☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Ordinary Shares, par value ILS 0.10 per share | ALLT | The Nasdaq Stock Market, LLC |
Large accelerated filer ☐ | Accelerated filer ☒ | Non-accelerated filer ☐ |
Emerging growth company ☐ |
U.S. GAAP ☒ | International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ | Other ☐ |
A. [Reserved] | |
B. Capitalization and Indebtedness | |
C. Reasons for Offer and Use of Proceeds | |
D. Risk Factors | |
A. History and Development of Allot | |
B. Business Overview | |
C. Organizational Structure | |
D. Property, Plant and Equipment | 41 |
A. Operating Results | |
B. Liquidity and Capital Resources | |
C. Research and Development, Patents and Licenses | 49 |
D. Trend Information | 50 |
E. Critical Accounting Estimates | 50 |
A. Directors and Senior Management | |
B. Compensation of Officers and Directors | |
C. Board Practices | |
D. Employees | |
E. Share Ownership | |
A. Major Shareholders | |
B. Record Holders | |
C. Related Party Transactions | |
D. Interests of Experts and Counsel | |
A. Consolidated Financial Statements and Other Financial Information. | |
B. Significant Changes | |
A. Share Capital | |
B. Memorandum and Articles of Association | |
C. Material Contracts | |
D. Exchange Controls | |
E. Taxation | |
F. Dividends and Paying Agents | |
G. Statement by Experts | |
H. Documents on Display | |
I. Subsidiary Information | |
A. Material Modifications to the Rights of Security Holders | |||
B. Use of Proceeds | |||
96 | |||
97 | |||
B. Capitalization and Indebtedness |
C. Reasons for Offer and Use of Proceeds |
D. Risk Factors |
A. History and Development of Allot |
B. Business Overview |
• | Network Security Threats: As reliance on the Internet has grown, service providers and enterprise networks have become increasingly vulnerable to a wide range of security threats, including DDoS attacks, spambots, malware and other threats. These attacks are designed to flood the network with traffic that consumes all available bandwidth, impeding operators’ ability to provide high quality broadband access to subscribers or preventing enterprises from using mission-critical applications. These threats also compromise network and data integrity. We believe service providers and enterprises can better protect against such attacks by detecting and neutralizing malicious traffic at very early stages, before such threats can compromise network integrity and services. |
• | End-User Security Threats: Broadband devices and mobile devices have also become increasingly vulnerable to online threats, such as malware, ransomware and phishing. Broadband and mobile device users have limited cyber-security expertise and therefore present easy targets for cybercriminals. In recent years, we have seen a growing demand from large and mid-size operators to offer such security services to their |
• | Allot Secure Management (ASM): The Allot Secure Management platform creates a unified security experience for Allot security consumers by providing an end-to-end security management infrastructure that seamlessly communicates with and integrates each enforcement |
Allot NetworkSecure: A multi-tenant solution that allows the service provider to offer opt-in security services that allow subscribers to define and enforce safe-browsing limits (Parental Control) and to prevent incoming malware from infecting their devices (Anti-Malware). Services are enforced at the network level, requiring no device involvement or battery consumption. |
Allot HomeSecure: A multi-tenant solution that allows the service provider to offer opt-in security services that allow subscribers to define and enforce safe-browsing limits (Parental Control) and to prevent incoming malware from infecting their devices (Anti-Malware). Services are enforced at the home router & network level. |
Allot DNSecure: A multi-tenant solution that allows the service provider to offer opt-in security services that allow subscribers to define and enforce safe-browsing limits (Parental Control) and to prevent incoming malware from infecting their devices (Anti-Malware). Services are enforced at the network DNS requests level, requiring no device involvement or battery consumption. |
Allot IoTSecure: A multi-tenant solution that enables CSPs to grant each of its enterprise customers a dedicated management console for monitoring and securing their mobile IoT deployments on the CSP network. |
Allot BusinessSecure: A multi-tenant solution that provides a simple, reliable and secure network for the connected business achieved through a small firmware agent installed on the business router, supported by the Allot Secure cloud, and a mobile application. These elements, working in concert, provide visibility into the network and block both external and internal attacks. |
EndPoint Secure: A multi-tenant solution that functions as an extension of NetworkSecure, securing the subscribers’ devices while off the Internet, producing seamless customer protection using market leading malware protection and controls. |
Allot Secure Cloud: The Allot Secure cloud provides to each enforcement point in the security architecture up-to-date threat intelligence, web categorization and device fingerprint data. The Allot Secure cloud uses machine learning and Artificial Intelligence technologies to identify connected devices, create device-specific profiles and provide anti-virus screening. |
• | Allot DDoS |
• | Smart5G: Deliver granular visibility and control of 5G network and application performance to help CSPs meet customer expectations from eMBB, mMTC, and URLLC. |
• | SmartVisibility: Access accurate usage data and analytics to improve network performance and deliver the services subscribers want. Make informed business decisions based on granular insights. |
• | SmartTraffic QoE: Leverage SmartVisibility to reap the benefits of automated congestion management and QoE optimization. Get the most out of deployed infrastructure and defer expansion. |
• | SmartPCC: Innovate and grow revenue by rolling out personalized service plans that cater to the unique and dynamic needs of prepaid, postpaid, and business customers. |
• | SmartSentinel: Navigate the regulatory landscape with flexibility and precision. Comply with URL filtering, data retention and GDPR regulations efficiently and cost effectively. |
• | Smart NetProtect: Allot’s multi-layer approach provides protection from multi-vector attacks against network infrastructure, subscribers, and applications. It is composed of multiple protection capabilities: Anti-DDoS, Anti-Botnet, Firewall and QoE protection. |
Revenues by Location | ||||||||||||||||||||||||
2021 | % Revenues | 2020 | % Revenues | 2019 | % Revenues | |||||||||||||||||||
($ in thousands) | ||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Europe | $ | 58,414 | 40 | % | $ | 94,644 | 70 | % | $ | 36,199 | 33 | % | ||||||||||||
Asia and Oceania | 44,227 | 30 | % | 23,519 | 17 | % | 42,994 | 39 | % | |||||||||||||||
Middle East and Africa | 23,568 | 16 | % | 9,628 | 7 | % | 14,331 | 13 | % | |||||||||||||||
Americas | 19,391 | 14 | % | 8,131 | 6 | % | 16,576 | 15 | % | |||||||||||||||
Total Revenues | $ | 145,600 | 100 | % | $ | 135,922 | 100 | % | $ | 110,100 | 100 | % |
Revenues by Location | ||||||||||||||||||||||||
($ in thousands) | ||||||||||||||||||||||||
2023 | % Revenues | 2022 | % Revenues | 2021 | % Revenues | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Europe | $ | 39,945 | 43 | % | $ | 41,773 | 34 | % | $ | 58,414 | 40 | % | ||||||||||||
Asia and Oceania | 20,547 | 22 | % | 29,888 | 24 | % | 44,227 | 30 | % | |||||||||||||||
Middle East and Africa | 16,116 | 17 | % | 29,285 | 24 | % | 23,568 | 16 | % | |||||||||||||||
Americas | 16,542 | 18 | % | 21,791 | 18 | % | 19,391 | 14 | % | |||||||||||||||
Total Revenues | $ | 93,150 | 100 | % | $ | 122,737 | 100 | % | $ | 145,600 | 100 | % |
C. Organizational Structure |
Company | Jurisdiction of Incorporation | Percentage Ownership | ||||
Allot Communications Inc. | United States | 100 | % | |||
Allot Communications Europe SARL | France | 100 | % | |||
Allot Communications (Asia Pacific) Pte. Limited | Singapore | 100 | % | |||
Allot Communications (UK) Limited (with branches in | United Kingdom | 100 | % | |||
Allot Communications Japan K.K. | Japan | 100 | % | |||
Allot Communications Africa (PTY) Ltd | South Africa | 100 | % | |||
Allot Communications India Private Ltd | India | 100 | % | |||
Allot Communications Spain, S.L. Sociedad Unipersonal | Spain | 100 | % | |||
Allot Communications (Colombia) S.A.S | Colombia | 100 | % | |||
Allot MexSub | Mexico | 100 | % | |||
Allot Turkey Komunikasion Hizmeleri limited | Turkey | 100 | % | |||
Allot Australia (PTY) LTD | Australia | 100 | % |
40 D. Property, Plant and Equipment |
A. Operating Results |
Year Ended December 31, | ||||||||
2022 | 2023 | |||||||
Revenues: | ||||||||
Products | 49.7 | 40.4 | ||||||
Services | 50.3 | 59.6 | ||||||
Total revenues | 100 | 100 | ||||||
Cost of revenues: | ||||||||
Products | 17.4 | 17.9 | ||||||
Services | 15.1 | 25.5 | ||||||
Total cost of revenues | 32.5 | 43.4 | ||||||
Gross profit | 67.5 | 56.6 | ||||||
Operating expenses: | ||||||||
Research and development, net | 40.6 | 42 | ||||||
Sales and marketing | 40.2 | 47.1 | ||||||
General and administrative | 13 | 37.2 | ||||||
Total operating expenses | 93.8 | 126.3 | ||||||
Operating loss | 26.2 | 69.7 | ||||||
Financing income, net | 1.7 | 3.45 | ||||||
Loss before income tax expense | 24.5 | 66.26 | ||||||
tax expense | 1.5 | 1.16 | ||||||
Net loss | 26.1 | 67.4 |
Year Ended December 31, | ||||||||
2020 | 2021 | |||||||
Revenues: | ||||||||
Products | 68.1 | 60.6 | ||||||
Services | 31.9 | 39.4 | ||||||
Total revenues | 100 | 100 | ||||||
Cost of revenues: | ||||||||
Products | 21 | 21.7 | ||||||
Services | 8.5 | 8.9 | ||||||
Total cost of revenues | 29.5 | 30.6 | ||||||
Gross profit | 70.5 | 69.4 | ||||||
Operating expenses: | ||||||||
Research and development, net | 32 | 32.3 | ||||||
Sales and marketing | 35 | 35.9 | ||||||
General and administrative | 10.2 | 10.4 | ||||||
Total operating expenses | 77.2 | 78.6 | ||||||
Operating loss | 6.6 | 9.3 | ||||||
Financing income, net | 1.3 | 0.2 | ||||||
Loss before income tax expense | 5.3 | 9.1 | ||||||
tax expense | 1.6 | 1.3 | ||||||
Net loss | 6.9 | 10.3 |
B. Liquidity and Capital Resources |
