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RADCOM LTD

RADCOM LTDRDCMEarnings & Financial Report

Nasdaq

RADCOM Ltd. is a provider of quality monitoring and service assurance software for telecommunications carriers, founded in 1991. RADCOM's U.S. headquarters is in Paramus, New Jersey and its international headquarters is in Tel Aviv, Israel. RADCOM is a member of the RAD Group of companies. The company is traded on the Nasdaq exchange.

What changed in RADCOM LTD's 20-F — 2023 vs 2024

Top changes in RADCOM LTD's 2024 20-F

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Item 2. Properties

Properties — owned and leased real estate

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ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE 1 ITEM 3. KEY INFORMATION 1 A. [RESERVED] 1 B. CAPITALIZATION AND INDEBTEDNESS 1 C. REASONS FOR THE OFFER AND USE OF PROCEEDS 1 D. RISK FACTORS 1 ITEM 4. INFORMATION ON THE COMPANY 17 A. HISTORY AND DEVELOPMENT OF THE COMPANY 17 B. BUSINESS OVERVIEW 17 C. ORGANIZATIONAL STRUCTURE 33 D.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE 1 ITEM 3. KEY INFORMATION 1 A. [RESERVED] 1 B. CAPITALIZATION AND INDEBTEDNESS 1 C. REASONS FOR THE OFFER AND USE OF PROCEEDS 1 D. RISK FACTORS 1 ITEM 4. INFORMATION ON THE COMPANY 17 A. HISTORY AND DEVELOPMENT OF THE COMPANY 17 B. BUSINESS OVERVIEW 17 C. ORGANIZATIONAL STRUCTURE 31 D.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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To the extent that CSPs will not choose our solution, the pace in which we could grow of our business may be adversely affected. The pace at which we deploy our solutions is directly affected by the pace of CSPs’ internal processes and the pace of maturation of the 5G market.
To the extent that CSPs will not choose our solution, the pace in which we could grow our business may be adversely affected. The pace at which we deploy our solutions is directly affected by the pace of CSPs’ internal processes and the pace of maturation of the 5G market.
While we focus our sales and marketing resources in such selected markets, we cannot assure the selection of our solutions by Tier 1, CSPs that build new networks from scratch, or Greenfield Operators, or other leading CSPs operating in such markets and therefore we may not be successful in expanding our business as we plan.
While we focus our sales and marketing resources in such selected markets, we cannot assure the selection of our solutions by Tier 1 CSPs, CSPs that build new networks from scratch, or Greenfield Operators, or other leading CSPs operating in such markets and therefore we may not be successful in expanding our business as we plan.
Depending on the extent and breadth of sanctions, export controls and other measures that may be imposed in connection with the conflict in Ukraine, it is possible that our business and results of operations could be materially adversely affected. 11 Because our revenues are generated primarily in foreign currencies (mostly in U.S. dollars but also in other currencies), but a significant portion of our expenses are incurred in New Israeli Shekels, our results of operations may be seriously adversely affected by currency fluctuations.
Depending on the extent and breadth of sanctions, export controls and other measures that may be imposed in connection with the conflict in Ukraine, it is possible that our business and results of operations could be adversely affected. 11 Because our revenues are generated primarily in foreign currencies (mostly in U.S. dollars but also in other currencies), but a significant portion of our expenses are incurred in New Israeli Shekels, our results of operations may be seriously adversely affected by currency fluctuations.
As a result of the difficulty associated with enforcing a judgment against us in Israel, you may not be able to collect any damages awarded by either a United States or foreign court. As a foreign private issuer whose shares are listed on the Nasdaq, we may follow certain home country corporate governance practices instead of certain Nasdaq requirements.
As a result of the difficulty associated with enforcing a judgment against us in Israel, you may not be able to collect any damages awarded by either a United States or foreign court. 14 As a foreign private issuer whose shares are listed on the Nasdaq, we may follow certain home country corporate governance practices instead of certain Nasdaq requirements.
If our shareholders decide to exercise these rights in a way inconsistent with our management’s strategic plans, our management’s ability to run our company may be disrupted, and this process may entail significant costs to us. 13 We currently benefit from government programs that may be discontinued or reduced. We currently receive grants under Government of Israel programs.
If our shareholders decide to exercise these rights in a way inconsistent with our management’s strategic plans, our management’s ability to run our company may be disrupted, and this process may entail significant costs to us. We currently benefit from government programs that may be discontinued or reduced. We currently receive grants under Government of Israel programs.
Furthermore, in making employment decisions, particularly in the high-technology industry, job candidates often consider the value of the equity they are to receive in connection with their employment. Employees may be more likely to leave us if the shares they own or the shares underlying their equity incentive awards have significantly appreciated or significantly decreased in value.
Furthermore, in making employment decisions, particularly in the high-technology industry, job candidates often consider the value of the equity they are to receive in connection with their employment. Employees may be more likely to leave us if the shares they own or the shares underlying their equity incentive awards have significantly decreased in value.
Grants received from the IIA before June 30, 2017, bear an annual interest rate based on the 12-month LIBOR, and grants received from the IIA after June 30, 2017, bear an annual interest rate based on the 12-month LIBOR, until December 31, 2023, and as of January 1, 2024, bear an annual interest rate based on the 12-month SOFR, or at an alternative rate published by the Bank of Israel, with the addition of 0.72%.
Grants received from the IIA after June 30, 2017, bear an annual interest rate based on the 12-month LIBOR, until December 31, 2023, and as of January 1, 2024, bear an annual interest rate based on the 12-month SOFR, or at an alternative rate published by the Bank of Israel, with the addition of 0.72%.
If the implementation of our growth strategy by acquiring other businesses will result in operational disruption, our business, financial condition and results of operations could be adversely affected. Because we received grants from the IIA, we are subject to ongoing restrictions.
If the implementation of our growth strategy by acquiring other businesses will result in operational disruption, our business, financial condition and results of operations could be adversely affected. 9 Because we received grants from the IIA, we are subject to ongoing restrictions.
Accordingly, our shareholders may not be afforded the same protection as provided under Nasdaq’s corporate governance rules. For more information, see “Item 16G—Corporate Governance”. 14 General Risk Factors Natural disasters and other events beyond our control could harm our business.
Accordingly, our shareholders may not be afforded the same protection as provided under Nasdaq’s corporate governance rules. For more information, see “Item 16G—Corporate Governance”. General Risk Factors Natural disasters and other events beyond our control could harm our business.
Such developments include changes in general global economic conditions, industry consolidation, emergence of new competitors, commoditization of voice services, regulatory changes, and changes in the plans of CSPs to shift, transform and adapt their network operations to rollout 5G networks and cloud-native virtualized networks.
Such developments include changes in general global economic conditions, industry consolidation, emergence of new competitors, commoditization of voice services, regulatory changes, and changes in the plans of CSPs to shift, transform and adapt their network operations to rollout 5G networks and cloud-native networks.
As a result, we may have to defer recognition of revenues, our reserves for doubtful accounts and write-offs of accounts receivable may increase and we may incur losses. Certain privacy and data security laws and regulations may affect the use of our solutions.
As a result, we may have to defer recognition of revenues, our reserves for doubtful accounts and write-offs of accounts receivable may increase and we may incur losses. 15 Certain privacy and data security laws and regulations may affect the use of our solutions.
While the transformation of network operations to cloud-native virtualized networks arise out of the desire of CSPs to reduce network infrastructure expense, thus creating opportunities for us, it also creates a downward pressure on the prices of our solutions.
While the transformation of network operations to cloud-native networks arise out of the desire of CSPs to reduce network infrastructure expense, thus creating opportunities for us, it also creates a downward pressure on the prices of our solutions.
Any of these factors could harm our international operations and have an adverse effect on our business, operating efficiency, results of operations, financial performance and financial condition. The continuing weakness in foreign economies could have a significant negative effect on our future operating results.
Any of these factors could harm our international operations and have an adverse effect on our business, operating efficiency, results of operations, financial performance and financial condition. The continuing weakness in certain foreign economies could have a significant negative effect on our future operating results.
Our future success also depends upon the increased utilization of our solutions by next-generation network operators and specifically virtualized cloud-native networks on private and public clouds, who may not adopt our technology.
Our future success also depends upon the increased utilization of our solutions by next-generation network operators and specifically cloud-native networks on private and public clouds, who may not adopt our technology.
The recent inflation, geopolitical issues, increase in energy costs, high interest rates, unstable global conditions and changes in currency exchange rates have led to global economic instability.
The recent inflation rates, geopolitical issues, increase in energy costs, interest rates, unstable global conditions and changes in currency exchange rates have led to global economic instability.
The Law for the Encouragement of Research, Development and Technological Innovation in the Industry, 1984-5744, or the R&D Law, generally requires a grant recipient and its controlling shareholders to notify the IIA of changes in the ownership of the recipient company and to undertake to the IIA to observe the laws governing the grant programs.
The Law for the Encouragement of Research, Development and Technological Innovation in the Industry, 1984-5744, or the Innovation Law, generally requires a grant recipient and its controlling shareholders to notify the IIA of changes in the ownership of the recipient company and to undertake to the IIA to observe the laws governing the grant programs.
If we lose the services of any key employees, we may not be able to manage our business successfully or to achieve our business objectives. 6 Competition for highly skilled technical and other personnel is intense, and as a result we may fail to attract, recruit and retain qualified employees, which could materially and adversely impact our business, financial condition and results of operations.
If we lose the services of any key employees, we may not be able to manage our business successfully or to achieve our business objectives. 6 We experience competition for highly skilled technical and other personnel, and as a result we may fail to attract, recruit and retain qualified employees, which could materially and adversely impact our business, financial condition and results of operations.
In the current environment, there are numerous and evolving risks to cybersecurity and privacy, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, employee malfeasance and human or technological error.
In the current environment, there are numerous and evolving risks to cybersecurity and privacy, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, employee malfeasance and human or technological errors.
Nonetheless, the amount of royalties that we may be required to pay, may be higher in certain circumstances, such as when the manufacturing activity or know how is transferred outside of Israel.
Nonetheless, the amount that we may be required to pay to the IIA, may be higher in certain circumstances, such as when the manufacturing activity or know how is transferred outside of Israel.
Our future success is dependent upon the continued growth of the telecommunications industry as well as the specific sectors that we target, which currently include, among others, 5G, Internet of Things, or IoT, 4G cellular, Triple Play networks and Voice over Long Term Evolution, or VoLTE.
Our future success is dependent upon the continued growth of the telecommunications industry as well as the specific sectors that we target, which currently include, among others, 5G, Internet of Things, or IoT, 4G cellular, Voice over Long Term Evolution, or VoLTE, Private Networks and Roaming.
As of today, we have not entered into any hedging transactions in order to mitigate these risks. Moreover, as our revenues are currently denominated primarily in U.S. dollars, devaluation in the local currencies of our customers relative to the U.S. dollar could cause customers to default on payment.
As of March 19, 2025, we have not entered into any hedging transactions in order to mitigate these risks. Moreover, as our revenues are currently denominated primarily in U.S. dollars, devaluation in the local currencies of our customers relative to the U.S. dollar could cause customers to default on payment.
Our strategy to focus most of our sales efforts on Tier 1, Greenfield Operators and other leading CSPs in the North American, European and select other markets may not be successful.
Our strategy to focus most of our sales efforts on Tier 1, Greenfield Operators and other leading CSPs in the North American, European, Japan and selected other markets may not be successful.
Compliance with the GDPR is an ongoing process. Additionally, in California the Consumer Privacy Act, or CCPA, provides new data privacy rights for consumers and new operational requirements for companies. Further, the California Privacy Rights Act, or CPRA, significantly modified the CCPA, including adding new privacy rights and increasing regulation on online advertising.
Compliance with the GDPR is an ongoing process. Additionally, in California the Consumer Privacy Act, or CCPA, provides for data privacy rights for consumers and operational requirements for companies. Further, the California Privacy Rights Act, or CPRA, significantly modified the CCPA, including providing for additional privacy rights and increasing regulation on online advertising.
Several companies compete with us in the market for service assurance and Customer Experience Management and Service Operations Center that offer cloud-native, software-based, virtualized service assurance solutions. We expect that competition will increase in the future, both with respect to solutions that we currently offer and solutions that we are developing.
Several companies compete with us in the market for service assurance and Customer Experience Management that offer cloud-native, software-based, automated service assurance solutions. We expect that competition will increase in the future, both with respect to solutions that we currently offer and solutions that we are developing.
We believe that the significant share of cloud-native, software-based and 5G deployment activity is expected to continue to take place in North America, Europe, selected CSPs in Asia-Pacific and selected CSPs in developing markets such as Latin America. We have accordingly enhanced our presence and focused our sales and marketing resources in these markets.
We believe that the significant share of cloud-native, software-based and 5G deployment activity is expected to continue to take place in North America, Europe, Japan, selected CSPs in Asia-Pacific and selected CSPs in Latin America. We have accordingly enhanced our presence and focused our sales and marketing resources in some of these markets.
Although we also engage a talented team in the United States, India and Romania to benefit from the significant pool of talent that is available in such markets, we have also witnessed increased competition in those markets as well during the last year.
Although we also engage a talented team in the United States, India and Romania to benefit from the significant pool of talent that is available in such markets, we have also witnessed increased competition in those markets as well in recent years.
Prior to 2023 we incurred net losses and we may not sustain profitability in the future. In 2023, we achieved net income of approximately $3.7 million while in 2022 and 2021, we incurred net losses of approximately $2.3 million and $5.3 million, respectively.
Prior to 2023 we incurred net losses and we may not sustain profitability in the future. In 2024, and 2023 we achieved net income of approximately $7 million and $3.7 million, respectively while in 2022, we incurred net loss of approximately $2.3 million.
Our business operations are subject to interruption by natural disasters, flooding, fire, power shortages, pandemics such as the recent spread of the coronavirus, terrorism, political unrest, telecommunications failure, vandalism, cyber-attacks, geopolitical instability, war, the effects of climate change (such as drought, wildfires, increased storm severity and sea level rise) and other events beyond our control.
Our business operations are subject to interruption by natural disasters, flooding, fire, power shortages, pandemics such as the recent spread of the coronavirus, terrorism, political unrest, telecommunications failure, vandalism, cyber-attacks, geopolitical instability, war, such as the recent war between Israel and the terrorist organization Hamas and the hostilities between Israel and the terrorist organizations Hezbollah and the Houthis and Iran, the effects of climate change (such as drought, wildfires, increased storm severity and sea level rise) and other events beyond our control.
While we are headquartered in Israel, approximately 96 % of our sales in 2023, 97% of our sales in 2022 and 94% of our sales in 2021 were generated outside of Israel.
While we are headquartered in Israel, approximately 89% of our sales in 2024, 96% of our sales in 2023 and 97% of our sales in 2022 were generated outside of Israel.
The complexity and scope of the solutions we provide to larger CSPs is increasing. The larger and more complex such projects are, the greater the operational risks associated with such projects.
The complexity and scope of the solutions we provide to larger CSPs is increasing. Larger projects entail greater operational risk and an increased chance of failure. The complexity and scope of the solutions we provide to larger CSPs is increasing. The larger and more complex such projects are, the greater the operational risks associated with such projects.
Additionally, the CCPA, the CPRA, and other legal and regulatory changes are making it easier for certain individuals to opt-out of having their personal data processed and disclosed to third parties through various opt-out mechanisms, which could result in an increase to our operational costs to ensure compliance with such legal and regulatory changes. 15 Use of our solutions could be subject to such regulations, which could significantly increase the cost of implementing our solutions and impact our ability to compete in the marketplace.
Additionally, the CCPA, the CPRA, and other legal and regulatory changes are making it easier for certain individuals to opt-out of having their personal data processed and disclosed to third parties through various opt-out mechanisms, which could result in an increase to our operational costs to ensure compliance with such legal and regulatory changes.
Any such requirement to disclose or grant rights in our source code or other confidential information related to our solutions could, therefore, materially adversely affect our competitive advantage and impact our business, financial condition and results of operations. 8 Our use of AI, GenAI, ML, data analytics and similar tools and technologies, or, collectively, AI and Related Tools, as well as applications, features, and functionality that we may introduce in the future, may result in difficulties, including with product development and integration and accuracy of the results and may otherwise not prove efficient or profitable, may not be widely or timely accepted by our customers or the market, may enhance intellectual property, cybersecurity, operational and technological risks, or may otherwise adversely impact our business or operations, or subject us to possible litigation .
Our use of AI, GenAI, ML, data analytics and similar tools and technologies, or, collectively, AI and Related Tools, as well as applications, features, and functionality that we may introduce in the future, may result in difficulties, including with product development and integration and accuracy of the results and may otherwise not prove efficient or profitable, may not be widely or timely accepted by our customers or the market, may enhance intellectual property, cybersecurity, operational and technological risks, or may otherwise adversely impact our business or operations, or subject us to possible litigation .
A failure to do so could adversely affect our revenues and profitability. 1 The pace at which we grow our business depends on our current and potential customers’ internal processes and decisions regarding the transition to 5G or to fully virtualized networks and our ability to secure new customers. Our expectations regarding the pace of 5G rollout may not materialize.
A failure to do so could adversely affect our revenues and profitability. 1 The pace at which we grow our business depends on our current and potential customers’ internal processes and decisions regarding the transition to 5G or to deploy new assurance systems and our ability to secure new customers.
The pace of transition to 5G and timeframe for reaching a mature infrastructure for 5G is dependent on CSPs’ internal decisions regarding 5G technology implementation, timing, nature of virtualization and budgeting.
Our expectations regarding the pace of 5G rollout may not materialize. The pace of transition to 5G and timeframe for reaching a mature infrastructure for 5G is dependent on CSPs’ internal decisions regarding 5G technology implementation, timing, and budgeting.
Our investments in emerging market countries may also be subject to risks and uncertainties, including unfavorable taxation treatment, exchange rates, challenges in protecting our intellectual property rights, nationalization, inflation, currency fluctuations, or the absence of, or unexpected changes in, regulation as well as other unforeseeable operational risks. 5 Most of our customers usually require a detailed and comprehensive evaluation process before they order our solutions.
Our investments in emerging market countries may also be subject to risks and uncertainties, including unfavorable taxation treatment, exchange rates, challenges in protecting our intellectual property rights, nationalization, inflation, currency fluctuations, or the absence of, or unexpected changes in, regulation as well as other unforeseeable operational risks.
Our sales process may be subject to delays that could significantly decrease our revenues and result in the eventual cancellations of some sale opportunities. We derive all of our revenues from the sale of solutions and related services for CSPs. As common practice in our industry, our solutions generally undergo a lengthy evaluation process before we can sell them.
Most of our customers usually require a detailed and comprehensive evaluation process before they order our solutions. Our sales process may be subject to delays that could significantly decrease our revenues and result in the eventual cancellations of some sale opportunities. As common practice in our industry, our solutions generally undergo a lengthy evaluation process before we can sell them.
Our international sales will be limited if we cannot continue to establish and maintain relationships with international distributors and resellers, set up additional foreign operations, expand international sales channel management, hire additional personnel, develop relationships with international CSPs and operate adequate after-sales support internationally.
Our international sales will be limited if we cannot continue to establish and maintain relationships with international distributors and resellers, set up additional foreign operations, expand international sales channel management, hire additional personnel, develop relationships with international CSPs and operate adequate after-sales support internationally. 10 Even if we are able to successfully further expand our international operations, we may not be able to maintain or increase international market demand for our solutions.
If AI and Related Tools are incorrectly designed or the data used to train them is incomplete, inadequate or biased in some way, use of AI and Related Tools may inadvertently reduce efficiency or cause unintentional or unexpected outputs that are incorrect, do not match our or our customers’ business goals, do not comply with our or our customers’ policies or interfere with the performance of our or our customers’ products, services, business and reputation.
If AI and Related Tools are incorrectly designed or the data used to train them is incomplete, inadequate or biased in some way, use of AI and Related Tools may inadvertently reduce efficiency or cause unintentional or unexpected outputs that are incorrect, do not match our or our customers’ business goals, do not comply with our or our customers’ policies or interfere with the performance of our or our customers’ products, services, business and reputation. 8 Additionally, there can be no assurance that any GenAI or other AI and Related Tool solutions we develop will be adopted by the market, or be profitable or viable.
Failure to complete a larger project successfully could expose us to potential contractual penalties, claims for breach of contract and in extreme cases, to cancellation of the entire project, and may result in difficulty in collecting payment and recognizing revenues from such project. 7 Cyber-attacks on our customers’ networks involving our products could have an adverse effect on our business.
Failure to complete a larger project successfully could expose us to potential contractual penalties, claims for breach of contract and in extreme cases, to cancellation of the entire project, and may result in difficulty in collecting payment and recognizing revenues from such project and may also harm our reputation.
For example, our two largest customers accounted for approximately 76% of our revenue in fiscal year 2023.
For example, our three largest customers accounted for approximately 88% of our revenue in fiscal year 2024.
Such changes, and their impact on the global macro-economic environment, may result in a slow in the level of investments made by CSPs, including, the transition of CSPs to 5G, which can impact our business, operating results, and financial condition.
Such changes, and their impact on the global macro-economic environment, may result in a slow in the level of investments made by CSPs, including, the transition of CSPs to 5G, which can impact our business, operating results, and financial condition. 5 Our sales derived from emerging market countries may be materially adversely affected by economic, exchange rates, regulatory and political developments in those countries.
Between January 1, 2023, and March 27, 2024, our ordinary shares’ closing price on the Nasdaq Capital Market, or the Nasdaq, was as high as $11.87 and as low as $7.58 per share. As of March 27, 2024, the closing price of our ordinary shares on Nasdaq was $10.80 per share.
Between January 1, 2024, and March 19, 2025, our ordinary shares’ closing price on the Nasdaq Capital Market, or the Nasdaq, was as high as $15.40 and as low as $7.71 per share. As of March 19, 2025, the closing price of our ordinary shares on Nasdaq was $12.68 per share.
Section 63(b) of the Israeli Companies Law, 5759-1999, or the Israeli Companies Law, may allow any one or more of our shareholders holding at least 10% of our voting rights to demand that we convene an extraordinary shareholders meeting.
Section 63(b) of the Israeli Companies Law, 5759-1999, or the Israeli Companies Law, together with Section 7B of the Israeli Companies Regulations (Relief for Public Companies with Shares Listed for Trading on a Stock Market Outside of Israel), 5760-2000, or the Relief Regulations, may allow any one or more of our shareholders holding at least 10% of our voting rights to demand that we convene an extraordinary shareholders meeting.
