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Cellebrite DI Ltd.

Cellebrite DI Ltd.CLBT決算レポート

Nasdaq · 情報技術 · サービス-オフィス用ソフトウェア

Cellebrite DI Ltd. is a digital forensics company headquartered in Petah Tikva, Israel that provides tools for law enforcement agencies as well as enterprise companies and service providers to collect, review, analyze and manage digital data. Their flagship product series is the Cellebrite UFED.

What changed in Cellebrite DI Ltd.'s 20-F — 2022 vs 2023

Top changes in Cellebrite DI Ltd.'s 2023 20-F

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Further, some of our strategic partners offer competing solutions or work with our competitors and some strategic partners have in the past and others may in the future be acquired by our competitors, resulting in the termination of the partnership.
Further, some of our partners offer competing solutions or work with our competitors and some strategic partners have in the past and others may in the future be acquired by our competitors, resulting in the termination of the partnership.
We are or will be subject to anti-corruption, anti-bribery, anti-money laundering and financial and economic sanctions laws and regulations in various jurisdictions in which we conduct or in the future may conduct activities, including the FCPA, the U.K. Bribery Act 2010, and other domestic or foreign anti-corruption laws and regulations. The FCPA and the U.K.
We are and will be subject to anti-corruption, anti-bribery, anti-money laundering and financial and economic sanctions laws and regulations in various jurisdictions in which we conduct or in the future may conduct activities, including the FCPA, the U.K. Bribery Act 2010, and other domestic or foreign anti-corruption laws and regulations. The FCPA and the U.K.
Our solutions and technologies could be exported to, or eventually be used by, these sanctioned targets due to circumvention of restrictions by customers , resellers or others, despite the contractual undertakings they are bound by that prohibit them from exporting or reselling to any unauthorized customer, and any such export, or use, could have negative consequences, including government investigations, penalties and reputational harm.
Our solutions and technologies could be exported or re-exported to, or eventually be used by, these sanctioned targets due to circumvention of restrictions by customers, resellers or others, despite the contractual undertakings they are bound by that prohibit them from exporting or reselling to any unauthorized customer, and any such export, re-export or use, could have negative consequences, including government investigations, penalties and reputational harm.
As a result, we rely on a range of information sources, and largely depend on media and other reports, to learn if there is a claim made that our products are being used inconsistent with our organizational mission and values. Third party reports may be incomplete, unreliable or unavailable.
As a result, we rely on a range of public information sources, and largely depend on media and other reports, to learn if there is a claim made that our products are being used inconsistent with our organizational mission and values. Third party reports may be incomplete, unreliable or unavailable.
Claims of infringement (including misappropriation and/or other intellectual property violation) are common in the software industry and increasing as related legal protections, including copyrights and patents, are applied to software solutions. Although most of our technology is proprietary in nature, we do include certain third party and open source software in our software solutions.
Claims of infringement (including misappropriation and/or other intellectual property violation) are common in the software industry and increasing related legal protections, including copyrights and patents, are applied to software solutions. Although most of our technology is proprietary in nature, we do include certain third party and open source software in our software solutions.
In the event that there is a failure of warranties in such agreements, we are generally obligated to correct the product to conform to the warranty provision as set forth in the applicable agreement, or, if we are unable to do so, the customer is entitled to seek a refund of the purchase price of the product and service.
In the event that there is a failure of warranties in such agreements, we are generally obligated to replace or correct the product to conform to the warranty provision as set forth in the applicable agreement, or, if we are unable to do so, the customer is entitled to seek a refund of the purchase price of the product and service.
As we have grown, we have increasingly managed larger and more complex deployments of our solutions with a broader base of government and private sector customers. As we continue to grow, we face challenges of integrating, developing, retaining, and motivating a rapidly growing employee base in various countries around the world.
As we have grown, we have increasingly managed larger and more complex deployments of our solutions with a broader base of government and private sector customers. As we continue to grow, we face challenges of integrating, developing, retaining, and motivating a growing employee base in various countries around the world.
Similarly, one or more of our partners in a joint venture, platform partnership, or strategic alliance may independently suffer a bankruptcy or other economic hardship that negatively affects its ability to continue as a going concern or successfully perform on its obligation under the arrangement.
Similarly, one or more of our partners in a joint venture, partnership, or strategic alliance may independently suffer a bankruptcy or other economic hardship that negatively affects its ability to continue as a going concern or successfully perform on its obligation under the arrangement.
Economic downturns and geopolitical challenges in the Americas, EMEA or certain other parts of the world critical to our operations could cause our customers in those locations to reevaluate decisions to purchase our solutions or to delay or reduce their technology purchasing decisions, which could adversely impact our results of operations.
Economic downturns and geopolitical challenges in the Americas, EMEA or certain other parts of the world critical to our operations could cause our customers in or outside of those locations to reevaluate decisions to purchase our solutions or to delay or reduce their technology purchasing decisions, which could adversely impact our results of operations.
In addition, we may have access to customer data, including PII, in connection with the provision of our Advanced Services in which we serve as an outsourced lab for the extraction of data from devices that are sent to us by our customers.
In addition, we may have access to customer data, including PII, in connection with the provision of our Advanced Services in which we serve as an outsourced forensics lab for the extraction of data from devices that are sent to us by our customers.
As a result, for the purposes of the European General Data Protection Regulation (“GDPR”) and the UK equivalent legislation, we believe that we are not considered to be a controller and serve as a processor in a number of circumstances, within the meaning of those terms.
As a result, for the purposes of the European General Data Protection Regulation (“GDPR”) and the UK equivalent legislation, we believe that we are not considered to be a controller and serve as a processor in a limited number of circumstances, within the meaning of those terms.
If our customers do not purchase additional subscriptions or renew their subscriptions, renew on less favorable terms or fail to add more users, our revenue may decline or grow less quickly than anticipated, which would harm our future results of operations.
If our customers do not purchase additional subscriptions or renew their subscriptions, renew on less favorable terms or fail to add more users or units, our revenue may decline or grow less quickly than anticipated, which would harm our future results of operations.
Cellebrite offers a comprehensive digital intelligence, or DI suite of solutions that includes a variety of solutions designed to help our customers collect, review, analyze and manage investigative data with respect to legally sanctioned investigations.
Cellebrite offers a comprehensive suite of digital investigative, or DI, solutions that includes a variety of solutions designed to help our customers collect, review, analyze and manage investigative data with respect to legally sanctioned investigations.
Our main offices, and many of our employees, including most of our management members, operate from our offices that are located in Israel. In addition, many of our employees, officers and directors are residents of Israel and we have a small assembly facility in Israel.
Our main offices, and many of our employees, including many of our management members, operate from our offices that are located in Israel, and many of our employees, officers and directors are residents of Israel. In addition, we have a small assembly facility in Israel.
In addition, customer satisfaction with our solutions provided in connection with these arrangements may be less favorable than anticipated, negatively impacting anticipated revenue growth and results of operations of arrangements in question.
In addition, customer satisfaction with our solutions provided in connection with these arrangements may be less favorable than anticipated, negatively impacting anticipated revenue growth, margins and results of operations of arrangements in question.
The Company has implemented a number of internal processes and measures for deleting data shortly after completion of related services (in the case of Advanced Services), and that are designed to ensure managed, limited, brief and secure access to customers data, done strictly on a need-to-service basis. The Company uses internationally recognized information security measures and complies with industry standards.
The Company has implemented several internal processes and measures for deleting data shortly after completion of related services (in the case of Advanced Services), and that are designed to ensure managed, limited, brief and secure access to customers data, done strictly on a need-to-service basis. The Company uses internationally recognized information security measures and complies with industry standards.
Lastly, many Israeli citizens are obligated to perform several days, and in some cases more, of annual military reserve duty each year until they reach the age of 40 (or older, for reservists who are military officers or who have certain occupations) and, in the event of a military conflict and/or national civil emergencies, may be called to active duty.
Israeli citizens are obligated to perform several days, and in some cases more, of annual military reserve duty each year until they reach the age of 40 (or older, for reservists who are military officers or who have certain occupations) and, in the event of a military conflict and/or national civil emergencies, may be called to active duty.
Such lawsuits 43 Table of Content could result in substantial costs and divert management’s attention and resources, which could adversely affect our business. The U.S. Internal Revenue Service (“IRS”) may not agree that Cellebrite should be treated as a non-U.S. corporation for U.S. federal income tax purposes.
Such lawsuits could result in substantial costs and divert management’s attention and resources, which could adversely affect our business. 47 Table of Content The U.S. Internal Revenue Service (“IRS”) may not agree that Cellebrite should be treated as a non-U.S. corporation for U.S. federal income tax purposes.
More specifically, for current and potential international customers whose contracts are denominated in U.S. dollars, the relative change in local currency values creates relative fluctuations in our product pricing. These changes in international end-user costs may result in lost orders and reduce the competitiveness of our solutions in certain foreign markets.
More specifically, for current and potential international customers whose contracts are denominated in U.S. dollars, the relative change in local currency values creates relative fluctuations in our product pricing. These changes in international end customer costs may result in lost orders and reduce the competitiveness of our solutions in certain foreign markets.
We specialize in the creation of software based solutions that enable collection, decoding, decryption, analysis, reporting and management of data derived from digital devices and sources manufactured or produced by a variety of original equipment manufacturers (“OEMs”) as well as the applications installed on such sources.
We specialize in the creation of software based solutions that enable collection, decoding, decryption, analysis, reporting, review and management of data derived from digital sources manufactured or produced by a variety of original equipment manufacturers (“OEMs”) as well as the applications installed on such sources.
If appropriations or continuing resolutions for the U.S. federal government departments and agencies with which we work or have prospective business are not 22 Table of Content made by September 30 (the last day of the federal fiscal year) of any given year, the lapse in appropriations may also have negative impacts on our ability to continue work and to recognize revenue from those customers, for so long as the lapse continues.
If appropriations or continuing resolutions for the U.S. federal government departments and agencies with which we work or have prospective business are not made by September 30 (the last day of the federal fiscal year) of any given year, the lapse in appropriations may also have negative impacts on our ability to continue work and to recognize revenue from those customers, for so long as the lapse continues.
Sales of substantial amounts of Ordinary Shares (including those shares issued in connection with the Merger), or the perception that such sales could occur, may materially and adversely affect prevailing market prices of Ordinary Shares. As a “foreign private issuer” under applicable securities laws and regulations, Cellebrite is permitted to, and may, file less or different information with the U.S.
Sales of substantial amounts of Ordinary Shares (including those shares issued in connection with the Merger), or the perception that such sales could occur, may materially and adversely affect prevailing market prices of Ordinary Shares. 44 Table of Content As a “foreign private issuer” under applicable securities laws and regulations, Cellebrite is permitted to, and may, file less or different information with the U.S.
We may also become subject to claims, lawsuits, proceedings and inquiries which could involve labor and employment disputes, discrimination and harassment allegations, commercial disputes, intellectual property rights (including patent, trademark, copyright, trade secret, and other proprietary rights), class actions, general contract, tort, or defamation, data privacy rights, antitrust concerns, common law fraud, government regulation, compliance, alleged federal and state securities and “blue sky” law 33 Table of Content violations or other investor related questions.
We may also become subject to claims, lawsuits, proceedings and inquiries which could involve labor and employment disputes, discrimination and harassment allegations, commercial disputes, intellectual property rights (including patent, trademark, copyright, trade secret, and other proprietary rights), class actions, general contract, tort, or defamation, data privacy rights, antitrust concerns, common law fraud, government regulation, compliance, alleged federal and state securities and “blue sky” law violations or other investor related questions.
In addition, over the last several years, lawsuits have been filed against cyber-related companies by large multinationals that claim that their terms of use have been violated and breached by the activities of the cyber companies. While we are not a cyber company, such a risk could potentially also apply to us and our solutions.
In addition, over the last several years, lawsuits have been filed against cyber-related companies by large multinationals that claim that their terms of use or intellectual property have been violated and breached by the activities of the cyber companies. While we are not a cyber company, such a risk could potentially also apply to us and our solutions.
We may be required to record a significant charge in our financial statements during the period in which any impairment of our goodwill or intangible assets is determined, which would negatively affect our results of operations. Our provision for income taxes and effective income tax rate may vary significantly and may adversely affect our results of operations and cash resources.
We may be required to record a significant charge in our financial statements during the period in which any impairment of our goodwill or intangible assets is determined, which would negatively affect our results of operations. 53 Table of Content Our provision for income taxes and effective income tax rate may vary significantly and may adversely affect our results of operations and cash resources.
The number and significance of our legal disputes and inquiries may increase as we continue to grow larger, as our business has expanded in customer count and geographic reach, and as our DI suite of solutions become more complex.
The number and significance of our legal disputes and inquiries may increase as we continue to grow larger, as our business has expanded in customer count and as our DI suite of solutions become more complex.
A determination regarding whether a breach of our license will result in termination or other corrective action involves judgment and depends on the facts and circumstances of each case. We cannot be sure that the foregoing safeguards will be sufficient to prevent circumvention of our restrictions or to identify misuse of our products or prevent any such misuse.
A determination regarding whether a breach of our license will result in termination or other corrective action involves judgment and depends on the facts and circumstances of each case. 30 Table of Content We cannot be sure that the foregoing safeguards will be sufficient to prevent circumvention of our restrictions or to identify misuse of our products or prevent any such misuse.
Major Shareholders and Related Party Transactions — Related Party Transactions .” In accordance with this and certain obligations relating to the PIPE Investment, we filed a registration statement for the resale of 171,729,210 Ordinary Shares, 9,666,667 Warrants and 29,666,667 Ordinary Shares underlying Warrants, which went effective on October 6, 2021.
Major Shareholders and Related Party Transactions — Related Party Transactions .” In accordance with this and certain obligations relating to the PIPE Investment, we filed a registration statement for the resale of 171,729,210 Ordinary Shares, 9,666,667 Warrants and 29,666,667 Ordinary Shares underlying Warrants, which was declared effective on October 6, 2021.
These risks could be difficult to eliminate or manage and, if not addressed, could adversely affect our business, results of operations, and financial conditions. Other companies may claim that we infringe their intellectual property, which could materially increase costs and materially harm our ability to generate future revenue and profits.
These risks could be difficult to eliminate or manage and, if not addressed, could adversely affect our business, results of operations, and financial conditions. 27 Table of Content Other companies may claim that we infringe their intellectual property, which could materially increase costs and materially harm our ability to generate future revenue and profits.
Typically, our agreements with our partners and customers contain provisions which require us to indemnify them for damages sustained by them as a result of any infringement claims involving our solutions.
Typically, our agreements with our partners and customers contain provisions which require us to indemnify them for damages sustained by them as a result of any intellectual property infringement claims involving our solutions.
Additionally, in November 2020, California voters passed the California Privacy Rights and Enforcement Act of 2020, or the CPRA. The CPRA will impose additional data protection obligations on companies doing business in California, including additional consumer rights processes and opt outs for certain uses of sensitive data and establishes a regulatory agency dedicated to enforcing those requirements.
Additionally, in November 2020, California voters passed the California Privacy Rights and Enforcement Act of 2020, or the CPRA. The CPRA imposes additional data protection obligations on companies doing business in California, including additional consumer rights processes and opt outs for certain uses of sensitive data and establishes a regulatory agency dedicated to enforcing those requirements.
For more information, see “ Risks Relating to an Investment in our Securities— Future resales of the Ordinary Shares issued in connection with the Business Combination may cause the market price of the Ordinary Shares to drop significantly, even if Cellebrite’s business is doing well .” Our share price may also be volatile for other reasons, including: • announcements by us or our competitors regarding, among other things, strategic changes, new products, product enhancements or technological advances, acquisitions, major transactions, significant litigation or regulatory matters, stock repurchases, or management changes; • press or analyst publications, including with respect to changes in recommendations or earnings estimates or growth rates by financial analysts, changes in investors’ or analysts’ valuation measures for our securities, our credit ratings, our security solutions and customers, speculation regarding strategy or mergers and acquisitions (“M&A”), or market trends unrelated to our performance; • stock sales by us or our directors, officers, or other significant holders, or stock repurchases by us; and • hedging or arbitrage trading activity by third parties. • actual or anticipated fluctuations in our results of operations; • market conditions in our industry and changes in the estimation of the future growth and size of our markets; • real or perceived future dilution risk; • the trading volume of our ordinary shares; and • general economic, regulatory, political and market conditions.
For more information, see “ Risks Relating to an Investment in our Securities— Future resales of the Ordinary Shares issued in connection with the Business Combination may cause the market price of the Ordinary Shares to drop significantly, even if Cellebrite’s business is doing well .” 46 Table of Content Our share price may also be volatile for other reasons, including: • announcements by us or our competitors regarding, among other things, strategic changes, new products, product enhancements or technological advances, acquisitions, major transactions, significant litigation or regulatory matters, stock repurchases, or management changes; • press or analyst publications, including with respect to changes in recommendations or earnings estimates or growth rates by financial analysts, changes in investors’ or analysts’ valuation measures for our securities, our credit ratings, our security solutions and customers, speculation regarding strategy or mergers and acquisitions (“M&A”), or market trends unrelated to our performance; • stock sales by us or our directors, officers, or other significant holders, or stock repurchases by us; • hedging or arbitrage trading activity by third parties; • actual or anticipated fluctuations in our results of operations; • market conditions in our industry and changes in the estimation of the future growth and size of our markets; • real or perceived future dilution risk; • meaningful M&A activities, actual or anticipated, or lack thereof; • the trading volume of our ordinary shares; and • general economic, regulatory, political and market conditions.
ITEM 3. KEY INFORMATION A. [Reserved] B. Capitalization and Indebtedness Not applicable. C. Reasons for the Offer and Use of Proceeds 10 Table of Content Not applicable. D. Risk Factors An investment in our securities involves a high degree of risk. You should carefully consider the risks described below before making an investment decision.
ITEM 3. KEY INFORMATION A. [Reserved] B. Capitalization and Indebtedness Not applicable. C. Reasons for the Offer and Use of Proceeds Not applicable. D. Risk Factors An investment in our securities involves a high degree of risk. You should carefully consider the risks described below before making an investment decision.
In the future, other allegations of misuse by our customers may damage our reputation, even if we took no part in the misuse or take immediate action to sever ties with such customers. We may not enter into relationships with potential customers if we consider their activities to be inconsistent with our organizational mission or values.
In the future, other allegations of misuse by our customers may damage our reputation, even if we took no part in the misuse or take immediate action to sever ties with such customers. 29 Table of Content We may not enter into relationships with potential customers if we consider their activities to be inconsistent with our organizational mission or values.
For example, we partner with various resellers who coordinate the provision 46 Table of Content of our solutions to the end customers. Also, for example, there is risk for termination of strategic or technology partnerships that complement or compose part of our DI offering; such terminations may impact our ability to successfully compete in the market.
For example, we partner with various resellers who coordinate the provision of our solutions to the end customers. Also, for example, there is risk for termination of strategic or technology partnerships that complement or compose part of our DI offering; such terminations may impact our ability to successfully compete in the market.
If we or our business partners or counterparties, including licensors and licensees, prime contractors, subcontractors, sublicensors, vendors, customers, shipping partners, or contractors, fail to obtain appropriate import, export, or re-export licenses or permits, notwithstanding regulatory requirements or contractual commitments to do so, or if we fail to secure such contractual commitments where necessary, we may 35 Table of Content also be adversely affected, through reputational harm as well as other negative consequences, including government investigations and penalties.
If we or our business partners or counterparties, including licensors and licensees, prime contractors, subcontractors, sublicensors, vendors, customers, shipping partners, or contractors, fail to obtain appropriate import, export, or re-export licenses or permits, notwithstanding regulatory requirements or contractual commitments to do so, or if we fail to secure such contractual commitments where necessary, we may also be adversely affected, through reputational harm as well as other negative consequences, including government investigations and penalties.
While we currently have no outstanding patents, we may in the future determine that we require patents in order to protect our software and processes, and we may be unable to obtain patent protection for the technology covered in our patent applications or such patent protection may not be obtained quickly enough to meet our business needs.
While we currently have no outstanding issued patents, we seek patent protection and may in the future determine that we require additional patents in order to protect our software and processes, and we may be unable to obtain patent protection for the technology covered in our patent applications or such patent protection may not be obtained quickly enough to meet our business needs.
Moreover, we spend significant resources to monitor and protect our intellectual property and other proprietary rights from potential infringement, and in the future we may conclude that in at least 25 Table of Content some instances the benefits of protecting our intellectual property or other proprietary rights may be outweighed by the expense or distraction to our management.
Moreover, we spend significant resources to monitor and protect our intellectual property and other proprietary rights from potential infringement, and in the future we may conclude that in at least some instances the benefits of protecting our intellectual property or other proprietary rights may be outweighed by the expense or distraction to our management.
A “foreign private issuer” must disclose in its annual reports filed with the SEC each 41 Table of Content Nasdaq requirement with which it does not comply, followed by a description of its applicable home country practice. Cellebrite currently intends to follow the corporate governance requirements of Nasdaq.
A “foreign private issuer” must disclose in its annual reports filed with the SEC each Nasdaq requirement with which it does not comply, followed by a description of its applicable home country practice. Cellebrite currently intends to follow the corporate governance requirements of Nasdaq.
While acquisitions made by us to date have thus far gone smoothly, these acquisitions or any future acquisition, investment or business 47 Table of Content relationship may result in unforeseen risks, operating difficulties and expenditures, including but not limited to the following: • An acquisition may negatively affect our financial results because it may require us to incur charges or assume substantial debt or other liabilities, may cause adverse tax consequences or unfavorable accounting treatment, may expose us to claims and disputes by third parties, including intellectual property claims and disputes, or may not generate sufficient financial return to offset additional costs and expenses related to the acquisition; • Potential goodwill impairment charges related to acquisitions; • Costs and potential difficulties associated with the requirement to test and assimilate the internal control processes of the acquired business; • We may encounter difficulties or unforeseen expenditures assimilating or integrating the businesses, technologies, infrastructure, solutions, personnel, or operations of the acquired companies, particularly if the key personnel of the acquired company choose not to work for us or if we are unable to retain key personnel, if their technology is not easily adapted to work with ours, or if we have difficulty retaining the customers of any acquired business due to changes in ownership, management, or otherwise; • We may not realize the expected benefits of the acquisition; • An acquisition may disrupt our ongoing business, divert resources, increase our expenses, and distract our management; • An acquisition may result in a delay or reduction of customer purchases for both us and the company acquired due to customer uncertainty about continuity and effectiveness of service from either company; • The potential impact on relationships with existing customers, vendors, and distributors as business partners as a result of acquiring another company or business that competes with or otherwise is incompatible with those existing relationships; • The potential that our due diligence of the acquired company or business does not identify significant problems or liabilities, or that we underestimate the costs and effects of identified liabilities; • Exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of, an acquisition, including but not limited to claims from former employees, customers, or other third parties, which may differ from or be more significant than the risks our business faces; • We may encounter difficulties in, or may be unable to, successfully sell any acquired solutions; • An acquisition may involve the entry into geographic or business markets in which we have little or no prior experience or where competitors have stronger market positions; • An acquisition may require us to comply with additional laws and regulations, or to engage in substantial remediation efforts to cause the acquired company to comply with applicable laws or regulations, or result in liabilities resulting from the acquired company’s failure to comply with applicable laws or regulations; • Our use of cash to pay for an acquisition would limit other potential uses for our cash; • If we incur debt to fund such acquisition, such debt may subject us to material restrictions on our ability to conduct our business as well as financial maintenance covenants; and • To the extent that we issue a significant amount of equity securities in connection with future acquisitions, existing shareholders may be diluted and earnings per share may decrease. 48 Table of Content The occurrence of any of these risks could have a material adverse effect on our business, results of operations, and financial condition.
