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Cellebrite DI Ltd.

Cellebrite DI Ltd.CLBT決算レポート

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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 — 2023 vs 2024

Top changes in Cellebrite DI Ltd.'s 2024 20-F

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Some AI scenarios present ethical issues, for example, due to unintentional biases that may stem from the predictive nature of AI algorithms and we may enable or offer solutions that draw controversy due to their perceived or actual impact on society.
Some AI scenarios present ethical issues, for example, due to unintentional biases that may stem from the predictive nature of AI algorithms and we may enable or offer solutions that draw controversy due to their perceived and actual impact on society.
Additionally, activist criticism of our relationships with customers could potentially engender dissatisfaction among potential and existing customers, investors, and employees with how we address political and social concerns in our business activities, such as ceasing to do business in certain jurisdictions.
Additionally, political and social activist criticism of our relationships with customers could potentially engender dissatisfaction among potential and existing customers, investors, and employees with how we address political and social concerns in our business activities, such as ceasing to do business in certain jurisdictions.
Supreme Court decision or changes in state legislation could impact our customers’ ability to seize funds or use seized funds to fund purchases. Changes in civil forfeiture statutes or regulations are outside of our control and could limit the amount of funds available to our customers, which could adversely affect the sale of our solutions.
Supreme Court decision or changes in state legislation could impact our customers’ ability to seize funds or use seized funds to fund purchases of our solutions. Changes in civil forfeiture statutes or regulations are outside of our control and could limit the amount of funds available to our customers, which could adversely affect the sale of our solutions.
In addition to protection under intellectual property laws, we rely on confidentiality or license agreements that we generally enter into with our corporate partners, employees, consultants, advisors, vendors, and customers, and generally limit access to and distribution of our intellectual property and proprietary information.
In addition to protection under intellectual property laws, we rely on confidentiality or license agreements that we generally enter into with our corporate partners, employees, consultants, advisors, vendors, and customers, and we generally limit access to and distribution of our intellectual property and proprietary information.
Although we take steps designed to secure our information technology infrastructure and sensitive data and enhance our business continuity and disaster recovery capabilities, we can provide no assurance that our current information technology systems or any updates or upgrades thereto, including the integration of AI capabilities into our product offerings the current or future information technology systems, cloud service providers, software and hardware vendors, supply chain information technology systems that we use or may use in the future, are fully protected against third-party intrusions, viruses, hacker attacks, information or data theft or other similar cybersecurity risks.
Although we take steps designed to secure our data and information technology infrastructure and sensitive data and enhance our business continuity and disaster recovery capabilities, we can provide no assurance that our current information technology systems or any updates or upgrades thereto, including the integration of AI capabilities into our product offerings the current or future information technology systems, cloud service providers, software and hardware vendors, supply chain information technology systems that we use or may use in the future, are fully protected against third-party intrusions, viruses, hacker attacks, information or data theft or other similar cybersecurity risks.
Contracts with the federal U.S. government may be terminated for convenience by the government at any time.
Contracts with the federal U.S. federal government may be terminated for convenience by the government at any time.
In general, if a foreign corporation acquires, directly or indirectly, substantially all of the properties held directly or indirectly by a U.S. corporation and after the acquisition, the former shareholders of the acquired U.S. corporation hold at least 60% (by either vote or value) but less than 80% (by vote and value) of the shares of the foreign acquiring corporation by reason of holding shares in the acquired U.S. corporation, subject to other requirements, certain adverse tax consequences under Section 7874 may apply. 48 Table of Content If these rules apply to the Merger, Cellebrite and certain of Cellebrite’s shareholders may be subject to adverse tax consequences including, but not limited to, restrictions on the use of tax attributes with respect to “inversion gain” recognized over a 10-year period following the transaction, disqualification of dividends paid from preferential “qualified dividend income” rates and the requirement that any U.S. corporation owned by Cellebrite include as “base erosion payments” that may be subject to a minimum U.S. federal income tax any amounts treated as reductions in gross income paid to certain related foreign persons.
