable to an increase of $2.3 million related to exchange rate differences, offset by a decrease of $0.5 million in net interest expenses and
a decrease of $0.3 million in other net finance expenses.
Taxes on income. Tax expenses totaled $1.6 million in the first six months of 2024 as compared to $3.0 million in the first six months of
2023, a decrease of $1.4 million. The decrease was mainly attributable to a decrease in deferred taxes of $1.3 million, and a decrease of $0.3 million in current tax expenses, offset by an increase of $0.2 million in respect of uncertain tax
positions.
Net income. The Company had a net income of $8.2 million in the first six months of 2024 as compared to a net income of $4.1 million in
the first six months of 2023, an increase of $4.1 million. As a percentage of revenues, net income was 4.5% in 2024 compared to 2.4% in 2023. The increase was attributable primarily to higher revenues and gross profit offset by higher operating
expenses.
Liquidity and Capital Resources
As of June 30, 2024, we had approximately $26.3 million in cash and cash equivalents.
On June 27, 2024, the Company renewed a total credit line of $117.9 million with the banks for an additional two years (until June 30, 2026) while maintaining the facility dedicated
for short-term loans on $77.0 million and reducing the facilities dedicated for bank guarantees to $40.9 million.
The credit facility is provided by a bank syndicate, with each bank agreeing severally (and not jointly) to make its agreed portion of the credit lines to us in accordance with the
terms of the credit agreement. Such credit agreement includes a framework for joint decision-making powers by the banks. As of June 30, 2024, we had $48.5 million available under our credit facility in the form of loans and $20.0 million available in
bank guarantees outstanding in respect of tender offer guarantees, financial guarantees, warranty guarantees and performance guarantees to our customers.
The Credit Facility contains financial and other covenants requiring that the Company maintains, among other things, minimum shareholders' equity value and financial assets, a
certain ratio between its shareholders' equity (excluding total intangible assets) and the total value of its assets (excluding total intangible assets) on its balance sheet, a certain ratio between its net financial debt to each of its working
capital and accounts receivable. As of June 30, 2024, the Company met all of its covenants.
The Credit Facility is secured by a floating charge over all Company's assets as well as several customary fixed charges on specific assets.
Net cash provided by operating activities was $11.3 million for the six months ended June 30, 2024. In the first six months of 2024, our cash provided by operating activities was predominantly
affected by the following principal factors:
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•
•
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our net income of $8.2 million;
a $8.5 million decrease in inventory;
a $5.9 million of depreciation and amortization expenses;
a $2.5 million of share-based compensation expenses;
a $0.5 million increase in trade payables and accrued liabilities; and
a $0.1 million loss from sale of property and equipment, net.
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These factors were offset mainly by:
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•
•
•
•
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a $10.6 million increase in trade receivables and other accounts receivables;
a $2.9 million decrease in deferred revenue;
a $0.6 million decrease in accrued severance pay and pensions, net; and
a $0.3 million decrease in operating lease liability, net.
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Net cash used in operating activities was $6.7 million for the six months ended June 30, 2023. In the first six months of 2023, our cash provided by operating activities was predominantly affected
by the following principal factors:
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•
•
•
•
•
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our net income of $4.1 million;
a $5.1 million of depreciation and amortization expenses;
a $4.1 million decrease in inventory;
a $1.9 million increase in share-based compensation expenses; and
a $0.4 million increase in deferred revenue.
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These factors were offset mainly by:
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•
•
•
•
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a $6.4 million increase in trade receivables and other accounts receivables;
a $1.6 million decrease in trade payables and accrued liabilities;
a $0.6 million decrease in operating lease liability, net; and
a $0.3 million decrease in accrued severance pay and pensions, net.
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Net cash used in investing activities was approximately $8.9 million in the first six months of 2024, compared to $7.3 million in the first six months of 2023. In the first six
months of 2024, our investing activities were comprised of $7.9 million paid for the purchase of property and equipment and $1.0 million of software development costs capitalized. In the first six months of 2023, our investing activities were
comprised of $5.5 million paid for the purchase of property and equipment and $1.8 million of software development costs capitalized.