Past acquisitions or any future acquisition, investment or business relationship in some cases have and may in the future result in unforeseen risks, operating difficulties and expenditures, including but not limited to the following: • An acquisition may negatively affect our financial results because it may require us to incur charges or assume substantial debt or other liabilities, may cause adverse tax consequences or unfavorable accounting treatment, may expose us to claims and disputes by third parties, including intellectual property claims and disputes, or may not generate sufficient financial return to offset additional costs and expenses related to the acquisition; • Potential goodwill impairment charges related to acquisitions; • Costs and potential difficulties associated with the requirement to test and assimilate the internal control processes of the acquired business; 51 Table of Content • We may encounter difficulties or unforeseen expenditures assimilating or integrating the businesses, technologies, infrastructure, solutions, personnel, or operations of the acquired companies, particularly if the key personnel of the acquired company choose not to work for us or if we are unable to retain key personnel, if their technology is not easily adapted to work with ours, or if we have difficulty retaining the customers of any acquired business due to changes in ownership, management, or otherwise; • We may not realize the expected benefits of the acquisition; • An acquisition may disrupt our ongoing business, divert resources, increase our expenses, and distract our management; • An acquisition may result in a delay or reduction of customer purchases for both us and the company acquired due to customer uncertainty about continuity and effectiveness of service from either company; • The potential impact on relationships with existing customers, vendors, and distributors as business partners as a result of acquiring another company or business that competes with or otherwise is incompatible with those existing relationships; • The potential that our due diligence of the acquired company or business does not identify significant problems or liabilities, or that we underestimate the costs and effects of identified liabilities; • Exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of, an acquisition, including but not limited to claims from former employees, customers, or other third parties, which may differ from or be more significant than the risks our business faces; • We may encounter difficulties in, or may be unable to, successfully sell any acquired solutions; • An acquisition may involve the entry into geographic or business markets in which we have little or no prior experience or where competitors have stronger market positions; • An acquisition may require us to comply with additional laws and regulations, or to engage in substantial remediation efforts to cause the acquired company to comply with applicable laws or regulations, or result in liabilities resulting from the acquired company’s failure to comply with applicable laws or regulations; • Our use of cash to pay for an acquisition would limit other potential uses for our cash; • If we incur debt to fund such acquisition, such debt may subject us to material restrictions on our ability to conduct our business as well as financial maintenance covenants; and • To the extent that we issue a significant amount of equity securities in connection with future acquisitions, existing shareholders may be diluted and earnings per share may decrease.
However, there can be no assurance that such measures will prevent all malicious activities, including deliberate insertion of exploitative code, malware or cyberattacks, or inadvertent disclosures (including of personal data or confidential business information) or unauthorized access, from impacting our system and information.
However, there can be no assurance that such measures will prevent all malicious activities, 18 Table of Content including deliberate insertion of exploitative code, malware or cyberattacks, or inadvertent disclosures (including of personal data or confidential business information) or unauthorized access, from impacting our system and information.
These claims could result in litigation and could require us to purchase a costly license, publicly release the affected portions of our source code, or cease offering the 27 Table of Content implicated software unless and until we can re-engineer it to avoid infringement.
These claims could result in litigation and could require us to purchase a costly license, publicly release the affected portions of our source code, or cease offering the implicated software unless and until we can re-engineer it to avoid infringement.
If we are unable to compete successfully, our business, financial condition and results of operations could be adversely affected. If our solutions are inadvertently or deliberately misused by customers, such customers may achieve sub-optimal results, which could lead to the perception that our solutions are low-quality.
If we are unable to compete successfully, our business, financial condition and results of operations could be adversely affected. If our solutions are misused by customers, such customers may achieve sub-optimal results, which could lead to the perception that our solutions are low-quality.
We conduct a fairly low volume of our business via e-commerce, which may result in the purchase process being more difficult for customers compared to other businesses. 15 Table of Content We do not sell our solutions to new customers using e-commerce methods.
We conduct a fairly low volume of our business via e-commerce, which may result in the purchase process being more difficult for customers compared to other businesses. We do not sell our solutions to new customers using e-commerce methods.
In addition, a controlling shareholder of an Israeli company or a shareholder who knows that it possesses the power to determine the outcome of a shareholder vote or who has the power according to the Amended Articles to appoint or prevent the appointment of a director or officer in the Company, or has other powers toward 39 Table of Content the Company according to the Amended Articles, has a duty of fairness toward the Company.
In addition, a controlling shareholder of an Israeli company or a shareholder who knows that it possesses the power to determine the outcome of a shareholder vote or who has the power according to the Amended Articles to appoint or prevent the appointment of a director or officer in the Company, or has other powers toward the Company according to the Amended Articles, has a duty of fairness toward the Company.
See “— We may not enter into relationships with potential customers if we consider their activities to be inconsistent with our organizational mission or values .” For example, all users are required to confirm, before activation, that they will only use the system for lawful uses, but Cellebrite cannot verify that this undertaking is accurate.
See “— We may not enter into relationships with potential customers if we consider their activities to be inconsistent with our organizational mission or values .” For example, all customers are required to confirm, before activation, that they will only use our product for lawful uses, but Cellebrite cannot verify that this undertaking is accurate.
We generally do not knowingly enter into business with customers whose positions or actions we consider inconsistent with our mission to support law enforcement acting in a legal manner. We developed and continue to evolve an ethical risk management framework, intended to assist us in managing the risk of human rights abuses by our customers.
We generally do not knowingly enter into business with customers whose positions or actions we consider inconsistent with our mission to support law enforcement agencies acting in a legal manner. We developed and continue to evolve an ethical risk management framework, intended to assist us in managing the risk of human rights abuses by our customers when using our products.
In addition, customers may use our investigative management solution to store, share and review sensitive data, including PII, when they decide to store such data in our investigative management SaaS solution.
In addition, customers may use our investigative management solution, the Guardian, to store, share and review sensitive data, including PII, when they decide to store such data in our investigative management SaaS solution.
Our activities or products could be subject to certain economic sanctions laws including the laws of the Israel and the United States. We have adopted policies and procedures to restrict sales to countries subject to comprehensive U.S. and Israeli sanctions and to designated entities and individuals.
Our activities or products could be subject to certain economic sanctions laws including the laws of Israel and the United States. We have adopted policies and procedures that are intended to restrict sales to countries subject to comprehensive U.S. and Israeli sanctions and to designated entities and individuals.
The rights and responsibilities of holders of Ordinary Shares are governed by our amended and restated articles of association (the “Amended Articles”) and the Israeli Companies Law (the “Companies Law”). These rights and responsibilities differ in some respects from the rights and responsibilities of shareholders in typical U.S. corporations.
We are incorporated under Israeli law. The rights and responsibilities of holders of Ordinary Shares are governed by our amended and restated articles of association (the “Amended Articles”) and the Israeli Companies Law (the “Companies Law”). These rights and responsibilities differ in some respects from the rights and responsibilities of shareholders in typical U.S. corporations.
Real or perceived errors, failures, defects or bugs in our DI solutions could adversely affect our results of operations, financial results, growth prospects and reputation.
Real or perceived errors, failures, defects or bugs in our digital investigative (DI) solutions could adversely affect our results of operations, financial results, growth prospects and reputation.
In either case, the resulting harm to our reputation could: • cause certain customers to cease doing business with us; • impair our ability to attract new customers, or to expand our relationships with existing customers; • diminish our ability to recruit, hire, or retain employees; • undermine our standing in professional communities to which we contribute and from which we receive expert knowledge; or • prompt us to cease doing business with certain customers.
In either case, the resulting harm to our reputation could: 19 Table of Content • cause certain customers to cease doing business with us; • impair our ability to attract new customers, or to expand our relationships with existing customers; • diminish our ability to recruit, hire, or retain employees; • undermine our standing in professional communities to which we contribute and from which we receive expert knowledge; or • prompt us to cease doing business with certain customers.
We may have interests that are different from our joint venture partners and/or which may affect our ability to successfully collaborate with a given partner.
We may have interests that are different from our partners and/or which may affect our ability to successfully collaborate with a given partner.
We do not generally have access to or store customer data nor have access to the data processed by customers using our solutions. Nevertheless, our personnel occasionally have brief and limited access 30 Table of Content to data, including personally identifiable information (“PII”), when they receive calls for technical support or when they maintain or operate the relevant solution.
We do not generally have access to or store customer data nor have access to the data processed by customers using our solutions. Nevertheless, our personnel occasionally have brief and limited access to data, including personally identifiable information (“PII”), when they receive calls for technical support or when they maintain or operate the relevant solution.
For example, we have adopted policies and procedures intended to prevent sales to customers in Bangladesh, Belarus, China, Hong Kong, Macau, Russia, Venezuela, Oman, Uganda and several other countries, partially due to concerns regarding human rights abuses, data privacy and security, partially due to regulatory requirements, and partially due to other business considerations, and we may in the future decide not to do business in other countries or with other potential customers for similar reasons.
For example, we have adopted policies and procedures intended to prevent sales to customers in Bangladesh, Belarus, China, Hong Kong, Macau, Russia, Venezuela, Oman, Uganda and a number of other countries, partially due to concerns regarding human rights abuses, data privacy and security, partially due to regulatory requirements, and partially due to other business considerations, and we may in the future decide not to do business in other countries or with other existing or potential customers for similar reasons.
Publicly available information regarding Cellebrite has historically been limited, in part due to the sensitivity of our work with customers or contractual requirements limiting or preventing public 20 Table of Content disclosure of certain aspects of our work or relationships with certain customers.
Publicly available information regarding Cellebrite has historically been limited, in part due to the sensitivity of our work with customers or contractual requirements limiting or preventing public disclosure of certain aspects of our work or relationships with certain customers.
As a result of the COVID-19 pandemic, a greater number of our employees are working remotely and accessing our IT systems and networks remotely, which may further increase our vulnerability to cybercrimes and cyberattacks and increase the stress on our technology infrastructure and systems.
Further, a greater number of our employees are working remotely and accessing our IT systems and networks remotely since the COVID-19 pandemic, which may further increase our vulnerability to cybercrimes and cyberattacks and increase the stress on our technology infrastructure and systems.
We have since adopted policies and procedures intended to prevent sales to customers in China and Hong Kong and have proactively stopped selling to Russia, Belarus and several other countries, but this petition as well as adverse media coverage and petitions relating to Russia, Bangladesh and Uganda may have negatively impacted our reputation.
We have since adopted policies and procedures intended to prevent sales to customers in China and Hong Kong and have proactively stopped selling to Russia, Belarus and a number of other countries, but this petition as well as adverse media coverage and petitions relating to Russia, Bangladesh and Uganda may have negatively impacted our reputation.
These U.S. federal and state and foreign laws and regulations, which, depending on the regime, may be enforced by private 31 Table of Content parties or government entities, are constantly evolving and can be subject to significant change, and they are likely to continue to develop and evolve for the foreseeable future.
These U.S. federal and state and foreign laws and regulations, which, depending on the regime, may be enforced by private parties or government entities, are constantly evolving and can be subject to significant change, and they are likely to continue to develop and evolve for the foreseeable future.
For example, in the DI market, there are numerous brands and solutions that compete for sales, with competition based upon brand recognition and loyalty, product packaging, quality and innovation, licensing models, price and convenience.
For example, in the market for digital investigative solutions, there are numerous brands and solutions that compete for sales, with competition based upon brand recognition and loyalty, product packaging, quality and innovation, licensing models, price and convenience.
We have also historically used, and continue to use, our Ordinary Shares as a means of both rewarding our employees, non-employee directors, and consultants and aligning their interests with those 40 Table of Content of our shareholders.
We have also historically used, and continue to use, our Ordinary Shares as a means of both rewarding our employees, non-employee directors, and consultants and aligning their interests with those of our shareholders.
Overall, we believe our ability to compete successfully in delivering DI at a competitive cost to customers does and will depend on a number of factors, which may change in the future due to increased competition, our ability to meet our 13 Table of Content customers’ needs and the frequency and availability of our offerings.
Overall, we believe our ability to compete successfully in delivering DI solutions at a competitive cost to customers does and will depend on a number of factors, which may change in the future due to increased competition, our ability to meet our customers’ needs and the frequency and availability of our offerings.
To the extent that we incur expenses in one currency but earn revenue in another, any change in the values of those foreign currencies relative to the USD could cause our profits to decrease or our products to be less competitive against those of our competitors.
To the extent that we incur expenses in one currency but earn revenue in another, any change in the values of those foreign currencies relative to the USD could cause our profits to decrease depending on the magnitude of the changes in foreign currencies, or our products to be less competitive against those of our competitors.
Any such determination or perception by potential customers, the general public, government entities or the judicial system could harm our reputation, may result in reduced usage or adoption rates of our DI solutions by our customers and adversely affect our reputation, revenue, financial condition and results of operations.
Any such determination or perception by potential customers, the general public, government entities or the judicial system could harm our reputation, may result in reduced usage or adoption rates of our C2C Platform by our customers and adversely affect our reputation, revenue, financial condition and results of operations.
These costs may increase in the future, thereby reducing our margins, which could have an adverse effect on our financial condition. 36 Table of Content Moreover, in the U.S., government contracts are subject to oversight audits by government representatives. Such audits could result in adjustments to our contracts.
These costs may increase in the future, thereby reducing our margins, which could have an adverse effect on our financial condition. Moreover, in the U.S., government contracts are subject to oversight audits by government representatives. Such audits could result in adjustments to our contracts.
We generated approximately 90% of our revenue in 2020, 2021 and 2022 from contracts with governments and government agencies, and our results of operations could be adversely affected by government spending caps or changes in government budgetary priorities, as well as by delays in the government budget process, program starts, or the award of contracts or orders under existing contract vehicles.
We generated more than 90% of our revenue in 2021, 2022 and 2023 from contracts with governments and government agencies, and our results of operations could be adversely affected by government spending caps or changes in government budgetary priorities, as well as by delays in the government budget process, program starts, or the award of contracts or orders under existing contract vehicles.
Non-compliance with anti-corruption, anti-bribery, anti-money laundering or financial and economic sanctions laws could subject us to whistleblower complaints, adverse media coverage, investigations, and severe administrative, civil and criminal penalties, collateral consequences, remedial measures and legal expenses, all of which could materially and adversely affect our business, results of operations, financial condition and reputation.
Non-compliance with anti-corruption, anti-bribery, or similar laws could subject us to whistleblower complaints, adverse media coverage, investigations, and severe administrative, civil and criminal penalties, collateral consequences, remedial measures and legal expenses, all of which could materially and adversely affect our business, results of operations, financial condition and reputation.
Our decisions not to do business with these countries may alter our expectations surrounding our long-term financial benefits and results, which may harm our growth prospects, business, and results of operations.
Our decisions not to do business within these countries or with these customers may alter our expectations surrounding our long-term financial benefits and results, which may harm our growth prospects, business, and results of operations.
Furthermore, once hired it takes at least three months before a new sales force member is fully trained and operating at 12 Table of Content a level that meets our expectations, and training may take even longer when working remotely.
Furthermore, once hired it takes at least three months before a new sales force member is fully trained and operating at a level that meets our expectations, and training may take even longer when working remotely.
We base our estimates on historical 52 Table of Content experience and on various other assumptions that we believe to be reasonable under the circumstances, as discussed in “ Part II, Item 5. Operating and Financial Review and Prospects—E.
We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as discussed in “ Part II, Item 5. Operating and Financial Review and Prospects—E.
Though our business practices are responsibly designed to meet our customers’ needs for products and services that use AI and to mitigate many of these risks, we could suffer reputational or competitive damage as a result of any inconsistencies in the application of the technology or ethical concerns both of which may generate negative publicity, as well as regulatory or legal scrutiny.
Though our business practices are responsibly designed to meet our customers’ needs for products and services that use AI and to mitigate many of these risks, we could suffer reputational or competitive damage as a result of any inconsistencies in the application of the technology or ethical concerns all of which may generate negative publicity.
If our solutions do become subject to the Wassenaar Arrangement dual use list as adopted by Israel, then they likely will be controlled under either the Israeli Defense Export Control Law, 5767-2007 or the Import and Export Order (Export Control over Dual Use Goods, Services and Technology), 5766-2006, depending on the nature of the customer.
If our solutions do become subject to the Wassenaar Arrangement dual use list as adopted by Israel, then some of them are likely to be controlled under either the Israeli Defense Export Control Law, 5767-2007 or the Import and Export Order (Export Control over Dual Use Goods, Services and Technology), 5766-2006, depending on the nature of the customer and end use.
The committee is comprised of approximately eight industry experts, which include ethics experts, legal experts, former members of the police force, former members of ministries of defense, technology experts, academic experts and community leaders.
The committee is comprised of seven industry experts, which include ethics experts, legal experts, former members of the police force, former members of ministries of defense, technology experts, academic experts and community leaders.
Compliance with these laws and regulations may be onerous and expensive, and may be inconsistent from jurisdiction to jurisdiction, further increasing the cost of compliance and the risk of 16 Table of Content liability.
Compliance with these laws and regulations may be onerous and expensive, and may be inconsistent from jurisdiction to jurisdiction, further increasing the cost of compliance and the risk of liability.
We seek to retain and motivate existing personnel through our compensation practices, 19 Table of Content company culture, and career development opportunities. If we fail to attract new personnel or to retain our current personnel, our business and operations could be harmed.
We seek to retain and motivate existing personnel through our compensation practices, company culture, and career development opportunities. If we fail to attract new personnel or to retain our current personnel, our business and operations could be harmed.
The export of our solutions is subject to Israeli encryption control laws. Our export license under the Israeli encryption control regime prohibits us from exporting some of our products to customers in certain countries and require us to obtain the consent of the Ministry of Defense to export to customers in certain other countries.
Our export license under the Israeli encryption control regime prohibits us from exporting some of our products to customers in certain countries and require us to obtain the consent of the Ministry of Defense to export to customers in certain other countries.
In recent years, some of these hostilities were accompanied by missiles being fired from the Gaza Strip against civilian targets in various parts of Israel, including areas in which our assembly facility, some of our employees and some of our consultants are located. Certain countries have also threatened Israel and may be developing nuclear weapons, including Iran.
Some of these hostilities were accompanied by missiles being fired from the Gaza Strip against civilian targets in various parts of Israel, including areas in which our assembly facility, some of our employees and some of our consultants are located. Iran has also threatened Israel and may be developing nuclear weapons.
If we are unable to effectively utilize our personnel on a timely basis to fulfill the needs of our customers, our business could suffer. Despite current employment market trends, we continue to face intense competition for qualified personnel, specifically personnel in sales, research and development.
If we are unable to effectively utilize our personnel on a timely basis to fulfill the needs of our customers, our business could suffer. We continue to face intense competition for qualified personnel, specifically personnel in sales, research and development.
As our business has grown and as interest in Cellebrite and the technology industry overall has increased, we have attracted, and may continue to attract, significant attention from news and other outlets, which in turn can lead to negative political and public sentiment.
As our business has grown and as interest in Cellebrite and digital investigative technology overall has increased, we have attracted, and may continue to attract, attention from news and other outlets, which in turn can lead to negative political and public sentiment.
However, cryptography that is subject to Israeli encryption laws is not regulated under the Israeli export control regime, even if such cryptography capabilities would otherwise be placed within Part 2 of Chapter 5 of the Wassenaar Arrangement Dual Use List which relates to Information Security.
However, neither cryptography (that is subject to Israeli encryption laws) nor cryptanalytic technology is regulated under the Israeli export control regime, even if such cryptography or cryptanalytic capabilities would otherwise be placed within Part 2 of Chapter 5 of the Wassenaar Arrangement Dual Use List which relates to Information Security.

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Such change in controls could limit our or our resellers’ ability to distribute these solutions or limit our customers’ ability to use these solutions.
Such change in controls could limit our or our resellers’ ability to distribute our solutions or limit our customers’ ability to use these solutions.
If the reform will take place and the revised laws and regulations will come into effect, our solutions will become subject to the Wassenaar Arrangement dual use list as adopted by the State of Israel, and will likely be controlled under the Israeli Defense Export Control Law, 5767-2007 or the Import and Export Order (Export Control over Dual Use Goods, Services and Technology), 5766-2006, depending on the nature of the customer.
If the reform will take place and the revised laws and regulations will come into effect, some of our solutions will become subject to the Wassenaar Arrangement dual use list as adopted by the State of Israel, and will likely be controlled under the Israeli Defense Export Control Law, 5767-2007 or the Import and Export Order (Export Control over Dual Use Goods, Services and Technology), 5766-2006, depending on the nature of the customer.
Cellebrite conducts a fairly low volume of its business via e-commerce, and our e-commerce system is available only to customers who have a valid license to use Cellebrite’s solutions. For more information regarding our e-commerce system, see – “Part I, Item 3. Key Information —D.
Cellebrite conducts a low volume of its business via e-commerce, and our e-commerce system is available only to customers who have a valid license to use Cellebrite’s solutions. For more information regarding our e-commerce system, see – “Part I, Item 3. Key Information —D.
As a result, for the purposes of the GDPR and the UK equivalent legislation, we are not considered to be a controller and serve as a processor in a number of circumstances, within the meaning of those terms under applicable data privacy laws.
As a result, for the purposes of the GDPR and the UK equivalent legislation, we are not considered to be a controller and serve as a processor in a limited number of circumstances, within the meaning of those terms under applicable data privacy laws.
Various other countries in which we operate also regulate the import of certain encryption solutions and technology, including import permitting and licensing requirements, and have enacted laws that could limit our ability to distribute our solutions or could limit our customers’ ability to implement our solutions in those countries.
Various other countries in which we operate also regulate the import of certain encryption, decryption and cryptographic solutions and technology, including import permitting and licensing requirements, and have enacted laws that could limit our ability to distribute our solutions or could limit our customers’ ability to implement our solutions in those countries.
We also lease a 1,445 square meters office space in Kiryat Malachi, Israel where the premises are used for our hardware factory. Our lease for this facility initially expired in June 7, 2018 and was extended until February 28, 2031.
We also lease a 1,445 square meters facility in Kiryat Malachi, Israel where the premises are used for our hardware factory. Our lease for this facility initially expired in June 7, 2018 and was extended until February 28, 2031.
We rely on a combination of copyright, trademark and trade secret laws, as well as certain contractual provisions to establish, maintain, protect and enforce our intellectual property and other proprietary rights, 66 Table of Content including those relating to our technology and solutions. In addition, we license technology from third parties that is integrated into some of our solutions.
We rely on a combination of copyright, trademark and trade secret laws, as well as certain contractual provisions to establish, maintain, protect and enforce our intellectual property and other proprietary rights, including those relating to our technology and solutions. In addition, we license technology from third parties that is integrated into some of our solutions.
Our export license under the Israeli encryption control regime prohibit us from exporting our controlled products to customers in certain countries and require us to obtain the consent of the Ministry of Defense to export controlled products to customers in certain other countries.
Our export license under the Israeli encryption control regime prohibits us from exporting our controlled products to customers in certain countries and require us to obtain the consent of the Israeli Ministry of Defense to export controlled products to customers in certain other countries.
PROPERTY, PLANTS AND EQUIPMENT 67 Table of Content Our main offices are currently located in a 6,386 square meter facility that we lease in Petah-Tikva, Israel, where the premises are used for all aspects of our operations (except for our factory). Our lease for this facility initially expired on December 11, 2007 and was extended until May 15, 2026.
D. PROPERTY, PLANTS AND EQUIPMENT Our main offices are currently located in a 6,386 square meter facility that we lease in Petah-Tikva, Israel, where the premises are used for all aspects of our operations (except for our factory). Our lease for this facility initially expired on December 11, 2007 and was extended until May 15, 2026.
In 2016, the Israeli Ministry of Defense published draft regulations proposing to cancel the existing encryption control regime and to bring Part 2 of Chapter 5 of the Wassenaar Arrangement into full force and effect in its place. In recent months, this effort was renewed and the regulator stated publicly its intention to advance this reform imminently.
In 2016, the Israeli Ministry of Defense published draft regulations proposing to cancel the existing encryption control regime and to bring Part 2 of Chapter 5 of the Wassenaar Arrangement into full force and effect in its place. Last year this effort was renewed and the regulator stated publicly its intention to advance this reform imminently.
In addition, we may extract files containing customer data, including PII, in connection with the provision of our Advanced Services in which we serve as an outsourced lab for the extraction of data from devices that are sent to us by our customers.
Further, we may extract files containing customer data, including PII, in connection with the provision of our Advanced Services in which we serve as an outsourced lab for the extraction of data from digital sources that are sent to us by our customers.
In both of those situations, we do not access or view customer data, maintain such data securely with limited access, and delete all such data following confirmation that the data has been received by the customer.