More and more CSPs require us to perform a product hardening in order to prevent security vulnerabilities via our products that may result in security breaches in our customers’ data.
In addition, these events could also result in damage to our reputation which will further negatively impact our business. 7 More and more CSPs require us to perform a product hardening in order to prevent security vulnerabilities via our products that may result in security breaches in our customers’ data.
However, our expectations may not be correct, and the actual pace of cloud-native, software-based, virtualized network transformation and/or 5G rollout may take longer than we anticipate or may not occur at all.
Our expectation is that the market for our solutions will materialize and gain momentum as a result. However, our expectations may not be correct, and the actual pace of cloud-native, network transformation and/or 5G rollout may take longer than we anticipate or may not occur at all.
We may be unable to sustain profitability or may again incur losses in the future, which could materially affect our cash and liquidity and could adversely affect the value and market price of our ordinary shares. 10 Our international presence exposes us to risks associated with varied and changing political, cultural, legal and economic conditions worldwide and if we fail to adapt appropriately to the challenges associated with operating internationally the expected growth of our business may be impeded, and our operating results may be affected.
Our international presence exposes us to risks associated with varied and changing political, cultural, legal and economic conditions worldwide and if we fail to adapt appropriately to the challenges associated with operating internationally the expected growth of our business may be impeded, and our operating results may be affected.
As of March 27, 2024, only one of our employees has been called to service, and none of our executive management. Our operations could be disrupted by such call-ups, which may include the call-up of members of our management. Such disruption could materially adversely affect our business, prospects, financial condition and results of operations.
As of March 19, 2025, none of our employees or executive management has been called to service. Our operations could be disrupted by such call-ups, which may include the call-up of members of our management.
We may not realize the intended benefits of any acquisition, investment or joint venture and we may incur future losses from any acquisition, investment or joint venture. 9 In addition, acquisitions such as our recent acquisition of Continual Ltd., or Continual, could result in, among other things, substantial cash expenditures, potentially dilutive issuances of equity securities, the incurrence of debt and contingent liabilities, a decrease in our profit margins, and amortization of intangibles and potential impairment of goodwill.
In addition, acquisitions could result in, among other things, substantial cash expenditures, potentially dilutive issuances of equity securities, the incurrence of debt and contingent liabilities, a decrease in our profit margins, and amortization of intangibles and potential impairment of goodwill.
Cyber-attacks, or other breaches of security on our customers’ networks, may be initiated at any network location or device including initiation through our products. Although we maintain high levels of cyber-security aware development processes, we cannot assure that such attacks, or other breaches of security through our products, will fail and therefore may negatively affect our customers’ business.
Although we maintain high levels of cyber-security aware development processes, we cannot assure that such attacks, or other breaches of security through our products, will fail and therefore may negatively affect our customers’ business. While we maintain insurance coverage for some of these events, we cannot be certain that our coverage will be adequate for liabilities actually incurred.
If the demand for cloud-native, software-based, virtualized network does not continue to grow or the 5G rollout does not materialize, our business, financial condition and results of operations may suffer.
If the demand for cloud-native, software-based networks does not continue to grow or the 5G rollout does not materialize, our business, financial condition and results of operations may suffer. Disruptions to our IT systems due to system failures or cybersecurity attacks may impact our operations, which would negatively materially adversely affect our reputation and business.
Part of our growth strategy may be to selectively pursue partnerships and acquisitions that provide us access to complementary technologies and accelerate our penetration into new markets. The negotiation of acquisitions, investments or joint ventures, as well as the integration of acquired or jointly developed businesses or technologies, could divert our management’s time and resources.
Part of our growth strategy may be to selectively pursue partnerships and acquisitions, such as our acquisition of Continual Ltd., or Continual, that provide us access to complementary technologies and accelerate our penetration into new markets.
Ongoing and revived hostilities in the Middle East or other Israeli political or economic factors, could harm our operations and solution development and cause any future sales to decrease.
Ongoing and revived hostilities in the Middle East or other Israeli political or economic factors, could harm our operations and solution development and cause any future sales to decrease. In October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets.
Our sales derived from emerging market countries may be materially adversely affected by economic, exchange rates, regulatory and political developments in those countries. We plan to continue to generate revenue from various emerging market countries which represent a portion of our existing business and our expected growth.
We plan to continue to generate revenue from various emerging market countries which represent a relatively small portion of our existing business and our expected growth. Economic or political turmoil in these countries could materially adversely affect our revenues and results of operations.
Our future growth and success depend to an extent upon the continuing services of our executive officers and other key employees including our Chief Operating Officer, Hilik Itman, and our Chief Technology Officer, Rami Amit. Competition for qualified management and other high-level telecommunications industry personnel is intense, and we may not be successful in attracting and retaining qualified personnel.
Our future growth and success depend to an extent upon the continuing services of our executive officers and other key employees including our Chief Executive Officer, Benjamin (Benny) Eppstein, Chief Operating Officer, Hilik Itman, and our Chief Technology Officer, Rami Amit.
Our principal research and development as well as significant elements of our marketing and general and administrative activities are conducted at our headquarters in Israel, where we face significant competition. The high-tech industry in Israel has experienced significant levels of employee attrition and a shortage of skilled human capital, including research and development, marketing, operations and customer service professionals.
Our principal research and development as well as significant elements of our marketing and general and administrative activities are conducted at our headquarters in Israel, where we face competition on skilled personnel.
In addition, during 2023, the Israeli government pursued extensive changes to Israel’s judicial system. This sparked extensive political debate and protests.
Such disruption could materially adversely affect our business, prospects, financial condition and results of operations. 13 In addition, commencing in 2023, the Israeli government pursued extensive changes to Israel’s judicial system. This sparked extensive political debate and protests.
Acquired businesses, technologies or joint ventures may not be successfully integrated with our solutions and operations.
The negotiation of acquisitions, investments or joint ventures, as well as the integration of acquired or jointly developed businesses or technologies, could divert our management’s time and resources. Acquired businesses, technologies or joint ventures may not be successfully integrated with our solutions and operations.
Maintaining the security of our products which are installed with our customers is a critical issue for us, therefore we invest resources and technologies to better protect our assets. However, security researchers, criminal hackers and other third parties regularly develop new techniques to penetrate computer and network security measures.
Cyber-attacks on our customers’ networks involving our products could have an adverse effect on our business. Maintaining the security of our products which are installed with our customers is a critical issue for us, therefore we invest resources and technologies to better protect our assets.
To the extent that CSPs require more time to reach the decision to virtualize, decide to delay virtualization while the market develops, elect not to deploy 5G, or to delay the transition to fully virtualized cloud-native networks our sales cycles may lengthen, and the growth of our business may be adversely affected.
To the extent that CSPs elect not to deploy 5G, or to delay the transition to cloud-native 5G networks our sales cycles may lengthen, and the growth of our business may be adversely affected. We believe that most of the industry’s leading CSPs will rollout 5G networks which will in turn promote the adoption of cloud-native, software-based, assurance solutions.
Disruptions to our IT systems due to system failures or cybersecurity attacks may impact our operations, result in sensitive customer information being compromised, which would negatively materially adversely affect our reputation and business. We believe that an appropriate IT infrastructure is important in order to support our daily operations and the growth of our business.
We believe that an appropriate IT infrastructure is important in order to support our daily operations and the growth of our business.
These changes require us to constantly adapt and improve our solutions to meet changing industry requirements.
In addition, the nature of 5G deployments enables new services to be introduced, which may require additional and costly development. These changes require us to constantly adapt and improve our solutions to meet changing industry requirements.
Removed
We believe that most of the industry’s leading CSPs will rollout 5G networks which will in turn promote the adoption of cloud-native, software-based, virtualized network solutions. Our expectation is that the market for our solutions will materialize and gain momentum as a result.
Added
Competition for qualified management and other high-level telecommunications industry personnel is intense, and we may not be successful in attracting and retaining qualified personnel.
Removed
Economic or political turmoil in these countries could materially adversely affect our revenues and results of operations.
Added
However, security researchers, criminal hackers and other third parties regularly develop new techniques to penetrate computer and network security measures. Cyber-attacks, or other breaches of security on our customers’ networks, may be initiated at any network location or device including initiation through our products.
Removed
A regional or global health pandemic could adversely affect our business, results of operations and financial condition due to impacts from remote work arrangements, actions taken to contain the disease or treat its impact and the speed and extent of the recovery.
Added
Any such requirement to disclose or grant rights in our source code or other confidential information related to our solutions could, therefore, materially adversely affect our competitive advantage and impact our business, financial condition and results of operations.
Removed
A regional or global health pandemic, depending upon its duration and severity, could have a material adverse effect on our business. For example, the COVID-19 pandemic had numerous effects on the global economy and governmental authorities around the world implemented measures to reduce the spread of COVID-19.
Added
We may not realize the intended benefits of any acquisition, investment or joint venture and we may incur future losses from any acquisition, investment or joint venture.
Removed
These measures, including shutdowns and “shelter-in-place” orders suggested or mandated by governmental authorities or otherwise elected by companies as a preventive measure, have adversely affected workforces, economies and financial markets, and, along with decreased consumer spending, led to an economic downturn in many markets.
Added
Pursuant to the latest IIA regulations, grants received from the IIA before June 30, 2017, bear an annual interest rate that applied at the time of the approval of the applicable IIA filing, and that interest rate will apply to all of the funding received under that IIA approval.
Removed
To the extent COVID-19 or any other pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this “Risk factors” section. The complexity and scope of the solutions we provide to larger CSPs is increasing. Larger projects entail greater operational risk and an increased chance of failure.
Added
We may be unable to sustain profitability or may again incur losses in the future, which could materially affect our cash and liquidity and could adversely affect the value and market price of our ordinary shares.
Removed
While we maintain insurance coverage for some of these events, we cannot be certain that our coverage will be adequate for liabilities actually incurred. In addition, these events could also result in damage to our reputation which will further negatively impact our business.
Added
Hamas also launched extensive rocket attacks on Israeli population and industrial centers located along Israel’s border with the Gaza Strip and in other areas within the State of Israel. Following the attack, Israel’s security cabinet declared war against Hamas.
Removed
Additionally, there can be no assurance that any GenAI or other AI and Related Tool solutions we develop will be adopted by the market, or be profitable or viable.
Added
Since the commencement of these events, there have been continued hostilities along Israel’s northern border with the Hezbollah terror organization, with Iran, the Houthis in Yemen and on other fronts with various extremist groups in the region, such as various rebel militia groups in Syria and Iraq.
Removed
Even if we are able to successfully further expand our international operations, we may not be able to maintain or increase international market demand for our solutions.
Added
In October 2024, Israel began limited ground operations against Hezbollah in Lebanon, and in November 2024, a ceasefire was brokered between Israel and Hezbollah, which has not been continuously upheld.
Removed
On October 7, 2023, the terrorist organization Hamas launched a terrorist attack on Israel, which resulted in a state of war in Israel, and a number of our employees being called-up to military reserve service, as further detailed below.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Our solution portfolio enables CSPs to deploy 5G networks and those still running or migrating their 4G, 3G, and 2G legacy networks to have one platform covering their entire network, providing fully cloud-native network intelligence and service assurance. Monitoring 5G SA requires a new approach that supports different options for traffic tapping and data acquisition.
Our solution portfolio enables CSPs to deploy 5G networks and those still running or migrating their 4G, 3G, and 2G legacy networks to have one platform covering their entire network, providing fully cloud-native network intelligence and service assurance. Monitoring 5G standalone, or SA, requires a new approach that supports different options for traffic tapping and data acquisition.
We believe that our solutions are significantly more advanced than competitors’ offerings and that we are better positioned than competitors who lack the experience deploying in cloud-native environments or do not offer true 5G-ready solutions that can be deployed at large scale.
We believe that our solutions are significantly more advanced than competitors’ offerings and that we are better positioned than competitors who lack the experience deploying in cloud-native and AI-native environments or do not offer true 5G-ready solutions that can be deployed at large scale.
Generally, the cost of the extended warranty is an annual maintenance fee based on a percentage of the overall cost of the solutions. 28 ● Customer-oriented product development: With the goal of continuously enhancing our customer relationships, we meet regularly with customers, and use the feedback from these discussions to improve our solutions and guide our R&D roadmap. ● Regional technical support: As the sale of a system and solutions requires a high level of technical skills, we decided to enhance our support with local experts located in our regional offices.
Generally, the cost of the extended warranty is an annual maintenance fee based on a percentage of the overall cost of the solutions. ● Customer-oriented product development: With the goal of continuously enhancing our customer relationships, we meet regularly with customers, and use the feedback from these discussions to improve our solutions and guide our R&D roadmap. 26 ● Regional technical support: As the sale of a system and solutions requires a high level of technical skills, we decided to enhance our support with local experts located in our regional offices.
As of December 31, 2023, royalties at a rate of 3% are due on revenues from sales of products and related services that incorporate know-how developed, in whole or in part, within the framework of projects funded by the IIA. In 2023, and in previous years, we participated in a Magnet consortium program sponsored by IIA, or Magnet Program.
As of December 31, 2024, royalties at a rate of 3% are due on revenues from sales of products and related services that incorporate know-how developed, in whole or in part, within the framework of projects funded by the IIA. In 2024, and in previous years, we participated in a Magnet consortium program sponsored by IIA, or Magnet Program.
We plan to increase our sales by leveraging our unparalleled experienced gained from implementing some of largest, most advanced network deployments to date, where we are providing complete end-to-end network visibility from the RAN to the network core in multiple deployment models including public cloud.
We plan to increase our sales by leveraging our unparalleled experience gained from implementing some of largest, most advanced network deployments to date, where we are providing complete end-to-end network visibility from the RAN to the network core in multiple deployment models including public cloud.
This strategy is advantageous in terms of the time zone, culture and language. For example, through our U.S., Japan, Brazil and India offices we established local support teams responsible for first level engagements with customers (Tier 1).
This strategy is advantageous in terms of the time zone, culture and language. For example, through our Israel, U.S., Japan, Brazil, Romania and India offices we established local support teams responsible for first level engagements with customers (Tier 1).
T he physical and cultural proximity contribute to the strength of the relationship, increase our proficiency in our customer’s network and needs, and leverage the ability to identify pain points and needs of our customers. ● Support of our sales representatives: We provide a high level of pre- and post-sale technical support to our sales representatives in the field.
The physical and cultural proximity contribute to the strength of the relationship, increase our proficiency in our customer’s network and needs, and leverage the ability to identify pain points and needs of our customers. ● Support of our sales representatives: We provide a high level of pre- and post-sale technical support to our sales representatives in the field.
We expect to continue this significant investment in 2024, as we develop new features and new solution offerings to meet the requirements of transition to 5G networks, as well as establishing a modular approach for the enabling of targeted packages for the service assurance market.
We expect to continue this significant investment in 2025, as we develop new features and new solution offerings to meet the requirements of transition to 5G networks, as well as establishing a modular approach for the enabling of targeted packages for the service assurance market.
Under the regulations promulgated under the R&D Law, the products may be manufactured outside Israel by us or by another entity only if prior approval is received 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).
Under the regulations promulgated under the Innovation Law, the products may be manufactured outside Israel by us or by another entity only if prior approval is received 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).
These programs do not require payments of royalties to the IIA, but all other restrictions under the R&D Law, such as local manufacturing obligations and know-how transfer limitations, as further detailed in this annual report on Form 20-F, are applicable to the know how developed by us with the funding received in such programs.
These programs do not require payments of royalties to the IIA, but all other restrictions under the Innovation Law, such as local manufacturing obligations and know-how transfer limitations, as further detailed in this annual report on Form 20-F, are applicable to the know how developed by us with the funding received in such programs.
Furthermore, the IIA may impose certain conditions on any arrangement under which it permits us to transfer Funded Know-How or manufacturing out of Israel. ● Approval of transfer of Funded Know-How to another Israeli company may be granted only if the recipient abides by the provisions of the R&D law and related regulations, including the restrictions on the transfer of know-how and manufacturing rights outside of Israel.
Furthermore, the IIA may impose certain conditions on any arrangement under which it permits us to transfer Funded Know-How or manufacturing out of Israel. ● Approval of transfer of Funded Know-How to another Israeli company may be granted only if the recipient abides by the provisions of the Innovation Law and related regulations, including the restrictions on the transfer of know-how and manufacturing rights outside of Israel.
During 2021, we announced partnerships with AWS and Microsoft Azure through which we are offering our RADCOM ACE solution with real-time subscriber analytics and advanced troubleshooting for both telecom operators that are rolling out 5G, Internet of Things, and edge services and operators already running 4G and VoLTE networks.
During 2021, we announced partnerships with Amazon Web Services, or AWS and Microsoft Azure through which we are offering our RADCOM ACE solution with real-time subscriber analytics and advanced troubleshooting for both telecom operators that are rolling out 5G, Internet of Things, and edge services and operators already running 4G and VoLTE networks.
In 2023, we signed agreements with new distributors to penetrate new geographical markets and engage with new customers, and to better serve our target markets. We continue to search for more of these channels to expand our outreach further.
In 2024, we signed agreements with new distributors to penetrate new geographical markets and engage with new customers, and to better serve our target markets. We continue to search for more of these channels to expand our outreach further.
The R&D Law requires the grant recipient and its controlling shareholders or the foreign interested party of such grant recipient to notify the IIA of any change in control of the recipient or a change in the holdings of the means of control of the grant recipient that results in a non-Israeli citizen or non-Israeli resident or an Israeli citizen or corporation incorporated in Israel becoming an interested party directly in the grant recipient, and requires the new interested party to undertake to the IIA to comply with the R&D Law.
The Innovation Law requires the grant recipient and its controlling shareholders or the foreign interested party of such grant recipient to notify the IIA of any change in control of the recipient or a change in the holdings of the means of control of the grant recipient that results in a non-Israeli citizen or non-Israeli resident or an Israeli citizen or corporation incorporated in Israel becoming an interested party directly in the grant recipient, and requires the new interested party to undertake to the IIA to comply with the Innovation Law.
In addition, we have filed numerous applications, and in the future may continue to file additional applications, for grants from the IIA pursuant to the R&D Law. Grants received under such programs are repaid through mandatory royalty payments based on revenues generated from products developed pursuant to such programs or deriving therefrom.
In addition, we have filed numerous applications, and in the future may continue to file additional applications, for grants from the IIA pursuant to the Innovation Law. Grants received under such programs are repaid through mandatory royalty payments based on revenues generated from products developed pursuant to such programs or deriving therefrom.
Our global customer base Our solution is deployed at multiple CSPs globally, such as AT&T, Dish, Rakuten, and Telefonica, and has received wide industry recognition, winning a Frost & Sullivan Product Differentiation Innovation Awards three times, winning multiple TMC Labs Innovation Awards, winning the Technology Marketing Corp.
Our global customer base Our solution is deployed at multiple CSPs globally, such as AT&T, Dish, Rakuten, and Telefonica, and has received wide industry recognition, winning a Fierce Network Innovation Award, a Frost & Sullivan Product Differentiation Innovation Awards three times, multiple TMC Labs Innovation Awards, the Technology Marketing Corp.
Below is a description of our obligations in connection with the grants received from the IIA under the R&D Law: Local Manufacturing Obligations The terms of the grants under the R&D Law require that we manufacture the products developed with these grants in Israel (but do not restrict the sale of products that incorporate the know-how).
Below is a description of our obligations in connection with the grants received from the IIA under the Innovation Law: Local Manufacturing Obligations The terms of the grants under the Innovation Law require that we manufacture the products developed with these grants in Israel (but do not restrict the sale of products that incorporate the know-how).
In addition, the IIA may require additional information or representations in respect of such events. For R&D Law purposes, “control” is defined as the ability to direct the activities of a corporation except the ability that stems from serving as an officer or director of the company.
In addition, the IIA may require additional information or representations in respect of such events. For Innovation Law purposes, “control” is defined as the ability to direct the activities of a corporation except the ability that stems from serving as an officer or director of the company.
This modular approach will enable us to offer not just the full solution, but also specific modules for smaller deployment of CSPs. 29 Israel Innovation Authority We have received royalty-bearing grants from the IIA for certain research and development activities pursuant to an incentive program, in an aggregate amount of $50.2 million, calculated from our inception through December 31, 2023, which are subject to provisions of the R&D Law and the regulations promulgated thereunder.
This modular approach will enable us to offer not just the full solution, but also specific modules for smaller deployment of CSPs. 27 Israel Innovation Authority We have received royalty-bearing grants from the IIA for certain research and development activities pursuant to an incentive program, in an aggregate amount of $50.2 million, calculated from our inception through December 31, 2024, which are subject to provisions of the Innovation Law and the regulations promulgated thereunder.
Investments that we are making to achieve this goal include: ● Enhancement of support: We are dedicated to the provision of timely, effective and professional support for all our customers. We provide 24x7 Network Operations Center services, or NOC services, monitoring customers’ environments remotely, troubleshooting and resolving system and application incidents, and supporting the continuance services of our solutions.
Investments that we are making to achieve this goal include: ● Enhancement of support: We are dedicated to the provision of timely, effective and professional support for all our customers. We provide 24x7 NOC services, monitoring customers’ environments remotely, troubleshooting and resolving system and application incidents, and supporting the continuance services of our solutions.
Our principal executive offices are located at 24 Raoul Wallenberg Street, Tel Aviv 69719, Israel, and our telephone and fax numbers are 972-3-645-5055 and 972-3-647-4681, respectively. Our website is www.radcom.com. Information on our website and other information that can be accessed through it are not part of, or incorporated by reference into, this Annual Report.
Our principal executive offices are located at 24 Raoul Wallenberg Street, Tel Aviv 69719, Israel, and our telephone is 972-3-645-5055. Our website is www.radcom.com. Information on our website and other information that can be accessed through it are not part of, or incorporated by reference into, this Annual Report.
