x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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20-5338862
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(State or other jurisdiction of
incorporation or organization)
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(IRS Employer
Identification No.)
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1 HaMada Street
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Herziliya Pituach, Israel
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4673335
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common stock, par value $0.0001 per share
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NASDAQ (Global Select Market)
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o
Large accelerated filer
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Accelerated filer
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x
Non-accelerated filer
(do not check if a
smaller reporting
company)
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Smaller reporting company
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3
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14
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30
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30
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30
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30
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31
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33
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35
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57
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58
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58
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58
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58
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59
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66
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69
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72
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75
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76
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77
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78
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our history of losses and limited period of profitability, which profitability may not continue in the future;
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our limited operating history, which makes it difficult to predict future results;
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future demand for solar energy solutions;
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changes to net metering policies or the reduction, elimination or expiration of government subsidies and economic incentives for on-grid solar electricity applications;
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federal, state and local regulations governing the electric utility industry with respect to solar energy;
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the retail price of electricity derived from the utility grid or alternative energy sources;
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interest rates and supply of capital in the global financial markets;
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competition, including introductions of power optimizer, inverter and solar
photovoltaic (“
PV”) system monitoring products by our competitors;
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developments in alternative technologies or improvements in distributed solar energy generation;
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historic cyclicality of industry and periodic downturns;
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defects or performance problems in our products;
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our ability to forecast demand for our products accurately and to match production with demand;
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our dependence on ocean transportation to deliver our products in a cost effective manner;
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our dependence upon a small number of outside contract manufacturers;
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capacity constraints, delivery schedules, manufacturing yields and costs of our contract manufacturers and availability of components;
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delays, disruptions and quality control problems in manufacturing;
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shortages, delays, price changes or cessation of operations or production affecting our suppliers of key components;
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business practices and regulatory compliance of our raw material suppliers;
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performance of distributors and large installers in selling our products;
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our ability to retain key personnel and attract additional qualified personnel;
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our ability to effectively design, launch, market and sell new generations of our products and services;
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our ability to maintain our brand and to protect and defend our intellectual property;
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our ability to retain, and events affecting, our major customers;
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our ability to manage effectively the growth of our organization and expansion into new markets;
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our ability to raise additional capital on favorable terms or at all;
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fluctuations in currency exchange rates;
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unrest, terrorism or armed conflict in Israel;
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general economic conditions in our domestic and international markets; and
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the other factors set forth under “Risk Factors.”
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ITEM 1.
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BUSINESS
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•
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Module mismatch.
Traditional inverter systems are unable to consistently produce maximum energy from PV modules. Each PV module in a system has a unique power production profile driven by differences in manufacturing and installation parameters. The architecture of traditional inverter systems does not allow each PV module to operate at its unique MPP. When PV modules are wired in series in a traditional inverter architecture, the entire string’s output is reduced, sometimes correlated directly to the output of the lowest-performing PV module on the string. Output reduction can result from subtle variations in PV module composition, atmospheric conditions, soiling, individual PV module locations and orientations, or varying levels of PV module degradation over time.
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•
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Partial shading.
Many real-world factors can cause a subset of the PV modules in a system to be partially shaded, which can significantly affect the power output of the entire string. For instance, electric wires, a chimney or even adjacent solar panels may cast a shadow during particular hours of the day, or debris may accumulate. This partial shading reduces the yield of a traditional solar PV system by decreasing, or in extreme cases eliminating, power output from the shaded modules. Overall losses to system production from such partial shading can range from small to substantial.
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•
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Dynamic maximum power point tracking loss.
The MPP of a PV module shifts constantly throughout the day as a result of atmospheric conditions. A traditional inverter system’s inability to coordinate output on a module-by-module basis makes it difficult for the system to respond dynamically to the shifting MPP. This inability to respond to the shifting MPP can reduce the potential power output of a traditional solar PV system by 3-10%.
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•
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Rooftop system design complexities.
A traditional inverter system requires each string to be of the same length, use the same type of PV modules and be positioned at the same angle toward the sun. Consequently, rooftop asymmetries and obstructions result in either wasted roof space or inefficient duplication of system components.
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•
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Safety hazards.
Traditional inverter systems cannot shut down the DC output voltage at the PV module level. The DC cables from these modules carry high voltages as long as the sun is shining, even when the traditional inverter or the grid connection has been shut down. This poses serious risks to installers, fire fighters and anyone else who performs work on or around the installation. Such safety hazards have recently prompted heightened safety installation and operation procedures and regulations in a growing number of geographies, compliance with which increases the cost of traditional PV systems.
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•
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No module level monitoring.
A traditional inverter system cannot track power output, temperature or any other attribute of a single PV module. Consequently, a system operator cannot perform remote diagnostics, track performance of PV system components or receive alerts about individual PV module status, and may be unaware of specific module-level problems or breakdowns.
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The first generation of module level power electronics (“MLPE”) was the microinverter. This technology scaled down the traditional inverter to a size and power appropriate to a single PV module. By creating control and monitoring at the module level, microinverters solved certain challenges of the traditional inverter system architecture. However, microinverter architecture has its own limitations, such as:
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•
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Higher initial cost per watt and limited economies of scale.
Microinverters perform all the functionality of the traditional inverter, but at each PV module, and consequently a microinverter system has a significantly higher initial upfront cost of components relative to traditional inverter architecture. In addition, as every PV module must have its own microinverter, the cost per watt of a microinverter system does not decrease with scale. As such, microinverters are generally more expensive than traditional inverter systems on a cost per watt basis for residential installations and not economically viable relative to traditional inverter systems for large commercial and utility installations.
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•
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Grid Code Compliance.
With the growing penetration of solar energy, many utilities in individual U.S. states and Europe have adopted new sets of grid codes to preserve the stability of the electric grid. These grid codes require solar PV inverters to respond dynamically to variances in grid-wide voltage, which typically requires inverter hardware and software to be reengineered. The microinverter faces significant implementation challenges in complying with many of these new grid codes primarily due to its small size. In most cases, adaptation to these new grid codes would require added costs and complexities, limiting the ability of microinverters to address some markets.
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•
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Maximized PV module power output.
Our power optimizers provide module-level MPP tracking and real-time adjustments of current and voltage to the optimal working point of each individual PV module. This enables each PV module to continuously produce its maximum power potential independent of other modules in the same string, thus minimizing module mismatch and partial shading losses. By performing these adjustments at a very high rate, our power optimizers also solve the dynamic MPP losses associated with traditional inverters. Independent testing from Photon Laboratories as well as tests performed by PV Evolution Labs according to the National Renewable Energy Laboratory shade test have confirmed that our technology provides power harvesting that is superior to traditional inverter systems.
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•
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Optimized architecture with economies of scale.
Our system shifts certain functions of the traditional inverter to our power optimizers while keeping the DC to AC function and grid interaction in our inverter. As a result, our inverter is smaller, more efficient, more reliable and less expensive than inverters used in traditional inverter systems. The cost savings that we have achieved on the inverter enable our system to be priced at a cost per watt that is comparable with traditional inverter systems of leading manufacturers. As a PV system grows in size, our inverter benefits from economies of scale, making our technology viable for large commercial and utility-scale applications.
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•
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Enhanced system design flexibility.
Unlike a traditional inverter system that requires each string to be the same length, use the same type of PV modules and be positioned at the same angle toward the sun, our system allows significant design flexibility by enabling the installer to place PV modules in uneven string lengths and on multiple roof facets. This design flexibility:
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increases the amount of the available roof that can be utilized for power production. Unlike traditional inverter systems, our system does not require each string to be the same length, use the same type of PV modules or be positioned at the same angle toward the sun. As a result, our system is significantly less prone to wasted roof space resulting from rooftop asymmetries and obstructions.
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reduces the number of field change orders. For example, some installers use remote tools to estimate the size and configuration of an installation in connection with the customer acquisition process. This is especially common for high-volume residential arrays, where an exhaustive survey of rooftop obstructions would be uneconomical. In some cases, installers discover that their preliminary design, based on remote tools, cannot be implemented due to unexpected shading or other obstructions. With traditional inverter system designs, an obstructed module may require a significant system redesign and a modification of the customer contract to take into account the changed system design. Our DC optimized inverter solution enables an installer to compensate or adjust for most obstructions without materially changing the original design or requiring a modification to the customer contract.
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Reduced balance of system costs.
Our DC optimized inverter system allows significantly longer strings to be connected to the same inverter (as compared to a traditional inverter system). This minimizes the cost of cabling, fuse boxes and other ancillary electric components. These factors together result in easier installation with shorter design times and a lower initial cost per watt, while enabling larger installations per rooftop.
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Continuous monitoring and control to reduce operation and maintenance costs.
Our cloud-based monitoring platform provides full data visibility at the module level, string level, inverter level and system level. The data can be accessed remotely by any web-enabled device, allowing comprehensive analysis, immediate fault detection and alerts. These monitoring features reduce O&M costs for the system owner by identifying and locating faults, enabling remote testing and reducing field visits.
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•
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Enhanced safety.
We have incorporated module-level safety mechanisms in our system to protect installers, electricians and firefighters. Each power optimizer is configured to reduce output to 1 volt unless the power optimizer receives a fail-safe signal from a functioning inverter. As a result, if the inverter is shut down (e.g., for system maintenance, due to malfunction, in the event of a fire or otherwise), the DC voltage throughout the system is reduced to a safe level. In recent years, new safety standards have been introduced in the U.S. and in Europe that require or encourage the installation of safety measures such as these. Our DC optimized inverters comply with the applicable safety requirements of the areas in which they are sold, providing incremental cost savings to installers by eliminating the need for additional hardware such as DC breakers, switches or fire-proof ducts required by traditional inverter systems.
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•
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High reliability.
Solar PV systems are typically expected to operate for at least 25 years under harsh outdoor conditions. High reliability is critical and is facilitated by systems and components that have low heat generation, solid and stable materials, and an absence of moving parts. We have designed our system to meet these stringent requirements. Our power optimizers dissipate much less heat than microinverters because no DC-AC inversion occurs at the module level. As a result, less heat is dissipated beneath the PV module, which improves lifetime expectancy and reliability of our power optimizers. Our power optimizers’ high switching frequency allows the use of ceramic capacitors with a low, fixed rate of aging and a proven life expectancy in excess of 25 years. Further, we use automotive-grade application specific integrated circuits (“ASICs”) that embed many of the required electronics into the ASIC. This reduces the number of components and consequently the potential points of failure.
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•
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product and system performance and features;
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total cost of ownership;
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PV module compatibility and interoperability;
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reliability and duration of product warranty;
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customer service and support;
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breadth of product line;
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local sales and distribution capabilities;
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compliance with applicable certifications and grid codes;
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size and financial stability of operations; and
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size of installed base.
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ITEM 1A.
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RISK FACTORS
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cost competitiveness, reliability and performance of solar PV systems compared to conventional and non-solar renewable energy sources and products;
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availability and amount of government subsidies and incentives to support the development and deployment of solar energy solutions;
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the extent to which the electric power industry and broader energy industries are deregulated to permit broader adoption of solar electricity generation;
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prices of traditional carbon-based energy sources;
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levels of investment by end-users of solar energy products, which tend to decrease when economic growth slows; and
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the emergence, continuance or success of, or increased government support for, other alternative energy generation technologies and products.
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construction of a significant number of new power generation plants, including plants utilizing natural gas, nuclear, coal, renewable energy or other generation technologies;
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relief of transmission constraints that enable local centers to generate energy less expensively;
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reductions in the price of natural gas;
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utility rate adjustment and customer class cost reallocation;
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energy conservation technologies and public initiatives to reduce electricity consumption;
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development of smart-grid technologies that lower the peak energy requirements of a utility generation facility;
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development of new or lower-cost energy storage technologies that have the ability to reduce a customer’s average cost of electricity by shifting load to off-peak times; and
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development of new energy generation technologies that provide less expensive energy.
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the addition or loss of significant customers;
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changes in laws or regulations applicable to our industry, products or services;
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speculation about our business in the press or the investment community;
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price and volume fluctuations in the overall stock market;
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volatility in the market price and trading volume of companies in our industry or companies that investors consider comparable;
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share price and volume fluctuations attributable to inconsistent trading levels of our shares;
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our ability to protect our intellectual property and other proprietary rights;
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sales of our common stock by us or our significant stockholders, officers and directors;
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the expiration of contractual lock-up agreements;
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the development and sustainability of an active trading market for our common stock;
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success of competitive products or services;
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the public’s response to press releases or other public announcements by us or others, including our filings with the Securities and Exchange Commission (the “SEC”), announcements relating to litigation or significant changes to our key personnel;
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the effectiveness of our internal controls over financial reporting;
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changes in our capital structure, such as future issuances of debt or equity securities;
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our entry into new markets;
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tax developments in the U.S., Europe or other markets;
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strategic actions by us or our competitors, such as acquisitions or restructurings; and
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changes in accounting principles.
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authorizing “blank check” preferred stock that our board of directors could issue to increase the number of outstanding shares to discourage a takeover attempt;
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providing for a classified board of directors with staggered, three-year terms, which could delay the ability of stockholders to change the membership of a majority of our board of directors;
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not providing for cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
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limiting the ability of stockholders to call a special stockholder meeting;
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prohibiting stockholders from acting by written consent;
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establishing advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings;
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the removal of directors only for cause and only upon the affirmative vote of the holders of at least 66
2
/
3
% in voting power of all the then-outstanding shares of common stock of the Company entitled to vote thereon, voting together as a single class;
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providing that our board of directors is expressly authorized to amend, alter, rescind or repeal our by-laws; and
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requiring the affirmative vote of holders of at least 66
2
/
3
% of the voting power of all of the then outstanding shares of common stock, voting as a single class, to amend provisions of our certificate of incorporation relating to the management of our business, our board of directors, stockholder action by written consent, advance notification of stockholder nominations and proposals, calling special meetings of stockholders, forum selection and the liability of our directors, or to amend, alter, rescind or repeal our by-laws.
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ITEM 1B.
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UNRESOLVED STAFF C
OM
MENTS
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ITEM 2.
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PROPERTIES
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ITEM 3.
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LEGAL PROCEEDINGS
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ITEM 4.
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MINE SAFETY DISCLOSURES
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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Fiscal Year 2015 | High |
Low
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||||||
Third Quarter (March 26, 2015 – March 31, 2015) | $ | 22.5 | $ | 19.49 | ||||
Fourth Quarter (April 1, 2015 – June 30, 2015) | $ | 43.0 | $ | 21.71 |
ITEM 6.
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SELECTED FINAN
CI
AL DATA
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Fiscal Year Ended June 30,
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2011
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2012
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2013
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2014
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2015
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(In thousands)
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Consolidated Statements of Operations Data:
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Revenues
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$ | 23,227 | $ | 75,351 | $ | 79,035 | $ | 133,217 | $ | 325,078 | ||||||||||
Cost of revenues
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30,034 | 76,028 | 74,626 | 111,246 | 243,295 | |||||||||||||||
Gross profit (loss)
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(6,807 | ) | (677 | ) | 4,409 | 21,971 | 81,783 | |||||||||||||
Operating expenses:
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Research and development, net
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10,857 | 13,783 | 15,823 | 18,256 | 22,018 | |||||||||||||||
Sales and marketing
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5,464 | 9,926 | 12,784 | 17,792 | 24,973 | |||||||||||||||
General and administrative
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3,543 | 3,074 | 3,262 | 4,294 | 6,535 | |||||||||||||||
Total operating expenses
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19,864 | 26,783 | 31,869 | 40,342 | 53,526 | |||||||||||||||
Operating income (loss)
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(26,671 | ) | (27,460 | ) | (27,460 | ) | (18,371 | ) | 28,257 | |||||||||||
Financial expenses
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1,093 | 287 | 612 | 2,787 | 5,077 | |||||||||||||||
Other expenses
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— | — | — | — | 104 | |||||||||||||||
Income (loss) before taxes on income
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(27,764 | ) | (27,747 | ) | (28,072 | ) | (21,158 | ) | 23,076 | |||||||||||
Taxes on income
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21 | 36 | 108 | 220 | 1,955 | |||||||||||||||
Net income (loss)
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$ | (27,785 | ) | $ | (27,783 | ) | $ | (28,180 | ) | $ | (21,378 | ) | $ | 21,121 | ||||||
Net basic earnings (loss) per share of common stock
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$ | (10.38 | ) | $ | (10.30 | ) | $ | (10.28 | ) | $ | (7.64 | ) | $ | 0.30 | ||||||
Net diluted earnings (loss) per share of common stock
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$ | (10.38 | ) | $ | (10.30 | ) | $ | (10.28 | ) | $ | (7.64 | ) | $ | 0.27 | ||||||
Weighted average number of shares used in computing net basic earnings (loss) per share of common stock
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2,678,040 | 2,698,093 | 2,741,370 | 2,798,894 | 11,902,911 | |||||||||||||||
Weighted average number of shares used in computing net diluted earnings (loss) per share of common stock
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2,678,040 | 2,698,093 | 2,741,370 | 2,798,894 | 15,269,448 |
At June 30,
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2011
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2012
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2013
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2014
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2015
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(In thousands)
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Consolidated Balance Sheet Data:
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Cash and cash equivalents
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$ | 3,493 | $ | 19,437 | $ | 13,142 | $ | 9,754 | $ | 144,750 | ||||||||||
Total assets
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19,625 | 55,894 | 49,086 | 74,998 | 305,658 | |||||||||||||||
Total debt
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— | 3,515 | 12,823 | 20,244 | - | |||||||||||||||
Total stockholders’ equity (deficiency)
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$ | (61,119 | ) | $ | (87,990 | ) | $ | (115,014 | ) | $ | (135,294 | ) | $ | 166,944 |
Fiscal Year Ended June 30,
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2013
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2014
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2015
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Inverters shipped
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36,088 | 61,999 | 150,428 | |||||||||
Power optimizers shipped
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890,445 | 1,357,251 | 3,533,528 | |||||||||
Megawatts shipped(1)
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239 | 365 | 920 |
(1)
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Calculated based on the aggregate nameplate capacity of inverters shipped during the applicable period. Nameplate capacity is the maximum rated power output capacity of an inverter as specified by the manufacturer. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Performance Measures”
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AN
D
RESULTS OF OPERATIONS
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•
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In 2010, we commenced commercial shipments of our power optimizers and inverters to Europe after contracting with Flextronics (Israel) Ltd. (with its affiliates, “Flextronics”) to initiate production in Israel.