In such situations, we do not access or view customer data, maintain such data securely with limited access, and delete such data following confirmation that the data has been received by the customer.
In the private sector, we compete with vertical software providers such as: Exterro, Magnet Forensics, Nuix, and OpenText. Private sector service providers are typically return-on-investment driven and will decide to acquire our solutions when there is a financial justification for the investment.
In the private sector, our digital forensic software solutions compete with vertical software providers such as Exterro Inc., Magnet Forensics Inc., Nuix Limited, and OpenText Corporation. Private sector service providers are typically return-on-investment driven and will decide to acquire our solutions when there is a financial justification for the investment.
ORGANIZATIONAL STRUCTURE The Company was incorporated on April 13, 1999 under Israeli Law and has subsidiaries in the United States, Germany, Singapore, Australia, Brazil, United Kingdom, France, Canada, Japan and India, which are listed below: SUBSIDIARIES OF CELLEBRITE DI LTD. Name of Subsidiary Jurisdiction of Organization Cellebrite Inc. U.S. (Delaware) Cellebrite GmbH Germany Cellebrite Asia Pacific Pte Ltd.
ORGANIZATIONAL STRUCTURE The Company was incorporated on April 13, 1999 under Israeli Law and has subsidiaries in the United States, Germany, Singapore, Australia, Brazil, United Kingdom, France, Canada, Japan and India, which are listed below: 71 Table of Content SUBSIDIARIES OF CELLEBRITE DI LTD. Name of Subsidiary Jurisdiction of Organization Cellebrite Inc. U.S.
Typically, we utilize a layered approach with each channel and the corresponding messaging that build on and complement one another, resulting in a demand offer that is meant to be compelling and relevant to their needs. We also measure the impact and performance of these efforts and make adjustments accordingly, including whether to channel, content, message and/or offer.
Typically, we utilize a layered approach with each channel and the corresponding messaging that build on and complement one another, resulting in a demand offer that is meant to be compelling and relevant to their needs. We also measure the impact and performance of these efforts and make adjustments accordingly across channels, content, messages and offerings.
Regulations We are subject to, and are required to comply with applicable laws and regulations on import and export controls, sanctions, privacy, data protection and employment, among others, in territories the company operates and sells its solutions. Sanctions and Export Controls We are subject to Israeli regulations controlling the export of encryption technology.
Regulations We are subject to, and are required to comply with applicable laws and regulations on import and export controls, sanctions, privacy, data protection and employment, among others, in territories where the company operates and sells its solutions.
However, cryptography that is subject to Israeli encryption control laws is not regulated under the Israeli export control regime, even where its capabilities would otherwise 64 Table of Content place such cryptography within Part 2 of Chapter 5 of the Wassenaar Arrangement Dual Use List which relates to Information Security.
However, neither cryptography (that is subject to Israeli encryption control laws) nor cryptanalytic technology is regulated under the Israeli export control regime, even where its capabilities would otherwise place such cryptography within Part 2 of Chapter 5 of the Wassenaar Arrangement Dual Use List which relates to Information Security.
Currently, some of our solutions are not subject to any export control laws. However, many countries where we operate update their export control laws and lists on a regular basis and, therefore, it is possible that some of these non-controlled solutions will become controlled.
Currently, some of our solutions are not subject to any heightened restrictions under applicable export control laws. However, many countries where we operate update their import or export control laws and lists on a regular basis and, therefore, it is possible that some of our currently non-controlled solutions will become subject to heightened controls.
Data Privacy 65 Table of Content Our products are mostly used as an on-premise solution and are generally operated by our customers without our involvement. Nevertheless, our service operators occasionally have brief and limited access to customer data, including PII, when they receive calls for technical support.
Data Privacy Our products are mostly used as an on-premise solution and are generally operated by our customers without our involvement. Nevertheless, our service operators occasionally have brief and limited access to customer data, including PII, when they receive calls for technical support, or when they maintain or operate the relevant solution.
The security holders of TWC became security holders of Cellebrite (the transactions consummated are referred to herein as the “Merger”). Our capital expenditures amounted to $6.9 million, $5.1 million and $6.2 million during the fiscal years ended December 31, 2022, 2021 and 2020, respectively, primarily consisting of expenditures related to property and equipment.
The security holders of TWC became security holders of Cellebrite (the transactions consummated are referred to herein as the “Merger”). Our capital expenditures amounted to $7.9 million, $9.1 million and $8.1 million during the fiscal years ended December 31, 2023, 2022 and 2021, respectively, primarily consisting of expenditures related to property and equipment and intangible assets.
Singapore Cellebrite Soluções de Inteligência Digital Ltda Brazil Cellebrite Digital Intelligence Solutions Private Limited India Cellebrite UK Limited United Kingdom Cellebrite Canada Mobile Data Solutions Ltd. Canada Cellebrite France SAS France Cellebrite Japan K.K. Japan Cellebrite Australia PTY Limited Australia BlackBag Technologies, Inc. U.S. (Delaware) Cellebrite digital Intelligence LP U.S. (Delaware) Cellebrite Saferworld, Inc. U.S.
(Delaware) Cellebrite GmbH Germany Cellebrite Asia Pacific Pte Ltd. Singapore Cellebrite Soluções de Inteligência Digital Ltda Brazil Cellebrite Digital Intelligence Solutions Private Limited India Cellebrite UK Limited United Kingdom Cellebrite Canada Mobile Data Solutions Ltd. Canada Cellebrite France SAS France Cellebrite Japan K.K. Japan Cellebrite Australia PTY Limited Australia Cellebrite Digital Intelligence LP U.S.
In addition, we have offices in the following locations: Vienna, Virginia; Parsippany, New Jersey; Ottawa, Canada; Singapore; India; Canberra, Australia; Tokyo, Japan; Sao Paulo, Brazil; London, UK; Munich, Germany and Tel Aviv, Israel. Our offices support functions across sales and marketing, services, research and development, and operations and administration. ITEM 4A. UNRESOLVED STAFF COMMENTS Not applicable.
In addition, we have offices in the following locations: Morristown, New Jersey; Ottawa, Canada; Singapore; New Delhi, India; Canberra, Australia; Tokyo, Japan; Sao Paulo, Brazil; London, UK; Munich, Germany and Tel Aviv, Israel. Our offices support functions across sales and marketing, services, research and development, and operations and administration.
Our activities may be subject to certain economic sanctions laws including the laws of the State of Israel and the United States, and we have adopted policies to ensure we remain compliant with such applicable regimes, laws and regulations. In addition, we have adopted policies and procedures to restrict sales in certain additional countries and to designated entities and individuals.
Our activities may be subject to certain economic sanctions laws including the laws of the State of Israel and the United States, and we have adopted policies to ensure we remain compliant with such applicable regimes, laws and regulations.
(Delaware) All subsidiaries are 100% owned by Cellebrite DI Ltd., except: Cellebrite Canada Mobile Data Solutions Ltd., which is 100% owned by Cellebrite UK Limited, BlackBag Technologies. Inc. which is 100% owned by Cellebrite Inc. and Cellebrite Digital Intelligence LP which is 99% owned by Cellebrite DI Ltd., and 1% owned by Cellebrite Inc. D.
(Delaware) All subsidiaries are 100% owned by Cellebrite DI Ltd., except: Cellebrite Canada Mobile Data Solutions Ltd., which is 100% owned by Cellebrite UK Limited, Cellebrite Digital Intelligence LP which is 99% owned by Cellebrite DI Ltd., and 1% owned by Cellebrite Inc., and Cellebrite Digital Intelligence Solutions Private Limited which is 99.99% owned by Cellebrite DI Ltd and 0.01% owned by Cellebrite Asia Pacific Pte Ltd.
Even if we operate in full compliance with Israeli, US and other applicable laws, unlawful uses of our products by our clients, despite the risk mitigation mechanisms we have put in place to prevent this, may nevertheless occur and result in the designation of our company under sanctions lists.
In addition, we have adopted policies and procedures to restrict sales in certain additional countries and to designated entities and individuals. 69 Table of Content Even if we operate in full compliance with Israeli, US and other applicable laws, unlawful uses of our products by our clients or partners, despite the risk mitigation mechanisms we have put in place to prevent this, may nevertheless occur and result in the designation of our company under sanctions lists.
Outside of the United States, virtually every jurisdiction in which we operate has established its own legal framework relating to privacy, data protection, and information security matters with which we and/or our customers must comply.
We expect that there will continue to be new proposed laws, regulations and industry standards concerning privacy, data protection and information security in the United States and other jurisdictions. 70 Table of Content Outside of the United States, virtually every jurisdiction in which we operate has established its own legal framework relating to privacy, data protection, and information security matters with which we and/or our customers must comply.
California also recently enacted legislation, the CCPA, and follow-on legislation in the CPRA, which provides for civil penalties for violations, as well as a private right of action for data breaches that may increase data breach litigation Additionally, Colorado adopted the Colorado Privacy Act (“CPA”) in June 2021 and it will become effective on July 1, 2023.
The United States subjects companies to Federal and state laws and regulations regarding privacy and information security. California also recently enacted legislation, the CCPA, and follow-on legislation in the CPRA, which provides for civil penalties for violations, as well as a private right of action for data breaches that may increase data breach litigation.
Utah also adopted the Utah Consumer Privacy Act (“UCPA”) in March 2022 and that will become effective December 31, 2023. Likewise, Connecticut enacted the Connecticut Act Concerning Personal Data Privacy and Online Monitoring (“CTDPA”) in May 2022 and most of which will become effective July 1, 2023.
Likewise, Connecticut enacted the Connecticut Act Concerning Personal Data Privacy and Online Monitoring (“CTDPA”) in May 2022 which went into effect on July 1, 2023.
For more information, see “ Part I, Item 10. Additional Information—H. Documents on Display .” B. BUSINESS OVERVIEW Our Mission 53 Table of Content Our mission is to support our customers in their efforts to protect and save lives, accelerate justice and preserve privacy in global communities.
For more information, see “ Part I, Item 10. Additional Information—H. Documents on Display .” 56 Table of Content B. BUSINESS OVERVIEW Our Mission Our mission is to provide the primary suite of digital investigative solutions for public and private sector customers.
Our operations also are subject to various laws and regulations governing the occupational health and safety of our employees and wage regulations, in each of the respective jurisdictions that we operate. Intellectual Property Our DI suite of solutions is based on proprietary software and related intellectual property rights.
In addition to the regulations outlined below, our operations also are subject to various laws and regulations governing the occupational health and safety of our employees and wage regulations, in each of the respective jurisdictions that we operate. 68 Table of Content Sanctions and Export Controls We are subject to Israeli regulations controlling the export of encryption technology.
In the private sector, we mainly sell to internal security or investigation groups or eDiscovery groups within enterprises and to service providers. For our reseller 62 Table of Content operations, we often utilize resellers for government agency procurement where direct sales opportunities do not exist or where the government requires local vendors due to local restrictions.
We often utilize resellers for government agency procurement to account for our internal business and operational needs, where direct sales opportunities do not exist or where the government requires local vendors due to local requirements. In the private sector, our direct salesforce in the EMEA and Asia Pacific regions is augmented by reseller relationships.
Risk Factors — Risks Related to Cellebrite’s Business and Industry — We conduct a fairly low volume of our business via e-commerce, which may result in the purchase process being more difficult for customers compared to other businesses ” For a breakdown of our revenues by geography, see Note 16 to our consolidated financial statements in “ Part III, Item 18.
Risk Factors — Risks Related to Cellebrite’s Business and Industry — We conduct a fairly low volume of our business via e-commerce, which may result in the purchase process being more difficult for customers compared to other businesses ” Marketing: To support the expansion of existing customer relationships, our marketing campaigns highlight the value we bring to them currently while introducing the value and advantages they can derive from increasing organizational adoption of existing solutions or using additional solutions in our portfolio.
Our main Services Offering : • Training Academy – Backed with years of hands-on experience, the Cellebrite team of trainers delivers training and certification programs to investigation practitioners, setting the industry standard for ongoing development and education. • Advanced Services – Cellebrite’s expert team serves as an extension to customer digital forensics lab teams, providing advanced services in Cellebrite’s Global Lab facilities, as well as outsourcing capabilities to help organizations deal with technological and operational workload.
Cellebrite’s Professional Services • Training and Certification Services : Backed with years of hands-on experience, Cellebrite’s team of professional trainers delivers product training and certification programs to investigation practitioners, setting the industry standard for ongoing development and education. In 2023, Cellebrite offered 24 training courses both live in-person and virtually, and in self-paced formats.
We often sell to decision makers in public safety, which often include the chief of investigations or the head of investigations and intelligence or the head of the lab. In smaller prime accounts we sell to digital forensics labs, experts as well as police chiefs.
Account executives and sales managers directly manage relationships with our largest customers while dedicated inside sales teams typically work with smaller customers. We sell to decision makers in public safety, which include the chief of investigations or the head of investigations and intelligence, or the head of the lab.
Overview Cellebrite is a leading provider of DI suite of solutions, comprising of software and services that we deliver to our customers for use in legally sanctioned investigations. Our approximately 7,000 customers are federal, state and local agencies as well as enterprise companies and service providers.
Our digital forensics software, case and evidence management, and investigative analytic solutions offered within our C2C Platform are used to advance legally sanctioned investigations by approximately 7,000 customers worldwide, including many of the largest federal, state and local law enforcement and government agencies as well as enterprise companies and service providers.
Our solutions are used in a variety of cases including child exploitation, homicide, anti-terror, border control, sexual crimes, human trafficking, corporate security, intellectual property theft, and civil litigation. The cornerstones of our DI suite of solutions span across the entire investigation lifecycle.
With most major crimes now having a digital component, we continue to see healthy demand for our solutions, which are used to advance a wide range of investigations spanning child exploitation, homicide, anti-terror, border control, sexual crimes, human trafficking, financial crimes including those involving cryptocurrency, corporate security, and intellectual property theft.
We continue to provide relevant thought leadership content that highlights feedback and input from experts and their peers around “what’s now and what’s next” in digital transformation that could be used to improve and accelerate their investigative workflow. For new customers, Cellebrite leverages channel and content mixes to target specific needs and interests through focused methodologies and tactics.
We also provide relevant thought leadership content that highlights feedback, best practices, emerging trends and customer success stories around “what’s now and what’s next” in digital forensics, evidence management and investigative analytics that could be used to transform their investigative workflows.
Over time, we see more public agency budgets being diverted to DI to make digital investigations more effective and efficient, in support of public safety efforts. We utilize a combination of direct sales force and resellers to reach customers. Strategic account executives and prime account representatives manage materially all of the customer relationships directly.
Over time, we have seen more public sector agency budgets being diverted to digitally transform the investigative workflow and to help close the growing public safety gap. We utilize a combination of direct sales and indirect channels to reach public sector customers.
Cellebrite also offers CryptoCurrency Investigative Solutions which analyze blockchain transactions together with related data from an extensive list of sources to identify and categorize wallets and transactions. Additionally, Cellebrite offers the OSINT Investigate solution, used to search, resolve and enrich identifiers in open sources.
We also provide, in collaboration with our partners, CryptoCurrency Investigative Solutions for analyzing blockchain transactions together with related data from an extensive list of sources to help investigators identify and categorize wallets and transactions. 60 Table of Content • Open Source Intelligence Tools : Cellebrite’s SaaS-based Smart Search solution securely automates the collection and review of publicly available online data, including social media platforms, on persons and organizations of interest.
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Our DI suite of solutions allows our customers to collect, review, analyze, and manage digital data across the investigative lifecycle. Our DI suite of solutions extracts digital data, delivers the data as digital evidence, and makes the evidence actionable. Our solutions are utilized in millions of investigations globally.
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Our Case-to-Closure (C2C) Platform, which encompasses Cellebrite flagship solutions delivered either on premise or through the cloud, is designed to assist our customers to deliver justice faster, smarter and more defensibly from case to closure, thereby helping to close the public safety gap and to create a safer world.
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Our Collect & Review solutions enable first responders, examiners and investigators to accelerate the time required to develop actionable evidence by capturing and processing data from most types of digital sources with respect to legally sanctioned investigations. Our investigative analytics solutions help investigative teams obtain AI-based insights on fused data, delivered in a digestible manner.
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Overview Cellebrite is a leading provider of digital investigative solutions, primarily comprised of software and services, that help public and private sector customers around the world transform their investigative workflows and make digital evidence more accessible, actionable and defensible.
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Our Investigation & Evidence Management solutions provide a centralized suite of solutions to manage the investigation workflow and data across investigative functions more efficiently, breaking down silos and enabling effective collaboration.
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Over the past 15 years, Cellebrite has leveraged its extensive expertise in mobile phones, including its deep understanding in hardware, firmware and operating systems, and in other digital sources to develop and market DI software solutions used to collect, review, decode, decrypt, analyze, share and manage digital evidence across the investigative lifecycle.
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We modernize the entire investigation lifecycle for police departments, public defenders, armed services, legal and corporate security which leads to accelerated investigation speeds and increased crime clearance rates, which helps earn higher community confidence, and enables preservation of data privacy and protection of intellectual property and corporate assets.
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As digital evidence has become integral to nearly every criminal investigation, our solutions are relied upon by our customers to advance the investigative lifecycle.
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We offer customers tools that are designed to support efforts to comply with applicable data privacy rules, including limiting data extraction to the time of an investigation and enabling them to implement access management protocols so that data is only visible to users authorized by our customers.
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Our solutions are designed to help law enforcement agencies protect their communities more effectively and efficiently by advancing investigations, and in that supporting these agencies in their efforts to successfully prosecute criminals, and exonerate the innocent.
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Because so much evidence originates from digital sources, digital evidence can be extremely important in bringing justice. For example, in a case investigated in late 2022, 50 Gigabytes of Child Sexual Abuse Material (CSAM) stored on Cloud Storage was obtained (backed by an appropriate search warrant) and reviewed by a customer through the use of Cellebrite solutions.
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We have established our leadership in digital forensics software used by Digital Forensic Units within law enforcement agencies utilizing our Inseyets solution to access and extract digital evidence from within smartphones, computers, cloud-based applications and other digital sources, and decode that data into readable information that can be shared with investigators, analysts, prosecutors and other relevant professionals to promote legally sanctioned investigations.
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The use of Cellebrite technology assisted the customer, a police department, in making an arrest. In another case, a violent felon was sentenced to a U.S federal prison for drug trafficking and gun crimes through the assistance of data retrieved by the government agency customer using the Cellebrite Collect & Review solutions.
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Our digital forensic software solutions are also used by legal, compliance and risk management, IT, cybersecurity and other corporate staff to support eDiscovery, corporate investigations and incidence response events.
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Searching for this digital evidence manually would have been much more time consuming and difficult in terms of locating the appropriate information. Without the digital intelligence tools of our solution suite, evidence of this criminal activity may never have been identified. Digital data has changed the way cases are managed and prosecuted.
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In recent years, we have augmented our digital forensic software offerings with the Cellebrite Guardian, a scalable, cloud-based case and evidence management platform that helps agencies create a high-fidelity chain of custody to manage the investigative lifecycle for digital evidence, from documenting the initial intake of devices to the sharing and reviewing of evidence with investigators, prosecutors and other law enforcement professionals.
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Investigations may be slower and may not identify relevant materials without the right tools to collect, review, analyze and manage digital data sources. Without the right tools, collection and review of digital evidence is manual and lacks scalability. Investigative analytics of disparate data without use of artificial intelligence (“AI”) to fuse, enrich and classify evidence are unable to generate insights.
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We have also extended our reach into the Investigative Units of law enforcement by developing the Cellebrite Pathfinder, a powerful, artificial intelligence (“AI”)-powered analytics software that is designed to help detectives quickly surface relevant leads and discover connections within enormous volumes of digital data that might be otherwise missed, as well as Cellebrite Smart Search, an open source intelligence tool to advance investigations by automating the collection and review of publicly available online data on persons and organizations of interest. 57 Table of Content Industry Background Public safety is among the top priorities for national, regional and local governments around the world.
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This lack of insights results in investigation teams wasting time trying to dissect tangible insights from deep pools of data. Investigative management is restricted by compliance, governance, and regulation which force investigators into one-on-one communications and printing of files or utilization of thumb drives that are physically delivered by police.
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Unfortunately, a pronounced public safety gap has occurred over the past decade due to a combination of factors including high crime rates, increasingly sophisticated criminals, the proliferation of digital sources, strained law enforcement manpower and limited financial resources, and heightened public scrutiny on police operations.
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The resulting investigation process is ineffective and may introduce data privacy, security and 54 Table of Content other risks. Due to these inefficiencies, the average investigation backlog is three months and crime clearance rates remain low 1 , resulting in significant amounts of criminals remaining on the streets.
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Based on our Cellebrite 2024 Industry Trends Survey, the gap in public safety is creating three major challenges for law enforcement: • Data volume and complexity : Most law enforcement officials that were surveyed agree that digital evidence increases case solvability.
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We deliver a world class leading DI suite of software solutions to manage DI in legally sanctioned investigations. Our technology enables faster data collection, review, fusion and enrichment for smarter analysis. It provides the ability to manage and collaborate efficiently across different investigative functions. Our Suite Of Solutions: Collect & Review .
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However, the volume of structured and unstructured data contained on mobile phones and other digital sources continues to grow with the average mobile phone containing more than 60,000 messages, 32,000 images and 1,000 videos.
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Our Collect & Review solutions enable full or selective extraction of data from major types of digital sources, preservation, analysis and reporting of evidence which include but are not limited to smartphones, feature phones, tablets, computers, the cloud, open source information, GPS devices, memory sticks, drones, and call detail records (“CDRs”) as well as from other sources like the web, deep web and dark web with respect to legally sanctioned investigations.
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Just as notable, advanced mobile phone security and application encryption makes it harder for law enforcement to access and extract relevant information, a trend compounded because approximately two-thirds of the mobile phones involved in an investigation enter the digital forensics lab locked.
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We decode and normalize the data enabling relevant stakeholders to review and validate relevant findings. Investigative Analytics . Our Cellebrite Pathfinder enables intelligent analysis of data, supporting different crime types, different use cases and different personas, which helps lab practitioners, analysts, investigators, prosecutors and agency management gain insights in a digestible manner and solve the respective case.
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Against the backdrop of these trends, many relevant agency personnel still do not believe they have the tools they need to access devices and handle the various data sources and volumes. • Inefficient Processes : To protect the public and bring criminals to justice, law enforcement officials strive to conduct investigations swiftly and effectively.
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We fuse and enrich data from disparate sources related to a crime or incident and connect multiple types of evidence from multiple sources that cover the major dimensions of crime.
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However, public sector investigations substantially rely on traditional, manual processes and workflows, which are often slow and typically conducted in silos. Compounding this trend, with crimes typically having a digital component, device backlog is another challenge that impacts overall efficiency. Many agencies believe that device backlog has worsened over the past years.
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For example, for a crime committed on a city street, our Pathfinder allows the relevant agency to bring together smartphone data, vehicle infotainment data, GPS devices data, license plate data from license plate recognition systems, CDRs from the cellular network and closed-circuit television footage from a nearby building, to provide more comprehensive investigation data on a “single pane of glass.” Investigative Management Solutions .
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For example our 2024 survey showed a 120% increase in the number of days it takes an investigator to receive a report about the data that was extracted from a device between 2021 and 2023. Compounding these issues, even after reviewing the data collected from digital witnesses, most investigators believe that key evidence is either missing, lost or both.
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Our Cellebrite Guardian SaaS solution is a centralized management tool that allows our customers to store data securely in the cloud, optimize communications across teams, enable collaboration and save valuable time and resources. Our technology digitizes and optimizes the investigation process for investigative teams globally.
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Just as problematic, in a typical case, investigators can spend up to 45 hours reviewing messages, photos, videos and closed-circuit television, This often limits how quickly a case can be advanced. • Ethics and Accountability : Law enforcement agencies are often scrutinized about the integrity and effectiveness of their operations and their personnel.
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Our approximately 7,000 customers include approximately 5,300 federal, state and local agencies as well as approximately 1,700 corporations and service providers. Our go-to-market strategy is targeted and customized to fit each of our addressable markets, using a mix of direct sales force and resellers.