• | Local Manufacturing Obligation. We must manufacture the products developed with these grants in Israel. We may manufacture the products outside Israel only if we receive prior approval from the IIA (such approval is not required for the transfer of up to 10% of the manufacturing capacity in the aggregate, in which case a notice must be provided to the IIA and not objected to by the IIA within 30 days of such notice). |
• | Know-How Transfer Limitation. We have certain limitations on our ability to transfer know-how funded by the IIA. Approval of any transfer of IIA funded know-how to another Israeli company will be granted only if the recipient abides by the provisions of the Innovation Law and related regulations. Transfer of IIA funded know-how outside of Israel requires prior approval of the IIA and may be subject to payments to the IIA. |
• | Change of Control. We must notify the IIA in respect of any change in the means of control in our company, including ownership of our shares. In respect of any non-Israeli citizen, resident or entity that, among other things, (i) becomes a holder of 5% or more of our share capital or voting rights, (ii) is entitled to appoint one or more of our directors or our chief executive officer or (iii) |
D. Trend Information |
E. Critical Accounting Estimates |
A. Directors and Senior Management |
Name | Age | Position | |||
Directors | |||||
Chairman of the Board | |||||
Director | |||||
Director | |||||
Director | |||||
Director | |||||
Director | |||||
Executive Officers | |||||
Erez Antebi | Chief Executive Officer and President | ||||
Ziv Leitman | Chief Financial Officer | ||||
Rael Kolevsohn | Vice President, Legal Affairs, General Counsel and Company Secretary | ||||
Senior Vice President, Cyber Security | |||||
Assaf Eyal | Senior Vice President, Global Sales | ||||
Vered Zur | Vice President, Marketing | ||||
Mark Shteiman | Senior Vice President Allot Smart | ||||
Noam Lila | Senior Vice President, Customer Success and Operations | ||||
Board Diversity Matrix | ||||
Country of Principal Executive Offices: | Israel | |||
Foreign Private Issuer | Yes | |||
Disclosure Prohibited under Home Country Law | No | |||
Total Number of Directors | 8 | |||
Female | Male | Non-Binary | Did Not Disclose Gender | |
Part I: Gender Identity | ||||
Directors | 2 | 6 | 0 | 0 |
Part II: Demographic Background | ||||
Underrepresented Individual in Home Country Jurisdiction | 0 | |||
LGBTQ+ | 0 | |||
Did Not Disclose Demographic Background | 8 |
Name and Principal Position (1) | Salary ($) | Bonus and Commission ($) (2) | Equity-Based Compensation ($) (3) | All Other Compensation ($) (4) | Total ($) | |||||||||||||||||||||||||||||||||||
Erez Antebi, President and Chief Executive Officer | 297,226 | 124,707 | 373,296 | 76,902 | 872,131 | |||||||||||||||||||||||||||||||||||
Name and Principal Position(1) | Salary ($) | Bonus and Commission ($)(2) | Equity-Based Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | |||||||||||||||||||||||||||||||||||
Ziv Leitman, Chief Financial Officer | 297,226 | 68,114 | 243,950 | 98,659 | 707,949 | 260,726 | - | 390,285 | 68,340 | 719,352 | ||||||||||||||||||||||||||||||
Keren Rubanenko, Senior Vice President, Cyber Security Business Unit | 260,073 | 58,857 | 284,447 | 71,016 | 674,393 | 246,233 | - | 358,285 | 79,402 | 683,920 | ||||||||||||||||||||||||||||||
Yael Villa, Former Senior Vice President, Cyber Security Business Unit | 278,649 | 59,877 | 195,333 | 93,515 | 627,374 | |||||||||||||||||||||||||||||||||||
Rael Kolevsohn, Vice President, Legal Affairs, General Counsel and Company Secretary | 242,425 | 56,194 | 103,530 | 68,020 | 470,169 | |||||||||||||||||||||||||||||||||||
Assaf Eyal, Senior Vice President, Global Sales | 260,726 | 35,364 | 289,370 | 87,894 | 673,355 | |||||||||||||||||||||||||||||||||||
Erez Antebi, President and Chief Executive Officer | 260,726 | - | 330,799 | 68,360 | 659,885 | |||||||||||||||||||||||||||||||||||
Mark Shteiman, Senior Vice President Allot Smart Business Unit | 228,136 | 29,701 | 238,625 | 64,096 | 530,857 |
(1) | Unless otherwise indicated herein, all Covered Executives are full-time employees of Allot. |
(2) | Amounts reported in this column represent annual incentive bonuses and commissions granted to the Covered Executives based on performance-metric based formulas set forth in their respective employment agreements. |
(3) | Amounts reported in this column represent the grant date fair value computed in accordance with accounting guidance for share-based compensation. For a discussion of the assumptions used in reaching this valuation, see Note |
(4) | Amounts reported in this column include personal benefits and perquisites, including those mandated by applicable law. Such benefits and perquisites may include, to the extent applicable to the respective Covered Executive, payments, contributions and/or allocations for savings funds (e.g., Managers Life Insurance Policy), education funds (referred to in Hebrew as “keren hishtalmut”), pension, severance, vacation, car or car allowance, medical insurances and benefits, risk insurance (e.g., life insurance or work disability insurance), telephone expense reimbursement, convalescence or recreation pay, relocation reimbursement, payments for social security, and other personal benefits and perquisites consistent with the Company’s guidelines. All amounts reported in the table represent incremental cost to the Company. |
• | Objectives: To attract, motivate and retain highly experienced personnel who will provide leadership for Allot’s success and enhance shareholder value, and to promote for each executive officer an opportunity to advance in a growing organization. |
• | Compensation instruments: Includes base salary; benefits and perquisites; cash bonuses; equity-based awards; and retirement and termination arrangements. |
• | Ratio between fixed and variable compensation: Allot aims to balance the mix of fixed compensation (base salary, benefits and perquisites) and variable compensation (cash bonuses and equity-based awards) pursuant to the ranges set forth in the compensation policy in order, among other things, to tie the compensation of each executive officer to Allot’s financial and strategic achievements and enhance the alignment between the executive officer’s interests and the long-term interests of Allot and its shareholders. |
• | Internal compensation ratio: Allot will target a ratio between overall compensation of the executive officers and the average and median salary of the other employees of Allot, as set forth in the compensation policy, to ensure that levels of executive compensation will not have a negative impact on work relations in Allot. |
• | Base salary, benefits and perquisites: The compensation policy provides guidelines and criteria for determining base salary, benefits and perquisites for executive officers. |
• | Cash bonuses: Allot’s policy is to allow annual cash bonuses, which may be awarded to executive officers pursuant to the guidelines and criteria, including maximum bonus opportunities, set forth in the compensation policy. |
• | “Clawback”: In the event of an accounting restatement, Allot shall be entitled to recover from current executive officers bonus compensation in the amount of the excess over what would have been paid under the accounting restatement, with a three-year look-back. |
• | Equity-based awards: Allot’s policy is to provide equity-based awards in the form of share options, restricted share units and other forms of equity, which may be awarded to executive officers pursuant to the guidelines and criteria, including minimum vesting period, set forth in the compensation policy. |
• | Retirement and termination: The compensation policy provides guidelines and criteria for determining retirement and termination arrangements of executive officers, including limitations thereon. |
• | Exculpation, indemnification and insurance: The compensation policy provides guidelines and criteria for providing directors and executive officers with exculpation, indemnification and insurance. |
• | Directors: The compensation policy provides guidelines for the compensation of our directors in accordance with applicable regulations promulgated under the Companies Law, and for equity-based awards that may be granted to directors pursuant to the guidelines and criteria, including minimum vesting period, set forth in the compensation policy. |
• | Applicability: The compensation policy applies to all compensation agreements and arrangements approved after the date on which the compensation policy is approved by the shareholders. |
• | Review: The compensation and nominating committee and the Board of Directors of Allot shall review and reassess the adequacy of the Compensation Policy from time to time, as required by the Companies Law. |
C. Board Practices |
D. Employees* |
December 31, | ||||||||||||
Department | 2021 | 2022 | 2023 | |||||||||
Manufacturing and operations | 13 | 15 | 12 | |||||||||
Research and development | 331 | 328 | 220 | |||||||||
Sales, marketing, service and support | 324 | 328 | 263 | |||||||||
Management and administration | 73 | 78 | 64 | |||||||||
Total | 741 | 749 | 559 |
December 31, | ||||||||||||
Department | 2019 | 2020 | 2021 | |||||||||
Manufacturing and operations | 13 | 15 | 13 | |||||||||
Research and development | 233 | 281 | 331 | |||||||||
Sales, marketing, service and support | 289 | 314 | 324 | |||||||||
Management and administration | 59 | 66 | 73 | |||||||||
Total | 594 | 676 | 741 |
December 31, | ||||||||||||
2021 | 2022 | 2023 | ||||||||||
Full time Employee | 508 | 523 | 401 | |||||||||
Part time Employee | 38 | 38 | 33 | |||||||||
Permanent Contractor | 33 | 37 | 32 | |||||||||
Subcontractor | 162 | 151 | 93 | |||||||||
Total | 741 | 749 | 559 |
December 31, | ||||||||||||
Department | 2019 | 2020 | 2021 | |||||||||
Full time Employee | 478 | 504 | 508 | |||||||||
Part time Employee | 29 | 30 | 38 | |||||||||
Permanent Contractor | 37 | 32 | 33 | |||||||||
Subcontractor | 50 | 110 | 162 | |||||||||
Total | 594 | 676 | 741 |
E. Share Ownership |
Name of Beneficial Owner | Number of Shares Beneficially Held(1) | Percent of Class | ||||||
Directors | ||||||||
David Reis | * | * | ||||||
Efrat Makov | * | * | ||||||
Manuel Echanove(2) | * | * | ||||||
Nadav Zohar | * | * | ||||||
Steven D. Levy | * | * | ||||||
Yigal Jacoby(2) | * | * | ||||||
