Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
|
Large accelerated filer ☐
|
|
Non-accelerated filer ☐
|
Emerging growth company
|
☒
|
☐ |
International Financial Reporting Standards as issued by the International Accounting Standards Board
|
☐ |
Other
|
◾ |
Managed satellite network services solutions, including services over our own networks (which may include satellite capacity);
|
◾ |
Network planning and optimization; |
◾ |
Remote network operation; |
◾ |
Call center support; |
◾ |
Hub and field operations; |
◾ |
End-to-end solutions for mission-critical operations; and |
◾ |
Construction and installation of communication networks, typically on a Build, Operate and Transfer, or BOT, or Build, Operate and
Own, or BOO, contract basis. |
• |
Satellite Networks is focused on developing and supplying networks that are used as the platform
that enables the latest satellite constellations of HTS, VHTS and NGSO opportunities worldwide. We provide advanced broadband satellite
communication networks and associated professional services and comprehensive turnkey solutions and managed satellite network services
solutions. Our customers are service providers, satellite operators, MNOs, Telcos, large enterprises, system integrators, defense, homeland
security organizations, and governments worldwide. Principal applications include In-Flight-Connectivity, cellular backhaul, maritime,
social inclusion solutions, government, defense and enterprise networks and are driving meaningful partnerships with satellite operators
to leverage our technology and breadth of services to deploy and operate the ground-based satellite communication networks. Our product
portfolio includes a leading satellite network platform with high-speed VSATs, high-performance on-the-move antennas, BUCs, and transceivers,
as well as multi-band Deployable Ku/Ka/X Earth Terminal, or DKET, terminals (a family of transportable terminal hubs), and durable, ultra-portable
terminals for quick connectivity in remote locations. |
• |
Integrated Solutions is focused on developing, manufacturing, and supplying products and solutions
for mission-critical defense and broadcast satellite communications systems, advanced on-the-move and on-the-pause satellite communications
equipment, systems, and solutions, including airborne, ground-mobile satellite systems and solutions. The integrated solutions product
portfolio comprises of leading high-efficiency, high-power SSPAs, BUCs and transceivers with a field-proven, high-performance variety
of frequency bands. Our customers are satellite operators, In-Flight Connectivity service providers, defense and homeland security system
integrators, NGSO satellite operators, and gateway integrators. |
• |
Network Infrastructure and Services is focused on telecom operation and implementation of
large-scale network projects in Peru. We provide terrestrial (fiber optic and wireless network) and satellite network construction and
operation. We serve our customers through technology integration, managed networks and services, connectivity services, internet access
and telephony over our own networks. We implement projects using various technologies (including our equipment), mainly based on BOT and
BOO contracts. |
|
1 | |
1 | ||
1 | ||
1 |
A. |
Reserved |
1 |
B. |
Capitalization and Indebtedness |
1 |
C. |
Reasons for the Offer and Use of Proceeds |
1 |
D. |
Risk Factors |
1 |
22 |
A. |
History and Development of the Company |
22 |
B. |
Business Overview |
23 |
C. |
Organizational Structure |
39 |
D. |
Property, Plants and Equipment |
39 |
40 | ||
40 |
A. |
Operating Results |
40 |
B. |
Liquidity and Capital Resources |
47 |
C. |
Research and Development |
48 |
D. |
Trend Information |
49 |
E. |
Critical Accounting Estimates |
51 |
ITEM 6: |
56 |
A. |
Directors and Senior Management |
56 |
B. |
Compensation of Directors and Officers |
60 |
C. |
Board Practices |
63 |
D. |
Employees |
71 |
E. |
Share Ownership |
72 |
ITEM 7: |
73 |
A. |
Major Shareholders |
73 |
B. |
Related Party Transactions |
74 |
C. |
Interests of Experts and Counsel |
74 |
ITEM 8: | 75 | |
ITEM 9: | 76 |
A. |
Offer and Listing Details |
76 |
B. |
Plan of Distribution |
76 |
C. |
Markets |
76 |
D. |
Selling Shareholders |
76 |
E. |
Dilution |
76 |
F. |
Expense of the Issue |
76 |
ITEM 10: | 77 |
A. |
Share Capital |
77 |
B. |
Memorandum and Articles of Association |
77 |
C. |
Material Contracts |
77 |
D. |
Exchange Controls |
78 |
E. |
Taxation |
78 |
F. |
Dividend and Paying Agents |
87 |
G. |
Statement by Experts |
87 |
H. |
Documents on Display |
87 |
I. |
Subsidiary Information |
88 |
ITEM 11: |
88 | |
ITEM 12: |
89 | |
89 | ||
ITEM 13: | 89 | |
ITEM 14: | 89 | |
ITEM 15: | 89 | |
ITEM 16: |
90 | |
ITEM 16A: | 90 | |
ITEM 16B: | 90 | |
ITEM 16C: | 91 | |
ITEM 16D. | 91 | |
ITEM 16E: | 91 | |
ITEM 16F: | 91 | |
ITEM 16G. | 92 | |
ITEM 16H. | 92 | |
ITEM 16I. | 92 | |
ITEM 16J. | INSIDER TRADING POLICY |
92 |
ITEM 16K. | CYBERSECURITY |
92 |
94 | ||
ITEM 17: |
94 | |
ITEM 18: | 94 | |
ITEM 19: | 94 | |
97 |
ITEM 1: |
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS |
ITEM 2: |
OFFER STATISTICS AND EXPECTED TIMETABLE |
ITEM 3: |
KEY INFORMATION |
A. |
Reserved |
B. |
Capitalization and Indebtedness |
C. |
Reasons for the Offer and Use of Proceeds |
D. |
Risk Factors |
• |
issuance of equity securities as consideration for acquisitions that would dilute our current shareholders’ percentages of
ownership; |
• |
significant acquisition costs; |
• |
decrease of our cash balance; |
• |
the incurrence of debt and contingent liabilities; |
• |
difficulties in the assimilation and integration of operations, personnel, technologies, products and information systems of the
acquired companies; |
• |
diversion of management’s attention from other business concerns; |
• |
contractual disputes; |
• |
compliance with additional regulatory requirements; |
• |
risks of entering geographic and business markets in which we have no or only limited prior experience; |
• |
potential loss of key employees of acquired organizations or loss of customers; |
• |
the possibility that business cultures will not be compatible; |
• |
the difficulty of incorporating acquired technology and rights into our products and services; |
• |
unanticipated expenses related to integration of the acquired companies; and |
• |
difficulties in implementing and maintaining uniform standards, controls and policies. |
• |
imposition of governmental controls, regulations and taxation which might include a government’s decision to raise import tariffs
or license fees in countries in which we do business; |
• |
government regulations that may prevent us from choosing our business partners or restrict our activities; |
• |
the U.S. Foreign Corrupt Practices Act, or the FCPA, and applicable anti-corruption laws in other jurisdictions, which include anti-bribery
provisions. Our policies mandate compliance with these laws. Nevertheless, we may not always be protected in cases of violation of the
FCPA or other applicable anti-corruption laws by our employees or third-parties acting on our behalf. A violation of anti-corruption laws
by our employees or third-parties during the performance of their obligations for us may have a material adverse effect on our reputation,
operating results and financial condition; |
• |
tax exposures in various jurisdictions relating to our activities throughout the world; |
• |
political and/or economic instability in countries in which we do or desire to do business or where we operate or manufacture our
products. Such unexpected changes could have an adverse effect on the gross margin of some of our projects. This includes similar risks
from potential or current political and economic instability as well as volatility of foreign currencies in countries such as Israel,
Peru, Colombia, Brazil, Russia, Ukraine, certain countries in Eastern Europe and East Asia and other countries in which we will conduct
business in the future; |
• |
difficulties in staffing and managing foreign operations that might mandate employing staff in various countries to manage foreign
operations. This requirement could have an adverse effect on the profitability of certain projects; |
• |
adverse economic conditions and general uncertainty about economic recovery or growth, including recession, depression and
inflation concerns; |
• |
longer payment cycles and difficulties in collecting accounts receivable; |
• |
foreign exchange risks due to fluctuations in local currencies relative to the dollar; and |
• |
relevant zoning ordinances that may restrict the installation of satellite antennas and might also reduce market demand for our service.
Additionally, authorities may increase regulation regarding the potential radiation hazard posed by transmitting earth station satellite
antennas’ emissions of radio frequency energy that may negatively impact our business plan and revenues. |
• |
rising inflation may put upward pressure on interest rates, increase our exposure to currency exchange risks and cause an increase
in our expenses, mainly related to costs of supplies and human resources, which could in turn adversely affect our business. |
• |
A significant portion of our expenses, principally salaries and related personnel expenses, are incurred in NIS, and to a lesser
extent, other non-U.S. dollar currencies, whereas the currency we use to report our financial results is the U.S. dollar and a significant
portion of our revenue is generated in U.S. dollars. During 2023 and 2022, we witnessed a general trend of revaluation of the U.S. dollar
against the NIS. However, during 2021 and 2020, we witnessed an opposite trend, of significant devaluation of the U.S. dollar against
the NIS. If we fail to properly hedge our currency exposure, the strengthening of the NIS against the U.S. dollar can considerably increase
the U.S. dollar value of our expenses in Israel and our results of operations may be adversely affected. |
• |
A portion of our international sales is denominated in currencies other than the U.S. dollar, including but not limited to the Euro,
Australian Dollar, Israeli Shekel, Peruvian Sol, Russian Ruble, Indian Rupee, Brazilian Real, and the Mexican Peso, therefore we are exposed
to the risk of devaluation of such currencies relative to the dollar which could have a negative impact on our revenues. |
• |
We have assets and liabilities that are denominated in non-U.S. dollar currencies. Therefore, significant fluctuation in these other
currencies could have significant effect on our results. |
• |
A portion of our U.S. dollar revenues are derived from customers operating in local currencies which are different from the U.S.
dollar. Therefore, devaluation in the local currencies of our customers relative to the U.S. dollar could cause our customers to cancel
or decrease orders or delay payment. |
• |
the timing, size and composition of requests for proposals or orders from customers; |
• |
the timing of introducing new products and product enhancements by us and the level of their market acceptance; |
• |
the mix of products and services we offer; |
• |
the level of our expenses; |
• |
the changes in the competitive environment in which we operate; and |
• |
Our ability to supply the goods ordered within the quarter. |
• |
economic instability; |
• |
announcements of technological innovations; |
• |
customer orders or new products or contracts; |
• |
competitors’ positions in the market; |
• |
changes in financial estimates by securities analysts; |
• |
conditions and trends in the VSAT and other technology industries relevant to our businesses; |
• |
our earnings releases and the earnings releases of our competitors; and |
• |
the general state of the securities markets (with particular emphasis on the technology and Israeli sectors thereof). |
A. |
History and Development of the Company |
B. |
Business Overview |
• |
Communications satellite – Typically a satellite in geostationary orbit (synchronized with the earth’s orbit) or NGSO.