In general, if a foreign corporation acquires, directly or indirectly, substantially all of the properties held directly or indirectly by a U.S. corporation and after the acquisition, the former shareholders of the acquired U.S. corporation hold at least 60% (by either vote or value) but less than 80% (by vote and value) of the shares of the foreign acquiring corporation by reason of holding shares in the acquired U.S. corporation, subject to other requirements, certain adverse tax consequences under Section 7874 may apply. 49 Table of Content If these rules apply to the Merger, Cellebrite and certain of Cellebrite’s shareholders may be subject to adverse tax consequences including, but not limited to, restrictions on the use of tax attributes with respect to “inversion gain” recognized over a 10-year period following the transaction, disqualification of dividends paid from preferential “qualified dividend income” rates and the requirement that any U.S. corporation owned by Cellebrite include as “base erosion payments” that may be subject to a minimum U.S. federal income tax any amounts treated as reductions in gross income paid to certain related foreign persons.
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.
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 by which they are bound 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.
Any failure or perceived failure by us or our suite of solutions to comply with U.S., EU, UK or other foreign laws, regulations, directives, policies, industry standards, or legal obligations relating to privacy, data protection, or information security, or any security incident that results in loss of or the unauthorized access to, or acquisition, use, release, or transfer of, personal information, personal data, or other customer or sensitive data or information may result in governmental investigations, inquiries, enforcement actions and prosecutions, private claims and litigation, indemnification or other contractual obligations, other remedies, including fines or demands that we modify or cease existing business practices, or adverse publicity, and related costs and liabilities, which could significantly and adversely affect our business, reputation and results of operations. 36 Table of Content We may in the future become involved in legal, regulatory, or administrative inquiries and proceedings, and unfavorable outcomes in litigation or other of these matters could negatively impact our business, financial conditions, and results of operations.
Any failure or perceived failure by us or our suite of solutions to comply with U.S., EU, UK or other foreign laws, regulations, directives, policies, industry standards, or legal obligations relating to privacy, data protection, or information security, or any security incident that results in loss of or the unauthorized access to, or acquisition, use, release, or transfer of, personal information, personal data, or other customer or sensitive data or information may result in governmental investigations, inquiries, enforcement actions and prosecutions, private claims and litigation, indemnification or other contractual obligations, other remedies, including fines or demands that we modify or cease existing business practices, or adverse publicity, and related costs and liabilities, which could significantly and adversely affect our business, reputation and results of operations. 38 Table of Content We may in the future become involved in legal, regulatory, or administrative inquiries and proceedings, and unfavorable outcomes in litigation or other of these matters could negatively impact our business, financial conditions, and results of operations.
An error, failure or bug in any of our solutions used by our law enforcement customers could lead to interference with the administration of justice, for example by corrupting digital evidence rendering them inadmissible. Real or perceived errors, failures, or bugs in our solutions, or dissatisfaction with our solutions and outcomes, could result in customer terminations or non-renewals.
An error, failure or bug in any of our solutions used by our law enforcement customers could lead to interference with the administration of justice, for example by corrupting digital evidence and even rendering them inadmissible. Real or perceived errors, failures, or bugs in our solutions, or dissatisfaction with our solutions and outcomes, could result in customer terminations or non-renewals.
Further, it is possible that domestic or foreign companies or governments, some with substantial experience in digital investigative solutions, public safety sector or law enforcement software and systems industry or greater financial resources than we possess, will seek to provide solutions that compete directly or indirectly with ours in the future.
Further, it is possible that domestic or foreign companies or governments, some with substantial experience in digital investigative solutions, public safety sector or law enforcement software and systems industry or greater financial resources than we possess, will seek to develop and provide solutions that compete directly or indirectly with ours in the future.
Moreover, an Israeli court will not enforce a non-Israeli judgment if it was given in a state whose laws do not provide for the enforcement of judgments of Israeli courts (subject to exceptional cases), if its enforcement is likely to prejudice the sovereignty or security of the State of Israel, if it was obtained by fraud or in the absence of due process, if it is at variance with another valid judgment that was given in the same matter between the same parties, or if a suit in the same matter between the same parties was pending before a court or tribunal in Israel at the time the foreign action was brought. 42 Table of Content The rights and responsibilities of our shareholders are governed by Israeli law, which may differ in some respects from the rights and responsibilities of shareholders of U.S. corporations.