Raffi Kesten | * | * | ||||||
Cynthia Paul | 8,776,999 | 22.8 | % | |||||
Executive Officers | * | * | ||||||
Erez Antebi | 446,666 | 1.2 | % | |||||
Ziv Leitman | * | * | ||||||
Rael Kolevsohn | * | * | ||||||
Vered Zur | * | * | ||||||
Mark Shteiman | * | * | ||||||
Noam Lila | ||||||||
Assaf Eyal | * | * | ||||||
Sarah Warshavsky Oberman | * | * | ||||||
Boaz Grossman | * | * | ||||||
All directors and executive officers as a group | 10,234,587 | 26.6 | % |
Name of Beneficial Owner | Number of Shares Beneficially Held(1) | Percent of Class | ||||||
Directors | ||||||||
Efrat Makov | * | * | ||||||
Itzhak Danziger | * | * | ||||||
Manuel Echanove | * | * | ||||||
Nadav Zohar | * | * | ||||||
Steven D. Levy | * | * | ||||||
Yigal Jacoby | 430,681 | 1.2 | % | |||||
Miron Kenneth | * | * | ||||||
Nurit Benjamini (2) | * | * | ||||||
Executive Officers | * | * | ||||||
Erez Antebi | * | * | ||||||
Ziv Leitman | * | * | ||||||
Ronit Weinstein (2) | * | * | ||||||
Rael Kolevsohn | * | * | ||||||
Keren Rubanenko | * | * | ||||||
Vered Zur | * | * | ||||||
Mark Shteiman | * | * | ||||||
Yael Villa (2) | * | * | ||||||
Aharon Mullokandov | * | * | ||||||
Noam Lila | * | * | ||||||
Ronen Priel (2) | * | * | ||||||
Pini Gvili (2) | * | * | ||||||
Ran Fridman (2) | * | * | ||||||
Hagay Katz (2) | * | * | ||||||
Assaf Eyal | * | * | ||||||
All directors and executive officers as a group | 1,232,059 | 3.4 | % |
____________ |
* Less than one percent of the outstanding ordinary shares. |
(1) | As used in this table, “beneficial ownership” is determined in accordance with the rules of the SEC and consists of either or both voting or investment power with respect to securities. For purposes of this table, a person is deemed to be the beneficial owner of securities that can be acquired within 60 days from |
(2) | Former Director, |
Plan | Shares reserved | Option and RSU grants, net (*) | Outstanding options and RSUs | Options outstanding exercise price | Date of expiration | Options exercisable | |||||||||||||||
2016 Incentive Compensation Plan | 252,847 | 11,858,262 | 3,955,755 | 0.028-27.58 | 5/5/2023-9/6/2025 | 377,095 |
Plan | Shares reserved | Option and RSU grants, net (*) | Outstanding options and RSUs | Options outstanding exercise price | Date of expiration | Options exercisable | |||||||||||||||
2016 Incentive Compensation Plan | 1,184,746 | 8,584,273 | 2,576,725 | 0.031-27.58 | 7/24/2023-09/06/2025 | 643,986 |
____________ | |
(*) | “Option and RSU grants, net” is calculated by subtracting options and RSUs expired or forfeited. |
A. Major Shareholders |
Ordinary Shares Beneficially Owned(1) | Percentage of Ordinary Shares Beneficially Owned | |||||||
Lynrock Lake Master Fund LP (2) | 8,768,666 | 22.8 | % | |||||
Clal Insurance Enterprises Holdings Ltd. (3) | 2,739,043 | 7.1 | % | |||||
Outerbridge Capital Management, LLC (4) | 2,735,112 | 7.1 | % |
Ordinary Shares Beneficially Owned(1) | Percentage of Ordinary Shares Beneficially Owned | |||||||
Lynrock Lake Partners LLC (2) | 7,266,666 | 19.9 | % | |||||
Clal Insurance Enterprises Holdings Ltd. (3) | 2,749,041 | 7.5 | % | |||||
Migdal Insurance & Financial Holdings Ltd. (4) | 2,653,431 | 7.3 | % | |||||
Outerbridge Capital Management, LLC (5) | 3,756,991 | 10.3 | % |
(1) | As used in this table, “beneficial ownership” means the sole or shared power to vote or direct the voting or to dispose or direct the disposition of any security. For purposes of this table, a person is deemed to be the beneficial owner of securities that can be acquired within 60 days from |
(2) | Based on a Schedule |
(3) | Based on a Schedule 13G/A filed on February |
(4) |
Based on a Schedule 13D/A filed on |
B. Record Holders |
D. Interests of Experts and Counsel |
A. Consolidated Financial Statements and Other Financial Information. |
B. Significant Changes |
A. Share Capital |
B. Memorandum and Articles of Association |
C. Material Contracts |
Material Contract | Location | |
Non-Stabilized Lease Agreement | “ITEM 4: Information on Allot |
D. Exchange Controls |
E. Taxation |
F. Dividends and Paying Agents |
G. Statement by Experts |
H. Documents on Display |
I. Subsidiary Information |
A. Material Modifications to the Rights of Security Holders |
B. Use of Proceeds |
(b) Management’s Annual Report on Internal Control over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that: |
(d) Changes in Internal Control over Financial Reporting. During the period covered by this report, no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) have occurred that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. |
Year ended December, 31, | Year ended December, 31, | |||||||||||||||
2020 | 2021 | 2022 | 2023 | |||||||||||||
(in thousands of U.S. dollars) | (in thousands of U.S. dollars) | |||||||||||||||
Audit Fees(1) | $ | 285 | $ | 416 | $ | 445 | $ | 489 | ||||||||
Audit-Related Fees(2) | 20 | - | 10 | 5 | ||||||||||||
Tax Fees(3) | 88 | 39 | 60 | 70 | ||||||||||||
Other | 50 | 30 | - | |||||||||||||
Total | $ | 393 | $ | 505 | $ | 545 | $ | 564 |
(1) | “Audit fees” include fees for services performed by our independent public accounting firm in connection with our annual audit for |
(2) | “Audit-Related fees” relate to assurance and associated services that are traditionally performed by the independent auditor, including: accounting consultation and consultation concerning financial accounting, reporting standards and due diligence investigations. |
(3) | “Tax fees” include fees for professional services rendered by our independent registered public accounting firm for tax compliance, transfer pricing and tax advice on actual or contemplated transactions. |
Allot Ltd | |||
By: | /s/ Erez Antebi | ||
Erez Antebi | |||
Chief Executive Officer and President | |||
___________________ | |
(1) | Previously filed with the SEC on October 31, 2006 pursuant to a registration statement on Form F-1 (File No. 333-138313) and incorporated by reference herein. |
(2) | Previously included in Exhibit 99.3 to the report of foreign private issuer on Form 6-K furnished to the SEC on November 1, 2018 and incorporated by reference herein. |
(3) | Previously filed with the SEC on March 26, 2015 as Exhibit 4.8 to the annual report on Form 20-F for the year ended December 31, 2014 and incorporated by reference herein. |
(4) | Previously filed with the SEC on March 28, 2016 as Exhibit 5.1 to the annual report on Form 20-F for the year ended December 31, 2015 and incorporated by reference herein. |
(5) | Previously included as Exhibit A-1 to the proxy statement included in Exhibit 99.1 to the report of foreign private issuer on Form 6-K furnished to the SEC on |
(6) | Previously filed with the SEC on March 23, 2017 as Exhibit 4.2 to the annual report on Form 20-F for the year ended December 31, 2016 and amended as set forth in Exhibit 99.1 to the report of foreign private issuer on Form 6-K furnished to the Commission on November 16, 2023, each of which are incorporated by reference herein. |
(7) | Previously filed with the SEC on March 23, 2017 as Exhibit 4.3 to the annual report on Form 20-F for the year ended December 31, 2016 and incorporated by reference herein. |
(8) | Previously filed with the SEC on March 23, 2017 as Exhibit 4.4 to the annual report on Form 20-F for the year ended December 31, 2016 and incorporated by reference herein. |
(9) | Previously included in Exhibit 99.1 to the report of foreign private issuer on Form 6-K furnished to the SEC on November 1, 2018 and incorporated by reference herein. |
(10) | Previously included in Exhibit 99.2 to the report of foreign private issuer on Form 6-K furnished to the SEC on November 1, 2018 and incorporated by reference herein. |
(11) | Previously filed with the SEC on March 22, 2018 as Exhibit 4.6 to the annual report on Form 20-F for the year ended December 31, 2017 and incorporated by reference herein. |
(12) | Previously included in Exhibit 4.1 to the report of foreign private issuer on Form 6-K furnished to the SEC on February 15, 2022 and incorporated by reference herein. |
(13) | Previously included in Exhibit 4.1 to the report of foreign private issuer on Form 6-K furnished to the SEC on May 12, 2022 and incorporated by reference herein. |
Page | |
Reports of Independent Registered Public Accounting Firm (PCAOB ID No. 1281) | F - 2 - F - 4 |
F - 5 - F - 6 | |
F - 7 | |
F - 8 | |
F - 9 – F - 10 | |
F - 11 - F - |
Kost Forer Gabbay & Kasierer 144 Menahem Begin Road, Building A Tel-Aviv 6492102, Israel | Tel: +972-3-6232525 Fax: +972-3-5622555 ey.com |
Revenue Recognition | ||
Description of the Matter | As described in Note Auditing the Company’s revenue recognition was complex due to the subjectivity of the assumptions that were used in developing the |
How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated design and tested the operating effectiveness of internal controls related to the determination of the stand-alone selling prices. To test management’s determination of stand-alone selling price for each performance obligation, we performed procedures to evaluate the methodology Finally, we assessed the appropriateness of the related disclosures in the consolidated financial statements. |
We have served as the Company’s auditor since 2006. | |
Tel-Aviv, Israel | /s/ KOST FORER GABBAY & KASIERER |
April 10, 2024 | A Member of EY Global |
Kost Forer Gabbay & Kasierer 144 Menahem Begin Road, Building A Tel-Aviv 6492102, Israel | Tel: +972-3-6232525 Fax: +972-3-5622555 ey.com |
Tel-Aviv, Israel | /s/ KOST FORER GABBAY & KASIERER |
April 10, 2024 | A Member of EY Global |
F - 4 |
December 31, | ||||||||
2021 | 2020 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 11,717 | $ | 23,599 | ||||
Restricted deposits | 1,480 | 1,200 | ||||||
Short-term bank deposits | 60,720 | 47,225 | ||||||
Available-for-sale marketable securities | 11,531 | 27,178 | ||||||
Trade receivables, net (net of allowance for credit losses of $2,398 and $2,309 on December 31, 2021 and 2020, respectively) | 30,829 | 20,685 | ||||||
Other receivables and prepaid expenses | 8,490 | 14,205 | ||||||
Inventories | 11,092 | 12,586 | ||||||
Total current assets | 135,859 | 146,678 | ||||||
NON-CURRENT ASSETS: | ||||||||
Long-term bank deposits | 215 | 215 | ||||||
Severance pay fund | 407 | 434 | ||||||
Operating lease right-of-use assets | 8,513 | 4,458 | ||||||
Trade receivables, net | 6,643 | 0 | ||||||
Deferred taxes | 0 | 420 | ||||||