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In this environment, it is critical that agencies conduct investigations that adhere to the highest standards, comply with legal and agency requirements, and strengthen the chain of custody.
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We are focused on new customer acquisition as well as on expanding relationships with our existing customers, by focusing on introducing our full suite of solutions, expanding sales volumes, and cultivating new buying centers.
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This puts increased value on proper training and using technology to modernize key workflows, thereby reducing or eliminating costly, time-consuming, manual or otherwise outdated practices that can jeopardize the chain of custody and cause important evidence to be lost, corrupted or declared inadmissible. Digital data has changed the way criminal cases are managed and prosecuted.
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We further seek to acquire new buying centers within our public sector accounts by targeting investigation departments’ decision makers who are accountable for more strategic, transformational implementations of modernized investigative workflows. Industry Background Public sector investigations substantially rely on traditional, manual processes and workflows, which are slow and typically conducted in silos.
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By using the right tools and solutions to collect, review, analyze and manage data from a wide range of digital sources, law enforcement and other agencies can better identify relevant and impactful information contained within vast volumes of complex data at scale.
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Law enforcement agencies often are challenged with the amount of cases involving digital evidence, the variety of digital sources as well as data types resulting with backlogs and low crime clearance rates.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

93 edited+14 added−25 removed42 unchanged
The subscription services revenue is the revenue that is recognized over the life of the subscription and the term-license revenue is what is immediately recognized upon the sale of an on-premise license.
The subscription services revenue is the revenue that is recognized over the life of the subscription and the term-license revenue is what is immediately recognized upon the sale of an on-premise subscription license.
Investing Activities Cash used in investing activities in the year ended December 31, 2022 was $(91.2) million, primarily as a result of purchase of property and equipment in the amount of $6.9 million, investment and maturities in marketable securities, net of $67.1 million and investment and maturities in short term deposits, net of $15.1 million.
Cash used in investing activities in the year ended December 31, 2022 was $91.2 million, primarily as a result of purchase of property and equipment in the amount of $6.9 million, investment and maturities in marketable securities, net of $67.1 million and investment and maturities in short term deposits, net of $15.1 million.
Financing Activities Cash provided by financing activities in the year ended December 31, 2022 was $14 million, mainly as a result of proceeds from exercise of stock options to shares of $12.6 million and proceeds from Employee Share Purchase Plan, net of $1.3 million.
Cash provided by financing activities in the year ended December 31, 2022 was $14 million, mainly as a result of proceeds from exercise of stock options to shares of $12.6 million and proceeds from Employee Share Purchase Plan, net of $1.3 million.
We may also enter into future arrangements to acquire or invest in businesses, products, services, strategic partnerships, and technologies. We believe that our existing cash and cash equivalents, short-term investments and cash flows from operations will be sufficient to fund our operations and capital expenditures for at least the next 12 months.
We may also enter into future arrangements to acquire or invest in businesses, products, services, strategic partnerships, and technologies. We believe that our existing cash and cash equivalents, short-term investments and cash flows from operations will be sufficient to fund our organic operations and capital expenditures for at least the next 12 months.
The subscription services revenue is the revenue that is recognized over the life of the subscription and the term-license revenue is what is immediately recognized upon the sale of an on-premise license.
Subscription revenue is comprised of subscription services and term-license revenue. The subscription services revenue is the revenue that is recognized over the life of the subscription and the term-license revenue is what is immediately recognized upon the sale of an on-premise subscription license.
Share-based Compensation We accounts for share-based compensation to employees and non-employees in accordance with ASC 718, “Compensation — Stock Compensation” (“ASC 718”), which requires companies to estimate the fair value of equity-based payment awards on the date of grant based on the fair value of the awards granted.
Share-based Compensation We accounts for share-based compensation to employees and non-employees in accordance with ASC 718, “Compensation — Stock Compensation”, (“ASC 718”), which requires companies to estimate the fair value of equity-based payment awards on the date of grants based on the fair value of the awards granted.
Additionally, most of our sales are denominated in U.S. dollars, EUR or GBP, which have not been subject to material currency inflation, and our operating expenses are denominated in ILS and U.S. dollar and have not been subject to material currency inflation. C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.
Additionally, most of our sales are denominated in U.S. dollars, EUR or GBP, which have not been subject to material currency inflation, and our operating expenses are denominated in NIS and U.S. dollar and have not been subject to material currency inflation. C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.
However, failure of one or more of these financial institutions is possible and could result in incurred losses. As of December 31, 2022, our cash, cash equivalents and short-term investments were primarily denominated in U.S. dollars.
However, failure of one or more of these financial institutions is possible and could result in incurred losses. As of December 31, 2023, our cash, cash equivalents and short-term investments were primarily denominated in U.S. dollars.
The expected volatility is derived from: (i) historical volatility of comparable companies, in accordance with the expected remaining lives of the option or RSU (ii) historical volatility of the Company’s publicly traded shares, commencing August 30, 2021 and (iii) implied volatility of the Company’s publicly traded Warrants.
The expected volatility is derived from: (i) historical volatility of comparable companies, in accordance with the expected remaining lives of the option (ii) historical volatility of the Company’s publicly traded shares, commencing August 30, 2021 and (iii) implied volatility of the Company’s publicly traded Warrants.
Therefore, the Company accounted for the price adjustment shares and for the restricted sponsor shares as a liability measured at fair value through earnings. Recent Accounting Pronouncements See the Summary of Significant Accounting Policies, included in our audited consolidated statements included in this Annual Report for a description of recently issued accounting pronouncements.
Therefore, the Company accounted for the price adjustment shares and for the restricted sponsor shares as a liability measured at fair value through earnings. 91 Table of Content Recent Accounting Pronouncements See the Summary of Significant Accounting Policies, included in our audited consolidated statements included in this Annual Report for a description of recently issued accounting pronouncements.
Cost of subscription revenue includes all direct cost to deliver and support subscription services, including salaries and related employees’ expenses, allocated overhead such as facilities expenses, third party license fees, fees paid to OEMs, hosting, and IT related expenses . We recognize these costs and expenses upon occurrence. • Cost of Perpetual License and Other .
Cost of subscription revenue includes all direct cost to deliver and support subscription services, including salaries and related employees’ expenses, allocated overhead such as facilities expenses, third party license fees, fees paid to OEMs, hosting, and IT related expenses. We recognize these costs and expenses upon occurrence. • Cost of other non-recurring.
The warrants liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of comprehensive loss. 87 Table of Content The estimated fair value of the private placement warrant liabilities is determined using Level 3 inputs.
The warrants liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of comprehensive loss. The estimated fair value of the private placement warrant liabilities is determined using Level 3 inputs.
Tax Expense (Income) Tax expense (income) (as well as deferred tax assets and liabilities, and liabilities for unrecognized tax benefits) reflect management’s best assessment of estimated current and future taxes to 74 Table of Content be paid. We are subject to income taxes in Israel, the United States, and numerous other foreign jurisdictions.
Tax Expense (Income) Tax expense (income) (as well as deferred tax assets and liabilities, and liabilities for unrecognized tax benefits) reflect management’s best assessment of estimated current and future taxes to be paid. We are subject to income taxes in Israel, the United States, and numerous other foreign jurisdictions.
Actual results could differ from those estimates. 84 Table of Content Please see Notes to Consolidated Financial Statements included in Item 18 of this Annual Report on Form 20-F for a summary of significant accounting policies and the effect on our financial statements.
Actual results could differ from those estimates. Please see Notes to Consolidated Financial Statements included in Item 18 of this Annual Report on Form 20-F for a summary of significant accounting policies and the effect on our financial statements.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary 86 Table of Content differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period of enactment.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period of enactment.
The most significant components of our operating expenses are personnel costs, which is 73 Table of Content included in each component of operating expenses and consists of salaries, benefits, bonuses, stock-based compensation and, with regards to sales and marketing expenses, sales commissions. • Research and development.
The most significant components of our operating expenses are personnel costs, which is included in each component of operating expenses and consists of salaries, benefits, bonuses, stock-based compensation and, with regards to sales and marketing expenses, sales commissions. • Research and development.
We intend to drive new customer growth in both the public sector, mainly with smaller accounts, as well as in the private sector by focusing on enterprise accounts and introducing offerings to address customers’ needs (for example, our additional remote collection offering). Key Metrics In addition to our U.S.
We intend to drive new customer growth in both the public sector, mainly with smaller accounts, as well as in the private sector by focusing on enterprise accounts and introducing new offerings to address customers’ needs (for example, our additional remote collection offering). 74 Table of Content Key Metrics In addition to our U.S.
Revenue Recognition The Company sells its products to its customers either directly or indirectly through distribution channels all of whom are considered end users. For contracts that contain multiple performance obligations, the Company allocates the transaction price to each performance obligation based on the relative standalone selling price (“SSP”) for each performance obligation.
Revenue Recognition The Company sells its products to its customers either directly or indirectly through distribution channels all of whom are considered end customers. 88 Table of Content For contracts that contain multiple performance obligations, the Company allocates the transaction price to each performance obligation based on the relative standalone selling price (“SSP”) for each performance obligation.
Our future capital requirements will depend on many factors, including our rate of revenue growth, timing of renewals and subscription renewal rates, the expansion of our sales and marketing activities, the timing and extent of spending to support product development efforts and expansion into new geographic locations, the timing of introductions of new software products and enhancements to existing software products, the continuing market acceptance of our software offerings and our use of cash to pay for acquisitions, if any.
Our future capital requirements will depend on many factors, including our rate of revenue growth, timing of renewals and subscription renewal rates, the expansion of our sales and marketing activities, the timing and extent of spending to support product development efforts and expansion into new customer base, the timing of introductions of new software products and enhancements to existing software products, and the continuing market acceptance of our software offerings and our use of cash to pay for acquisitions.
Our research and development spending totaled $80.6 million, $65.5 million and $54.4 million for the years ended December 31, 2022, 2021 and 2020 respectively. As described in “Part I, Item 3. Key Information—3.D.
Our research and development spending totaled $84.4 million, $80.6 million and $65.5 million for the years ended December 31, 2023, 2022 and 2021 respectively. As described in “Part I, Item 3. Key Information—3.D.
Mainly: • Share-based compensation expenses utilize varying available valuation methodologies, subjective assumptions and a variety of equity instruments that can impact a company’s non-cash expenses; • Acquired intangible assets are valued at the time of acquisition and are amortized over an estimated useful life after the acquisition, and acquisition-related expenses are unrelated to current operations and neither are comparable to the prior period nor predictive of future results; • To the extent that the above adjustments have an effect on tax (income) expense, such an effect is excluded in the non-GAAP adjustment to net income; • Tax expense, depreciation and amortization expense vary for many reasons that are often unrelated to our underlying performance and make period-to-period comparisons more challenging; and • Financial instruments are remeasured according to GAAP and vary for many reasons that are often unrelated to the Company’s current operations and affect financial income.
Mainly: • Share-based compensation expenses utilize varying available valuation methodologies, subjective assumptions and a variety of equity instruments that can impact a company’s non-cash expenses; • Acquired intangible assets are valued at the time of acquisition and are amortized over an estimated useful life after the acquisition, and acquisition-related expenses are unrelated to current operations and neither are comparable to the prior period nor predictive of future results; • To the extent that the above adjustments have an effect on tax expense (income), such an effect is excluded in the non-GAAP adjustment to net income; • Tax expense (income), and depreciation and amortization expense vary for many reasons that are often unrelated to our underlying performance and make period-to-period comparisons more challenging; and • Financial instruments are remeasured according to GAAP and vary for many reasons that are often unrelated to the Company’s current operations and affect financial income. 76 Table of Content Key Components of Results of Operations Revenue Revenue consists of subscription, other non-recurring, and professional services. • Subscription .
We expect that sales and marketing expenses will continue to increase as we continue to invest in our Go-to-Market activities. • General and administrative. General and administrative expenses primarily consist of personnel, insurance, consultants and facility-related costs for our executive, finance, legal, IT, human resources, administrative personnel, and other corporate expenses, including those associated with the Merger.
We expect that sales and marketing expenses will continue to increase as we continue to invest in our Go-to-Market activities. • General and administrative. General and administrative expenses primarily consist of personnel, insurance, consultants and facility-related costs for our executive, finance, legal, IT, human resources, administrative personnel, and other corporate expenses.
We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all.
We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. Credit Facilities We do not have any credit facilities.
Merger On April 8, 2021, TWC, Cellebrite and Merger Sub entered into the Merger Agreement providing for, upon the terms and subject to the conditions thereof, the Merger between TWC and Cellebrite pursuant to which, among other things, Merger Sub merged with and into TWC at the Effective Time (as defined in the Business Combination Agreement), with TWC continuing as the surviving entity and as a wholly-owned subsidiary of Cellebrite.
Business Overview—Recent Acquisitions. ” 73 Table of Content Merger On April 8, 2021, TWC, Cellebrite and Merger Sub entered into the Merger Agreement providing for, upon the terms and subject to the conditions thereof, the Merger between TWC and Cellebrite pursuant to which, among other things, Merger Sub merged with and into TWC at the Effective Time (as defined in the Merger Agreement), with TWC continuing as the surviving entity and as a wholly-owned subsidiary of Cellebrite.
Contractual Obligations and Commitments As of December 31, 2022, we had commitments of $20.9 million related to office and car leases arrangements, that we cannot cancel or where we would be required to pay a termination fee in the event of cancellation.
Contractual Obligations and Commitments As of December 31, 2023, we had commitments of $15.5 million related to office and car leases arrangements, that we cannot cancel or where we would be required to pay a termination fee in the event of cancellation.
During the fiscal years ended December 31, 2022 and 2021, our capital expenditures amounted to $6.9 million and $5.1 million, respectively, primarily consisting of expenditures related to property and equipment and software, and we expect that our capital expenditures for the next 12 months will relate to the same needs.
During the fiscal years ended December 31, 2023 and 2022, our capital expenditures amounted to $7.9 million and $9.1 million, respectively, primarily consisting of expenditures related to property and equipment and software and intangible assets, and we expect that our capital expenditures for the next 12 months will relate to the same needs.
The combined entity is the successor SEC registrant, meaning that Cellebrite’s financial statements for previous periods will be disclosed in the registrant’s future periodic reports filed with the SEC.
The combined entity is the successor SEC registrant, meaning that Cellebrite’s financial statements for previous periods will be disclosed in the registrant’s future periodic reports filed with the SEC. In December 2023, TWC was dissolved.
The effect of a hypothetical 10% change in foreign currency exchange rates applicable to our business, after considering cash flow hedges, would have had an impact on our results of operations of $0.3 million and $0.1 million, for the years ended December 31, 2022 and 2021, respectively.
The effect of a hypothetical 10% change in foreign currency exchange rates applicable to our business, after considering cash flow hedges, would have had an impact on our results of operations of $8.3 million and $9.3 million, for the year ended December 31, 2023 and 2022, respectively.
For a comparison of our results of operations for the years ended December 31, 2021 and 2020, see “P art I, Item 5. Operating and Financial Review Prospects—A.
For a comparison of our results of operations for the years ended December 31, 2022 and 2021, see “ P art I, Item 5. Operating and Financial Review Prospects—A.
We recognize these costs and expenses upon occurrence. • Cost of Professional Service . Cost of professional service revenue includes salaries and related employees’ expenses, subcontractors and all direct costs related to services such as services materials, allocated overhead for depreciation of equipment, facilities and IT related costs. We recognize these costs and expenses upon occurrence.
Cost of professional service revenue includes salaries and related employees’ expenses, subcontractors and all direct costs related to services such as services materials, allocated overhead such as depreciation of equipment, facilities and IT related costs.
Perpetual license and other gross profit margin decreased from 71% to 39%, during the year ended December 31, 2022, as compared to the year ended December 31, 2021, mainly as a result of lower perpetual revenue and higher hardware revenue mix in 2022.
Other non-recurring and other gross profit margin decreased from 39% to (2)%, during the year ended December 31, 2023, as compared to the year ended December 31, 2022, mainly as a result of lower Perpetual revenue and higher hardware revenue mix in 2023.
Liquidity and Capital Resources ” in our Annual Report on Form 20-F for the fiscal year ended December 31, 2021, filed with the SEC on March 29, 2022, as amended on April 18, 2022, which comparative information is herein incorporated by reference.
Liquidity and Capital Resources ” in our Annual Report on Form 20-F for the fiscal year ended December 31, 2022, filed with the SEC on April 27, 2023, which comparative information is herein incorporated by reference.
Subscription license contracts and maintenance contracts for perpetual licenses are annualized by multiplying the revenue of the last month of the period by 12. Recurring revenue dollar-based net retention rate : Dollar-based net retention rate is calculated by dividing customer recurring revenue by base revenue.
Subscription license contracts and maintenance contracts for other non-recurring are annualized by multiplying a full month revenue as of the last month of the period by 12. Recurring revenue dollar-based net retention rate : Dollar-based net retention rate is calculated by dividing customer recurring revenue by base revenue.
GAAP financial information, we monitor the following key metrics and non-GAAP financial measure in order to help us measure and evaluate the effectiveness of our operations: 70 Table of Content Year Ended December 31, 2022 2021 Annual recurring revenue (ARR) $ 249 $ 187 YoY ARR Growth 33 % 36% Recurring revenue dollar-based net retention rate 130 % 137 % Adjusted EBITDA $ 25.9 $ 47.9 Annual recurring revenue : ARR is defined as the annualized value of active term-based subscription license contracts and maintenance contracts related to perpetual licenses in effect at the end of that period.
GAAP financial information, we monitor the following key metrics and non-GAAP financial measure in order to help us measure and evaluate the effectiveness of our operations: Year Ended December 31, 2023 2022 Annual recurring revenue (ARR) $316 $249 YoY ARR Growth 27% 33% Recurring revenue dollar-based net retention rate 125% 130% Adjusted EBITDA 61.9 25.9 Annual recurring revenue : ARR is defined as the annualized value of active term-based subscription license contracts and maintenance contracts related to other non-recurring in effect at the end of that period.
Due to the short-term nature of these instruments, a hypothetical 10% change in interest rates during any of the periods presented would impact our financial income by $0.4 million for the year ended December 31, 2022. Inflation Risk Inflationary factors, such as increases in our cost of goods sold, may adversely affect our operating results.
Due to the short-term nature of these instruments, a hypothetical 10% change in interest rates during any of the periods presented would have impacted our financial income by approxim at ely $4.8 million for the year ended December 31, 2023. 87 Table of Content Inflation Risk Inflationary factors, such as increases in our cost of goods sold, may adversely affect our operating results.
Operating Income: Operating Income is calculated as Revenue less cost of revenue expenses and operating expenses. non-GAAP Operating Income: Non-GAAP Operating Income is calculate as Operating Income plus issuance expenses, dividend participation compensation, share-based compensation expenses, amortization of intangible assets, and acquisition related costs.
Non-GAAP Operating Income: Non-GAAP Operating Income is calculated as Operating Income plus issuance expenses, share-based compensation expenses, amortization of intangible assets, and acquisition related costs.
Revenue related to other professional services is generally recognized over time and in certain cases at a point in time upon satisfaction of the performance obligation. Service revenue is included in the Company’s consolidated statements of income as service revenue.
Revenue related to other professional services is generally recognized over time and in certain cases at a point in time upon satisfaction of the performance obligation.
We define our customer revenue as the recurring revenue we recognized on the date of measurement from the same customer base included in our measure of base revenue, including recurring revenue resulting from additional sales to those customers.
We define our customer revenue as the recurring revenue we recognized on the date of measurement from the same customer base included in our measure of base revenue, including recurring revenue resulting from additional sales to those customers. Operating Income: Operating Income is calculated as Revenue less cost of revenue expenses and operating expenses.
Cost of perpetual license and other revenue includes all direct costs to deliver perpetual license and other products, including HW costs, fees paid for third party products, materials, salaries and related employees’ expenses, allocated overhead such as depreciation of equipment and IT related expenses, warehouse, manufacturing and supply chain costs.
Cost of other non-recurring revenue includes all direct costs to deliver other non-recurring revenue, including HW costs, fees paid for third party products, materials, salaries and related employees’ expenses, allocated overhead such as depreciation of equipment and IT related expenses, warehouse, manufacturing and supply chain costs. We recognize these costs and expenses upon occurrence. • Cost of Professional Service .
The primary objectives of our investment activities are the preservation of capital, the fulfillment of liquidity needs and the fiduciary control of cash. We do not enter into investments for trading or speculative purposes.
Such interest-earning instruments carry a degree of interest rate risk. The primary objectives of our investment activities are the preservation of capital, the fulfillment of liquidity needs and the fiduciary control of cash. We do not enter into investments for trading or speculative purposes.
The second step is to measure the tax benefit as the largest amount that is greater than 50 percent (cumulative basis) likely to be realized upon settlement. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company classifies interest and penalties related to unrecognized tax benefits as part of income taxes.
The second step is to measure the tax benefit as the largest amount that is greater than 50 percent (cumulative basis) likely to be realized upon settlement. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.
This increase is mainly attributable to an increase in salaries and related costs for employees and subcontractors of $9 million. Sales and marketing Sales and marketing expenses increased by $21 million, or 27%, for the year ended December 31, 2022, as compared to the year ended December 31, 2021.
This increase is mainly attributable to an increase in salaries related costs for employees. Sales and marketing Sales and marketing expenses increased by $13.4 million, or 14%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022 .
Additionally, we plan to promote our offerings to address more private sector use cases. We believe this strategy expands our addressable market, enables new growth opportunities and allows us to continue to deliver differentiated high-value outcomes to our customers. • Grow our customer base .
We believe this strategy expands our addressable market, enables new growth opportunities and allows us to continue to deliver differentiated high-value outcomes to our customers. • Grow our customer base .
The increase primarily relates to higher salaries and related costs for employees and commissions earned by our sales personnel of $13 million and an increase of $2.8 million in travel expenses. General and administrative General and administrative expenses decreased by $7.1 million, or 15%, for the year ended December 31, 2022, as compared to the year ended December 31, 2021.
The increase primarily relates to higher salaries and related costs for employees and commissions earned by our sales personnel of $8.9 million and increase of $4.1 million in Marketing activities. General and administrative General and administrative expenses increased by $2.6 million, or 6%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022.
For more information, see “ Part I, Item 3. Key Information — D. Risk Factors .” Key Factors Affecting Our Performance Our historical financial performance has been, and we expect our financial performance in the future to be, mainly driven by our ability to: • Increase penetration within existing customers .
Key Factors Affecting Our Performance Our historical financial performance has been, and we expect our financial performance in the future to be, mainly driven by our ability to: • Increase penetration within existing customers .
Professional Services Professional services gross profit increased by $5.2 million, or 67% during the year ended December 31, 2022, as compared to the year ended December 31, 2021.
Professional Services Professional services gross profit decreased by $2.0 million, or 15% during the year ended December 31, 2023, as compared to the year ended December 31, 2022.
Risk-free interest rate — The Company determined the risk-free interest rate by using a weighted-average equivalent to the expected term based on the U.S.
Risk-free interest rate — The Company determined the risk-free interest rate by using a weighted-average equivalent to the expected term based on the U.S. Treasury yield curve in effect as of the date of grant.
These transactions are designated as cash flow hedges, as defined under ASC topic 815, “Derivatives and Hedging.” Quantitative and Qualitative Disclosures About Market Risk We are exposed to market risk in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates.
These transactions are designated as cash flow hedges, as defined under ASC topic 815, “Derivatives and Hedging.” 86 Table of Content Quantitative and Qualitative Disclosures About Market Risk We are exposed to market risk in the ordinary course of our business.
This increase is primarily due to hosting expenses, customer success and customer support expenses. Cost of Perpetual License and Other Cost of perpetual license and other revenue marginally increased by $3.2 million, or 32% for the year ended December 31, 2022, as compared to the year ended December 31, 2021.
This increase is primarily due to OEM expenses, customer success and customer support expenses. Cost of Other Non-Recurring Cost of other non-recurring revenue marginally increased by $0.8 million, or 6% for the year ended December 31, 2023, as compared to the year ended December 31, 2022 .
This increase is primarily due to an increase in shipping costs and cost for upgrading existing hardware. Cost of Professional Services Cost of professional services revenue decreased by $0.6 million, or 3% for the year ended December 31, 2022, as compared to the year ended December 31, 2021.