Moreover, an Israeli court will not enforce a non-Israeli judgment if it was given in a state whose laws do not provide for the enforcement of judgments of Israeli courts (subject to exceptional cases), if its enforcement is likely to prejudice the sovereignty or security of the State of Israel, if it was obtained by fraud or in the absence of due process, if it is at variance with another valid judgment that was given in the same matter between the same parties, or if a suit in the same matter between the same parties was pending before a court or tribunal in Israel at the time the foreign action was brought. 43 Table of Content The rights and responsibilities of our shareholders are governed by Israeli law, which may differ in some respects from the rights and responsibilities of shareholders of U.S. corporations.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our current security holders will be diluted, and the terms of those securities may include liquidation or other preferences that adversely affect the rights of our current holders of Ordinary Shares or Warrants.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our current security holders will be diluted, and the terms of those securities may include liquidation or other preferences that adversely affect the rights of our current holders of Ordinary Shares.
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.
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; • 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 in a timely manner, if at all; • 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; 53 Table of Content • 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.
In addition, the application, interpretation, and enforcement of these laws and regulations are often uncertain, particularly in the new and rapidly evolving software and technology industry in which we operate, and may be interpreted and applied inconsistently from country to country and inconsistently with our current policies and practices.
In addition, the application, interpretation, and enforcement of these laws and regulations are often uncertain, particularly in the new and rapidly evolving software and technology industry in which we operate, and may be interpreted and applied inconsistently from country to country and differently with our current policies and practices.
Certain of our key employees participate in our equity plan and receive RSUs and/or options to purchase Ordinary Shares and/or are invited to participate in our 2021 Employee Share Purchase Plan (“ESPP”). Volatility in the trading price of Ordinary Shares may also affect our ability to attract and retain qualified personnel.
Certain of our key employees participate in our equity plan and receive RSUs, PSUs and/or options to purchase ordinary shares and/or are invited to participate in our 2021 Employee Share Purchase Plan (“ESPP”). Volatility in the trading price of Ordinary Shares may also affect our ability to attract and retain qualified personnel.
Furthermore, if we experience high turnover of our research and development personnel, a lack of managerial resources to guide our research and development, or a lack of other research and development resources, we may miss or fail to execute on new product development and strategic opportunities and consequently lose potential and actual market share.
If we experience high turnover of our research and development personnel, a lack of managerial resources to guide our research and development, or a lack of other research and development resources, we may miss or fail to execute on new product development and strategic opportunities and consequently lose potential and actual market share.
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.
Furthermore, once hired, it typically 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.
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.
If we are unable to effectively utilize our personnel on a timely basis to fulfill the needs of our customers, our business and operations could suffer. We continue to face intense competition for qualified personnel, specifically personnel in sales, research and development.
Data Privacy Framework, new legal challenges to the mechanisms allowing companies to transfer personal data from the European Economic Area to certain other jurisdictions, including the United States, could emerge resulting in further limitations on the ability to transfer data across borders.
Data Privacy Framework, new legal challenges to the mechanisms allowing companies to transfer personal data from the European Economic Area (“EEA”) to certain other jurisdictions, including the United States, could emerge resulting in further limitations on the ability to transfer data across borders.
The U.S. dollar compared to the NIS experienced meaningful volatility over the last several years, which, if it continues to present the same behavior, could have an adverse impact on our expenses and profitability.
The U.S. dollar compared with the NIS experienced meaningful volatility over the last several years, which, if it continues to present the same behavior, could have an adverse impact on our expenses and profitability.
The key trends affecting the digital investigations market include, among other things, the explosive growth in the volume of digital data, the increases in data complexity and sophistication, the need for digital evidence management and analysis systems, and the lack of sufficient digital forensic professionals.
