The trial of the Convexom skimmer company turned into a complete trial this morning (Thursday), when Judge Hagai Brenner informed the company’s shareholders, the American BRG Foundation and the NSO management group headed by Julio, that in case neither party provides funding, it is expected to receive a liquidation order.
Not only is the fate of the skimmer company – a small company that employs 35 people selling for a few million dollars – but the ability of the two major shareholders in the NSO group – his group Julio (30%) and the BRG fund – to work with each other.
NSO attorneys have not provided an answer as to whether they are willing to fund Convexom’s operations in the coming months, which have reached a deficit of $ 9.5 million; While the representative of the BRG fund, Howard Berkowitz, conditioned the flow of funds on the immediate separation of the activities of the skimmer company from the Israeli spy company. Berkowitz said that “the trustee appointed to the company told us that the decision we made on the board not to sell the software to high-risk countries – affects NSO’s ability to continue to provide services to Convexom.”
Judge Brenner presented to the American Fund, which controls the group of NSO companies with 70% of its shares, a week to return an answer as to whether it is willing to continue financing Convexum and in what amount. He will then decide which route of rehabilitation the company will go. The company currently has only 1.4 million euros in cash, which will be enough to pay salaries for a month or two, and it is possible that the company will be able to continue operating for a few more months until it is sold.
One of the significant problems involved in separating Convexum from NSO is the very fact that it is dependent on the parent company for marketing, sales and finance purposes. Convaxom employs only development workers, and after the sale to the offensive cyber company for $ 60 million in 2020, eight workers moved to help sell its systems worldwide and apparently combine its sales with other products such as Pegasus.
Advocate Shlomo Ness, representing Convexum, argued that in the current situation when the company is not independent, “no one would want to buy a business half of which is in the NSO group, let alone when it is on the US blacklist and the economic situation it is in. About- According to the trustee’s report, in order to continue operating the company, NSO employees must also be funded. ”
Advocate Ness added that the very fact that Convexom’s sales company, like many companies in the NSO Group’s value chain, is located in Luxembourg, makes it even more difficult for the company to operate. “And what will happen if NSO collapses in a month? Will this torpedo called ‘Convexum’ sink along with the cargo ship named NSO? “
The legal battle over Convexom between the shareholders of the NSO Group, the BRG Fund and the group of company executives led by Shalio Julio, is only an expression of a larger struggle, in which Julio draws the sale of the entire NSO group into the hands of Integrity, and the American fund that does not recognize this transaction. Julio. Both sides accuse each other of not sharing data and taking strategic business moves without coordination.
Above all hovers the question of NSO’s debt, which stands at $ 460 million, and how it is deployed. The question arises as to whether NSO does not agree to pay the salaries of Convexom employees, at least not explicitly to the court, as part of a strategic move with the intention of taking over after BRG waives it – or whether the company is having difficulty making payments, as trustee Advocate Uri Gaon told Berkowitz. According to the latter.