This increase is primarily due to higher hardware revenue offset by a decrease in shipping costs. Cost of Professional Services Cost of professional services revenue decreased by $0.2 million, or 1% for the year ended December 31, 2023, as compared to the year ended December 31, 2022 .
Other revenue consists of revenue from usage-based fees and sale of hardware related to our offering. • Professional Services . Professional Services consists of revenue related to: (i) certified training classes by Cellebrite Academy; (ii) our advanced services; (iii) implementation of our products in connection with our software licenses and (iv) on premise contracted customer success and technical support.
Professional Services consists of revenue related to: (i) certified training sessions by Cellebrite Training; (ii) our advanced services; (iii) implementation of our products in connection with our software licenses and (iv) on premise contracted customer success and technical support. The revenue of professional services is recognized upon the delivery of our services.
In connection with our term-based license and perpetual license arrangements, we generate revenue through maintenance and support 72 Table of Content under renewable subscription, fee-based contracts that include unspecified software updates and upgrades released when and if available as well as software patches and support.
In connection with our term-based license and other non-recurring arrangements, we generate revenue through maintenance and support under renewable subscription, fee-based contracts that include unspecified software updates and upgrades released when and if available as well as software patches and support. Customers with active subscriptions are also entitled to our technical customers’ support. • Other non-recurring .
We account for our Derivative Instruments as either assets or liabilities and carry them at fair value in the consolidated balance sheets. The accounting for changes in the fair value of the derivative depends on the intended use of the derivative and the resulting designation. Our hedging program reduces but does not eliminate the impact of currency exchange rate movements.
We do not enter into Derivative Instruments for trading or speculative purposes. We account for our Derivative Instruments as either assets or liabilities and carry them at fair value in the consolidated balance sheets. The accounting for changes in the fair value of the derivative depends on the intended use of the derivative and the resulting designation.
Subscription gross profit margin marginally decreased from 94% to 92%, during the year ended December 31, 2022, as compared to the year ended December 31, 2021, mainly due to the increase in hosting expenses.
Subscription gross profit margin marginally increased from 92% to 93%, during the year ended December 31, 2023, as compared to the year ended December 31, 2022, mainly due to a decrease in hosting expenses and partner solution expenses.
Payments under these commitments are estimated to be made as follows: (In millions of U.S. dollars) Payments (1) Less than 1 year $ 5,445 1-3 years 9,124 3-5 years 3,037 More than 5 years 3,264 Total $ 20,870 (1) Am 82 Table of Content ounts do not include recourse that we may have to recover termination fees or penalties from clients.
Payments under these commitments are estimated to be made as follows: (In thousands of U.S. dollars) Payments (1) Less than 1 year $ 5,071 1-3 years 5,887 3-5 years 1,907 More than 5 years 2,674 Total $ 15,539 (1) Amounts do not include recourse that we may have to recover termination fees or penalties from clients.
Our market risk exposure is primarily a result of fluctuations in foreign currency exchange rates and interest rates and inflation. Foreign Currency Exchange Risk Our revenue and expenses are primarily denominated in U.S. dollars and ILS and to a lesser extent, other currencies in our relevant subsidiaries.
Foreign Currency Exchange Risk Our revenue and expenses are primarily denominated in U.S. dollars and NIS and to a lesser extent, other currencies in our relevant subsidiaries. As some of our sales are denominated in non-U.S. dollars currencies, our revenue is subject to foreign currency risk.
Expected volatility Options and RSUs — Since the Company has a limited trading history of its Ordinary Shares, there is not sufficient historical volatility for the expected term of the share options.
The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the options. 89 Table of Content Expected volatility Options — Since the Company has a limited trading history of its Ordinary Shares, there is not sufficient historical volatility for the expected term of the share options.
Risk Factors ” and elsewhere in this Annual Report, our actual results may differ materially from those anticipated in these forward-looking statements. Please see “ Special Note About Forward-Looking Statements and Risk Factor Summary ” in this Annual Report. Overview Cellebrite is a leading provider of DI solutions, delivering a suite of software and services for legally sanctioned investigations.
Risk Factors ” and elsewhere in this Annual Report, our actual results may differ materially from those anticipated in these forward-looking statements. Please see “ Special Note About Forward-Looking Statements and Risk Factor Summary ” in this Annual Report.
Subscription revenue increased by $32.6 million, or 18% for the year ended December 31, 2022, as compared to the year ended December 31, 2021, primarily due to an increase of $19.6 million related to the adoption of our leading Collect & Review offering in a term-based license model instead of a perpetual license model with usage-based fees.
Other non-recurring Other non-recurring and other revenue decreased by $7.8 million, or 37% for the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily due to the adoption of our leading Collect & Review offering in a term-based license model instead of a perpetual model and usage-based fees.
Perpetual license and other Perpetual license and other gross profit decreased by $16 million, or 66%, during the year ended December 31, 2022, as compared to the year ended December 31, 2021.
Other non-recurring Other non-recurring and other gross profit decreased by $8.6 million, or 102%, during the year ended December 31, 2023, as compared to the year ended December 31, 2022.
A 10% increase or decrease in current exchange rates would affect our cash, cash equivalents, restricted cash, and short-term investment balances in amount of $3.6 million and $3.2 million as of December 31, 2022 and 2021, respectively. 83 Table of Content Interest Rate Risk As of December 31, 2022, we had cash and cash equivalents of $87.6 million and short-term deposits of $51.3 million.
A 10% increase or decrease in current exchange rates would have affected our cash, cash equivalents, restricted cash, and short-term investment balances in amount of $3.1 million and $3.6 million as of December 31, 2023 and 2022, respectively.
Since the Company does not have sufficient historical share exercise data to calculate the expected term of the share options. The Company determines the expected term using the simplified method. The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the options.
Expected term — The expected term of options granted is based on historical experience and represents the period of time that options granted are expected to be outstanding. Since the Company does not have sufficient historical share exercise data to calculate the expected term of the share options. The Company determines the expected term using the simplified method.
To reduce the impact of foreign exchange risks associated with forecasted future cash flows and the volatility in our consolidated statements of operations, we have established a hedging program. Our foreign currency contracts are generally short-term in duration. We do not enter into Derivative Instruments for trading or speculative purposes.
Furthermore, we anticipate that a material portion of our expenses will continue to be denominated in NIS. To reduce the impact of foreign exchange risks associated with forecasted future cash flows and the volatility in our consolidated statements of operations, we have established a hedging program. Our foreign currency contracts are generally short-term in duration.
Cash and cash equivalents consist of cash in banks, bank deposits, and money market funds. Short-term investments generally consist of bank deposits. Our cash, cash equivalents, and short-term investments are held for working capital purposes. Such interest-earning instruments carry a degree of interest rate risk.
Interest Rate Risk As of December 31, 2023, we had cash and cash equivalents of $189.5 million and short-term deposits of $74.7 million. Cash and cash equivalents consist of cash in banks, bank deposits, and money market funds. Short-term investments generally consist of bank deposits. Our cash, cash equivalents, and short-term investments are held for working capital purposes.
We plan to continue to increase penetration within our existing customers with our DI suite of solutions and by expanding the breadth of our suite of solutions capabilities to provide for continued up-sell and cross-selling opportunities across the DI suite of solutions and to new buying centers.
We plan to continue to increase penetration within our existing customers with our Case-to-Closure Platform of digital investigative software solutions and by expanding the breadth of our solutions capabilities to provide for continued up-sell and cross-selling opportunities primarily within the digital forensics units and investigative units of our law enforcement agency customers.
The following table provides a reconciliation of our net income to Adjusted EBITDA: 71 Table of Content Year Ended December 31, 2022 2021 ($ in thousands) Net income $ 120,805 $ 71,396 Financial income (119,716) (68,483) Tax (income) expense (45) 10,909 Depreciation expenses 6,368 5,036 Amortization of intangible assets 2,826 1,971 Issuance expenses — 11,835 Dividend participation compensation — 966 Share-based compensation expense 13,708 6,480 Acquisition related costs 1,960 7,795 Adjusted EBITDA 25,906 47,905 Adjusted EBITDA margin 10 % 20 % We believe that the use of non-GAAP operating income and Adjusted EBITDA is helpful to investors.
The following table provides a reconciliation of our operating income to Non-GAAP operating income: Year Ended December 31, 2023 2022 ($ in thousands) Operating income $ 33,237 $ 1,044 Issuance expenses (345) — Share-based compensation expense 18,998 13,708 Amortization of intangible assets 3,347 2,826 Acquisition related costs 45 1,960 Non-GAAP operating income $ 55,282 $ 19,538 Adjusted EBITDA : Adjusted EBITDA is calculated as net income plus financial expense (income), tax expense (income), depreciation expenses, amortization of intangible assets, issuance expenses, share-based compensation expense, acquisition related costs. 75 Table of Content The following table provides a reconciliation of our net income to Adjusted EBITDA: Year Ended December 31, 2023 2022 ($ in thousands) Net (loss) income $ (81,100) $ 120,805 Financial expense (income) 108,800 (119,716) Tax expense (income) 5,537 (45) Depreciation expenses 6,664 6,368 Amortization of intangible assets 3,347 2,826 Issuance expenses (345) — Share-based compensation expense 18,998 13,708 Acquisition related costs 45 1,960 Adjusted EBITDA 61,946 25,906 Adjusted EBITDA margin 19 % 10 % We believe that the use of non-GAAP operating income and Adjusted EBITDA is helpful to investors.
Business Overview .” Our revenue was $270.7 million and $246.2 million for the years ended December 31, 2022 and 2021, respectively, representing a year-over-year increase of 10%. The increase in revenue period over 68 Table of Content period was driven by the following: (i) continued sales to existing customer base; and (ii) continuous adoption of our entire portfolio of offering.
The increase in revenue period-over-period was driven by the following: (i) continued sales to existing customer base; and (ii) continuous adoption of our entire portfolio of offering. Net loss of $81.1 million and net income of $120.8 million were incurred for the years ended December 31, 2023 and 2022, respectively, representing a period-over-period decrease of $201.9 million.
The assumptions and estimates were determined as follows: Fair value of Ordinary Shares — The Company’s Ordinary Shares have a limited history of being publicly traded. Prior to the consummation of the merger, the fair value was determined by management, with input from valuation reports prepared by third-party valuation specialists.
Prior to the consummation of the merger, the fair value was determined by management, with input from valuation reports prepared by third-party valuation specialists.
Liquidity and Capital Resources The following tables and narrative set forth our results of operations for the periods presented. For a discussion of our cash flows for the year ended December 31, 2020, see“ Part I, Item 5. Operating and Financial Review Prospects—B.
For a discussion of our cash flows for the year ended December 31, 2021, see “ Part I, Item 5. Operating and Financial Review Prospects—B.
We have seen increase in Annual Recurring Revenue (“ARR”) and dollar-based net retention due to the broad use cases of our DI suite of solutions. • Extend our technology and market leadership position . We intend to strengthen our position as a market-leading DI suite of solutions through investment in research and development and continued innovation.
We have seen increase in Annual Recurring Revenue (“ARR”) and dollar-based net retention due to the broad use cases of our software offerings with public sector and private sector customers. • Extend our technology and market leadership position .
Our cash, cash equivalents, short-term deposits and marketable securities were $206 million and $182 million as of December 31, 2022 and December 31, 2022, respectively. We derive our cash primarily from our business operations. During 2021 we received net proceeds of $17 million from the Merger, all of which remained as of December 31, 2021.
Our cash, cash equivalents, short-term deposits and marketable securities were $331.8 million and $205.7 million as of December 31, 2023 and December 31, 2022, respectively. We derive our cash primarily from our business operations.
Operating Results ” in our Annual Report on Form 20-F for the fiscal year ended December 31, 2021, filed with the SEC on March 29, 2022, as amended on April 18, 2022, which comparative information is herein incorporated by reference. 75 Table of Content Year ended December 31, 2022 2021 ($ in thousands) Revenue: Subscription services $ 153,470 $ 120,889 Term-license 62,487 62,428 Total subscription 215,957 183,317 Perpetual license and other 21,373 34,169 Professional services 33,321 28,760 Total Revenue 270,651 246,246 Cost of revenue: Cost of subscription services 16,875 9,369 Cost of term license 425 2,299 Total subscription 17,300 11,668 Cost of perpetual license and other 12,987 9,817 Cost of professional services 20,459 21,072 Total cost of revenue 50,746 42,557 Gross profit $ 219,905 $ 203,689 Operating expenses: Research and development 80,620 65,541 Sales and marketing 97,387 76,389 General and administrative 40,854 47,937 Total operating expenses 218,861 189,867 Operating income 1,044 13,822 Financial income, net 119,716 68,483 Income before income tax expense 120,760 82,305 Tax (income) expense (45) 10,909 Net income $ 120,805 $ 71,396 Other comprehensive income Unrealized loss on hedging transactions, net of tax (953) (944) Unrealize loss on marketable securities (502) — Foreign currency translation adjustments 414 995 Total other comprehensive (loss) income, net of tax (1,041) 51 Total comprehensive income $ 119,764 $ 71,447 76 Table of Content Results of operations includes share-based compensation expenses: Year ended December 31, 2022 2021 ($ in thousands) Cost of revenue $ 1,283 $ 290 Research and development 2,974 1,076 Sales and marketing 5,041 2,332 General and administrative 4,410 2,782 Total share-based compensation $ 13,708 $ 6,480 The following table summarizes revenue for the year ended December 31 Revenue Year Ended December 31, Change 2022 2021 Amount Percent ($ in thousands) Subscription services $ 153,470 $ 120,889 $ 32,581 27% Term-license 62,487 62,428 59 0% Total subscription 215,957 183,317 32,640 18% Perpetual license and other 21,373 34,169 (12,796) (37%) Professional services 33,321 28,760 4,561 16% Total Revenue $ 270,651 $ 246,246 $ 24,405 10% ____________ Subscription Subscription revenue is comprised of subscription services and term-license revenue.
Operating Results ” in our Annual Report on Form 20-F for the fiscal year ended December 31, 2022, filed with the SEC on April 27, 2023, which comparative information is herein incorporated by reference. 79 Table of Content Year ended December 31, 2023 2022 ($ in thousands) Revenue: Subscription services $ 209,751 $ 153,470 Term-license 70,663 62,487 Total subscription 280,414 215,957 Other non-recurring 13,561 21,373 Professional services 31,135 33,321 Total Revenue 325,110 270,651 Cost of revenue: Cost of subscription services 19,219 16,875 Cost of term license 6 425 Total cost of subscription 19,225 17,300 Cost of other non-recurring 13,766 12,987 Cost of professional services 20,240 20,459 Total cost of revenue 53,231 50,746 Gross profit $ 271,879 $ 219,905 Operating expenses: Research and development 84,386 80,620 Sales and marketing 110,813 97,387 General and administrative 43,443 40,854 Total operating expenses 238,642 218,861 Operating income 33,237 1,044 Financial (expense) income, net (108,800) 119,716 (Loss) income before tax expenses (75,563) 120,760 Tax expense (income) 5,537 (45) Net (loss) income $ (81,100) $ 120,805 Other comprehensive income Unrealized income (loss) on hedging transactions, net of tax 1,252 (953) Unrealize income (loss) on marketable securities 506 (502) Foreign currency translation adjustments (1,039) 414 Total other comprehensive income (loss), net of tax 719 (1,041) Total comprehensive (loss) income $ (80,381) $ 119,764 80 Table of Content Results of operations includes share-based compensation expenses: Year ended December 31, 2023 2022 ($ in thousands) Cost of revenue $ 1,733 $ 1,283 Research and development 4,673 2,974 Sales and marketing 6,478 $ 5,041 General and administrative 6,114 4,410 Total share-based compensation $ 18,998 $ 13,708 The following table summarizes revenue for the year ended December 31 Revenue Year Ended December 31, Change 2023 2022 Amount Percent ($ in thousands) Subscription services $ 209,751 $ 153,470 $ 56,281 37% Term-license 70,663 62,487 8,176 13% Total subscription 280,414 215,957 64,457 30% Other non-recurring 13,561 21,373 (7,812) (37%) Professional services 31,135 33,321 (2,186) (7%) Total Revenue $ 325,110 $ 270,651 $ 54,459 20% Subscription Subscription revenue is comprised of subscription services and term-license revenue.
Gross Profit and Gross Margin Gross profit is revenue less cost of revenue, and gross margin is gross profit as a percentage of revenue.
We recognize these costs and expenses upon occurrence. 77 Table of Content Gross Profit and Gross Margin Gross profit is revenue less cost of revenue, and gross margin is gross profit as a percentage of revenue.
Quarterly Trends in Operating Expenses Operating expenses have generally increased sequentially as a result of our growth and are primarily related to increases in personnel-related costs, including share-based compensation, to support the expanded operations, continued investment in research and development, and expansion of commercial and marketing investments.
Quarterly Trends in Operating Expenses Operating expenses have generally increased sequentially as a result of our growth and are primarily related to increases in personnel-related costs, including share-based compensation, to support the expanded operations, continued investment in research and development, and expansion of commercial and marketing investments. 78 Table of Content Financial (Expense) Income, Net Financial (expense) income, net consists primarily of revaluation of derivative warrant liability, restricted sponsor shares and price adjustment shares, interest income on our short-term deposits, fees to banks and foreign currency realized and unrealized income and loss related to the impact of transactions denominated in a foreign currency and financial investment activities.
This foreign currency exposure gives rise to market risk associated with exchange rate movements of the U.S. dollar against the ILS. Furthermore, we anticipate that a material portion of our expenses will continue to be denominated in ILS.
In addition, a significant portion of our operating costs in Israel, consisting mainly of salaries and related personnel expenses are denominated in NIS. This foreign currency exposure gives rise to market risk associated with exchange rate movements of the U.S. dollar against the NIS.
Cash Flows Year Ended December 31, 2022 2021 ($ in thousands) Net cash provided by operating activities $ 20,577 $ 36,052 Net cash (used in) provided by investing activities $ (91,231) $ 45,226 Net cash used in (provided by) financing activities $ 13,970 $ (68,397) Operating Activities For the year ended December 31, 2022, cash provided by operating activities was $20.6 million, mainly as a result of the following: increase in Deferred Revenue, as a result of increased sales to customers, off-set by increase in inventories, prepaid expenses and other current assets, decrease in trade payables and other accounts payables and accrued expenses. 81 Table of Content For the year ended December 31, 2021, cash provided by operating activities was $36.1 million, mainly as a result of the following: increase in share based compensation and RSU’s expenses of $6.5 million, increase in deferred revenue of $21.8 million as a result of increase of business with customers, increase in trade payables of $4.2 million and depreciation and amortization of $7 million.
For the year ended December 31, 2022, cash provided by operating activities was $20.6 million, mainly as a result of the following: increase in deferred revenue, as a result of increased sales to customers, off-set by increase in inventories, prepaid expenses and other current assets, decrease in trade payables and other accounts payables and accrued expenses. 85 Table of Content Investing Activities Cash used in investing activities in the year ended December 31, 2023 was $22.5 million, primarily as a result of purchase of property and equipment in the amount of $5.2 milli on, purchase of Intangible assets in the amount of $2.7 million, investment and maturities in short term deposits, net of $15.6 million.
We have incurred, and expect to incur, additional annual expenses as a public company for, among other things, directors’ and officers’ liability and board of directors related expenses. Coronavirus (COVID-19) Impact In mid-March 2020, as a result of the COVID-19 pandemic, we moved our operations from our offices to a remote model, allowing employees to work from their homes.
We have incurred, and expect to incur, additional annual expenses as a public company for, among other things, directors’ and officers’ liability and board of directors related expenses.
Net income of $120.8 million and $71.4 million was incurred for the years ended December 31, 2022 and 2021, respectively, representing a period-over-period increase of $49.4 million. This growth primarily reflects the impact of the financial income from presenting the Company’s Warrants, Restricted Sponsor shares liability and Price adjustment shares liability at their fair value.
This decrease primarily reflects the impact of the financial expenses from presenting the Company’s Warrants, Restricted Sponsor shares liability and Price adjustment shares liability at their fair value. Our Adjusted EBITDA for the years ended December 31, 2023 and 2022 was $61.9 million and $25.9 million, respectively and reflects the company’s continuous revenue growth couple be prudent spending management.
For awards with graded vesting schedules subject to service condition, the Company recognize compensation costs based on the straight line attribution method over the requisite service period of the awards.The Company estimates the fair value of share options granted using the Black-Scholes-Merton option-pricing model.
We grant awards that vest upon the satisfaction of service conditions and in certain grant market conditions. For awards with graded vesting schedules subject to service condition, the Company recognize compensation costs based on the straight line attribution method over the requisite service period of the awards.
Marketable securities The Company accounts for investments in marketable securities in accordance with ASC No. 320, “Investments—Debt Securities”. Management determines the appropriate classification of its investments in the debt securities at the time of purchase and re-evaluates such determination at each balance sheet date.
Management determines the appropriate classification of its investments in the debt securities at the time of purchase and re-evaluates such determination at each balance sheet date. As of December 31, 2023, all of the Company's marketable securities investments were classified as "available-for-sale" ("AFS") and are carried at fair value.

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

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Clammer is also a Founding Partner of True Wind Capital Management, L.P., a private equity fund manager focused on the technology industry. Prior to founding True Wind Capital in 2015, Mr. Clammer was with KKR since 1995 where he co-founded and led the Global Technology Group from 2004 to 2013. Mr.
Clammer is also a Founding Partner of True Wind Capital Management, L.P., a private equity fund manager focused on the technology industry. Prior to founding True Wind Capital Management in 2015, Mr. Clammer was with KKR since 1995, where he co-founded and led the Global Technology Group from 2004 to 2013. Mr.
If the administrator is a duly authorized committee of our board of directors, Cellebrite’s board of directors will determine the grant of options to be made, if any, to members of such committee.
If the administrator is a duly authorized committee of our board of directors, Cellebrite’s board of directors will determine the grant of options to be made, if any, to members of such committee.
Section 102 of the Ordinance allows employees, directors and officers who are not “controlling shareholders” (as used under the Ordinance) and are considered Israeli residents to receive favorable tax treatment for compensation in the form of shares or options under certain terms and conditions.
Section 102 of the Ordinance allows employees, directors and officers who are not “controlling shareholders” (as used under the Ordinance) and are considered Israeli residents to receive favorable tax treatment for compensation in the form of shares or options under certain terms and conditions.
Our non-employee service providers and controlling shareholders who are considered Israeli residents may only be granted options under section 3(i) of the Ordinance, which does not provide for similar tax benefits.
Our non-employee service providers and controlling shareholders who are considered Israeli residents may only be granted options under section 3(i) of the Ordinance, which does not provide for similar tax benefits.
Section 102 includes two alternatives for tax treatment involving the issuance of options or shares to a trustee for the benefit of the grantees and also includes an additional alternative for the issuance of options or shares directly to the grantee.
Section 102 includes two alternatives for tax treatment involving the issuance of options or shares to a trustee for the benefit of the grantees and also includes an additional alternative for the issuance of options or shares directly to the grantee.
Such notice is irrevocable and may not be resigned or revised once it has been delivered to Cellebrite its representative. An option may not be exercised for a fraction of a share.
Such notice is irrevocable and may not be resigned or revised once it has been delivered to Cellebrite its representative. An option may not be exercised for a fraction of a share.
After such three month period, all such unexercised options will terminate and the shares covered by such options shall be made available for issuance under the 2021 Share Incentive Plan.
After such three month period, all such unexercised options will terminate and the shares covered by such options shall be made available for issuance under the 2021 Share Incentive Plan.
To the extant it has not been previously exercised, an option will terminate immediately prior to the event.
To the extant it has not been previously exercised, an option will terminate immediately prior to the event.
Exercise . An award under the 2021 Plan may be exercised by providing the Company with a written or electronic notice of exercise and full payment of the exercise price for such shares underlying the award, if applicable, in such form and method as may be determined by the administrator and permitted by applicable law.
An award under the 2021 Plan may be exercised by providing the Company with a written or electronic notice of exercise and full payment of the exercise price for such shares underlying the award, if applicable, in such form and method as may be determined by the administrator and permitted by applicable law.
