SOLAREDGE TECHNOLOGIES, INC. 10-Q

ITEM 1 LEGAL PROCEEDINGS In our Annual Report on Form 10-K for the year ended December 31, 2020 we disclosed that in May 2019, we were served with three lawsuits by Huawei Technologies Co., Ltd., a Chinese entity (“Huawei”), against our two Chinese subsidiaries and our equipment manufacturer in China. The lawsuits, filed in the Guangzhou Intellectual property court, alleged infringement of three patents and ask for an injunction of manufacture, use, sale and offer for sale,. A first-instance judgment was issued on August 7, 2020 ordering the three defendants to collectively pay damages in the amount of approximately $1.6 million (including court fees) with respect of one of the patents. We appealed this judgement with the Supreme People’s Court. The first instance court’s judgement is not effective or enforceable pending the appeal. In addition, in January 2021, Huawei filed a motion to increase its claimed monetary damages to approximately $7.7 million and for a preliminary injunction with respect to the second lawsuit. In February 2021, the preliminary injunction was rendered by the Guangzhou intellectual property court applying to seven inverter models. In line with the court’s mandate, we took immediate action to make software changes to meet the court order and also appealed the decision. In addition, on February 22, 2021 a first-instance judgment was issued ordering the three defendants to collectively pay damages in the amount of approximately $7.7 million (including court fees) with respect to the second patent. We appealed this judgement with the Supreme People’s Court. The first instance court’s judgement is not effective or enforceable pending the appeal. We believe that we have meritorious defenses to the claims asserted by Huawei. In addition in the normal course of business, we may from time to time be named as a party to various legal claims, actions and complaints (including as a result of initiating such legal claims, action or complaints on behalf of the Company), including the matters described in Item 3 – “Legal Proceedings” of our Annual Report on Form 10-K/A for the period ended December 31, 2020. It is impossible to predict with certainty whether any resulting liability from any such legal claims, actions or complaints would have a material adverse effect on our financial position, results of operations or cash flows. ITEM 1A RISK FACTORS There have been no material changes to the risk factors as described in Part I, Item 1A, "Risk Factors," in our Annual Report on Form 10-K/A for the year ended December 31, 2020. ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS None. 16 ITEM 3 DEFAULTS UPON SENIOR SECURITIES None. ITEM 4 MINE SAFETY DISCLOSURES Not applicable.