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In 2011, we commenced sales in the U.S. and expanded our manufacturing capacity by contracting with Jabil Circuit, Inc. to open a larger manufacturing site in Guangzhou, China.
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In 2011, we introduced our second generation power optimizer, based on our second generation ASIC, with a power rating of up to 500 watts and a substantially reduced number of components.
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•
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In 2012, we shipped our millionth power optimizer and increased our sales personnel presence in the U.S. market.
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•
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In 2013, we opened an additional manufacturing site with Flextronics in Hungary to accommodate our accelerated growth, replacing the Flextronics manufacturing site in Israel.
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•
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In 2013, we introduced our third generation power optimizer, based on our third generation ASIC, with a power rating of up to 700 watts and improved heat dissipation capabilities for high reliability and lower cost.
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•
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In 2014, we shipped our three millionth power optimizer.
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•
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In March 2015, we completed our initial public offering and started to trade on the NASDAQ Global Select Market under the ticker SEDG.
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Fiscal Year Ended June 30,
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2013 to 2014
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2014 to 2015
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||||||||||||||||||||||||||
2013
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2014
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2015
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Change
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Change
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(Dollars in thousands)
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||||||||||||||||||||||||||||
Revenues
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$ | 79,035 | $ | 133,217 | $ | 325,078 | $ | 54,182 | 68.6 | % | $ | 191,861 | 144.0 | % | ||||||||||||||
Cost of revenues
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74,626 | 111,246 | 243,295 | 36,620 | 49.1 | 132,049 | 118.7 | |||||||||||||||||||||
Gross profit
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4,409 | 21,971 | 81,783 | 17,562 | 398.3 | 59,812 | 272.2 | |||||||||||||||||||||
Operating expenses:
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Research and development, net
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15,823 | 18,256 | 22,018 | 2,433 | 15.4 | 3,762 | 20.6 | |||||||||||||||||||||
Sales and marketing
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12,784 | 17,792 | 24,973 | 5,008 | 39.2 | 7,181 | 40.4 | |||||||||||||||||||||
General and administrative
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3,262 | 4,294 | 6,535 | 1,032 | 31.6 | 2,241 | 52.2 | |||||||||||||||||||||
Total operating expenses
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31,869 | 40,342 | 53,526 | 8,473 | 26.6 | 13,184 | 32.7 | |||||||||||||||||||||
Operating income (loss)
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(27,460 | ) | (18,371 | ) | 28,257 | 9,089 | 33.1 | 46,628 | N/A | |||||||||||||||||||
Financial expenses
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612 | 2,787 | 5,077 | 2,175 | 355.4 | 2,290 | 82.2 | |||||||||||||||||||||
Other expenses
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- | - | 104 | 0 | 0 | 104 | N/A | |||||||||||||||||||||
Income (loss) before taxes on income
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(28,072 | ) | (21,158 | ) | 23,076 | 6,914 | 24.6 | 44,234 | N/A | |||||||||||||||||||
Taxes on income
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108 | 220 | 1,955 | 112 | 103.7 | 1,735 | 788.6 | |||||||||||||||||||||
Net income (loss)
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$ | (28,180 | ) | $ | (21,378 | ) | $ | 21,121 | $ | 6,802 | 24.1 | % | $ | 42,499 | N/A |
Fiscal Year Ended
June 30,
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2014 to 2015
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2014
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2015
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Change
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(Dollars in thousands)
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||||||||||||||||
Revenues
|
$ | 133,217 | $ | 325,078 | $ | 191,861 | 144.0 | % |
Fiscal Year Ended
June 30,
|
2014 to 2015
|
|||||||||||||||
2014
|
2015
|
Change
|
||||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Cost of revenues
|
$ | 111,246 | $ | 243,295 | $ | 132,049 | 118.7 | % | ||||||||
Gross profit
|
$ | 21,971 | $ | 81,783 | $ | 59,812 | 272.2 | % |
Fiscal Year Ended
June 30,
|
2014 to 2015
|
|||||||||||||||
2014
|
2015
|
Change
|
||||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Research and development, net
|
$ | 18,256 | $ | 22,018 | $ | 3,762 | 20.6 | % |
Fiscal Year Ended
June 30,
|
2014 to 2015
|
|||||||||||||||
2014
|
2015
|
Change
|
||||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Sales and marketing
|
$ | 17,792 | $ | 24,973 | $ | 7,181 | 40.4 | % |
Fiscal Year Ended
June 30,
|
2014 to 2015
|
|||||||||||||||
2014
|
2015
|
Change
|
||||||||||||||
(Dollars in thousands)
|
||||||||||||||||
General and administrative
|
$ | 4,294 | $ | 6,535 | $ | 2,241 | 52.2 | % |
Fiscal Year Ended
June 30,
|
2014 to 2015
|
|||||||||||||||
2014
|
2015
|
Change
|
||||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Financial expenses
|
$ | 2,787 | $ | 5,077 | $ | 2,290 | 82.2 | % |
Fiscal Year Ended
June 30,
|
2014 to 2015
|
|||||||||||||||
2014
|
2015
|
Change
|
||||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Other expenses
|
- | $ | 104 | $ | 104 | N/A |
Fiscal Year Ended
June 30,
|
2014 to 2015
|
|||||||||||||||
2014
|
2015
|
Change
|
||||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Taxes on income
|
$ | 220 | $ | 1,955 | $ | 1,735 | 788.6 | % |
Fiscal Year Ended
June 30,
|
2014 to 2015
|
|||||||||||||||
2014
|
2015
|
Change
|
||||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Net income (loss)
|
$ | (21,378 | ) | $ | 21,121 | $ | 42,499 | N/A |
Fiscal Year Ended
June 30,
|
2013 to 2014
|
|||||||||||||||
2013
|
2014
|
Change
|
||||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Revenues
|
$ | 79,035 | $ | 133,217 | $ | 54,182 | 68.6 | % |
Fiscal Year Ended
June 30,
|
2013 to 2014
|
|||||||||||||||
2013
|
2014
|
Change
|
||||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Cost of revenues
|
$ | 74,626 | $ | 111,246 | $ | 36,620 | 49.1 | % | ||||||||
Gross profit
|
4,409 | 21,971 | 17,562 | 398.3 |
Fiscal Year Ended
June 30,
|
2013 to 2014
|
|||||||||||||||
2013
|
2014
|
Change
|
||||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Research and development, net
|
$ | 15,823 | $ | 18,256 | $ | 2,433 | 15.4 | % |
Fiscal Year Ended
June 30,
|
2013 to 2014
|
|||||||||||||||
2013
|
2014
|
Change
|
||||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Sales and marketing
|
$ | 12,784 | $ | 17,792 | $ | 5,008 | 39.2 | % |
Fiscal Year Ended
June 30,
|
2013 to 2014
|
|||||||||||||||
2013
|
2014
|
Change
|
||||||||||||||
(Dollars in thousands)
|
||||||||||||||||
General and administrative
|
$ | 3,262 | $ | 4,294 | $ | 1,032 | 31.6 | % |
Fiscal Year Ended
June 30,
|
2013 to 2014
|
|||
2013
|
2014
|
Change
|
||
(Dollars in thousands)
|
||||
Financial expenses
|
$612
|
$2,787
|
$2,175
|
355.4%
|
Fiscal Year Ended
June 30,
|
2013 to 2014
|
|||||||||||||||
2013
|
2014
|
Change
|
||||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Taxes on income
|
$ | 108 | $ | 220 | $ | 112 | 103.7 | % |
Fiscal Year Ended
June 30,
|
2013 to 2014
|
|||||||||||||||
2013
|
2014
|
Change
|
||||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Net loss
|
$ | (28,180 | ) | $ | (21,378 | ) | $ | 6,802 | 24.1 | % |
Three Months Ended
|
||||||||||||||||||||||||||||||||
Sept. 30,
2013
|
Dec. 31,
2013
|
Mar. 31,
2014
|
June 30,
2014
|
Sept. 30,
2014
|
Dec. 31,
2014
|
Mar. 31,
2015
|
June 30,
2015
|
|||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||
Revenues
|
$ | 30,515 | $ | 27,569 | $ | 30,560 | $ | 44,573 | $ | 66,969 | $ | 73,290 | $ | 86,399 | $ | 98,420 | ||||||||||||||||
Cost of revenues
|
26,457 | 24,609 | 24,331 | 35,849 | 52,939 | 57,509 | 62,698 | 70,149 | ||||||||||||||||||||||||
Gross profit
|
4,058 | 2,960 | 6,229 | 8,724 | 14,030 | 15,781 | 23,701 | 28,271 | ||||||||||||||||||||||||
Operating expense
|
||||||||||||||||||||||||||||||||
Research and development, net
|
4,136 | 4,686 | 4,864 | 4,570 | 5,059 | 4,768 | 5,490 | 6,701 | ||||||||||||||||||||||||
Sales and marketing
|
3,657 | 4,123 | 4,592 | 5,420 | 5,461 | 5,658 | 6,422 | 7,432 | ||||||||||||||||||||||||
General and administrative
|
792 | 1,010 | 1,318 | 1,174 | 1,159 | 1,121 | 1,990 | 2,265 | ||||||||||||||||||||||||
Total operating expenses
|
8,585 | 9,819 | 10,774 | 11,164 | 11,679 | 11,547 | 13,902 | 16,398 | ||||||||||||||||||||||||
Operating income (loss)
|
(4,527 | ) | (6,859 | ) | (4,545 | ) | (2,440 | ) | 2,351 | 4,234 | 9,799 | 11,873 | ||||||||||||||||||||
Financial expenses (income)
|
777 | 914 | 626 | 470 | (516 | ) | 458 | 3,436 | 1,699 | |||||||||||||||||||||||
Other expenses
|
- | - | - | - | - | - | - | 104 | ||||||||||||||||||||||||
Income (loss) before taxes on income
|
(5,304 | ) | (7,773 | ) | (5,171 | ) | (2,910 | ) | 2,867 | 3,776 | 6,363 | 10,070 | ||||||||||||||||||||
Taxes on income
|
7 | 14 | 67 | 132 | 347 | 401 | 398 | 809 | ||||||||||||||||||||||||
Net income (loss)
|
$ | (5,311 | ) | $ | (7,787 | ) | $ | (5,238 | ) | $ | (3,042 | ) | $ | 2,520 | $ | 3,375 | $ | 5,965 | $ | 9,261 |
Fiscal Year Ended June 30,
|
||||||||||||
2013
|
2014
|
2015
|
||||||||||
(In thousands)
|
||||||||||||
Net cash provided by (used in) operating activities
|
$ | (23,107 | ) | $ | (17,845 | ) | $ | 12,054 | ||||
Net cash used in investing activities
|
(2,778 | ) | (3,147 | ) | (13,937 | ) | ||||||
Net cash provided by financing activities
|
19,676 | 17,676 | 136,953 | |||||||||
Increase (decrease) in cash and cash equivalents
|
$ | (6,209 | ) | $ | (3,316 | ) | $ | 135,070 |
Payment Due By Period
|
||||||||||||||||||||
Total
|
Less
Than
1 Year
|
1 – 3
Years
|
4 – 5
Years
|
More
Than
5 Years
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Operating leases(1)
|
$ | 17,378 | $ | 2,256 | $ | 4,375 | $ | 3,922 | $ | 6,825 | ||||||||||
Purchase commitments under agreements(2)
|
92,071 | 92,071 | — | — | — | |||||||||||||||
Total
|
$ | 109,449 | $ | 94,327 | $ | 4,375 | $ | 3,922 | $ | 6,825 |
(1)
|
Represents future minimum lease commitments under non-cancellable operating lease agreements through which we lease our operating facilities.
|
(2)
|
Represents non-cancelable amounts associated with our manufacturing contracts. Such purchase commitments are based on our forecasted manufacturing requirements and typically provide for fulfillment within agreed-upon or commercially standard lead-times for the particular part or product. The timing and amounts of payments represent our best estimates and may change due to business needs and other factors.
|
|
•
|
Fair value of our common stock.
Because our stock has not been publicly traded prior to March 26, 2015, we have estimated the fair value of our common stock, as discussed in “Common Stock Valuations” below. Upon the completion of our initial public offering, our common stock is valued by reference to the trading price of our common stock in the public market.
|
|
•
|
Expected term.
The expected term represents the period that our stock-based awards are expected to be outstanding. For stock option awards that were at the money when granted, we have based our expected term on the simplified method available under SAB 110, as we do not have sufficient historical experience for determining the expected term of the stock option awards granted. For stock-option awards that were in the money when granted, we use an expected term that we believe is appropriate under these circumstances, which is not materially different than determining the expected term based on a lattice model.
|
|
•
|
Risk-free rate.
The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected terms of the options for each option group.
|
|
•
|
Dividend yield.
We have never declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future. Consequently, we used an expected dividend yield of zero.
|
Fiscal Year Ended June 30,
|
||||||||||||
2013
|
2014
|
2015
|
||||||||||
Expected term (in years)
|
6.08 – 6.27 years
|
6.02 – 6.27 years
|
5.50 – 6.27 years
|
|||||||||
Expected volatility
|
55.8% – 62.7 | % | 46.3% – 55.8 | % | 46.5% – 55.1 | % | ||||||
Risk-free rate
|
0.74% – 1.00 | % | 1.62% – 1.94 | % | 1.39% – 2.06 | % | ||||||
Dividend yield
|
0.0 | % | 0.0 | % | 0.0 | % |
Grant Date
|
Number of
Grants
|
Fair
Value Per
Share of
Common
Stock at
Grant Date($)
|
Exercise
Price($)
|
|||||||||
July 20, 2011
|
26,664 | 2.37 | 2.01 | |||||||||
September 14, 2011
|
109,990 | 2.43 | 2.01 | |||||||||
January 26, 2012
|
943,238 | 2.70 | 2.46 | |||||||||
June 6, 2012
|
187,316 | 3.06 | 2.46 | |||||||||
July 24, 2012
|
35,497 | 2.97 | 2.46 | |||||||||
September 9, 2012
|
116,661 | 2.76 | 2.46 | |||||||||
October 24, 2012
|
148,328 | 2.67 | 2.46 | |||||||||
January 23, 2013
|
49,989 | 2.64 | 3.03 | |||||||||
April 24, 2013
|
36,993 | 3.15 | 3.03 | |||||||||
July 31, 2013
|
68,326 | 3.54 | 3.03 | |||||||||
October 30, 2013
|
46,322 | 3.66 | 3.03 | |||||||||
January 27, 2014
|
409,817 | 3.75 | 3.51 | |||||||||
May 1, 2014
|
63,656 | 3.87 | 3.51 | |||||||||
September 17, 2014
|
97,478 | 4.63 | 3.96 | |||||||||
October 29, 2014
|
969,921 | 4.98 | 5.01 | |||||||||
December 17, 2014
|
168,975 | 8.45 | 5.01 | |||||||||
December 22, 2014
|
777,253 | 8.80 | 5.01 | |||||||||
January 28, 2015
|
96,666 | 12.28 | 5.01 | |||||||||
January 28, 2015
|
36,660 | 12.28 | 9.36 | |||||||||
April 1, 2015*
|
67,440 | 22.24 | -- |
|
•
|
The Company’s equity fair value based on a weighted income approach and market approach of $157.4 million;
|
|
•
|
Lack of marketability discount of 20.9%;
|
|
•
|
Expected term of 2 years representing the period starting on the valuation date and ending on an expected liquidation event date;
|
|
•
|
Expected volatility of 62.7%, based on the average volatility of comparable companies; and
|
|
•
|
Risk-free rate of 0.34%, based on U.S. treasury constant maturities with a time to maturity of 2 years as of the valuation date.
|
|
•
|
The Company’s equity fair value based on a weighted income approach and market approach of $144.5 million, a decrease of $12.9 million from our prior valuation as of June 30, 2012;
|
|
•
|
Lack of marketability discount of 19.3%;
|
|
•
|
Expected term of 2 years, representing the period starting on the valuation date and ending on an expected liquidation event date;
|
|
•
|
Expected volatility of 58.3%, based on the average volatility of comparable companies; and
|
|
•
|
Risk-free rate of 0.36%, based on U.S. treasury constant maturities with a time to maturity of 2 years as of the valuation date.
|
|
•
|
The Company’s equity fair value based on a weighted income approach and market approach of $188.1 million, an increase of $43.6 million from our prior valuation as of December 31, 2012;
|
|
•
|
Lack of marketability discount of 28.5%;
|
|
•
|
Expected term of 1.5 years representing the period starting on the valuation date and ending on an expected liquidation event date;
|
|
•
|
Expected volatility of 55.8%, based on the average volatility of comparable companies; and
|
|
•
|
Risk-free rate of 0.30%, based on U.S. treasury constant maturities with a time to maturity of 1.5 years as of the valuation date.
|
|
•
|
The Company’s equity fair value based on a weighted income approach and market approach of $190.1 million, an increase of $2.0 million from our prior valuation as of June 30, 2013;
|
|
•
|
Lack of marketability discount of 25.6%;
|
|
•
|
Expected term of 1.25 years representing the period starting on the valuation date and ending on an expected liquidation event date;
|
|
•
|
Expected volatility of 53.0%, based on the average volatility of comparable companies; and
|
|
•
|
Risk-free rate of 0.20%, based on U.S. treasury constant maturities with a time to maturity of 1.25 years as of the valuation date.