The approval may be subject to certain requirements, as determined in each project separately. ● Among others, the IIA may determine that certain Funded Know-How can be transferred to third parties in Israel only if such transferee company will also be subject to the same terms and conditions that were levied upon the transferor company under the R&D Law prior to the transfer of such know-how. ● The IIA may approve the transfer of Funded Know-How from Israel to abroad, generally, provided that (a) the IIA will receive a payment of the portion of the sale price, which portion will not exceed six times the amount of the grants received plus interest (or three times the amount of the grant received plus interest, in the event that the recipient of the know-how has committed to retain most of the R&D positions of the grant recipient in Israel after the transfer); (b) the grant recipient receives an alternative know-how from a third party in exchange for its Funded Know-How, subject to certain requirements, among which the alternative know-how will generate higher revenues than the Funded Know-How for the company; or (c) such transfer of know-how arises in connection with a liquidation by reason of insolvency or receivership of the grant recipient and the Funded Know-How is sold for a lower price than the amount of funds invested in it, in which case the payment set forth in (a) may be reduced. 30 ● Approval to manufacture products outside of Israel or consent to the transfer of Funded Know-How, if requested, is within the discretion of the IIA.
The approval may be subject to certain requirements, as determined in each project separately. ● Among others, the IIA may determine that certain Funded Know-How can be transferred to third parties in Israel only if such transferee company will also be subject to the same terms and conditions that were levied upon the transferor company under the Innovation Law prior to the transfer of such know-how and that the transferor will need to pay 3% of the consideration for the transfer to the IIA ● The IIA may approve the transfer of Funded Know-How from Israel to abroad, generally, provided that (a) the IIA will receive a payment of the portion of the sale price, which portion will not exceed six times the amount of the grants received plus interest (or three times the amount of the grant received plus interest, in the event that the recipient of the know-how has committed to retain at least 75% of the R&D positions of the grant recipient in Israel after the transfer for a minimum period of three years)); (b) the grant recipient receives an alternative know-how from a third party in exchange for its Funded Know-How, subject to certain requirements, among which the alternative know-how will generate higher revenues than the Funded Know-How for the company; or (c) such transfer of know-how arises in connection with a liquidation by reason of insolvency or receivership of the grant recipient and the Funded Know-How is sold for a lower price than the amount of funds invested in it, in which case the payment set forth in (a) may be reduced. ● Approval to manufacture products outside of Israel or consent to the transfer of Funded Know-How, if requested, is within the discretion of the IIA.
Geographic Markets : The table below indicates the approximate breakdown of our revenue by territory, based on the location of the end-customer: Year ended December 31, (in millions of U.S. dollars) Year ended December 31, (in percentages) 2023 2022 2021 2023 2022 2021 North America 31.8 23.0 21.8 61.6 49.8 54.1 Asia 9.8 12.5 14.7 19.0 27.2 36.5 Latin America 1.3 3.0 1.1 2.5 6.4 2.7 EMEA (including Israel) 8.7 7.6 2.7 16.9 16.6 6.7 Total revenues 51.6 46.1 40.3 100 % 100 % 100 % 27 Competition The market for our solutions is competitive, and we expect that competition will continue in the future, both with respect to solutions that we are currently offering and solutions that we are developing.
Geographic Markets : The table below indicates the approximate breakdown of our revenue by territory, based on the location of the end-customer: Year ended December 31, (in millions of U.S. dollars) Year ended December 31, (in percentages) 2024 2023 2022 2024 2023 2022 North America 36.1 31.8 23.0 59.1 61.6 49.8 Asia 12.7 9.8 12.5 20.9 19.0 27.2 Latin America 0.3 1.3 3.0 0.5 2.5 6.4 EMEA (including Israel) 11.9 8.7 7.6 19.5 16.9 16.6 Total revenues 61 51.6 46.1 100 % 100 % 100 % Competition The market for our solutions is competitive, and we expect that competition will continue in the future, both with respect to solutions that we are currently offering and solutions that we are developing.
We currently have nine registered patents and one pending patent application in the United States. In addition, we usually enter into non-disclosure and confidentiality agreements with our employees, distributors, sales representatives and with suppliers and sub-contractors who have access to sensitive information. Employees Our total headcount as of December 31, 2023, was 295 including employees and contractors.
We currently have nine registered patents and one pending patent application in the United States. In addition, we usually enter into non-disclosure and confidentiality agreements with our employees, distributors, sales representatives and with suppliers and sub-contractors who have access to sensitive information. 29 Employees Our total headcount as of December 31, 2024, was 307 including employees and contractors.
According to the IIA regulations, that are relevant to our projects until 2023 , companies that moved the manufacturing of their products outside of Israel, may be subject to an increased royalties cap ranging between 120% to 300% of the grants, depending on the manufacturing volume that if performed outside of Israel.
According to the IIA regulations, that are relevant to our projects until 2024, companies that moved the manufacturing of their products outside of Israel, may be subject to an increased royalties cap ranging between 120% to 300% of the grants, depending on the manufacturing volume that is performed outside of Israel.
Know-How and Know-How Transfer Limitation ● The R&D Law provides that the IIA is authorized to determine the ownership requirements of know-how developed under an approved research and development program and/or rights associated with such know-how including intellectual property, which is not the product that was developed under such program, or the Funded Know-How. ● The R&D Law further provides that Funded Know-How can not be transferred to any third parties without the IIA’s approval.
Know-How and Know-How Transfer Limitation ● The Innovation Law provides that the IIA is authorized to determine the ownership requirements of know-how developed under an approved research and development program and/or derived therefrom and/or rights associated with such know-how including intellectual property, which is not the product that was developed under such program, or the Funded Know-How. 28 ● The Innovation Law further provides that Funded Know-How can not be transferred to any third parties without the IIA’s approval.
In the years ended December 31, 2023, 2022 and 2021, our capital expenditures were approximately $232,000, $150,000 and $437,000 respectively, and were spent primarily on computers and electronic equipment. We have no current significant commitments for capital expenditures.
In the years ended December 31, 2024, 2023 and 2022, our capital expenditures were approximately $427,000, $232,000 and $150,000 respectively, and were spent primarily on computers and electronic equipment. We have no current significant commitments for capital expenditures.
The receipt of such grants is contingent upon our ability to comply with certain applicable requirements and conditions specified in the R&D Law and under the applicable program.
The receipt of such grants is contingent upon our ability to comply with certain applicable requirements and conditions specified in the Innovation Law and under the applicable program.
In the United States, we provide benefits in the form of health, dental, vision and disability coverage and matching 401(k) plan contributions, in an average amount equal to approximately 19.65% of the employee’s base salary.
In the United States, we provide benefits in the form of health, dental, vision and disability coverage and matching 401(k) plan contributions, in an average amount equal to approximately 22.61% of the employee’s base salary.
For more information, see “Item 3.D—Risk Factors— Risks Related to Our Business and Our Industry.” We believe that we are differentiated from our competitors due to: ● our recognized class-leading, cloud-native 5G-ready service assurance solutions; ● our experience deploying and scaling cloud-native solutions with Tier 1 CSPs such as AT&T; ● our telecom domain expertise and knowhow of key members of our company in advanced software development; ● our experience deploying our solutions on the world’s first fully virtualized network and expansion to 5G SA; ● our advanced technology offering an end-to-end solution for service assurance from the RAN to the core; ● our proven 5G-ready solutions deployed in existing 5G networks such as Rakuten Mobile and Dish Networks; ● our multi-technology correlation capabilities that can support all major technologies – 5G, 4G, LTE, IMS, VoLTE, VoIP and legacy 3G - within the same solution; ● our cloud-native solutions provide cost-efficiency, rapid deployment times and agility in development; and ● our proven flexibility and responsiveness in a dynamic customer and technology environment.
For more information, see “Item 3.D—Risk Factors— Risks Related to Our Business and Our Industry.” 25 We believe that we are differentiated from our competitors due to: ● our recognized class-leading, cloud-native 5G-ready service assurance solutions; ● our experience deploying and scaling cloud-native solutions with Tier 1 CSPs such as AT&T; ● our telecom domain expertise and knowhow of key members of our company in advanced software development; ● our experience deploying our solutions on the world’s first fully virtualized network and expansion to 5G SA; ● our advanced technology offering an end-to-end solution for service assurance from the RAN to the core; ● our proven 5G-ready solutions deployed in existing 5G networks such as Rakuten Mobile and Dish Networks; ● our multi-technology correlation capabilities that can support all major technologies – 5G, 4G, LTE, IMS, VoLTE, VoIP and legacy 3G and 2G - within the same solution; ● our End-to-End (RAN to Core) view of the network and ability to correlate into a full customer experience view; ● our cloud-native solutions provide cost-efficiency, rapid deployment times and agility in development; ● our ability to operate across multiple technologies and domains, including public, private, and hybrid cloud environments; and ● our proven flexibility and responsiveness in a dynamic customer and technology environment.
Except for employees located in Brazil, none of our employees are represented by labor unions. 31 Although we are not a party to a collective bargaining agreement in Israel, we are subject to certain provisions of collective bargaining agreements among the General Federation of Labor in Israel, or the Histadrut, and the Coordinating Bureau of Economic Organizations (including the Industrialists’ Association), or the CBEO, that are applicable to our Israeli employees by virtue of expansion orders of the Israeli Ministry of Economy and Industry, including transportation allowance, annual recreation allowance, the lengths of the workday and workweek and mandatory general insurance pension.
Although we are not a party to a collective bargaining agreement in Israel, we are subject to certain provisions of collective bargaining agreements among the General Federation of Labor in Israel, or the Histadrut, and the Coordinating Bureau of Economic Organizations (including the Industrialists’ Association), or the CBEO, that are applicable to our Israeli employees by virtue of expansion orders of the Israeli Ministry of Economy and Industry, including transportation allowance, annual recreation allowance, the lengths of the workday and workweek and mandatory general insurance pension.
Change In Control The R&D Law generally imposes reporting requirements with respect to certain changes in the ownership of a grant recipient.
Change In Control The Innovation Law generally imposes reporting requirements with respect to certain changes in the ownership of a grant recipient.
Our solutions are deployed with leading and innovative CSPs such as AT&T, Dish and Rakuten. We believe that we are positioned to be one of the most advanced leaders in cloud-native 5G network intelligence solutions for CSPs deploying 5G networks on private and public cloud (such as RCP, AWS, GCP and Azure).
Our solutions are deployed with leading and innovative CSPs such as AT&T, Dish and Rakuten. We believe that we are positioned to be one of the most advanced leaders in cloud-native, AI-native 5G assurance and customer experience analytics solutions for CSPs deploying 5G networks on private and public cloud (such as RCP, AWS, GCP and Azure).
We aim to leverage our offering to CSPs through long term multi-year sales models, which will allow them to meet their system planning needs through term licensing, operational services, managed services, annual maintenance and support and software upgrade packages.
We aim to leverage our offering to CSPs and offer long term multi-year business engagement models, which will allow them to meet their system planning needs through subscription or term licensing, operational services, managed services, annual maintenance and support and software upgrade packages.
During 2023, we invested in several aspects that differentiate our cloud native approach to 5G networks, enabling a true CI/CD approach on multiple clouds, including AWS, GCP and other cloud networks, which enables automated deployment and higher security standards. We also enhanced our RADCOM NETWORK DISCOVERY solution, which is the application layer of the RADCOM ACE solution.
In addition, we invested in several aspects that differentiate our cloud native approach to 5G networks, enabling a true continuous integration/continuous delivery approach on multiple clouds, including AWS, GCP and other cloud networks, which enables automated deployment and higher security standards. We also enhanced our RADCOM NETWORK DISCOVERY solution, which is the application layer of the RADCOM ACE solution.
In May 2019, we entered into a multi-year agreement with Rakuten to provide our Network Intelligence solution for Rakuten’s unique and innovative mobile network. Rakuten’s network is the world’s first fully virtualized, end-to-end cloud-native mobile network that has adopted 5G systems architecture since its launch.
Since then we extended the agreements we signed with AT&T and have expanded our relationship. In May 2019, we entered into a multi-year agreement with Rakuten to provide our Network Intelligence solution for Rakuten’s unique and innovative mobile network. Rakuten’s network is the world’s first fully virtualized, end-to-end cloud-native mobile network that has adopted 5G systems architecture since its launch.
In India, we provide benefits in form of health coverage, education fund, house rent allowance and health insurance fund, in an amount equal to 21.22% of the employee’s salary. 32 C.
In India, we provide benefits in form of health coverage, education fund, house rent allowance and health insurance fund, in an average amount equal to approximately 24.37% of the employee’s salary. 30 C.
Award for NFV Innovation and being recommended for the most innovative cloud offering in the Glotel Awards competition. By developing and adapting our solutions to meet the industry’s most stringent requirements, we have expanded our customer base to include new opportunities and markets while expanding our footprint with existing customers by supporting them in transitioning to a 5G network.
By developing and adapting our solutions to meet the industry’s most stringent requirements, we have expanded our customer base to include new opportunities and markets while expanding our footprint with existing customers by supporting them in transitioning to a 5G network.
RADCOM ACE is the culmination of our significant product investment over the last few years and reinforced by customer feedback to enable a new way of monitoring 5G services that ensures a high-quality customer experience as operators transition to 5G. RADCOM ACE includes automated assurance, advanced network insights, automated insights via AI/ML, and cloud-native network visibility.
RADCOM ACE is the culmination of our significant product investment over the last few years and reinforced by customer feedback to enable a new way of monitoring 5G services that ensures a high-quality customer experience as operators transition to 5G.
In Brazil, we operate through RADCOM Brazil, which primarily sells our solutions to end-users in the Brazilian market directly. In India, we operate through RADCOM India, which primarily provides customer support and development services worldwide.
Our solutions are sold to CSPs in North America either by RADCOM US, RADCOM Canada or by us. In Brazil, we operate through RADCOM Brazil, which primarily sells our solutions to end-users in the Brazilian market directly. In India, we operate through RADCOM India, which primarily provides customer support and development services worldwide.
Accordingly, any non-Israeli who acquires 5% or more of our ordinary shares will be required to notify the IIA that it has become an interested party and to sign an undertaking to comply with the R&D Law. Since we commenced operations, we have received royalty-bearing grants from the IIA.
Accordingly, any non-Israeli who acquires 5% or more of our ordinary shares will be required to notify the IIA that it has become an interested party and to sign an undertaking to comply with the Innovation Law.
For more information, the SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding us that has been filed electronically with the SEC. B. BUSINESS OVERVIEW Overview We are an assurance expert for telecom operators transitioning to 5G and deploying cloud-native networks.
For more information, the SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding us that has been filed electronically with the SEC. B. BUSINESS OVERVIEW Overview We are a leader in automated assurance and intelligent analytics for telecom operators.
As of December 31, 2023, our total contingent liability to the IIA in respect of grants received including accumulated interest and net of accumulated royalties paid was approximately $56 million.
Since we commenced operations, we have received royalty-bearing grants from the IIA. As of December 31, 2024, our total contingent liability to the IIA in respect of grants received including accumulated interest and net of accumulated royalties paid, was approximately $56.2 million.
In May 2022, we announced our selection by Dish to provide RADCOM ACE solution to monitor customers’ experience across Dish’s 5G Smart Network™ — the first cloud-native, Open RAN-based 5G network in the United States. RADCOM ACE at Dish runs on AWS.
In May 2022, we announced our selection by Dish to provide RADCOM ACE solution to monitor customers’ experience across Dish’s 5G Smart Network™ — the first cloud-native, Open RAN-based 5G network in the United States. RADCOM ACE at Dish runs on AWS. In April 2023, we acquired Continual’s technology, intellectual property, and customer agreements for $2.5 million in cash.
Such transition contains new technological challenges, which require a new approach in order to be solved. The customers in our market consist primarily of mobile and fixed CSPs who are responsible for providing mobile and fixed telecommunications services. Our solutions are used by multiple divisions within a CSP’s organization, including engineering, operations, marketing, management and customer care departments.
The customers in our market consist primarily of mobile and fixed CSPs who are responsible for providing mobile and fixed telecommunications services. Our solutions are used by multiple divisions within a CSPs’ organization, including engineering, operations, marketing, management and customer care departments.
This capability allows the CSP to benefit from prioritizing enterprise accounts, proactively addressing technical issues, backing up its contracts with Service Level Agreement and VIP care, and directing the conversation with the customer toward experience and value.
Enterprise Analytics RADCOM’s Enterprise Analytics solution analyzes customer experiences for all devices and handsets affiliated with an enterprise. This capability allows the CSP to benefit from prioritizing enterprise accounts, proactively addressing technical issues, backing up its contracts with Service Level Agreement and premier customers, or VIP care, and directing the conversation with the customer toward experience and value.
See “Item 6.D—Directors, Senior Management and Employees—Employees.” We consider our relations with our employees to be good and we have never experienced a strike or work stoppage.
See “Item 6.D—Directors, Senior Management and Employees—Employees.” We consider our relations with our employees to be good and we have never experienced a strike or work stoppage. Except for employees located in Brazil, none of our employees are represented by labor unions.
In Brazil, we provide benefits in the form of health coverage, including health, vision and dental coverage, in an amount that varies from 4% - 13% of the employee’s base salary.
In Brazil, we provide benefits in the form of health coverage, including health, vision and dental coverage, in an average amount equal to approximately 17% of the employee’s base salary.
The aggregate annual lease and maintenance payments for those premises in 2023 were approximately $7,000 and $85,000, respectively. We believe that our offices and facilities are adequate for our current needs and that suitable additional or substitute space will be available when needed. ITEM 4A. UNRESOLVED STAFF COMMENTS Not applicable.
We believe that our offices and facilities are adequate for our current needs and that suitable additional or substitute space will be available when needed. ITEM 4A. UNRESOLVED STAFF COMMENTS Not applicable.
Mobility Experience Analytics Following the acquisition of Continual in April 2023, RADCOM offers mobility experience analytics solutions that analyze, monitor, and optimize the RAN's performance, focusing on voice and data quality and subscribers' mobility experience. ○ Virtual Drive Test for route service assurance - Route analysis monitors the customer experience across all highways and railways 24/7 to benchmark service quality on transportation routes.
Powered by large language models, RADCOM NetTalk TM enables operators to leverage the extensive data insights generated by RADCOM ACE utilizing trusted data from their network. 23 Mobility Experience Analytics (MEA) also referred to as RAN Experience Analytics (REA) Following the acquisition of Continual in April 2023, RADCOM offers mobility experience analytics solutions that analyze, monitor, and optimize the RAN’s performance, focusing on voice and data quality and subscribers’ mobility experience. ○ Virtual Drive Test for route service assurance - Route analysis monitors the customer experience across all highways and railways 24/7 to benchmark service quality on transportation routes.
Being dynamic and fully integrated enables operators who deploy RADCOM solutions to take an end-to-end view, from the radio-access networks, or RAN to core, utilizing an on-demand approach to assure the customer experience for the first 5G use cases and more advanced use cases along their 5G journey. 17 Fully Cloud- Native Architecture The fully cloud-native approach is a key enabler of the 5G telecommunications infrastructure, a major change in how CSPs design and build their 5G networks.
Being dynamic and fully integrated enables operators who deploy RADCOM solutions to take an end-to-end view, from RAN to core, utilizing an on-demand approach to assure the customer experience for the first 5G use cases and more advanced use cases along their 5G journey.
This space includes our development facilities, which consist primarily of programming, documenting, quality control, testing and bug fixing, as well as from time to time, installation of software components on third party hardware.
PROPERTY, PLANTS AND EQUIPMENT We currently lease an aggregate of approximately 22,830 square feet of office space in Tel Aviv, Israel. This space includes our development facilities, which consist primarily of programming, documenting, quality control, testing and bug fixing, as well as from time to time, installation of software components on third party hardware.
Our continued and increased investment in research and development was validated in 2019 by our renewed engagement with AT&T. We entered a multi-year engagement to continue our relationship and expand the integration of our solutions into AT&T’s network.
Our solutions support both mobile and fixed networks, including 5G, LTE, VoLTE, VoWifi, VoNR, IMS, VoIP, and UMTS. Our long standing investment in research and development was validated in 2019 by our renewed engagement with AT&T, when we entered a multi-year engagement to continue our relationship and expand the integration of our solutions into AT&T’s network.
It covers a wide range of customizable use cases, including anomaly detection, automated root cause analysis, Geographic-based analytics, network dimensioning, network performance monitoring, pinpointing radio network issues, predictive and prescriptive analytics, and quality of experience analytics for encrypted data.
It covers a wide range of customizable use cases, including anomaly detection, automated root cause analysis, mobile device and geographic-based analytics, network dimensioning, network performance monitoring, pinpointing radio network issues, complaint investigation, predictive and prescriptive analytics, and QoE analytics. RADCOM ACE can also be deployed to support private network monitoring.
With our advanced deployment with customers such as AT&T, Rakuten and Dish, and our position as a 5G assurance leader, we believe we are well positioned to leverage our vast experience in true 5G assurance solutions in order to successfully expand our deployment base to other CSPs as we focus our sales and marketing activities on Tier 1, galaxy (multi-carrier) and innovative CSPs and other CSPs seeking to monitor their legacy 4G, 3G and 2G networks while preparing for the future deployment of 5G. ● Targeting innovative CSPs deploying 5G networks.
With our advanced deployment with customers such as AT&T, Rakuten and Dish, and our position as a 5G assurance leader which is cloud-native and can be deployed on any public or private cloud, we believe we are well positioned to leverage our vast experience in true 5G assurance solutions in order to successfully expand our deployment base to other CSPs as we focus our sales and marketing activities on Tier 1, galaxy (multi-carrier) and innovative CSPs and other CSPs. ● Shifting to multi-year recurring revenue contracts .
In North America, we operate mainly through RADCOM US, which sells our solutions to end-users directly and provides support to customers in the North American market. Our solutions are sold to end-users in North America either by RADCOM US, RADCOM Canada or by us.
During 2024, these direct sales were made mainly in North America, Europe, the Middle East and Africa. or EMEA, and Asia. In North America, we operate mainly through RADCOM US, which sells our solutions to end-users directly and provides support to customers in the North American market.
We also lease an aggregate of approximately 5,377 square feet of office space in Paramus, New Jersey, from an affiliate of certain of our principal shareholders. In 2023, our aggregate annual lease payments for such premises were approximately $114,000. We also lease an aggregate of approximately 40 square feet of office space in Brazil and 5,809 square feet in India.
In 2024, our aggregate annual lease and maintenance expenses were approximately $799,000 for our Tel Aviv offices. We also lease an aggregate of approximately 5,377 square feet of office space in Paramus, New Jersey. In 2024, our aggregate annual lease payments for such premises were approximately $117,000.
RADCOM ACE uses built-in artificial intelligence/machine learning, or AI/ML, and heuristic modeling to proactively and predictively monitor and troubleshoot the network with real-streaming analytics for a closed-loop approach to customer experience management.
