Business Context and Reporting Period
This Form 6-K filing by D-MARKET Electronic Services & Trading (Hepsiburada) is dated December 5, 2022. The report discloses a proposed settlement of two existing class action lawsuits filed in the United States regarding the Company's July 1, 2021, initial public offering (IPO).
Key Financial Metrics
The filing does not provide standard financial performance metrics such as revenue, profit, cash flow, margins, debt, or liquidity for the reporting period. The only financial figure disclosed relates to the legal settlement:
- Total Settlement Amount: $13.9 million to resolve both lawsuits.
- Contribution by Selling Shareholder: TurkCommerce B.V. is expected to contribute $3,975,000 to the settlement fund.
- Company Contribution: The Company will fund the remainder of the settlement amount.
Material Changes
The primary material event is the execution of a binding term sheet on December 2, 2022, to settle two class action lawsuits:
- Case 1: Filed September 28, 2021, in the U.S. District Court for the Southern District of New York (Case No. 1:21-cv-08634-PKC).
- Case 2: Filed October 21, 2021, in the Supreme Court of the State of New York (Case No. 655701/2021).
- Defendants: The settlement covers claims against the Company, its board members at the time of the IPO, senior management, underwriters, and TurkCommerce B.V.
Outlook, Risks, and Management Commentary
Management Commentary: The Company maintains that the claims are without merit. Management believes the settlement will allow the Company to focus on its path to profitability without the distraction of litigation. The settlement contains no admission of liability, wrongdoing, or responsibility.
Contingencies and Risks:
- Court Approval: The settlement is subject to approval and/or entry of judgment by the respective courts, a process that could take several months.
- Uncertainty: There is no assurance that either court will approve the settlement.
- Forward-Looking Statements: The filing includes standard disclaimers regarding risks such as plaintiffs opting out of the settlement or appeals being filed.
Investor Verification Checklist
- Verify the final approval status of the settlement by the U.S. District Court for the Southern District of New York and the Supreme Court of the State of New York.
- Confirm the exact timing of the cash outflow for the Company's portion of the $13.9 million settlement.
- Monitor for any updates regarding plaintiffs opting out of the settlement or filing appeals.
- Review subsequent filings for the impact of this settlement on the Company's quarterly or annual financial statements.