Other assets | 1,639 | 2,975 | ||||||
Property and equipment, net | 15,000 | 11,993 | ||||||
Intangible assets, net | 3,455 | 2,744 | ||||||
Goodwill | 31,683 | 31,683 | ||||||
Total non- current assets | 67,555 | 54,922 | ||||||
Total assets | $ | 203,414 | $ | 201,600 |
December 31, | ||||||||
2021 | 2020 | |||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Trade payables | $ | 3,940 | $ | 2,092 | ||||
Employees and payroll accruals | 14,636 | 14,138 | ||||||
Deferred revenues | 22,138 | 26,658 | ||||||
Short-term operating lease liabilities | 2,785 | 2,813 | ||||||
Other payables and accrued expenses | 11,614 | 13,161 | ||||||
Total current liabilities | 55,113 | 58,862 | ||||||
LONG-TERM LIABILITIES: | ||||||||
Deferred revenues | 15,942 | 9,782 | ||||||
Long-term operating lease liabilities | 5,467 | 1,835 | ||||||
Accrued severance pay | 884 | 969 | ||||||
Total long-term liabilities | 22,293 | 12,586 | ||||||
COMMITMENTS AND CONTINGENT LIABILITIES | 0 | 0 | ||||||
SHAREHOLDERS' EQUITY: | ||||||||
Share capital - | ||||||||
Ordinary shares of NIS 0.1 par value - Authorized: 200,000,000 shares at December 31, 2021 and 2020; Issued: 37,307,480 and 36,198,638 shares at December 31, 2021 and 2020, respectively; Outstanding: 36,491,480 and 35,382,638 shares at December 31, 2021 and 2020, respectively | 929 | 896 | ||||||
Additional paid-in capital | 293,803 | 283,065 | ||||||
Treasury share at cost - 816,000 shares at December 31, 2021 and 2020. | (3,998 | ) | (3,998 | ) | ||||
Accumulated other comprehensive income | 271 | 146 | ||||||
Accumulated deficit | (164,997 | ) | (149,957 | ) | ||||
Total shareholders' equity | 126,008 | 130,152 | ||||||
Total liabilities and shareholders' equity | $ | 203,414 | $ | 201,600 |
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Revenues: | ||||||||||||
Products | $ | 88,229 | $ | 92,524 | $ | 67,440 | ||||||
Services | 57,371 | 43,398 | 42,660 | |||||||||
Total revenues | 145,600 | 135,922 | 110,100 | |||||||||
Cost of revenues: | ||||||||||||
Products | 31,603 | 28,524 | 22,743 | |||||||||
Services | 12,950 | 11,558 | 11,091 | |||||||||
Total cost of revenues | 44,553 | 40,082 | 33,834 | |||||||||
Gross profit | 101,047 | 95,840 | 76,266 | |||||||||
Operating expenses: | ||||||||||||
Research and development (net of grant participations of $ 167, $ 339 and $ 378 for the years ended December 31, 2021, 2020 and 2019, respectively) | 47,093 | 43,447 | 31,461 | |||||||||
Sales and marketing | 52,337 | 47,528 | 47,105 | |||||||||
General and administrative | 15,145 | 13,894 | 6,678 | |||||||||
Total operating expenses | 114,575 | 104,869 | 85,244 | |||||||||
Operating loss | (13,528 | ) | (9,029 | ) | (8,978 | ) | ||||||
Financial income, net | 339 | 1,857 | 1,960 | |||||||||
Loss before income tax expense | (13,189 | ) | (7,172 | ) | (7,018 | ) | ||||||
Income tax expense | 1,851 | 2,176 | 1,641 | |||||||||
Net loss | $ | (15,040 | ) | $ | (9,348 | ) | $ | (8,659 | ) | |||
Unrealized gain (loss) on available-for-sale marketable securities | (359 | ) | 191 | 666 | ||||||||
Net amount reclassified to earnings from available-for-sale marketable securities | (15 | ) | (40 | ) | 4 | |||||||
Total comprehensive gain (loss) from available-for-sale marketable securities | (374 | ) | 151 | 670 | ||||||||
Unrealized gain (loss) on foreign currency cash flow hedges transactions | 1,269 | 723 | (332 | ) | ||||||||
Net amount reclassified to earnings from hedging transactions | (770 | ) | (203 | ) | (96 | ) | ||||||
Total comprehensive gain (loss) from hedge transactions | 499 | 520 | (428 | ) | ||||||||
Total comprehensive loss | $ | (14,915 | ) | $ | (8,677 | ) | $ | (8,417 | ) | |||
Net loss per share: | ||||||||||||
Basic and diluted | $ | (0.42 | ) | $ | (0.27 | ) | $ | (0.25 | ) | |||
Weighted average number of shares used in per share computations of net loss: | ||||||||||||
Basic and diluted | 36,050,540 | 35,007,201 | 34,250,582 |
December 31, | ||||||||
2023 | 2022 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 14,192 | $ | 12,295 | ||||
Restricted deposits | 1,728 | 1,050 | ||||||
Short-term bank deposits | 10,000 | 68,765 | ||||||
Available-for-sale marketable securities | 28,853 | 4,293 | ||||||
Trade receivables, net (net of allowance for credit losses of $ 25,253 and $ 2,908 on December 31, 2023 and 2022, respectively) | 14,828 | 44,167 | ||||||
Other receivables and prepaid expenses | 8,437 | 7,985 | ||||||
Inventories | 11,874 | 13,262 | ||||||
Total current assets | 89,912 | 151,817 | ||||||
NON-CURRENT ASSETS: | ||||||||
Severance pay fund | 395 | 371 | ||||||
Restricted deposit | 158 | - | ||||||
Operating lease right-of-use assets | 3,057 | 5,387 | ||||||
Trade receivables, net | - | 4,934 | ||||||
Other assets | 704 | 864 | ||||||
Property and equipment, net | 11,189 | 14,236 | ||||||
Intangible assets, net | 915 | 3,511 | ||||||
Goodwill | 31,833 | 31,833 | ||||||
Total non-current assets | 48,251 | 61,136 | ||||||
Total assets | $ | 138,163 | $ | 212,953 |
F - |
December 31, | ||||||||
2023 | 2022 | |||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Trade payables | $ | 969 | $ | 11,661 | ||||
Employees and payroll accruals | 12,566 | 14,149 | ||||||
Deferred revenues | 14,892 | 20,825 | ||||||
Short-term operating lease liabilities | 1,453 | 2,542 | ||||||
Other payables and accrued expenses | 9,528 | 11,424 | ||||||
Total current liabilities | 39,408 | 60,601 | ||||||
LONG-TERM LIABILITIES: | ||||||||
Deferred revenues | 7,437 | 7,285 | ||||||
Long-term operating lease liabilities | 702 | 2,579 | ||||||
Accrued severance pay | 1,080 | 940 | ||||||
Convertible debt | 39,773 | 39,575 | ||||||
Total long-term liabilities | 48,992 | 50,379 | ||||||
SHAREHOLDERS' EQUITY: | ||||||||
Share capital - | ||||||||
Ordinary shares of NIS 0.1 par value - Authorized: 200,000,000 shares at December 31, 2023 and 2022; Issued: 39,192,939 and 38,186,043 shares at December 31, 2023 and 2022, respectively; Outstanding: 38,376,939 and 37,370,043 shares at December 31, 2023 and 2022, respectively | 981 | 954 | ||||||
Additional paid-in capital | 312,128 | 303,298 | ||||||
Treasury share at cost - 816,000 shares at December 31, 2023 and 2022. | (3,998 | ) | (3,998 | ) | ||||
Accumulated other comprehensive income | 483 | (1,254 | ) | |||||
Accumulated deficit | (259,831 | ) | (197,027 | ) | ||||
Total shareholders' equity | 49,763 | 101,973 | ||||||
Total liabilities and shareholders' equity | $ | 138,163 | $ | 212,953 |
Ordinary shares | Additional paid-in capital | Treasury share | Accumulated other comprehensive income (loss) | Accumulated deficit | Total shareholders' equity | |||||||||||||||||||||||
Outstanding shares | Amount | |||||||||||||||||||||||||||
Balance as of January 1, 2019 | 33,896,261 | 853 | 271,765 | (3,998 | ) | (767 | ) | (131,950 | ) | 135,903 | ||||||||||||||||||
Exercise of share options and restricted share units | 624,467 | 18 | 974 | 0 | 0 | 0 | 992 | |||||||||||||||||||||
Share-based compensation | - | 0 | 3,373 | 0 | 0 | 0 | 3,373 | |||||||||||||||||||||
Other comprehensive loss | - | 0 | 0 | 0 | 242 | 0 | 242 | |||||||||||||||||||||
Net loss | - | 0 | 0 | 0 | 0 | (8,659 | ) | (8,659 | ) | |||||||||||||||||||
Balance as of December 31, 2019 | 34,520,728 | 871 | 276,112 | (3,998 | ) | (525 | ) | (140,609 | ) | 131,851 | ||||||||||||||||||
Exercise of share options and restricted share units | 861,910 | 25 | 1,810 | 0 | 0 | 0 | 1,835 | |||||||||||||||||||||
Share-based compensation | - | 0 | 5,143 | 0 | 0 | 0 | 5,143 | |||||||||||||||||||||
Other comprehensive income | - | 0 | 0 | 0 | 671 | 0 | 671 | |||||||||||||||||||||
Net loss | - | 0 | 0 | 0 | 0 | (9,348 | ) | (9,348 | ) | |||||||||||||||||||
Balance as of December 31, 2020 | 35,382,638 | 896 | 283,065 | (3,998 | ) | 146 | (149,957 | ) | 130,152 | |||||||||||||||||||
Exercise of share options and restricted share units | 1,108,842 | 33 | 2,778 | 0 | 0 | 0 | 2,811 | |||||||||||||||||||||
Share-based compensation | - | 0 | 7,960 | 0 | 0 | 0 | 7,960 | |||||||||||||||||||||
Other comprehensive income | - | 0 | 0 | 0 | 125 | 0 | 125 | |||||||||||||||||||||
Net loss | - | 0 | 0 | 0 | 0 | (15,040 | ) | (15,040 | ) | |||||||||||||||||||
Balance as of December 31, 2021 | 36,491,480 | 929 | 293,803 | (3,998 | ) | 271 | (164,997 | ) | 126,008 |
F - |
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net loss | $ | (15,040 | ) | $ | (9,348 | ) | $ | (8,659 | ) | |||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||
Depreciation and amortization | 5,575 | 4,312 | 4,359 | |||||||||
Share-based compensation | 8,000 | 5,198 | 3,420 | |||||||||
Capital loss | 0 | 18 | 0 | |||||||||
Increase (decrease) in accrued severance pay, net | (58 | ) | 128 | (54 | ) | |||||||
Decrease (increase) in other assets | 1,006 | (2,048 | ) | (326 | ) | |||||||
Decrease in accrued interest and amortization of premium on available-for sale marketable securities | 182 | 357 | 343 | |||||||||
Decrease (increase) in operating lease right-of-use asset | (4,055 | ) | 1,910 | (6,368 | ) | |||||||
Increase (decrease) in operating leases liability | 3,604 | (2,323 | ) | 6,971 | ||||||||
Decrease (increase) in trade receivables | (16,787 | ) | 8,323 | (2,915 | ) | |||||||
Decrease (increase) in other receivables and prepaid expenses | 4,902 | (7,272 | ) | (3,168 | ) | |||||||
Decrease (increase) in inventories | 1,494 | (1,918 | ) | (253 | ) | |||||||
Decrease (increase) in long-term deferred taxes, net | 420 | 96 | (236 | ) | ||||||||
Increase (decrease) in trade payables | 1,848 | (9,584 | ) | 3,863 | ||||||||
Increase in employees and payroll accruals | 458 | 2,047 | 4,635 | |||||||||
Increase (decrease) in deferred revenues | 1,640 | (5,182 | ) | 23,520 | ||||||||
Increase (decrease) in other payables and accrued expenses | (1,559 | ) | 3,061 | (9,040 | ) | |||||||
Net cash provided by (used in) operating activities | (8,370 | ) | (12,225 | ) | 16,092 | |||||||
Cash flows from investing activities: | ||||||||||||
Decrease (increase) in restricted deposits | (280 | ) | 32,896 | (33,374 | ) | |||||||
Redemption of (Investment in) short-term deposits | (13,495 | ) | (41,883 | ) | 16,986 | |||||||
Purchase of property and equipment | (7,642 | ) | (7,582 | ) | (3,708 | ) | ||||||
Investment in available-for sale marketable securities | 0 | (1,219 | ) | (39,950 | ) | |||||||
Proceeds from sales and maturity of available-for sale marketable securities | 15,094 | 34,847 | 43,555 | |||||||||