It seamlessly integrates into an operator’s cloud environment (OpenStack, VMWare, Kubernetes, etc.) and fully supports 5G, 4G, 3G and 2G. RADCOM ACE uses built-in AI/ML, and heuristic modeling to proactively and predictively monitor and troubleshoot the network with real-streaming analytics for a closed-loop approach to customer experience management.
Deploying a cloud-native, virtualized network intelligence and network intelligence solution is an essential part of a CSP’s network, derived by the need to manage huge amounts of various network elements and services from multiple vendors and technologies.
In addition, with new technology rapidly evolving, AI and GenAI are central to the vision of next-generation network operations (AIOps). 19 Deploying a cloud-native AI-based assurance solution, is an essential part of a CSP’s network, derived by the need to smartly manage huge amounts of various network elements, data and services from multiple vendors and technologies.
CPSs’ adoption of 5G is accelerating while they continue to operate their 4G, 3G and 2G networks and search for superior solutions that will enable them full end-to-end network visibility. Our solution offering is built on years of industry experience, is 5G ready and supports the CSPs entire network offerings.
CPSs’ adoption of 5G is accelerating while they continue to operate their 4G, 3G and 2G networks and search for superior solutions that will enable them full end-to-end network visibility. In addition, CSP’s requirement to run 5G network analytics in public cloud infrastructure is rising.
RADCOM ACE is an automated, 5G assurance platform for end-to-end network monitoring, built based on our cloud-native expertise and designed to allow CSPs to manage their networks in a more dynamic and agile way, which can run on private and public clouds such as AWS, RCP and Azure.
With RADCOM ACE, CSPs are able to manage their networks in a more dynamic and agile way, which can run on private and public clouds such as AWS, Google Cloud Platform, or GCP, and Azure.
Sales and Marketing Organization We mainly sell directly to customers throughout the world through our executives and sales representatives in North America, Europe, Latin America, Asia Pacific and Israel, which are supported by local representatives and subcontractors in the local markets. During 2023, these direct sales were made mainly in North America and Asia.
The solution helps operators improve new 5G sites, automate root cause analysis, optimize mobility services, and digitize their network operations center. 24 Sales and Marketing Organization We mainly sell directly to customers throughout the world through our executives and sales representatives in North America, Europe, Latin America, Asia Pacific and Israel, which are supported by local representatives and agents in the local markets.
Rakuten chose RADCOM Network Intelligence because it monitors the entire end-to-end network, including the world’s first fully virtualized RAN. In April 2020, we announced that we had successfully supported Rakuten’s commercial launch of the world’s first fully virtualized mobile network. Our solution helped Rakuten launch its virtualized network and ensured a superior customer experience delivery.
Rakuten chose RADCOM Network Intelligence because it monitors the entire end-to-end network, including the world’s first fully virtualized RAN and we have continued to work with Rakuten since then, among other things on Rakuten’s successful commercial launch of the world’s first fully virtualized mobile network in April 2020.
It allows troubleshooting and optimizing key performance issues such as latency, reliability, and signaling overhead. ○ Our RAN Assurance solution is combined with RADCOM ACE for operators that require an end-to-end solution. In this case, RAN and core data correlate, providing end-to-end subscriber sessions that help operators perform advanced 5G troubleshooting to ensure excellent customer experiences.
In this case, RAN and core data correlate, providing end-to-end subscriber sessions that help operators perform advanced 5G troubleshooting to ensure excellent customer experiences. RADCOM AI Intelligent Module (RADCOM AIM) RADCOM ACE incorporates RADCOM AIM – RADCOM’s AI Intelligent Module for intelligent analytics and automated assurance.
We specialize in solutions for next-generation mobile and fixed networks, including 5G, Long Term Evolution, or LTE, VoLTE, Voice over Wifi, or VoWifi, Voice over NewRadio, or VoNR, IP Multimedia Subsystem, or IMS, Voice over IP, or VoIP, and Universal Mobile Telecommunication Service, or UMTS.
Our solution is cloud and vendor agnostic, can be deployed in multiple cloud environments and can also deploy on bare-metal, and supports any hybrid deployments of public and private clouds as required in the market. 17 We specialize in solutions for next-generation mobile and fixed networks, including 5G, Voice over New Radio, or VoNR, Long Term Evolution, or LTE, VoLTE, Voice over Wifi, or VoWifi, IP Multimedia Subsystem, or IMS, Voice over IP, or VoIP, and Universal Mobile Telecommunication Service, or UMTS.
New site validation offers both on-demand and semi-automatic analysis and provides engineers with root cause analysis and corrective actions introduced by the launch of the new network cell sites. Enterprise Analytics RADCOM’s Enterprise Analytics solution analyzes customer experiences for all devices and handsets affiliated with an enterprise.
New site validation offers both on-demand and semi-automatic analysis and provides engineers with root cause analysis and corrective actions introduced by the launch of the new network cell sites. ○ Complaint Investigation - RADCOM Complaint Investigation allows operators to gain a complete understanding of the actual subscriber’s experience.
Such multi-year contracts also provide us with the ability to add new capabilities over-time to ensure that the CSPs are always benefitting from our most-up to date cutting-edge software solutions. Products and Solutions The RADCOM Portfolio is comprised of RADCOM ACE – our portfolio of Automated assurance solutions, and RADCOM NWDAF – Network Data Analytics Function for closed loop automation.
Such multi-year contracts also provide us with the ability to add new capabilities over-time to ensure that the CSPs are always benefitting from our most-up to date cutting-edge software solutions. ● Expand our addressable market via internal development, strategic partnerships and M&A . We are expanding our addressable market through a three-pronged approach.
Our Strategy Our objective is to be the worldwide market leader for 5G automated assurance solutions while maintaining our leadership by providing end-to-end network visibility.
We extend security through a native design, where elements that are deployed, distributed, and communicated, use encryption to enhance security, especially across domains. 20 Our Strategy Our objective is to be the worldwide market leader for 5G automated assurance solutions and customer experience analytics while maintaining our leadership by providing end-to-end network visibility.
In April 2023, we acquired Continual’s technology, intellectual property, and customer agreements for $2.5 million in cash. This leading mobility experience analytics company uses AI and ML to deliver advanced insights to help telecom operators improve their subscribers’ mobility experience.
This leading mobility experience analytics company uses AI and ML to deliver advanced insights to help telecom operators improve their subscribers’ mobility experience. 18 In January 2024 we launched our new GenAI applications, NetTalk TM .
When CSPs seek a solution to assure their network, transition to the cloud, deploy new greenfield networks or deploy a new 5G network, they may select RADCOM as their assurance partner. Chosen by AT&T, DISH Purchasing Corporation, or Dish, Rakuten, and others, we offer an innovative cloud-native assurance solution - RADCOM ACE - that seamlessly integrates into multi-cloud environments.
When CSPs seek a solution to assure all or parts of their network, maximize value out of their network data, elevate their customers’ experience or deploy a new 5G or greenfield network, they may select RADCOM as their assurance partner. Chosen by AT&T, DISH Purchasing Corporation, or Dish, Rakuten Mobile, Rakuten Symphony Singapore Pte.
We offer advanced cloud-native assurance solutions for large-scale networks, providing operators with an innovative, efficient, and on-demand approach to network monitoring that meets the challenges of assuring the customer experience in the 5G era. Our solution supports any hybrid deployments of public and private clouds as required in the market.
We provide operators with an innovative, efficient, and on-demand approach to network assurance that meets the challenges of improving customer experience in the 5G era.
In addition, CSPs are facing strong competition both from other CSPs and from over-the-top (OTT) players who are offering more and more similar services.
In addition, CSPs are facing strong competition both from other CSPs and from over-the-top, or OTT players who are offering more and more similar services. In order to fight for their customers’ satisfaction, CSPs will need to gain deeper insight into customer behavior end to end, enabling them to tailor processes based on customer preferences.
In parallel, we continued to enhance and develop both our cloud native virtualized network and 5G solutions to offer greater value and benefit to our current and potential customers.
In addition, we are developing a prototype for a high-capacity user plane data capture and analytics solution powered by NVIDIA’s BlueField-3 data processing unit, designed to provide real-time, customer-level QoE insights. In parallel, we continued to enhance and develop both our cloud native virtualized network and 5G solutions to offer greater value and benefit to our current and potential customers.
We offer our solutions and expertise to existing Tier 1 and innovative CSPs worldwide, which are evaluating or building their 4G, 3G and 2G networks to 5G networks.
We offer our solutions and expertise to CSPs worldwide, with a focus on CSPs which are deploying or have already deployed 5G SA networks.
The ongoing deployments of 5G networks are expected to drive a greater opportunity for advanced automated assurance solutions like ours.
Key elements of our strategy include: ● Targeting Tier 1, Greenfield Operators and other CSPs worldwide, who have deployed, or are planning to deploy 5G networks . The ongoing deployments of 5G networks and the benefits that come with it are expected to drive a greater opportunity for advanced automated assurance and customer experience analytics solutions like ours.
During 2024, we expect to maintain the level of our investment in research and development and increase our sales and marketing efforts. We intend to leverage our success with industry-leading customers as we seek to engage with other CSPs looking to manage existing networks while evaluating their transition to the cloud-native architectures and 5G network.
We intend to leverage our success with industry-leading customers as we seek to engage with other CSPs looking to transition to a 5G network or invest in cutting edge technology to proactively assure their customers experience while using automated assurance at the core of their operations.
RADCOM Service Assurance RADCOM Service Assurance is a full assurance solution that smartly and passively collects and analyzes multiple data types (network packets, events, PM/FM counters, and more) across various domains (fixed and mobile) and generations of technologies (5G, 4G, 3G) from access to the core to provide real-time subscriber analytics.
We offer advanced cloud-native solutions for large-scale networks, which smartly analyze and correlate multiple data types (network packets, events, performance management and fault management, counters, and more) across multiple domains, (mobile and fixed), and generations of technologies (5G, 4G, 3G) providing real-time subscriber analytics to drive network automation.
We are targeting Tier 1 Greenfield Operators and CSPs who are deploying 5G virtualized networks as well as CSPs who are evaluating or migrating their 4G, 3G, and 2G networks to fully virtualized cloud-native networks and are searching for a cutting-edge network intelligence solution that can cover their entire network needs. 21 Industry Background Our Customers and the Market for Our Solutions We operate in a large market that is undergoing significant transformation with significant potential for growth, which is evidenced by the evolution of the networks and transition to 5G networks all over the world.
Industry Background Our Customers and the Market for Our Solutions We operate in the telecom market which is undergoing significant transformation with significant potential for growth, which is evidenced by the evolution of the networks and transition to 5G networks and the beginning of outlook to 5G advanced and GenAI embedded network technologies.
We plan to maintain our technical advantage over competitors by further investing in enhancing the analytics and automation capabilities (including advanced AI\ML capabilities) of our solutions to meet the evolving needs of 5G networks. Key elements of our strategy include: ● Targeting Tier 1, Greenfield Operators and other CSPs worldwide, who are evaluating or deploying to 5G networks .
We plan to maintain our technical advantage over competitors by further investing in enhancing the analytics and automation capabilities (including advanced AI\ML capabilities), embed GenAI capabilities and open our solution to adjacent partnerships to allow for a wider scope and target market.
Removed
It monitors, analyzes, and delivers real-time subscriber analytics and network insights into how the network performs 24/7. It also provides advanced troubleshooting capabilities to help the operator launch 5G smoothly and ensure customers enjoy a great user experience. With over 30 years of deep network understanding, we have extensive experience with leading telecom operators globally.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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The increase in services revenues relates to Asia and EMEA, and mainly derives from existing customers.
The increase in services revenues relates to EMEA and Asia and mainly derives from existing customers.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS The following discussion of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and the related notes included elsewhere in this Annual Report. Overview We provide cloud-native, virtualized network and 5G-ready network intelligence solutions for CSPs.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS The following discussion of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and the related notes included elsewhere in this Annual Report. Overview We provide cloud-native and 5G-ready network intelligence solutions for CSPs.
Such accounting policies require significant judgments, assumptions, and estimations used in the preparation of the Consolidated Financial Statements, and actual results could differ materially from the amounts reported based on these policies. Revenue recognition . We recognize revenues in accordance with ASC No. 606, “Revenue from Contracts with Customers”.
Such accounting policies require significant judgments, assumptions, and estimations used in the preparation of the Consolidated Financial Statements, and actual results could differ materially from the amounts reported based on these policies. 39 Revenue recognition . We recognize revenues in accordance with ASC No. 606, “Revenue from Contracts with Customers”.
Research and Development expenses, Net . Research and development expenses, net consist primarily of salaries and related expenses, including share-based compensation, payments for subcontractors and overhead expenses. Overhead expenses consist of a variety of costs, including rent, office and associated expenses. The R&D expenses have been partially offset by royalty-bearing grants from the IIA. 34 Sales and Marketing expenses .
Research and development expenses, net consist primarily of salaries and related expenses, including share-based compensation, payments for subcontractors and overhead expenses. Overhead expenses consist of a variety of costs, including rent, office and associated expenses. The R&D expenses have been partially offset by royalty-bearing grants from the IIA. Sales and Marketing expenses .
In evaluating the contract with a customer, we analyze the customer’s intent and ability to pay the amount of promised consideration (credit risk) and consider the probability of collecting substantially all of the consideration. 41 b) Identify the performance obligations in the contract: At a contract’s inception, we assess the goods or services promised in a contract with a customer and identify the performance obligations.
In evaluating the contract with a customer, we analyze the customer’s intent and ability to pay the amount of promised consideration (credit risk) and consider the probability of collecting substantially all of the consideration. b) Identify the performance obligations in the contract: At a contract’s inception, we assess the goods or services promised in a contract with a customer and identify the performance obligations.
This was partially offset by a decrease in deferred revenue and advances from customers of approximately $5.6 million, an increase in accrued interest on short-term bank deposits of approximately $2.2 million, and an increase of approximately $2.2 million in trade receivables, net.
This was partially offset by a decrease in deferred revenue and advances from customers of approximately $5.6 million, an increase in accrued interest on short-term bank deposits of approximately $2.2 million, and an increase of approximately $2.3 million in trade receivables, net.
LIQUIDITY AND CAPITAL RESOURCES We have financed our operations through cash generated from operations, the proceeds from our private and public equity offerings we conducted until 2017, proceeds from the exercise of options and royalty-bearing participation from the IIA and others.
LIQUIDITY AND CAPITAL RESOURCES We have financed our operations through cash generated from operations, proceeds from the exercise of options, royalty-bearing participation from the IIA, up until 2017 from proceeds from our private and public equity offerings we conducted and others.
Grants approved after January 1, 2024 will bear the higher of (i) the 12 months SOFR, plus 1%, or (ii) a fixed annual interest rate of 4%. 40 We are also obligated to pay royalties to the BIRD Foundation, with respect to sales of products based on technology resulting from research and development funded by the BIRD Foundation.
Grants approved after January 1, 2024 will bear the higher of (i) the 12 months SOFR, plus 1%, or (ii) a fixed annual interest rate of 4%. 38 We are also obligated to pay royalties to the BIRD Foundation, with respect to sales of products based on technology resulting from research and development funded by the BIRD Foundation.
The positive net cash flow in 2023 was primarily due to share-based and restricted share compensation expenses of approximately $6.1 million, net income of approximately $3.7 million, an increase in other account payables and accrued expenses of approximately $2.2 million, a decrease of approximately $1.4 million in other account receivables and prepaid expenses, a decrease in inventory of approximately $0.6 million, depreciation and amortization of $0.6 million, and an increase of approximately $0.2 million in employees and payroll accruals.
The positive net cash flow in 2023 was primarily due to share-based and restricted share compensation expenses of approximately $6.1 million, net income of approximately $3.7 million, an increase in other liabilities and accrued expenses of approximately $2.2 million, a decrease of approximately $1.4 million in other account receivables and prepaid expenses, a decrease in inventory of approximately $0.6 million, depreciation and amortization of $0.6 million, and an increase of approximately $0.2 million in employees and payroll accruals.
We do not expect to pay taxes in Israel, on our incomes from operations, until we utilize our carry forward tax losses. We may be required to pay taxes on our passive income, if any. For more information on taxation, see “Item 10.E — Taxation.” 38 Our effective corporate tax rate may exceed the Israeli tax rate.
We do not expect to pay taxes in Israel, on our incomes from operations, until we utilize our carry forward tax losses. We may be required to pay taxes on our passive income, if any. For more information on taxation, see “Item 10.E — Taxation.” 36 Our effective corporate tax rate may exceed the Israeli tax rate.
Control is either transferred over time or at a point in time, which affects the revenue recognition schedule. 42 Products . Revenues from sales of software solutions which include customer acceptance or software licenses only are recognized at a point in time of the acceptance of the solution or the point in time the software license is delivered. Services .
Control is either transferred over time or at a point in time, which affects the revenue recognition schedule. 40 Products . Revenues from sales of software solutions which include customer acceptance or software licenses only are recognized at a point in time of the acceptance of the solution or the point in time the software license is delivered. Services .
The main performance obligations would generally include: License for our software solutions (which may include significant customization), professional services, managed services, service type warranty and post-contract customer support, each of which are distinct. c) Determine the transaction price: The transaction price is the amount of consideration to which we are entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.
The main performance obligations would generally include: License for our software solutions, professional services, managed services, service type warranty and post-contract customer support, each of which are distinct. c) Determine the transaction price: The transaction price is the amount of consideration to which we are entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.
We followed the below sales strategy in 2023 in order to expand our sales pipeline and revenues: ● We focused on leveraging our implementations with AT&T, Rakuten and other customers to expand our value proposition to additional carriers; ● We expanded our business with our key existing customers; ● We continued our investment in our sales and marketing resources and have expanded our reach through the engagement of local representatives; ● We invested in marketing campaigns globally to enhance our market positioning and open new opportunities; ● We invested in research and development to maintain our recognized technological leadership in cloud-based, 5G solutions, to meet the requirements of our customers, and to develop new product offerings and capabilities; ● We invested in sales and marketing to create more sales engagements that can lead to additional multi-year contracts and increased market share; ● We invested in our professional services team and resources to meet our customers’ deployment, customization and support requirements and to allow us to successfully deliver multiple proof of concept demonstrations to potential new customers; and ● We pursued strategic partnerships, including OEM partnerships, and teaming agreements.
We followed the below sales strategy in 2024 in order to expand our sales pipeline and revenues: ● We focused on leveraging our implementations with AT&T, Rakuten and other customers to expand our value proposition to additional carriers; ● We expanded our business with our key existing customers; ● We increased our investment in our sales and marketing resources and have expanded our reach through the engagement of local representatives; ● We invested in marketing campaigns globally to enhance our market positioning and open new opportunities; ● We continued to invest in research and development to maintain our recognized technological leadership in cloud-based, 5G solutions, to meet the requirements of our customers, and to develop new product offerings and capabilities; ● We invested in sales and marketing to create more sales engagements that can lead to additional multi-year contracts and increased market share; ● We invested in our professional services team and resources to meet our customers’ deployment, customization and support requirements and to allow us to successfully deliver multiple proof of concept demonstrations to potential new customers; and ● We pursued strategic partnerships.
Our gross profit is affected by several factors, including the introduction of new products, price erosion due to increasing competition, the bargaining power of larger clients, the number of employees that we have in operations, deployment, software development customization, managed services and customer support, integration of third-party software components into our own, product mix, and exchange rate fluctuations.
Our gross profit is affected by several factors, including the introduction of new products, price erosion due to increasing competition, the bargaining power of larger clients, the number of employees that we have in operations, deployment, software development customization, managed services and customer support, integration of third-party software components into our own, product mix, and exchange rate fluctuations. 32 Research and Development expenses, Net .
We do not generate taxable income in Israel, as we have historically incurred operating losses resulting in carry forward losses for tax purposes totaling approximately $38.4 million and an additional $1.7 million of capital loss as of December 31, 2023. We believe that we will be able to carry forward these tax losses to future tax years.
We do not generate taxable income in Israel, as we have historically incurred operating losses resulting in carry forward losses for tax purposes totaling approximately $38.5 million and an additional $1.7 million of capital loss as of December 31, 2024. We believe that we will be able to carry forward these tax losses to future tax years.
We may receive grants from the IIA at rates that range from 20% to 60% (and with respect to Magnet Programs up to 66%) of the research and development expenses, as prescribed by the research committee of the IIA in accordance with the R&D Law.
We may receive grants from the IIA at rates that range from 20% to 60% (and with respect to Magnet Programs up to 66%) of the research and development expenses, as prescribed by the research committee of the IIA in accordance with the Innovation Law.
Our determination of the fair value of restricted share units or RSUs is based on the closing market value of the underlying shares at the date of grant.
Our determination of the fair value of restricted share units or RSUs is based on the closing market value of the underlying shares at the date of grant. Business combination.
Cash and cash equivalents, and bank deposits on December 31, 2023, and 2022, were approximately $82.2 and $77.7 million, respectively. We believe that our existing capital resources and cash flows from operations will be adequate to satisfy our expected liquidity requirements through the next twelve months.
Cash and cash equivalents, and bank deposits on December 31, 2024, and 2023, were approximately $94.7 and $82.2 million, respectively. We believe that our existing capital resources and cash flows from operations will be adequate to satisfy our expected liquidity requirements through the next twelve months.
Our non-Israeli subsidiaries will generally be subject to applicable federal, state and local taxation, and we may also be subject to taxation in the other foreign jurisdictions in which we own assets, have employees or conduct business activities. We recorded a valuation allowance of approximately $13.5 million on December 31, 2023, for all of our deferred tax assets and liabilities.
Our non-Israeli subsidiaries will generally be subject to applicable federal, state and local taxation, and we may also be subject to taxation in the other foreign jurisdictions in which we own assets, have employees or conduct business activities. We recorded a valuation allowance of approximately $12 million on December 31, 2024, for all of our deferred tax assets and liabilities.
We commenced operations in 1991. Since then, we have focused on developing and enhancing our products, building our worldwide direct and indirect distribution network and establishing and expanding our sales, marketing, and customer support infrastructures. 33 Most of our revenues are generated in U.S. dollars and the financing activities are made in U.S. dollars.
Since then, we have focused on developing and enhancing our products, building our worldwide direct and indirect distribution network and establishing and expanding our sales, marketing, and customer support infrastructures. Most of our revenues are generated in U.S. dollars and the financing activities are made in U.S. dollars.