|
• |
Satellite communications ground station equipment – These are devices that have a combination of data communications and Radio
Frequency, or RF elements designed to deliver data via communication satellites. Examples of ground station equipment are remote site
terminals, such as VSATs, central hub station systems, amplifiers, BUCs and antennas. |
• |
A VSAT is comprised of the following elements: |
o |
Modem – This is the device that modulates the digital data into an analog RF signal for delivery to the upconverter and demodulates
the analog signals from the downconverter back into digital data. The modem, which is typically located indoors, performs data processing
functions such as traffic management and prioritization and provides the digital interfaces (Ethernet port/s) for connecting to the user’s
equipment (PC, switch, etc.). |
o |
Amplifiers and BUCs – These are the components that connect the ground station equipment with the antenna. The purpose of the
amplifiers and BUCs is to amplify the power and convert the frequency of the transmitted RF signal. |
o |
Antenna – Antennas can vary quite significantly in size, power and complexity depending on the ground equipment they are connected
to, and their application. For example, antennas connected to remote sites generally are in the range of one meter in diameter while those
connected to the central hub system can be in the range of ten meters in diameter. Antennas used on moving platforms need to be compact
and have a mechanically or electronically auto-pointing mechanism so that they can remain locked onto the satellite during motion.
|
• |
Universal availability – Satellite communications provide service to any location within
a satellite footprint. |
• |
Timely implementation – Large satellite communications networks with thousands of remote
sites can be deployed within a few weeks. |
• |
Broadcast and multicast capabilities – Satellite is an optimal solution for broadcast
and multicast transmission as the satellite signal is simultaneously received by any group of users in the satellite footprint.
|
• |
Reliability and service availability – Satellite communications network availability
is high due to the satellite and ground equipment reliability, the small number of components in the network and terrestrial infrastructure
independence. |
• |
Scalability – Satellite communications networks scale easily from a single site to
thousands of locations. |
• |
Cost-effectiveness – The cost of satellite communications networks is independent of
distance and therefore it is a cost-effective solution for networks comprised of multiple sites in remote locations. |
• |
Applications delivery – Satellite communications networks offer a wide variety of customer
applications such as e‑mail, virtual private networks, video, voice, internet access, distance learning, cellular backhaul and financial
transactions. |
• |
Portability and Mobility – Satellite communications solutions can be mounted on moving
platforms for communications on the move or deployed rapidly for communications in fixed locations and then relocated or moved as required.
|
• |
Project management – accompanying the customer through all stages of a project and
ensuring that the project objectives are within the predefined scope, time and budget; |
• |
Satellite network design – translating the customer’s requirements into a system
to be deployed, performing the sizing and dimensioning of the system and evaluating the available solutions; |
• |
Deployment logistics – transportation and rapid installation of equipment in all of
the network sites; |
• |
Implementation and integration – combining our equipment with third party equipment
such as solar panel systems and surveillance systems as well as developing tools to allow the customer to monitor and control the system;
|
• |
Operational services – providing professional services, program management, network
operations and field services; and |
• |
Maintenance and support – providing 24/7 helpdesk services, on-site technician support
and equipment repairs and updates. |
• |
Space segment - where applicable, providing space capacity with back to back agreements with
the satellite operators. |
• |
Outsourced operations such as VSAT installation, service commissioning and hub operations; |
• |
Proactive troubleshooting, such as periodic network analysis, to identify symptoms in advance; and |
• |
Training and certification to ensure customers and local installers are proficient in VSAT operation. |
• |
In-Flight Connectivity and UAS – Single and Dual Band solutions for commercial, business and military aviation including panel
based high efficiency antennas. In early 2022, we successfully demonstrated with Airbus a flat ESA antenna with no moving parts.
|
• |
Train Data Connectivity – Reliable and wide band alternative to cellular based data connectivity for trains over satellite
supporting high-speed trains. Provides access in remote and rural places with smooth coverage and cross-country access with no roaming
limitation; |
• |
Military - strategic military advantage by supporting the transfer of real-time intelligence while on-the-move with a small, low
profile, hard to track antenna; |
• |
Digital satellite news gathering – always on, no set up time, real-time streaming video; First responders - supports vehicles’ mobility, agility and stability required for teams to be the first to reach the scene; and |
• |
Search and exploration teams, close-to-shore vessels etc. |
Years Ended December 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
U.S |
39 |
% |
40 |
% |
34 |
% | ||||||
Peru |
20 |
% |
24 |
% |
23 |
% | ||||||
Israel |
2 |
% |
1 |
% |
3 |
% | ||||||
Other |
39 |
% |
35 |
% |
40 |
% | ||||||
Total |
100 |
% |
100 |
% |
100 |
% |
C. |
Organizational Structure |
Significant Subsidiaries
|
Country/State
of Incorporation
|
% Ownership |
1. Wavestream Corporation | Delaware (U.S.) | 100%
|
2. Gilat Networks Peru S.A | Peru | 100%
|
3. DataPath Inc. |
Georgia (U.S) |
100%
|
4. Gilat Satellite Networks MDC (Moldova) | Moldova | 100%
|
5. Rayasat Bulgaria EOOD |
Bulgaria | 100%
|
6. Gilat Satellite Networks Spain, S.L |
Spain |
100%
|
D. |
Property, Plants and Equipment |
ITEM 4A: |
UNRESOLVED STAFF COMMENTS |
ITEM 5: |
OPERATING AND FINANCIAL REVIEW AND PROSPECTS |
A. |
Operating Results |
• |
Satellite Networks |
• |
Integrated Solutions |
• |
Network Infrastructure and Services |
Year Ended |
Year Ended |
|||||||||||||||||||
December 31, |
December 31, |
|||||||||||||||||||
|
2023 |
2022 |
2023 |
2022 |
||||||||||||||||
|
U.S. dollars in thousands |
Percentage change |
Percentage of revenues |
|||||||||||||||||
|
||||||||||||||||||||
Satellite Networks |
168,527 |
120,381 |
40 |
% |
64 |
% |
50 |
% | ||||||||||||
Integrated Solutions |
46,133 |
61,376 |
(25 |
%) |
17 |
% |
26 |
% | ||||||||||||
Network Infrastructure & Services |
51,430 |
58,083 |
(11 |
%) |
19 |
% |
24 |
% | ||||||||||||
Total |
266,090 |
239,840 |
11 |
% |
100 |
% |
100 |
% |
|
Year Ended |
Year Ended |
||||||||||||||
|
December 31, |
December 31, |
||||||||||||||
|
2023 |
2022 |
2023 |
2022 |
||||||||||||
U.S. dollars in thousands |
Percentage of revenues |
|||||||||||||||
Satellite Networks |
88,543 |
56,918 |
53 |
% |
47 |
% | ||||||||||
Integrated Solutions |
11,482 |
17,634 |
25 |
% |
29 |
% | ||||||||||
Network Infrastructure & Services |
4,920 |
12,356 |
10 |
% |
21 |
% | ||||||||||
Total |
104,945 |
86,908 |
39 |
% |
36 |
% |
• |
The increase in the Satellite Networks operating segment is mainly attributable to a favorable deal mix as well as increase in revenue
volume. |
• |
The decrease in the Integrated Solutions operating segment is mainly attributable to lower revenue volume, offset partially by a
favorable deal mix. |
• |
The decrease in the Network Infrastructure and Services operating segment is primarily attributable to higher construction costs,
following cost increases and delays. |
|
Year Ended |
|||||||||||
|
December 31, |
|||||||||||
|
2023 |
2022 |
||||||||||
|
U.S. dollars in thousands |
Percentage change |
||||||||||
|
||||||||||||
Research and development expenses, net |
41,173 |
35,640 |
16 |
% | ||||||||
Selling and marketing expenses |
25,243 |
21,694 |
16 |
% | ||||||||
General and administrative expenses |
19,215 |
* |
18,412 |
4 |
% | |||||||
Other operating expenses (income), net |
(8,771 |
) |
* |
438 |
||||||||
Impairment of held for sale asset |
- |
771 |
||||||||||
Total operating expenses |
76,860 |
76,955 |
(0.1 |
%) |
B. |
Liquidity and Capital Resources |
Years Ended December 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
U.S. dollars in thousands |
||||||||||||
Net cash provided by operating activities
|
31,944 |
10,814 |
18,903 |
|||||||||
Net cash used in investing activities
|
(12,685 |
) |
(8,164 |
) |
(11,092 |
) | ||||||
Net cash used in financing activities
|
(1,590 |
) |
- |
(39,003 |
) | |||||||
Effect of exchange rate changes on cash, cash equivalents and
restricted cash |
(63 |
) |
32 |
(303 |
) | |||||||
Net increase (decrease) in cash, cash equivalents and restricted
cash |
17,606 |
2,682 |
(31,495 |
) | ||||||||
Cash, cash equivalents and restricted cash at beginning of the
period |
87,145 |
84,463 |
115,958 |
|||||||||
Cash, cash equivalents and restricted cash at end of the period
|
104,751 |
87,145 |
84,463 |
C. |
Research and Development |
Years Ended December 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
(U.S. dollars in thousands) |
||||||||||||
Gross research and development expenses |
42,216 |
36,281 |
33,031 |
|||||||||
Grants |
(1,043 |
) |
(641 |
) |
(1,695 |
) | ||||||
Net research and development expenses |
41,173 |
35,640 |
31,336 |
D. |
Trend Information |
E. |
Critical Accounting Estimates |
ITEM 6: |
DIRECTORS AND SENIOR MANAGEMENT |
A. |
Directors and Senior Management |
Name |
Age |
Position |
Amiram Boehm
|
52 |
Chairman of the Board of Directors |
Adi Sfadia |
53 |
Chief Executive Officer |
Ronit Zalman Malach
(3)(4) |
57 |
Director |
Amir Ofek |
47 |
Director |
Aylon (Lonny) Rafaeli
(1) (2)(4) |
70 |
Director |
Dafna Sharir (1)(4)
|
56 |
Director |
Elyezer Shkedy (1)(2)(4)(5) |
66 |
Director |
Ami Shafran (1)(2)(4)(5) |
69 |
Director |
Gil Benyamini |
50 |
Chief Financial Officer |
Ron Levin |
48 |
Chief Commercial Officer |
Gilad Landsberg |
44 |
Chief Operating Officer |
Lior Moyal |
46 |
Chief People Officer |
Hagay Katz |
64 |
Chief Product and Marketing Officer |
Aharon Mullokandov |
40 |
Senior Vice President of Research & Development |
Doron Kerbel |
52 |
General Counsel & Company Secretary |
Roni Stoleru |
53 |
Senior Vice President Corporate Business Development
|
(1) |
Member of our Audit Committee. |
(2) |
Member of our Compensation Committee. |
(3) |
“Independent Director” under the applicable NASDAQ Marketplace Rules (see explanation below) |
(4) |
“Independent Director” under the applicable NASDAQ Marketplace Rules and the applicable rules of the SEC (see explanation
below) |
(5) |
“External Director” as required by Israel’s Companies Law (see explanation below) |
Board Diversity Matrix (As of March 20,
2024) | ||||
Country of Principal Executive Offices:
|
Israel | |||
Foreign Private Issuer |
Yes | |||
Disclosure Prohibited under Home Country
Law |
No | |||
Total Number of Directors |
7 | |||
|
Female |
Male |
Non-binary |
Did Not Disclose Gender |
Part I: Gender Identity |
| |||
Directors |
2 |
5 |
0 |
0 |
Part II: Demographic Background
|
| |||
Underrepresented Individual in Home Country
Jurisdiction |
0 | |||
LGBTQ |
0 | |||
Did Not Disclose Demographic Background
|
0 | |||
Directors with Disabilities |
0 |
B. |
Compensation of Directors and Officers |
Salaries, Fees, Directors’ Fees,
Commissions and
Bonuses (1)
|
Amounts Set Aside for Pension, Retirement
and Similar Benefits |
|||||||
All directors and officers as a group (18 persons)
(2) |
$ |
5,080,792 |
$ |
423,384 |
(1) |
Includes bonuses and equity-based compensation accrued in 2023, but does not include business travel, professional and business association
dues and expenses reimbursed to our directors and officers, and other benefits commonly reimbursed or paid by companies in Israel.