In the event of a distribution of a cash dividend to all shareholders, the administrator may determine, without the consent of any holder of an award, that the exercise price of an outstanding and unexercised award shall be reduced by an amount equal to the per share gross dividend amount distributed by the Company, subject to applicable law.
In the event of a distribution of a cash dividend to all shareholders, the administrator may determine, without the consent of any holder of an award, that the exercise price of an outstanding and unexercised award shall be reduced by an amount equal to the per share gross dividend amount distributed by the Company, subject to applicable law.
The term of office for external directors for Israeli companies traded on certain foreign stock exchanges, including the Nasdaq may be extended indefinitely in increments of additional three-year terms, in each case provided that the audit committee and the board of directors of the company confirm that, in light of the external director’s expertise and special contribution to the work of the board of directors and its committees, the re-election for such additional period(s) is beneficial to the company, and provided that the external director is re-elected subject to the same shareholder vote requirements (as described above regarding the re-election of external directors).
The term of office for external directors for Israeli companies traded on certain foreign stock exchanges, including Nasdaq may be extended indefinitely in increments of additional three-year terms, in each case provided that the audit committee and the board of directors of the company confirm that, in light of the external director’s expertise and special contribution to the work of the board of directors and its committees, the re-election for such additional period(s) is beneficial to the company, and provided that the external director is re-elected subject to the same shareholder vote requirements (as described above regarding the re-election of external directors).
The audit committee may not include the chairman of the board, a controlling shareholder of the company, a relative of a controlling shareholder, a director employed by or providing services on a regular basis to the company, to a controlling shareholder or to an entity controlled by a controlling shareholder, or a director who derives most of his or her income from a controlling shareholder.
The audit committee may not include the chairman of the board, a controlling shareholder of the company, a relative of a controlling shareholder, a director employed by or providing services on a regular basis to the company, to a controlling shareholder or to an entity controlled by a controlling shareholder, or a director who derives most of his or her income from a controlling shareholder.
Unless otherwise determined by our board of directors, the compensation committee of our board of directors (or such other committee or sub-committee to which our board of directors delegates administration of the ESPP) will administer the ESPP and will have the authority to interpret the terms of the ESPP, determine eligibility under the ESPP, determine when rights to purchase shares shall be granted and the provisions of each offering of such rights, to impose a mandatory holding period under which employees may not dispose or transfer shares under the ESPP, prescribe, revoke and amend forms, rules and procedures relating to the ESPP, and otherwise exercise such powers and to perform such acts as the administrator deems necessary or expedient to promote the best interests of the Company and its subsidiaries and to carry out the intent that the ESPP be treated as an “employee stock purchase plan” within the meaning of Section 423 of the Code for the Section 423 Component. 106 Table of Content Eligibility.
Unless otherwise determined by our board of directors, the compensation committee of our board of directors (or such other committee or sub-committee to which our board of directors delegates administration of the ESPP) will administer the ESPP and will have the authority to interpret the terms of the ESPP, determine eligibility under the ESPP, determine when rights to purchase shares shall be granted and the provisions of each offering of such rights, to impose a mandatory holding period under which employees may not dispose or transfer shares under the ESPP, prescribe, revoke and amend forms, rules and procedures relating to the ESPP, and otherwise exercise such powers and to perform such acts as the administrator deems necessary or expedient to promote the best interests of the Company and its subsidiaries and to carry out the intent that the ESPP be treated as an “employee stock purchase plan” within the meaning of Section 423 of the Code for the Section 423 Component. 111 Table of Content Eligibility.
For more information, see “— External Directors .” Each director, aside from our external directors, the Sponsor Directors, the SUN Directors and IGP Director, will hold office until the annual general meeting of our shareholders for the year in which such director’s term expires, unless the tenure of such director expires earlier pursuant to the Companies Law or unless such director is removed from office as described below.
For more information, see “— External Directors .” Each director, aside from our external directors, the Sponsor Directors and the SUN Directors will hold office until the annual general meeting of our shareholders for the year in which such director’s term expires, unless the tenure of such director expires earlier pursuant to the Companies Law or unless such director is removed from office as described below.
Compensation Committee Role In accordance with the Companies Law, the roles of the compensation committee are, among others, as follows: • making recommendations to the board of directors with respect to the approval of the compensation policy for office holders and, once every three years, regarding any extensions to a compensation policy that was adopted for a period of more than three years (other than following a company’s initial public offering, in which case such approval must occur within 5 years of the initial public offering); • reviewing the implementation of the compensation policy and periodically making recommendations to the board of directors with respect to any amendments or updates of the compensation policy; • resolving whether or not to approve arrangements with respect to the terms of office and employment of office holders; • exempting, under certain circumstances, a transaction with our Chief Executive Officer from the approval of our shareholders. 117 Table of Content • determining, subject to the approval of the board and under special circumstances, whether to override a determination of the company’s shareholders regarding certain compensation related issues.
Compensation Committee Role In accordance with the Companies Law, the roles of the compensation committee are, among others, as follows: • making recommendations to the board of directors with respect to the approval of the compensation policy for office holders and, once every three years, regarding any extensions to a compensation policy that was adopted for a period of more than three years (other than following a company’s initial public offering, in which case such approval must occur within 5 years of the initial public offering); • reviewing the implementation of the compensation policy and periodically making recommendations to the board of directors with respect to any amendments or updates of the compensation policy; • resolving whether or not to approve arrangements with respect to the terms of office and employment of office holders; 123 Table of Content • exempting, under certain circumstances, a transaction with our Chief Executive Officer from the approval of our shareholders. • determining, subject to the approval of the board and under special circumstances, whether to override a determination of the company’s shareholders regarding certain compensation related issues.
However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company’s activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the above mentioned events and amount or criteria; • reasonable litigation expenses, including reasonable attorneys’ fees, incurred by the office holder as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (i) no indictment was filed against such office holder as a result of such investigation or proceeding; and (ii) no financial liability, such as a criminal penalty, was imposed upon him or her as a substitute for the criminal proceeding as a result of such investigation or proceeding or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; and (iii) in connection with a monetary sanction; • reasonable litigation expenses, including legal fees, incurred by the office holder or imposed by a court in proceedings instituted against him or her by the company, on its 124 Table of Content behalf or by a third-party or in connection with criminal proceedings in which the office holder was acquitted or as a result of a conviction for an offense that does not require proof of criminal intent; • expenses, including reasonable litigation expenses and legal fees, incurred by an office holder in relation to an administrative proceeding instituted against such office holder, or certain compensation payments made to an injured party imposed on an office holder by an administrative proceeding, pursuant to certain provisions of the Israeli Securities Law, 5728-1968 (the “Israeli Securities Law”); • expenses, including reasonable litigation expenses and legal fees, incurred by an office holder in relation to an administrative proceeding instituted against such office holder pursuant to certain provisions of the Israeli Economic Competition Law, 5758-1988; and • any other event, occurrence, matter or circumstance under any law with respect to which the Company may, or will be able to, indemnify an office holder.
However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company’s activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the above mentioned events and amount or criteria; • reasonable litigation expenses, including reasonable attorneys’ fees, incurred by the office holder as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (i) no indictment was filed against such office holder as a result of such investigation or proceeding; and (ii) no financial liability, such as a criminal penalty, was imposed upon him or her as a substitute for the criminal proceeding as a result of such investigation or proceeding or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; and (iii) in connection with a monetary sanction; • reasonable litigation expenses, including legal fees, incurred by the office holder or imposed by a court in proceedings instituted against him or her by the company, on its behalf or by a third-party or in connection with criminal proceedings in which the office holder was acquitted or as a result of a conviction for an offense that does not require proof of criminal intent; • expenses, including reasonable litigation expenses and legal fees, incurred by an office holder in relation to an administrative proceeding instituted against such office holder, or certain compensation payments made to an injured party imposed on an office holder by an administrative proceeding, pursuant to certain provisions of the Israeli Securities Law, 5728-1968 (the “Israeli Securities Law”); • expenses, including reasonable litigation expenses and legal fees, incurred by an office holder in relation to an administrative proceeding instituted against such office holder pursuant to certain provisions of the Israeli Economic Competition Law, 5758-1988; and • any other event, occurrence, matter or circumstance under any law with respect to which the Company may, or will be able to, indemnify an office holder.
Directors Ryusuke Utsumi is a Director of Cellebrite, a position which he has held since April 2020. Mr. Utsumi is currently president of SUNCORPORATION after joining SUNCORPORATION in June 2012. Prior to that, Mr. Utsumi served as a General Manager at Chubu Aerospace Industrial Technology Center from June 2009 to June 2012. Prior to that, Mr.
Ryusuke Utsumi is a Director of Cellebrite, a position which he has held since April 2020. Mr. Utsumi is currently president of SUNCORPORATION after joining SUNCORPORATION in June 2012. Prior to that, Mr. Utsumi served as a General Manager at Chubu Aerospace Industrial Technology Center from June 2009 to June 2012. Prior to that, Mr.
In the event of a merger or consolidation of the Company, or a sale of all, or substantially all, of the Company’s shares or assets or other transaction having a similar effect on the Company, or change in the composition of the board of directors, or liquidation or dissolution, or such other transaction or circumstances that the board of directors determines to be a relevant transaction, then without the consent of the grantee, (i) unless otherwise determined by the administrator, any outstanding award will be assumed or substituted by such successor corporation, or (ii) regardless of whether or not the successor corporation assumes or substitutes the award the administrator may (a) provide the grantee with the option to exercise the award as to all or part of the shares, and may provide for an acceleration of vesting of unvested awards, (b) cancel the award and pay in cash, shares of the Company, the acquirer or other corporation which is a party to such transaction or other property as determined by the administrator as fair in the circumstances, or (c) provide that the terms of any award shall be otherwise amended, modified or terminated, as determined by the administrator to be fair in the circumstances. 2021 Employee Share Purchase Plan The ESPP was adopted by our board of directors on August 5, 2021.
In the event of a merger or consolidation of the Company, or a sale of all, or substantially all, of the Company’s shares or assets or other transaction having a similar effect on the Company, or change in the composition of the board of directors, or liquidation or dissolution, or such other transaction or circumstances that the board of directors determines to be a relevant transaction, then without the consent of the grantee, (i) unless otherwise determined by the administrator, any outstanding award will be assumed or substituted by such successor corporation, or (ii) regardless of whether or not the successor corporation assumes or substitutes the award the administrator may (a) provide the grantee with the option to exercise the award as to all or part of the shares, and may provide for an acceleration of vesting of unvested awards, (b) cancel the award and pay in cash, shares of the Company, the acquirer or other corporation which is a party to such transaction or other property as determined by the administrator as fair in the circumstances, or (c) provide that the terms of any award shall be otherwise amended, modified or terminated, as determined by the administrator to be fair in the circumstances. 110 Table of Content 2021 Employee Share Purchase Plan The ESPP was adopted by our board of directors on August 5, 2021.
We currently rely on this “foreign private issuer exemption” only with respect to the quorum requirement for shareholder meetings and the requirement regarding distribution of annual and interim reports. For more information, see “ Part I, Item 16G.
We currently rely on this “foreign private issuer exemption” only with respect to the quorum requirement for shareholder meetings and the requirement regarding distribution of annual reports. For more information, see “ Part I, Item 16G.
In the event of a share split, reverse share split, share dividend, recapitalization, combination or reclassification of the Company’s shares, the administrator in its sole discretion may, and where required by applicable law shall, without the need for a consent of any holder, make an appropriate adjustment in order to adjust (i) the number and class of shares reserved and available for the outstanding awards, (ii) the number and class of shares covered by outstanding awards, (iii) the exercise price per share covered by any award, (iv) the terms and conditions concerning vesting and exercisability and the term and duration of the outstanding awards, and (v) the type or class of security, asset or right underlying the award (which need not be only that of the Company, and may be that of the surviving corporation or 105 Table of Content any affiliate thereof or such other entity party to any of the above transactions), and (vi) any other terms of the award that in the opinion of the administrator should be adjusted; provided that any fractional shares resulting from such adjustment shall be rounded to the nearest whole share unless otherwise determined by the administrator.
In the event of a share split, reverse share split, share dividend, recapitalization, combination or reclassification of the Company’s shares, the administrator in its sole discretion may, and where required by applicable law shall, without the need for a consent of any holder, make an appropriate adjustment in order to adjust (i) the number and class of shares reserved and available for the outstanding awards, (ii) the number and class of shares covered by outstanding awards, (iii) the exercise price per share covered by any award, (iv) the terms and conditions concerning vesting and exercisability and the term and duration of the outstanding awards, and (v) the type or class of security, asset or right underlying the award (which need not be only that of the Company, and may be that of the surviving corporation or any affiliate thereof or such other entity party to any of the above transactions), and (vi) any other terms of the award that in the opinion of the administrator should be adjusted; provided that any fractional shares resulting from such adjustment shall be rounded to the nearest whole share unless otherwise determined by the administrator.
Following such period and until the earlier of (i) the date immediately prior to Cellebrite’s 2023 annual general meeting of its shareholders and (ii) the date on which the Sponsor Parties beneficially own in the aggregate less than one-third (1/3) of the number of Ordinary Shares beneficially owned by the Sponsor Parties on the consummation of the Merger, the Sponsor has the right to appoint a Class III Sponsor Director. • SUNCORPORATION has the right to appoint a Class I SUN Director and a Class II SUN Director until such time as SUNCORPORATION and its affiliates cease to beneficially own in the aggregate at least 20% of the issued and outstanding Ordinary Shares.
Following such period and until the earlier of (i) the date immediately prior to Cellebrite’s 2027 annual general meeting of its shareholders and (ii) the date on which the Sponsor Parties beneficially own in the aggregate less than one-third (1/3) of the number of Ordinary Shares beneficially owned by the Sponsor Parties on the consummation of the Merger, the Sponsor has the right to appoint one Class III Sponsor Director. • SUNCORPORATION has the right to appoint a Class I SUN Director and a Class II SUN Director until such time as SUNCORPORATION and its affiliates cease to beneficially own in the aggregate at least 20% of the issued and outstanding Ordinary Shares.
In addition, vacancies on our board of directors may only be filled by a vote of a simple majority of the directors then in office or in case of a Sponsor Directors, SUN Directors or IGP Director, by a majority of the holders of the respective director appointment rights.
In addition, vacancies on our board of directors may only be filled by a vote of a simple majority of the directors then in office or in case of a Sponsor Directors or SUN Directors, by a majority of the holders of the respective director appointment rights.
Thereafter, an external director may be re-elected by shareholders to serve in that capacity for up to two additional three-year terms, provided that either: (i) his or her service for each such additional term is recommended by one or more shareholders holding at least 1% of the company’s voting rights and is approved at a shareholders meeting by a disinterested majority, where the total number of shares held by non-controlling, disinterested shareholders voting for such re-election exceeds 2% of the aggregate voting rights in the company, subject to additional restrictions set forth in the Companies Law with respect to affiliations of external director nominee; (ii) his or her service for each such additional term is recommended by the board of directors and is approved at a meeting of shareholders by the same majority required for the initial election of an external director (as described above); or (iii) his or her service for each such additional term is suggested by the director himself/herself and is approved at a shareholders meeting by a disinterested majority, where the total number of shares held by non-controlling, disinterested shareholders voting for such re-election exceeds 2% of the aggregate voting rights in the company, subject to additional restrictions set forth in the Companies Law with respect to affiliations of external director nominee.
Thereafter, an external director may be re-elected by shareholders to serve in that capacity for up to two additional three-year terms, provided that either: (i) his or her service for each such additional term is recommended by one or more shareholders holding at least 1% of the company’s voting rights and is approved at a shareholders meeting by a disinterested majority, where the total number of shares held by non-controlling, disinterested shareholders voting for such re-election exceeds 2% of the aggregate voting rights in the company, subject to additional restrictions set forth in the Companies Law with respect to affiliations of external director nominee; 117 Table of Content (ii) his or her service for each such additional term is recommended by the board of directors and is approved at a meeting of shareholders by the same majority required for the initial election of an external director (as described above); or (iii) his or her service for each such additional term is suggested by the director himself/herself and is approved at a shareholders meeting by a disinterested majority, where the total number of shares held by non-controlling, disinterested shareholders voting for such re-election exceeds 2% of the aggregate voting rights in the company, subject to additional restrictions set forth in the Companies Law with respect to affiliations of external director nominee.
An Israeli company may insure an office holder against the following liabilities incurred for acts performed as an office holder if and to the extent provided in the company’s articles of association: • a breach of the duty of loyalty to the company, to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the Company; • a breach of the duty of care to the company or to a third-party, including a breach arising out of the negligent conduct of the office holder; • a financial liability imposed on the office holder in favor of a third-party; • a financial liability imposed on the office holder in favor of a third-party harmed by a breach in an administrative proceeding; • expenses, including reasonable litigation expenses and legal fees, incurred by the office holder as a result of an administrative proceeding instituted against him or her, pursuant to certain provisions of the Israeli Securities Law; and • any other event, occurrence, matters or circumstances under any law with respect to which the company may, or will be able to, insure an office holder.
An Israeli company may insure an office holder against the following liabilities incurred for acts performed as an office holder if and to the extent provided in the company’s articles of association: • a breach of the duty of loyalty to the company, to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the Company; • a breach of the duty of care to the company or to a third-party, including a breach arising out of the negligent conduct of the office holder; 131 Table of Content • a financial liability imposed on the office holder in favor of a third-party; • a financial liability imposed on the office holder in favor of a third-party harmed by a breach in an administrative proceeding; • expenses, including reasonable litigation expenses and legal fees, incurred by the office holder as a result of an administrative proceeding instituted against him or her, pursuant to certain provisions of the Israeli Securities Law; and • any other event, occurrence, matters or circumstances under any law with respect to which the company may, or will be able to, insure an office holder.
However, according to regulations promulgated under the Companies Law, an amendment to an existing arrangement with an office holder (who is not a director) who is subordinate to the Chief Executive Officer shall not require the approval of the compensation committee, if (i) the amendment is approved by the Chief Executive Officer, (ii) the company’s compensation policy provides that a non-material amendment to the terms of service of an office holder (other than the Chief Executive Officer) may be approved by the Chief Executive Officer and (iii) the engagement terms are consistent with the company’s compensation policy. 95 Table of Content Chief Executive Officer Under the Companies Law, the compensation of a public company’s Chief Executive Officer is required to be approved by: (i) the company’s compensation committee; (ii) the company’s board of directors, and (iii) the company’s shareholders (by a special majority vote as discussed above with respect to the approval of director compensation).
However, according to regulations promulgated under the Companies Law, an amendment to an existing arrangement with an office holder (who is not a director) who is subordinate to the Chief Executive Officer shall not require the approval of the compensation committee, if (i) the amendment is approved by the Chief Executive Officer, (ii) the company’s compensation policy provides that a non-material amendment to the terms of service of an office holder (other than the Chief Executive Officer) may be approved by the Chief Executive Officer and (iii) the engagement terms are consistent with the company’s compensation policy. 99 Table of Content Chief Executive Officer Under the Companies Law, the compensation of a public company’s Chief Executive Officer is required to be approved by: (i) the company’s compensation committee; (ii) the company’s board of directors, and (iii) the company’s shareholders (and if not a member of the board, by a special majority vote as discussed above with respect to the approval of director compensation).
In the event of a merger, acquisition, shares sale or assets sale, then 100 Table of Content without the consent of the grantee, the administrator may, but is not required to, (i) cause any outstanding option to be assumed or substituted by such successor corporation, or (ii) regardless of whether or not the successor corporation assumes or substitutes the option (a) provide the grantee with the option to exercise the option as to all or part of the shares, and may provide for an acceleration of vesting of unvested options, or (b) cancel the option and pay in cash, shares of Cellebrite, the acquirer or other corporation which is a party to such transaction or other property as determined by the administrator as fair in the circumstances.
In the event of a merger, acquisition, shares sale or assets sale, then without the consent of the grantee, the administrator may, but is not required to, (i) cause any outstanding option to be assumed or substituted by such successor corporation, or (ii) regardless of whether or not the successor corporation assumes or substitutes the option (a) provide the grantee with the option to exercise the option as to all or part of the shares, and may provide for an acceleration of vesting of unvested options, or (b) cancel the option and pay in cash, shares of Cellebrite, the acquirer or other corporation which is a party to such transaction or other property as determined by the administrator as fair in the circumstances.
Compensation—Compensation of Directors and Executive Officers .” Shareholder Duties Pursuant to the Companies Law, a shareholder has a duty to act in good faith and in a customary manner in exercising his or her rights and in fulfilling his or her duties toward the company and other shareholders and to refrain from abusing his or her power with respect to the company, including, among other things, in voting at a general meeting and at shareholder class meetings with respect to the following matters: • an amendment to the company’s articles of association; • an increase of the company’s authorized share capital; • a merger; or • interested party transactions that require shareholder approval.
Compensation—Compensation of Directors and Executive Officers .” 129 Table of Content Shareholder Duties Pursuant to the Companies Law, a shareholder has a duty to act in good faith and in a customary manner in exercising his or her rights and in fulfilling his or her duties toward the company and other shareholders and to refrain from abusing his or her power with respect to the company, including, among other things, in voting at a general meeting and at shareholder class meetings with respect to the following matters: • an amendment to the company’s articles of association; • an increase of the company’s authorized share capital; • a merger; or • interested party transactions that require shareholder approval.
Risk Factors—Risks Relating to an Investment in our Securities —As a ‘foreign private issuer’ under applicable securities laws and regulations, Cellebrite is permitted to, 108 Table of Content and may, file less or different information with the SEC than a company incorporated in the United States, and will follow certain home country governance practices in lieu of certain Nasdaq requirements applicable to U.S. issuers. ” Board of Directors Under the Companies Law and the Amended Articles, our business and affairs are managed under the direction of our board of directors.
Risk Factors—Risks Relating to an Investment in our Securities —As a ‘foreign private issuer’ under applicable securities laws and regulations, Cellebrite is permitted to, and may, file less or different information with the SEC than a company incorporated in the United States, and will follow certain home country governance practices in lieu of certain Nasdaq requirements applicable to U.S. issuers. ” Board of Directors Under the Companies Law and the Amended Articles, our business and affairs are managed under the direction of our board of directors.
The director appointment rights of the Sponsor, SUNCORPORATION and IGP under the Cellebrite Articles are subject to the following limitations: • The Sponsor has the right to appoint a Class II Sponsor Director and a Class III Sponsor Director during the period commencing on the date of the consummation of the Merger and ending on the earlier of (i) the date immediately following Cellebrite’s 2023 annual general meeting of its shareholders and (ii) the date on which TWC and certain affiliates (the “Sponsor Parties”) beneficially own in the aggregate less than two-thirds (2/3) of the number of Ordinary Shares beneficially owned by the Sponsor Parties on the date of the consummation of the Merger.
The director appointment rights of the Sponsor and SUNCORPORATION under the Cellebrite Articles are subject to the following limitations: • The Sponsor had the right to appoint a Class II Sponsor Director and a Class III Sponsor Director during the period commencing on the date of the consummation of the Merger and ending on the earlier of (i) the date immediately following Cellebrite’s 2023 annual general meeting of its shareholders and (ii) the date on which TWC and certain affiliates (the “Sponsor Parties”) beneficially own in the aggregate less than two-thirds (2/3) of the number of Ordinary Shares beneficially owned by the Sponsor Parties on the date of the consummation of the Merger.
The following is a summary of the salary expenses and social benefit costs of our five most highly compensated executive officers in 2022, or the "Covered Executives." All amounts reported reflect the cost to the Company as recognized in our financial statements for the year ended December 31, 2022.
The following is a summary of the salary expenses and social benefit costs of our five most highly compensated executive officers in 2023, or the "Covered Executives." All amounts reported reflect the cost to the Company as recognized in our financial statements for the year ended December 31, 2023.
In addition, our compensation policy contains compensation recovery provisions which allow us under certain conditions to recover bonuses paid in excess, enable our Chief Executive Officer to approve an immaterial change in the terms of employment of an executive officer who reports directly him (provided that the changes of the terms of employment are in accordance with our compensation policy) 120 Table of Content and allow us to exculpate, indemnify and insure our executive officers and directors to the maximum extent permitted by Israeli law subject to certain limitations set forth therein.