Net cash provided by (used in) investing activities | (6,323 | ) | 17,059 | (16,491 | ) |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Revenues: | ||||||||||||
Products | $ | 37,599 | $ | 60,980 | $ | 88,229 | ||||||
Services | 55,551 | 61,757 | 57,371 | |||||||||
Total revenues | 93,150 | 122,737 | 145,600 | |||||||||
Cost of revenues: | ||||||||||||
Products | 16,693 | 21,345 | 31,603 | |||||||||
Services | 23,771 | 18,486 | 12,950 | |||||||||
Total cost of revenues | 40,464 | 39,831 | 44,553 | |||||||||
Gross profit | 52,686 | 82,906 | 101,047 | |||||||||
Operating expenses: | ||||||||||||
Research and development (net of grant participations of $ 3,129, $ 825 and $ 167 for the years ended December 31, 2023, 2022 and 2021, respectively) | 39,115 | 49,800 | 47,093 | |||||||||
Sales and marketing | 43,850 | 49,393 | 52,337 | |||||||||
General and administrative | 34,656 | 15,982 | 15,145 | |||||||||
Total operating expenses | 117,621 | 115,175 | 114,575 | |||||||||
Operating loss | (64,935 | ) | (32,269 | ) | (13,528 | ) | ||||||
Financial income, net | 3,215 | 2,134 | 339 | |||||||||
Loss before income tax expense | (61,720 | ) | (30,135 | ) | (13,189 | ) | ||||||
Income tax expense | 1,084 | 1,895 | 1,851 | |||||||||
Net loss | $ | (62,804 | ) | $ | (32,030 | ) | $ | (15,040 | ) | |||
Net loss per share: | ||||||||||||
Basic and diluted | $ | (1.66 | ) | $ | (0.87 | ) | $ | (0.42 | ) | |||
Weighted average number of shares used in per share computations of net loss: | ||||||||||||
Basic and diluted | 37,911,214 | 36,975,424 | 36,050,540 | |||||||||
Unrealized gain (loss) on available-for-sale marketable securities | 41 | (140 | ) | (359 | ) | |||||||
Net amount reclassified to earnings from available-for-sale marketable securities | - | 2 | (15 | ) | ||||||||
Total comprehensive gain (loss) from available-for-sale marketable securities | 41 | (138 | ) | (374 | ) | |||||||
Unrealized gain (loss) on foreign currency cash flow hedges transactions | (960 | ) | (5,562 | ) | 1,269 | |||||||
Net amount reclassified to earnings from hedging transactions | 2,656 | 4,175 | (770 | ) | ||||||||
Total comprehensive gain (loss) from hedge transactions | 1,696 | (1,387 | ) | 499 | ||||||||
Total other comprehensive income (loss) | 1,737 | (1,525 | ) | 125 | ||||||||
Total comprehensive loss | $ | (61,067 | ) | $ | (33,555 | ) | $ | (14,915 | ) |
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from exercise of share options | 2,811 | 1,835 | 993 | |||||||||
Net cash provided by financing activities | 2,811 | 1,835 | 993 | |||||||||
Increase (decrease) in cash and cash equivalents | (11,882 | ) | 6,669 | 594 | ||||||||
Cash and cash equivalents at the beginning of the year | 23,599 | 16,930 | 16,336 | |||||||||
Cash and cash equivalents at the end of the year | $ | 11,717 | $ | 23,599 | $ | 16,930 | ||||||
Supplementary cash flow information: | ||||||||||||
Cash paid during the year for: | ||||||||||||
Taxes | $ | 633 | $ | 410 | $ | 473 | ||||||
Non-cash activity: | ||||||||||||
Right-of-use assets obtained in the exchange for operating lease liabilities | $ | 6,746 | $ | 1,080 | $ | 1,208 |
F - 7 |
Ordinary shares | Additional paid-in capital | Accumulated other comprehensive income (loss) | Total shareholders' equity | |||||||||||||||||||||||||
Outstanding shares | Amount | Treasury share | Accumulated deficit | |||||||||||||||||||||||||
Balance as of January 1, 2021 | 35,382,638 | 896 | 283,065 | (3,998 | ) | 146 | (149,957 | ) | 130,152 | |||||||||||||||||||
Exercise of share options and restricted share units | 1,108,842 | 33 | 2,778 | - | - | - | 2,811 | |||||||||||||||||||||
Share-based compensation | - | - | 7,960 | - | - | - | 7,960 | |||||||||||||||||||||
Other comprehensive income | - | - | - | - | 125 | - | 125 | |||||||||||||||||||||
Net loss | - | - | - | - | - | (15,040 | ) | (15,040 | ) | |||||||||||||||||||
Balance as of December 31, 2021 | 36,491,480 | 929 | 293,803 | (3,998 | ) | 271 | (164,997 | ) | 126,008 | |||||||||||||||||||
Exercise of share options and restricted share units | 878,563 | 25 | 226 | - | - | - | 251 | |||||||||||||||||||||
Share-based compensation | - | - | 9,269 | - | - | - | 9,269 | |||||||||||||||||||||
Other comprehensive loss | - | - | - | - | (1,525 | ) | - | (1,525 | ) | |||||||||||||||||||
Net loss | - | - | - | - | - | (32,030 | ) | (32,030 | ) | |||||||||||||||||||
Balance as of December 31, 2022 | 37,370,043 | 954 | 303,298 | (3,998 | ) | (1,254 | ) | (197,027 | ) | 101,973 | ||||||||||||||||||
Exercise of share options and restricted share units | 1,006,896 | 27 | (27 | ) | - | - | - | - | ||||||||||||||||||||
Share-based compensation | - | - | 8,857 | - | - | - | 8,857 | |||||||||||||||||||||
Other comprehensive loss | - | - | - | - | 1,737 | - | 1,737 | |||||||||||||||||||||
Net loss | - | - | - | - | - | (62,804 | ) | (62,804 | ) | |||||||||||||||||||
Balance as of December 31, 2023 | 38,376,939 | 981 | 312,128 | (3,998 | ) | 483 | (259,831 | ) | 49,763 |
F - 8 |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net loss | $ | (62,804 | ) | $ | (32,030 | ) | $ | (15,040 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
Depreciation, amortization and impairment | 8,132 | 7,352 | 5,575 | |||||||||
Share-based compensation | 8,845 | 9,165 | 8,000 | |||||||||
Amortization of issuance costs of Convertible debt | 198 | 171 | - | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Increase (decrease) in severance pay, net | 116 | 92 | (58 | ) | ||||||||
Decrease in other assets, other receivables and prepaid expenses | 621 | 720 | 5,908 | |||||||||
Decrease (increase) in accrued interest and amortization of premium on available-for sale marketable securities | (712 | ) | 71 | 182 | ||||||||
Decrease (increase) in operating lease right-of-use asset | 2,686 | 3,126 | (4,055 | ) | ||||||||
Increase (decrease) in operating leases liability | (3,322 | ) | (3,131 | ) | 3,604 | |||||||
Decrease (increase) in trade receivables | 34,273 | (11,629 | ) | (16,787 | ) | |||||||
Decrease (increase) in inventories | 1,388 | (2,170 | ) | 1,494 | ||||||||
Decrease in long-term deferred taxes, net | - | - | 420 | |||||||||
Increase (decrease) in trade payables | (10,692 | ) | 7,721 | 1,848 | ||||||||
Increase (decrease) in employees and payroll accruals | (1,571 | ) | (385 | ) | 458 | |||||||
Increase (decrease) in deferred revenues | (5,781 | ) | (9,970 | ) | 1,640 | |||||||
Decrease in other payables and accrued expenses | (1,113 | ) | (1,668 | ) | (1,559 | ) | ||||||
Net cash used in operating activities | (29,736 | ) | (32,565 | ) | (8,370 | ) | ||||||
Cash flows from investing activities: | ||||||||||||
Decrease (increase) in restricted deposits | (836 | ) | 430 | (280 | ) | |||||||
Investment in short-term bank deposits | (15,900 | ) | (130,050 | ) | (82,220 | ) | ||||||
Withdrawal of short-term bank deposits | 74,665 | 122,220 | 68,725 | |||||||||
Purchase of property and equipment | (2,489 | ) | (5,642 | ) | (7,642 | ) | ||||||
Investment in available-for sale marketable securities | (46,742 | ) | - | - | ||||||||
Proceeds from sales and maturity of available-for sale marketable securities | 22,935 | 7,030 | 15,094 | |||||||||
Acquisition | - | (500 | ) | - | ||||||||
Net cash provided by (used in) investing activities | 31,633 | (6,512 | ) | (6,323 | ) |
F - 9 |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from exercise of share options | - | 251 | 2,811 | |||||||||
Issuance of convertible debt | - | 39,404 | - | |||||||||
Net cash provided by financing activities | - | 39,655 | 2,811 | |||||||||
Increase (decrease) in cash and cash equivalents | 1,897 | 578 | (11,882 | ) | ||||||||
Cash and cash equivalents at the beginning of the year | 12,295 | 11,717 | 23,599 | |||||||||
Cash and cash equivalents at the end of the year | $ | 14,192 | $ | 12,295 | $ | 11,717 | ||||||
Supplementary cash flow information: | ||||||||||||
Cash paid during the year for: | ||||||||||||
Taxes | $ | 385 | $ | 413 | $ | 633 | ||||||
Non-cash activity: | ||||||||||||
Right-of-use assets obtained in the exchange for operating lease liabilities | $ | 356 | $ | 196 | $ | 6,746 |
The accompanying notes are an integral part of the consolidated financial statements.
F - 10 |
NOTE 1: - | GENERAL |
a. | Allot Ltd. (the "Company") was incorporated in November 1996 under the laws of the State of Israel. The Company is engaged in developing, selling and marketing of leading innovative network intelligence (“Allot Smart”) and security solutions (“Allot Secure”) for mobile and fixed service providers as well as enterprises worldwide. Our solutions are deployed globally for network and application analytics, traffic control and shaping, network-based security including mobile security, distributed denial of service (DDoS) protection, IoT security, and more. Allot Smart generates insightful intelligence that allows CSPs to analyze every packet of network, user, application and security data, CSPs can see, control and secure their networks, optimizing performance, minimizing costs and maximizing end-user QoE. Allot Secure |
F - 11
NOTE 1: - | GENERAL (Cont.) |
The Spanish and Mexican subsidiaries commenced operations in 2015 and are engaged in the sales and marketing, technical support and development activities of one of the Company's product lines.
b. | Acquisitions: |
a. | On January 14, 2018 (the "Netonomy acquisition date"), the Company entered into a purchase agreement with the shareholders of Netonomy LTD ("Netonomy"), a developer of software-based cybersecurity solutions for the connected home. |
F - 12
NOTE 1: - | GENERAL (Cont.) |
b. | On December 18, 2022 (the "Keepers acquisition date"), the Company entered into an Bussines combination (the "Keepers PPA") with the shareholders of Keepers Child Safety Ltd. ("Keepers") a private company which has a business of developing and marketing software to protect children from digital online threats. |
Fair value | ||||
Non-current assets | $ | 4 | ||
Account Payable | (11 | ) | ||
Other Payables | (142 | ) | ||
IPR&D | 3,659 | |||
Goodwill | 121 | |||
Net assets acquired | $ | 3,631 |
Fair value | ||||
Technology | $ | 1,002 | ||
Goodwill | 150 | |||
Net assets acquired | $ | 1,152 |
Since the Company abandon the technology, management estimate that as of December 31, 2023, the contingent consideration relating with the acquisition of Keppers has fair value of $0.