|
(2) |
Includes one director and one officer who ceased to hold office during 2023 and were replaced by newly appointed officers.
|
Information Regarding the Covered Executive in U.S. dollars (1)
|
||||||||||||||||||||
Name and Principal Position
|
Base Salary |
Benefits and
Perquisites(2) |
Variable Compensation(3)
|
Equity-Based
Compensation(4) |
Total
|
|||||||||||||||
Adi Sfadia, CEO |
356,444 |
59,725 |
248,139 |
241,292 |
905,600 |
|||||||||||||||
Aharon Mullokandov, Senior Vice President of R&D
|
234,038 |
56,334 |
165,989 |
83,100 |
539,461 |
|||||||||||||||
Hagay Katz, Chief Product and Marketing Officer |
232,418 |
51,488 |
107,783 |
134,210 |
525,899 |
|||||||||||||||
Gil Benyamini, CFO |
232,783 |
48,177 |
118,183 |
119,085 |
518,228 |
|||||||||||||||
Ron Levin, Chief Commercial Officer |
245,970 |
58,095 |
122,648 |
90,621 |
517,334 |
(1) |
All amounts reported in the table are in terms of cost to our
company, as recorded in our financial statements. |
(2) |
Amounts reported in this column include benefits and perquisites,
including those mandated by applicable law. Such benefits and perquisites may include, to the extent applicable to each executive, payments,
contributions and/or allocations for savings funds, pension, severance, vacation, car or car allowance, medical insurances and benefits,
risk insurances (e.g., life, disability, accident), convalescence pay, payments for social security and other benefits and perquisites
consistent with our guidelines, but do not include business travel, relocation, professional and business association dues and expenses
reimbursed to our directors and officers. |
(3) |
Amounts reported in this column refer to Variable Compensation such as commissions,
incentive and bonus payments payable upon conditions met in the year ended December 31, 2023 and recorded in our financial statements.
|
(4) |
Amounts reported in this column represent the expense recorded
in our financial statements for the year ended December 31, 2023, with respect to equity-based compensation granted to the Covered Executive.
|
• |
the majority includes at least a majority of the shares voted by shareholders other than our controlling shareholders or shareholders
who have a personal interest in the adoption of the Executive Compensation Policy; or |
• |
the total number of shares held by non-controlling shareholders and disinterested shareholders that voted against the adoption of
the Executive Compensation Policy does not exceed 2% of the aggregate voting rights of our company. |
C. |
Board Practices |
• |
such majority includes at least a majority of the shares held by all shareholders who are not controlling shareholders and do not
have a personal interest in such appointment, present and voting at such meeting; or |
• |
the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in such appointment
voting against such appointment does not exceed two percent of the aggregate voting rights in the company. |
• |
a breach by the office holder of his fiduciary duty unless the office holder acted in good faith and had a reasonable basis to believe
that the act would not prejudice the company; |
• |
a breach by the office holder of his duty of care if such breach was performed intentionally or recklessly; |
• |
any act or omission carried out with the intent to derive an illegal personal gain; or |
• |
any fine or penalty levied against the office holder as a result of a criminal offense. |
D. |
Employees |
E. |
Share Ownership |
F. |
DISCLOSURE OF A REGISTRANT’S ACTION TO RECOVER ERRONEOUSLY AWARDED COMPENSATION |
ITEM 7: |
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS |
A. |
Major Shareholders |
Name |
Number of Shares |
Percent |
||||||
Phoenix Holdings Ltd. (1) |
11,999,894 |
21.05 |
% | |||||
Meitav Investment House Ltd.(2) |
4,321,089 |
7.58 |
% | |||||
All directors and executive officers as a group (16 persons) (3) |
2,401,900 |
4.21 |
% |
(1) |
Based on Schedule 13D filed on February 13, 2024 with the SEC by Phoenix Holdings Ltd. and information provided to us by Phoenix
Holdings Ltd., as of January 2, 2024. The ordinary shares reported are beneficially owned by various direct or indirect, majority or wholly-owned
subsidiaries of Benelus Lux S.a.r.l and/or Phoenix Holdings Ltd. The Subsidiaries manage their own funds and/or the funds of others, including
for holders of exchange-traded notes or various insurance policies, members of pension or provident funds, unit holders of mutual funds,
and portfolio management clients. CP III Cayman GP Ltd., Matthew Botein and Lewis (Lee) Sachs are the controlling shareholders of Benelus
Lux S.a.r.l. The principal office of Phoenix Holdings Ltd. is 53 Derech Hashalom Drive, Ramat Gan 5345433. |
(2) |
Based on Schedule 13G filed on January 9, 2024 with the SEC by Meitav Investment House Ltd. (“Meitav”) and information
provided to us by Meitav as of January 2, 2024. The ordinary shares reported are beneficially owned by various direct or indirect, majority
or wholly-owned subsidiaries of Meitav (the "Subsidiaries"). Some of the securities reported in the filing are held by third-party
client accounts managed by a subsidiary of Meitav as portfolio managers, which subsidiary operates under independent management and makes
independent investment decisions and has no voting power in the securities held in such client accounts. The Subsidiaries manage
their own funds and/or the funds of others, including for holders of exchange-traded notes or members of pension or provident funds, unit
holders of mutual funds, and portfolio management clients. Each of the Subsidiaries operates under independent management and makes
its own independent voting and investment decisions. The principal office of Meitav. is 30 Derekh Sheshet Ha-Yamim, Bnei Brak, Israel.
|
(3) |
As of March 13, 2024, all directors and executive officers as a group (16 persons) held 954,400 options that are vested or that vest
within 60 days of March 13, 2024. |
B. |
Related Party Transactions |
C. |
Interests of Experts and Counsel |
ITEM 8: |
FINANCIAL INFORMATION |
A. |
Consolidated Statements |
ITEM 9: |
THE OFFER AND LISTING |
A. |
Offer and Listing Details |
B. |
Plan of Distribution |
C. |
Markets |
D. |
Selling Shareholders |
E. |
Dilution |
F. |
Expense of the Issue |
ITEM 10: |
ADDITIONAL INFORMATION |
A. |
Share Capital |
B. |
Memorandum and Articles of Association |
C. |
Material Contracts |
D. |
Exchange Controls |
E. |
Taxation |
• |
broker-dealers; |
• |
financial institutions or financial services entities; |
• |
certain insurance companies; |
• |
investors liable for alternative minimum tax; |
• |
regulated investment companies, real estate investment trusts, or grantor trusts; |
• |
dealers or traders in securities, commodities or currencies; |
• |
tax-exempt organizations; |
• |
retirement plans; |
• |
S corporations |
• |
pension funds; |
• |
certain former citizens or long-term residents of the United States; |
• |
non-resident aliens of the United States or taxpayers whose functional currency is not the U.S. dollar; |
• |
persons who hold ordinary shares through partnerships or other pass-through entities; |
• |
persons who acquire their ordinary shares through the exercise or cancellation of employee stock options or otherwise as compensation
for services; |
• |
direct, indirect or constructive owners of investors that actually or constructively own at least 10% of the total combined voting
power of our shares or at least 10% of our shares by value; or |
• |
investors holding ordinary shares as part of a straddle, appreciated financial position, a hedging transaction or conversion transaction.
|
• |
an individual who is a citizen or a resident (for U.S. federal income tax purposes) of the United States; |
• |
a corporation or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized in or under the
laws of the United States or any political subdivision thereof or the District of Columbia; |
• |
an estate the income of which is subject to U.S. federal income taxation regardless of its source; or |
• |
a trust resident in the United States, to the extent such trust's income is subject to US tax as the income of a resident.
|
F. |
Dividend and Paying Agents
Not applicable. |
G. |
Statement by Experts
Not applicable. |
H. |
Documents on Display |
I. |
Subsidiary Information
Not applicable. |
ITEM 11: |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 12: |
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES |
ITEM 13: |
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES |
ITEM 14: |
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |
ITEM 15: |
CONTROLS AND PROCEDURES |
• |
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transaction and dispositions of
the assets of the company; |
• |
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and |
• |
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use of disposition of the company’s
assets that could have a material effect on the financial statements. |
ITEM 16: |
RESERVED |
ITEM 16A: |
AUDIT COMMITTEE FINANCIAL EXPERT |
ITEM 16B: |
CODE OF ETHICS |
ITEM
16C: |
PRINCIPAL ACCOUNTANT FEES
AND SERVICES |
Year Ended December 31, |
||||||||||||||||
2023 |
2022 |
|||||||||||||||
Services Rendered |
Fees
(in thousands) |
Percentages |
Fees
(in thousands) |
Percentages |
||||||||||||
Audit fees (1) |
$ |
770 |
83 |
% |
$ |
906 |
81 |
% | ||||||||
Tax fees (2) |
42 |
5 |
% |
68 |
6 |
% | ||||||||||
Other (3) |
115 |
12 |
% |
140 |
13 |
% | ||||||||||
Total |
$ |
927 |
100 |
% |
$ |
1,114 |
100 |
% |
(1) |
Audit fees include fees associated with the annual audit, services provided in connection with audit of our internal control over
financial reporting and audit services provided in connection with other statutory or regulatory filings. The fees for 2022 include one-time
fees of $235 thousand with respect to 2021 audit overrun. |
(2) |
Tax fees are fees for professional services rendered by our auditors for tax compliance, tax planning and tax advice on actual or
contemplated transactions. |
(3) |
Other fees are fees for professional services other than audit or tax related fees, rendered in connection with our business activities.