Royalty expenses relating to the IIA grants included in the cost of revenues for years ended December 31, 2023 and 2022 were approximately $1.5 million and $1.4 million, respectively. The total grants regarding projects that we have received from the IIA as of December 31, 2023 were approximately $50.2 million.
Royalty expenses relating to the IIA grants included in the cost of revenues for years ended December 31, 2024 and 2023 were approximately $1.8 million and $1.5 million, respectively. The total grants regarding projects that we have received from the IIA as of December 31, 2024 were approximately $50.2 million.
Based on our budget for 2024, we expect that a change of NIS 0.10 to the exchange rate of the NIS to U.S. dollar will change our expenses expressed in dollar terms by approximately $490,000 per fiscal year and vice versa.
Based on our budget for 2025, we expect that a change of NIS 0.10 to the exchange rate of the NIS to U.S. dollar will change our expenses expressed in dollar terms by approximately $625,000 per fiscal year and vice versa.
For projects authorized as a research and development program under the R&D Law since January 1, 1999, the repayment interest rate was LIBOR, as further detailed and qualified below.
For projects authorized as a research and development program under the Innovation Law since January 1, 1999, the repayment interest rate was LIBOR, as further detailed and qualified below.
Our general and administrative expenses included approximately $1.2 million for share-based compensation in 2023, as compared to approximately $0.9 million for share-based compensation in 2022. Financial Income, Net . In 2023, the financial income, net, was approximately $4.6 million, as compared to financial income, net, of approximately $2.0 million in 2022.
Our general and administrative expenses included approximately $1.6 million for share-based compensation in 2024, as compared to approximately $1.2 million for share-based compensation in 2023. Financial Income, Net . In 2024, the financial income, net, was approximately $4.1 million, as compared to financial income, net, of approximately $4.6 million in 2023.
Government Grants and Related Royalties The Government of Israel, through the IIA, encourages research and development projects pursuant to the R&D Law and the regulations promulgated thereunder.
Government Grants and Related Royalties The Government of Israel, through the IIA, encourages research and development projects pursuant to the Innovation Law and the regulations promulgated thereunder.
Royalties to the BIRD Foundation are generally payable at the rate of 5% of the sales of such products, up to 150% of the grant received, linked to the United States Consumer Price Index. As of December 31, 2023, we had a contingent obligation to pay the BIRD Foundation aggregate royalties in the amount of approximately $466,000. C.
Royalties to the BIRD Foundation are generally payable at the rate of 5% of the sales of such products, up to 150% of the grant received, linked to the United States Consumer Price Index. As of December 31, 2024, we had a contingent obligation to pay the BIRD Foundation aggregate royalties in the amount of approximately $478,606. C.
An increase or a decrease in our total revenues would not necessarily result in a proportional increase or decrease in the levels of our research and development expenditures, which could affect our operating margin. Sales and Marketing Expenses. Sales and marketing expenses increased from approximately $12.3 million in 2022 to approximately $14.6 million in 2023.
An increase or a decrease in our total revenues would not necessarily result in a proportional increase or decrease in the levels of our research and development expenditures, which could affect our operating margin. Sales and Marketing Expenses. Sales and marketing expenses increased from approximately $14.6 million in 2023 to approximately $17.8 million in 2024.
The trade receivables and days of sales outstanding are primarily impacted by payment terms, variations in the levels of shipment in the quarter, and collections performance. Trade receivables for 2023 increased to approximately $13.4 million from approximately $11.1 million in 2022.
The trade receivables and days of sales outstanding are primarily impacted by payment terms, variations in the levels of shipment in the quarter, and collections performance. Trade receivables for 2024 increased to approximately $19 million from approximately $13.4 million in 2023.
In 2023, we invested approximately $2.5 million in acquiring Continual, invested approximately $65 million in bank deposits, received approximately $64.1 million from the maturity of a short-term bank deposit and invested approximately $0.2 million for the purchase of equipment.
In 2024, we invested approximately $75.5 million in bank deposits, received approximately $73.2 million from the maturity of a short-term bank deposit and invested approximately $0.4 million for the purchase of equipment. 37 In 2023, we invested approximately $2.5 million in acquiring Continual, invested approximately $65 million in bank deposits, received approximately $64.1 million from the maturity of a short-term bank deposit and invested approximately $0.2 million for the purchase of equipment.
Year ended December 31, (in millions of U.S. dollars) % Change 2023 vs. 2023 2022 2022 Research and development 19.6 21.5 (8.8 ) Less royalty-bearing participation 0.8 0.8 - Research and development, net 18.8 20.7 (9.2 ) Sales and marketing 14.6 12.3 18.7 General and administrative 5.1 4.5 13.3 Total operating expenses 38.5 37.5 2.7 Research and Development Expenses, gross .
Year ended December 31, (in millions of U.S. dollars) % Change 2024 vs. 2024 2023 2023 Research and development 18.7 19.6 (4.6 ) Less royalty-bearing participation 0.7 0.8 (12.5 ) Research and development, net 18.0 18.8 (4.3 ) Sales and marketing 17.8 14.6 21.9 General and administrative 6.4 5.1 25.5 Total operating expenses 42.2 38.5 9.6 Research and Development Expenses, gross .
The decrease in inventories in 2023 was mainly due to an increase in inventory delivered to customers for which revenue criteria have been met and recognized. Net Cash Provided by (Used in) Investing Activities. Our investing activities generally consist of the purchase of equipment and investment in bank deposits.
The increase in inventories in 2024 was mainly due to an increase in inventory delivered to customers for which revenue criteria have not been met. Net Cash Used in Investing Activities. Our investing activities generally consist of the purchase of equipment and investment in bank deposits.
During the measurement period, not to exceed one year from the date of acquisition, we may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition date. Acquisition costs, such as legal and consulting fees, are expensed as incurred.
During the measurement period, not to exceed one year from the date of acquisition, we may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition date.
Our sales and marketing expenses included an expense of approximately $1.8 million for share based compensation in 2023, as compared to approximately $1.4 million for share-based compensation in 2022. 37 General and Administrative Expenses . General and administrative expenses increased from approximately $4.5 million in 2022 to approximately $5.1 million in 2023.
Our sales and marketing expenses included an expense of approximately $2.0 million for share based compensation in 2024, as compared to approximately $1.8 million for share-based compensation in 2023. 35 General and Administrative Expenses . General and administrative expenses increased from approximately $5.1 million in 2023 to approximately $6.4 million in 2024.
OPERATING RESULTS Results for the Year Ended December 31, 2023, compared to Year Ended December 31, 2022 The following table sets forth, for the periods indicated, certain financial data expressed as a percentage of revenues: Year ended December 31, 2023 2022 Revenues 100 % 100 % Cost of revenues 26.7 27.6 Gross profit 73.3 72.4 Operating expenses: Research and development 37.9 46.7 Less royalty-bearing participation 1.4 1.7 Research and development, net 36.5 45.0 Sales and marketing 28.3 26.6 General and administrative 9.8 9.7 Total operating expenses 74.6 81.3 Operating loss (1.3 ) (8.9 ) Financial income, net 8.8 4.3 Income (loss) before taxes on income 7.5 (4.6 ) Taxes on income (0.4 ) (0.3 ) Net Income (loss) 7.1 (4.9 ) 35 Revenues Year Ended December 31, (in millions of U.S. dollars) 2023 2022 Products 22.8 19.0 Services 28.8 27.1 Total Revenues 51.6 46.1 Revenues .
OPERATING RESULTS Results for the Year Ended December 31, 2024, compared to Year Ended December 31, 2023 The following table sets forth, for the periods indicated, certain financial data expressed as a percentage of revenues: Year ended December 31, 2024 2023 Revenues 100 % 100 % Cost of revenues 25.8 26.7 Gross profit 74.2 73.3 Operating expenses: Research and development 30.6 37.9 Less royalty-bearing participation 1.1 1.4 Research and development, net 29.5 36.5 Sales and marketing 29.2 28.3 General and administrative 10.5 9.8 Total operating expenses 69.1 74.6 Operating income (loss) 5.1 (1.3 ) Financial income, net 6.7 8.8 Income before taxes on income 11.8 7.5 Taxes on income (0.4 ) (0.4 ) Net Income 11.4 7.1 33 Revenues Year Ended December 31, (in millions of U.S. dollars) 2024 2023 Products 28.2 22.8 Services 32.8 28.8 Total Revenues 61.0 51.6 Revenues .
Our operating activities generated approximately $4.7 million in cash during 2023, compared to approximately $6.0 million generated in 2022. Our net income for the year ended December 31, 2023, was approximately $3.7 million, compared to a net loss of approximately $2.3 million in 2022.
Our operating activities generated approximately $11.4 million in cash during 2024, compared to approximately $4.7 million generated in 2023. Our net income for the year ended December 31, 2024, was approximately $7 million, compared to a net income of approximately $3.7 million in 2023.
Comparison of Financial Data for Year Ended December 31, 2022, compared with Year Ended December 31, 2021 For a discussion of the financial data for the year ended December 31, 2022, compared with the year ended December 31, 2021, see “Item 5.A. —Operating and Financial Review and Prospects—Operating Results—Summary of Our Financial Performance for the Fiscal Year Ended 2022 Compared to the Fiscal Year Ended 2021” included in our Annual Report on Form 20-F for the fiscal year ended December 31, 2022, filed with the SEC on March 30, 2023.
Comparison of Financial Data for Year Ended December 31, 2023, compared with Year Ended December 31, 2022 For a discussion of the financial data for the year ended December 31, 2023, compared with the year ended December 31, 2022, see “Item 5.A. —Operating and Financial Review and Prospects—Operating Results—Results for the Year Ended December 31, 2023, compared to the Year Ended December 31, 2022” included in our Annual Report on Form 20-F for the fiscal year ended December 31, 2023, filed with the SEC on April 2, 2024.
The positive net cash flow in 2022 was primarily due to share-based and restricted share compensation expenses of approximately $5.2 million, an increase in deferred revenue and advances from customers of approximately $4.3 million, an increase in other liabilities and accrued expenses of approximately $0.9 million, an increase of approximately $0.8 million in employees and payroll accruals and depreciation of $0.5 million.
The positive net cash flow in 2024 was primarily due to net income of approximately $7 million, share-based and restricted share compensation expenses of approximately $6.1 million, an increase in deferred revenue and advances from customers of approximately $5.4 million, an increase of approximately $1.8 million in employees and payroll accruals, an increase of approximately $1.5 million in other liabilities and accrued expenses and depreciation and amortization of $0.7 million.
Grants received from the IIA before June 30, 2017, bear an annual interest rate based on the 12-month LIBOR, and grants received from the IIA after June 30, 2017, bear an annual interest rate based on the 12-month LIBOR, until December 31, 2023, and as of January 1, 2024, bear an annual interest rate based on the 12-month SOFR, or at an alternative rate published by the Bank of Israel, with the addition of 0.72%.
Grants received from the IIA before June 30, 2017, bear an annual interest rate that applied at the time of the approval of the applicable IIA file, and that interest rate will apply to all of the funding received under that IIA approval, and grants received from the IIA after June 30, 2017, bear an annual interest rate based on the 12-month LIBOR, until December 31, 2023, and as of January 1, 2024, bear an annual interest rate based on the 12-month SOFR, or at an alternative rate published by the Bank of Israel, with the addition of 0.72%.
As of December 31, 2023, our cash and cash equivalents and bank deposits totaled approximately $82.2 million, compared with cash and cash equivalents and bank deposits of approximately $77.7 million as of December 31, 2022. Our 2023 income includes non-cash expenses due to share-based compensation of approximately $6.1 million, compared to $5.2 million in 2022.
As of December 31, 2024, our cash and cash equivalents and bank deposits totaled approximately $94.7 million, compared with cash and cash equivalents and bank deposits of approximately $82.2 million as of December 31, 2023. Our 2024 and 2023 income includes non-cash expenses due to share-based compensation of approximately $6.1 million in each of such fiscal years.
Revenues per geographic region, based on the location of the end-customer Year Ended December 31, (in millions of U.S. dollars) Year Ended December 31, (as percentages) 2023 2022 2023 2022 North America 31.8 23.0 61.7 49.8 Asia 9.8 12.5 18.9 27.2 Latin America 1.3 3.0 2.5 6.4 EMEA (including Israel) 8.7 7.6 16.9 16.6 Total revenues 51.6 46.1 100 % 100 % In 2023, our two largest customers amounted to approximately 76% of our total consolidated revenues.
Revenues per geographic region, based on the location of the end-customer Year Ended December 31, (in millions of U.S. dollars) Year Ended December 31, (as percentages) 2024 2023 2024 2023 North America 36.1 31.8 59.1 61.7 Asia 12.7 9.8 20.9 18.9 Latin America 0.3 1.3 0.5 2.5 EMEA (including Israel) 11.9 8.7 19.5 16.9 Total revenues 61.0 51.6 100 % 100 % In 2024, our three largest customers amounted to approximately 88% of our total consolidated revenues.
Net cash provided by operating activities was approximately $4.7 million in 2023 compared to net cash provided by operating activities of approximately $6.0 million in 2022.
Net cash provided by operating activities was approximately $11.4 million in 2024 compared to net cash provided by operating activities of approximately $4.7 million in 2023.
As of December 31, 2023, the accumulated interest was approximately $26.7 million, the accumulated royalties paid to the IIA were approximately $21 million and our total amount of contingent liability to the IIA in respect of grants received was, according to our records, approximately $56 million.
As of December 31, 2024, the accumulated interest was approximately $28.6 million, the accumulated royalties paid to the IIA were approximately $22.6 million and our total amount of contingent liability to the IIA in respect of grants received was, according to our records, approximately $56.2 million.
In 2022 our two largest customers amounted to approximately 77% our total consolidated revenues. Cost of Revenues and Gross Profit Year Ended December 31, (in millions of U.S. dollars) 2023 2022 Products 5.7 5.5 Services 8.1 7.2 Total cost of revenues 13.8 12.7 Gross profit 37.8 33.3 36 Cost of Revenues .
In 2023 our two largest customers amounted to approximately 76% our total consolidated revenues. Cost of Revenues and Gross Profit Year Ended December 31, (in millions of U.S. dollars) 2024 2023 Products 7.1 5.7 Services 8.6 8.1 Total cost of revenues 15.7 13.8 Gross profit 45.3 37.8 Cost of Revenues .
Such valuations require us to make significant estimates, assumptions, and judgments, especially with respect to intangible assets. The estimated fair values and useful lives of identifiable intangible assets are based on many factors, including estimates and assumptions of future operating performance and cash flows of the acquired business, market conditions, technological developments and specific characteristics of the identified intangible assets.
The estimated fair values and useful lives of identifiable intangible assets are based on many factors, including estimates and assumptions of future operating performance and cash flows of the acquired business, market conditions, technological developments and specific characteristics of the identified intangible assets.
The increase in our general and administrative expenses is mainly attributed to an increase in share-based compensation expenses and to an increase in professional services expenses in 2023 compared to 2022. As a percentage of total revenues, general and administrative expenses were 9.8% in 2023, with no significant change from 9.7% in 2022.
The increase in our general and administrative expenses is mainly attributed to an increase in share-based compensation expenses and to an increase in professional services expenses in 2024 compared to 2023. As a percentage of total revenues, general and administrative expenses were 10.5% in 2024, compared to 9.8% in 2023.
Summary of Our Financial Performance for the Fiscal Year Ended 2023 Compared to the Fiscal Year Ended 2022 For the year ended December 31, 2023, our revenues were approximately $51.6 million, compared to approximately $46.1 million in 2022, reflecting an increase of approximately 12%.
Summary of Our Financial Performance for the Fiscal Year Ended 2024 Compared to the Fiscal Year Ended 2023 For the year ended December 31, 2024, our revenues were approximately $61.0 million, compared to approximately $51.6 million in 2023, reflecting an increase of approximately 18.2%.
Net cash used in investing activities in 2023 was approximately $3.6 million, compared to net cash used in investing activities in 2022 of $8.4 million.
Net cash used in investing activities in 2024 was approximately $2.7 million, compared to net cash used in investing activities in 2023 of $3.6 million.
GAAP requires us to make judgments, assumptions, and estimates that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Note 2 of the Notes to the Consolidated Financial Statements describes the significant accounting policies and methods used in the preparation of the Consolidated Financial Statements. The accounting policies described below are significantly affected by critical accounting estimates.
Note 2 of the Notes to the Consolidated Financial Statements describes the significant accounting policies and methods used in the preparation of the Consolidated Financial Statements. The accounting policies described below are significantly affected by critical accounting estimates.
The qualitative assessment includes judgement and considers events and circumstances that might indicate that a reporting unit’s fair value is less than its carrying amount. For the year ended December 31, 2023, no impairment loss was identified.
The accounting guidance gives the option to perform a qualitative assessment to determine whether further impairment testing is necessary. The qualitative assessment includes judgement and considers events and circumstances that might indicate that a reporting unit’s fair value is less than its carrying amount. For the years ended December 31, 2024 and 2023 no impairment loss was identified.
We recorded such grants from the IIA in the total amount of approximately $0.8 million in each of 2023 and 2022. Pursuant to the specific terms of these grants, we are obligated to pay royalties of 3% of the revenues generated by sales of products (and certain related services) funded with these grants (excluding grants received in the Magnet project).
Pursuant to the specific terms of these grants, we are obligated to pay royalties of 3% of the revenues generated by sales of products (and certain related services) funded with these grants (excluding grants received in the Magnet project).
In 2023, our revenues increased by approximately $5.5 million, or approximately 12%, compared to 2022 due to an increase of approximately $3.8 million in product revenues, and an increase of approximately $1.7 million in services revenues. The increase in product revenues relates mainly to an increase in revenues in North America and derives from existing and new customers.
In 2024, our revenues increased by approximately $9.4 million, or approximately 18.2%, compared to 2023 due to an increase of approximately $5.4 million in product revenues, and an increase of approximately $4.0 million in services revenues. The increase in product revenues relates mainly to an increase in revenues in EMEA and North America and derives from existing customers.
This was partially offset by net loss of approximately $2.3 million, an increase in accrued interest on short-term bank deposits and long-term bank deposits of approximately $1.2 million, an increase of approximately $1.1 million in other account receivables and prepaid expenses and an increase of approximately $1.0 million in trade receivables, net.
This was partially offset by an increase of approximately $5.6 million in trade receivables, net, an increase of approximately $2.2 million in other account receivables and prepaid expenses, a decrease of $1.8 million in accrued interest on bank deposits and an increase of approximately $1.4 million in inventory.
The increase in our sales and marketing expenses is mainly related to expansion of the global sales and marketing team and to an increase in share-based compensation expenses in 2023 compared to 2022. As a percentage of total revenues, sales and marketing expenses were 28.3% in 2023, compared to 26.6% in 2022.
The increase in our sales and marketing expenses is mainly related to supporting our revenue growth and was also attributable to an increase of sales efforts and expansion of the global sales and marketing team in 2024 compared to 2023. As a percentage of total revenues, sales and marketing expenses were 29.2% in 2024, compared to 28.3% in 2023.
The increase in our financial income, net is related to a positive impact of currency exchange rates and an increase in interest income from bank deposits. Taxes on Income . In 2023, we recorded tax expenses of approximately $182,000 as compared to tax expenses of approximately $159,000 in 2022.
The decrease in our financial income, net is related to a negative impact of currency exchange rates. Taxes on Income . In 2024, we recorded tax expenses of approximately $234,000 as compared to tax expenses of approximately $182,000 in 2023. Tax expenses are mainly related to tax expenses of RADCOM India and RADCOM US.
During 2023, our gross profit as a percentage of revenues, calculated to include variable costs such as salaries and related expenses was approximately 73.3% compared to approximately 72.4% in 2022. Our cost of revenues for both 2023 and 2022 includes an expense of approximately $0.4 million for share-based compensation.
During 2024, our gross profit as a percentage of revenues, calculated to include variable costs such as salaries and related expenses was approximately 74.2% compared to approximately 73.3% in 2023.
TREND INFORMATION During 2023, we saw more deployments of 5G SA by CSPs, but still in small numbers. According to industry research, 46 operators in 27 countries, launched 5G standalone networks so we expect that the number of 5G SA deployments will grow during 2024 and beyond, although the pace of such growth is still unknown.
TREND INFORMATION According to industry research, as of January 2025, 67 operators in 35 countries, launched 5G standalone networks and we expect that the number of 5G SA deployments will grow in the coming years, although the pace of such growth is still unknown.
Research and development expenses, gross, decreased from approximately $21.5 million in 2022 to approximately $19.6 million in 2023. As a percentage of total revenues, research and development expenses, gross, decreased from approximately 46.7% in 2022 to approximately 37.9% in 2023. The decrease in our gross research and development expenses is attributable mostly to favorable foreign exchange rates.
Research and development expenses, gross, decreased from approximately $19.6 million in 2023 to approximately $18.7 million in 2024. As a percentage of total revenues, research and development expenses, gross, decreased from approximately 37.9% in 2023 to approximately 30.6% in 2024.
While we expect to continue to grow organically, we expect to continue to evaluate additional potential transactions to purchase other companies or technologies in the field in which we operate.
The post-acquisition synergies from integrating Continual’s technology into our portfolio contributed to our product and services offering and to our operation. While we expect to continue to grow organically, we expect to continue to evaluate additional potential transactions to purchase other companies or technologies in the field in which we operate.
Goodwill and Other Intangible Assets. Goodwill and certain other purchased intangible assets have been recorded in our financial statements as a result of acquisitions. In business combinations, in accordance with ASC Topic 805, “Business Combinations”, we allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values.
In business combinations, in accordance with ASC Topic 805, “Business Combinations”, we allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. Such valuations require us to make significant estimates, assumptions, and judgments, especially with respect to intangible assets.
Goodwill is not amortized, but rather is subject to an impairment test. ASC No. 350, “Intangible—Goodwill and Other” requires goodwill to be tested for impairment at least annually and, in certain circumstances, between annual tests. The accounting guidance gives the option to perform a qualitative assessment to determine whether further impairment testing is necessary.
Goodwill represents excess of the purchase price in a business combination over the fair value of identifiable tangible and intangible assets acquired. Goodwill is not amortized, but rather is subject to an impairment test. ASC No. 350, “Intangible—Goodwill and Other” requires goodwill to be tested for impairment at least annually and, in certain circumstances, between annual tests.