The key trends affecting the digital investigations market include, among other things, growth in the volume of digital data, increases in data complexity and sophistication, the need for digital evidence management and analysis systems, and the lack of sufficient digital forensic professionals.
As a result, the purchase process can be lengthy compared to e-commerce transactions, and it is possible that the length of the process may discourage some customers from completing the transaction with us rather than a competitor which offers more seamless online sales. 13 Table of Content Issues in the use of artificial intelligence (“AI”) (including machine learning) in our C2C Platform may result in reputational harm, liability or impact our financial results.
As a result, the purchase process can be lengthy compared to e-commerce transactions, and it is possible that the length of the process may discourage some customers from completing the transaction with us rather than with a competitor who offers more seamless online sales. 13 Table of Content Issues in the use of artificial intelligence (“AI”) (including machine learning) in our C2C Platform may result in reputational harm, liability or impact our financial results.
Other companies have also experienced cybersecurity incidents that implicate confidential and proprietary company data and/or the personal data of end users of AI applications integrated into their software offerings or used in their operations.
Other companies have also experienced cybersecurity incidents that implicate confidential and proprietary company data and/or the personal information of end users of AI applications integrated into their software offerings or used in their operations.
Accordingly, notwithstanding the foregoing, the Amended Articles provide that the exclusive forum provision will not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. 43 Table of Content These exclusive forum provisions may limit a shareholders ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors or other employees which may discourage lawsuits against us, our directors, officers and employees.
Accordingly, notwithstanding the foregoing, the Amended Articles provide that the exclusive forum provision will not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. 44 Table of Content These exclusive forum provisions may limit a shareholders ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors or other employees which may discourage lawsuits against us, our directors, officers and employees.
Risks Relating to an Investment in our Securities Future issuances of Ordinary Shares by us or resales of our Ordinary Shares may cause the market price of the Ordinary Shares to drop significantly, even if Cellebrite’s business is doing well.
Risks Relating to an Investment in our Securities Future issuances of Ordinary Shares by us or resales of our Ordinary Shares may cause the market price of the Ordinary Shares to drop significantly, even if our business is doing well.
Although we take steps to hedge our foreign currency exposures related to our NIS expenses, such measures may not adequately protect us from material adverse effects due to the impact of local conflicts, including the ongoing Israel-Hamas conflict and tensions in the Middle East, global inflation or from fluctuations in the relative values of the U.S. dollar and other foreign currencies in which we transact business, and may result in a financial loss.
Although we take steps to hedge our foreign currency exposures related to our NIS expenses, such measures may not adequately protect us from material adverse effects arising from the impact of local conflicts, including the ongoing Israel-Hamas conflict and tensions in the Middle East, global inflation or from fluctuations in the relative values of the U.S. dollar and other foreign currencies in which we transact business, and may result in a financial loss.
Our failure to comply with these requirements could subject us to financial and other penalties, which could materially adversely impact our revenue and profits, and harm our reputation. 31 Table of Content Although Israel is not a party to the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies (the “Wassenaar Arrangement”), it has adopted the Wassenaar Arrangement List of Dual Use Goods and Technologies, and the goods and technologies listed therein are subject to Israeli export control laws and regulations.
Our failure to comply with these requirements could subject us to financial and other penalties, which could materially adversely impact our revenue and profits, and harm our reputation. 33 Table of Content Although Israel is not a party to the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies (the “Wassenaar Arrangement”), it has adopted the Wassenaar Arrangement List of Dual Use Goods and Technologies, and the goods and technologies listed therein are subject to Israeli export control laws and regulations.
If the recommendations, forecasts, or analyses that AI applications assist in producing are deficient or inaccurate, we could be subjected to competitive harm, potential legal liability, and brand or reputational harm.
If the recommendations, forecasts, or analyses that AI-powered applications assist in producing are deficient or inaccurate, we could be subjected to competitive harm, potential legal liability, and brand or reputational harm.