|
ITEM 16D. |
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES |
ITEM 16E: |
PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS |
ITEM 16F: |
CHANGES IN REGISTRANT’S CERTIFYING ACCOUNTANT |
ITEM 16G. |
CORPORATE GOVERNANCE |
• |
The requirement to obtain shareholder approval for the establishment or material amendment of certain equity-based compensation plans
and arrangements, under which shares may be acquired by officers, directors, employees or consultants. Under Israeli law and practice,
the approval of the board of directors is required for the establishment or material amendment of such equity-based compensation plans
and arrangements. However, any equity-based compensation arrangement with a director or the Chief Executive Officer or the material amendment
of such an arrangement must be approved by our Compensation Committee, Board of Directors and shareholders, in that order. |
• |
The requirements regarding the director nominations process. We do not have a nomination committee. Under Israeli law and practice,
our Board of Directors is authorized to recommend to our shareholders director nominees for election, and certain of our shareholders
may nominate candidates for election as directors by the general meeting of shareholders. |
ITEM 16H. |
MINE SAFETY DISCLOSURE |
ITEM 16I. |
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS |
ITEM 16J. |
INSIDER TRADING POLICY |
ITEM 16K. |
CYBERSECURITY |
ITEM 17: |
FINANCIAL STATEMENTS |
ITEM 18: |
FINANCIAL STATEMENTS |
ITEM 19:
|
EXHIBITS |
1.1 |
Memorandum of Association, as amended.
Previously filed as Exhibit 1.1 to our Annual Report on Form 20-F for the fiscal year ending December 31, 2000, which Exhibit is incorporated
herein by reference. |
101.INS |
Inline XBRL Instance Document *. |
101.SCH |
Inline XBRL Taxonomy Extension Schema Document. |
101.PRE |
Inline XBRL Taxonomy Presentation Linkbase Document. |
101.CAL |
Inline XBRL Taxonomy Calculation Linkbase Document. |
101.LAB |
Inline XBRL Taxonomy Label Linkbase Document. |
101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document. |
104 |
Cover page formatted as Inline XBRL and contained in Exhibit 101 |
* |
Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or
prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for the purposes of Section
18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections. |
|
GILAT SATELLITE NETWORKS LTD.
By: /s/
Adi Sfadia
Adi
Sfadia
Chief
Executive Officer |
Page
|
|
Reports of Independent Registered Public Accounting Firm (PCAOB ID No.
|
F-2 - F-5
|
F-6 - F-7
|
|
F-8
|
|
F-9
|
|
F-10
|
|
F-11 - F-13
|
|
F-14 - F-60
|
|
Kost Forer Gabbay & Kasierer
144 Menachem Begin Road, Building A,
Tel-Aviv 6492102, Israel
|
Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com
|
Revenue Recognition
|
||
Description of the Matter
|
As described in Note 2 to the consolidated financial statements, the Company generates revenue from long-term contracts with its customers for which the related performance obligations are satisfied over time. The Company recognizes revenue on such contracts using the percentage-of-completion method of accounting, based on cost-to-cost measure of progress ("input method"). Under this method, the Company measures progress towards completion based on the ratio of costs incurred to date to the estimated total costs to complete their performance obligation (referred to as the estimate-at-completion, or "EAC").
The determination of contract EACs requires management to make significant estimates and assumptions to calculate recorded contract revenue, costs, and profit associated with its contracts with customers. Significant changes in EAC estimates could have a material effect on the Company’s estimated revenue and gross profit recorded during the period under audit.
Auditing the Company’s recognized revenues based on the percentage-of-completion method of accounting was complex due to the significant auditor judgment involved in evaluating management's significant estimates and assumptions over project technical, schedule and cost aspects, at contract inception and throughout the contract's life cycle.
|
How We Addressed the Matter in Our Audit
|
We obtained an understanding, evaluated the design and tested the operating effectiveness of relevant internal controls over the Company’s revenue recognition process. For example, we tested internal controls over management’s preparation and periodic reviews of the cost incurred, as well as controls over cost deviation analysis, including the significant assumptions underlying a contract’s estimated value and estimated EAC. We also tested internal controls over the accuracy and completeness of the underlying data used in management’s EAC analyses.
To evaluate the Company’s contract estimates related to revenue recognized and test the Company's EAC analyses, our substantive audit procedures included, among others, obtaining an understanding of the contract and the contractual terms, for a sample of contracts we evaluated the Company's historical ability to accurately estimate expected costs by comparing management's estimates of labor hours, subcontractor costs and materials required to complete the contract to actual results. We also compared recorded costs incurred to supporting information and agreed key contract terms to contract documentation. In addition, we evaluated whether the variances in costs incurred from projected costs were properly reflected in the EAC analysis. In addition, we assessed the appropriateness of the related disclosures in the consolidated financial statements.
|
|
Valuation of deferred tax asset
|
||
Description of the Matter
|
As described in Note 12 to the consolidated financial statements, the Company’s consolidated net deferred tax assets of $11,484 thousands, primarily related to the deferred tax assets established for carry forward operating losses. Management records valuation allowances to reduce the carrying value of deferred tax assets to amounts that are more likely than not to be realized. Management assesses existing deferred tax assets, net operating losses and tax credits by jurisdiction and expectations of the Company’s ability to utilize these tax attributes through a review of past, current and estimated future taxable income and establishment of tax planning strategies.
The principal considerations for our determination that performing procedures relating to the income tax valuation allowances on deferred tax assets is a critical audit matter are there was significant judgment by management when estimating future taxable income. Auditing management’s assessment of the realizability of its deferred tax assets involved complex auditor judgment because management’s estimate of future taxable income is highly judgmental and based on significant assumptions that may be affected by future market conditions and the Company’s performance.
|
|
How We Addressed the Matter in Our Audit
|
We obtained an understanding, evaluated the design and tested the operating effectiveness of the controls over management’s plan for future realization of deferred tax assets. For example, we tested controls around the determination of key assumptions used in management’s projections of future taxable income.
To test the deferred income tax asset, our audit procedures included, among others, comparing the assumptions used by management to the Company´s approved budget, evaluating management assumptions to develop estimates of future taxable income, and tested the completeness and accuracy of the underlying data. For example, we compared the estimates of future taxable income with the actual results of prior periods, as well as management's consideration of other future market conditions. Additionally, evaluating the application of the relevant accounting standard, retrospectively assessing past management estimations about net deferred tax asset recoverability, and comparing the prospective financial information and underlying assumptions to industry and economic trends, changes in the entity’s business model, customer base and product mix. In addition, we assessed the adequacy of the related disclosures in the consolidated financial statements.
|
Valuation of customer relationships intangible asset acquired in a business combination and fair value of contingent consideration liability
|
||
Description of the Matter
|
As described in Note 17 to the consolidated financial statements, the Company completed the acquisition of 100% of the equity shares of DataPath Inc. ("DataPath") in November 2023 for total estimated consideration of $19,231 thousands, which included contingent consideration liability of approximately $11,163 thousands. The Company accounted for the acquisition as a business combination.
Auditing the Company's accounting for its business combination was complex due to the significant estimation required by management to determine the fair value of the acquired assets and liabilities, especially the customer relationship intangible asset of $10,922 thousands and the contingent consideration liability of $11,163 thousands. The significant estimation was primarily due to the complexity of the valuation models used by management to measure the fair value of the customer relationships intangible asset and the contingent consideration liability and the sensitivity of the respective fair values to changes in the significant underlying assumptions.
The significant assumptions used to estimate the fair value of the customer relationships intangible asset included discount rates and certain assumptions that form the basis of the forecasted results (e.g., revenue growth rates, operating profit margin and customer attrition rates). The significant assumptions used to estimate the fair value of the contingent consideration mainly included projected revenues and Adjusted EBITDA. These significant assumptions are forward looking and could be affected by future economic and market conditions.
|
How We Addressed the Matter in Our Audit
|
We obtained an understanding, evaluated the design and tested the operating effectiveness of the controls over the Company’s accounting for the acquisition. For example, controls over the valuation of the customer relationships intangible asset acquired and contingent consideration liability, including the valuation models used and the underlying assumptions used to develop such estimates.
To test the estimated fair value of the customer relationships intangible asset and contingent consideration liability, our audit procedures included, among others, evaluating the Company's selection of the valuation methodology, evaluating the methods and significant assumptions used by the Company, and evaluating the completeness and accuracy of the underlying data supporting the significant assumptions and estimates. For example, we compared the revenue growth rates and expected costs to historical financial information, comparable companies and market and economic trends. We also performed a sensitivity analysis of the discount rate, profit margins, revenue projections and estimated expected costs to evaluate the change in the fair value resulting from changes in the assumptions. We also involved our valuation specialists to assist with our evaluation of the methodology used by the Company and significant assumptions included in the fair value estimates. In addition, we evaluated the appropriateness of the related disclosures in relation to the DataPath acquisition.
|
|
/s/ KOST FORER GABBAY & KASIERER
A Member of EY Global
|
Tel-Aviv, Israel
March 20, 2024
|
|
Kost Forer Gabbay & Kasierer
144 Menachem Begin Road, Building A,
Tel-Aviv 6492102, Israel
|
Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com
|
/s/
A Member of EY Global
|
|
March 20, 2024
|
December 31,
|
||||||||
2023
|
2022
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Restricted cash
|
|
|
||||||
Trade receivables (net of allowance for credit losses of $
|
|
|
||||||
Contract assets
|
|
|
||||||
Inventories
|
|
|
||||||
Other current assets
|
|
|
||||||
Total current assets
|
|
|
||||||
LONG-TERM ASSETS:
|
||||||||
Restricted cash
|
|
|
||||||
Long-term contract assets
|
|
|
||||||
Severance pay funds
|
|
|
||||||
Deferred taxes
|
|
|
||||||
Operating lease right-of-use assets
|
|
|
||||||
Other long-term assets
|
|
|
||||||
Total long-term assets
|
|
|
||||||
PROPERTY AND EQUIPMENT, NET
|
|
|
||||||
INTANGIBLE ASSETS, NET
|
|
|
||||||
GOODWILL
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
The accompanying notes are an integral part of the consolidated financial statements.