|
|
•
|
Application of the PWERM, assuming 40% probability of an initial public offering of our common stock and a 60% probability of merger or sale;
|
|
•
|
Lack of marketability discount of 27.3%;
|
|
•
|
Expected term of 1.21 years representing the period starting on the valuation date and ending on an expected liquidation event date;
|
|
•
|
Expected volatility of 45.0%, based on the average volatility of comparable companies; and
|
|
•
|
Risk-free rate of 0.09%, based on U.S. treasury constant maturities with a time to maturity of 1.21 years as of the valuation date.
|
|
•
|
Application of the PWERM, assuming 50% probability of an initial public offering of our common stock and a 50% probability of merger or sale;
|
|
•
|
Lack of marketability discount of 24.6%;
|
|
•
|
Expected term of 0.92 years representing the period starting on the valuation date and ending on an expected liquidation event date;
|
|
•
|
Expected volatility of 47.0%, based on the average volatility of comparable companies; and
|
|
•
|
Risk-free rate of 0.12%, based on U.S. treasury constant maturities with a time to maturity of 0.92 years as of the valuation date.
|
|
•
|
Application of the PWERM, assuming 50% probability of an initial public offering of our common stock and a 50% probability of merger or sale;
|
|
•
|
Lack of marketability discount of 16.6%;
|
|
•
|
Expected term of 0.75 years representing the period starting on the valuation date and ending on an expected liquidation event date;
|
|
•
|
Expected volatility of 54.5%, based on the average volatility of comparable companies; and
|
|
•
|
Risk-free rate of 0.24%, based on U.S. treasury constant maturities with a time to maturity of 0.75 years as of the valuation date.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET R
IS
K
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTAR
Y
DATA.
|
Consolidated Financial Statements
|
|
F-2
|
|
F-3
|
|
F-5
|
|
F-6
|
|
F-8
|
|
F-10
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
Name
|
Age
(1)
|
Position(s) Held
|
||
Guy Sella
|
51
|
Chief Executive Officer and Chairman of the Board
|
||
Ronen Faier
|
44
|
Chief Financial Officer
|
||
Rachel Prishkolnik
|
47
|
Vice President, General Counsel & Corporate Secretary
|
||
Zvi Lando
|
50
|
Vice President, Global Sales
|
||
Lior Handelsman
|
41
|
Vice President, Marketing and Product Strategy
|
||
Yoav Galin
|
42
|
Vice President, Research & Development
|
||
Meir Adest
|
39
|
Vice President, Core Technologies
|
Name
|
Age
(1)
|
Position(s) Held
|
||
Guy Sella
|
51
|
Chief Executive Officer and Chairman of the Board
|
||
Dan Avida
|
51
|
Director*
|
||
Yoni Cheifetz
|
55
|
Director*
|
||
Marcel Gani
|
62
|
Director*
|
||
Doron Inbar
|
65
|
Director*
|
||
Avery More
|
60
|
Director*
|
||
Tal Payne
|
43
|
Director*
|
Name
|
Fees
Earned or
Paid in
Cash ($)
(1)
|
Stock
Awards ($)
(2)
|
Option
Awards ($)
|
Non-Equity
Incentive Plan
Compensation ($)
|
Nonqualified
Deferred
Compensation
Earnings ($)
|
All Other
Compensation ($)
|
Total ($)
|
|||||||||||||||||||||
Dan Avida
(3)
|
10,000 | 250,000 | — | — | — | — | 260,000 | |||||||||||||||||||||
Yoni Cheifetz
(3)
|
8,750 | 250,000 | — | — | — | — | 258,750 | |||||||||||||||||||||
Marcel Gani
(3)
|
13,750 | 250,000 | — | — | — | — | 263,750 | |||||||||||||||||||||
Doron Inbar
(3)
|
8,750 | 250,000 | — | — | — | — | 258,750 | |||||||||||||||||||||
Avery More
(3)
|
12,500 | 250,000 | — | — | — | — | 262,500 | |||||||||||||||||||||
Tal Payne
(3)
|
8,750 | 250,000 | — | — | — | — | 258,750 | |||||||||||||||||||||
Chester A. Farris
(4)
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Gary Gannot
(4)
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Roni Hefetz
(4)
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Dror Nahumi
(4)
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Yoram Oron
(4)
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Bill Hallisey
(4)
|
— | — | — | — | — | — | — |
Position
|
Retainer ($)
|
|||
Board Member
|
30,000 | |||
Audit Committee Chair
|
20,000 | |||
Compensation Committee Chair
|
10,000 | |||
Nominating and Corporate Governance Committee Chair
|
10,000 | |||
Audit Committee Member
|
5,000 | |||
Compensation Committee Member
|
5,000 | |||
Nominating and Corporate Governance Committee Member
|
5,000 |
|
·
|
demonstrated business acumen and leadership, and high levels of accomplishment;
|
|
·
|
ability to exercise sound business judgment and to provide insight and practical wisdom based on experience;
|
|
·
|
commitment to understand the Company and its business, industry and strategic objectives;’
|
|
·
|
integrity and adherence to high personal ethics and values, consistent with our Code of Business Conduct and Ethics;
|
|
·
|
ability to read and understand financial statements and other financial information pertaining to the Company;
|
|
·
|
commitment to enhancing stockholder value;
|
|
·
|
willingness to act in the interest of all stockholders; and
|
|
·
|
for non-employee directors, independence under NASDAQ listing standards and other applicable rules and regulations.
|
The Compensation Committee,
Avery More, Chairman
Dan Avida
Marcel Gani
Doron Inbar
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
Name and Principal Position
|
Year
|
Salary
($)(1)
|
Bonus
($)(1)
|
Option Awards($)(4)
|
Nonequity Incentive Plan Compensation($)(1)
|
All Other
Compensation
($)(1)
|
Total
($)
|
|||||||||||||||||||
Guy Sella
|
2015
|
298,114 | 417,156 | (3)(5) | 4,650,956 | — | 46,749 | (6) | 5,413,975 | |||||||||||||||||
Chief Executive Officer and
|
2014
|
273,746 | 218,150 | (2) | — | — | 43,732 | (7) | 535,628 | |||||||||||||||||
Chairman of the Board
|
||||||||||||||||||||||||||
Ronen Faier
|
2015
|
180,319 | 152,453 | (3)(5) | 154,399 | — | 28,720 | (8) | 515,891 | |||||||||||||||||
Chief Financial Officer
|
2014
|
188,201 | 63,991 | (2) | — | — | 29,850 | (9) | 282,042 | |||||||||||||||||
Zvi Lando
|
2015
|
190,260 | 71,815 | (5) | 154,399 | — | 31,688 | (10) | 448,162 | |||||||||||||||||
Vice President, Global Sales
|
2014
|
178,223 | 79,544 | (2) | — | — | 26,588 | (11) | 284,355 |
(1)
|
We paid the amounts reported for each named executive officer in New Israeli Shekels. We have translated amounts paid in New Israeli Shekels into U.S. dollars at the foreign exchange rate published by the Bank of Israel as of the date of payment.
|
(2)
|
Represents discretionary bonuses paid to Mr. Sella, Mr. Faier and Mr. Lando in respect of the Company’s performance in fiscal 2014.
|
(3)
|
Represents one time bonuses to Mr. Sella and Mr. Faier in connection with the completion of our initiate public offering of $243,808 and $92,879, respectively.
|
(4)
|
The amounts in this column represent the aggregate grant date fair value of the option awards granted to our NEOs in fiscal 2015, computed in accordance with FASB ASC Topic 718. We provide information regarding the assumptions used to calculate the value of these option awards in Note 2u to the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. There can be no assurance that these awards will vest or will be exercised (in which case no value will be realized by the individual), or that the value upon exercise will approximate the aggregate grant date fair value.
|
(5)
|
Represents the cash bonuses earned pursuant to our Management By Objectives (MBO) program for fiscal 2015 to the extent not related to bonuses in connection with our initial public offering.
|
(6)
|
Includes a $24,833 contribution by the Company to Mr. Sella’s severance fund and $21,916 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance.
|
(7)
|
Includes a $22,812 contribution by the Company to Mr. Sella’s severance fund and $20,920 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance.
|
(8)
|
Includes a $15,021 contribution by the Company to Mr. Faier’s severance fund and $13,699 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance.
|
(9)
|
Includes a $15,683 contribution by the Company to Mr. Faier’s severance fund and $14,167 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance.
|
(10)
|
Includes a $15,849 contribution by the Company to Mr. Lando’s severance fund and $15,839 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance.
|
(11)
|
Includes a $14,852 contribution by the Company to Mr. Lando’s severance fund and $11,736 in aggregate Company contributions to pension and Israeli recreational funds and a recuperation allowance.
|
Option Awards
|
Stock Awards
|
||||||||||||||||||||
Name
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number of
Shares or
Units of
Stock that
have not
Vested
(#)
|
Market
Value of
Shares or
Units of
Stock that
have not
Vested
($)
|
|||||||||||||||
Guy Sella
|
73,333 | — | $ | 1.50 |
July 1, 2019
|
— | — | ||||||||||||||
65,486 | 11,181 | (1) | $ | 2.46 |
January 26, 2022
|
— | — | ||||||||||||||
11,111 | 55,555 | (2) | $ | 5.01 |
October 29, 2024
|
— | — | ||||||||||||||
97,157 | 680,096 | (3) | $ | 5.01 |
December 22, 2024
|
— | — | ||||||||||||||
Ronen Faier
|
200,000 | — | $ | 2.01 |
January 25, 2021
|
— | — | ||||||||||||||
78,298 | 13,368 | (4) | $ | 2.46 |
January 26, 2022
|
— | — | ||||||||||||||
11,111 | 55,556 | (5) | $ | 5.01 |
October 29, 2024
|
— | — | ||||||||||||||
Zvi Lando
|
160,000 | — | $ | 1.50 |
May 28, 2019
|
— | — | ||||||||||||||
54,889 | 8,444 | (6) | $ | 2.01 |
January 25, 2021
|
— | — | ||||||||||||||
58,368 | 9,965 | (7) | $ | 2.46 |
January 26, 2022
|
— | — | ||||||||||||||
11,111 | 55,556 | (8) | $ | 5.01 |
October 29, 2024
|
— | — |
(1)
|
The shares subject to the stock option vest over a four-year period commencing January 31, 2012, with 1/48 of the shares vesting monthly thereafter.
|
(2)
|
The shares subject to the stock option vest over a four-year period commencing October 31, 2014, with 1/48 of the shares vesting monthly thereafter.
|
(3)
|
The shares subject to the stock option vest over a four-year period commencing December 31, 2014, with 1/48 of the shares vesting monthly thereafter.
|
(4)
|
The shares subject to the stock option vest over a four-year period commencing January 31, 2012, with 1/48 of the shares vesting monthly thereafter.
|
(5)
|
The shares subject to the stock option vest over a four-year period commencing October 31, 2014, with 1/48 of the shares vesting monthly thereafter.
|
(6)
|
The shares subject to the stock option vest over a five-year period commencing February 1, 2011, with 1/60 of the shares vesting monthly thereafter.
|
(7)
|
The shares subject to the stock option vest over a four-year period commencing January 31, 2012, with 1/48 of the shares vesting monthly thereafter.
|
(8)
|
The shares subject to the stock option vest over a four-year period commencing October 31, 2014, with 1/48 of the shares vesting monthly thereafter.
|
ITEM
12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
Plan Category
|
Number of securities to be issued upon exercise of outstanding options and warrants (a)
|
Weighted-average exercise price of outstanding options and warrants
(b)
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
(c)
|
|||||||||
Equity compensation plans approved by security holders
(1)
|
6,220,716 | $ | 3.09 | 2,242,687 | ||||||||
Equity compensation plans not approved by security holders
|
— | — | — | |||||||||
Total
|
6,220,716 | $ | 3.09 | 2,242,687 |
(1)
|
Includes in column (a) 67,440 shares of common stock issuable upon exercise of options outstanding under the Company’s 2015 Global Incentive Plan, 6,153,276 shares of common stock issuable upon exercise of options outstanding under the Company’s 2007 Global Incentive Plan. Includes in column (c) 1,755,044 shares of common stock available for future issuance under the Company’s 2015 Global Incentive Plan and 487,643 shares of common stock available for future issuance under the Company’s Employee Stock Purchase Plan. Upon consummation of our initial public offering, the Company’s 2007 Global Incentive Plan was terminated and no further awards can be granted under this plan.
|
|
•
|
each person known by us to beneficially own 5% or more of the outstanding shares of our common stock;
|
|
•
|
each member of our board of directors and each NEO; and
|
|
•
|
the members of our board of directors and our executive officers as a group.
|
Shares Beneficially Owned
|
||||||||
Name of Beneficial Owner
|
Shares
|
%
|
||||||
5% Stockholders:
|
||||||||
Affiliates of Opus Capital Venture Partners V, L.P.(1)
|
4,549,944 | 11.58 | % | |||||
Genesis Partners III L.P.(2)
|
4,549,945 | 11.58 | % | |||||
Affiliates of Pacven Walden Ventures VI, L.P.(3)
|
4,549,264 | 14.64 | % | |||||
Norwest Venture Partners XI, L.P.(4)
|
3,282,506 | 9.11 | % | |||||
Lightspeed Venture Partners VIII LP(5)
|
3,580,650 | 11.52 | % | |||||
NWC SolarEdge Holdings, LLC(6)
|
1,976,056 | 5.03 | % | |||||
Directors and Named Executive Officers:
|
||||||||
Guy Sella(7)
|
718,778 | 1.83 | % | |||||
Ronen Faier(8)
|
296,006 | * | ||||||
Zvi Lando(9)
|
293,159 | * | ||||||
Dan Avida(10)
|
4,549,944 | 11.58 | % | |||||
Yoni Cheifetz(11)
|
3,580,650 | 11.52 | % | |||||
Marcel Gani
|
- | - | ||||||
Doron Inbar(12)
|
223,333 | * | ||||||
Avery More(13)
|
1,700,743 | 4.33 | ||||||
Tal Payne
|
- | - | ||||||
All directors and executive officers as a group (16 individuals)(16)
|
13,577,784 | 34.55 | % |
*
|
Represents beneficial ownership of less than 1%.
|
(1)
|
Opus Capital Venture Partners V, L.P.’s investment committee consists of Carl Showalter, Dan Avida, Gill Cogan and Joseph Cutts. Each of these individuals has shared voting and investment power over the shares held by Opus Capital Venture Partners, L.P. The principal business address of each of the Opus Capital Venture Partners Funds is 2730 Sand Hill Road, Suite 150, Menlo Park, CA 94025.
|
(2)
|
The investment committee of Genesis Partners III L.P.’s general partner, Genesis Partners III Management Ltd., consists of Eddy Shalev, Dr. Eyal Kishon, Gary Gannot, Jonathan Saacks and Hadar Kiriati. Each of these individuals has shared voting and investment power over the shares held by Genesis Partners III L.P. The principal business address of Genesis Partners III L.P. is 11B Hamenofim St., Hertzilia Pituach POB 12866 Israel 46733.
|
(3)
|
Consists of
4,220,620
shares held by Pacven Walden Ventures VI, L.P. and
328,644
shares held by Pacven Walden Ventures Parallel VI, L.P. (together with Pacven Walden Ventures VI, L.P., the “Pacven Walden Funds”). The general partner of Pacven Walden Ventures VI, L.P. (“Pacven VI”) and Pacven Walden Ventures VI Parallel VI, L.P. (“Pacven VI Parallel”) is Pacven Walden Management VI Co. Ltd., which is affiliated with Walden International, a venture capital firm. Mr. Lip-Bu Tan is the sole director and a member of the investment committee of Pacven Walden Management VI Co., Ltd. and shares voting and investment power with respect to the shares held by Pacven VI and Pacven VI Parallel with other members of the investment committee, i.e., Andrew Kau, and Brian Chiang. The business address of Pacven VI, Pacven VI Parallel and Walden International is One California Street 28th Floor, San Francisco, California 94111.
|
(4)
|
The general partner of Norwest Venture Partners XI, L.P. is Genesis VC Partners XI, LLC. The managing member of Genesis VC Partners XI, LLC is NVP Associates, LLC. Promod Haque, Matthew Howard and Jeffrey Crowe are co-chief executive officers of NVP Associates, LLC. Each of these individuals has shared voting and investment power over the shares held by Norwest Venture Partners XI, L.P. The address of Norwest Venture Partners XI, L.P. is 525 University Avenue, Suite 800, Palo Alto, CA 94301-1922.
|
(5)
|
Lightspeed Ultimate General Partner VIII, Ltd. is the general partner of Lightspeed General Partner VIII, L.P, which is the general partner of Lightspeed Venture Partners VIII, L.P. As such, Lightspeed Ultimate General Partner VIII, Ltd. possesses the power to direct the voting and disposition of the shares owned by Lightspeed Venture Partners VIII, L.P. and may be deemed to have indirect beneficial ownership of the shares held by Lightspeed Venture Partners VIII, L.P. Christopher J. Schaepe, Barry Eggers, Ravi Mhatre and Peter Nieh are the directors of Lightspeed Ultimate General Partner VIII, Ltd. and possess power to direct the voting and disposition of the shares owned by Lightspeed Venture Partners VIII, L.P. and may be deemed to have indirect beneficial ownership of the shares held by Lightspeed Venture Partners VIII, L.P. The address for Lightspeed Ultimate General Partner VIII, Ltd. is 2200 Sand Hill Road, Menlo Park, California 94025.