F - 13
NOTE 2: - | SIGNIFICANT ACCOUNTING POLICIES |
a. | Use of estimates: |
b. | Financial statements in U.S. dollars: |
c. | Principles of consolidation: |
d. | Cash and cash equivalents: |
|
F - 14
NOTE 2: - | SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
e. | Restricted deposits: |
f. | Short-term bank deposits: |
g. | Trade Receivable and Allowances: |
2023 | 2022 | 2021 | ||||||||||
Total allowance for credit losses – January 1 | 2,908 | 2,398 | 2,309 | |||||||||
Current-period provision for expected credit losses | 22,563 | 823 | 293 | |||||||||
Write-offs | (145 | ) | (64 | ) | (9 | ) | ||||||
Recoveries collected | (73 | ) | (249 | ) | (195 | ) | ||||||
Total allowance for credit losses – December 31 | 25,253 | 2,908 | 2,398 |
2021 | 2020 | 2019 | ||||||||||
Total allowance for credit losses – January 1 | 2,309 | 1,867 | 1,415 | |||||||||
Current-period provision for expected credit losses | 293 | 1,894 | 866 | |||||||||
Write-offs | (9 | ) | (934 | ) | (3 | ) | ||||||
Recoveries collected | (195 | ) | (518 | ) | (411 | ) | ||||||
Total allowance for credit losses – December 31 | 2,398 | 2,309 | 1,867 |
F - 15
NOTE 2: - | SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
h. | Marketable securities: |
F - 15
F - 16
NOTE 2: - | SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
i. | Inventories: |
j. | Property and equipment, net: |
% | ||
Lab equipment | 16 - 25 | |
Computers and peripheral equipment | 33 | |
Office furniture | 6 | |
SECaaS | 16 | |
Leasehold improvements | Over the shorter of the term of the lease or the useful life of the asset |
F - 16
k. | Goodwill: |
F - 17
NOTE 2: - | SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
l. | Impairment of long-lived assets, Right-of-use assets, and intangible assets subject to amortization: |
F - 17
m. | Revenue recognition: |
F - 18
NOTE 2: - | SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
F - 18
F - 19
NOTE 2: - | SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
F - 19
n. | Cost of revenues: |
F - 20
NOTE 2: - | SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
o. | Research and development costs: |
p. | Severance pay: |
F - 20
F - 21
NOTE 2: - | SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
q. | Accounting for share-based compensation: |
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Cost of revenues | $ | 581 | $ | 355 | $ | 264 | ||||||
Research and development | 2,499 | 1,368 | 847 | |||||||||
Sales and marketing | 3,212 | 2,145 | 1,257 | |||||||||
General and administrative | 1,708 | 1,330 | 1,052 | |||||||||
Total share-based compensation expense | $ | 8,000 | $ | 5,198 | $ | 3,420 |
F - 21
The Company selected the binomial option pricing model as the most appropriate fair value method for its share options awards with the following assumptions for the years ended December 31, 2018:
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Cost of revenues | $ | 1,219 | $ | 1,133 | $ | 581 | ||||||
Research and development | 3,010 | 3,168 | 2,499 | |||||||||
Sales and marketing | 2,651 | 2,943 | 3,212 | |||||||||
General and administrative | 1,965 | 1,921 | 1,708 | |||||||||
Total share-based compensation expense | $ | 8,845 | $ | 9,165 | $ | 8,000 |
F - 22
NOTE 2: - | SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
r. | Treasury share: |
s. | Concentration of credit risks: |
F - 22
F - 23
NOTE 2: - | SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
t. | Government grants: |
F - 23
u. | Income taxes: |
F - 24
NOTE 2: - | SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
v. | Basic and diluted net income (loss) per share: |
w. | Comprehensive loss: |
F - 2425
NOTE 2: - | SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
Year ended December 31, 2023 | ||||||||||||
Unrealized gain (losses) on marketable securities | Unrealized gains (losses) on cash flow hedges | Total | ||||||||||
Balance as of December 31, 2022 | $ | (40 | ) | $ | (1,214 | ) | $ | (1,254 | ) | |||
Changes in other comprehensive loss before reclassifications | 41 | (960 | ) | (919 | ) | |||||||
Amounts reclassified from accumulated other comprehensive loss to: | ||||||||||||
Cost of revenues | - | 475 | 475 | |||||||||
Research and development | - | 1,198 | 1,198 | |||||||||
Sales and marketing | - | 542 | 542 | |||||||||
General and administrative | - | 441 | 441 | |||||||||
Net current-period other comprehensive loss | 41 | 1,696 | 1,737 | |||||||||
Balance as of December 31, 2023 | $ | 1 | $ | 482 | $ | 483 |
Year ended December 31, 2021 | ||||||||||||
Unrealized gain (losses) on marketable securities | Unrealized gains (losses) on cash flow hedges | Total | ||||||||||
Balance as of December 31, 2020 | $ | 472 | $ | (326 | ) | $ | 146 | |||||
Changes in other comprehensive income (loss) before reclassifications | (359 | ) | 1,269 | 910 | ||||||||
Amounts reclassified from accumulated other comprehensive loss to: | ||||||||||||
Cost of revenues | 0 | (146 | ) | (146 | ) | |||||||
Operating expenses | 0 | (624 | ) | (624 | ) | |||||||
Financial income, net | (15 | ) | 0 | (15 | ) | |||||||
Net current-period other comprehensive income (loss) | (374 | ) | 499 | 125 | ||||||||
Balance as of December 31, 2021 | $ | 98 | $ | 173 | $ | 271 |
x. | Fair value of financial instruments: |
Level 1 - | Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. | |
F - 26
NOTE 2: - | SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
Level 2 - | Include other inputs that are directly or indirectly observable in the marketplace, other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets with insufficient volume or infrequent transactions, or other inputs that are observable (model-derived valuations in which significant inputs are observable), or can be derived principally from or corroborated by observable market data; and |
Level 3 - | Unobservable inputs which are supported by little or no market activity. |
F - 25
y. | Derivatives and hedging: |
F - 2627
NOTE 2: - | SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
z. | Business combinations: |
aa. | Lease: |
F - 2728
NOTE 2: - | SIGNIFICANT ACCOUNTING POLICIES (Cont.) |
ab. | Warranty costs: |
ac. | Recently |
F - 29
NOTE 3: - | AVAILABLE-FOR-SALE MARKETABLE SECURITIES |
December 31, 2021 | December 31, 2020 | |||||||||||||||||||||||||||||||
Amortized cost | Gross unrealized gain | Gross unrealized loss | Fair value | Amortized cost | Gross unrealized gain | Gross unrealized loss | Fair value | |||||||||||||||||||||||||
Available-for-sale - matures within one year: | ||||||||||||||||||||||||||||||||
Corporate debentures | 6,334 | 36 | 0 | 6,370 | 12,611 | 97 | 0 | 12,708 | ||||||||||||||||||||||||
6,334 | 36 | 0 | 6,370 | 12,611 | 97 | 0 | 12,708 | |||||||||||||||||||||||||
Available-for-sale - matures after one year through three years: | ||||||||||||||||||||||||||||||||
Governmental debentures | 176 | 0 | 0 | 176 | 379 | 3 | 0 | 382 | ||||||||||||||||||||||||
Corporate debentures | 4,920 | 67 | (2 | ) | 4,985 | 13,181 | 364 | 0 | 13,545 | |||||||||||||||||||||||
5,096 | 67 | (2 | ) | 5,161 | 13,560 | 367 | 0 | 13,927 | ||||||||||||||||||||||||
Available-for-sale - matures after three years through five years: | ||||||||||||||||||||||||||||||||
Corporate debentures | 0 | 0 | 0 | 0 | 535 | 8 | 0 | 543 | ||||||||||||||||||||||||
0 | 0 | 0 | 0 | 535 | 8 | 0 | 543 | |||||||||||||||||||||||||
$ | 11,430 | $ | 103 | $ | (2 | ) | $ | 11,531 | $ | 26,706 | $ | 472 | $ | 0 | $ | 27,178 |
F - 28
December 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||
Amortized cost | Gross unrealized gain | Gross unrealized loss | Fair value | Amortized cost | Gross unrealized gain | Gross unrealized loss | Fair value | |||||||||||||||||||||||||
Available-for-sale - matures within one year: | ||||||||||||||||||||||||||||||||
Governmental debentures | $ | 28,495 | $ | 9 | $ | - | $ | 28,504 | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
Corporate debentures | 357 | - | (8 | ) | 349 | 4,029 | - | (37 | ) | 3,992 | ||||||||||||||||||||||
28,852 | 9 | (8 | ) | 28,853 | 4,029 | - | (37 | ) | 3,992 | |||||||||||||||||||||||
Available-for-sale - matures after one year through three years: | ||||||||||||||||||||||||||||||||
Governmental debentures | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Corporate debentures | - | - | - | - | 304 | - | (3 | ) | 301 | |||||||||||||||||||||||
- | - | - | - | 304 | - | (3 | ) | 301 | ||||||||||||||||||||||||
$ | 28,852 | $ | 9 | $ | (8 | ) | $ | 28,853 | $ | 4,333 | $ | - | $ | (40 | ) | $ | 4,293 |
NOTE 4: - | FAIR VALUE MEASUREMENTS |
F - 30
NOTE 4: - | FAIR VALUE MEASUREMENTS (Cont.) |
As of December 31, 2021 | As of December 31, 2023 | |||||||||||||||||||||||||||||||
Fair value measurements using input type | Fair value measurements using input type | |||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Available-for-sale marketable securities | $ | 0 | $ | 11,531 | $ | 0 | $ | 11,531 | $ | - | $ | 28,853 | $ | - | $ | 28,853 | ||||||||||||||||
Foreign currency derivative contracts | 0 | 902 | 0 | 902 | - | 650 | - | 650 | ||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||
Earn-out liability | - | - | - | - | ||||||||||||||||||||||||||||
Foreign currency derivative contracts | - | (106 | ) | - | (106 | ) | ||||||||||||||||||||||||||
Total financial net assets | $ | 0 | $ | 12,433 | $ | 0 | $ | 12,433 | $ | - | $ | 29,397 | $ | - | $ | 29,397 |
As of December 31, 2022 | ||||||||||||||||
Fair value measurements using input type | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Assets: | ||||||||||||||||
Available-for-sale marketable securities | $ | - | $ | 4,293 | $ | - | $ | 4,293 | ||||||||
Foreign currency derivative contracts | - | 23 | - | 23 | ||||||||||||
Liabilities: | ||||||||||||||||
Earn-out liability | - | - | (656 | ) | (656 | ) | ||||||||||
Foreign currency derivative contracts | - | (901 | ) | - | (901 | ) | ||||||||||
Total financial net assets | $ | - | $ | 3,415 | $ | (656 | ) | $ | 2,759 |
As of December 31, 2020 | ||||||||||||||||
Fair value measurements using input type | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Available-for-sale marketable securities | $ | 0 | $ | 27,178 | $ | 0 | $ | 27,178 | ||||||||
Foreign currency derivative contracts | 0 | (952 | ) | 0 | (952 | ) | ||||||||||
Total financial net assets | $ | 0 | $ | 26,226 | $ | 0 | $ | 26,226 |
Balance at January 1, 2023 | $ | 656 | ||
Earn Out liability – Keepers | (656 | ) | ||
Balance at December 31, 2023 | $ | - |
F - 2931
NOTE 5: - | DERIVATIVE INSTRUMENTS |
Foreign exchange forward and | December 31, | |||||||||
options contracts | Balance sheet | 2021 | 2020 | |||||||
Fair value of foreign exchange hedge transactions | Other receivables and prepaid expenses | $ | 973 | $ | 2,258 | |||||
Fair value of foreign exchange hedge transactions | Other payables and accrued expenses | (11 | ) | (3,224 | ) | |||||