F - 6
December 31,
|
||||||||
2023
|
2022
|
|||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Credit facility
|
$
|
|
$
|
|
||||
Trade payables
|
|
|
||||||
Accrued expenses
|
|
|
||||||
Advances from customers and deferred revenues
|
|
|
||||||
Operating lease liabilities
|
|
|
||||||
Other current liabilities
|
|
|
||||||
Total current liabilities
|
|
|
||||||
LONG-TERM LIABILITIES:
|
||||||||
Long-term loan
|
|
|
||||||
Accrued severance pay
|
|
|
||||||
Long-term advances from customers and deferred revenues
|
|
|
||||||
Operating lease liabilities
|
|
|
||||||
Other long-term liabilities
|
|
|
||||||
Total long-term liabilities
|
|
|
||||||
COMMITMENTS AND CONTINGENCIES |
||||||||
SHAREHOLDERS' EQUITY:
|
||||||||
Share capital -
Ordinary shares of NIS
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Accumulated other comprehensive loss
|
(
|
)
|
(
|
)
|
||||
Accumulated deficit
|
(
|
)
|
(
|
)
|
||||
Total shareholders' equity
|
|
|
||||||
Total liabilities and shareholders' equity
|
$
|
|
$
|
|
F - 7
Year ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Revenues:
|
||||||||||||
Products
|
$
|
|
$
|
|
$
|
|
||||||
Services
|
|
|
|
|||||||||
Total revenues
|
|
|
|
|||||||||
Cost of revenues:
|
||||||||||||
Products
|
|
|
|
|||||||||
Services
|
|
|
|
|||||||||
Total cost of revenues
|
|
|
|
|||||||||
Gross profit
|
|
|
|
|||||||||
Operating expenses:
|
||||||||||||
Research and development expenses, net
|
|
|
|
|||||||||
Selling and marketing expenses
|
|
|
|
|||||||||
General and administrative expenses
|
|
*) |
|
|
|
|||||||
Impairment of held for sale asset
|
|
|
|
|||||||||
Other operating expenses (income), net
|
(
|
)
|
*) |
|
|
|
||||||
Total operating expenses
|
|
|
|
|||||||||
Operating income
|
|
|
|
|||||||||
Financial income (expenses), net
|
|
(
|
)
|
(
|
)
|
|||||||
Income before taxes on income
|
|
|
|
|||||||||
Taxes on income
|
|
|
|
|||||||||
Net income (loss)
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
Total earnings (losses) per share:
|
||||||||||||
Basic
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
Diluted
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
Weighted average number of shares used in computing earnings (losses) per share:
|
||||||||||||
Basic
|
|
|
|
|||||||||
Diluted
|
|
|
|
F - 8
Year ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Net income (loss)
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
Other comprehensive income (loss):
|
||||||||||||
Foreign currency translation adjustments
|
|
|
(
|
)
|
||||||||
Change in unrealized gain (loss) on hedging instruments, net
|
(
|
)
|
(
|
)
|
|
|||||||
Less - reclassification adjustments for net loss (gain) realized on hedging instruments, net
|
|
|
(
|
)
|
||||||||
Total other comprehensive income (loss)
|
|
(
|
)
|
(
|
)
|
|||||||
Comprehensive income (loss)
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
F - 9
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Number of
ordinary
shares
|
Share
capital
|
Additional
paid-in
capital
|
Accumulated
other
comprehensive
loss
|
Accumulated
Deficit
|
Total
shareholders' equity
|
|||||||||||||||||||
Balance as of December 31, 2020
|
|
|
|
(
|
)
|
(
|
)
|
|
||||||||||||||||
Stock-based compensation
|
-
|
|
|
|
|
|
||||||||||||||||||
Exercise of stock options
|
|
|
(
|
)
|
|
|
|
|||||||||||||||||
Comprehensive loss
|
-
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||||||||
Balance as of December 31, 2021
|
|
|
|
(
|
)
|
(
|
)
|
|
||||||||||||||||
Stock-based compensation
|
-
|
|
|
|
|
|
||||||||||||||||||
Exercise of stock options
|
|
|
(
|
)
|
|
|
|
|||||||||||||||||
Comprehensive loss
|
-
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||||||||
Balance as of December 31, 2022
|
|
|
|
(
|
)
|
(
|
)
|
|
||||||||||||||||
Issuance of shares related to business combination (see Note 17)
|
|
|
|
|
|
|
||||||||||||||||||
Stock-based compensation
|
-
|
|
|
|
|
|||||||||||||||||||
Exercise of stock options
|
|
|
(
|
)
|
|
|
|
|||||||||||||||||
Comprehensive income
|
-
|
|
|
|
|
|
||||||||||||||||||
Balance as of December 31, 2023
|
|
|
|
(
|
)
|
(
|
)
|
|
F - 10
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
Year ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income (loss)
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
Adjustments required to reconcile net income (loss) to net cash provided by operating activities:
|
||||||||||||
Depreciation and amortization
|
|
|
|
|||||||||
Capital gain from sale of property
|
(
|
)
|
|
|
||||||||
Impairment of held for sale asset
|
|
|
|
|||||||||
Stock-based compensation
|
|
|
|
|||||||||
Accrued severance pay, net
|
|
|
|
|||||||||
Deferred taxes, net
|
|
(
|
)
|
|
||||||||
Decrease (increase) in trade receivables, net
|
|
(
|
)
|
(
|
)
|
|||||||
Decrease (increase) in contract assets
|
(
|
)
|
|
|
||||||||
Increase in other assets and other adjustments (including current, long-term and effect of exchange rate changes on cash, cash equivalents and restricted cash)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Decrease (increase) in inventories
|
(
|
)
|
(
|
)
|
|
|||||||
Decrease in trade payables
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Increase (decrease) in accrued expenses
|
|
|
(
|
) | ||||||||
Increase (decrease) in advances from customers and deferred revenues
|
|
|
(
|
)
|
||||||||
Increase (decrease) in other liabilities
|
(
|
)
|
|
(
|
)
|
|||||||
Net cash provided by operating activities
|
|
|
|
F - 11
Year ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Cash flows from investing activities:
|
||||||||||||
Purchase of property and equipment
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Proceeds from (investment in) short-term deposits
|
|
|
(
|
)
|
||||||||
Investment in financial instrument
|
|
(
|
)
|
|
||||||||
Acquisitions of subsidiary, net of cash acquired (see Note 17)
|
(
|
)
|
|
|
||||||||
Receipts from sale of properties
|
|
|
|
|||||||||
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Cash flows from financing activities:
|
||||||||||||
Dividend payment
|
|
|
(
|
)
|
||||||||
Repayment of credit facility, net
|
(
|
)
|
|
|||||||||
Repayment of long-term loan
|
|
|
(
|
)
|
||||||||
Net cash used in financing activities
|
(
|
)
|
|
(
|
)
|
|||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(
|
)
|
|
(
|
)
|
|||||||
Increase (decrease) in cash, cash equivalents and restricted cash
|
|
|
(
|
)
|
||||||||
Cash, cash equivalents and restricted cash at the beginning of the year
|
|
|
|
|||||||||
Cash, cash equivalents and restricted cash at the end of the year (a)
|
$
|
|
$
|
|
$
|
|
Supplementary disclosure of cash flows activities:
|
||||||||||||
(A) Cash paid during the year for:
|
||||||||||||
Interest
|
$
|
|
$
|
|
$
|
|
||||||
Taxes on income
|
$
|
|
$
|
|
$
|
|
||||||
(B) Non-cash transactions:
|
||||||||||||
Purchases of property and equipment that were not paid for and reclassification from inventories to property and equipment
|
$
|
|
$
|
|
$
|
|
||||||
New operating lease assets obtained in exchange for operating lease liabilities
|
$
|
|
$
|
|
$
|
|
F - 12
(a) |
The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the consolidated balance sheets:
|
December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
||||||
Restricted cash - current
|
|
|
|
|||||||||
Restricted cash - long-term
|
|
|
|
|||||||||
Cash, cash equivalents and restricted cash
|
$
|
|
$
|
|
$
|
|
F - 13
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 1:- |
GENERAL
|
a. |
Organization:
|
b. |
The Company depends on major suppliers to supply certain components and services for the production of its products or providing services. If these suppliers fail to deliver or delay the delivery of the necessary components or services, the Company will be required to seek alternative sources of supply. A change in suppliers could result in product redesign, manufacturing delays or services delays which could cause a possible loss of sales and additional incremental costs and, consequently, could adversely affect the Company's results of operations and financial position.
|
F - 14
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 1:- |
GENERAL (Cont.)
|
c. |
The Company has three major customers which accounted for
|
|
d. |
The military conflict between Russia and Ukraine and the rising tensions between the U.S. and other countries, on the one hand, and Russia, on the other hand, caused major economic sanctions and export controls restrictions on Russia and various Russian entities were imposed by the U.S., European Union, and the United Kingdom commencing February 2022, and additional sanctions and restrictions may be imposed in the future. These sanctions and restrictions restrict the Company’s business in Russia, which mainly includes exports to Russia, and may delay or prevent the Company from collecting funds and performing money transfers from Russia. While the Company’s business in Russia is of limited in scope, these restrictions may cause a reduction of the Company’s sales and financial results. In addition, The Company receives manufacturing services from a global manufacturer’s facility in the Ukraine. While the manufacturer assured the Company that the operations of the plant had not been interrupted by the military situation in Ukraine and has a recovery plan in place, there is no assurance that negative developments in the area in the future will not disrupt the Company’s business and materially adversely affect it. |
e. |
On March 8, 2023, the Company signed a definitive agreement to acquire
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES
|
a. |
The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"), followed on a consistent basis other than described in note 2(ad).