|
(6)
|
The general partner of both members of NWC Solar Edge Holdings, LLC is NWC IP GP IV, LLC. The executive committee and the investment committee of the general partner consist of Carter Bales, William Hallisey, Ali Iz and Louis Schick. Each of these individuals has shared voting and investment power over the shares held by NWC Solar Edge Holdings, LLC. Each such individual disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein. The principal business address of NWC SolarEdge Holdings, LLC is 527 Madison Avenue, 24th Floor, New York, NY 10022.
|
(7)
|
Consists of
433,333
shares of common stock owned of record by Mr. Sella and
285,445
shares of common stock issuable upon exercise of options exercisable within 60 days of June 30, 2015.
|
(8)
|
Consists of
296,006
shares of common stock issuable upon exercise of options exercisable within 60 days of June 30, 2015.
|
(9)
|
Consists of
293,159
shares of common stock issuable upon exercise of options exercisable within 60 days of June 30, 2015.
|
(10)
|
Consists solely of shares described in Note (1) above.
|
(11)
|
Consists solely of shares described in Note (5) above.
|
(12)
|
Consists of
223,333
shares of common stock issuable upon exercise of options exercisable within 60 days of June 30, 2015.
|
(14)
|
Consists of
1,176,470
shares held by ORR Partners I, L.P., 163,132 shares held by ORR Partners I-S, L.P.,
194,903
shares held by ORR Partners I-S, II, L.P. and 166,238 shares held by ORR Partners I-S III, L.P. (together with ORR Partners I, L.P. and ORR Partners I-S, L.P., the “ORR Partners Funds”). Avery More is the general partner of the ORR Partners Funds, and has voting and investment power with respect to the shares held by the ORR Partners Funds. The principal business address of each of the ORR Partners Funds is 5930 Royal Lane, Suite E-120, Dallas, TX 75230.
|
(16)
|
Consists of
11,564,670
shares of common stock and
2,013,115
shares of common stock issuable upon exercise of options exercisable within 60 days of June 30, 2015.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDE
PE
NDENCE
|
Name
|
Shares of
Series D
Convertible
Preferred
Stock
|
Aggregate
Purchase
Price of
Series D
Convertible
Preferred
Stock ($)
|
Shares of
Series D-1
Convertible
Preferred
Stock
|
Aggregate
Purchase
Price of
Series D-1
Convertible
Preferred
Stock ($)
|
Shares of
Series D-2
Convertible
Preferred
Stock
|
Aggregate
Purchase
Price of
Series D-2
Convertible
Preferred
Stock ($)
|
Shares of
Series D-3
Convertible
Preferred
Stock
|
Aggregate
Purchase
Price of
Series D-3
Convertible
Preferred
Stock ($)
|
Shares of
Series E
Convertible
Preferred
Stock
|
Aggregate
Purchase
Price of
Series E
Convertible
Preferred
Stock ($)
|
||||||||||||||||||||||||||||||
Affiliates of ORR Partners I, L.P.(1)
|
64,963 | 150,000 | 103,140 | 238,150 | 123,768 | 285,780 | 206,845 | 477,605 | — | — | ||||||||||||||||||||||||||||||
Opus Capital Venture Partners, L.P.
|
1,444,123 | 3,334,480 | 390,776 | 902,301 | 468,989 | 1,082,895 | 783,792 | 1,809,776 | — | — | ||||||||||||||||||||||||||||||
Genesis Partners III L.P.
|
1,444,112 | 3,334,455 | 390,873 | 902,525 | 468,989 | 1,082,895 | 783,792 | 1,809,776 | — | — | ||||||||||||||||||||||||||||||
Affiliates of Pacven Walden Ventures VI, L.P.
|
1,443,902 | 3,333,970 | 390,765 | 902,276 | 468,919 | 1,082,734 | 783,674 | 1,809,503 | — | — | ||||||||||||||||||||||||||||||
Affiliates of Vertex III (C.I.) Fund L.P.(1)
|
585,672 | 1,352,317 | 158,502 | 365,981 | 190,202 | 439,176 | 317,870 | 733,962 | — | — | ||||||||||||||||||||||||||||||
Affiliates of Lightspeed Ventures Partners VII, LP
|
1,136,471 | 2,624,112 | 307,565 | 710,167 | 369,078 | 852,201 | 616,817 | 1,424,230 | — | — | ||||||||||||||||||||||||||||||
Affiliates of NWC SolarEdge Holdings, LLC
|
— | — | — | — | — | — | — | — | 5,928,169 | $ | 15,900,001 | |||||||||||||||||||||||||||||
Affiliates of Norwest Venture Partners XI, L.P.
|
8,661,758 | 20,000,000 | 281,956 | 651,036 | 338,347 | 781,242 | 565,458 | 1,305,643 | — | — |
(1)
|
These holders held more than 5% of our capital stock at the time of the relevant financing but held less than 5% of our capital stock on June 30, 2015.
|
Dividend
per share
|
||||
Series E
|
0.21457 | |||
Series D-3
|
0.184721 | |||
Series D-2
|
0.184721 | |||
Series D-1
|
0.184721 | |||
Series D
|
0.184721 | |||
Series C
|
0.12500 | |||
Series B
|
0.09808 | |||
Series A
|
0.05913 |
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
2015
|
2014 | |||||||
(in thousands) | ||||||||
Audit fees(1)
|
$
|
890
|
$
|
115
|
||||
Audit Related fees(2)
|
22
|
28
|
||||||
Tax fees(3)
|
80
|
23
|
||||||
Total audit and related fees
|
$
|
992
|
$
|
166
|
(1)
|
Represents professional services rendered for the audits of our annual consolidated financial statements, the reviews of our quarterly consolidated financial statements, the filing of our Form S-1 and fees related to our initial public offering.
|
(3)
|
Represents professional services rendered for tax compliance, tax advice, tax planning and review our Israeli tax returns.
|
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
1.
|
Our Consolidated Financial Statements and Notes thereto are included in ITEM 8 of this Annual Report on Form 10-K. See Index to ITEM 8 for more detail.
|
2.
|
All financial schedules have been omitted either because they are not applicable or because the required information is provided in our Consolidated Financial Statements and Notes thereto, included in ITEM 8 of this Annual Report on Form 10-K.
|
3.
|
The Index to Exhibits, which appears immediately following the signature page and is incorporated herein by reference, is filed as part of this Annual Report on Form 10-K.
|
Page
|
|
F-2
|
|
F-3
|
|
F-5
|
|
F-6
|
|
F-8
|
|
F-10
|
Kost Forer Gabbay & Kasierer
3 Aminadav St.
Tel-Aviv 6706703, Israel
|
Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com
|
Tel-Aviv, Israel
|
/S/ KOST FORER GABBAY & KASIERER
|
|
August 20, 2015
|
A Member of Ernst & Young Global
|
June 30,
|
||||||||
2015
|
2014
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$ | 144,750 | $ | 9,754 | ||||
Restricted cash
|
3,639 | 1,602 | ||||||
Trade receivables, net
|
35,428 | 19,267 | ||||||
Prepaid expenses and other accounts receivable
|
32,645 | 13,151 | ||||||
Inventories
|
73,950 | 25,499 | ||||||
Total
current assets
|
290,412 | 69,273 | ||||||
PROPERTY AND EQUIPMENT, NET
|
14,717 | 5,351 | ||||||
LONG-TERM LEASE DEPOSIT AND PREPAID EXPENSES
|
529 | 367 | ||||||
LONG-TERM DEFERRED CHARGES
|
- | 7 | ||||||
Total
assets
|
$ | 305,658 | $ | 74,998 |
June 30,
|
||||||||
2015
|
2014
|
|||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFECIENCY)
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Short term bank loan
|
$ | - | $ | 13,326 | ||||
Current maturities of term loan
|
- | 3,474 | ||||||
Trade payables
|
80,684 | 39,438 | ||||||
Employees and payroll accruals
|
6,814 | 5,210 | ||||||
Warranty obligations
|
9,431 | 5,496 | ||||||
Deferred revenues
|
1,676 | 1,729 | ||||||
Accrued expenses and other accounts payable
|
6,987 | 4,270 | ||||||
Total
current liabilities
|
105,592 | 72,943 | ||||||
LONG-TERM LIABILITIES:
|
||||||||
Warranty obligations
|
22,448 | 12,685 | ||||||
Deferred revenues
|
8,289 | 4,252 | ||||||
Warrants to purchase convertible preferred stock
|
- | 765 | ||||||
Term loan
|
- | 3,444 | ||||||
Lease incentive obligation
|
2,385 | - | ||||||
Total long-term liabilities
|
33,122 | 21,146 | ||||||
COMMITMENTS AND CONTINGENT LIABILITIES
|
||||||||
Convertible Preferred Series A, B, C, D, D-1, D-2, D-3 stock of $0.0001 par value - authorized: 95,000,000 and 80,772,775 shares as of June 30, 2015 and 2014, respectively; issued and outstanding: 0 and 75,422,773 shares as of June 30, 2015 and 2014, respectively. Aggregate liquidation preferences of $0 and $134,656 as of June 30, 2015 and 2014, respectively.
|
- | 116,203 | ||||||
STOCKHOLDERS’ EQUITY (DEFECIENCY):
|
||||||||
Share capital
|
||||||||
Common stock of $0.0001 par value - Authorized: 125,000,000 and 34,939,461 shares as of June 30, 2015 and 2014, respectively; issued and outstanding: 39,297,539 and 2,809,950 shares as of June 30, 2015 and 2014, respectively.
|
4 | * - | ||||||
Additional paid-in capital
|
287,152 | 5,878 | ||||||
Accumulated other comprehensive loss
|
(222 | ) | (61 | ) | ||||
Accumulated deficit
|
(119,990 | ) | (141,111 | ) | ||||
Total
stockholders’ equity (deficiency)
|
166,944 | (135,294 | ) | |||||
Total
liabilities and stockholders’ equity (deficiency)
|
$ | 305,658 | $ | 74,998 |
Year ended
June 30,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Revenues
|
$ | 325,078 | $ | 133,217 | $ | 79,035 | ||||||
Cost of revenues
|
243,295 | 111,246 | 74,626 | |||||||||
Gross profit
|
81,783 | 21,971 | 4,409 | |||||||||
Operating expenses:
|
||||||||||||
Research and development, net
|
22,018 | 18,256 | 15,823 | |||||||||
Sales and marketing
|
24,973 | 17,792 | 12,784 | |||||||||
General and administrative
|
6,535 | 4,294 | 3,262 | |||||||||
Total
operating expenses
|
53,526 | 40,342 | 31,869 | |||||||||
Operating income (loss)
|
28,257 | (18,371 | ) | (27,460 | ) | |||||||
Other expenses
|
104 | - | - | |||||||||
Financial expenses, net (Note 15)
|
5,077 | 2,787 | 612 | |||||||||
Income (loss) before taxes on income
|
23,076 | (21,158 | ) | (28,072 | ) | |||||||
Taxes on income (Note 14)
|
1,955 | 220 | 108 | |||||||||
Net income (loss)
|
$ | 21,121 | $ | (21,378 | ) | $ | (28,180 | ) | ||||
Net basic earnings (loss) per share of common stock
|
$ | 0.30 | $ | (7.64 | ) | $ | (10.28 | ) | ||||
Net diluted earnings (loss) per share of common
stock
|
$ | 0.27 | $ | (7.64 | ) | $ | (10.28 | ) | ||||
Weighted average number of shares used in computing net basic earnings (loss) per share of common stock
|
11,902,911 | 2,798,894 | 2,741,370 | |||||||||
Weighted average number of shares used in computing net diluted earnings (loss) per share of common stock
|
15,269,448 | 2,798,894 | 2,741,370 | |||||||||
Other comprehensive income (loss)
|
||||||||||||
Change in comprehensive income (loss) related to foreign currency translation adjustments
|
(161 | ) | (35 | ) | (32 | ) | ||||||
Total comprehensive income (loss)
|
$ | 20,960 | $ | (21,413 | ) | $ | (28,212 | ) |
Reconciliation of net income (loss) to net income (loss) available to common stock used for net basic earnings (loss) per share calculations
|
||||||||||||
Net income (loss)
|
$ | 21,121 | $ | (21,378 | ) | $ | (28,180 | ) | ||||
Dividends accumulated for the period
|
(17,550 | ) | - | - | ||||||||
Net income (loss) available to shareholders of common stock
|
$ | 3,571 | $ | (21,378 | ) | $ | (28,180 | ) |
Reconciliation of net income (loss) to net income (loss) available to common stock used for net diluted earnings (loss) per share calculations
|
||||||||||||
Net income (loss)
|
$ | 21,121 | $ | (21,378 | ) | $ | (28,180 | ) | ||||
Dividends accumulated for the period
|
(16,971 | ) | - | - | ||||||||
Net income (loss) available to shareholders of common stock
|
$ | 4,150 | $ | (21,378 | ) | $ | (28,180 | ) |
Convertible
Preferred stock
|
Receipt on account of Convertible Preferred stock |
Additional paid in
Capital
|
Accumulated
other comprehensive
Income (loss)
|
Accumulated
deficit
|
Total stockholders’ | |||||||||||||||||||||||||||||||
Common stock
|
||||||||||||||||||||||||||||||||||||
Number
|
Amount
|
Number
|
Amount
|
equity (deficiency)
|
||||||||||||||||||||||||||||||||
Balance as of June 30, 2012
|
66,327,932 | 95,234 | - | 2,718,381 | * - | 3,557 | 6 | (91,553 | ) | (87,990 | ) | |||||||||||||||||||||||||
Issuance of Common Stock upon exercise of employee stock options
|
- | - | - | 64,110 | * - | 110 | - | - | 110 | |||||||||||||||||||||||||||
Issuance of Series D-1 Convertible Preferred stock, net of issuance expenses in the amount of $5
|
2,165,441 | 4,995 | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Receipts on account of convertible preferred stock
|
- | - | 5,314 | - | - | - | - | - | - | |||||||||||||||||||||||||||
Equity based compensation expenses to employees and non-employee consultatns
|
- | - | - | - | - | 1,078 | - | - | 1,078 | |||||||||||||||||||||||||||
Change in comprehensive loss related to foreign currency translation adjustments
|
- | - | - | - | - | - | (32 | ) | - | (32 | ) | |||||||||||||||||||||||||
Net loss
|
- | - | - | - | - | - | - | (28,180 | ) | (28,180 | ) | |||||||||||||||||||||||||
Balance as of June 30, 2013
|
68,493,373 | $ | 100,229 | $ | 5,314 | 2,782,491 | $ | * - | $ | 4,745 | $ | (26 | ) | $ | (119,733 | ) | $ | (115,014 | ) |
Convertible
Preferred stock
|
Receipt on account of Convertible Preferred stock | Common stock |
Additional paid
in
Capital
|
Accumulated
Other comprehensive
Income (loss)
|
Accumulated
deficit
|
Total stockholders’ equity (deficiency) | ||||||||||||||||||||||||||||||
Number
|
Amount
|
Number
|
Amount
|
|||||||||||||||||||||||||||||||||
Balance as of June 30, 2013
|
68,493,373 | $ | 100,229 | $ | 5,314 | 2,782,491 | $ | * - | $ | 4,745 | $ | (26 | ) | $ | (119,733 | ) | $ | (115,014 | ) | |||||||||||||||||
Issuance of Common Stock upon exercise of employee stock options
|
- | - | - | 27,459 | * - | 51 | - | - | 51 | |||||||||||||||||||||||||||
Issuance of Series D-2 Convertible Preferred stock, net of issuance expenses in the amount of $17
|
2,598,528 | 5,983 | (5,314 | ) | - | - | - | - | - | - | ||||||||||||||||||||||||||
Issuance of Series D-3 Convertible Preferred stock, net of issuance expenses in the amount of $9
|
4,330,872 | 9,991 | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Equity based compensation expenses to employees and non-employee consultatns
|
- | - | - | - | - | 1,082 | - | - | 1,082 | |||||||||||||||||||||||||||
Change in comprehensive loss related to foreign currency translation adjustments
|
- | - | - | - | - | - | (35 | ) | - | (35 | ) | |||||||||||||||||||||||||
Net loss
|
- | - | - | - | - | - | - | (21,378 | ) | (21,378 | ) | |||||||||||||||||||||||||
Balance as of June 30, 2014
|
75,422,773 | $ | 116,203 | $ | - | 2,809,950 | $ | * - | $ | 5,878 | $ | (61 | ) | $ | (141,111 | ) | $ | (135,294 | ) | |||||||||||||||||
Issuance of Common Stock upon exercise of employee and non-employees stock options
|
- | - | - | 34,898 | * - | 84 | - | - | 84 | |||||||||||||||||||||||||||
Issuance of Series E Convertible Preferred stock, net of issuance expenses in the amount of $288
|
9,321,019 | 24,712 | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Equity based compensation expenses to employees and non-employee consultants
|
- | - | - | - | - | 2,956 | - | - | 2,956 | |||||||||||||||||||||||||||
Conversion of convertible preferred stock into ordinary shares
|
(84,743,792 | ) | (140,915 | ) | - | 28,247,923 | 3 | 140,912 | - | - | 140,915 | |||||||||||||||||||||||||
Issuance of common stock in initial public offering, net of issuance expenses in an amount of $13,692
|
- | - | - | 8,050,000 | 1 | 131,207 | - | - | 131,208 | |||||||||||||||||||||||||||
Exercise of warrants into common stock
|
- | - | - | 154,768 | * - | 6,115 | - | - | 6,115 | |||||||||||||||||||||||||||
Change in comprehensive loss related to foreign currency translation adjustments
|
- | - | - | - | - | - | (161 | ) | - | (161 | ) | |||||||||||||||||||||||||
Net income
|
- | - | - | - | - | - | - | 21,121 | 21,121 | |||||||||||||||||||||||||||
Balance as of June 30, 2015
|
- | $ | - | $ | - | 39,297,539 | $ | 4 | $ | 287,152 | $ | (222 | ) | $ | (119,990 | ) | $ | 166,944 |
Year ended
June 30,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income (loss)
|
$ | 21,121 | $ | (21,378 | ) | $ | (28,180 | ) | ||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
||||||||||||
Depreciation
|
2,253 | 1,978 | 1,842 | |||||||||
Capital loss from disposal of property
|
104 | - | - | |||||||||
Interest expenses related to short term bank loan
|
- | 44 | 6 | |||||||||
Stock-based compensation related to employees and non-employee consultants stock options
|
2,956 | 1,082 | 1,078 | |||||||||
Financial expenses (income), net related to term loan
|
(992 | ) | 431 | 768 | ||||||||
Remeasurement of warrants to purchase convertible preferred stock
|
5,350 | (53 | ) | 40 | ||||||||
Changes in assets and liabilities:
|
||||||||||||
Inventories
|
(48,507 | ) | (10,681 | ) | (1,161 | ) | ||||||
Prepaid expenses and other accounts receivable
|
(19,563 | ) | (7,409 | ) | 3,776 | |||||||
Trade receivables, net
|
(16,333 | ) | (9,911 | ) | (1,040 | ) | ||||||
Trade payables
|
41,111 | 19,441 | (7,928 | ) | ||||||||
Employees and payroll accruals
|
1,668 | 1,726 | 307 | |||||||||
Warranty obligations
|
13,698 | 7,803 | 3,866 | |||||||||
Deferred revenues
|
3,989 | (500 | ) | 1,934 | ||||||||
Accrued expenses and other accounts payable
|
2,530 | (418 | ) | 1,585 | ||||||||
Lease incentive obligation
|
2,669 | - | - | |||||||||
Net cash provided by (used in) operating activities
|
12,054 | (17,845 | ) | (23,107 | ) | |||||||
Cash flows from investing activities:
|
||||||||||||
Purchase of property and equipment
|
(11,765 | ) | (2,990 | ) | (1,539 | ) | ||||||
Increase in restricted cash
|
(2,038 | ) | (156 | ) | (1,085 | ) | ||||||
Increase in long-term lease deposit
|
(134 | ) | (1 | ) | (154 | ) | ||||||
Net cash used in investing activities
|
(13,937 | ) | (3,147 | ) | (2,778 | ) |
Year ended
June 30,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Cash flows from financing activities:
|
||||||||||||
Proceeds from short term bank loan
|
23,000 | 21,813 | 17,880 | |||||||||
Repayment of short term bank loan
|
(36,326 | ) | (12,447 | ) | (17,485 | ) | ||||||
Proceeds from term loan (net of $100 transaction fee)
|
- | - | 9,900 | |||||||||
Repayments of term loan
|
(5,919 | ) | (2,401 | ) | (969 | ) | ||||||
Deferred charges related to term loan
|
- | - | (69 | ) | ||||||||
Proceeds from issuance of Series D-1 Convertible Preferred stock, net
|
- | - | 4,995 | |||||||||
Proceeds from issuance of Series D-2 Convertible Preferred stock, net
|
- | 669 | - | |||||||||
Proceeds from issuance of Series D-3 Convertible Preferred stock, net
|
- | 9,991 | - | |||||||||
Proceeds from issuance of Series E Convertible Preferred stock, net
|
24,712 | - | - | |||||||||
Proceeds from initial public offering, net
|
131,402 | - | - | |||||||||
Receipts on account of Convertible Preferred stock
|
- | - | 5,314 | |||||||||
Proceeds from exercise of employees and non-employee consultants stock options
|
84 | 51 | 110 | |||||||||
Net cash provided by financing activities
|
136,953 | 17,676 | 19,676 | |||||||||
Increase (decrease) in cash and cash equivalents
|
135,070 | (3,316 | ) | (6,209 | ) | |||||||
Cash and cash equivalents at the beginning of the period
|
9,754 | 13,142 | 19,437 | |||||||||
Effect of exchange rate differences on cash and cash equivalents
|
(74 | ) | (72 | ) | (86 | ) | ||||||
Cash and cash equivalents at the end of the period
|
$ | 144,750 | $ | 9,754 | $ | 13,142 | ||||||
Supplemental disclosure of non-cash financing activities:
|
||||||||||||
Deferred issuance costs related to initial public offering
|
$ | 194 | $ | - | $ | - | ||||||
Cashless exersice of warrants to purchase common stock
|
$ | 6,115 | $ | - | $ | - | ||||||
Supplemental disclosure of cash flow information:
|
||||||||||||
Cash paid for interest
|
$ | 896 | $ | 1,085 | $ | 1,065 | ||||||
Cash paid for income taxes
|
$ | 4,040 | $ | 92 | $ | 8 |
NOTE 1:-
|
GENERAL
|
|
a.