Net cash used in financing activities was approximately $3.6 million in the first six months of 2024, compared to net cash provided by financing activities of $2.1 million in the
first six months of 2023. In the first six months of 2024, our net cash used in financing activities was primarily due to $4.1 million repayments of bank credit and loans, net, offset by $0.5 million of proceeds from stock-options exercise. In the
first six months of 2023, our net cash provided by financing activities was, attributed mainly to $2.1 million proceeds from bank credit and loans, net.
Our capital requirements are dependent on many factors, including, among other things, working capital requirements to finance the business activity of the Company and the
allocation of resources to research and development, marketing and sales activities. We may decide to raise capital if and when we may require it, subject to changes in our business activities.
We believe that current cash and cash equivalent balances, together with the credit facility available with the lenders, will be sufficient for our requirements through at least
the next 12 months.
COMMITMENTS AND CONTINGENT LIABILITIES
|
6 Months Ended |
Jun. 30, 2024 |
|---|
| Commitments and Contingencies Disclosure [Abstract] |
|
| COMMITMENTS AND CONTINGENT LIABILITIES |
| NOTE 7: |
COMMITMENTS AND CONTINGENT LIABILITIES
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| |
a. |
Israel Innovation Authority:
|
During the six months ended June 30, 2024, and 2023, the Company received several grants from the Israel Innovation Authority (“IIA”). The grants require the Company to comply with the requirements of the Research and Development Law, however, the Company is not obligated to pay royalties on sales of products based on technology or know how developed from the grants. In a case involving the transfer of technology or know how developed from the grants outside of Israel, the Company may be required to pay royalties related to past sales of products based on the technology or the developed know how. The Company recorded the IIA grants as a reduction of research and development expenses in the six months ended June 30, 2024, and 2023 in the amount of $765 thousand and $277 thousand respectively.
Prior to the Siklu Acquisition, Siklu had received research and development grants from the IIA. The Company assumed Siklu's contract with the IIA, which requires the Company to pay royalties to the IIA on sales of products based on technology or know-how developed from the grants. The royalties were calculated at the rates of 3% to 4% of the aggregated proceeds from the sale of such products. As of June 30, 2024, the Company's maximum possible future royalties commitment, including $3,035 thousand of unpaid royalties accrued, was $10,573 thousand, based on grants received from the IIA and not yet repaid.
| |
b. |
Charges and guarantees:
|
As of June 30, 2024, and December 31, 2023, the Company provided bank guarantees in an aggregate amount of $20,864 thousand and $26,686 thousand, respectively, with respect to tender offer guarantees, financial guarantees, warranty guarantees and performance guarantees to its customers.
The Company is currently involved in various claims and legal proceedings. The Company reviews the status of each matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss.
| |
1) |
Motion to Approve a Class Action (District Court of Tel Aviv - Economic Department)
|
On January 6, 2015 the Company was served with a motion to approve a purported class action, naming the Company, its Chief Executive Officer and its directors as defendants (the “Defendants”). The motion was filed with the District Court of Tel-Aviv (the “Court”). The purported class action alleges breaches of duties by making false and misleading statements in the Company's SEC filings and public statements. The class action claimed amount is $78,768 thousand (294,750 NIS thousand).
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1.1 |
On June 21, 2015, the Defendants filed their response to the motion, arguing that the motion should be dismissed.
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| |
1.2 |
On May 27, 2021, following a lengthy procedure that included filing of various pleadings and affidavits, evidentiary hearings, and submission of summaries, the Court ruled to certify the motion as a class action, while applying the Israeli Law (the “Ruling”). According to the Ruling, the class action shall include several causes of action according to the Israeli Securities Act and the Israeli Torts Ordinance, concerning the alleged misleading statements in the Company’s SEC filings.
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1.3 |
On June 9, 2021, the Court issued a decision suggesting that the parties refer the case to a mediation procedure.
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| |
1.4 |
The Company believes that the Ruling is erroneous and that the Defendants have strong defense arguments, and therefore, on September 12, 2021, filed a motion for a rehearing on behalf of the Defendants in order to revert the Ruling (the “Rehearing Motion”).