Total derivatives designated as hedging instruments | Other Comprehensive profit (loss) | $ | 173 | $ | (326 | ) |
Foreign exchange forward and | December 31, | |||||||||
options contracts | Balance sheet | 2023 | 2022 | |||||||
Fair value of foreign exchange hedge transactions | Other receivables and prepaid expenses | $ | 537 | $ | 12 | |||||
Fair value of foreign exchange hedge transactions | Other payables and accrued expenses | (55 | ) | (838 | ) | |||||
Total derivatives designated as hedging instruments | Other Comprehensive profit (loss) | $ | 482 | $ | (1,214 | ) |
F - 3032
NOTE 5: - | DERIVATIVE INSTRUMENTS (Cont.) |
Foreign exchange forward and | December 31, | December 31, | ||||||||||||||||||
options contracts | Balance sheet | 2021 | 2020 | Balance sheet | 2023 | 2022 | ||||||||||||||
Fair value of foreign exchange non-designated hedge transactions | Other receivables and prepaid expenses | $ | 7 | $ | 0 | Other receivables and prepaid expenses | $ | 113 | $ | 11 | ||||||||||
Fair value of foreign exchange non-designated hedge transactions | Other payables and accrued expenses | (67 | ) | (13 | ) | Other payables and accrued expenses | (51 | ) | (63 | ) | ||||||||||
Total derivatives non-designated as hedging instruments | $ | (60 | ) | $ | (13 | ) | $ | 62 | $ | (52 | ) |
NOTE 6: - | OTHER RECEIVABLES AND PREPAID EXPENSES |
December 31, | ||||||||
2021 | 2020 | |||||||
Prepaid expenses | $ | 4,029 | $ | 6,495 | ||||
Government authorities | 2,947 | 2,403 | ||||||
Prepayment to OEM | 0 | 2,359 | ||||||
Foreign currency derivative contracts | 980 | 2,285 | ||||||
Short-term lease deposits | 185 | 231 | ||||||
Grants receivable from the IIA | 0 | 103 | ||||||
Others | 349 | 329 | ||||||
$ | 8,490 | $ | 14,205 |
December 31, | ||||||||
2023 | 2022 | |||||||
Prepaid expenses | $ | 5,890 | $ | 4,560 | ||||
Government authorities | 988 | 2,108 | ||||||
Accrued interest | 591 | 1,059 | ||||||
Foreign currency derivative contracts | 650 | 23 | ||||||
Short-term deposits | 145 | 163 | ||||||
Others | 173 | 72 | ||||||
$ | 8,437 | $ | 7,985 |
F - 3133
NOTE 7: - | INVENTORIES |
December 31, | ||||||||
2023 | 2022 | |||||||
Raw materials | $ | 1,656 | $ | 2,003 | ||||
Finished goods | 10,218 | 11,259 | ||||||
$ | 11,874 | $ | 13,262 |
NOTE 8: - | PROPERTY AND EQUIPMENT, NET |
December 31, | ||||||||
2023 | 2022 | |||||||
Cost: | ||||||||
Lab equipment | $ | 12,750 | $ | 19,711 | ||||
Computers and peripheral equipment | 11,353 | 11,856 | ||||||
Office furniture and equipment | 1,438 | 1,568 | ||||||
Leasehold improvements | 2,990 | 3,039 | ||||||
SECaaS equipment | 8,036 | 7,722 | ||||||
36,567 | 43,896 | |||||||
Accumulated depreciation: | ||||||||
Lab equipment | 9,835 | 16,037 | ||||||
Computers and peripheral equipment | 9,041 | 8,239 | ||||||
Office furniture and equipment | 535 | 589 | ||||||
Leasehold improvements | 1,692 | 1,453 | ||||||
SECaaS equipment | 4,275 | 3,342 | ||||||
25,378 | 29,660 | |||||||
Depreciated cost | $ | 11,189 | $ | 14,236 |
F - 34
NOTE | INTANGIBLE ASSETS, NET |
a. |
December 31, | ||||||||
2021 | 2020 | |||||||
Raw materials | $ | 1,494 | $ | 1,299 | ||||
Finished goods | 9,598 | 11,287 | ||||||
$ | 11,092 | $ | 12,586 |
December 31, | ||||||||
2023 | 2022 | |||||||
Gross Carrying Amount: | ||||||||
Technology | $ | 10,113 | $ | 10,113 | ||||
Backlog | 1,877 | 1,877 | ||||||
Customer relationships | 3,592 | 3,592 | ||||||
Software license | 1,651 | 1,651 | ||||||
IP R&D | 3,659 | 3,659 | ||||||
$ | 20,892 | $ | 20,892 | |||||
Accumulated amortization: | ||||||||
Technology | $ | 10,113 | $ | 9,117 | ||||
Backlog | 1,877 | 1,877 | ||||||
Customer relationships | 3,592 | 3,592 | ||||||
Software license | 1,651 | 660 | ||||||
IP R&D | 2,744 | 2,135 | ||||||
$ | 19,977 | $ | 17,381 | |||||
Net Carrying Amount: | $ | 915 | $ | 3,511 |
b. | Amortization expense for the years ended December 31, 2023, 2022 and 2021 were $ 982, $ 946 and $ 940, respectively. |
c. | Estimated amortization expense for the years ending: |
Year ending December 31, | ||||
2024 | $ | 610 | ||
2025 | 305 | |||
Total | $ | 915 |
NOTE 8: - PROPERTY AND EQUIPMENT, NET
December 31, | ||||||||
2021 | 2020 | |||||||
Cost: | ||||||||
Lab equipment | $ | 18,871 | $ | 17,624 | ||||
Computers and peripheral equipment | 14,316 | 13,090 | ||||||
Office furniture and equipment | 1,510 | 1,454 | ||||||
Leasehold improvements | 3,039 | 3,134 | ||||||
SECaaS equipment | 5,886 | 2,976 | ||||||
43,622 | 38,278 | |||||||
Accumulated depreciation: | ||||||||
Lab equipment | 14,408 | 13,511 | ||||||
Computers and peripheral equipment | 11,164 | 10,501 | ||||||
Office furniture and equipment | 535 | 575 | ||||||
Leasehold improvements | 1,230 | 1,224 | ||||||
SECaaS equipment | 1,285 | 474 | ||||||
28,622 | 26,285 | |||||||
Depreciated cost | $ | 15,000 | $ | 11,993 |
F - 3235
Weighted Average Useful life | December 31, | |||||||||||
(Years) | 2021 | 2020 | ||||||||||
Original Cost: | ||||||||||||
Technology | 3.8 | $ | 9,111 | $ | 9,111 | |||||||
Backlog | 2.8 | 1,877 | 1,877 | |||||||||
Customer relationships | 4.4 | 3,592 | 3,592 | |||||||||
Software license | 5 | 1,651 | 0 | |||||||||
IP R&D | 6 | 3,659 | 3,659 | |||||||||
$ | 19,890 | $ | 18,239 | |||||||||
Accumulated amortization: | ||||||||||||
Technology | $ | 9,111 | $ | 9,111 | ||||||||
Backlog | 1,877 | 1,877 | ||||||||||
Customer relationships | 3,592 | 3,592 | ||||||||||
Software license | �� | 330 | 0 | |||||||||
IP R&D | 1,525 | 915 | ||||||||||
$ | 16,435 | $ | 15,495 | |||||||||
Amortized cost | $ | 3,455 | $ | 2,744 |
Year ending December 31, | ||||
2022 | $ | 940 | ||
2023 | 940 | |||
2024 | 940 | |||
Thereafter | 635 | |||
Total | $ | 3,455 |
F - 33
NOTE 10: - | OTHER PAYABLES AND ACCRUED EXPENSES |
December 31, | December 31, | |||||||||||||||
2021 | 2020 | 2023 | 2022 | |||||||||||||
Accrued expenses | $ | 7,405 | $ | 4,920 | $ | 5,964 | $ | 7,056 | ||||||||
Deferred revenues from IIA | 282 | 0 | 302 | 110 | ||||||||||||
Onerous contract liability | 551 | - | ||||||||||||||
Government authorities | 2,592 | 3,723 | 2,108 | 1,955 | ||||||||||||
Foreign currency derivative contracts | 78 | 3,237 | 106 | 901 | ||||||||||||
Holdback and contingent earnout | 834 | 837 | 299 | 1,216 | ||||||||||||
Provision for returns | 233 | 290 | 90 | 90 | ||||||||||||
Advances from customers | 0 | 7 | ||||||||||||||
Others | 190 | 147 | 108 | 96 | ||||||||||||
$ | 11,614 | $ | 13,161 | $ | 9,528 | $ | 11,424 |
NOTE 11: - |
| ||||||||||||||||||||||||||||||||||||
F - 3436
Year ending December 31, | ||||
2022 | 2,804 | |||
2023 | 2,714 | |||
2024 | 2,302 | |||
2025 | 571 | |||
2026 and thereafter | 17 | |||
Total lease payments | 8,408 | |||
Less - imputed interest | (156 | ) | ||
Present value of lease liabilities | 8,252 |
F - 35
NOTE 11: - | LEASES (Cont.) |
Year ending December 31, | ||||
2024 | $ | 1,465 | ||
2025 | 673 | |||
2026 | 64 | |||
Total lease payments | 2,202 | |||
Less - imputed interest | (47 | ) | ||
Present value of lease liabilities | $ | 2,155 |
NOTE 12: - |
a. |
b. | Litigations: |
F - 37
NOTE 13: - | SHAREHOLDERS' EQUITY |
a. | Company's shares: |
b. | Share option plan: |
Year ended December 31, | ||||||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||||||
Number of shares upon exercise | Weighted average exercise price | Number of shares upon exercise | Weighted average exercise price | Number of shares upon exercise | Weighted average exercise price | |||||||||||||||||||
Outstanding at beginning of year | 1,134,256 | $ | 7.68 | 1,453,741 | $ | 7.59 | 1,736,143 | $ | 7.26 | |||||||||||||||
Granted | 0 | $ | 0 | 0 | $ | 0 | 0 | $ | 0 | |||||||||||||||
Forfeited | (30,861 | ) | $ | 16.78 | (28,657 | ) | $ | 17.47 | (59,107 | ) | $ | 10.05 | ||||||||||||
Exercised | (427,409 | ) | $ | 6.54 | (290,828 | ) | $ | 6.25 | (223,295 | ) | $ | 4.36 | ||||||||||||
Outstanding at end of year | 675,986 | $ | 7.99 | 1,134,256 | $ | 7.68 | 1,453,741 | $ | 7.59 | |||||||||||||||
Exercisable at end of year | 660,986 | $ | 8.04 | 1,065,498 | $ | 7.83 | 1,240,005 | $ | 8.01 | |||||||||||||||
Vested and expected to vest | 675,584 | $ | 7.99 | 1,132,007 | $ | 7.68 | 1,442,990 | $ | 7.61 |
Year ended December 31, | ||||||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||||||
Number of shares upon exercise | Weighted average exercise price | Number of shares upon exercise | Weighted average exercise price | Number of shares upon exercise | Weighted average exercise price | |||||||||||||||||||
Outstanding at beginning of year | 487,839 | $ | 5.96 | 675,986 | $ | 7.99 | 1,134,256 | $ | 7.68 | |||||||||||||||
Forfeited | (72,480 | ) | $ | 9.04 | (139,494 | ) | $ | 16.08 | (30,861 | ) | $ | 16.78 | ||||||||||||
Exercised | (1,364 | ) | $ | 0.03 | (48,653 | ) | $ | 5.01 | (427,409 | ) | $ | 6.54 | ||||||||||||
Outstanding at end of year | 413,995 | $ | 5.44 | 487,839 | $ | 5.96 | 675,986 | $ | 7.99 | |||||||||||||||
Exercisable at end of year | 413,995 | $ | 5.44 | 487,839 | $ | 5.96 | 660,986 | $ | 8.04 | |||||||||||||||
Vested and expected to vest | 413,995 | $ | 5.44 | 487,839 | $ | 5.96 | 675,584 | $ | 7.99 |
F - 38
NOTE 13: - | SHAREHOLDERS' EQUITY (Cont.) |
F - 36
Exercise price | Shares upon exercise of options outstanding as of December 31, 2021 | Weighted average remaining contractual life | Shares upon exercise of options exercisable as of December 31, 2021 | |||||||||||
Years | ||||||||||||||
$ | 23.31-27.58 | 45,500 | 0.65 | 45,500 | ||||||||||
$ | 15.2-17.07 | 13,000 | 1.04 | 13,000 | ||||||||||
$ | 10.0 -14.68 | 98,007 | 1.71 | 98,007 | ||||||||||
$ | 5.01-9.7 | 140,300 | 1.9 | 125,300 | ||||||||||
$ | 0.1-4.95 | 379,179 | 2.17 | 379,179 | ||||||||||
675,986 | 660,986 |
Year ended December 31, | ||||||||||||||||
2021 | 2020 | |||||||||||||||
Number of shares upon exercise | Weighted average share price | Number of shares upon exercise | Weighted average share price | |||||||||||||
Outstanding at beginning of year | 1,763,017 | $ | 8.63 | 1,652,060 | $ | 6.53 | ||||||||||
Granted | 1,149,500 | $ | 16.26 | 869,250 | $ | 10.96 | ||||||||||
Vested | (681,433 | ) | $ | 15.82 | (570,000 | ) | $ | 10.69 | ||||||||
Forfeited | (293,176 | ) | $ | 16.39 | (188,293 | ) | $ | 10.01 | ||||||||
Unvested at end of year | 1,937,908 | $ | 12.92 | 1,763,017 | $ | 8.63 |
Year ended December 31, | ||||||||||||||||
2023 | 2022 | |||||||||||||||
Number of shares upon exercise | Weighted average share price | Number of shares upon exercise | Weighted average share price | |||||||||||||
Outstanding at beginning of year | 2,255,620 | $ | 8.52 | 1,937,908 | $ | 12.92 | ||||||||||
Granted | 1,330,500 | $ | 2.47 | 1,473,400 | $ | 5.22 | ||||||||||
Vested | (1,005,532 | ) | $ | 2.19 | (829,910 | ) | $ | 15.82 | ||||||||
Forfeited | (316,889 | ) | $ | 2.38 | (325,778 | ) | $ | 5.78 | ||||||||
Unvested at end of year | 2,263,699 | $ | 4.95 | 2,255,620 | $ | 8.52 |
NOTE 14: - | TAXES ON INCOME |