|
b. |
Use of estimates:
|
F - 15
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
c. |
Functional currency:
|
d. |
Principles of consolidation:
|
e. |
Cash and Cash equivalents:
|
F - 16
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
f. |
Short-term restricted cash:
|
g. |
Inventories:
|
h. |
Property and equipment, net:
|
Years
|
||
Buildings
|
|
|
Computers, software and electronic equipment
|
|
|
Office furniture and equipment
|
|
|
Vehicles
|
|
F - 17
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
i. |
Intangible assets:
|
j. |
Impairment of long-lived assets:
|
k. |
Goodwill:
|
F - 18
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
l. |
Contingencies:
|
m. |
Revenue recognition:
|
F - 19
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
F - 20
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
F - 21
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
n. |
Selling and marketing expenses:
|
o. |
Warranty costs:
|
F - 22
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
p. |
Research and development expenses:
|
q. |
Research and development grants:
|
r. |
Accounting for stock-based compensation:
|
F - 23
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
s. |
Taxes on income:
|
t. |
Concentrations of credit risks:
|
F - 24
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
u. |
Employee related benefits:
|
F - 25
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share data)
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
v. |
Fair value of financial instruments:
|
Level 1 - |
Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
Level 2 - |
Include inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
|
Level 3 - |
Unobservable inputs for the asset or liability.
|
w. |
Earnings per share:
|
F - 26
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
Awards that are contingently issuable upon the achievement of specified performance conditions (see Note 17) are included in the diluted earnings per share calculation based on the number of shares that would be issuable if the end of the period was the end of the contingency period.
x. |
Derivatives and hedging activities:
|
y. |
Comprehensive income (loss):
|
F - 27
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
December 31, 2023
|
||||||||||||
Foreign currency translation adjustments
|
Unrealized gains (losses) on cash flow hedges
|
Total
|
||||||||||
Beginning balance
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
Other comprehensive income (loss) before reclassifications
|
|
(
|
)
|
(
|
)
|
|||||||
Amounts reclassified from accumulated other comprehensive loss
|
-
|
|
|
|||||||||
Net current-period other comprehensive income
|
|
|
|
|||||||||
Ending balance
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
December 31, 2022
|
||||||||||||
Foreign currency translation adjustments
|
Unrealized gains (losses) on cash flow hedges
|
Total
|
||||||||||
Beginning balance
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
||||
Other comprehensive income (loss) before reclassifications
|
|
(
|
)
|
(
|
)
|
|||||||
Amounts reclassified from accumulated other comprehensive loss
|
-
|
|
|
|||||||||
Net current-period other comprehensive income (loss)
|
|
(
|
)
|
(
|
)
|
|||||||
Ending balance
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
F - 28
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
z. |
Leases:
|
aa. |
Business combination
|
F - 29
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
ab. |
Short-term deposits:
|
ac. |
Reclassifications:
|
ad. |
Change in accounting policy:
Prior to 2023, the Company reported any interest related to Taxes on income as a component of Financial income (expenses), net and reported any related penalties as a component of Operating expenses. In 2023, the Company elected to change its method of accounting for tax related interest and penalties from Financial income (expenses), net and Operating expenses to the Taxes on income line in the Consolidated Statements of Income (Loss). The revised classification is more appropriate under the circumstances for the following reasons:
|
1. |
The acquisition of DPI (see Note 17) in November 2023 has introduced external debts into the Company’s balance sheet and interest expenses arising from these debts into the Company’s consolidated statement of income (loss).
In the context of this event, the Company believes it is preferable for the Financial expense, net line in the consolidated statement of income (loss) to exclude interest related to taxes on income, and reflect mostly interest expense relating to these debts, foreign exchange rates changes and interest income from deposits.
|
2. |
The revised policy is better aligned with the accounting policy followed by the Company’s publicly listed competitors and will lead to enhanced comparability.
This accounting policy change had an immaterial effect on the consolidated statements of income (loss) in the years ended December 31, 2022 and 2021. Therefore, the Company did not make retrospective adjustments to its comparative financial statements.
During the years ended December 31, 2023, 2022, and 2021 interest and penalties related to income tax were immaterial.
|
F - 30
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
ae. |
Recently issued and adopted accounting pronouncement:
|
af. |
Recently issued accounting pronouncements – not yet adopted:
|
F - 31
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 3:- |
INVENTORIES
|
a. |
Inventories are comprised of the following:
|
December 31,
|
||||||||
2023
|
2022
|
|||||||
Raw materials, parts and supplies
|
$
|
|
$
|
|
||||
Work in progress and assembled raw materials
|
|
|
||||||
Finished products
|
|
|
||||||
$
|
|
$
|
|
b. |
Inventory net write-offs amounted to $
|
NOTE 4:- |
PROPERTY AND EQUIPMENT, NET
|
a. |
Property and equipment, net is comprised of the following:
|
December 31,
|
||||||||
2023
|
2022
|
|||||||
Cost:
|
||||||||
Buildings and land
|
$
|
|
$
|
|
||||
Computers, software and electronic equipment
|
|
|
||||||
Network equipment
|
|
|
||||||
Office furniture and equipment
|
|
|
||||||
Vehicles
|
|
|
||||||
Leasehold improvements
|
|
|
||||||
|
|
|||||||
Accumulated depreciation
|
|
|
||||||
Depreciated cost
|
$
|
|
$
|
|
b. |
Depreciation expenses amounted to $
|
c. |
The Company leases part of its buildings as office space to others. The gross income generated from such leases amounted to approximately $
|
F - 32
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 4:- |
PROPERTY AND EQUIPMENT, NET (Cont.)
|
d. |
During the year ended December 31, 2021, a property of the Company in Germany was classified as held for sale. During the year ended December 31, 2022, the property was derecognized from the consolidated balance sheets. The Company recognized impairment of $
|
e. |
During the year ended December 31, 2023, the Company entered into a definitive agreement for the sale of a real estate property in Bulgaria for $
|
NOTE 5:- |
DEFERRED REVENUES
|
F - 33
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 6:- |
INTANGIBLE ASSETS, NET
|
a. |
Intangible assets, net comprised of the following:
|
December 31,
|
||||||||
2023
|
2022
|
|||||||
Original amounts:
|
||||||||
Technology
|
$
|
|
$
|
|
||||
Customer relationships
|
|
|
||||||
Marketing rights and patents
|
|
|
||||||
Backlog
|
|
|
||||||
Trademark
|
|
|
||||||
|
|
|||||||
Accumulated amortization:
|
||||||||
Technology
|
|
|
||||||
Customer relationships
|
|
|
||||||
Marketing rights and patents
|
|
|
||||||
Backlog
|
|
|
||||||
Trademark
|
|
|
||||||
|
|
|||||||
$
|
|
$
|
|
b. |
Amortization expenses amounted to $
|
c. |
Estimated amortization expenses for the following years are as follows:
|
Year ending December 31,
|
||||
2024
|
$
|
|
||
2025
|
|
|||
2026
|
|
|||
2027
|
|
|||
2028
|
|
|||
2029 onwards
|
|
|||
$
|
|
F - 34
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 7:- |
GOODWILL
|
Satellite Networks
|
Integrated Solutions
|
Total
|
||||||||||
Balance as of December 31, 2022 *)
|
$
|
|
$
|
|
$
|
|
||||||
Addition from acquisition (see Note 17)
|
|
|
|
|||||||||
Balance as of December 31, 2023 *)
|
$
|
|
$
|
|
$
|
|
NOTE 8:- |
COMMITMENTS AND CONTINGENCIES
|
a. |
Commitments with respect to space segment services:
|
Year ending December 31,
|
||||
2024
|
|
|||
2025
|
|
|||
2026
|
|
|||
$
|
|
b. |
In 2023 and 2022, the Company's primary material purchase commitments were with inventory suppliers. The Company's material inventory purchase commitments are based on purchase orders, or on outstanding agreements with some of the Company's suppliers of inventory. As of December 31, 2023 and 2022, the Company's major outstanding inventory purchase commitments amounted to $
|
c. |
Royalty commitments:
|
1. |
Certain of the Company’s research and development programs funded by the Israel Innovation Authority ("IIA"), formerly known as the Office of the Chief Scientist of the Ministry of Economy of the Government of Israel, are royalty bearing programs. Sales of products developed as a result of such programs are subject to payment of royalties to the IIA.
|
F - 35
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 8:- |
COMMITMENTS AND CONTINGENCIES (Cont.)
|
2. |
Research and development projects undertaken by the Company were partially financed by the Binational Industrial Research and Development Foundation ("BIRD Foundation"). The Company is committed to pay royalties to the BIRD Foundation at a rate of
|
d. |
Litigation:
|
1. |
In 2003, the Brazilian tax authority filed a claim against the Company’s inactive subsidiary in Brazil, SPC International Ltda., for the payment of taxes allegedly due from the subsidiary. After numerous hearings and appeals at various appellate levels in Brazil, the Supreme Court ruled against the subsidiary in final non-appealable decisions published in June 2017. As of December 31, 2023, the total amount of this claim, including interest, penalties and legal fees is approximately $
|
F - 36
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 8:- |
COMMITMENTS AND CONTINGENCIES (Cont.)
|
While foreclosure and other collection proceedings are pending against the subsidiary, based on Brazilian external counsel’s opinion, the Company believes that the subsidiary has solid arguments to sustain its position that further collection proceedings and inclusion of any additional co-obligors in the tax foreclosure certificate are barred due to statute of limitation and that the foreclosure procedures cannot legally be redirected to other group entities and managers who were not initially cited in the foreclosure proceeding due to the passage of the statute of limitation. Accordingly, the Company believes that the chances that such redirection will lead to a loss recognition are remote.
|
2. |
In 2014, the Company’s Peruvian subsidiary, Gilat To Home Peru S.A., ("GTH"), initiated arbitration proceedings in Lima against the Ministry of Transport and Communications of Peru, ("MTC"), and the Programa Nacional de Telecomunicaciones ("Pronatel"). The arbitration was related to the Pronatel projects awarded to the Company in 2000-2001. Under these projects, GTH provided fixed public telephony services in rural areas of Peru. GTH’s main claim was related to damages caused by the promotion of mobile telephony in such areas by the Peruvian government in the years 2011-2015. In June 2018, the arbitration tribunal issued an arbitration award ordering MTC and Pronatel to pay GTH approximately $
|
3. |
In October 2019, GTH initiated additional arbitration proceedings against MTC and Pronatel based on similar grounds for the years
|
4. |
In 2018, Gilat Networks Peru S.A. ("GNP"), the Company’s subsidiary in Peru, won a government bid for two additional regional projects in the Amazonas and Ica regions in Peru for Pronatel with a contractual value of approximately $
|
F - 37
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 8:- |
COMMITMENTS AND CONTINGENCIES (Cont.)
|
5. |
The Company is in the midst of different stages of audits and disputes with various tax authorities in different parts of the world. Further, the Company is the defendant in various other lawsuits, including employment-related litigation claims and may be subject to other legal proceedings in the normal course of its business. While the Company intends to defend the aforementioned matters vigorously, it believes that a loss in excess of its accrued liability with respect to these claims is not probable.