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1.5 |
On October 20, 2021, the Plaintiff submitted his response to the Rehearing Motion and the Defendants submitted their reply to the Plaintiff’s response on November 23, 2021.
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| |
1.6 |
Without delaying or derogating from the Rehearing Motion, the Company agreed to the Court’s suggestion that the parties refer the case to a mediation procedure and designated the retired Judge B. Arnon as a mediator. After several mediation meetings were held, the mediation process ended without reaching a settlement.
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1.7 |
On January 3, 2022, a hearing was held in Court in the Rehearing Motion before the Honorable Justices K. Kabub, R. Ronen and T. Avrahami.
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1.8 |
On January 27, 2022, a judgment was rendered in the Rehearing Motion. The Court ruled that the Ruling was erroneous as it applied Israeli Law, instead of foreign law, and held accordingly that the law that will apply is U.S. law. The Court further held that the case will be returned to the first judicial instance and will be adjudicated as a class claim under U.S. law. The Court commented that the Company’s claims based upon the Statute of Limitations should prima facie also be adjudicated under U.S. law.
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1.9 |
On March 20, 2022, following the Court's decision, the Plaintiff filed to the first judicial instance, an amended class action claim, based on provisions of U.S. law. The Plaintiff estimated the amended claim amount at $45,430 thousand (170,000 NIS thousand).
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1.10 |
On June 28, 2022, following a joint application filed by the parties in order to approve certain procedural matters, the Court issued a decision suggesting that the parties should consider initiating another mediation procedure. On July 5, 2022, following the Court's decision, the parties filed a notice, informing the Court that they believe that the time to consider initiating another mediation procedure, will be only after the parties submit their pleadings.
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1.11 |
On November 3rd, 2022, the Defendants submitted their Statement of Defense, based on U.S law. On February 5th, 2023, the plaintiff submitted his response to the Defendants’ Statement of Defense.
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1.12 |
On June 15th, 2023, the court rejected a motion filed by the Defendants to rule on the issues of Statute of Repose and Limitations as a preliminary matter, and held that those issues will be dealt with as part of the main hearing. Additionally, the parties conducted preliminary procedures, including discovery and questionnaires, and filed related motions, which are still pending.
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1.13 |
On September 21, 2023, a preliminary hearing was held. At the conclusion of the hearing, the court ruled that it would issue written decisions on the discovery issues and then set dates for further proceedings.
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1.14 |
On September 28, 2023, the court approved the defendants’ motion for document discovery and determined that the documents in question are indeed relevant. As a result, the court has directed the plaintiff to furnish the requested documents by October 28, 2023. Alternatively, the court has given the plaintiff the option to waive any claims associated with these documents.
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1.15 |
On October 1, 2023, the court granted the plaintiff's motion for document discovery and ordered the Company to produce all requested documents and to complete some of the answers to the questions included in the plaintiff questionnaire within 45 days. In making this decision, it was determined that, in addition to the documents already provided to the plaintiff, the Company is required to disclose thousands of additional documents and document types. These materials, however, were deemed irrelevant and extended beyond the approved grounds for the class action request. The discovery and disclosure of such documents would impose a substantial burden on the Company.
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| |
1.16 |
As a result, on December 31, 2023, the Company sought permission to appeal the District Court's decision and requested a delay in its implementation. The Supreme Court granted a stay on the execution of the District Court's decision and scheduled a hearing for January 25, 2024.
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| |
1.17 |
During the hearing, the Supreme Court, presided over by the Honorable Judge Grosskopf, acknowledged the Company's contentions. It clarified that the extensive disclosure mandated by the District Court exceeded the necessary requirements accordance with the law, and suggested that the plaintiff negotiate agreements with the Company. These agreements aimed at significantly reducing the scope of disclosure, particularly concerning the period for which documents and correspondence must be provided.
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1.18 |
Following discussions both outside the courtroom and before the Honorable Judge, where the parties presented their arguments on each dispute demand, partial agreements were reached. These agreements outline the documents the Company will provide to the plaintiff.