In addition, our compensation policy contains compensation recovery provisions which allow us under certain conditions to recover bonuses paid in excess, enable our Chief Executive Officer to approve an immaterial change in the terms of employment of an executive officer who reports directly him (provided that the changes of the terms of employment are in accordance with our compensation policy) and allow us to exculpate, indemnify and insure our executive officers and directors to the maximum extent permitted by Israeli law subject to certain limitations set forth therein.
As of December 31, 2021, our internal auditor is Deloitte, represented by Ms. Sharon Cohen. Approval of Related Party Transactions under Israeli Law Fiduciary Duties of Directors and Executive Officers The Companies Law codifies the fiduciary duties that office holders owe to a company.
As of December 31, 2023, our internal auditor is Deloitte, represented by Ms. Sharon Cohen. Approval of Related Party Transactions under Israeli Law Fiduciary Duties of Directors and Executive Officers The Companies Law codifies the fiduciary duties that office holders owe to a company.
Armon holds a BSc. degree in Computer Science and Industrial Engineering, and a Master’s degree in System Analysis and Operations Research, both from the Technion, Israel’s Institute of Technology. 89 Table of Content Leeor Ben-Peretz is our Chief Strategy Officer, a position which he has held since February 2020. Prior to serving as Chief Strategy Officer, Mr.
Armon holds a BSc. degree in Computer Science and Industrial Engineering, and a Master’s degree in System Analysis and Operations Research, both from the Technion, Israel’s Institute of Technology. Leeor Ben-Peretz is our Chief Strategy Officer, a position which he has held since February 2020. Prior to serving as Chief Strategy Officer, Mr.
The administrator also has the authority to amend and rescind rules and regulations relating to the 2008 Plan or terminate the 2008 Plan at any time before the date of expiration of its ten year term. 96 Table of Content Eligibility.
The administrator also has the authority to amend and rescind rules and regulations relating to the 2008 Plan or terminate the 2008 Plan at any time before the date of expiration of its ten year term. 100 Table of Content Eligibility.
The term “controlling shareholder” as used in the Companies Law for purposes of all matters related to external directors and for certain other purposes (such as the requirements related to appointment to the audit committee or compensation committee, as described below), means a 111 Table of Content shareholder with the ability to direct the activities of the company, other than by virtue of being an office holder.
The term “controlling shareholder” as used in the Companies Law for purposes of all matters related to external directors and for certain other purposes (such as the requirements related to appointment to the audit committee or compensation committee, as described below), means a shareholder with the ability to direct the activities of the company, other than by virtue of being an office holder.
In the absence of any specific designation by the administrator, a participant may decrease (but not increase) his or her payroll deduction elections one time during each offering period. Exercise of Purchase Right. Amounts contributed and accumulated by the participant will be used to purchase our Ordinary Shares at the end of each offering period.
In the absence of any specific designation by the administrator, a participant may decrease (but not increase) his or her payroll deduction elections one time during each offering period. 112 Table of Content Exercise of Purchase Right. Amounts contributed and accumulated by the participant will be used to purchase our Ordinary Shares at the end of each offering period.
Vesting of awards granted under the 2019 Plan shall be suspended during any unpaid leave of absence, other than in the case of any (i) leave of absence which was pre-approved by the Company explicitly for purposes of continuing the 102 Table of Content vesting of Awards, or (ii) transfers between locations of the Company or any of its Affiliates, or between the Company and any of its Affiliates, or any respective successor thereof.
Vesting of awards granted under the 2019 Plan shall be suspended during any unpaid leave of absence, other than in the case of any (i) leave of absence which was pre-approved by the Company explicitly for purposes of continuing the vesting of Awards, or (ii) transfers between locations of the Company or any of its Affiliates, or between the Company and any of its Affiliates, or any respective successor thereof.
Unless otherwise determined by 107 Table of Content the administrator, the purchase price of the shares will be 85% of the lower of the fair market value of our Ordinary Shares on (i) the first trading day of the offering period or (ii) the last trading day of the offering period (and may not be lower than such amount with respect to the Section 423 Component).
Unless otherwise determined by the administrator, the purchase price of the shares will be 85% of the lower of the fair market value of our Ordinary Shares on (i) the first trading day of the offering period or (ii) the last trading day of the offering period (and may not be lower than such amount with respect to the Section 423 Component).
The exercise price of an Incentive Stock Option may not be less than 100% of the fair market value of the underlying share on the date of grant or 104 Table of Content such other amount as may be required pursuant to the Code, and in the case of Incentive Stock Options granted to ten percent stockholders, not less than 110%.
The exercise price of an Incentive Stock Option may not be less than 100% of the fair market value of the underlying share on the date of grant or such other amount as may be required pursuant to the Code, and in the case of Incentive Stock Options granted to ten percent stockholders, not less than 110%. Exercise .
Notwithstanding any of the foregoing, if a grantee’s employment or services with Cellebrite or any of its affiliates is terminated for “cause” (as defined in the 2019 Option Plan), all outstanding options held by such grantee (whether vested or unvested) will terminate on the date of such termination and the shares covered by such options shall be made available for issuance under the 2021 Share Incentive Plan.
Notwithstanding any of the foregoing, if a grantee’s employment or services with Cellebrite or any of its affiliates is terminated for “cause” (as defined in the 2019 Option Plan), all outstanding options held by such grantee (whether vested or unvested) will terminate on the date of such termination and the shares covered by such options shall be made available for issuance under the 2021 Share Incentive Plan. 104 Table of Content Transactions.
Notwithstanding the foregoing, the administrator may upon such event amend, modify or terminate the terms of any award as it shall deem, in good faith, appropriate. 2021 Share Incentive Plan The 2021 Share Incentive Plan (the “2021 Plan”), was adopted by our board of directors on August 5, 2021.
Notwithstanding the foregoing, the administrator may upon such event amend, modify or terminate the terms of any award as it shall deem, in good faith, appropriate. 107 Table of Content 2021 Share Incentive Plan The 2021 Share Incentive Plan (the “2021 Plan”), was adopted by our board of directors on August 5, 2021.
Clammer has served on the boards of several public companies over the past 20 years. Mr. Clammer currently serves as, as Chairman of the Board of LeadVenture since 2017, as a director of e-Emphasys since 2022, as a director of Open Lending since 2020, and as a director of Rover Group, Inc (Nasdaq: ROVER) since 2021.
Clammer has served on the boards of several public companies over the past 20 years. Mr. Clammer currently serves as Chairman of the Board of LeadVenture since 2017, as a director of VitalEdge Technologies (fka e-Emphasys) since 2022, as a director of Open Lending since 2020 and as a director of Rover Group, Inc (Nasdaq: ROVER) since 2021.
Certain awards under the 2019 Plan may constitute or provide for a deferral of compensation, subject to Section 409A of the Code, which may impose additional requirements on the terms and conditions of such awards. Awards. The 2019 Plan provides for the grant of restricted shares, RSUs or other share-based awards. 101 Table of Content Restricted Shares .
Certain awards under the 2019 Plan may constitute or provide for a deferral of compensation, subject to Section 409A of the Code, which may impose additional requirements on the terms and conditions of such awards. Awards. The 2019 Plan provides for the grant of restricted shares, RSUs or other share-based awards. Restricted Shares .
For a description of the implications of Section 102, see above under the description of the 2019 Option Plan. Grants. All awards granted pursuant to the 2021 Plan will be evidenced by an award agreement, in a form approved by the administrator in its sole discretion.
For a description of the implications of Section 102, see above under the description of the 2019 Option Plan. 108 Table of Content Grants. All awards granted pursuant to the 2021 Plan will be evidenced by an award agreement, in a form approved by the administrator in its sole discretion.
An option may be subject to such other terms and 99 Table of Content conditions on the time or times when it may be exercised (including by way of performance conditions), as the Administration may deem appropriate. The vesting provisions of individual options may vary. Exercise.
An option may be subject to such other terms and conditions on the time or times when it may be exercised (including by way of performance conditions), as the Administration may deem appropriate. The vesting provisions of individual options may vary. Exercise.
An office holder is defined in the Companies Law as a general manager, chief business manager, deputy general manager, vice general manager, any other person assuming the responsibilities of any of these 121 Table of Content positions regardless of such person’s title, a director and any other manager directly subordinate to the general manager.
An office holder is defined in the Companies Law as a general manager, chief business manager, deputy general manager, vice general manager, any other person assuming the responsibilities of any of these positions regardless of such person’s title, a director and any other manager directly subordinate to the general manager.
Under the Companies Law, external directors of a company are prohibited from receiving, 112 Table of Content directly or indirectly, any compensation from the company other than for their services as external directors pursuant to the Companies Law and the regulations promulgated thereunder.
Under the Companies Law, external directors of a company are prohibited from receiving, directly or indirectly, any compensation from the company other than for their services as external directors pursuant to the Companies Law and the regulations promulgated thereunder.
Gruber currently serves as an Independent or External Director at Nova Ltd. and ICL Group ltd. Ms. Gruber is a certified public accountant and holds a Bachelor’s degree in Accounting and Economics from Tel Aviv University, Israel.
Gruber currently serves as an External Director at ICL Group Ltd. Ms. Gruber is a certified public accountant and holds a Bachelor’s degree in Accounting and Economics from Tel Aviv University, Israel.
Each option will expire ten years from the date of the grant thereof, or upon the earlier termination of the grantee’s employment, unless such shorter term of expiration is otherwise designated by the administrator. Awards.
Each option will expire ten years from the date of the grant thereof, or upon the earlier termination of the grantee’s employment, unless such shorter term of expiration is otherwise designated by the administrator. 103 Table of Content Awards.
Directors, Senior Management and Employees—C. Board Practices—Approval of Related Party Transactions under Israeli Law—Exculpation, Insurance and Indemnification of Office Holders ” and is incorporated herein by reference. C.
Directors, Senior Management and Employees—C. Board Practices—Approval of Related Party Transactions under Israeli Law—Exculpation, Insurance and Indemnification of Office Holders ” and is incorporated herein by reference. 113 Table of Content C.
The maximum number Ordinary shares available for issuance under the 2021 Plan is equal to the sum of (i) 18,716,873 shares, equal to 10% of our outstanding shares, (ii) any shares subject to awards under the 2008 and the 2019 Option Plans that expire, or are cancelled, terminated, forfeited or settled in cash in lieu of issuance of shares or became unexercisable without having been exercised, and (iii) an annual increase on the first day of each year beginning in 2022 and on January 1st of each calendar year thereafter during the term of the 2021 Plan, equal to 5% of the outstanding Ordinary shares of the Company on the last day of the immediately 103 Table of Content preceding calendar year.
The maximum number of Ordinary shares available for issuance under the 2021 Plan is equal to the sum of (i ) 18,716,872 shares, equal to 10% of our outstanding shares immediately after the closing of the Merger, (ii) any shares subject to awards under the 2008 and the 2019 Option Plans that expire, or are cancelled, terminated, forfeited or settled in cash in lieu of issuance of shares or became unexercisable without having been exercised, and (iii) an annual increase on the first day of each year beginning in 2022 and on January 1st of each calendar year thereafter during the term of the 2021 Plan, equal to 5% of the outstanding Ordinary shares of the Company on the last day of the immediately preceding calendar year.
Assumptions and key variables used in the calculation of such amounts are described in Note 13 to our audited consolidated financial statements included in Item 18 of this Annual Report.
Assumptions and key variables used in the calculation of such amounts are described in N ote 13 to our audited consolidated financial statements included in Item 18 of this Annual Report.
In no event will more than 36,150,000 Ordinary Shares (subject to adjustment as provided for in the ESPP) be available for issuance under the Section 423 Component. ESPP Administration.
In no event will more than 36,150,000 Or dinary Shares (subject to adjustment as provided for in the ESPP) be available for issuance under the Section 423 Component. ESPP Administration.
Nadine Baudot-Trajtenberg and Dafna Gruber are considered external directors as required by Israeli Law, and together with Elly Keinan the three are considered independent directors under Israeli law (for the avoidance of doubt, the definition of independent director under Israeli Law differs than the definition under Nasdaq Rules).
For more information, see “— External Directors .” Nadine Baudot-Trajtenberg and Dafna Gruber are considered external directors as required by Israeli Law, and together with Elly Keinan the three are considered independent directors under Israeli law (for the avoidance of doubt, the definition of independent director under Israeli Law differs than the definition under Nasdaq Rules).
We pay each of our non-employee directors (including our external directors), in accordance with the Companies Law, an annual retainer of $45 thousand, and with respect to an expert external director (as such term is defined in the Companies Law), an annual retainer of $60 thousand.
We pay each of our non-employee directors, except for our executive chairman (including our external directors in accordance with the Companies Law), an annual retainer of $45 thousand, and with respect to an expert external director (as such term is defined in the Companies Law), an annual retainer of $60 thousand.
The 2019 Plan provides for the grant and issuance of restricted shares, RSUs or other share-based awards (collectively, awards) to employees, directors, officers, consultants, advisors and other service providers of Cellebrite and its affiliates. Authorized Shares . As of December 31, 2022, there were awards related to 71,351 Ordinary Shares outstanding under the 2019 Plan. Administration.
The 2019 Plan provides for the grant and issuance of restricted shares, RSUs or other share-based awards (collectively, awards) to employees, directors, officers, consultants, advisors and other service providers of Cellebrite and its affiliates. Authorized Shares . As of December 31, 2023, there were no awards related to Ordinary Shares outstanding under the 2019 Plan. Administration.
Board Diversity The table below provides certain information regarding the diversity of our board of directors as of the date of this Annual Report Board Diversity Matrix (as of April 27, 2023) Country of Principal Executive Offices: Israel Foreign Private Issuer Yes Disclosure Prohibited under Home Country Law No Total Number of Directors 9 Female Male Non- Binary Did Not Disclose Gender 92 Table of Content Part I: Gender Identity Directors 2 6 0 1 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ+ 0 Did Not Disclose Demographic Background 2 Family Relationships There are no family relationships between any of our executive officers and our directors.
Board Diversity The table below provides certain information regarding the diversity of our board of directors as of the date of this Annual Report Board Diversity Matrix (as of March 10, 2024) Country of Principal Executive Offices: Israel Foreign Private Issuer Yes 95 Table of Content Disclosure Prohibited under Home Country Law No Total Number of Directors 9 Female Male Non- Binary Did Not Disclose Gender Part I: Gender Identity Directors 2 6 0 1 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ+ 0 Did Not Disclose Demographic Background 3 Family Relationships There are no family relationships between any of our executive officers and our directors.
Our audit committee consists of Dafna Gruber, Nadine Baudot-Trajtenberg and William Heldfond, each of whom is an independent director in accordance with Rule 10A‑3(b)(1) under the Exchange Act and satisfies the independent director requirements under the Nasdaq rules. Dafna Gruber serves as the chairperson of the audit committee.
Our audit committee consists of Dafna Gruber, Nadine Baudot-Trajtenberg and Brandon Van Buren, each of whom is an independent director in accordance with Rule 10A‑3(b)(1) under the Exchange Act and satisfies the independent director requirements under the Nasdaq rules. Dafna Gruber serves as the chairperson of the audit committee.
The relevant amounts underlying the equity awards granted to our officers in previous years will continue to be expensed in our financial statements over a four-year period on account of the grants given in previous years.
The relevant amo unts underlying the equity awards granted to our executive officers in previous years will continue to be expensed in our financial statements over a four-year period on account of the grants given in previous years.
Our board of directors has determined that each of our directors, other than Mr. Carmil, is an independent director as defined in the Nasdaq corporate governance rules. 110 Table of Content Chairperson of the Board The Amended Articles provide that the Chairperson of the board of directors is appointed by the members of the board of directors from among them.
Our board of directors has determined that each of our directors, other than Mr. Carmil and Mr. Hogan, is an independent director as defined in the Nasdaq corporate governance rules. Chairperson of the Board The Amended Articles provide that the Chairperson of the board of directors is appointed by the members of the board of directors from among them.
Clammer is a Director of Cellebrite, a position which he has held since the consummation of the Merger. Mr. Clammer served as the Chief Executive Officer and a Director of TWC from November 2020 until the consummation of the Merger. Mr.
Clammer is a Director of Cellebrite, a position which he has held since the consummation of the Merger. Mr. Clammer served as the Chief Executive Officer and a Director of TWC Tech Holdings II, LLC, from November 2020 until the consummation of the Merger. Mr.
On the first day of each fiscal year beginning with our 2023 fiscal year and ending on and including the fiscal year of 2033, such pool of Ordinary Shares shall be increased by that number of our Ordinary Shares equal to the lesser of: • 1% of the outstanding Ordinary Shares as of the last day of the immediately preceding fiscal year, determined on a fully diluted basis; or • such smaller amount as our board of directors may determine.
On the first day of each fiscal year beginning with our 2023 fiscal year and ending on and including the fiscal year of 2033, the initial pool of Ordinary Shares available for issuance under the ESPP has and shall be increased by that number of our Ordinary Shares equal to the lesser of: • 1% of the outstanding Ordinary Shares as of the last day of the immediately preceding fiscal year, determined on a fully diluted basis; or • such smaller amount as our board of directors may determine.
Utsumi served as the Incubation Manager at Aichi Venture House from March 2008 to June 2009. Yonatan Domnitz is a Director of Cellebrite, a position which he has held since April 2020. Mr. Domnitz was appointed as a Director of SUNCORPORATION, the parent company of Cellebrite, in 90 Table of Content April 2020 and as a director of Bascoft Ltd.
Utsumi served as the Incubation Manager at Aichi Venture House from March 2008 to June 2009. Yonatan Domnitz is a Director of Cellebrite, a position which he has held since April 2020. Mr. Domnitz was appointed as a Director of SUNCORPORATION, the parent company of Cellebrite, in April 2020.
In addition, upon election, non-employee directors were granted with restricted share units under our 2021 Equity Incentive Plan at a fair market value of $150 thousand, which vest in three equal annual installments (the "Initial Grant").
In August 2021, upon election, non-employee directors were granted with restricted share units under our 2021 Equity Incentive Plan at a fair market value of $150 thousand, which vest in three equal annual installments (the "Initial Grant") as a one time event.
Any Shares (a) underlying an option granted under the 2019 Option Plan or an option granted under the 2008 Plan (and any sub-plans) (the “Prior Plans”) (in an amount not to exceed 16,235,405 Shares under the Prior Plan(s)) that has expired, or was cancelled, terminated, forfeited or settled in cash in lieu of issuance of shares, for any reason, without having been exercised; (b) if permitted by Cellebrite, tendered to pay the exercise price of an option (or the exercise price or other purchase price of any option under the Prior Plan(s)), or withholding tax obligations with respect to an option (or any options under the Prior Plan(s)); or (c) if permitted by the Company, subject to an option (or any option under the Prior Plan(s)) that are not delivered to a Grantee because such shares are withheld to pay the exercise price of such option (or of any option under the Prior Plan(s)), or withholding tax obligations with respect to such 98 Table of Content option (or such other option); shall automatically, and without any further action on the part of Cellebrite or any grantee, again be available for grant of options and shares issued upon exercise of (if applicable) vesting thereof for the purposes of the 2019 Option Plan (unless the 2019 Option Plan shall have been terminated) or unless the board determines otherwise.
Ordinary shares subject to options granted under the 2019 Option Plan that expire or become unexercisable without having been exercised in full will become available again for future grant under the 2021 Share Incentive Plan. 102 Table of Content Any Shares (a) underlying an option granted under the 2019 Option Plan or an option granted under the 2008 Plan (and any sub-plans) (the “Prior Plans”) (in an amount not to exceed 16,921,120 Shares under the Prior Plan(s)) that has expired, or was cancelled, terminated, forfeited or settled in cash in lieu of issuance of shares, for any reason, without having been exercised; (b) if permitted by Cellebrite, tendered to pay the exercise price of an option (or the exercise price or other purchase price of any option under the Prior Plan(s)), or withholding tax obligations with respect to an option (or any options under the Prior Plan(s)); or (c) if permitted by the Company, subject to an option (or any option under the Prior Plan(s)) that are not delivered to a Grantee because such shares are withheld to pay the exercise price of such option (or of any option under the Prior Plan(s)), or withholding tax obligations with respect to such option (or such other option); shall automatically, and without any further action on the part of Cellebrite or any grantee, again be available for grant of options and shares issued upon exercise of (if applicable) vesting thereof for the purposes of the 2019 Option Plan (unless the 2019 Option Plan shall have been terminated) or unless the board determines otherwise.
Prior to joining Cellebrite, Lisa was the Vice President of Corporate Marketing at FARO from October 2019 to October 2022. Prior to that, she was the Chief Marketing Officer at Huron from May 2017 to October 2019.
Cole was the Vice President of Corporate Marketing at FARO from October 2019 to October 2022. Prior to that, she was the Chief Marketing Officer at Huron from May 2017 to October 2019.
The Companies Law provides that a person is not qualified to be appointed as an external director if (i) the person is a relative of a controlling shareholder of the company, or (ii) if that person or his or her relative, partner, employer, another person to whom he or she was directly or indirectly subordinate, or any entity under the person’s control, has or had, during the two years preceding the date of appointment as an external director: (a) any affiliation or other disqualifying relationship with the company, with any person or entity controlling the company or a relative of such person, or with any entity controlled by or under common control with the company; or (b) in the case of a company with no controlling shareholder or any shareholder holding 25% or more of its voting rights, had at the date of appointment as an external director, any affiliation or other disqualifying relationship with a person then serving as chairman of the board or Chief Executive Officer, a holder of 5% or more of the issued share capital or voting power in the company or the most senior financial officer.
The Companies Law provides that a person is not qualified to be appointed as an external director if (i) the person is a relative of a controlling shareholder of the company, or (ii) if that person or his or her relative, partner, employer, another person to whom he or she was directly or indirectly subordinate, or any entity under the person’s control, has or had, during the two years preceding the date of appointment as an external director: (a) any affiliation or other disqualifying relationship with the company, with any person or entity controlling the company or a relative of such person, or with any entity controlled by or under common control with the company; or (b) in the case of a company with no controlling shareholder or any shareholder holding 25% or more of its voting rights, had at the date of appointment as an external director, any affiliation or other disqualifying relationship with a person then serving as chairman of the board or Chief Executive Officer, a holder of 5% or more of the issued share capital or voting power in the company or the most senior financial officer. 118 Table of Content The term “relative” is defined in the Companies Law as a spouse, sibling, parent, grandparent or descendant; spouse’s sibling, parent or descendant; and the spouse of each of the foregoing persons.
With respect to the directors appointed pursuant to the specific appointment rights described above: one Sponsor Director serves in Class II (the “Class II Sponsor Director”) and the other Sponsor Director serves in Class III (the “Class III Sponsor Director”); one SUN Director serves in Class I (the 109 Table of Content “Class I SUN Director”) and the other SUN Director serves in Class II (the “Class II SUN Director”); and the IGP Director serves in Class II.
With respect to the directors appointed pursuant to the specific appointment rights described above: one Sponsor Director serves in Class II (the “Class II Sponsor Director”) and the other Sponsor Director serves in Class III (the “Class III Sponsor Director”); one SUN Director serves in Class I (the “Class I SUN Director”) and the other SUN Director serves in Class II (the “Class II SUN Director”).
Under the Israeli Companies Law, our audit committee is responsible for: • 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 of directors to improve such practices; • determining whether to approve certain related party transactions (including transactions in which an office holder has a personal interest and whether such transaction is extraordinary or material under the Israeli Companies Law) (see “— Approval of Related Party Transactions Under Israeli Law ”); • establishing the approval process (including, potentially, the approval of the audit committee and conducting a competitive procedure supervised by the audit committee) for certain transactions with a controlling shareholder or in which a controlling shareholder has a personal interest; • where the board of directors approves the working plan of the internal auditor, examining such working plan before its submission to the board of directors and proposing amendments thereto; • examining our internal audit controls and internal auditor’s performance, including whether the internal auditor has sufficient resources and tools to fulfill his responsibilities; • examining the scope of our auditor’s work and compensation and submitting a recommendation with respect thereto to our board of directors or shareholders, depending on which of them is considering the appointment of our auditor; and • establishing procedures for the handling of employees’ complaints as to the management of our business and the protection to be provided to such employees.