|
e. |
Guarantees:
|
F - 38
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 9:- |
LEASES
|
Year ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Operating lease expenses *)
|
$
|
|
$
|
|
$
|
|
||||||
Short-term lease expenses
|
|
|
|
|||||||||
Total lease expenses
|
$
|
|
$
|
|
$
|
|
2024
|
|
|||
2025
|
|
|||
2026
|
|
|||
2027
|
|
|||
Total future lease payments
|
|
|||
Less imputed interest
|
|
|||
Total lease liability balance
|
$
|
|
NOTE 10:- |
DERIVATIVE INSTRUMENTS
|
F - 39
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share data)
NOTE 10:- |
DERIVATIVE INSTRUMENTS (Cont.)
|
NOTE 11:- |
SHAREHOLDERS' EQUITY
|
a. |
Share capital:
|
b. |
Stock option plans:
|
F - 40
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 11:- |
SHAREHOLDERS' EQUITY (Cont.)
|
Year ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Risk free interest
|
|
%
|
|
%
|
|
%
|
||||||
Dividend yields
|
|
%
|
|
%
|
|
%
|
||||||
Volatility
|
|
%
|
|
%
|
|
%
|
||||||
Expected term (in years)
|
|
|
|
Number of options
|
Weighted-average exercise price
|
Weighted- average remaining contractual term
(in years)
|
Aggregate intrinsic value
(in thousands)
|
|||||||||||||
Outstanding at January 1, 2023
|
|
$
|
|
|
$
|
|
||||||||||
Granted
|
|
$
|
|
|||||||||||||
Exercised
|
(
|
)
|
$
|
|
||||||||||||
Forfeited and cancelled
|
(
|
)
|
$
|
|
||||||||||||
Outstanding as of December 31, 2023
|
|
$
|
|
|
$
|
|
||||||||||
Exercisable as of December 31, 2023
|
|
$
|
|
|
$
|
|
F - 41
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 11:- |
SHAREHOLDERS' EQUITY (Cont.)
|
c. |
As part of DPI’s acquisition, the Company issued ordinary shares and might issue additional ordinary shares in the future upon meeting certain criteria. For additional details, see Note 17.
|
d. |
During the years ended December 31, 2023, 2022 and 2021, the stock-based compensation expenses, including with respect to the Service Based Earn-Out and the Bonus Amount as defined in Note 17, were recognized in the consolidated statement of income (loss) in the following line items:
|
Year ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Cost of revenues of products
|
$
|
|
$
|
|
$
|
|
||||||
Cost of revenues of services
|
|
|
|
|||||||||
Research and development expenses, net
|
|
|
|
|||||||||
Selling and marketing expenses
|
|
|
|
|||||||||
General and administrative expenses
|
|
|
|
|||||||||
$
|
|
$
|
|
$
|
|
e. |
Dividends:
|
1. |
In the event that cash dividends are declared by the Company, such dividends will be declared and paid in Israeli currency. Under current Israeli regulations, any cash dividend paid in Israeli currency in respect of ordinary shares purchased by non-residents of Israel with non-Israeli currency, may be freely repatriated in such non-Israeli currency, at the exchange rate prevailing at the time of repatriation.
|
2. |
The Company has not adopted a policy regarding the distribution of dividends.
|
3. |
Pursuant to the terms of a bank agreement, the Company is restricted from paying cash dividends to its shareholders without initial approval from the bank.
|
F - 42
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 12:- |
TAXES ON INCOME
|
a. |
Israeli taxation:
|
1. |
Corporate tax rates:
|
2. |
Tax benefits under the Law for the Encouragement of Capital Investments, 1959 (the "Law"):
|
F - 43
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 12:- |
TAXES ON INCOME (Cont.)
|
3. |
On November 15, 2021, the Israeli Parliament released its 2021-2022 Budget Law (“2021 Budget Law”). The 2021 Budget Law introduces a new dividend ordering rule that apportions every dividend between previously tax-exempt (“Trapped Earnings”) and previously taxed income. Consequently, distributions (including deemed distributions as per Section 51(h)/51B of the Law) may entail additional corporate tax liability to the distributing company. The Company had approximately $
|
b. |
Taxes on income on non-Israeli subsidiaries:
|
c. |
Carryforward tax losses and credits:
|
F - 44
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 12:- |
TAXES ON INCOME (Cont.)
|
d. |
Deferred taxes:
|
F - 45
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 12:- |
TAXES ON INCOME (Cont.)
|
|
December 31,
|
||||||||
2023
|
2022
|
||||||||
1. |
Provided in respect of the following:
|
||||||||
Gross deferred tax assets:
|
|||||||||
Carryforward tax losses and credits *) **)
|
$
|
|
$
|
|
|||||
Property, equipment and intangibles
|
|
|
|||||||
Inventory accrual
|
|
|
|||||||
Vacation accrual
|
|
|
|||||||
Supplementary tax advances
|
|
|
|||||||
Deferred revenues
|
|
|
|||||||
Research and development costs
|
|
|
|||||||
Other temporary differences
|
|
|
|||||||
Gross deferred tax assets
|
|
|
|||||||
Valuation allowance
|
(
|
)
|
(
|
)
|
|||||
Net deferred tax assets
|
|
|
|||||||
Gross deferred tax liabilities:
|
|||||||||
Property, equipment and intangibles
|
(
|
)
|
(
|
)
|
|||||
Other temporary differences
|
(
|
)
|
(
|
)
|
|||||
Gross deferred tax liabilities
|
(
|
)
|
(
|
)
|
|||||
Net deferred tax assets
|
$
|
|
$
|
|
*) |
The amounts are presented after reduction for unrecognized tax benefits of $
|
**) |
Excluding capital losses carryforwards, which are not part of the Company’s on-going business, and for which the Company records full valuation allowance, see Note 12c.
|
2. |
The Peruvian government awarded GNP, the Company's subsidiary in Peru, the Regional Pronatel Projects under six separate bids for the construction of fiber and wireless networks and operation of the networks for a defined period. The income derived from the construction and operation of the projects is a tax-exempt subsidy.
|
|
F - 46
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 12:- |
TAXES ON INCOME (Cont.)
|
3. |
During the year ended December 31, 2023, the Company increased valuation allowance by $
|
e. |
Reconciling items between the statutory tax rate of the Company and the actual taxes on income:
|
Year ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
|
|||||||||
Income before taxes on income, as reported in the consolidated statements of income (loss)
|
$
|
|
$
|
|
$
|
|
||||||
Statutory tax rate
|
|
%
|
|
%
|
|
%
|
||||||
Theoretical taxes on income
|
$
|
|
$
|
|
$
|
|
||||||
Currency differences
|
(
|
)
|
|
|
||||||||
Tax adjustment in respect of different tax rates
|
|
(
|
)
|
(
|
)
|
|||||||
Changes in valuation allowance
|
|
|
|
|||||||||
Expiration of carryforward tax losses
|
|
|
|
|||||||||
Exempt subsidy income
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Release of trapped earnings
|
|
|
|
|||||||||
Nondeductible expenses and other differences
|
|
|
|
|||||||||
$
|
|
$
|
|
$
|
|
F - 47
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 12:- |
TAXES ON INCOME (Cont.)
|
f. |
Taxes on income included in the consolidated statements of income (loss):
|
Year ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Current
|
$
|
|
$
|
|
$
|
|
||||||
Deferred
|
|
(
|
)
|
|
||||||||
$
|
|
$
|
|
$
|
|
Year ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Domestic
|
$
|
|
$
|
|
$
|
|
||||||
Foreign
|
|
|
|
|||||||||
$
|
|
$
|
|
$
|
|
g. |
Income (loss) before taxes on income:
|
Year ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Domestic
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
Foreign
|
|
|
|
|||||||||
$
|
|
$
|
|
$
|
|
h. |
Unrecognized tax benefits:
|
December 31,
|
||||||||
2023
|
2022
|
|||||||
Balance at beginning of year
|
$
|
|
$
|
|
||||
Increase (decrease) in tax positions for prior years, net
|
(
|
)
|
||||||
Increase in tax positions for current year
|
|
|||||||
|
||||||||
Balance at the end of year **)
|
$ |
$
|
|
**) |
The amounts for the years ended December 31, 2023 and 2022 include $
|
|
F - 48
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 12:- |
TAXES ON INCOME (Cont.)
|
i. |
The Company and its subsidiaries file income tax returns in Israel and in other jurisdictions of its subsidiaries. The Company's Israeli tax assessments through 2019 are considered final. As of December 31, 2023, the tax returns of the Company’s main subsidiaries are still subject to audits by the tax authorities for the tax years 2018 through 2022.
|
NOTE 13:- |
SUPPLEMENTARY CONSOLIDATED BALANCE SHEETS INFORMATION
|
a. |
Other current assets:
|
December 31,
|
||||||||
2023
|
2022
|
|||||||
Governmental authorities *)
|
$
|
|
$
|
|
||||
Prepaid expenses
|
|
|
||||||
Deferred charges
|
|
|
||||||
Advance payments to suppliers
|
|
|
||||||
Other
|
|
|
||||||
$
|
|
$
|
|
b. |
Other current liabilities:
|
December 31,
|
||||||||
2023
|
2022
|
|||||||
Payroll and related employee accruals
|
$
|
|
$
|
|
||||
Governmental authorities
|
|
|
||||||
Other
|
|
|
||||||
$
|
|
$
|
|
F - 49
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 13:- |
SUPPLEMENTARY CONSOLIDATED BALANCE SHEETS INFORMATION (Cont.)
|
c. |
Credit facility:
|
December 31,
|
|||||||||
Interest rate
|
Maturity
|
2023
|
|||||||
Credit facility from bank:
|
|
|
$
|
|
One of the Company’s subsidiaries has a $
|
d. |
Long-term loan:
|
Interest rate
|
Maturity
|
December 31,
2023
|
|||||||
Other loan:
|
|
%
|
|
$
|
|
One of the Company’s subsidiaries has a loan agreement with one of its former shareholders.