|
SolarEdge Technologies Inc. (the “Company”) and its subsidiaries design, develop, and sell an intelligent inverter solution that maximizes power generation at the individual photovoltaic (“PV”) module level while lowering the cost of energy produced by the solar PV system and providing comprehensive and advanced safety features
.
The Company’s products consist mainly of (i) power optimizers which maximize energy throughput from each and every module through constant tracking of Maximum Power Point individually per module, (ii) inverters which invert direct current (DC) from the PV module to alternating current (AC) and (iii) a related cloud based monitoring platform, that collects and processes information from the power optimizers and inverters of a solar PV system to enable customers and system owners, as applicable, to monitor and manage the solar PV systems. The Company operates its business itself and through its wholly-owned subsidiaries: SolarEdge Technologies Ltd. in Israel; SolarEdge Technologies GmbH in Germany; SolarEdge Technologies (China) Co., Ltd in China; SolarEdge Technologies (Australia) PTY Ltd. in Australia; SolarEdge Technologies (Canada) Ltd. in Canada; SolarEdge Technologies (Holland) B.V. in the Netherlands; SolarEdge Technologies (UK) Ltd in United Kingdom; SolarEdge Technologies (Japan) Co., Ltd. in Japan and SolarEdge Technologies (France) in France (collectively, the “subsidiaries”). Except for SolarEdge Technologies Ltd in Israel, which carries out the research and development, management of manufacturing, global sales and support and management activities, the other subsidiaries are engaged solely in selling, marketing and support activities. The Company was incorporated in Delaware in August 2006 and began commercial sale of its products in January 2010.
|
|
b.
|
Initial Public Offering:
On March 31, 2015, the Company closed its initial public offering (“IPO”) whereby 8,050,000 shares of common stock were sold by the Company to the public (inclusive of 1,050,000 shares of common stock pursuant to the full exercise of an overallotment option granted to the underwriters). The aggregate net proceeds received by the Company from the offering were approximately $131,208, net of underwriting discounts and commissions and offering expenses the majority of which have already been paid by the Company. Upon the closing of the IPO, all shares of the Company’s outstanding convertible preferred stock automatically converted into 28,247,923 shares of common stock, and outstanding warrants to purchase convertible preferred stock automatically converted into warrants to purchase 187,671 shares of common stock (See Note 12).
|
|
c.
|
As of June 30, 2015 and 2014, the Company had a major customer that accounted for approximately 24.6% and 19.1% of the Company’s consolidated revenues, respectively.
|
|
d.
|
The Company depends on two contract manufacturers and several limited or single source component suppliers. Reliance on these vendors makes the Company vulnerable to possible capacity constraints and reduced control over component availability, delivery schedules, manufacturing yields and costs. Two vendors collectively account for 79% and 60% of the Company’s total trade payables as of June 30, 2015 and 2014, respectively.
|
NOTE 2:-
|
SIGNIFICANT ACCOUNTING POLICIES
|
|
a.
|
Use of estimates:
The preparation of financial statements, in conformity with U.S. GAAP, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company evaluates on an ongoing basis its assumptions, including those related to warranty obligation, warrants to purchase convertible preferred stock, contingencies, share-based compensation cost, as well as in estimates used in applying the revenue recognition policy. The Company’s management believes that the estimates, judgment and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.
|
|
b.
|
Financial statements in U.S. dollars:
The functional currency of the Company and its Israeli subsidiary is the U.S. dollar, as the U.S. dollar is the currency of the primary economic environment in which the Company has operated and expects to continue to operate in the foreseeable future. The Company’s and its Israeli subsidiary’s operations are currently primarily conducted in Israel and a significant portion of its expenses are currently paid in U.S. dollars. Financing activities including loans and cash investments, are mainly made in U.S. dollars.
Accordingly, monetary accounts maintained in currencies other than the U.S. dollar are translated into U.S. dollars in accordance with Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 830 (“Foreign Currency Matters”). All transaction gains and losses of the re-measurement of monetary balance sheet items are reflected in the statements of operations as financial income or expenses, as appropriate.
The financial statements of the Company’s German, Chinese, Australian, Canadian, Dutch, Japanese and French subsidiaries, whose functional currency is other than the U.S. dollar, have been translated into U.S dollars. Assets and liabilities have been translated using the exchange rates in effect on the balance sheet date. Statements of operations amounts have been translated using the average exchange rate for the relevant periods.
The resulting translation adjustments are reported as a component of stockholders’ equity (deficiency) in accumulated other comprehensive income (loss).
Accumulated other comprehensive loss related to foreign currency translation adjustments, net amounted to $222, $61 and $26 as of June 30, 2015, 2014 and 2013, respectively.
|
NOTE 2:-
|
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
|
c.
|
Principles of consolidation:
The consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany transactions and balances including profits from intercompany sales not yet realized outside the Company have been eliminated upon consolidation.
The Company’s fiscal years 2015, 2014 and 2013 ended on June 30, 2015, 2014 and 2013, respectively. Unless otherwise stated, references to particular years and quarters, refer to the Company’s fiscal years ended in June and the associated quarters of those fiscal years.
|
|
d.
|
Basic and Diluted Net
Earnings
(Loss) Per Share
:
Basic net earnings (loss) per share is computed by dividing the net earnings (loss) by the weighted-average number of shares of common stock outstanding during the period.
Diluted net earnings (loss) per share is computed by giving effect to all potential shares of common stock, including stock options and convertible preferred stock, to the extent dilutive, all in accordance with FASB ASC No. 260, "Earnings Per Share."
The total weighted average number of shares related to the outstanding stock options, convertible preferred stock and warrants to purchase convertible preferred stock, excluded from the calculation of diluted net earnings (loss) per share due to their anti-dilutive effect was 20,565,747, 25,234,818 and 22,953,263, for the years ended June 30, 2015, 2014 and 2013, respectively.
Basic and diluted earnings (loss) per share is presented in conformity with the two-class method for participating securities for the periods prior to their conversion. Under this method the earnings per share for each class of shares are calculated assuming 100% of the Company’s earnings are distributed as dividends to each class of shares based on their contractual rights. In addition, since all classes other than common stock do not participate in losses, for the twelve months period ended June 30, 2014 and 2013 these shares are not included in the computation of basic loss per share.
For the years ended June 30, 2014 and 2013 basic and diluted net loss per share was the same for each period presented as the inclusion of all potential shares of common stock outstanding would have been anti-dilutive.
|
NOTE 2:-
|
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
Year ended June 30,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Net basic earnings (loss) per share of common stock:
|
||||||||||||
Numerator:
|
||||||||||||
Net income (loss)
|
21,121 | (21,378 | ) | (28,180 | ) | |||||||
Dividends accumulated for the period
|
(17,550 | ) | - | - | ||||||||
Net income (loss) available to shareholders of common stock
|
3,571 | (21,378 | ) | (28,180 | ) | |||||||
Denominator:
|
||||||||||||
Shares used in computing net earnings (loss) per share of common stock, basic
|
11,902,911 | 2,798,894 | 2,741,370 | |||||||||
Net diluted earnings (loss) per share of common stock:
|
||||||||||||
Numerator:
|
||||||||||||
Net income (loss)
|
21,121 | (21,378 | ) | (28,180 | ) | |||||||
Dividends accumulated for the period
|
(16,971 | ) | - | - | ||||||||
Net income (loss) available to shareholders of common stock
|
4,150 | (21,378 | ) | (28,180 | ) | |||||||
Denominator:
|
||||||||||||
Shares used in computing net earnings (loss) per share of common stock, diluted
|
15,269,448 | 2,798,894 | 2,741,370 |
|
e.
|
Cash and cash equivalents:
Cash equivalents are short-term, highly liquid investments that are readily convertible to cash, with original maturities of three months or less at the date acquired.
|
|
f.
|
Restricted cash:
Restricted cash is primarily invested in short-term bank deposits, which are primarily used to guarantee a letter of credit which has been issued to one of the Company’s major vendors and to the Company’s landlords for its office leases.
|
|
g.
|
Inventories:
Inventories are stated at the lower of cost or market value. Inventory reserves are provided to cover risks arising from slow-moving items or technological obsolescence.
The Company periodically evaluates the quantities on hand relative to historical, current and projected sales volume. Based on this evaluation, an impairment charge is recorded when required to write-down inventory to its market value. Cost of finished goods and raw materials is determined using the moving average cost method.
|
NOTE 2:-
|
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
|
h.
|
Property and equipment:
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets, at the following rates:
|
%
|
||
Computers and peripheral equipment
|
14 – 33 (mainly 33)
|
|
Office furniture and equipment
|
7 – 15 (mainly 7)
|
|
Machinery & equipment
|
7 – 33 (mainly 20)
|
|
Laboratory equipment
|
15 – 33 (mainly 15)
|
|
Vehicles
|
15
|
|
Leasehold improvements
|
over the shorter of the lease term or useful economic life
|
|
i.
|
Impairment of long-lived assets:
The Company’s long-lived assets are reviewed for impairment in accordance with ASC 360 (“Property, Plants and Equipment”), whenever events or changes in circumstances indicate that the carrying amount of an asset (or asset group) may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset (or asset group) to the future undiscounted cash flows expected to be generated by the assets (or asset group).
If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds their fair value. For the years ended June 30, 2015, 2014 and 2013, no impairment losses have been identified.
|
|
j.
|
Severance pay:
Pursuant to Israel’s Severance Pay Law, Israeli employees are entitled to severance pay equal to one month’s salary for each year of employment, or a portion thereof. The employees of the Company’s Israeli subsidiary have elected to be included under section 14 of the Severance Pay Law, 1963, under which these employees are entitled only to monthly deposits made in their name with insurance companies, at a rate of 8.33% of their monthly salary. These payments cause the Company to be released from any future obligation under the Israeli Severance Pay Law to make severance payments in respect of those employees; therefore, related assets and liabilities are not presented in the balance sheet.
For the years ended June 30, 2015, 2014 and 2013, the Company recorded $1,273, $1,109 and $974, severance expenses, respectively.
|
NOTE 2:-
|
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
|
k.
|
Revenue recognition:
The Company and its subsidiaries generate their revenues mainly from the sale of power optimizers, inverters and cloud-based monitoring services, to distributors, installers and PV module manufacturers.
Revenues from product sales and related services are recognized in accordance with ASC 605 (“Revenue Recognition”), when persuasive evidence of an arrangement exists, delivery has occurred, the selling price is fixed or determinable, collectability is reasonably assured and no significant obligations remain.
Persuasive evidence of an arrangement exists
. The Company’s customers mainly consist of distributors and installers (the “Customers”). The Company’s sales arrangements with Customers are pursuant to written documentation, either a written contract or purchase order. The actual documentation used is dependent on the business practice with each Customer. Therefore, the Company determines that persuasive evidence of an arrangement exists with respect to a Customer when it has a written contract, or a binding purchase order from the Customer.
Delivery has occurred
. Each item of written documentation relating to a sale arrangement that is agreed upon with the Customer specifically sets forth when risk of loss and title are being transferred (based on the agreed International Commercial terms, or “INCOTERMS”). Unless a different written arrangement with the Customer exists, the Company determines that risk of loss and title are transferred to the Customer when the applicable INCOTERMS are satisfied and thus delivery of its products has occurred.
The fee is fixed or determinable
. The Company does not provide any price protection, stock rotation and/or right of return and thus the Company considers all the Customers as end-users and the fee is considered fixed and determinable upon execution of the written documentation with the Customers. Additionally, payments that are due within the normal course of the Company’s credit terms, which are currently no more than three months from the delivery date, are deemed to be fixed and determinable. Fees and arrangements with payment terms extending beyond customary payment terms are considered not to be fixed or determinable, in which case revenues are deferred and recognized when payments become due, provided that all other revenue recognition criteria have been met.
Collectability is reasonably assured
. The Company determines whether collectability is reasonably assured on a Customer-by-Customer basis pursuant to its credit review policy. The Company typically sells to Customers with whom it has a long-term business relationship and a history of successful collection. For a new Customer, or when an existing Customer substantially expands its commitments, the Company evaluates the Customer’s financial position, the number of years the Customer has been in business, the history of collection with the Customer and the Customer’s ability to pay and typically assigns a credit limit based on that review.
|
NOTE 2:-
|
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
|
l.
|
Cost of revenues:
Cost of revenues sold includes the following: product costs consisting of purchases from contract manufacturers and other suppliers, indirect manufacturing, support, warranty, provision for loss related to slow moving and dead inventory, personnel and logistics costs.
|
NOTE 2:-
|
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
|
m.
|
Shipping and handling costs:
Shipping and handling costs, which amounted to $26,931, $14,066 and $5,140 for the years ended June 30, 2015, 2014 and 2013, respectively, are included in cost of revenues in the consolidated statements of operations. Shipping and handling costs include all costs associated with the distribution of finished products from the Company’s point of selling directly to its Customers.
|
|
n.
|
Warranty obligations:
.