Under the Israeli Companies Law, our audit committee is responsible for: • 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 of directors to improve such practices; • determining whether to approve certain related party transactions (including transactions in which an office holder has a personal interest and whether such transaction is extraordinary or material under the Israeli Companies Law) (see “— Approval of Related Party Transactions Under Israeli Law ”); • establishing the approval process (including, potentially, the approval of the audit committee and conducting a competitive procedure supervised by the audit committee) for certain transactions with a controlling shareholder or in which a controlling shareholder has a personal interest; • where the board of directors approves the working plan of the internal auditor, examining such working plan before its submission to the board of directors and proposing amendments thereto; • examining our internal audit controls and internal auditor’s performance, including whether the internal auditor has sufficient resources and tools to fulfill his responsibilities; • examining the scope of our auditor’s work and compensation and submitting a recommendation with respect thereto to our board of directors or shareholders, depending on which of them is considering the appointment of our auditor; and • establishing procedures for the handling of employees’ complaints as to the management of our business and the protection to be provided to such employees. 122 Table of Content Our audit committee may not approve any actions requiring its approval (see “— Approval of Related Party Transactions Under Israeli Law ”), unless at the time of the approval a majority of the committee’s members are present, which majority consists of unaffiliated directors including at least one external director.
The Amended Articles allow us to exculpate, indemnify, and insure our officer holders for any liability imposed on them as a consequence of an act (including any omission) which was performed by virtue of being an office holder.
The Amended Articles allow us to exculpate, indemnify, and insure our officer holders for any liability imposed on them as a consequence of an act (including any omission) which was performed by virtue of being an office holder. Our office holders are currently covered by a directors and officers’ liability insurance policy.
She has previously served on several boards, including of the holding company of Menora Mivtachim, one of Israel’s largest financial groups, Gazit Globe, a leading global real estate company, Bank Leumi Luxembourg, Bank Leumi Switzerland . Dr.
Baudot-Trajtenberg has served on several boards, including the holding company of Menora Mivtachim, one of Israel’s largest financial groups, Gazit Globe, a leading global real estate company, Bank Leumi Luxembourg, Bank Leumi Switzerland. Dr. Baudot-Trajtenberg holds a BSc.
Following, the Initial Grant (and going forward), at each annual general meeting of our shareholders, beginning with the annual general meeting to be held in 2023, and provided the director is still in office, our non-employee director are granted restricted share units under our incentive plan at a 94 Table of Content fair market value of $100 thousand as of the date of grant, which fully vest on the first anniversary of the grant date, respectively (the “Annual Grant”).
Following the Initial Grant and going forward, at each annual general meeting of our shareholders, beginning with the annual general meeting that was held in 2023, and provided the director is still in office, our non-employee director other than our executive chairman are granted restricted share units under our incentive plan at a fair market value of $100 thousand as of the date of grant, which fully vest on the first anniversary of the grant date, respectively (the “Annual Grant”).
This amount includes approximately $0.3 million set aside or accrued to provide pension, severance, retirement or similar benefits or expenses, but does not include business travel, relocation, professional and business association dues and expenses reimbursed to office holders, 93 Table of Content and other benefits commonly reimbursed or paid by companies in Israel.
This amount includes approxim ately $0.5 million set aside or accrued to provide pension, severance, retirement or similar benefits or expenses, but does not include business travel, relocation, professional and business association dues and expenses reimbursed to office holders, and other benefits commonly reimbursed or paid by companies in Israel.
Notwithstanding any of the foregoing, if a grantee’s employment or services with Cellebrite is terminated for “cause” (as defined in the 2008 Plan), all outstanding options held by such grantee 97 Table of Content (whether vested or unvested) will terminate on the date of such termination and the shares covered by such options shall be made available for issuance under the 2021 Share Incentive Plan.
Any options which are unvested as of the date of such termination or which are vested but not then exercised within the 6 months period following such date, will terminate and the shares covered by such options shall be made available for issuance under the 2021 Share Incentive Plan. 101 Table of Content Notwithstanding any of the foregoing, if a grantee’s employment or services with Cellebrite is terminated for “cause” (as defined in the 2008 Plan), all outstanding options held by such grantee (whether vested or unvested) will terminate on the date of such termination and the shares covered by such options shall be made available for issuance under the 2021 Share Incentive Plan.
A director of one company may not be appointed as an external director of another company if a director of the other company is acting as an external director of the first company at such time. 113 Table of Content According to the Companies Law and regulations promulgated thereunder, a person may be appointed as an external director only if he or she has professional qualifications or if he or she has accounting and financial expertise (each, as defined below); provided that at least one of the external directors must be determined by our board of directors to have accounting and financial expertise.
According to the Companies Law and regulations promulgated thereunder, a person may be appointed as an external director only if he or she has professional qualifications or if he or she has accounting and financial expertise (each, as defined below); provided that at least one of the external directors must be determined by our board of directors to have accounting and financial expertise.
No further grants of options were allowed after the Company’s adoption of the 2019 Share Option Plan (described below); however, options granted under the 2008 Plan before such adoption continue in effect in accordance with their terms. Authorized Shares. As of December 31, 2022, there were options to purchase 6,792,066 Ordinary Shares outstanding under the 2008 Plan.
No further grants of options were allowed after the Company’s adoption of the 2019 Share Option Plan (described below); however, options granted under the 2008 Plan before such adoption continue in effect in accordance with their terms. Authorized Shares. As of December 31, 2023, there were options to p urchase 3,973,980 Ordinary Shares outstanding under the 2008 Plan.
Our office holders are currently covered by a directors and officers’ liability insurance policy. 125 Table of Content We have entered into agreements with each of our directors and executive officers exculpating them in advance, to the fullest extent permitted by law, from liability to us for damages caused to us as a result of a breach of duty of care, and undertaking to indemnify them to the fullest extent permitted by law.
We have entered into agreements with each of our directors and executive officers exculpating them in advance, to the fullest extent permitted by law, from liability to us for damages caused to us as a result of a breach of duty of care, and undertaking to indemnify them to the fullest extent permitted by law.
Notwithstanding any of the foregoing, if a grantee’s employment or services with the Company or any of its affiliates is terminated for “cause” (as defined in the 2021 Plan), all outstanding awards held by such grantee (whether vested or unvested) will terminate on the date of such termination and the shares covered by such awards shall again be available for issuance under the 2021 Plan.
Any awards which are unvested as of the date of such termination or which are vested but not then exercised within the one year period following such date, will terminate and the shares covered by such awards shall again be available for issuance under the 2021 Plan. 109 Table of Content Notwithstanding any of the foregoing, if a grantee’s employment or services with the Company or any of its affiliates is terminated for “cause” (as defined in the 2021 Plan), all outstanding awards held by such grantee (whether vested or unvested) will terminate on the date of such termination and the shares covered by such awards shall again be available for issuance under the 2021 Plan.
The 2019 Plan provides for granting awards under various tax regimes, including, without limitation, in compliance with Section 102 of the Israeli Income Tax Ordinance (New Version), 5721-1961 (the “Ordinance”), and Section 3(i) of the Ordinance and for awards granted to our United States employees or service providers, including those who are deemed to be residents of the United States for tax purposes, Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), and Section 409A of the Code.
The 2019 Plan provides for granting awards under various tax regimes, including, without limitation, in compliance with Section 102 of the Israeli Income Tax Ordinance (New Version), 5721-1961 (the “Ordinance”), and Section 3(i) of the Ordinance and for awards granted to our United States employees or service providers, including those who are deemed to be residents of the United States for tax purposes, Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), and Section 409A of the Code. 105 Table of Content Section 102 of the Ordinance allows employees, directors and officers who are not controlling shareholders and are considered Israeli residents to receive favorable tax treatment for compensation in the form of shares or options.
Our board of directors has adopted a nominating and governance committee charter setting forth the responsibilities of the committee, which include, but are not limited to: • overseeing and assisting our board in reviewing and recommending nominees for election of directors, including that its membership consists of persons with sufficiently diverse and independent backgrounds; • assessing the performance of the members of our board; and • establishing and maintaining effective corporate governance policies and practices, including, but not limited to, developing and recommending to our board a set of corporate governance guidelines applicable to our business.
Our board of directors has adopted a nominating and governance committee charter setting forth the responsibilities of the committee, which include, but are not limited to: • overseeing and assisting our board in reviewing and recommending nominees for election of directors, including that its membership consists of persons with sufficiently diverse and independent backgrounds; • assessing the performance of the members of our board; and • establishing and maintaining effective corporate governance policies and practices, including, but not limited to, developing and recommending to our board a set of corporate governance guidelines applicable to our business. 127 Table of Content Internal Auditor Under the Companies Law, the board of directors of a public company must appoint an internal auditor based on the recommendation of the audit committee.

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Item 7. Management's Discussion & Analysis

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

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Investors Rights Agreement Pursuant to the Merger Agreement, certain TWC stockholders who received Ordinary Shares and certain Cellebrite shareholders (collectively “Cellebrite Equityholders”) and Cellebrite entered into the Investor Rights Agreement, pursuant to which, among other things, Cellebrite agreed to file a registration statement within 30 days of the Effective Time to register for resale under the Securities Act (x) the Ordinary Shares and the Warrants issued or issuable pursuant to the Business Combination Agreement (including the Ordinary Shares underlying the Warrants, any and all earned Price Adjustment Shares (as defined in the Business Combination Agreement), and the Ordinary Shares issued pursuant to the Share Purchase Agreement) and (y) certain Ordinary Shares held by Cellebrite Equityholders which were 130 Table of Content subject to registration rights pursuant to other registration rights agreements in existence prior to the date thereof.
Investors Rights Agreement Pursuant to the Merger Agreement, certain TWC stockholders who received Ordinary Shares and certain Cellebrite shareholders (collectively “Cellebrite Equityholders”) and Cellebrite entered into the Investor Rights Agreement, pursuant to which, among other things, Cellebrite agreed to file a registration statement within 30 days of the Effective Time to register for resale under the Securities Act (x) the Ordinary Shares and the Warrants issued or issuable pursuant to the Merger Agreement (including the Ordinary Shares underlying the Warrants, any and all earned Price Adjustment Shares (as defined in the Merger Agreement), and the Ordinary Shares issued pursuant to the Share Purchase Agreement) and (y) certain Ordinary Shares held by Cellebrite Equityholders which were subject to registration rights pursuant to other registration rights agreements in existence prior to the date thereof.
For more information, see “ Part I, Item 7. Major Shareholders and Related Party 128 Table of Content Transactions—B. Related Party Transactions —Restricted Sponsor Shares and Price Adjustment Shares —Restricted Sponsor Shares and Price Adjustment Shares .” TWC SPAC Aggregator II, LLC is the managing member of TWC Tech Holdings II, LLC.
For more information, see “ Part I, Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions —Restricted Sponsor Shares and Price Adjustment Shares—Restricted Sponsor Shares and Price Adjustment Shares .” TWC SPAC Aggregator II, LLC is the managing member of TWC Tech Holdings II, LLC.
The number of record holders in the United States is not representative of the number of beneficial holders, nor is it representative of where such beneficial holders are resident, since many of these ordinary shares were held by brokers or other nominees. 129 Table of Content B.
The number of record holders in the United States is not representative of the number of beneficial holders, nor is it representative of where such beneficial holders are resident, since many of these ordinary shares were held by brokers or other nominees. B.
RELATED PARTY TRANSACTIONS The below is a description of all reportable related party transactions since January 1, 2022: Distribution Agreement with SUNCORPORATION We expect to enter into a new distribution agreement with SUNCORPORATION, which will replace a previous distribution agreement which expired on January 31, 2023.
RELATED PARTY TRANSACTIONS The below is a description of all reportable related party transactions since January 1, 2023: Distribution Agreement with SUNCORPORATION We expect to enter into a new distribution agreement with SUNCORPORATION, which will replace a previous distribution agreement which expired on March 1, 2024.
Upon the expiration of the Price Adjustment Period (a period of seven years), any unvested shares that have not vested as of such time will be forfeited.
Upon the expiration of the Price Adjustment Period (a period of seven years from the closing date of the Merger), any unvested shares that have not vested as of such time will be forfeited.
Each person named in the table has sole voting and investment power with respect to all of the Ordinary Shares shown as beneficially owned by such person, except as otherwise indicated in the table or footnotes below. The percentage of Ordinary Shares beneficially owned is computed on the basis of 194,689,938 Ordinary Shares outstanding as of April 14, 2023.
Each person named in the table has sole voting and investment power with respect to all of the Ordinary Shares shown as beneficially owned by such person, except as otherwise indicated in the table or footnotes below. The percentage of Ordinary Shares beneficially owned is computed on the basis of 205,297,065 Ordinary Shares outstanding as of March 11, 2024.
Cellebrite agreed to indemnify the Sponsor and certain of the Sponsor’s related persons from certain liabilities arising from the Business Combination Agreement, the transactions agreements relating to the Merger, and the transactions and filings contemplated thereby, subject to certain limitations set forth in the Investor Rights Agreement.
Cellebrite agreed to indemnify the Sponsor and certain of the Sponsor’s related persons from certain liabilities arising from the Merger Agreement, the transactions agreements relating to the Merger, and the transactions and filings contemplated thereby, subject to certain limitations set forth in the Investor Rights Agreement. Indemnification Agreements We have entered into indemnification agreements with our directors and executive officers.
Restricted Sponsor Shares and Price Adjustment Shares As set forth in the Merger Agreement, 7,500,000 Ordinary Shares issued to TWC Tech Holdings II, LLC, out of a total of 13,500,000 shares, are Restricted Sponsor Shares and will vest in 3 tranches of 3,000,000, 3,000,000 and 1,500,000, upon achievement of the triggering events (as defined in the business combination agreement); if at any time during the Price Adjustment Period the price of Ordinary Shares will be greater than or equal to $12.50, $15.00 and $30.00, respectively, over any twenty trading days within any thirty trading day period.
The proposed Distribution Agreement was approved by the audit committee on February 11, 2024 following the determination of the audit committee that the Distribution Agreement is not deemed to be an "extraordinary transaction" under the Companies Law. 137 Table of Content Restricted Sponsor Shares and Price Adjustment Shares As set forth in the Merger Agreement, 7,500,000 Ordinary Shares issued to TWC Tech Holdings II, LLC, out of a total of 13,500,000 shares, are Restricted Sponsor Shares and will vest in 3 tranches of 3,000,000, 3,000,000 and 1,500,000, upon achievement of the triggering events (as defined in the Merger Agreement); if at any time during the Price Adjustment Period the price of Ordinary Shares will be greater than or equal to $12.50, $15.00 and $30.00, respectively, over any twenty trading days within any thirty trading day period.
MAJOR SHAREHOLDERS The following table sets forth information relating to the beneficial ownership of our Ordinary Shares by: • each person, or group of affiliated persons, known by us to beneficially own more than 5% of outstanding Ordinary Shares; • each of our directors; • each of our executive officers; and • all of our directors and executive officers as a group.
MAJOR SHAREHOLDERS The following table sets forth information relating to the beneficial ownership of our Ordinary Shares by: • each person, or group of affiliated persons, known by us to beneficially own more than 5% of outstanding Ordinary Shares; • each of our directors; • each of our executive officers; and • all of our directors and executive officers as a group. 133 Table of Content The SEC has defined “beneficial ownership” of a security to mean the possession, directly or indirectly, of voting power and/or investment power over such security.
Board Practices—Approval of Related Party Transactions under Israeli Law—Exculpation, Insurance and Indemnification of Office Holders ” for additional information. C. INTERESTS OF EXPERTS AND COUNSEL Not applicable.
See “Part I, Item 6. Directors, Senior Management and Employees—C. Board Practices—Approval of Related Party Transactions under Israeli Law—Exculpation, Insurance and Indemnification of Office Holders ” for additional information. 138 Table of Content C. INTERESTS OF EXPERTS AND COUNSEL Not applicable.
Moshe Lichtman serve as the managing directors of IGP Investments (G.P.), Ltd. and possess ultimate voting and investment authority with respect to all of the reported ordinary shares beneficially owned by IGP Saferworld.
Moshe Lichtman serve as the managing directors of IGP Investments (G.P.), Ltd. and possess ultimate voting and investment authority with respect to all of the reported ordinary shares directly held by IGP Saferworld and IGP Investments (G.P.L.P), Limited Partnership. Mr. Haim Shani holds 11,832 of the reported ordinary shares individually.
Number of Ordinary Shares Underlying Option Exercise Price Expiration Date 757,987 $2.43 7/1/2027 1,055,424 $2.49 7/1/2028 527,712 $3.02 4/1/2029 551,788 $2.57 6/17/2029 551,787 $3.05 6/17/2029 551,787 $3.59 6/17/2029 551,783 $4.22 6/17/2029 132,196 $6.60 2/15/2032 176,262 $4.95 2/13/2033 Registered Holders Based on a review of the information provided to us by our transfer agent, as of December 31, 2022, there were 12 registered holders of our shares in the United States, including Cede & Co., the nominee of the Depository Trust Company, together holding approximately 33.31% of our outstanding Ordinary Shares.
Option Holdings Pursuant to SEC rules, the following table provides informati on as of March 11, 2024 regarding all options to purchase our ordinary shares (including options exercisable and unexercisable) held by our Chief Executive Officer Yossi Carmil, who is our only executive officer or director who owned more than 1% of our ordinary shares outstanding as of that date. 136 Table of Content Number of Ordinary Shares Underlying Option Exercise Price Expiration Date 557,987 $2.43 7/1/2027 1,055,424 $2.49 7/1/2028 527,712 $3.02 4/1/2029 551,788 $2.57 6/17/2029 551,787 $3.05 6/17/2029 551,787 $3.59 6/17/2029 551,783 $4.22 6/17/2029 132,196 $6.60 2/15/2032 176,262 $4.95 2/13/2033 188,648 $9.25 2/13/2034 Registered Holders Based on a review of the information provided to us by our transfer agent, as of December 31, 2023, there were 7 registered holders of our shares in the United States, including Cede & Co., the nominee of the Depository Trust Company, together holding approximately 42.5% of our outstanding Ordinary Shares.
Clammer (5) * * William Heldfond * * Dafna Gruber * * Nadine Baudot-Trajtenberg * * All Executive Officers and Directors as a Group 9,671,873 4.98% ____________ * Less than 1% (1) According to a Schedule 13G/A filed with the SEC on February 14, 2023, SUNCORPORATION is the sole beneficial owner of the Ordinary Shares.
Clammer (4) * * Brandon Van Buren * * Dafna Gruber * * Nadine Baudot-Trajtenberg * * All Executive Officers and Directors as a Group 7,442,766 3.6% ____________ * Less than 1% 135 Table of Content (1) According to a Schedule 13G/A filed with the SEC on February 8, 2024, SUNCORPORATION is the sole beneficial owner of the Ordinary Shares.
The address of each the persons named in this footnote is c/o True Wind Capital, Four Embarcadero Center, Suite 2100, San Francisco, CA 94111. (4) According to a Schedule 13G filed with the SEC on February 24, 2022, Mr. Shani may be deemed the beneficial owner of 32,631,492 ordinary shares directly held by IGP Saferworld.
The address of each the persons named in this footnote is c/o True Wind Capital, Four Embarcadero Center, Suite 2100, San Francisco, CA 94111. (4) According to a Schedule 13D filed with the SEC on September 9, 2021, Mr. Clammer may be deemed the beneficial owner of 23,804,167 shares as of the date hereof.
Unless otherwise noted below, each shareholder’s address is 94 Shlomo Shmelzer Road, Petah Tikva 4970602, Israel. 127 Table of Content Number of Ordinary Shares Beneficially Owned Percentage of Outstanding Ordinary Shares 5% Holders: SUNCORPORATION (1) 95,597,718 49.10% IGP Saferworld, Limited Partnership (2) 32,631,492 16.76% True Wind Capital Management (3) 23,054,167 6.88% Name and Address of Beneficial Owners Executive Officers and Directors Yossi Carmil 4,866,977 2.44% Dana Gerner * * Leeor Ben-Peretz * * Ronnen Armon * * Lisa Cole - - Arthur Veinstein * * Marque Teegardin * * Ryusuke Utsumi * * Yonatan Domnitz * * Haim Shani (4) * * Elly Keinan * * Adam H.
Unless otherwise noted below, each shareholder’s address is 94 Shlomo Shmelzer Road, Petah Tikva 4970602, Israel. 134 Table of Content Number of Ordinary Shares Beneficially Owned Percentage of Outstanding Ordinary Shares 5% Holders: SUNCORPORATION (1) 95,597,718 46.6% IGP Saferworld, Limited Partnership / IGP Investments (G.P.L.P), Limited Partnership (2) 11,782,173 5.7% True Wind Capital Management (3) 23,054,167 6.5% Name and Address of Beneficial Owners Executive Officers and Directors Yossi Carmil 4,935,971 2.4% Marcus Jewell * * Dana Gerner * * Leeor Ben-Peretz * * Ronnen Armon * * Lisa Cole * * Ayala Berler Shapira * * Zohar Tadmor-Eilat * * Ryusuke Utsumi * * Yonatan Domnitz * * Thomas E.
Under the proposed Distribution Agreement, SUNCORPORATION will be the non-exclusive distributor for the promotion, marketing and sale of our mobile solutions in Japan. The proposed Distribution Agreement was approved by the audit committee on February 12, 2023 following the determination of the audit committee that the Distribution Agreement is not deemed to be an "extraordinary transaction" under the Companies Law.
Under the proposed Distribution Agreement, SUNCORPORATION will be the non-exclusive distributor for the promotion, marketing and sale of our mobile solutions in Japan.
Its address is 250 Asahi, Kochino-cho, Konan, Aichi 483-8555, Japan. SUNCORPORATION is a publicly traded company on the Tokyo Stock Exchange. (2) According to a Schedule 13G filed with the SEC on February 24, 2022, IGP Saferworld, Limited Partnership (“IGP Saferworld”) directly holds all of the 32,631,492 reported ordinary shares.
Its address is 250 Asahi, Kochino-cho, Konan, Aichi 483-8555, Japan. SUNCORPORATION is a publicly traded company on the Tokyo Stock Exchange.
IGP Investments (G.P.L.P), Limited Partnership serves as the general partner to IGP Saferworld and IGP Investments (G.P.), Ltd., in turn, serves as the general partner to IGP Investments (G.P.L.P), Limited Partnership. Additionally, Mr. Haim Shani and Mr.
The decrease from the amount reported on the Schedule 13G/A reflects a distribution-in-kind effected by IGP Saferworld subsequent to December 31, 2023. IGP Saferworld directly holds 10,763,366 of these shares and IGP LP directly holds 1,018,807 ordinary shares. IGP Investments (G.P.), Ltd., in turn, serves as the general partner to IGP LP. Additionally, Mr. Haim Shani and Mr.
Removed
The SEC has defined “beneficial ownership” of a security to mean the possession, directly or indirectly, of voting power and/or investment power over such security.
Added
Hogan * * Elly Keinan * * Adam H.
Removed
For more information, see footnote 2. (5) According to a Schedule 13D filed with the SEC on September 9, 2021, Mr. Clammer may be deemed the beneficial owner of 23,804,167 shares as of the date hereof.
Added
(2) Based on a Schedule 13G/A filed on March 12, 2024 and information provided by IGP Saferworld, Limited Partnership (“IGP Saferworld”), as of March 11, 2024, IGP Saferworld and IGP Investments (G.P.L.P), Limited Partnership (“IGP LP”), the general partner of IGP Saferworld, beneficially owned 11,782,173 ordinary shares.
Removed
Option Holdings Pursuant to SEC rules, the following table provides information as of April 14, 2023 regarding all options to purchase our ordinary shares (including options exercisable and unexercisable) held by our Chief Executive Officer Yossi Carmil, who is our only executive officer or director who owned more than 1% of our ordinary shares outstanding as of that date.
Removed
Amended Articles of Association Lock-up The Sponsor Parties and other shareholders were subject to a lock-up (subject to certain exceptions for permitted transfers) with respect to Ordinary Shares that expired in March 2022. Indemnification Agreements We have entered into indemnification agreements with our directors and executive officers. See “Part I, Item 6. Directors, Senior Management and Employees—C.

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