General Our discussion and analysis of our financial condition and results of operation are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. Our operating and financial review and prospects should be read in conjunction with our financial statements, accompanying notes thereto and other financial information appearing elsewhere in this Annual Report.
Our operating and financial review and prospects should be read in conjunction with our financial statements, accompanying notes thereto and other financial information appearing elsewhere in this Annual Report. 31 We commenced operations in 1991.
Our world leading, innovative solutions are well-positioned to fulfill the CSPs’ ongoing needs to monitor their networks (fixed and mobile) and assure the delivery of a quality service to their subscribers; both on cloud-native virtualized network and non-virtual networks.
Our world leading, innovative solutions are well-positioned to fulfill the CSPs’ ongoing needs to monitor their networks (fixed and mobile) and assure the delivery of a quality service to their subscribers. General Our discussion and analysis of our financial condition and results of operation are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP.
We consider customer experience as another driver for CSPs to invest in solutions that enable them to better monitor and proactively offer resolution and upgrade of quality of service. As services become more technologically complex and their volumes increase, service quality becomes an issue that must be addressed to allow for end-to-end visibility across the different network areas.
As services become more technologically complex and their volumes increase, service quality becomes an issue that must be addressed to allow for end-to-end visibility across the different network areas. Our automated assurance solutions address this need by providing end-to-end network visibility from RAN to core, enabling CSPs to monitor their networks end-to-end as they progress with 5G deployments. E.
The following table provides the operating costs and expenses of the Company in 2023 and 2022 as well as the percentage change of such expenses in 2023 as compared to 2022.
Our cost of revenues for both 2024 and 2023 includes an expense of approximately $0.4 million for share-based compensation in each of the fiscal years. 34 The following table provides the operating costs and expenses of the Company in 2024 and 2023 as well as the percentage change of such expenses in 2024 as compared to 2023.
We expect to keep the levels of our research and development expenses at similar levels as they were in 2022 and 2023. We believe that our research and development efforts are a key element of our strategy and are essential to our success.
As a result, we will continue to allocate significant resources to research and development to drive innovation and growth. We believe that our research and development efforts are a key element of our strategy and are essential to our success.
On April 30, 2023, we acquired the technology, intellectual property, and customer agreements of Continual for $2.5 million in cash. The post-acquisition synergies from integrating Continual’s technology into our portfolio contributed to our product and services offering and to our operation.
Net Cash provided by (Used in) Financing Activities. In 2024 and in 2023, there was no net cash provided by or used in financing activities. On April 30, 2023, we acquired the technology, intellectual property, and customer agreements of Continual for $2.5 million in cash.
CSPs are continuing to invest in 5G networks and more devices have become commercially available despite the economic disruption. We saw the mobile industry continuing to allocate 5G spectrum and the investment in 5G SA networks in both trials and live deployments. 5G networks and services are much more complex and dynamic than traditional networks.
CSPs are continuing to invest in 5G networks and more devices have become commercially available despite the economic disruption. 5G networks and services are becoming much more complex and dynamic. They use cloud-native technologies such as containers and kubernetes to enable automation and simplification and to reduce operating costs.
As of both December 31, 2023, and December 31, 2022, our total research and development headcount, including contractors, was 137. Our research and development costs included an expense of approximately $2.7 million for share-based compensation in 2023, as compared to approximately $2.5 million for share-based compensation in 2022.
Our research and development costs included an expense of approximately $2.0 million for share-based compensation in 2024, as compared to approximately $2.7 million for share-based compensation in 2023. We are committed to continuously enhancing and expanding our product offerings and capabilities. Additionally, we plan to continue investing in our cloud solutions, 5G, automation, and AI.
Removed
Tax expenses are comprised from tax expenses of RADCOM India and RADCOM US, as well as withholding taxes that were deducted by our customers.
Added
The decrease in our gross research and development expenses is attributable mostly to share-based compensation and salary expenses due to favorable impact of foreign exchange rate fluctuations. As of December 31, 2024, and December 31, 2023, our total research and development headcount, including contractors, was 134 and 137 respectively.
Removed
In 2022, we invested approximately $66.9 million in bank deposits, received approximately $58.6 million from the maturity of a short-term bank deposit and invested approximately $0.2 million for the purchase of equipment. 39 Net Cash provided by (Used in) Financing Activities. In 2023 and in 2022, there was no net cash provided by or used in financing activities.
Added
Impact of Related Party Transactions For more information, about our related party transactions, none of which currently has a material impact on us, see “Item 7.B—Major Shareholders and Related Party Transactions—Related Party Transactions” below.
Removed
Impact of Related Party Transactions We have entered into a number of lease agreements with the RAD-BYNET Group (as described under “Item 7.B-Major Shareholders and Related Party Transactions-Related Party Transactions”). The pricing of the transactions with respect to such leases was determined based on negotiations between the parties.
Added
We recorded such grants from the IIA in the total amount of approximately $0.7 million in 2024 and $0.8 million in each of 2023 and 2022.
Removed
Members of our audit committee of the Board of Directors, or the Audit Committee, Board of Directors and management reviewed the pricing of the leases and confirmed that these agreements were not different from terms that could have been obtained from unaffiliated third parties. For more information, see “Item 7.B—Major Shareholders and Related Party Transactions—Related Party Transactions” below.
Added
These and the evolution to 5G advanced and GenAI embedded network technologies may result in potential increased interest by CSPs in our solutions. We consider customer experience as another driver for CSPs to invest in solutions that enable them to better monitor, understand customer affecting issues, and proactively offer resolution and upgrade of quality of service.
Removed
They use cloud-native technologies such as containers and kubernetes to enable automation and simplification and to reduce operating costs. These technological advancements may result in potential increased interest by CSPs in our solutions.
Added
CRITICAL ACCOUNTING ESTIMATES Critical Accounting Policies and Estimates The preparation of Consolidated Financial Statements and related disclosures in conformity with U.S. GAAP requires us to make judgments, assumptions, and estimates that affect the amounts reported in the Consolidated Financial Statements and accompanying notes.
Removed
Our automated assurance solutions address this need by providing end-to-end network visibility from RAN to core, enabling CSPs to monitor their networks end-to-end as they progress with 5G deployments. E. CRITICAL ACCOUNTING ESTIMATES Critical Accounting Policies and Estimates The preparation of Consolidated Financial Statements and related disclosures in conformity with U.S.
Added
Acquisition costs, such as legal and consulting fees, are expensed as incurred. 41 Goodwill and Other Intangible Assets. Goodwill and certain other purchased intangible assets have been recorded in our financial statements as a result of acquisitions.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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The compensation policy must furthermore consider the following additional factors: ● the knowledge, skills, expertise and accomplishments of the relevant Office Holder; ● the Office Holder’s roles and responsibilities and prior compensation agreements with him or her; ● the relationship between the terms offered and the average compensation of the other employees of the company, including those employed through human resource companies; ● the impact of disparities in salary upon work relationships in the company; 50 ● the possibility of reducing variable compensation at the discretion of the Board of Directors or the possibility of setting a limit on the exercise value of non-cash variable equity-based compensation; and ● as to severance compensation, the period of service of the Office Holder, the terms of his or her compensation during such service period, the company’s performance during that period of service, the person’s contributions towards the company’s achievement of its goals and the maximization of its profits and the circumstances under which the person is leaving the company.
The compensation policy must furthermore consider the following additional factors: ● the knowledge, skills, expertise and accomplishments of the relevant Office Holder; ● the Office Holder’s roles and responsibilities and prior compensation agreements with him or her; ● the relationship between the terms offered and the average compensation of the other employees of the company, including those employed through human resource companies; ● the impact of disparities in salary upon work relationships in the company; 49 ● the possibility of reducing variable compensation at the discretion of the Board of Directors or the possibility of setting a limit on the exercise value of non-cash variable equity-based compensation; and ● as to severance compensation, the period of service of the Office Holder, the terms of his or her compensation during such service period, the company’s performance during that period of service, the person’s contributions towards the company’s achievement of its goals and the maximization of its profits and the circumstances under which the person is leaving the company.
COMPENSATION The following table presents information regarding compensation accrued in our financial statements for our five most highly compensated office holders (within the meaning of the Israeli Companies Law), during or with respect to the year ended December 31, 2023.
COMPENSATION The following table presents information regarding compensation accrued in our financial statements for our five most highly compensated office holders (within the meaning of the Israeli Companies Law), during or with respect to the year ended December 31, 2024.
We measure the compensation expense for all share-based payments (including employee stock options) at fair value, in accordance with ASC 718. We recorded an expense of approximately $6.1 million for share-based compensation plans during 2023.
We measure the compensation expense for all share-based payments (including employee stock options) at fair value, in accordance with ASC 718. We recorded an expense of approximately $6.1 million for share-based compensation plans during 2024.
Most of our agreements with our key employees are subject to termination by either party upon the delivery of notice of termination as provided therein. 51 Nominating Committee Our Board of Directors does not currently have a nominating committee.
Most of our agreements with our key employees are subject to termination by either party upon the delivery of notice of termination as provided therein. 50 Nominating Committee Our Board of Directors does not currently have a nominating committee.
Mr. Amit holds a B.Sc. in electrical engineering from Tel Aviv University. There are no family relationships between any of the directors or executive officers named above. 46 B.
Mr. Amit holds a B.Sc. in electrical engineering from Tel Aviv University. There are no family relationships between any of the directors or executive officers named above. 44 B.
Under the Israeli Companies Law and the Nasdaq Listing Rules, our Audit Committee is responsible for, among others (i) determining whether there are deficiencies in the business management practices of our Company, including in consultation with our internal auditor or the independent auditor, and making recommendations to the Board to improve such practices, (ii) determining whether to approve certain related party transactions (including transactions in which an Office Holder has a personal interest) and whether such transaction should be deemed as material or extraordinary, (iii) where the Board approves the working plan of the internal auditor, to examine such working plan before its submission to the Board and propose amendments thereto, (iv) examining our internal controls and internal auditor’s performance, including whether the internal auditor has sufficient resources and tools to dispose of its responsibilities, (v) examining the scope of our auditor’s work and compensation and submitting a recommendation with respect thereto to our Board or shareholders, depending on which of them is considering the appointment of our auditor, and (vi) establishing procedures for the handling of employee complaints as to the management of our business and the protection to be provided to such employees.
Under the Israeli Companies Law and the Nasdaq Listing Rules, our Audit Committee is responsible for, among others (i) determining whether there are deficiencies in the business management practices of our Company, including in consultation with our internal auditor or the independent auditor, and making recommendations to the Board to improve such practices, (ii) determining whether to approve certain related party transactions (including transactions in which an Office Holder has a personal interest) and whether such transaction should be deemed as material or extraordinary, (iii) where the Board approves the working plan of the internal auditor, to examine such working plan before its submission to the Board and propose amendments thereto, (iv) examining our internal controls and internal auditor’s performance, including whether the internal auditor has sufficient resources and tools to dispose of its responsibilities, (v) examining the scope of our auditor’s work and compensation and submitting a recommendation with respect thereto to our Board or shareholders, depending on which of them is considering the appointment of our auditor, and (vi) establishing procedures for the handling of employee complaints as to the management of our business and the protection to be provided to such employees. 48 Compensation Committee The current members of our Compensation Committee are, Oren Most, Yaron Ravkaie and Andre Fuetsch.
For a description of our compensation of directors see “Item 6.B—Directors, Senior Management and Employees—Compensation.” External Directors Under the Israeli Companies Law, a public company incorporated under the laws of the State of Israel must appoint at least two External Directors; however, pursuant to an exemption provided under section 5D of the Israeli Companies Regulations (Relief for Public Companies with Shares Listed for Trading on a Stock Market Outside of Israel), 5760-2000, or the Exemption, a public company with securities listed on certain foreign exchanges, including Nasdaq, that satisfies the applicable foreign country laws and regulations that apply to companies organized in that country relating to the appointment of independent directors and composition of audit and compensation committees and has no controlling shareholder is exempt from the requirement to elect External Directors or comply with the audit committee and compensation committee composition requirements under the Israeli Companies Law.
For a description of our compensation of directors see “Item 6.B—Directors, Senior Management and Employees—Compensation.” External Directors Under the Israeli Companies Law, a public company incorporated under the laws of the State of Israel must appoint at least two External Directors; however, pursuant to an exemption provided under section 5D of the Relief Regulations, or the Exemption, a public company with securities listed on certain foreign exchanges, including Nasdaq, that satisfies the applicable foreign country laws and regulations that apply to companies organized in that country relating to the appointment of independent directors and composition of audit and compensation committees and has no controlling shareholder is exempt from the requirement to elect External Directors or comply with the audit committee and compensation committee composition requirements under the Israeli Companies Law.
Our Board of Directors has also determined that Oren Most is an “Audit Committee Financial Expert” as defined in Item 407(d)(5)(ii) of Regulation S-K under the Exchange Act and that he has the requisite experience under Nasdaq Listing Rules. Our Audit Committee operates under a written charter that is posted on our website.
Our Board of Directors has also determined that Yaron Ravkaie is an “Audit Committee Financial Expert” as defined in Item 407(d)(5)(ii) of Regulation S-K under the Exchange Act and that he has the requisite experience under Nasdaq Listing Rules. Our Audit Committee operates under a written charter that is posted on our website.
Options and RSUs granted under our 2023 Plan generally vest over a period of between one and four years, with expiration term for Options of five to seven years from the date of grant, subject to the discretion of our Board of Directors, which has the authority to deviate from such parameters in respect of specific grants.
Options and RSUs granted under our 2023 Plan generally vest over a period of between one and four years, with a default expiration term for Options of ten years from the date of grant, subject to the discretion of our Board of Directors, which has the authority to deviate from such parameters in respect of specific grants.
Options and RSUs granted under our 2013 Plan generally vest over a period of between one and four years, with expiration term for Options of five to seven years from the date of grant, subject to the discretion of our Board of Directors, which had the authority to deviate from such parameters in respect of specific grants.
Options and RSUs granted under our 2013 Plan generally vest over a period of between one and four years, with a default expiration term for Options of ten years from the date of grant, subject to the discretion of our Board of Directors, which had the authority to deviate from such parameters in respect of specific grants.
The terms of office of Ms. Bennun and Messrs. Fuetsch, Karp, Most, Ravkaie and Schwartz, will expire on our 2026 annual general meeting. Except our Executive Chairman, Ms. Bennun, and Mr. Andre Fuetsch, none of our directors have service contracts with the Company relating to their service as a director.
The terms of office of Mr. Totah and Messrs. Bennun, Fuetsch, Most, Ravkaie, Ripstein and Schwartz, will expire on our 2026 annual general meeting. Except our former Executive Chairman, Ms. Bennun, and Mr. Andre Fuetsch, none of our directors have service contracts with the Company relating to their service as a director.
Our Board of Directors has determined that each of the members of our Compensation Committee is independent within the meaning of the Nasdaq Listing Rules. The Compensation Committee operates under a charter that is posted on our website.
Mr. Ravkaie is the Chairman of the Compensation Committee. Our Board of Directors has determined that each of the members of our Compensation Committee is independent within the meaning of the Nasdaq Listing Rules. The Compensation Committee operates under a charter that is posted on our website.
Consequently, we have adopted share option plans and material amendments thereto by action of our board of directors, without shareholder approval. See also “Item 16G—Corporate Governance.” Compensation Policy Our compensation policy for our executive officers and directors, was last approved by our shareholders on July 21, 2022, and most recently amended on August 3, 2023.
Consequently, we have adopted share option plans and material amendments thereto by action of our board of directors, without shareholder approval. See also “Item 16G—Corporate Governance.” Compensation Policy Our compensation policy for our executive officers and directors, was last approved by our shareholders on July 21, 2022, and most recently amended on October 15, 2024.
Our compensation policy for our executive officers and directors, was last approved by our shareholders on July 21, 2022, and most recently amended on August 3, 2023. Internal Auditor Under the Israeli Companies Law, the board of directors of a public company must also appoint an internal auditor proposed by the audit committee.
Our compensation policy for our executive officers and directors, was last approved by our shareholders on July 21, 2022, and most recently amended on October 15, 2025. Internal Auditor Under the Israeli Companies Law, the board of directors of a public company must also appoint an internal auditor proposed by the audit committee.
Under the 2023 Plan, we may grant options to purchase our ordinary shares, or Options, restricted shares and RSUs to our employees, directors, consultants and contractors.
Under the 2023 Plan, we may grant Options, restricted shares and RSUs to our employees, directors, consultants and contractors.
The RSUs have a vesting schedule of four years over equal annual installments commencing as of the date of the grant. Further information regarding the options and RSU grants to our directors is detailed below.
The RSUs and the Options have a vesting schedule up to four years over equal monthly or quarterly installments commencing as of the date of the grant. Further information regarding the RSU and Options grants to our directors is detailed below.
Bennun co-founded Arel Communications & Software Ltd. (formerly Nasdaq: ARLC) in 1988, a company focused on offering integrated video, audio and data-enabled conferencing solutions, including real time Interactive Distance Learning, and served as CEO, CFO, and director, leading the company to its initial public offering on Nasdaq in 1994. Ms. Bennun also co-founded ArelNet Ltd.
(formerly Nasdaq: ARLC) in 1988, a company focused on offering integrated video, audio and data-enabled conferencing solutions, including real time Interactive Distance Learning, and served as Chief Executive Officer, or CEO, Chief Financial Officer, or CFO, and director, leading the company to its initial public offering on Nasdaq in 1994. Ms. Bennun also co-founded ArelNet Ltd.
As of December 31, 2023, our current directors and officers, as a group, held, in the aggregate 310,283 RSUs that were granted under our 2013 Plan and the 2023 Plan. Our directors are reimbursed for expenses and receive cash and equity compensation, which terms are detailed below.
As of December 31, 2024, our current directors and officers, as a group, held, in the aggregate 373,925 RSUs and 112,028 Options that were granted under our 2013 Plan and the 2023 Plan. Our directors are reimbursed for expenses and receive cash and equity compensation, which terms are detailed below.
The grants awarded during 2023 and 2024 were for a vesting term of up to 4 years. (2) All other compensation includes social benefits and car leasing costs. (3) Mr. Harari served as the Chief Executive Officer of the Company until February 2024.
The grants awarded during 2024 and 2025 were for a vesting term of up to 4 years. (2) All other compensation includes social benefits and car leasing costs. (3) Mr. Itman served as Interim Chief Executive Officer of the Company from April 2024 until December 2024. (4) Mr.
See “Item 6.C—Directors, Senior Management and Employees—Board Practices—Compensation Committee.” 48 C. BOARD PRACTICES Terms of Office Our current Board of Directors is comprised of Rachel (Heli) Bennun (Executive Chairman), and our non-executive directors, Andre Fuetsch, Matty Karp, Oren Most, Yaron Ravkaie, and Rami Schwartz.
See “Item 6.C—Directors, Senior Management and Employees—Board Practices—Compensation Committee.” 47 C. BOARD PRACTICES Terms of Office Our current Board of Directors is comprised of Sami Totah (Chairman), and our non-executive directors, Rachel (Heli) Bennun, Andre Fuetsch, Oren Most, Yaron Ravkaie, David (Dudi) Ripstein and Rami Schwartz.
Rahav holds a BA (cum laude) in Business Management Accounting and Risk Management from the College of Management and Academic Studies, Rishon Le-Zion and is certified in Israel as a CPA. Mr.
Rahav served in various positions with Ernst & Young Israel. Ms. Rahav holds a BA (cum laude) in Business Management Accounting and Risk Management from the College of Management and Academic Studies, Rishon Le-Zion and is certified in Israel as a CPA. Mr.
In his previous roles in AT&T, Mr. Fuetsch supported and led several organizations responsible for software, systems, and network architecture, planning and engineering, where he held six patents in the field of network traffic optimization and database design. Mr. Fuetsch holds a B.Sc. in Industrial Engineering and Operations Research at U.C.
Fuetsch supported and led several organizations responsible for software, systems, and network architecture, planning and engineering, where he held six patents in the field of network traffic optimization and database design. Mr. Fuetsch holds a B.Sc. in Industrial Engineering and Operations Research at U.C. Berkeley and completed his graduate coursework in Computer Science at Stanford University. Mr.
On April 3, 2013, our Board of Directors adopted the 2013 Plan. The 2013 Plan expired on April 2, 2023, or the 2013 Plan Expiration Date. Under the 2013 Plan, we were able to grant Options, restricted shares and RSUs to our employees, directors, consultants and contractors.
The 2013 Plan expired on April 2, 2023, or the 2013 Plan Expiration Date. Under the 2013 Plan, we were able to grant Options, restricted shares and RSUs to our employees, directors, consultants and contractors. As of the 2013 Plan Expiration Date, we had granted 1,278,808 Options and 2,554,031 RSUs under the 2013 Plan.
EMPLOYEES Our total headcount as of December 31, 2023, was 295, compared to 284 in 2022 and 278 in 2021, including full-time and part-time employees and contractors, broken down geographically and by function as follows: Research and Development Sales, Marketing and Customer Support Operations Administration and Management Total Headcount Israel 95 23 2 11 131 India 13 46 0 2 61 United States 0 24 0 4 28 Brazil 0 12 0 1 13 Other 40 22 0 0 62 Total 148 127 2 18 295 We consider our relations with our employees to be good and we have never experienced a strike or work stoppage.
EMPLOYEES Our total headcount as of December 31, 2024, was 307, compared to 295 in 2023 and 284 in 2022, including full-time and part-time employees and contractors, broken down geographically and by function as follows: Research and Development Sales, Marketing and Customer Support Operations Administration and Management Total Headcount Israel 82 37 5 10 134 India 13 53 0 2 68 United States 0 27 0 3 30 Brazil 0 12 0 1 13 Other 39 23 0 0 62 Total 134 152 5 16 307 We consider our relations with our employees to be good and we have never experienced a strike or work stoppage.
DIRECTORS AND SENIOR MANAGEMENT The following table lists our current directors and executive officers: Name Age Position Rachel (Heli) Bennun 70 Executive Chairman of our Board of Directors Matty Karp (1)(2)(4)(5) 74 Director Andre Fuetsch (1) 53 Director Oren Most (1) (4)(5) 73 Director Yaron Ravkaie 55 Director Rami Schwartz (1)(3)(4)(5) 66 Director Guy Shemesh 50 Chief Executive Officer Hadar Rahav 36 Chief Financial Officer Hilik Itman 52 Chief Operating Officer Rami Amit 58 Chief Technology Officer and Head of Product (1) Independent Director, under Nasdaq Stock Market Rules, or the Nasdaq Listing Rules.