The Company’s products include a minimum 12-year limited warranty for inverters and a 25-year limited warranty for power optimizers. In certain cases, the Company provides extended warranties for inverters that bring the warranty period up to 25 years. The Company maintains reserves to cover the expected costs that could result from these warranties. The potential liability is generally in the form of product replacement. Warranty reserves are based on the Company’s best estimate of such costs and are included in cost of revenues. The reserve for the related warranty expenses is based on various factors including assumptions about the frequency of warranty claims on product failures, derived from results of accelerated lab testing, field monitoring, analysis of the history of product failures and the Company’s reliability estimates.
The Company has established a reliability measurement system based on the units’ estimated mean time between failure, or MTBF, a metric that equates to a steady-state failure rate per year for current generation products. The MTBF represents the predicted mean elapsed time to each product unit failure during system operation. The Company performs accelerated life cycle testing, which simulates the service life of the product in a short period of time.
The accelerated life cycle tests incorporate test methodologies derived from standard tests used by solar module vendors to evaluate the period over which solar modules wear out. Corresponding replacement costs are updated periodically to reflect changes in the Company’s actual and estimated production costs for its products.
In addition, through the collection of actual failure statistics, the Company has identified several additional failure causes that are not included in the MTBF calculations. Such causes, which mostly consist of workmanship errors caused during the manufacturing process and replacement of non-faulty units by installers, are in addition to the replacement costs projected under the MTBF model. The Company identified each of those causes, its failure pattern and the relative ratio compared to the pattern of malfunctions identified under the MTBF and accrued additional provisions for the occurrence of such malfunctioning. The Company evaluates the continuation of these occurrences and the appearance of potential additional malfunctioning cases beyond the MTBF pattern and accrues additional expenses accordingly.
Warranty obligations are classified as short-term and long-term warranty obligations based on the period in which the warranty is expected to be claimed.
|
NOTE 2:-
|
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
|
o.
|
Royalty-bearing grants from the Binational Industrial Research and Development Foundation:
Royalty-bearing grants from the Binational Industrial Research and Development Foundation (“BIRD-F”) for funding of approved research and development projects are recognized, as a deduction from research and development expenses, at the time the Company is entitled to such grants (see Note 10c).
The Company recorded grants from BIRD-F in the amount of $248 for the year ended June 30, 2013, which was deducted from research and development expenses. No grants were recorded in the years ended June 30, 2015 and 2014.
|
|
p.
|
Government grants:
Government grants received by the Company’s Israeli subsidiary relating to categories of operating expenditures are credited to the consolidated statements of operations during the period in which the expenditure to which they relate is charged. Royalty bearing grants from the Israeli Office of the Chief Scientist (“OCS”) for funding certain approved research and development projects are recognized at the time when the Company’s Israeli subsidiary is entitled to such grants, on the basis of the related costs incurred, and are included as a deduction from research and development expenses.
The Company recorded grants in the amount of $763 and $275 for the year ended June 30, 2015 and 2014, respectively, which was deducted from research and development expenses. No grants were recorded in the year ended June 30, 2013.
|
|
q.
|
Research and development costs:
Research and development costs, net of grants received, are charged to the consolidated statement of operations as incurred.
|
|
r.
|
Concentrations of credit risks:
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, trade receivables and other accounts receivable.
Cash and cash equivalents are mainly invested in major banks in the U.S., Israel and in Germany. Management believes that the financial institutions that hold the Company’s investments are financially sound and, accordingly, minimal credit risk exists with respect to these investments.
The trade receivables of the Company are derived from sales to Customers located primarily in North America and Europe.
|
NOTE 2:-
|
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
NOTE 2:-
|
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
|
Level 1-
|
Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
|
Level 2-
|
Include other inputs that are directly or indirectly observable in the marketplace.
|
|
Level 3-
|
Unobservable inputs which are supported by little or no market activity.
|
|
t.
|
Warrants to Purchase Convertible Preferred Stock:
|
NOTE 2:-
|
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
June 30,
|
|||||||||
2014
|
2013
|
||||||||
Expected volatility
|
45.0 | % | 55.8 | % | |||||
Risk-free rate
|
0.09 | % | 0.3 | % | |||||
Dividend yield
|
0 | % | 0 | % | |||||
Expected term (in years)
|
1.21 | 1.50 |
Balance at beginning of period
|
Issuance of
warrants to
purchase preferred stock
|
Exercise of
warrants to
purchase common stock (*)
|
Change in fair value
|
Balance at
end of period
|
||||||||||||||||
June 30, 2015
|
$ | 765 | $ | - | $ | (6,115 | ) | $ | 5,350 | $ | - | |||||||||
June 30, 2014
|
$ | 818 | $ | - | $ | - | $ | (53 | ) | $ | 765 | |||||||||
June 30, 2013
|
$ | - | $ | 778 | $ | - | $ | 40 | $ | 818 |
|
(*)
|
Upon the closing of the IPO, all outstanding warrants to purchase convertible preferred stock automatically converted into warrants to purchase 187,671 shares of common stock (See Note 1b).
On June 18, 2015 the warrants were cashless exercised into 154,768 common shares. Immidiately before the cashless exercise the warrants were remessured to fair value based on their intrinsic value which amounted to $6,115 (see Note 8).
|
NOTE 2:-
|
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
|
u.
|
Accounting for stock-based compensation:
The Company accounts for stock-based compensation in accordance with ASC 718 (“Compensation-Stock Compensation”). ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an Option-Pricing Model (“OPM”). The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company’s consolidated statements of operations.
The Company recognizes compensation expenses for the value of its awards granted based on the straight-line method over the requisite service period of each of the awards, net of estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Estimated forfeitures are based on actual historical pre-vesting forfeitures.
The Company selected the Black-Scholes-Merton option pricing model as the most appropriate fair value method for its stock-option awards. The option-pricing model requires a number of assumptions, of which the most significant are the fair market value of the underlying common stock, expected stock price volatility and the expected option term. Expected volatility was calculated based upon certain peer companies that the Company considered to be comparable. The expected option term represents the period of time that options granted are expected to be outstanding. The expected option term is determined based on the simplified method in accordance with SAB No. 110, as adequate historical experience is not available to provide a reasonable estimate. The simplified method will continue to apply until enough historical experience is available to provide a reasonable estimate of the expected term. The risk-free interest rate is based on the yield from U.S. treasury bonds with an equivalent term. The Company has not declared or paid any dividends on its common stock and does not expect to pay any dividends in the foreseeable future.
The fair value of the shares of common stock underlying the stock options has historically been determined by the Company’s management and approved by the board of directors. Because there has been no public market for the Company’s common stock, the Company’s management has determined fair value of the common stock by using, among other factors, third party valuations at the time of grant of the option by considering a number of objective and subjective factors, including data from other comparable companies, issuance of convertible preferred stock to unrelated third parties, operating and financial performance, the lack of liquidity of capital stock and general and industry specific economic outlook. The fair value of the underlying common stock was determined by the management until such time as the Company’s common stock is listed on an established stock exchange or national market system. The Company’s management determined the value of the shares of common stock based on valuations performed using the OPM for the years ended June 30, 2014 and 2013 and for the period from July 1, 2014 and up to March 31, 2015. From March 31, 2015 the common stock is publicly traded.
|
NOTE 2:-
|
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
Year ended
June 30,
|
||||||
2015
|
2014
|
2013
|
||||
Risk-free interest
|
1.39% - 2.06%
|
1.62% - 1.94%
|
0.74% - 1.00%
|
|||
Dividend yields
|
0%
|
0%
|
0%
|
|||
Volatility
|
46.5%-55.1%
|
46.3%-55.8%
|
55.8%-62.7%
|
|||
Expected option term
|
5.50-6.27 years
|
6.02-6.27 years
|
6.08-6.27 years
|
|||
Estimated forfeiture rate
|
12.5%-18.7%
|
14.0%
|
14.5%-20.9%
|
Year ended
June 30,
|
||||||
2015
|
2014
|
2013
|
||||
Risk-free interest
|
1.49%-2.58%
|
1.95%-2.45%
|
0.98%-1.96%
|
|||
Dividend yields
|
0%
|
0%
|
0%
|
|||
Volatility
|
45.5%-56.2%
|
45.0%-55.8%
|
55.8%-62.7%
|
|||
Contractual life
|
7.2-10.0 years
|
6.0-10.0 years
|
7.0-10.0 years
|
|
v.
|
Income taxes:
The Company and its subsidiaries account for income taxes in accordance with ASC 740, “Income Taxes.” ASC 740 prescribes the use of the liability method, whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates that will be in effect when the differences are expected to reverse.
|
NOTE 2:-
|
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
|
w.
|
Derivative financial instruments:
|
|
x.
|
Comprehensive income (loss):
|
NOTE 2:-
|
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
|
y.
|
The impact of recently issued accounting standards still not effective for the Company as of June 30, 2015 is as follows:
In May 2014, the FASB issued an accounting standard update on revenue from contracts with customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers.
The new guidance will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. On July 9, 2015, the FASB agreed to delay the effective date by one year. In accordance with the agreed upon delay, the new standard is effective for the Company beginning January 1st, 2018. Early adoption is permitted, but not before the original effective date of the standard. The new standard is required to be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. The Company is currently evaluating the effect that the new guidance will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.
|
|
z.
|
Certain 2014 and 2013 figures have been reclassified to conform to the 2015 presentation. The reclassification had no effect on previously reported net loss or stockholders' equity (deficiency).
|
NOTE 3:-
|
PREPAID EXPENSES AND OTHER ACCOUNTS RECEIVABLE
|
June 30,
|
||||||||
2015
|
2014
|
|||||||
Contract manufacturers (*)
|
$ | 24,814 | $ | 10,234 | ||||
Government authorities
|
3,729 | 646 | ||||||
OCS
|
249 | - | ||||||
Prepaid expenses and other
|
2,994
|
2,038 | ||||||
Foreign currency derivative contracts
|
859 | 213 | ||||||
Deferred charges (see Note 8)
|
- | 20 | ||||||
$ | 32,645 | $ | 13,151 |
NOTE 4:-
|
INVENTORIES
|
June 30,
|
||||||||
2015
|
2014
|
|||||||
Raw materials
|
$ | 14,405 | $ | 7,750 | ||||
Finished goods
|
59,545 | 17,749 | ||||||
$ | 73,950 | $ | 25,499 |
NOTE 5:-
|
PROPERTY AND EQUIPMENT
|
June 30,
|
||||||||
2015
|
2014
|
|||||||
Cost:
|
||||||||
Computers and peripheral equipment
|
$ | 3,139 | $ | 3,193 | ||||
Office furniture and equipment
|
779 | 404 | ||||||
Laboratory and testing equipment
|
7,205 | 5,856 | ||||||
Machinery and equipment
|
6,936 | 2,491 | ||||||
Leasehold improvements
|
4,047 | 353 | ||||||
Vehicles
|
13 | - | ||||||
22,119 | 12,297 | |||||||
Less - accumulated depreciation
|
7,402 | 6,946 | ||||||
Depreciated cost
|
$ | 14,717 | $ | 5,351 |
NOTE 6:-
|
ACCRUED EXPENSES AND OTHER ACCOUNTS PAYABLE
|
June 30,
|
||||||||
2015
|
2014
|
|||||||
Accrued expenses
|
$ | 5,271 | $ |
2,807
|
||||
Provision for contractual inventory purchase obligations *
|
1,304 | 1,317 | ||||||
OCS
|
- | 146 | ||||||
Other
|
412 | - | ||||||
$ | 6,987 | $ |
4,270
|
|
*
|
See also Note 10e.
|
NOTE 7:-
|
WARRANTY OBLIGATIONS
|
June 30,
|
||||||||
2015
|
2014
|
|||||||
Balance, at beginning of year
|
$ | 18,181 | $ | 10,378 | ||||
Additions and adjustments to cost of revenues
|
19,407 | 11,861 | ||||||
Usage and current warranty expenses
|
(5,709 | ) | (4,058 | ) | ||||
Balance, at end of year
|
31,879 | 18,181 | ||||||
Less current portion
|
(9,431 | ) | (5,496 | ) | ||||
Long term portion
|
$ | 22,448 | $ | 12,685 |
NOTE 8:-
|
TERM LOAN AND WARRANTS TO PURCHASE CONVERTIBLE PREFERRED STOCK
|
NOTE 8:-
|
TERM LOAN AND WARRANTS TO PURCHASE CONVERTIBLE PREFERRED STOCK (Cont.)
|
NOTE 8:-
|
TERM LOAN AND WARRANTS TO PURCHASE CONVERTIBLE PREFERRED STOCK (Cont.)
|
NOTE 9:-
|
REVOLVING CREDIT LINE
|
NOTE 9:-
|
REVOLVING CREDIT LINE (Cont.)
|
NOTE 10:-
|
COMMITMENTS AND CONTINGENT LIABILITIES
|
|
a.
|
Lease commitments:
The Company and its subsidiaries lease their operating facilities under non-cancelable operating lease agreements, which expire over the next ten years, with the last ending in December 2024.
The future minimum lease commitments of the Company and its subsidiaries under various non-cancelable operating lease agreements in respect of premises, that are in effect as of June 30, 2015, are as follows:
|
2016
|
$ | 2,256 | ||
2017
|
2,218 | |||
2018
|
2,156 | |||
2019
|
2,042 | |||
2020 and thereafter
|
8,706 | |||
$ | 17,378 |
|
b.
|
Guarantees:
As of June 30, 2015, contingent liabilities exist regarding guarantees in the amount of $813, $53 and $85 in respect of office rent lease agreements, customs transactions and credit card limits, respectively.
|
NOTE 10:-
|
COMMITMENTS AND CONTINGENT LIABILITIES (Cont.)
|
|
c.
|
Royalty commitments:
On April 12, 2009, the Company received approval for a grant in a total amount of $703, from the BIRD-F in conjunction with a mutual development project with an American corporation.
Under the Company’s research and development agreements with the BIRD-F, and pursuant to applicable law, the Company is required to pay royalties at the rate of 5% of gross sales of products developed with funds provided by the BIRD-F, up to an amount equal to 150% of the research and development grants (dollar-linked) received from the BIRD-F. The obligation to pay these royalties is contingent on actual sales of the products and, in the absence of such sales, no payment is required. Royalties payable with respect to grants received from the BIRD-F are linked to the Consumer Price Index in the U.S.
At the end of 2011, the American corporation that had partnered with the Company announced the discontinuation of its solar business, resulting in the termination of the mutual development agreements. As a result, the development has not advanced into a commercial product. The Company does not expect any revenues from such project or the utilization of the technology mutually developed.
As of June 30, 2015, the aggregate contingent liability to the BIRD-F amounted to approximately $1,135 which would be payable by the Company if the project were to generate revenues.
|
|
d.
|
Governmental commitments:
The Company has received royalty-bearing grants sponsored by the Israeli government for the support of research and development activities. Through June 30, 2015, the Company had obtained grants from the OCS for certain of the Company’s research and development projects. The Company is obligated to pay royalties to the OCS, amounting to 4% in the first three years, and 4.5% thereafter, of the sales of the products and other related revenues (based on the dollar equivalent amount of the grant) generated from such projects, up to 100% of the grants received. The royalty payment obligations also bear interest at the LIBOR rate. The obligation to pay these royalties is contingent on actual sales of the applicable products and in the absence of such sales, no payment is required. As of June 30, 2015 and 2014, there have been no sales or revenues on which royalties are payables.