|
e. |
Other long-term liabilities:
|
December 31,
|
||||||||
2023
|
2022
|
|||||||
Earn-Out Consideration, Holdback Amount and Bonus Amount (see Note 17)
|
$
|
|
$
|
|
||||
Long-term governmental authorities
|
|
|
||||||
Other
|
|
|
||||||
$
|
|
$
|
|
F - 50
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 14:- |
SELECTED CONSOLIDATED STATEMENTS OF INCOME (LOSS) DATA
|
a. |
Other operating expenses (income), net:
|
Year ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Capital gain from disposal of property
|
$
|
(
|
)
|
$
|
|
$
|
|
|||||
Income from arbitrations in Peru, net
|
(
|
)
|
|
|
||||||||
Income from legal procedure in the Philippines
|
(
|
)
|
|
|
||||||||
Mergers and acquisitions related expenses
|
|
|
|
|||||||||
Others, net
|
|
|
|
|||||||||
$
|
(
|
)
|
$
|
|
$
|
|
b. |
Financial income (expenses), net: |
Year ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Income:
|
||||||||||||
Interest on cash equivalents, short-term deposits and restricted cash
|
$
|
|
$
|
|
$
|
|
||||||
Other
|
|
|
|
|||||||||
|
|
|
||||||||||
Expenses:
|
||||||||||||
Interest with respect to loan and credit facility
|
(
|
)
|
|
|
||||||||
Exchange rate differences, net
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Bank charges including guarantees
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Revaluation of investment in a convertible debt
|
(
|
)
|
|
|
||||||||
Other
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
(
|
)
|
(
|
)
|
(
|
)
|
|||||||
Total financial income (expenses), net
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
F - 51
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share data)
NOTE 14:- |
SELECTED CONSOLIDATED STATEMENTS OF INCOME (LOSS) DATA (Cont.)
|
c. |
Earnings (losses) per share:
|
1. |
Numerator:
|
Year ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Net income (losses) available to holders of ordinary shares
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
2.Denominator:
Year ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Weighted average number of shares
|
|
|
|
|||||||||
Add - stock options
|
|
|
|
|||||||||
Denominator for diluted earnings (losses) per share - adjusted weighted average shares assuming exercise of stock options
|
|
|
|
NOTE 15:- |
CUSTOMERS, GEOGRAPHIC AND SEGMENT INFORMATION
|
F - 52
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 15:- |
CUSTOMERS, GEOGRAPHIC AND SEGMENT INFORMATION (Cont.)
|
• |
Satellite Networks is focused on developing and supplying networks that are used as the platform that enables the latest satellite constellations of high throughput satellites ("HTS"), very high throughput satellites ("VHTS") and Non-GEO-Stationary Orbit ("NGSO") opportunities worldwide. The segment provides advanced broadband satellite communication networks and associated professional services and comprehensive turnkey solutions and managed satellite network services solutions. Segment’s customers are service providers, satellite operators, MNOs, Telcos, large enterprises, system integrators, defense, homeland security organizations and governments worldwide. Principal applications include IFC, cellular backhaul, maritime, social inclusion solutions, government, defense and enterprise networks and are driving meaningful partnerships with satellite operators to leverage the segment’s technology and breadth of services to deploy and operate the ground-based satellite communication networks. The segment’s product portfolio includes a leading satellite network platform with high-speed VSATs, high performance on-the-move antennas, BUCs and transceivers, as well as multi-band DKET terminals, and durable, ultra-portable terminals for quick connectivity in remote locations.
|
• |
Integrated Solutions is focused on developing, manufacturing and supplying products and solutions for mission-critical defense and broadcast satellite communications systems, advanced on-the-move and on-the-pause satellite communications equipment, systems and solutions, including airborne, ground-mobile satellite systems and solutions. The integrated solutions product portfolio comprises of leading high-efficiency, high-power SSPAs, BUCs and transceivers with a field-proven, high-performance variety of frequency bands. The segment’s customers are satellite operators, IFC service providers, defense and homeland security system integrators, and NGSO gateway integrators.
|
• |
Network Infrastructure and Services is focused on telecom operation and implementation of large-scale network projects in Peru. The segment provides terrestrial (fiber optic and wireless network) and satellite network construction and operation. The segment serves the Company’s customers through technology integration, managed networks and services, connectivity services, internet access and telephony over the segment’s networks. The segment implements projects using various technologies (including the Company’s equipment), mainly based on BOT and BOO contracts.
|
a. |
Information on the reportable operating segments:
|
1. |
The measurement of operating income (loss) in the reportable operating segments is based on the same accounting principles applied in these consolidated financial statements and includes certain corporate overhead allocations.
|
2. |
Financial information relating to reportable operating segments:
|
F - 53
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 15:- |
CUSTOMERS, GEOGRAPHIC AND SEGMENT INFORMATION (Cont.)
|
Year ended December 31, 2023
|
||||||||||||||||
Satellite Networks
|
Integrated Solutions
|
Network Infrastructure and Services
|
Total
|
|||||||||||||
Revenues
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Operating income (loss)
|
|
(
|
)
|
(
|
)
|
|
||||||||||
Financial income, net
|
|
|||||||||||||||
Income before taxes on income
|
|
|||||||||||||||
Taxes on income
|
|
|||||||||||||||
Net income
|
$
|
|
||||||||||||||
Depreciation and amortization
|
$
|
|
$
|
|
$
|
|
$
|
|
Year ended December 31, 2022
|
||||||||||||||||||||
Satellite Networks
|
Integrated Solutions
|
Network Infrastructure and Services
|
Unallocated
|
Total
|
||||||||||||||||
Revenues
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Operating income (loss)
|
|
|
|
(
|
)
|
|
||||||||||||||
Financial expenses, net
|
(
|
)
|
||||||||||||||||||
Income before taxes on income
|
|
|||||||||||||||||||
Taxes on income
|
|
|||||||||||||||||||
Net loss
|
$
|
(
|
)
|
|||||||||||||||||
Depreciation and amortization
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Year ended December 31, 2021
|
||||||||||||||||||||
Satellite Networks
|
Integrated Solutions
|
Network Infrastructure and Services
|
Unallocated
|
Total
|
||||||||||||||||
Revenues
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Operating income (loss)
|
|
|
(
|
)
|
(
|
)
|
|
|||||||||||||
Financial expenses, net
|
(
|
)
|
||||||||||||||||||
Income before taxes on income
|
|
|||||||||||||||||||
Taxes on income
|
|
|||||||||||||||||||
Net loss
|
$
|
(
|
)
|
|||||||||||||||||
Depreciation and amortization
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
F - 54
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 15:- |
CUSTOMERS, GEOGRAPHIC AND SEGMENT INFORMATION (Cont.)
|
b. |
Geographic information:
|
Year ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
United States
|
$
|
|
$
|
|
$
|
|
||||||
Peru
|
|
|
|
|||||||||
Israel
|
|
|
|
|||||||||
Others
|
|
|
|
|||||||||
$
|
|
$
|
|
$
|
|
c. |
The Company’s long-lived assets (property and equipment, net and operating lease right-of-use assets) are located as follows:
|
December 31,
|
||||||||
2023
|
2022
|
|||||||
Israel
|
$
|
|
$
|
|
||||
United States
|
|
|
||||||
Peru
|
|
|
||||||
Other
|
|
|
||||||
$
|
|
$
|
|
d. |
The table below represents the revenues from major customers and their segments:
|
Year ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Customer A – Network Infrastructure and Services
|
|
%
|
|
%
|
|
%
|
||||||
Customer B – Satellite Networks
|
|
%
|
|
)
|
|
)
|
||||||
Customer C – Satellite Networks
|
|
%
|
|
)
|
|
)
|
F - 55
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 16:- |
RELATED PARTY BALANCES AND TRANSACTIONS
|
a. |
The Company entered into a number of agreements with affiliates of the FIMI Opportunity Funds ("FIMI"), formerly the Company's largest shareholder.
|
b. |
As of December 31, 2023 and 2022, FIMI held less than
|
c. |
The transactions with the Company’s related parties during 2022 and 2021 were approved by the Company’s Audit Committee and Board of Directors in accordance with the requirements of the Israeli Companies Law.
|
d. |
Transactions with the related parties:
|
Year ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Cost of revenues of products
|
$
|
|
)
|
$
|
|
$
|
|
|||||
Purchase of property and equipment and inventory
|
$
|
|
)
|
$
|
|
$
|
|
NOTE 17:- |
BUSINESS COMBINATION |
i. |
A closing payment totaling $
|
ii. |
A deferred payment of $
|
iii. |
$
|
iv. |
$
|
F - 56
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 17:- |
BUSINESS COMBINATION (Cont.) |
F - 57
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 17:- |
BUSINESS COMBINATION (Cont.) |
|
Value
|
|||
Cash and Cash equivalents
|
|
|||
Trade receivables and contract assets
|
|
|||
Inventories
|
|
|||
Other current assets
|
|
|||
Identified intangible assets
|
|
|||
Goodwill
|
|
|||
Other long-term assets
|
|
|||
Total assets acquired
|
|
|||
|
||||
Credit facility
|
|
|||
Other current liabilities
|
|
|||
Deferred taxes
|
|
|||
Long-term loan
|
|
|||
Other long-term liabilities
|
|
|||
Total liabilities assumed
|
|
|||
|
||||
Total purchase price consideration
|
|
Fair Value
|
Average expected
useful life
|
|||||||
Customer relationships
|
|
|
||||||
Technology
|
|
|
||||||
Trademark
|
|
|
||||||
Backlog
|
|
|
||||||
|
F - 58
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 17:- |
BUSINESS COMBINATION (Cont.) |
Year Ended December 31,
|
||||||||
Unaudited
|
||||||||
2023
|
2022
|
|||||||
Revenues
|
|
|
||||||
Net income (loss)
|
|
(
|
)
|
NOTE 18:- |
FAIR VALUE MEASURMENTS
|
F - 59
GILAT SATELLITE NETWORKS LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands
NOTE 18:- |
FAIR VALUE MEASURMENTS (Cont.)
|
December 31, 2023
|
||||||||||||||||
Fair value measurements using input type
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Assets:
|
||||||||||||||||
|
|
|
|
|
||||||||||||
Total financial assets
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Liabilities:
|
||||||||||||||||
Holdback Amount
|
|
|
|
|
||||||||||||
Earn-Out Consideration
|
|
|
|
|
||||||||||||
Total financial liabilities
|
$
|
|
$
|
|
$
|
|
$
|
|
December 31, 2022
|
||||||||||||||||
Fair value measurements using input type
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Assets:
|
||||||||||||||||
Convertible debt
|
|
|
|
|||||||||||||
Total financial assets
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Liabilities:
|
||||||||||||||||
|
|
|
|
|
||||||||||||
Total financial liabilities
|
$
|
|
$
|
|
$
|
|
$
|
|
Fair value at the beginning of the year
|
$
|
|
||
Business combination (see Note 17)
|
|
|||
Income from changes in fair value
|
(
|
)
|
||
Fair value at the end of the year
|
$
|
|
F - 60