a. | Corporate tax rates: |
F - 3739
NOTE | TAXES ON INCOME (Cont.) |
b. | Foreign Exchange Regulations: |
c. |
Pre-tax income (loss) is comprised as follows: |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Domestic | $ | (64,360 | ) | $ | (32,826 | ) | $ | (15,419 | ) | |||
Foreign | 2,640 | 2,691 | 2,230 | |||||||||
$ | (61,720 | ) | $ | (30,135 | ) | $ | (13,189 | ) |
F - 3840
NOTE |
F - 39
|
F - 40
TAXES ON INCOME (Cont.) |
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Domestic | $ | (15,419 | ) | $ | (8,722 | ) | $ | (8,934 | ) | |||
Foreign | 2,230 | 1,550 | 1,916 | |||||||||
$ | (13,189 | ) | $ | (7,172 | ) | $ | (7,018 | ) |
A reconciliation of the theoretical tax expenses, assuming all income is taxed at the statutory tax rate applicable to the income of the Company and the actual tax expenses is as follows: |
Year ended December 31, | Year ended December 31, | |||||||||||||||||||||||
2021 | 2020 | 2019 | 2023 | 2022 | 2021 | |||||||||||||||||||
Loss before taxes on income | $ | (13,189 | ) | $ | (7,172 | ) | $ | (7,018 | ) | $ | (61,720 | ) | $ | (30,135 | ) | $ | (13,189 | ) | ||||||
Theoretical tax income computed at the Israeli statutory tax rate (23% for the years 2021, 2020 and 2019, respectively) | $ | (3,034 | ) | $ | (1,650 | ) | $ | (1,614 | ) | |||||||||||||||
Theoretical tax income computed at the Israeli statutory tax rate (23% for the years 2023, 2022 and 2021, respectively) | $ | (14,196 | ) | $ | (6,931 | ) | $ | (3,034 | ) | |||||||||||||||
Changes in valuation allowance | 2,604 | 1,979 | 951 | 13,131 | 4,116 | 2,604 | ||||||||||||||||||
Increase in losses and temporary differences due to change in Israeli corporate and “Approved Enterprise" tax | 0 | 0 | 0 | |||||||||||||||||||||
Write off of prepaid and withholding taxes | 875 | 1,066 | 1,536 | 749 | 1,388 | 875 | ||||||||||||||||||
Foreign tax rates differences related to subsidiaries | 14 | 35 | 44 | 20 | 46 | 14 | ||||||||||||||||||
Non-deductible expenses | 71 | 72 | 470 | |||||||||||||||||||||
Capital note release taxes | 100 | 0 | 0 | |||||||||||||||||||||
Non-deductible expenses and exempt income | (269 | ) | 512 | 71 | ||||||||||||||||||||
Capital note and inter-company balances release taxes | - | 544 | 100 | |||||||||||||||||||||
Other expenses and Exchange rate differences | 488 | (383 | ) | (143 | ) | (37 | ) | 195 | 488 | |||||||||||||||
Non-deductible share-based compensation expense | 633 | 557 | 397 | 1,586 | 1,925 | 633 | ||||||||||||||||||
Change in expense associated with tax positions for current year | 100 | 500 | 0 | |||||||||||||||||||||
Change in uncertain tax positions | 100 | 100 | 100 | |||||||||||||||||||||
Actual tax expense | $ | 1,851 | $ | 2,176 | $ | 1,641 | $ | 1,084 | $ | 1,895 | $ | 1,851 |
F - 41
NOTE 14: - | TAXES ON INCOME (Cont.) |
e. | Taxes on income |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Current taxes | $ | 248 | $ | 391 | $ | 334 | ||||||
Deferred taxes expense | - | - | 420 | |||||||||
Taxes in respect of previous years | (13 | ) | 16 | 122 | ||||||||
Write off of prepaid and withholding taxes | 749 | 1,388 | 875 | |||||||||
Change in expense associated with tax positions for current year | 100 | 100 | 100 | |||||||||
$ | 1,084 | $ | 1,895 | $ | 1,851 |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Domestic | $ | 822 | $ | 1,129 | $ | 973 | ||||||
Foreign | 262 | 766 | 878 | |||||||||
Total | $ | 1,084 | $ | 1,895 | $ | 1,851 |
Domestic | ||||||||||||
Taxes in respect of previous years | $ | - | $ | (20 | ) | $ | 37 | |||||
Write off of prepaid and withholding taxes | 822 | 1,149 | 936 | |||||||||
Total Domestic | $ | 822 | $ | 1,129 | $ | 973 |
Foreign | ||||||||||||
Current taxes | $ | 248 | $ | 391 | $ | 334 | ||||||
Deferred taxes expense | - | - | 420 | |||||||||
Taxes in respect of previous years | (13 | ) | 36 | 85 | ||||||||
Write off of prepaid and withholding taxes | (73 | ) | 239 | (61 | ) | |||||||
Change in expense associated with tax positions for current year | 100 | 100 | 100 | |||||||||
Total foreign | $ | 262 | $ | 766 | $ | 878 | ||||||
Total income tax expense (benefit) | $ | 1,084 | $ | 1,895 | $ | 1,851 |
F - 42
NOTE | TAXES ON INCOME (Cont.) |
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Current taxes | $ | 334 | 513 | $ | 341 | |||||||
Deferred taxes expense (benefit) | 420 | 97 | (236 | ) | ||||||||
Taxes in respect of previous years | 122 | 0 | 0 | |||||||||
Write off of prepaid and withholding taxes | 875 | 1,066 | 1,536 | |||||||||
Change in expense associated with tax positions for current year | 100 | 500 | 0 | |||||||||
1,851 | 2,176 | 1,641 |
F - 4243
NOTE | TAXES ON INCOME (Cont.) |
Deferred income taxes: |
December 31, | ||||||||
2021 | 2020 | |||||||
Deferred tax assets: | ||||||||
Operating and capital loss carryforwards | $ | 22,332 | $ | 26,731 | ||||
Research and development | 9,161 | 2,602 | ||||||
Employee benefits | 1,629 | 1,368 | ||||||
Intangible assets | 179 | 282 | ||||||
Other temporary differences mainly relating to reserve and allowances | 2,336 | 1,607 | ||||||
Deferred tax asset before valuation allowance | 35,637 | 32,590 | ||||||
Valuation allowance | (30,256 | ) | (27,652 | ) | ||||
Deferred tax asset net of valuation allowance | 5,381 | 4,938 | ||||||
Deferred tax liability: | ||||||||
Intangible assets | 3,423 | 3,493 | ||||||
Other temporary differences mainly relating to reserve and allowances | 1,958 | 1,025 | ||||||
Net deferred tax asset | $ | 0 | $ | 420 |
December 31, | ||||||||
2023 | 2022 | |||||||
Deferred tax assets: | ||||||||
Operating and capital loss carryforwards | $ | 34,420 | $ | 25,962 | ||||
Research and development | 8,423 | 10,260 | ||||||
Employee benefits | 1,522 | 1,286 | ||||||
Intangible assets | 353 | 77 | ||||||
Operating lease liabilities | 496 | 1,178 | ||||||
Stock based compensation expenses | 1,733 | 1,481 | ||||||
Onerous contract | 127 | - | ||||||
Prepaid and withholding taxes | 6,297 | 5,702 | ||||||
Other temporary differences | 543 | 563 | ||||||
Deferred tax asset before valuation allowance | 53,914 | 46,509 | ||||||
Valuation allowance | (49,928 | ) | (41,917 | ) | ||||
Deferred tax asset net of valuation allowance | 3,986 | 4,592 | ||||||
Deferred tax liability: | ||||||||
Intangible assets | 3,284 | 3,354 | ||||||
Operating lease right-of-use assets | 702 | 1,239 | ||||||
Net deferred tax asset | $ | - | $ | - |
F - 44
NOTE 14: - | TAXES ON INCOME (Cont.) |
As of December 31, |
F - 43
NOTE | GEOGRAPHIC INFORMATION |
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Europe | $ | 58,414 | $ | 94,644 | $ | 36,199 | ||||||
Asia and Oceania | 44,227 | 23,519 | 42,994 | |||||||||
Americas | 19,391 | 8,131 | 16,576 | |||||||||
Middle East and Africa | 23,568 | 9,628 | 14,331 | |||||||||
$ | 145,600 | $ | 135,922 | $ | 110,100 |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Europe | $ | 39,945 | $ | 41,773 | $ | 58,414 | ||||||
Asia and Oceania | 20,547 | 29,888 | 44,227 | |||||||||
Americas | 16,542 | 21,791 | 19,391 | |||||||||
Middle East and Africa (*) | 16,116 | 29,285 | 23,568 | |||||||||
$ | 93,150 | $ | 122,737 | $ | 145,600 |
F - 45
NOTE 15: - | GEOGRAPHIC INFORMATION (Cont.) |
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
1st Customer | 11 | % | 43 | % | 16 | % | ||||||
2nd Customer | 0 | 11 | % | 11 | % | |||||||
11 | % | 54 | % | 27 | % |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
1st Customer | 15 | % | - | 11 | % | |||||||
15 | % | - | 11 | % |
December 31, | ||||||||
2021 | 2020 | |||||||
Long-lived assets: | ||||||||
Israel | $ | 21,821 | $ | 14,210 | ||||
Other | 1,692 | 2,241 | ||||||
$ | 23,513 | $ | 16,451 |
December 31, | ||||||||
2023 | 2022 | |||||||
Long-lived assets: | ||||||||
Israel | $ | 13,431 | $ | 18,472 | ||||
Other | 815 | 1,151 | ||||||
$ | 14,246 | $ | 19,623 |
NOTE 16: - | FINANCIAL INCOME (EXPENSES), NET |
Year ended December 31, | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Financial income: | ||||||||||||
Interest income | $ | 2,341 | $ | 1,880 | $ | 1,045 | ||||||
Amortization/accretion of premium/discount on marketable securities, net | 732 | - | - | |||||||||
Exchange rate differences and other | 214 | 292 | - | |||||||||
Financial expenses: | ||||||||||||
Exchange rate differences and other | - | - | 630 | |||||||||
institutions interest Expenses | 72 | - | - | |||||||||
Amortization/accretion of premium/discount on marketable securities, net | - | 38 | 76 | |||||||||
$ | 3,215 | $ | 2,134 | $ | 339 |
F - 4446
NOTE 17: - | RELATED PARTIES BALANCES AND TRANSACTIONS |
a. | The Company acquired services from Galil Software Ltd. (“Galil”), a related party as part of a service agreement between them which was approved by the board of directors of the Company. Galil is owned by a member of the board of directors of the Company. The Company recorded expenses related to services received from Galil amounting to approximately $ 325 and $ 993 for the years ended December 31, 2023 and 2022, respectively. |
b. | Lynrock Lake Master Fund LP (“Lynrock”) is a Major Sharholder of the Company’s ordinary shares as of December 31, 2023 and 2022. As of December 31, 2023, the Company had an outstanding senior unsecured promissory note in an aggregate principal amount of $ 40,000 (the “Note”) issued to Linrock, see note 18 below. The Company recorded amortization expenses related to the issuance costs of the notes during the years ended December 31, 2023 and 2022, in amountes of $ 198 and $ 171, respectively. |
NOTE |
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Financial income: | ||||||||||||
Interest income | $ | 1,045 | $ | 1,754 | $ | 2,551 | ||||||
Exchange rate differences and other | 0 | 231 | 0 | |||||||||
Financial expenses: | ||||||||||||
Exchange rate differences and other | 630 | 0 | 334 | |||||||||
Amortization/accretion of premium/discount on marketable securities, net | 76 | 128 | 257 | |||||||||
$ | 339 | $ | 1,857 | $ | 1,960 |
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Numerator: | ||||||||||||
Net loss | $ | (15,040 | ) | $ | (9,348 | ) | $ | (8,659 | ) | |||
Denominator: | ||||||||||||
Weighted average number of shares outstanding used in computing basic and diluted net loss per share | 36,050,540 | 35,007,201 | 34,250,582 | |||||||||
Basic and diluted net loss per share | $ | (0.42 | ) | $ | (0.27 | ) | $ | (0.25 | ) |
In event of a change of control (as defined in the note), the holder of the note has the right to require the company to convert all or a portion of the note to ordinary shares or redeem all (but not less than all) of the outstanding principal amount of the note.
F - 4547
NOTE 18: - | CONVERTIBLE NOTES (Cont.) |
December 31, | ||||||||
2023 | 2022 | |||||||
Liability: | ||||||||
Principal | $ | 40,000 | $ | 40,000 | ||||
Unamortized issuance costs | (227 | ) | (425 | ) | ||||
Net carrying amount | $ | 39,773 | $ | 39,575 |
F - 48