Any such damages, penalties, disruption, or limitation in our ability to do business with a government could adversely impact, and could have a material adverse effect on, our business, results of operations, financial condition, public perception, and growth prospects. 38 Table of Content New laws and/or law interpretations, as well as changing regulations, create the risk that we may not comply with those laws and regulations and the costs to comply could materially adversely affect our business.
Any such damages, penalties, disruption, or limitation in our ability to do business with a government could adversely impact, and could have a material adverse effect on, our business, results of operations, financial condition, public perception, and growth prospects. 40 Table of Content New laws and/or law interpretations, as well as changing regulations, create the risk that we may not comply with those laws and regulations and the costs to comply could materially adversely affect our business.
Any of these events, as well as a general weakening of, or declining corporate confidence in, the global economy, or a curtailment in corporate spending could delay or decrease our revenue and therefore have a material adverse effect on our business, operating results and financial condition. 23 Table of Content Risks Related to Cellebrite’s Intellectual Property Failure to adequately obtain, maintain, protect and enforce our intellectual property and other proprietary rights could adversely affect our business.
Any of these events, as well as a general weakening of, or declining corporate confidence in, the global economy, or a curtailment in corporate spending could delay or decrease our revenue and therefore have a material adverse effect on our business, operating results and financial condition. 25 Table of Content Risks Related to Cellebrite’s Intellectual Property Failure to adequately obtain, maintain, protect and enforce our intellectual property and other proprietary rights could adversely affect our business.
Furthermore, because the techniques used to obtain unauthorized access or sabotage systems change frequently and generally are not identified until after they are launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. 25 Table of Content In addition, security breaches at other companies and in government agencies have increased in frequency and sophistication in recent years.
Furthermore, because the techniques used to obtain unauthorized access or sabotage systems change frequently and generally are not identified until after they are launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. 27 Table of Content In addition, security breaches at other companies and in government agencies have increased in frequency and sophistication in recent years.
Furthermore, there can be no assurance that any limitations of liability provisions in our license arrangements with customers or in our agreements with vendors, partners, or others would be enforceable, applicable, or adequate or would otherwise protect us from any such liabilities or damages with respect to any particular claim. 26 Table of Content Some of our software and systems contain open source software, which may pose particular risks to our proprietary software and information technology systems.
Furthermore, there can be no assurance that any limitations of liability provisions in our license arrangements with customers or in our agreements with vendors, partners, or others would be enforceable, applicable, or adequate or would otherwise protect us from any such liabilities or damages with respect to any particular claim. 28 Table of Content Some of our software and systems contain open-source software, which may pose particular risks to our proprietary software and information technology systems.
We are required to comply with the GDPR and, following the exit of the United Kingdom (“UK”) from the European Union (“EU”), the UK equivalent, the implementation of which exposes us to two parallel data protection regimes in Europe, each of which impose several stringent requirements for controllers and processors of personal data and could make it more difficult to and/or more costly for us to collect, store, use, transmit and process personal and sensitive data.
We are required to comply with the GDPR and, following the exit of the United Kingdom (“UK”) from the European Union (“EU”), the UK equivalent, the implementation of which exposes us to two parallel data protection regimes in Europe, each of which imposes several stringent requirements for controllers and processors of personal data and could make it more difficult and/or more costly for us to collect, store, use, transmit and process personal data and sensitive data.
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.
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. 45 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 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.
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 lawful 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.
Even if our patent applications do issue as patents, they may not issue in a form that is sufficiently broad to protect our technology, prevent competitors or other third parties from competing with us or otherwise provide us with any competitive advantage. 24 Table of Content Third parties may legitimately and independently develop products, services, and technology similar to or duplicative of our products, services and technology.
Even if our patent applications do issue as patents, they may not issue in a form that is sufficiently broad to protect our technology, prevent competitors or other third parties from competing with us or otherwise provide us with any competitive advantage. 26 Table of Content Third parties may legitimately and independently develop products, services, and technology similar to or duplicative of our products, services and technology.
Responding to such coverage, claims, investigations and lawsuits, regardless of the ultimate outcome of the proceeding, can divert the time and effort of senior management from the management of our businesses.