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| |
1.19 |
Validated by the Supreme Court, these agreements substantially reduced the disclosure requirements outlined in the District Court's decision. The plaintiff, in turn, waived certain demands entirely and significantly narrowed others. For the limited remaining requirements, it was established that the Company would convey its position on transferring the requested documents to the plaintiff in the reduced format proposed during the hearing. It was also decided that if no agreements are reached concerning these documents, the court will make a decision on the matter.
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| |
1.20 |
On March 26, 2024, the Company provided the plaintiff with the required documents, in accordance with the agreements between the parties. On March 12, 2024, following the submission of pleadings by the parties, the Supreme Court reduced the amount of expenses imposed by the District Court against the Company in its decision dated October 1, 2023, since the appeal resulted in a reduction in the extent of disclosure initially determined by the District Court.
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| |
1.21 |
Recently, the parties have agreed to refer the dispute to a mediation procedure before the esteemed retired judge, Dr. Avi Zamir. The first mediation meeting was held on June 10, 2024. A second mediation meeting is expected to take place in the next few weeks.
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| |
1.22 |
On July 10, 2024, the plaintiff filed with the court an update on the mediation procedure's current status. Accordingly, the court instructed the plaintiff to provide a further update on the matter, by October 10, 2024.
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| |
1.23 |
Generally speaking, and as was held in the judgement rendered in the Rehearing Motion, U.S law presents a higher bar for plaintiffs in comparison to Israeli law in proving claims regarding misleading representations to investors. However, given that the class action is being adjudicated under U.S law and that the Court has yet to address the parties’ pleadings, and because of the preliminary stage of the lawsuit, the amount of loss cannot be reasonably estimated.
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| |
2) |
Claim against Station Enterprises Ltd. regarding breach of the Lease Agreement
|
A dispute has arisen between the Company and Station Enterprises Ltd, with respect to the lease agreement signed between the parties on April 11, 2019 (the "Lease Agreement"), under which the Company leases its offices and labs in Rosh Haayin.
| |
2.1 |
The Company, the lessee, claims that Station Enterprises was late in delivering the possession to the lessee and has not fulfilled its maintenance and management obligations. Therefore, the Company claims that Station Enterprises breached its contractual obligations, causing the Company damages and expenses.
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| |
2.2 |
Due to the said breaches, the Company has set-off the rent and management fees against outstanding debts of Station Enterprises towards the Company and provided Station Enterprises with a set-off notice.
|
| |
2.3 |
On 8 February 2022 Station Enterprises notified the Company on the termination of the Lease Agreement, and also on the exercise of the bank guarantees provided to it in connection with the Lease Agreement, in amount of NIS 2,492,327. The Company rejected the alleged termination notice, which was provided with no legal grounds, and further required Station Enterprises to avoid from exercising the bank guarantees. This demand was disregarded, and the bank guarantees were realized in full.
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| |
2.4 |
Under these circumstances, the Company filed a claim against Station Enterprises, in the framework of which the court will be asked to issue a Declarative Order, declaring that the notice of termination was invalid and that the Lease Agreement is valid and in force; to order Station Enterprises to reimburse the Company for the amount of the exercised bank guarantees; to order Station Enterprises to uphold and fulfill its contractual obligation and undertakings under the Lease Agreement and the management agreement; and to compensate the Company for the damages caused to it in an amount of 1.2 million NIS.
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| |
2.5 |
On October 13, 2022, Station Enterprises Ltd. submitted a new claim against the Company, for its eviction of from the leased premises. On March 27, 2023, the judge ordered the consolidation of the hearings in the two lawsuits.
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| |
2.6 |
The parties agreed to refer the dispute in both claims to mediation. The first mediation meeting was scheduled for May 8, 2023.
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| |
2.7 |
On June 27, 2023, a mediation meeting took place between the parties. After extensive meetings and negotiations between the parties, the mediation was unsuccessful.
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| |
2.8 |
On July 15, 2024, during the first pre-trial, the judge made another attempt to mediate the dispute between the parties, but without success. Consequently, the court scheduled deposition dates and set another pre-trial for March 5, 2025.
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2.9 |
The amount of loss cannot be reasonably estimated because of the preliminary stage of the lawsuit.
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