DIRECTORS AND SENIOR MANAGEMENT The following table lists our current directors and executive officers: Name Age Position Sami Totah (1)(4) 67 Chairman of our Board of Directors Rachel (Heli) Bennun 71 Director Andre Fuetsch (1)(5) 54 Director Oren Most (1)(5) 74 Director Yaron Ravkaie (1)(3)(4) 56 Director David (Dudi) Ripstein (1)(4) 58 Director Rami Schwartz (1)(2) 67 Director Benjamin (Benny) Eppstein 51 Chief Executive Officer Hadar Rahav 37 Chief Financial Officer Hilik Itman 53 Chief Operating Officer Rami Amit 59 Chief Technology Officer (1) Independent Director, under Nasdaq Stock Market Rules, or the Nasdaq Listing Rules.
Rahav served as Corporate Director of Finance at TAT Technologies Ltd. (Nasdaq: TATT; TASE: TATT.TA) from 2018 until 2020, and as Corporate Controller at Electra Consumer Products (1970) Ltd. (ECP.TA) from 2015 until 2018. Before 2018, Ms. Rahav served in various positions with Ernst & Young Israel. Ms.
Rahav joined us in May 2020 as our Head of Global Finance. Prior to joining our Company, Ms. Rahav served as Corporate Director of Finance at TAT Technologies Ltd. (Nasdaq: TATT; TASE: TATT.TA) from 2018 until 2020, and as Corporate Controller at Electra Consumer Products (1970) Ltd. (ECP.TA) from 2015 until 2018. Before 2018, Ms.
Fuetsch received a grant of 23,400 RSU, vesting over a period of three years . 47 Share Option Plans On March 28, 2023, our Board of Directors adopted the 2023 Plan. The 2023 Plan expires on March 27, 2033.
Fuetsch, was an annual fee of $52,000 and a per meeting attendance fee of $2,000. In addition Mr. Fuetsch received a grant of 23,400 RSU, vesting over a period of three years. 46 Share Option Plans On March 28, 2023, our Board of Directors adopted the 2023 Plan. The 2023 Plan expires on March 27, 2033.
In January 2024 and during 2023, we granted 867,814 and 1,198,500 RSUs, respectively, which will result in ongoing accounting charges that will significantly reduce our net income. See Notes 2(n) and 11(b) of the Notes to the Consolidated Financial Statements for further information.
In January 2025 we granted 197,220 RSUs, and 22,960 Options and during 2024, we granted 997,364 RSUs, and 112,028 Options, which will result in ongoing accounting charges that will significantly reduce our net income. See Notes 2(n) and 12(b)of the Notes to the Consolidated Financial Statements for further information.
The bonus and commission payments made to our other officers and the Executive Chairman of our Board of Directors are based on the achievements of goals and objectives that are set and communicated at the beginning of each year and which are made in accordance with our Compensation Policy, as approved by our shareholders from time to time and most recently on July 11, 2019, as amended on July 8, 2021, July 21, 2022 and August 3, 2023.
The bonus and commission payments made to the persons listed in the table above are based on the achievements of goals and objectives that are set and communicated at the beginning of each year and which are made in accordance with our Compensation Policy, as approved by our shareholders from time to time and most recently on July 21, 2022 as amended on August 3, 2023 and October 15, 2024. 45 The aggregate direct remuneration paid to all our directors and executive officers as a group for the year ended December 31, 2024, including Mr.
Fuetsch has served in various senior capacities in AT&T Inc. since his joining in 1995, the most recent of which is AT&T’s Executive Vice President and CTO Network Services. As part of his role, Mr. Fuetsch oversaw the global technology direction for AT&T, including network planning, innovation road map and led AT&T Labs, AT&T Foundry, and the intellectual property organization.
As part of his role, Mr. Fuetsch oversaw the global technology direction for AT&T, including network planning, innovation road map and led AT&T Labs, AT&T Foundry, and the intellectual property organization. In his previous roles in AT&T, Mr.
Our Board of Directors has determined that each of the members of our Audit Committee is independent within the meaning of the Nasdaq Listing Rules.
Audit Committee The current members of our Audit Committee are, Sami Totah, David (Dudi) Ripstein, Yaron Ravkaie and Rami Schwartz. Mr. Schwartz is the Chairman of the Audit Committee. Our Board of Directors has determined that each of the members of our Audit Committee is independent within the meaning of the Nasdaq Listing Rules.
Fuetsch ) receives a grant of 15,600 RSU or the equivalent in options to purchase ordinary shares, vesting over a period of three years. The cash compensation currently paid to our director Mr.
In addition, prior to October 15, 2024, upon his or her election or re-election, each of our non-executive directors (other than Mr. Fuetsch) received a grant of 15,600 RSU or the equivalent in options to purchase ordinary shares, vesting over a period of three years. The cash compensation which was paid to our director Mr.
As of March 27, 2024, there were (i) 39,597 outstanding Options and 285,187 unvested RSUs under the 2013 Plan, and (ii) no outstanding Options and 1,724,272 unvested RSUs under the 2023 Plan.
As of March 19, 2025, there were (i) 39,597 outstanding Options and 121,335 unvested RSUs under the 2013 Plan, and (ii) 134,988 outstanding Options and 1,429,612 unvested RSUs under the 2023 Plan.
(2) Chairman of Audit Committee. (3) Chairman of Compensation Committee. (4) Audit Committee Member. (5) Compensation Committee Member. 44 Ms. Rachel (Heli) Bennun has served as a director since December 2012 and was appointed as the Executive Chairman of our Board of Directors in September 2015. Ms. Bennun has over 25 years of professional experience in hi-tech companies. Ms.
Rachel (Heli) Bennun has served as a director since December 2012 and as our Executive Chairman from September 2015 until December 2024. Ms. Bennun has over 25 years of professional experience in hi-tech companies. Ms. Bennun co-founded Arel Communications & Software Ltd.
Most has also served in executive positions with several private and public companies including as President and Chief Executive Officer of Gilat Satellite Networks Ltd. (Nasdaq and TASE: GILT) and as Founder and Deputy Chief Executive Officer of Cellcom (Israel) Ltd. Mr. Most has also served as director for several public and private corporations. Mr.
Oren Most has served as a director since July 2019. Mr. Most is the founder and former president of Golan Telecom, Ltd., an Israeli cellular operator. Mr. Most has also served in executive positions with several private and public companies including as President and Chief Executive Officer of Gilat Satellite Networks Ltd.
Ravkaie previously served as the Company’s chief executive officer from January 2016 through December 2019. Prior to joining RADCOM, Mr. Ravkaie served during 2015 as the Chief Business Officer of RR Media Ltd. Prior to serving at RR Media Ltd., and between 1998 and 2015, Mr. Ravkaie served in various roles with Amdocs Ltd.
Ravkaie served during 2015 as the Chief Business Officer of RR Media Ltd. Prior to serving at RR Media Ltd., and between 1998 and 2015, Mr. Ravkaie served in various roles with Amdocs Ltd. (Nasdaq: DOX), including as the President of the Mobile Financial Services Division, President of the AT&T division, and other director and vice president roles. Mr.
During 2023, our office holders, as such term is defined in the Israeli Companies Law, or Office Holders, who are not directors, received, in the aggregate, 127,800 restricted share units, or RSUs, under our 2013 Share Option Plan, or the 2013 Plan and the 2023 Equity Incentive Plan or the 2023 Plan.
During 2024, our office holders, as such term is defined in the Israeli Companies Law, or Office Holders, including those who served as such during the year 2024, including our former Executive Chairman, but excluding our non-executive directors, received, in the aggregate 246,421 RSUs and 25,628 options to acquire ordinary shares, or Options, under our 2013 Share Option Plan, or the 2013 Plan and the 2023 Equity Incentive Plan or the 2023 Plan.
Most holds a B.A. in Sociology & Anthropology, Film & Television from the Tel Aviv University and an M.B.A. from New York University. Mr. Yaron Ravkaie has served as a director since January 2020. Mr. Ravkaie is the chief executive officer of Teridion Technologies Ltd., having assumed that role in January 2020. Mr.
(Nasdaq and TASE: GILT) and as Founder and Deputy Chief Executive Officer of Cellcom (Israel) Ltd. Mr. Most has also served as director for several public and private corporations. Mr. Most holds a B.A. in Sociology & Anthropology, Film & Television from Tel Aviv University and an M.B.A. from New York University. Mr.
Schwartz also served as Chief of System Development for the Israeli Air Force. Mr. Schwartz holds a B.Sc. in math and computer science form the Hebrew University of Jerusalem. Mr . Guy Shemesh, has served as our Chief Executive Officer since February 2024. Prior to joining our Company, Mr.
Schwartz previously served in senior positions, including as business group president, founder, Chief Executive Officer and Active Chairman, with several public and private companies including Amdocs. Mr. Schwartz also served as Chief of System Development for the Israeli Air Force. Mr. Schwartz holds a B.Sc. in math and computer science form the Hebrew University of Jerusalem. Mr .
Schwartz currently serves as the Managing Director of the Portland Trust Israel and as an Advisory Board Member to AlgoSec and a director at Perion Network Ltd. Mr. Schwartz previously served in senior positions, including as business group president, founder, Chief Executive Officer and Active Chairman, with several public and private companies including Amdocs. Mr.
Schwartz has over 20 years’ experience in leadership positions in the technology and enterprise software fields. Mr. Schwartz currently serves as the Managing Director of the Portland Trust Israel and as an Advisory Board Member to AlgoSec and a director at Perion Network Ltd. (Nasdaq: PERI) Mr.
Ravkaie holds an M.B.A. from the University of Beersheba and a B.Sc. in Industrial Engineering & Management from the Technion, Haifa. 45 Mr. Rami Schwartz has served as a director since July 2019. Mr. Schwartz has over 20 years’ experience in leadership positions in the technology and enterprise software fields. Mr.
Ravkaie served for nine years in information systems, industrial engineering and logistics with the Israeli Air Force as a Major. Mr. Ravkaie holds an M.B.A. from the University of Beersheba and a B.Sc. in Industrial Engineering & Management from the Technion, Haifa. Mr. David (Dudi) Ripstein has served as a director since June 2024. Mr.
The aggregate direct remuneration paid to all our directors and executive officers as a group for the year ended December 31, 2023, was approximately $2.4 million in salaries, bonus, commissions and directors’ fees. This amount includes approximately $0.3 million that was set aside or accrued to provide pension, retirement or similar benefits.
Guy Shemesh who ceased to serve in his position on April 7, 2024 and Mr. Benjamine (Benny) Eppstein who joined the Company as Chief Executive Officer on December 1, 2024, was approximately $3 million in salaries, bonus, commissions and directors’ fees. This amount includes approximately $0.5 million that was set aside or accrued to provide pension, retirement or similar benefits.
We have reserved an aggregate of 3,000,000 ordinary shares under our 2023 Plan. As of March 27, 2024, we have granted 1,831,314 RSUs and no Options under the 2023 Plan. This number includes the grant of 180,000 RSUs to our CEO in February 2024 under the 2023 Plan, which grant is pending shareholders’ approval.
We have reserved an aggregate of 3,000,000 ordinary shares under our 2023 Plan. As of March 19, 2025, we have granted 2,158,084 RSUs and 134,988 Options under the 2023 Plan.
The cash compensation currently paid to our non-executive directors as approved by a resolution of our shareholders in the annual general meeting held on July 9, 2020 and ratified in the annual general meeting of shareholders held on July 21, 2022 and August 3, 2023 (other than to our Executive Chairman, as of July 21, 2022 and other than Mr.
The cash compensation currently paid to our non-executive directors (other than to our former Executive Chairman and Mr.
Fuetsch ) is an annual fee of NIS 52,000 (currently equivalent to approximately $14,337) and a per meeting attendance fee of NIS 2,000 (currently equivalent to approximately $551). In addition, upon his or her election or re-election, each of our non-executive directors (other than Mr.
The terms of the Options are identical to the Options granted under the General Director Grant. The cash compensation paid to our non-executive directors prior to October 15, 2024 was an annual fee of NIS 52,000 (currently equivalent to approximately $14,258) and a per meeting attendance fee of NIS 2,000 (currently equivalent to approximately $548).
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Bennun holds a M.Sc. and a B.Sc. in Industrial and Management Engineering from Ben-Gurion University. Mr. Matty Karp has served as a director since December 2009. From 1996 to 2015, he was the managing partner of Concord Ventures, an Israeli venture capital fund focused on Israeli early-stage technology companies, which he co-founded in 1997.
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(2) Chairman of Audit Committee. (3) Chairman of Compensation Committee. (4) Audit Committee Member. (5) Compensation Committee Member. 42 Mr. Sami Totah has served as a director since June 2024 and was appointed as Chairman of our Board of Directors in January 2025. Mr.
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From 2007 to 2008, he served as the Chairman of Israel Growth Partners Acquisition Corp. From 1994 to 1999, he served as the Chief Executive Officer of Kardan Technologies, a technology investment company, and continued to serve as a director until October 2001.
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Totah has been a General Partner at Viola Growth, a private equity firm investing in the hi-tech arena, from 2008 until 2023. He has extensive knowledge and execution experience in overseeing very large information technology projects and has built an extensive global network with customers, partners, investors and executives. Mr.
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From 1994 to 1997, he served as the President of Nitzanim Venture Fund, an Israeli venture capital fund focused on early-stage high technology companies. From 1987 to 1994, he served in numerous positions at Elbit Systems Ltd. (Nasdaq and TASE: ESLT). Mr.
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Totah served on the board of directors of various private and public companies including Itamar Medical Ltd. (Nasdaq and TASE: ITMR) between 2017 and 2021, and Magic Software Enterprises Ltd. (Nasdaq and TASE: MGIC), from 2023 until present. Ms.
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Karp has served as a director of a number of companies, including: Elta Ltd.; Galileo Technology, which was acquired by Marvell Technology, Inc. (Nasdaq: MRVL); Accord Networks which was acquired by Polycom, Inc.; Saifun Semiconductors, Ltd. which merged with Spansion Inc., and El Al Israel Airlines Ltd. (TASE: ELAL). Mr.
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Bennun holds a M.Sc. and a B.Sc. in Industrial and Management Engineering from Ben-Gurion University. Mr. Andre Fuetsch has served as a director since August 2023. Mr. Fuetsch has served in various senior capacities in AT&T Inc. since his joining in 1995, the most recent of which is AT&T’s Executive Vice President and CTO Network Services.
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Karp received a B.Sc., cum laude, in Electrical Engineering from the Technion - Israel Institute of Technology and is a graduate of the Harvard Business School Advanced Management Program. Mr. Andre Fuetsch has served as a director since August 2023. Mr.
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Yaron Ravkaie has served as a director since January 2020. Mr. Ravkaie is the chief executive officer of Teridion Technologies Ltd., having assumed that role in January 2020. Mr. Ravkaie previously served as the Company’s chief executive officer from January 2016 through December 2019. Prior to joining RADCOM, Mr.
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Berkeley and completed his graduate coursework in Computer Science at Stanford University. Mr. Oren Most has served as a director since July 2019. Mr. Most is the founder and former president of Golan Telecom, Ltd., an Israeli cellular operator. Mr.
Added
Ripstein has three decades of experience in senior management positions in Israel’s telecommunications industry and Israel Defense Force technology and intelligence units. Since 2021, Mr. Ripstein has served as a member on the board of directors of Ceragon Networks Ltd., a Nasdaq-traded (Nasdaq: CRNT), solution provider of wireless connectivity. From 2022 to 2023, Mr.
Removed
(Nasdaq: DOX), including as the President of the Mobile Financial Services Division, President of the AT&T division, and other director and vice president roles. Mr. Ravkaie served for nine years in information systems, industrial engineering and logistics with the Israeli Air Force as a Major. Mr.
Added
Ripstein served as the Chief Executive Officer of SatixFy Communications Ltd. (NYSE American: SATX). From 2017 to 2022, Mr. Ripstein served as a board member and the President and Chief Executive Officer of GreenRoad Technologies Ltd., a global leader in fleet safety telematics. In 2016, Mr. Ripstein served as the Chief Executive Officer of SpotOption Technologies, a fintech software provider.
Removed
Shemesh served as Vice President of Business Applications R&D from 2020 to 2022 and Vice President CloudBand Business Unit from 2017 to 2020, both at Nokia Solutions and Networks Israel Ltd. where he spent over ten years in various leadership roles. Mr.
Added
From 2000 to 2015, Mr. Ripstein served in various positions with the Company, first for six years as a General Manager and then for nine years as its President and Chief Executive Officer. Prior to the Company, Mr.
Removed
Shemesh holds a B.A. in Computer Science and a B.A. in Economics and Management from the Tel Aviv Academic College and an M.B.A. from Tel-Aviv University. Ms. Hadar Rahav has served as our Chief Financial Officer since January 2022. Ms. Rahav joined us in May 2020 as our Head of Global Finance. Prior to joining our Company, Ms.
Added
Ripstein co-founded two technology startups and served for 10 years as the head of a large R&D engineering group within the Israel Defense Forces-Intelligence Unit. Mr. Ripstein holds a B.Sc. in Electrical Engineering from the Technion, Israel Institute of Technology. 43 Mr. Rami Schwartz has served as a director since July 2019. Mr.
Removed
Name and Principal Position Year Salary ($) Bonus ($) Equity-Based Compensation ($) (1) All Other Compensation ($) (2) Total ($) Eyal Harari, former CEO (3) 2023 300,000 200,000 408,506 46,564 955,070 Hilik Itman, COO 2023 213,867 145,059 380,336 74,973 814,235 Rami Amit, CTO and Head of Product 2023 213,867 114,507 326,081 80,469 734,923 Rachel (Heli) Bennun, Executive Chairman of our Board of Directors 2023 213,867 232,903 201,930 76,595 725,294 Hadar Rahav, CFO 2023 178,222 134,450 121,933 52,890 487,495 (1) Equity based compensation includes the cost of non-cash share-based compensation of the Company in 2023.
Added
Benjamin (Benny) Eppstein, has served as our Chief Executive Officer since December 2024. Prior to joining our Company, Mr.
Removed
The bonus paid to our former CEO is based on a formula which takes into consideration independent measurable and non-measurable components, and which was approved by the Board of Directors in accordance with the Compensation Policy and the former CEO’s amended terms of employment approved by general meeting of our shareholders on July 21, 2022.
Added
Eppstein served as Canada Division President from 2022 to 2024, as a General Manager at the T-Mobile Division from 2020 to 2022, and as Vice President and Client Business Executive and Head of Customer Unit Sprint Corporation from 2015 to 2020 at Amdocs Inc. Prior to Amdocs, Mr.
Removed
Fuetsch as approved by a resolution of our shareholders in the annual general meeting held on August 3, 2023, is an annual fee of $52,000 and a per meeting attendance fee of $2,000. In addition, Mr.
Added
Eppstein was Vice President at Ericsson Japan K.K from 2013 to 2014, managing the relationship with a major telecommunications company and the sales and delivery of software, hardware, and system integration services. Mr. Eppstein holds a B.A. in Public Policy from the Hebrew University of Jerusalem. Ms. Hadar Rahav has served as our Chief Financial Officer since January 2022. Ms.
Removed
As of the 2013 Plan Expiration Date, we had granted 1,278,808 Options and 2,554,031 RSUs under the 2013 Plan.
Added
Name and Principal Position Year Salary ($) Bonus ($) Equity-Based Compensation ($) (1) All Other Compensation ($) (2) Total ($) Hilik Itman, Chief Operating Officer and Former Interim CEO (3) 2024 243,965 199,637 537,249 238,099 1,218,950 Eyal Harari, former CEO (4) 2024 241,050 166,500 564,301 38,671 1,010,522 Rami Amit, Chief Technology Officer 2024 214,673 170,022 377,365 61,828 823,888 Rachel (Heli) Bennun, former Executive Chairman of our Board of Directors (5) 2024 214,673 120,174 260,871 77,828 673,546 Hadar Rahav, CFO 2024 143,466 99,622 213,103 62,735 518,926 (1) Equity based compensation includes the cost of non-cash share-based compensation of the Company in 2024.
Removed
On July 31, 2019, our Board adopted the Exemption.
Added
Harari served as the Chief Executive Officer of the Company until February 2024. (5) Ms. Bennun served as Executive Chairman of our Board of Directors until December 31, 2024 and is currently serving as a member of our Board of Directors.
Removed
As a result of the adoption of the Exemption, the terms of office of any External Directors serving at the time of such adoption were shortened to the earlier to occur of the remainder of their three-year term as External Director or the term ending on the second annual general meeting following the adoption of the Exemption.
Added
Matty Karp who retired from the Board on June 24, 2024, Mr. Sami Totah who joined the Board on June 24, 2024, Mr. David (Dudi) Ripstein who joined the Board on June 17, 2024, Mr. Eyal Harari who ceased to serve in his position on February 13, 2024, Mr.
Removed
As a result, the terms of office of Mr. Schwartz and Mr. Most were shortened. Audit Committee The current members of our Audit Committee are, Matty Karp, Oren Most and, Rami Schwartz. Mr. Karp is the Chairman of the Audit Committee.
Added
Fuetsch) as approved by our shareholders at the annual general meeting held on October 15, 2024, or the 2024 AGM, consists of an annual retainer fee of $54,000 and an additional fee for directors serving as members of our committees, or Committee Membership Fee consisting of an annual retainer of $9,000 for Audit Committee members, with the chairman of our Audit Committee receiving an annual retainer of $18,000 and an annual retainer of $7,000 for Compensation Committee members, with the chairman of our Compensation Committee receiving an annual retainer of $14,000.
Removed
In compliance with regulations promulgated under the Israeli Companies Law, our Audit Committee also approves our financial statements, thereby fulfilling the requirement that a board committee provide such approval. 49 Compensation Committee The current members of our Compensation Committee are Matty Karp, Oren Most, and Rami Schwartz. Mr. Schwartz is the Chairman of the Compensation Committee.
Added
The cash compensation currently paid to Mr. Fuetsch, who was designated by our Board as a director who holds special expertise, or a Special Expertise Director, is an annual cash retainer compensation in the amount of $70,000 and the applicable Committee Membership Fees.