As of June 30, 2015, the aggregate contingent liability to the OCS amounted to $771.
|
NOTE 10:-
|
COMMITMENTS AND CONTINGENT LIABILITIES (Cont.)
|
|
e.
|
Contractual purchase obligations:
The Company has contractual obligations to purchase goods and raw materials. These contractual purchase obligations relate to inventories held by contract manufacturers and purchase orders initiated by the contract manufacturers, which cannot be canceled without penalty. The Company utilizes third parties to manufacture its products. In addition, it acquires raw materials or other goods and services, including product components, by issuing to suppliers authorizations to purchase based on its projected demand and manufacturing needs. As of June 30, 2015, the Company had non-cancelable purchase obligations totaling approximately $92,071 out of which the Company already recorded a provision for loss in the amount of $1,304 (see also Note 6).
|
|
f.
|
Legal claims:
|
|
1.
|
From time to time, the Company may be involved in various claims and legal proceedings. The Company reviews the status of each matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss. These accruals are reviewed at least quarterly and adjusted to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular matter.
|
NOTE 10:-
|
COMMITMENTS AND CONTINGENT LIABILITIES (Cont.)
|
|
2.
|
On February 6, 2012, SolarEdge Technologies Ltd. (“SolarEdge”) was served with a lawsuit filed by Appletech Ltd. (“Appletech”) in the Tel Aviv-Jaffa Court in an amount of NIS 2,208,000 ($642 as of June 30, 2014) alleging that SolarEdge owes payment under a manufacturing agreement and purchase orders. SolarEdge maintained that if any amounts should be deemed due, they would need to be offset with damages caused by Appletech and incurred by SolarEdge. SolarEdge filed a countersuit. The parties agreed to a summary judgment proceeding which was held in July 2014. On July 24, 2014, the judge ruled that SolarEdge is to pay NIS 1,725,000 ($502 as of June 30, 2014) to Appletech within 45 days of the judgment.
|
NOTE 11:-
|
LEASE INCENTIVE OBLIGATION
|
NOTE 12:-
|
CONVERTIBLE PREFERRED STOCK
|
a.
|
Composition of convertible preferred stock of the Company:
|
Authorized
|
Issued and outstanding
|
|||||||||||||||
Number of shares
|
||||||||||||||||
June 30,
|
||||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Stock of $0.0001 par value:
|
||||||||||||||||
Preferred stock
|
95,000,000 | - | - | - | ||||||||||||
Series A Preferred stock
|
- | 15,558,830 | - | 15,558,830 | ||||||||||||
Series B Preferred stock
|
- | 19,010,196 | - | 18,760,196 | ||||||||||||
Series C Preferred stock
|
- | 15,984,655 | - | 15,984,655 | ||||||||||||
Series D Preferred stock
|
- | 16,024,251 | - | 16,024,251 | ||||||||||||
Series D-1 Preferred stock
|
- | 5,100,000 | - | 2,165,441 | ||||||||||||
Series D-2 Preferred stock (*)
|
- | 2,598,528 | - | 2,598,528 | ||||||||||||
Series D-3 Preferred stock
|
- | 6,496,315 | - | 4,330,872 | ||||||||||||
Series E Preferred stock(**)
|
- | - | - | - | ||||||||||||
95,000,000 | 80,772,775 | - | 75,422,773 |
(*)
|
As of June 30, 2013, a total of $5,314 was received on account of preferred stock.
|
(**)
|
In September 2014, the Company entered into a stock purchase agreement with new investors, pursuant to which the Company issued 9,321,019 shares of the Company's Series E Convertible Preferred stock for cash consideration of $25,000, which was received by the end of October 2014.
|
NOTE 12:-
|
CONVERTIBLE PREFERRED STOCK (Cont.)
|
b.
|
Prior to the consummation of the Company’s IPO on March 31, 2015, the Company had the following convertible preferred stock outstanding, all of which was converted into common stock following with the IPO on March 31, 2015 (see Note 1b) which resulted in classification of convertible preferred stock temporary equity in the amount of $140,915 into stockholders’ equity (deficiency):
|
Shares Outstanding
|
Number of Shares of Common Stock issued upon conversion
|
|||||||
Series A Preferred stock
|
15,558,830 | 5,186,276 | ||||||
Series B Preferred stock
|
18,760,196 | 6,253,398 | ||||||
Series C Preferred stock
|
15,984,655 | 5,328,217 | ||||||
Series D Preferred stock
|
16,024,251 | 5,341,416 | ||||||
Series D-1 Preferred stock
|
2,165,441 | 721,813 | ||||||
Series D-2 Preferred stock
|
2,598,528 | 866,175 | ||||||
Series D-3 Preferred stock
|
4,330,872 | 1,443,623 | ||||||
Series E Preferred stock
|
9,321,019 | 3,107,005 | ||||||
84,743,792 | 28,247,923 |
NOTE 13:-
|
STOCK CAPITAL
|
|
a.
|
Composition of common stock capital of the Company:
|
Authorized
|
Issued and outstanding
|
|||||||||||||||
Number of shares
|
||||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014 | |||||||||||||
Stock of $0.0001 par value:
|
||||||||||||||||
Common stock
|
125,000,000 | 34,939,461 | 39,297,539 | 2,809,950 |
|
b.
|
Common stock rights:
Common stock confers upon its holders the right to receive notice of, and to participate in, all general meetings of the Company, where each share of common stock shall have one vote for all purposes; to share equally, on a per share basis, in bonuses, profits or distributions out of fund legally available therefor; and to participate in the distribution of the surplus assets of the Company in the event of liquidation of the Company.
|
c.
|
On March 23, 2015, the Company's board of directors and the requisite holders of the Company's capital stock consented to a 1-for-3 reverse stock split of the Company's common stock.
|
d.
|
As a result of the reverse stock split, (i) every 3 shares of authorized, issued and outstanding common stock was decreased to one share of authorized, issued and outstanding common stock, (ii) the number of shares of common stock into which each outstanding warrant or option to purchase common stock is exercisable was proportionally decreased on a 1-for-3 basis, (iii) all share prices and exercise prices were proportionately increased. All of the share numbers, share prices, and exercise prices have been adjusted within these consolidated financial statements, on a retroactive basis, to reflect this 1-for-3 reverse stock split.
|
e.
|
Stock option plans:
The Company’s 2007 Global Incentive Plan (the “2007 Plan”) was adopted by the board of directors on August 30, 2007. The 2007 Plan terminated upon the Company’s IPO on March 31, 2015 and no further awards may be granted thereunder. All outstanding awards will continue to be governed by their existing terms and 379,358 available options for future grant were transferred to the Company’s 2015 Global Incentive Plan (the “2015 Plan”) and are reserved for future issuances under the 2015 plan.
The 2015 Plan became effective upon the consummation of the IPO. The 2015 Plan provides for the grant of options, RSUs and other share-based awards to directors, employees, officers and consultants of the Company and its Subsidiaries. As of June 30, 2015, a total of 1,822,484 shares of common stock were reserved for issuance pursuant to stock awards under the 2015 Plan (the “Share Reserve”).
|
NOTE 13:-
|
STOCK CAPITAL (Cont.)
|
|
The Share Reserve will automatically increase on January 1st of each year during the term of the 2015 Plan commencing on January 1st of the year following the year in which the 2015 Plan becomes effective in an amount equal to 5% of the total number of shares of capital stock outstanding on December 31st of the preceding calendar year; provided, however, that the Company’s board of directors may determine that there will not be a January 1st increase in the Share Reserve in a given year or that the increase will be less than 5% of the shares of capital stock outstanding on the preceding December 31st. The aggregate maximum number of shares of common stock that may be issued on the exercise of incentive stock options is 10,000,000.
As of June 30, 2015, an aggregate of 1,755,044 options are still available for future grant under the 2015 Plan.
In addition, the Company adopted an Employee Stock Purchase Plan (the “ESPP”) effective upon the consummation of the IPO. As of June 30, 2015, a total of 487,643 shares reserved for issuance under this plan. The number of shares of common stock reserved for issuance under the ESPP will increase automatically on January 1st of each year, for ten years, by the lesser of 1% of the total number of shares of the Company’s common stock outstanding on December 31st of the preceding calendar year or 487,643 shares.
However, the Company’s board of directors may reduce the amount of the increase in any particular year at their discretion, including a reduction to zero.
A summary of the activity in the share options granted to employees and members of the board of directors for the year ended June 30, 2015 and related information follows:
|
Weighted
|
||||||||||||||||
average
|
||||||||||||||||
Weighted
|
remaining
|
|||||||||||||||
Number
|
average
|
contractual
|
Aggregate
|
|||||||||||||
of
|
exercise
|
term
|
intrinsic
|
|||||||||||||
options
|
price
|
in years
|
Value
|
|||||||||||||
Outstanding as of July 1, 2014
|
4,007,116 | $ | 2.13 | 6.82 | $ | 6,384 | ||||||||||
Granted
|
2,183,563 | $ | 4.89 | |||||||||||||
Exercised
|
(31,981 | ) | $ | 2.36 | ||||||||||||
Forfeited or expired
|
(56,476 | ) | $ | 3.42 | ||||||||||||
Outstanding as of June 30, 2015
|
6,102,222 | $ | 3.10 | 7.08 | $ | 202,889 | ||||||||||
Vested and expected to vest as of June 30, 2015
|
5,809,767 | $ | 3.04 | 7.00 | $ | 193,518 | ||||||||||
Exercisable as of June 30, 2015
|
3,551,239 | $ | 2.17 | 5.71 | $ | 121,373 |
NOTE 13:-
|
STOCK CAPITAL (Cont.)
|
Weighted
|
||||||||||||||||
average
|
||||||||||||||||
Weighted
|
remaining
|
|||||||||||||||
Number
|
average
|
contractual
|
Aggregate
|
|||||||||||||
of
|
exercise
|
term
|
intrinsic
|
|||||||||||||
options
|
price
|
in years
|
Value
|
|||||||||||||
Outstanding as of July 1, 2013
|
3,625,366 | $ | 1.92 | 7.39 | $ | 5,757 | ||||||||||
Granted
|
575,457 | $ | 3.41 | |||||||||||||
Exercised
|
(27,459 | ) | $ | 1.86 | ||||||||||||
Forfeited or expired
|
(166,248 | ) | $ | 2.16 | ||||||||||||
Outstanding as of June 30, 2014
|
4,007,116 | $ | 2.13 | 6.82 | $ | 6,384 | ||||||||||
Vested and expected to vest as of June 30, 2014
|
3,746,620 | $ | 2.07 | 6.69 | $ | 6,175 | ||||||||||
Exercisable as of June 30, 2014
|
2,719,543 | $ | 1.81 | 6.08 | $ | 5,206 |
Options
|
Weighted
|
Options
|
Weighted
|
|||||||||||||||
outstanding
|
average
|
exercisable
|
average
|
|||||||||||||||
Range of
|
as of
|
remaining
|
as of
|
remaining
|
||||||||||||||
exercise
|
June 30,
|
contractual
|
June 30,
|
contractual
|
||||||||||||||
price
|
2015
|
Life in years
|
2015
|
Life in years
|
||||||||||||||
$ 0.87 | 557,605 | 3.94 | 490,165 | 3.14 | ||||||||||||||
$ 1.50 - $1.68 | 771,321 | 4.04 | 771,321 | 4.04 | ||||||||||||||
$ 2.01 - $2.46 | 2,075,550 | 6.30 | 1,794,228 | 6.24 | ||||||||||||||
$ 3.03 - $3.96 | 668,270 | 8.54 | 247,767 | 8.46 | ||||||||||||||
$ 5.01 - $5.04 | 1,996,148 | 9.42 | 247,758 | 9.40 | ||||||||||||||
$ 9.36 | 33,328 | 9.59 | - | - | ||||||||||||||
6,102,222 | 7.08 | 3,551,239 | 5.71 |
NOTE 13:-
|
STOCK CAPITAL (Cont.)
|
Options
|
Weighted
|
Options
|
Weighted
|
||||||||||||||
outstanding
|
average
|
exercisable
|
average
|
||||||||||||||
Range of
|
as of
|
remaining
|
as of
|
remaining
|
|||||||||||||
exercise
|
June 30,
|
contractual
|
June 30,
|
contractual
|
|||||||||||||
price
|
2014
|
Life in years
|
2014
|
Life in years
|
|||||||||||||
$0.87 | 490,165 | 4.14 | 490,165 | 4.14 | |||||||||||||
$1.50 - $1.68 | 779,653 | 5.05 | 774,185 | 5.05 | |||||||||||||
$2.01 - $2.46 | 2,114,517 | 7.31 | 1,388,628 | 7.19 | |||||||||||||
$3.03 - $3.51 | 622,781 | 9.46 | 66,565 | 9.19 | |||||||||||||
4,007,116 | 6.82 | 2,719,543 | 6.08 |
|
Options issued to non-employee consultants:
|
a.
|
The Company has granted options to purchase common shares to non-employee consultants as of June 30, 2015 as follows:
|
Options
|
|||||||||||||
outstanding
|
Exercisable
|
||||||||||||
as of
|
as of
|
||||||||||||
Issuance
|
June 30,
|
Exercise
|
June 30,
|
Exercisable
|
|||||||||
Date
|
2015
|
price
|
2015
|
Through
|
|||||||||
July 31, 2008
|
33,333 | $ | 0.87 | 33,333 |
July 31, 2018
|
||||||||
January 26, 2011
|
5,000 | $ | 2.01 | 5,000 |
January 26, 2021
|
||||||||
January 26, 2012
|
33,333 | $ | 2.46 | 33,333 |
January 26, 2022
|
||||||||
October 24, 2012
|
6,666 | $ | 2.46 | 4,583 |
October 24, 2022
|
||||||||
January 23, 2013
|
3,333 | $ | 3.03 | 2,153 |
January 23, 2023
|
||||||||
January 27, 2014
|
4,998 | $ | 3.51 | 1,652 |
January 27, 2024
|
||||||||
May 1, 2014
|
6,000 | $ | 3.51 | 2,042 |
May 1, 2024
|
||||||||
September 17, 2014
|
19,163 | $ | 3.96 | 3,662 |
September 17, 2024
|
||||||||
October 29, 2014
|
6,668 | $ | 5.01 | 890 |
October 29, 2024
|
||||||||
118,494 | 86,648 |
NOTE 13:-
|
STOCK CAPITAL (Cont.)
|
b.
|
The Company has granted options to purchase common shares to non-employee consultants as of June 30, 2014 as follows:
|
Options
|
|||||||||||||
outstanding
|
Exercisable
|
||||||||||||
as of
|
as of
|
||||||||||||
Issuance
|
June 30,
|
Exercise
|
June 30,
|
Exercisable
|
|||||||||
Date
|
2014
|
price
|
2014
|
Through
|
|||||||||
July 31, 2008
|
33,333 | $ | 0.87 | 33,333 |
July 31, 2018
|
||||||||
January 26, 2011
|
5,000 | $ | 2.01 | 5,000 |
January 26, 2021
|
||||||||
January 26, 2012
|
33,333 | $ | 2.46 | 27,778 |
January 26, 2022
|
||||||||
October 24, 2012
|
6,666 | $ | 2.46 | 2,916 |
October 24, 2022
|
||||||||
January 23, 2013
|
8,333 | $ | 3.03 | 3,298 |
January 23, 2023
|
||||||||
January 27, 2014
|
4,998 | $ | 3.51 | 139 |
January 27, 2024
|
||||||||
May 1, 2014
|
6,000 | $ | 3.51 | - |
May 1, 2024
|
||||||||
97,663 | 72,464 |
|
The Company accounts for its options granted to non-employee consultants under the fair value method of ASC 505-50 (“Equity-Based Payments to Non-Employees”).
In connection with the grant of stock options to non-employee consultants, the Company recorded stock compensation expenses in the years ended June 30, 2015, 2014 and 2013 in the amounts of $563, $55 and $45, respectively.
|
|
Stock-based compensation expense for employees and non-employee consultants:
The Company recognized stock-based compensation expenses related to stock options granted to employees and non-employee consultants in the consolidated statement of operations for the years ended June 30, 2015, 2014 and 2013, as follows:
|
Year ended
June 30,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Cost of revenues
|
$ | 442 | $ | 108 | $ | 88 | ||||||
Research and development, net
|
635 | 397 | 381 | |||||||||
Selling and marketing
|
809 | 297 | 317 | |||||||||
General and administrative
|
1,070 | 280 | 292 | |||||||||
Total stock-based compensation expense
|
$ | 2,956 | $ | 1,082 | $ | 1,078 |
a. |
Tax rates in U.S. and Germany:
The Company is subject to U.S. federal tax at the rate of 35%, and the Company’s German subsidiary is subject to German tax at the rate of 33%.
|
|
b.
|
Corporate tax in Israel:
Taxable income of Israeli companies is subject to corporate tax at the rate of 25% in the year ended June 30, 2013, and 26.5% in the year ended June 30, 2014 onwards.
|
|
c.
|
Carryforward tax losses:
As of June 30, 2015, the Israeli subsidiary has approximately $84,700 of Israeli net carryforward tax losses, which has no expiration date.
As of June 30, 2015, the Company has no federal carryforward tax losses.
As of June 30, 2015 , the Company has net operating loss carryforwards for California income tax purposes of approximately $9,794.
The state net operating loss carryforwards, if not utilized, will expire beginning in 2031. Utilization of the net operating loss carryforwards may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended (the “Code”), and similar state provisions. The annual limitation may result in the expiration of net operating losses before utilization.
|
|
d.
|
Deferred income taxes:
Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
|
June 30,
|
||||||||
2015
|
2014
|
|||||||
Assets in respect of:
|
||||||||
Carryforward tax losses (1)
|
$ | 23,033 | $ | 32,203 | ||||
Research and Development carryforward expenses- temporary differences
|
5,173 | 4,310 | ||||||
Other reserves
|
1,346 | 786 | ||||||
29,552 | 37,299 | |||||||
Valuation allowance (2)
|
(29,552 | ) | (37,299 | ) | ||||
Net deferred tax assets
|
$ | - | $ | - |
|
(1)
|
See Note 14c.
|
|
(2)
|
The Company has provided full valuation allowances as of June 30, 2015 and 2014 on deferred tax assets resulting from carryforward tax losses, research and development carryforward expenses and other reserves due to its history of operating losses and current uncertainty concerning the ability to realize these deferred tax assets in the future.
|
|
Undistributed earnings of certain subsidiaries as of June 30, 2015 were immaterial. The Company intends to reinvest these earnings indefinitely in the foreign subsidiaries. As a result, the Company has not provided for any deferred income taxes.
|
|
e.
|
Income (loss) before taxes is comprised as follows:
|
|
f.
|
Taxes on income are comprised as follows:
|
Year ended
June 30,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Federal
|
$ | 1,270 | $ | 11 | $ | - | ||||||
State
|
180 | 89 | - | |||||||||
Foreign
|
300 | 120 | 108 | |||||||||
Taxes on income related to prior years
|
205 | - | - | |||||||||
$ | 1,955 | $ | 220 | $ | 108 |
|
g.
|
Reconciliation of theoretical tax expense to actual tax expense:
The differences between the statutory tax rate of the Company and the effective tax rate are primarily accounted for by the non-recognition of tax benefits from accumulated net carryforward tax losses among the Company and various subsidiaries due to uncertainty of the realization of such tax benefits.
A reconciliation between the theoretical tax expense, assuming all income is taxed at the statutory tax rate applicable to income of the Company, and the actual tax expense (benefit) as reported in the consolidated statements of operations is as follows:
|
Year ended
June 30,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Income (loss) before taxes, as reported in the consolidated statements of operations
|
$ | 23,076 | $ | (21,158 | ) | $ | (28,072 | ) | ||||
Statutory tax rate
|
35 | 35 | 35 | |||||||||
Theoretical tax benefits on the above amount at the US statutory tax rate
|
8,077 | (7,405 | ) | (9,825 | ) | |||||||
Income tax at rate other than the U.S. statutory tax rate
|
(1,763 | ) | 2,007 | 2,167 | ||||||||
Impact of Israel corporate tax rate change from 25% to 26.5%
|
- | (2,103 | ) | - | ||||||||
Taxes on income related to prior years
|
205 | - | - | |||||||||
Non-deductible expenses including equity based compensation expenses
|
3,003 | 467 | 300 | |||||||||
Operating losses and other temporary differences for which valuation allowance was provided
|
(7,747 | ) | 7,165 | 7,466 | ||||||||
State tax
|
180 | 89 | - | |||||||||
Actual tax expense
|
$ | 1,955 | $ | 220 | $ | 108 |
|
h.
|
Tax assessments:
As of June 30, 2015, the Company and certain of its subsidiaries filed U.S. federal and various state and foreign income tax returns. The statute of limitations relating to the consolidated U.S. federal income tax return is closed for all tax years up to and including 2011.