Added
In addition, as resolved at the 2024 AGM, we grant our directors (other than our Chairman, our former Executive Chairman and Mr. Fuetsch), a grant reflecting 6,000 RSUs and 8,000 options, annually, both for the term for which such director is appointed, elected or re-elected, or the General Director Grant. Such grants vest in equal monthly installments.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

21 edited+5 added−21 removed10 unchanged
The address of the principal office of Barclays PLC and Barclays Bank PLC is 1 Churchill Place, London, E14 5HP, England. The address of the principal office of Barclays Capital Inc. is 745 Seventh Ave, New York, NY 10019. (7) Based on a Schedule 13G/A filed with the SEC on February 13, 2024.
The address of the principal office of Barclays PLC and Barclays Bank PLC is 1 Churchill Place, London, E14 5HP, England. The address of the principal office of Barclays Capital Inc. is 745 Seventh Ave, New York, NY 10019. 53 (8) Based on a Schedule 13G/A filed with the SEC on February 13, 2024.
(9) Each of the directors and executive officers not separately identified in the above table beneficially owns less than 1% of our outstanding ordinary shares, including options held by each such party, which are vested or shall become vested within 60 days of March 27, 2024, and have, therefore, not been separately disclosed.
(9) Each of the directors and executive officers not separately identified in the above table beneficially owns less than 1% of our outstanding ordinary shares, including options held by each such party, which are vested or shall become vested within 60 days of March 19, 2025, and have, therefore, not been separately disclosed.
MAJOR SHAREHOLDERS The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of March 27, 2024, by: ● each person or entity known by us to own beneficially more than 5% of our outstanding ordinary shares; ● each of our directors and executive officers individually; and ● all of our executive officers and directors as a group.
MAJOR SHAREHOLDERS The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of March 19, 2025, by: ● each person or entity known by us to own beneficially more than 5% of our outstanding ordinary shares; ● each of our directors and executive officers individually; and ● all of our executive officers and directors as a group.
Pursuant to an investment management agreement, the Investment Manager has been delegated full voting and investment power over securities of the Company held by Lynrock Lake Master.
Lynrock Lake LP, or Investment Manager, is the investment manager of Lynrock Lake Master. Pursuant to an investment management agreement, the Investment Manager has been delegated full voting and investment power over securities of the Company held by Lynrock Lake Master.
In determining the percentage owned by each person, ordinary shares for each person includes ordinary shares that may be acquired by such person pursuant to options to purchase ordinary shares that are exercisable within 60 days of March 27, 2024.
In determining the percentage owned by each person, ordinary shares for each person includes ordinary shares that may be acquired by such person pursuant to options to purchase ordinary shares that are exercisable within 60 days of March 19, 2025.
For purposes of the table below, we deem shares subject to options that are currently exercisable or exercisable within 60 days of March 27, 2024, and restricted share units, or RSUs, that shall vest within 60 days of March 27, 2024, to be outstanding and to be beneficially owned by the person holding the options or restricted share units for the purposes of computing the percentage ownership of that person but we do not treat them as outstanding for the purpose of computing the percentage ownership of any other person.
For purposes of the table below, we deem shares subject to Options that are currently exercisable or exercisable within 60 days of March 19, 2025, and RSUs, that shall vest within 60 days of March 19, 2025, to be outstanding and to be beneficially owned by the person holding the Options or RSUs for the purposes of computing the percentage ownership of that person but we do not treat them as outstanding for the purpose of computing the percentage ownership of any other person.
As of March 27, 2024, our ordinary shares had a total of 13 holders of record, of which 7 were registered with addresses in the United States.
As of March 19, 2025, our ordinary shares had a total of 13 holders of record, of which 7 were registered with addresses in the United States.
The percentage of shares beneficially owned is based on 15,471,117 ordinary shares outstanding as of March 27, 2024. 52 The information presented below is based on information provided to us by the directors, officers, and shareholders or disclosed in public filings with the SEC.
The percentage of shares beneficially owned is based on 16,029,315 ordinary shares outstanding as of March 19, 2025. 51 The information presented below is based on information provided to us by the directors, officers, and shareholders or disclosed in public filings with the SEC.
Name Number of Ordinary Shares beneficially owned (1) Percentage of Outstanding Ordinary Shares beneficially owned (2) Principal Shareholders The heirs of Zohar Zisapel 2,793,551 (3) 18.1 % Lynrock Lake LP 2,266,666 (4) 14.7 % Yelin Lapidot Holdings Management Ltd. 1,286,669 (5) 8.3 % Barclays PLC 861,020 (6) 5.6 % Value Base Ltd. 826,670 (7) 5.3 % AWM Investment Company, Inc. 795,795 (8) 5.1 % Directors and Officers Rachel (Heli) Bennun * * Andre Fuetsch * * Matty Karp * * Oren Most * * Yaron Ravkaie * * Rami Schwartz * * Guy Shemesh * * Hadar Rahav * * Hilik Itman * * Rami Amit * * All directors and executive officers as a group (10 persons) 224,127 (9) 1.5 % * less than 1% (1) Except as otherwise noted and subject to applicable community property laws, each person named in the table has sole voting and investment power with respect to all ordinary shares listed as owned by such person.
Name Number of Ordinary Shares beneficially owned (1) Percentage of Outstanding Ordinary Shares beneficially owned (2) Principal Shareholders Lynrock Lake LP 2,266,666 (3) 14.1 % Klil Zisapel 1,209,908 (4) 7.5 % Michael Zisapel 1,209,907 (5) 7.5 % AWM Investment Company, Inc. 991,261 (6) 6.2 % Barclays PLC 861,020 (7) 5.4 % Value Base Ltd. 826,670 (8) 5.2 % Directors and Officers Sami Totah * * Rachel (Heli) Bennun * * Andre Fuetsch * * Oren Most * * Yaron Ravkaie * * David (Dudi) Ripstein * * Rami Schwartz * * Benjamin (Benny) Eppstein * * Hadar Rahav * * Hilik Itman * * Rami Amit * * All directors and executive officers as a group (11 persons) 299,581 (9) 1.9 % * Less than 1% (1) Except as otherwise noted and subject to applicable community property laws, each person named in the table has sole voting and investment power with respect to all ordinary shares listed as owned by such person.
Greenhouse and Adam C. Stettner are also controlling principals of AWM. The business address AWM Investment Company, Inc.is c/o Special Situations Funds, 527 Madison Avenue, Suite 2600, New York, NY 10022.
Greenhouse and Adam C. Stettner are also controlling principals of AWM. The business address AWM Investment Company, Inc.is c/o Special Situations Funds, 527 Madison Avenue, Suite 2600, New York, NY 10022. (7) Based on a Schedule 13G filed on February 16, 2024 by Barclays PLC.
Shares beneficially owned include shares that may be acquired pursuant to options to purchase ordinary shares that are exercisable within 60 days of March 27, 2024. 53 (2) The percentage of outstanding ordinary shares is based on 15,471,117 ordinary shares outstanding as of March 27, 2024.
Shares beneficially owned include shares that may be acquired pursuant to options to purchase ordinary shares that are exercisable within 60 days of March 19, 2025. 52 (2) The percentage of outstanding ordinary shares is based on 16,029,315 ordinary shares outstanding as of March 19, 2025.
The address of each of Value Base Ltd. and Harmony Base L.P. is 23 Yehuda Halevi St., Tel-Aviv 6513601, Israel. 54 (8) Based on a Schedule 13G filed with the SEC on February 14, 2024 by AWM Investment Company, Inc., or AWM, reporting that AWM is the investment adviser to Special Situations Fund III QP, L.P., or SSFQP, Special Situations Cayman Fund, L.P., or Cayman, Special Situations Technology Fund, L.P., or TECH and Special Situations Technology Fund II, L.P., or TECH II and referred to together with SSFQP, Cayman, and TECH as the Funds.
(6) Based on a Schedule 13G filed with the SEC on February 14, 2025 by AWM Investment Company, Inc., or AWM, reporting that AWM is the investment adviser to Special Situations Fund III QP, L.P., or SSFQP, Special Situations Cayman Fund, L.P., or Cayman, Special Situations Technology Fund, L.P., or TECH and Special Situations Technology Fund II, L.P., or TECH II and referred to together with SSFQP, Cayman, and TECH as the Funds.
All future transactions and arrangements (or modifications of existing ones) with members of the RAD-BYNET Group will be approved in accordance with the requirements of the Israeli Companies Law. C. INTERESTS OF EXPERTS AND COUNSEL Not applicable. 56
All future transactions and arrangements (or modifications of existing ones) which may constitute related party transactions under applicable law will be approved in accordance with the requirements of such applicable law. C. INTERESTS OF EXPERTS AND COUNSEL Not applicable.
As the investment adviser to the Funds, AWM holds sole voting and investment power over 295,363 ordinary shares held by SSFQP, 89,246 ordinary shares held by Cayman, 60,871 ordinary shares held by TECH and 350,315 ordinary shares held by TECH II. David M. Greenhouse and Adam C.
As the investment adviser to the Funds, AWM holds sole voting and investment power over 380,185 ordinary shares held by SSFQP, 106,530 ordinary shares held by Cayman, 84,821 ordinary shares held by TECH and 419,725 ordinary shares held by TECH II. David M. Greenhouse and Adam C.
We believe that the terms of the transactions in which we have entered and are currently engaged with other members of the RAD-BYNET Group are beneficial to us and no less favorable to us than terms that might be available to us from unaffiliated third parties.
The aggregate amount of such purchases in 2024, was approximately $ 539,000 and $27,000 from CommIT and ITSoft, respectively. 54 We believe that the terms of the transactions in which we have entered and are currently engaged with, and are discussed above are beneficial to us and no less favorable to us than terms that might be available to us from unaffiliated third parties.
(4) Based on a Schedule 13G/A filed with the SEC on February 14, 2024. Includes 2,266,666 Ordinary Shares held by Lynrock Lake Master Fund LP, or Lynrock Lake Master. Lynrock Lake LP, or Investment Manager, is the investment manager of Lynrock Lake Master.
The number of outstanding ordinary shares does not include 5,189 ordinary shares held by RADCOM US, a wholly owned subsidiary and 30,843 ordinary shares that were repurchased by us. (3) Based on a Schedule 13G/A filed with the SEC on February 14, 2024. Includes 2,266,666 ordinary shares held by Lynrock Lake Master Fund LP, or Lynrock Lake Master.
Zohar Zisapel prior to his death, representing approximately 18.1% of our outstanding ordinary shares as of March 27, 2024 (ii) increase in the percentage of ownership held by Lynrock Lake LP above 5% as of 2021 and additional increases until it has a beneficial ownership percentage of 14.7% as of December 31, 2023, (iii) a decrease in the percentage of ownership held by Yelin Lapidot Holdings Management Ltd from 9.9% as of December 31, 2022 to 8.3% as of December 31, 2023, (iv) an increase in the percentage of ownership held by Barclays PLC above 5% until it has a beneficial ownership percentage of 5.6% as of December 31, 2023, (v) an increase in the percentage of ownership held by Value Base Ltd. above 5% until it has a beneficial ownership percentage of 5.3% as of December 31, 2023, and (vi) an increase in the percentage of ownership held by AWM Investment Company, Inc. above 5% until it has a beneficial ownership percentage of 5.1% as of December 31, 2023.
Significant Changes in Percentage Ownership by Major Shareholders To our knowledge, the significant changes in the percentage of ownership held by our major shareholders during the past three years have been: (i) the transfer by inheritance of the ordinary shares and options to purchase ordinary shares beneficially owned by our former largest shareholder, late Zohar Zisapel, to each of his children Michael Zisapel and Klil Zisapel in equal parts, and the subsequent decrease in the percentage of ownership of each of them, from approximately 9.1% as of December 31, 2023 to 7.5% as of December 31, 2024 (ii) a decrease in the percentage of ownership held by Lynrock Lake LP from 14.8% as of December 31, 2023 to 14.2% as of December 31, 2024, (iii) a decrease in the percentage of ownership held by Yelin Lapidot Holdings Management Ltd, who previously were listed in the table above, from 10.1% as of December 31, 2022 to less than 5% as of December 31, 2024, (iv) an increase in the percentage of ownership held by Barclays PLC above 5% until it has beneficial owned 5.6% as of December 31, 2023 and subsequent decrease until it has beneficial owned 5.4% as of December 31, 2024 (v) an increase in the percentage of ownership held by Value Base Ltd. above 5% until it has a beneficial ownership of 5.2% as of December 31, 2024, and (vi) an increase in the percentage of ownership held by AWM Investment Company, Inc. above 5% as of December 31, 2023 until it reached a beneficial ownership of 6.2% as of December 31, 2024.
The address of each of Cynthia Paul, Lynrock Lake Partners LLC, and Lynrock Lake LP is 2 International Drive, Suite 130 Rye Brook, NY 10573. (5) Based on a Schedule 13G/A filed with the SEC on January 31, 2024.
The address of each of Cynthia Paul, Lynrock Lake Partners LLC, and Lynrock Lake LP is 2 International Drive, Suite 130 Rye Brook, NY 10573. (4) Based on a Schedule 13D/A filed with the SEC on February 10, 2025, Ms. Klil Zisapel beneficially owns 1,209,908 ordinary shares, consisting of (i) 919,035 ordinary shares held directly by Ms.
The number of shares is comprised of 184,701 ordinary shares and 39,426 RSUs that will vest within 60 days of March 27, 2024.
The number of shares is comprised of 187,507 ordinary shares and 34,717 RSUs and 77,357 Options that will vest within 60 days of March 19, 2025.
The aggregate amount of lease and maintenance payments, which may constitute related party transactions under Item 7.B to Form 20-F, was approximately $443,000 in 2023, which amount includes payments made to (i) the companies currently controlled by Ms.
The aggregate amount of lease and maintenance payments, which may constitute related party transactions under Item 7.B of Form 20-F, was approximately $206,000 in 2024. Transactions with Magic Software Enterprises Ltd Our Chairman Mr. Sami Totah also serves as a director in Magic Software Enterprises Ltd, or Magic Software.
Zohar Zisapel and (ii) from RAD Communications throughout 2023, as this company remained a related party of the Company pursuant to Item 7.B to Form 20-F. Office Leases We currently lease office premises in Tel Aviv, Israel and in Paramus, New Jersey, from private companies controlled by Michael and Klil Zisapel and by Ms.
B. RELATED PARTY TRANSACTIONS Transactions with certain Principal Shareholders We currently lease office premises in Tel Aviv, Israel and in Paramus, New Jersey, in part from private companies owned by two of our shareholders Michael Zisapel and Klil Zisapel, for which we believe we pay on market terms and rates.
Removed
The number of outstanding ordinary shares does not include 5,189 ordinary shares held by RADCOM US, a wholly owned subsidiary and 30,843 ordinary shares that were repurchased by us. (3) Mr. Zohar Zisapel, who was our largest shareholder passed away on May 19, 2023. Each of Mr. Zohar Zisapel children, Michael Zisapel and Klil Zisapel, or the Heirs of Mr.
Added
Klil Zisapel and (ii) 271,074 ordinary shares that are held indirectly by Ms. Klil Zisapel through her 50% ownership in each of Lomsha Ltd., an Israeli company, and Michael & Klil Holdings (93) Ltd., an Israeli company and (iii) Options to acquire 19,799 ordinary shares exercisable within 60 days. The address of Ms.
Removed
Zohar Zisapel, inherited half of the ordinary shares and options to purchase ordinary shares beneficially owned by Mr. Zohar Zisapel prior to his death. The process of transferring such ordinary shares and options to purchase ordinary shares to the Heirs of Mr.
Added
Zisapel is 24 Raoul Wallenberg Street, Building C, Tel-Aviv 69719, Israel. (5) Based on a Schedule 13D/A filed with the SEC on February 10, 2025, Mr. Michael Zisapel beneficially owns 1,209,907 ordinary shares of the Issuer, consisting of (i) 919,035 ordinary shares held directly by Mr. Michael Zisapel, and (ii) 271,074 ordinary shares that are held indirectly by Mr.
Removed
Zohar Zisapel has not been completed yet, but assuming that such process shall have been completed, as of March 27, 2024, each of Michael Zisapel and Klil Zisapel, may be deemed to beneficially own one-half of the (i) 2,211,807 ordinary shares which were held directly by Mr.
Added
Michael Zisapel through his 50% ownership in each of Lomsha Ltd., an Israeli company, and Michael & Klil Holdings (93) Ltd., an Israeli company and (iii) Options to acquire 19,798 ordinary shares exercisable within 60 days. The address of Mr. Zisapel is 24 Raoul Wallenberg Street, Building C, Tel-Aviv 69719, Israel.
Removed
Zohar Zisapel, prior to his death (ii) 299,416 ordinary shares held by Michael & Klil Holdings (93) Ltd, an Israeli company, which was wholly owned by Mr. Zohar Zisapel, prior to his death (iii) 242,731 ordinary shares held by Lomsha Ltd., an Israeli company, which was wholly owned by Mr.
Added
The address of each of Value Base Ltd. and Harmony Base L.P. is 23 Yehuda Halevi St., Tel-Aviv 6513601, Israel.
Removed
Zohar Zisapel prior to his death, and (iv) 39,597 ordinary shares issuable upon exercise of options, currently exercisable or exercisable within 60 days of March 27, 2024, which were owned by Mr. Zohar Zisapel, prior to his death. This information is based on information provided to the Company by the Heirs of Zohar Zisapel.
Added
During 2024 we purchased certain cloud management services from CommIT Technology Solutions Ltd, or CommIT and human resources services from 9540 Y.G. Soft I.T Ltd., or ITSoft, for which we believe we pay on market terms and rates, both of which companies are subsidiaries of Magic Software.
Removed
Includes 555,920 Ordinary Shares beneficially owned by mutual funds managed by Yelin Lapidot Mutual Funds Management Ltd. and 730,749 Ordinary Shares beneficially owned by provident funds managed by Yelin Lapidot Provident Funds Management Ltd, or each a Yelin Lapidot Holder, each of which a wholly-owned subsidiary of Yelin Lapidot Holdings Management Ltd., or Yelin Lapidot Holdings.
Removed
Each of Dov Yelin and Yair Lapidot owns 24.4% of the share capital and 25.0% of the voting rights of Yelin Lapidot Holdings. The address of each of the Yelin Lapidot Holders and each of Messrs. Yelin and Lapidot is 50 Dizengoff St., Dizengoff Center, Gate 3, Top Tower, 13th floor, Tel Aviv 64332, Israel.
Removed
Each of the Yelin Lapidot Holders and Messrs. Yelin and Lapidot and is a resident of Israel. (6) Based on a Schedule 13G filed on February 16, 2024 by Barclays PLC.
Removed
Significant Changes in Percentage Ownership by Major Shareholders To our knowledge, the significant change in the percentage of ownership held by our major shareholders during the past three years has been: (i) the transfer by inheritance of the ordinary shares and options to purchase ordinary shares beneficially owned by our largest shareholder, Zohar Zisapel, who passed away on May 19, 2023, to each of his children, Michael Zisapel and Klil Zisapel in equal parts, such that each of them may be deemed to beneficially own one-half of the 2,793,551 ordinary shares, including options exercisable for 39,597 ordinary shares that are exercisable within 60 days of March 27, 2024, beneficially owned by Mr.
Removed
B. RELATED PARTY TRANSACTIONS RAD-BYNET Group Mr. Zohar Zisapel, who served as a member of our Board of Directors until he passed away on May 19, 2023, was also a director of RAD Data Communications Ltd., or RAD Communications, and served as the Chairman of the board and as a director and held shares in several other companies.
Removed
Based on information received by the Company, following Mr. Zohar Zisapel’s death, his children, Michael Zisapel and Klil Zisapel, as heirs are entitled to representation on the board of directors of RAD Communications and in certain of such other companies and hold shares in RAD Communications and certain of such other companies.
Removed
Michael Zisapel and Klil Zisapel, may be deemed to have “significant influence,” as such term is defined in Item 7.B to form 20-F, over the Company, as a result of their holdings of ordinary shares of the Company. Mr. Yehuda Zisapel (brother of late Mr.
Removed
Zohar Zisapel and uncle of Michael and Klil Zisapel), who passed away on March 10, 2024, was also a director of RAD Communications and of additional companies, including, Bynet Data Communications Ltd., or Bynet Communication, Bynet Systems Applications Ltd., or Bynet Applications, Internet Binat Ltd., or Internet Binat, and had several other private holdings.
Removed
The above list does not constitute a complete list of Mr. Yehuda Zisapel’s holdings prior to his death. 55 The above companies are suppliers of RADCOM and may render additional services by arm’s length transactions or share logistical arrangements with the Company. The above companies are part of a group of companies known as the “RAD-BYNET Group.” Ms.
Removed
Rachel (Heli) Bennun, who is the Executive Chairman of our Board of Directors, was Mr. Zohar Zisapel’s life partner. We and other members of the RAD-BYNET Group may also market certain of our products through the same distribution channels.
Removed
Certain products of members of the RAD-BYNET Group are complementary to, and may be used in connection with, products of ours, and certain of such products may be used in place of (and thus may be deemed to be competitive with) our products.
Removed
Supplier and Service Provider Arrangements During 2023 we purchased products and services from the following members of the RAD-BYNET Group, for which we pay on market terms and rates: RAD Communications, from which we purchased certain operating services, Bynet Communication, from which we purchased network management, IT and communication equipment, testing and repair services, and manpower services, Bynet Applications, from which we purchased, communication equipment and services, and Internet Binat, from which we purchase, internet communication services.
Removed
The aggregate amount of such purchases, which may constitute related party transactions under Item 7.B to Form 20-F was approximately $29,000 in 2023 which amount includes products and services purchased (i) from Bynet Communication, Bynet Applications and Internet Binat until May 19, 2023, the date upon which these vendors may no longer be considered related parties of the Company under Item 7.B to Form 20-F, following the passing away of Mr.
Removed
Nava Zisapel, widow of late Yehuda Zisapel, and his heirs. When these agreements were signed, the lease payments were at fair market prices based on quotes we received from third parties for similar space. Historically, we have had some additional flexibility to change the leased space, which we might not have had with unrelated third parties.
Removed
Nava Zisapel and the heirs of Yehuda Zisapel - until May 19, 2023, the date upon which these companies may no longer be considered related parties of the Company under Item 7.B to Form 20-F, following the passing away of Mr.
Removed
Zohar Zisapel, and (ii) companies controlled by Michael and Klil Zisapel - throughout 2023, as these companies remain related parties of the Company pursuant to Item 7.B to Form 20-F.

Other RDCM 10-K year-over-year comparisons