The statute of limitations related to tax returns of the Company’s Israeli subsidiary is closed for all tax years up to and including 2010.
With respect to the Company’s German, Chinese, Australian, Canadian, Dutch, Japaneese, UK and French subsidiaries, the statute of limitations related to its tax returns is open for all tax years since incorporation.
The Company believes that it has adequately provided for any reasonably foreseeable outcome related to tax audits and settlements. The final tax outcome of any Company tax audits could be different from that which is reflected in the Company’s income tax provisions and accruals. Such differences could have a material effect on the Company’s income tax provision and net income (loss) in the period in which such determination is made.
|
|
i.
|
Tax benefits for Israeli companies under the Law for the Encouragement of Capital Investments, 1959 (the “Investment Law”):
The Israeli subsidiary elected tax year 2012 as a "Year of Election" for “Beneficiary Enterprise” status under the Investment Law, which provides certain benefits, including tax exemptions and reduced tax rates. Income not eligible for Beneficiary Enterprise benefits is taxed at a regular corporate tax rate. Upon meeting the requirements under the Investment Law, income derived from Beneficiary Enterprise from productive activity will be exempt from tax for two years from the year in which the Israeli subsidiary first has taxable income, provided that 12 years have not passed from the beginning of the year of election.
If dividends are distributed out of tax exempt profits, the Israeli subsidiary will then become liable for tax at the rate applicable to its profits from the Beneficiary Enterprise in the year in which the income was earned, as if it had not chosen the alternative track of benefits.
The dividend recipient is subject to withholding tax at the rate of 15% applicable to dividends from Beneficiary enterprises, if the dividend is distributed during the tax benefits period or within twelve years thereafter. This limitation does not apply to a foreign investors' company. The Israeli subsidiary currently has no plans to distribute dividends and intends to retain future earnings to finance the development of its business.
|
|
Through June 30, 2015, the Israeli subsidiary had not generated income under the provision of the Investment Law.
|
|
In December 2010, the Israeli Parliament passed the Law for Economic Policy for 2011 and 2012 (Amended Legislation), which, among other things, included an amendment to the Investment Law, effective as of January 1, 2011 (the “Amendment”). In accordance with the 2011 Amendment, the benefit tracks under the Investment Law were modified and a uniform tax rate would apply to companies eligible for the “Preferred Enterprise” status (rather than the previous terminology of “Beneficiary Enterprise”). Companies may elect to irrevocably implement the 2011 Amendment (while waiving benefits provided under the Investment Law as then in effect).
On July 30, 2013, the Israeli Parliament passed a law, which, among other things, was designated to amend the uniform tax rates that were set in the 2011 Amendment, and to increase the tax levy for years 2013 and 2014 (the “New Law”). The New Law increases the Israeli corporate tax rate from 25% to 26.5%, cancels the reduction of corporate tax rate for “Preferred Enterprises”, which was set at 16% for 2014 and succeeding years under the New Law and increases the tax rate on dividends from sources under the Prefeed Enterprise status to 20% commencing on January 1, 2014.
|
|
The Israeli subsidiary currently does not intend to implement the Amendment.
|
|
j.
|
Tax benefits under Israel's Law for Encouragement of Industry (Taxation), 1969:
|
|
The Israeli entity is an "industrial company" under the Law for the Encouragement of Industry (Taxation), 1969, and as such is entitled to certain tax benefits, mainly the amortization of costs relating to know-how and patents, over eight years and accelerated depreciation.
|
|
The following corporate tax benefits, among others, are available to Industrial Companies:
|
·
|
amortization of the cost of purchased a patent, rights to use a patent, and know-how, which are used for the development or advancement of the company, over an eight-year period, commencing on the year in which such rights were first exercised;
|
·
|
under limited conditions, an election to file consolidated tax returns with related Israeli Industrial Companies; and
|
·
|
expenses related to a public offering are deductible in equal amounts over three years.
|
|
Eligibility for benefits under the Industry Encouragement Law is not contingent upon approval of any governmental authority.
There can be no assurance that the Company will continue to qualify as an Industrial Company or that the benefits described above will be available in the future.
|
NOTE 15:-
|
FINANCIAL EXPENSES (INCOME), NET
|
Year ended
June 30,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Remeasurement of warrants to purchase convertible preferred stock
|
$ | 5,350 | $ | (53 | ) | $ | 40 | |||||
Interest on term loan
|
579 | 1,475 | 794 | |||||||||
Other financial expenses related to term loan
|
373 | 31 | 21 | |||||||||
Expenses (income) related to hedging transaction
|
(1,721 | ) | 189 | (207 | ) | |||||||
Interest on short- term loan
|
316 | 537 | 276 | |||||||||
Exchange rate loss (income), net, bank charges and other finance expenses
|
180 | 608 | (312 | ) | ||||||||
$ | 5,077 | $ | 2,787 | $ | 612 |
NOTE 16:-
|
GEOGRAPHIC INFORMATION AND MAJOR CUSTOMER AND PRODUCT DATA
|
Year ended
June 30,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Revenues based on Customers’ location:
|
||||||||||||
United States
|
$ | 238,340 | $ | 64,607 | $ | 15,334 | ||||||
Germany
|
13,290 | 15,133 | 12,692 | |||||||||
Europe (*)
|
52,163 | 38,655 | 40,367 | |||||||||
Rest of the World
|
21,285 | 14,822 | 10,642 | |||||||||
Total revenues
|
$ | 325,078 | $ | 133,217 | $ | 79,035 |
|
(*) Except for Germany
|
NOTE 16:-
|
GEOGRAPHIC INFORMATION AND MAJOR CUSTOMER AND PRODUCT DATA (Cont.)
|
|
*)
|
Less than 10%.
|
Year ended
June 30,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Inverters
|
$ | 156,984 | $ | 62,085 | $ | 35,422 | ||||||
Optimizers
|
158,513 | 65,018 | 38,337 | |||||||||
Others
|
9,581 | 6,114 | 5,276 | |||||||||
Total revenues
|
$ | 325,078 | $ | 133,217 | $ | 79,035 |
Year ended
June 30,
|
||||||||
2015
|
2014
|
|||||||
Israel
|
$ | 14,136 | $ | 5,025 | ||||
Europe
|
230 | 211 | ||||||
U.S.
|
342 | 112 | ||||||
Other
|
9 | 3 | ||||||
Total long-lived assets*
|
$ | 14,717 | $ | 5,351 |
|
*
|
Long-lived assets are comprised of property and equipment, net (long term lease deposits and severance pay fund are not included).
|
NOTE 17:-
|
SUBSEQUENT EVENTS
|
|
On January 9, 2015, a patent infringement lawsuit was filed by Beacon Power LLC, a Delaware limited liability company (“Beacon”), against the Company and a third party in the United States District Court for the Western District of Texas, San Antonio Division which alleges infringement by the Company of two U.S. patents. On March 9, 2015, the Company and Beacon entered into a patent purchase agreement under which the Company agreed to purchase all rights in the aforementioned patents and Beacon agreed to dismiss all outstanding claims against the Company. In July 2015 the Company completed the purchase in return for total consideration of $800.
|
SOLAREDGE TECHNOLOGIES, INC.
|
|||
By:
|
/s/ Guy Sella | ||
Name: Guy Sella | |||
Title: Chief Executive Officer and Chairman | |||
Date: | 8/20/2015 |
Signature
|
Title
|
Date
|
||
/s/ Guy Sella
Guy Sella
|
Chief Executive Officer and Chairman
(
Principal Executive Officer
)
|
8/20/2015 | ||
/s/Ronen Faier
Ronen Faier
|
Chief Financial Officer
(
Principal Financial and Accounting Officer
)
|
8/20/2015 | ||
Dan Avida
|
Director
|
|||
/s/Yoni Cheifetz
Yoni Cheifetz
|
Director
|
8/20/2015 | ||
/s/Marcel Gani
Marcel Gani
|
Director
|
8/20/2015 | ||
/s/Doron Inbar
Doron Inbar
|
Director
|
8/20/2015 | ||
/s/Avery More
Avery More
|
Director
|
8/20/2015 | ||
/s/Tal Payne
Tal Payne
|
Director
|
8/20/2015 |
Exhibit
No.
|
Description
|
Incorporation by Reference
|
||
3.1
|
Amended and Restated Certificate of Incorporation
|
Incorporated by reference to Exhibit 4.1 to Form S-8 (Registration No. 333-203193) filed with the SEC on April 2, 2015
|
||
3.2
|
Amended and Restated By-Laws
|
Incorporated by reference to Exhibit 4.2 to Form S-8 (Registration No. 333-203193) filed with the SEC on April 2, 2015
|
||
4.1
|
Specimen Common Stock Certificate of the Registrant
|
Incorporated by reference to Exhibit 4.1 of Amendment No. 1 to Form S-1 (Registration No. 333-202159) filed with the SEC on March 11, 2015
|
||
4.2
|
Fifth Amended and Restated Investors’ Rights Agreement, dated as of September 17, 2014, among SolarEdge Technologies, Inc. and the investors party thereto
|
Incorporated by reference to Exhibit 4.2 to Form S-1 (Registration No. 333-202159) filed with the SEC on February 18, 2015
|
||
4.3
|
Warrant to Purchase Shares of SolarEdge Technologies, Inc., dated December 28, 2012
|
Incorporated by reference to Exhibit 4.3 to Form S-1 (Registration No. 333-202159) filed with the SEC on February 18, 2015
|
||
10.1
|
Second Amended and Restated Loan and Security Agreement, dated as of February 17, 2015, among Silicon Valley Bank, SolarEdge Technologies Ltd., SolarEdge Technologies, Inc. and SolarEdge Technologies GmbH
|
Incorporated by reference to Exhibit 10.1 of Amendment No. 1 to Form S-1 (Registration No. 333-202159) filed with the SEC on March 11, 2015
|
||
10.2†
|
Employment Agreement, dated August 26, 2007, between SolarEdge Technologies, Inc. and Guy Sella
|
Incorporated by reference to Exhibit 10.2 of Amendment No. 1 to Form S-1 (Registration No. 333-202159) filed with the SEC on March 11, 2015
|
||
10.3
|
Employment Agreement, dated December 1, 2010, between
SolarEdge Technologies, Inc. and Ronen Faier
|
Incorporated by reference to Exhibit 10.3 of
Amendment No. 1 to Form S-1 (Registration
No. 333-202159) filed with the SEC on March
11, 2015
|
||
10.4†
|
Employment Agreement, dated May 17, 2009, between SolarEdge Technologies, Inc. and Zvi Lando
|
Incorporated by reference to Exhibit 10.3 of Amendment No. 1 to Form S-1 (Registration No. 333-202159) filed with the SEC on March 11, 2015
|
||
10.5†
|
SolarEdge Technologies, Inc. 2007 Global Incentive Plan.
|
Incorporated by reference to Exhibit 99.3 to Form S-8 (Registration No. 333-203193) filed with the SEC on April 2, 2015
|
||
10.6†
|
SolarEdge Technologies, Inc. 2015 Global Incentive Plan
|
Incorporated by reference to Exhibit 99.1 to Form S-8 (Registration No. 333-203193) filed with the SEC on April 2, 2015
|
||
10.7†
|
SolarEdge Technologies, Inc. 2015 Employee Stock Purchase Plan
|
Incorporated by reference to Exhibit 99.2 to Form S-8 (Registration No. 333-203193) filed with the SEC on April 2, 2015
|
||
10.8
|
Manufacturing Services Agreement, dated February 14, 2010 between Flextronics (Israel) Ltd. and SolarEdge Technologies Ltd. (previously filed as Exhibit 10.10 to the Company's Registration Statement on Form S-1, filed with the Commission on February 18, 2015
|
Incorporated by reference to Exhibit 10.10 to
Form S-1 (Registration No. 333-202159) filed
with the SEC on February 18, 2015
|
10.9#
|
Interim Agreement, dated April 7, 2013 among Flextronics Industrial Ltd. between Flextronics (Israel) Ltd. and SolarEdge Technologies Ltd. (previously filed as Exhibit 10.11 to the Company's Registration Statement on Form S-1, filed with the Commission on February 18, 2015)
|
Incorporated by reference to Exhibit 10.11 to Form S-1 (Registration No. 333-202159) filed with the SEC on February 18, 2015
|
||
10.10#
|
Manufacturing Services Agreement, dated June 9, 2011 between Jabil Circuit Inc. and SolarEdge Technologies Inc. (previously filed as Exhibit 10.11 to the Company's Registration Statement on Form S-1, filed with the Commission on February 18, 2015)
|
Incorporated by reference to Exhibit 10.12 to Form S-1 (Registration No. 333-202159) filed with the SEC on February 18, 2015
|
||
10.11 †
|
Form of Non-Employee Director RSU Award Agreement
|
Filed with this report.
|
||
10.12 †
|
Form of Non-Employee Director Stock Option Award Agreement
|
Filed with this report.
|
||
10.13 †
|
Form of Employee RSU Award Agreement
|
Filed with this report.
|
||
10.14 †
|
Form of Employee Stock Option Award Agreement
|
Filed with this report.
|
||
21.1
|
List of Subsidiaries of the Registrant
|
Filed with this report.
|
||
23.1
|
Consent of Kost Forer Gabbay & Kasierer, independent registered public accounting firm
|
Filed with this report.
|
||
24.1
|
Power of Attorney (included in signature page)
|
Filed with this report.
|
||
31.1
|
Certification of Chief Executive Officer Pursuant to Rules 13a-14(a) and15d-14(a) of the Securities Exchange Act of 1934, as amended
|
Filed with this report.
|
||
31.2
|
Certification of Chief Financial Officer Pursuant to Rules 13a-14(a) and15d-14(a) of the Securities Exchange Act of 1934, as amended
|
Filed with this report.
|
||
32.1
|
Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
Filed with this report
|
||
32.2
|
Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
Filed with this report.
|
||
101.INS
|
XBRL Instance Document
|
Filed with this report.
|
||
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
Filed with this report.
|
||
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
Filed with this report.
|
||
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
Filed with this report.
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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Filed with this report.
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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Filed with this report.
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Participant Name
:
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Grant Date
:
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Number of Restricted Stock Units
:
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·
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[_______] of the Restricted Stock Units (which is 33% of the total Restricted Stock Units) will vest on each anniversary of the Grant Date, subject in each case to Continuous Service through each such date.]
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·
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[_______] of the Restricted Stock Units (which is 100% of the total Restricted Stock Units) will vest on the earlier of: (i) the first anniversary of the Grant Date or (ii) the next Annual Meeting of Stockholders of the Company occurring after the Grant Date, subject to Continuous Service through the applicable vesting date.]
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·
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[_______] of the Option Shares (which is 33% of the total Option Shares) will become vested and exercisable on each anniversary of the Grant Date, subject in each case to Continuous Service through each such vesting date.]
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·
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[_______] of the Option Shares (which is 100% of the total Option Shares) will become vested and exercisable on the earlier of: (i) the first anniversary of the Grant Date or (ii) the next Annual Meeting of Stockholders of the Company occurring after the Grant Date, subject to Continuous Service through the applicable vesting date.]
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Participant Name
:
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Grant Date
:
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Vesting Commencement Date
:
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Number of Restricted Stock Units
:
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·
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[_______] of the Restricted Stock Units (which is 25% of the total Restricted Stock Units) will vest one year from the Vesting Commencement Date; and
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·
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The remaining [_______] Restricted Stock Units (which is 75% of the total Restricted Stock Units) will vest in 36 equal installments of [_______] shares each at the end of each calendar month thereafter, with all remaining unvested Restricted Stock Units becoming vested at the end of the 36th monthly installment,
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·
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[_______] of the Option Shares (which is 25% of the total Option Shares) will become vested and exercisable one year from the Grant Date; and
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·
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The remaining [_______] Option Shares (which is 75% of the total Option Shares) will become vested and exercisable in 36 equal installments of [_______] shares each at the end of each calendar month thereafter, with all remaining unvested Option Shares becoming vested and exercisable at the end of the 36
th
monthly installment,
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Name
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Jurisdiction of organization
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SolarEdge Technologies Ltd.
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Israel
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SolarEdge Technologies GmbH
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Germany
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SolarEdge Technologies China
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China
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SolarEdge Technologies (Australia) PTY LTD
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Australia
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SolarEdge Technologies (Canada) Ltd.
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Canada
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SolarEdge Technologies (Holland) B.V.
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The Netherlands
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SolarEdge Technologies (Japan) Co., Ltd.
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Japan
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SolarEdge Technologies (France) SARL.
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France
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SolarEdge Technologies (UK) Ltd.
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United Kingdom
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Kost Forer Gabbay & Kasierer
A Member of Ernst & Young Global
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/s/
Guy Sella
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Guy Sella
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Chief Executive Officer and Chairman of the Board
(Principal Executive Officer)
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/s/
Ronen Faier
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Ronen Faier
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Chief Financial Officer
(Principal Financial Officer)
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/s/
Guy Sella
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Guy Sella
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Chief Executive Officer and Chairman of the Board
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/s/ RONEN FAIER
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Ronen Faier
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Chief Financial Officer
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