Responding to such coverage, claims, investigations and lawsuits, regardless of the ultimate outcome of the proceeding, can also divert the time and effort of senior management from the management of our businesses.
The application of these laws’ requirements to us and to our products could subject us to different licensing requirements and may require us to adapt our marketing, sales and export practices to accommodate these changed requirements.
The application of these laws’ requirements to us and to our products could subject us to different licensing requirements and could require us to adapt our marketing, sales and export practices to accommodate these changed requirements.
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.
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.
In addition, even claims that ultimately are unsuccessful could result in our expenditure of funds in litigation and divert management’s time and other resources. 37 Table of Content Failure to comply with laws, regulations, or contractual provisions applicable to our business could cause us to lose government customers or our ability to contract with the U.S. and other governments.
In addition, even claims that ultimately are unsuccessful could result in our expenditure of funds in litigation and divert management’s time and other resources. 39 Table of Content Failure to comply with laws, regulations, or contractual provisions applicable to our business could cause us to lose government customers or our ability to contract with the U.S. and other governments.
Additionally, unless Cellebrite consents in writing to the selection of an alternative forum, the U.S. federal courts shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended (the “Securities Act”) against us or any of our directors, officers, other employees or agents.
Additionally, unless we consents in writing to the selection of an alternative forum, the U.S. federal courts shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended (the “Securities Act”) against us or any of our directors, officers, other employees or agents.
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.
These risks could be difficult to eliminate or manage and, if not addressed, could adversely affect our business, results of operations, and financial conditions. 29 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.
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.
Such lawsuits could result in substantial costs and divert management’s attention and resources, which could adversely affect our business. 48 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 customer 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 or delayed orders and reduce the competitiveness of our solutions in certain foreign markets.
We require personnel with expertise in government contracting at federal, state and local levels in a variety of countries, and expertise in the private market, and with sufficient technological literacy to discuss our solutions’ features. There is a limited number of individuals with this experience and competition for them is intense.
We require personnel with expertise in government contracting at the federal, state and local levels in a variety of countries, and expertise in the private sector, and with sufficient technological literacy to discuss our solutions’ features. There is a limited number of individuals with this experience and competition for them is intense.
If other businesses were to engage in aggressive pricing policies with respect to competing products, as done in the past, or if the dynamics in our marketplace resulted in increasing bargaining power by the consumers of our solutions, we might need to lower the prices we charge for the solutions we offer, as we were forced in the past.
If other businesses were to engage in aggressive pricing policies with respect to competing products, as they have done in the past, or if the dynamics in our marketplace resulted in increasing bargaining power by the consumers of our solutions, we might need to lower the prices we charge for the solutions we offer, as we were forced in the past.
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.
As we have grown, we have increasingly managed larger and more complex deployments of our solutions with a broader base of public 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.
Cybersecurity threats employ a wide variety of methods and techniques, which may include the use of social engineering techniques or supply-chain attacks, are constantly evolving, and have become increasingly complex and sophisticated; all of which increase the difficulty of detecting and successfully defending against them.
Cybersecurity threats are constantly evolving, have become increasingly complex and sophisticated, and employ a wide variety of methods and techniques, which may include the use of social engineering techniques or supply-chain attacks, all of which increase the difficulty of detecting and successfully defending against such threats.
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.
Any such determination or perception by potential customers, the general public, government entities or judicial authorities 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.
Many of our customers, especially those in law enforcement, use our solutions in applications that are of public interest or critical to their businesses or missions and may thus have a lower risk tolerance to defects in our solutions than to defects in other, less critical, software solutions.
Many of our customers, especially those in law enforcement, use our solutions in applications that are of public interest or critical to their businesses or missions and may thus have a lower risk tolerance for defects in our solutions than for defects in, less critical, software solutions.
Errors or delays in releasing software updates or allegations of unsatisfactory performance or errors, defects or failures in released software could cause us, in the long run, to lose sales opportunities, increase our service costs, incur substantial software redesigning costs, lose customers or subject us to liability for damages and divert our resources from other tasks, any one of which could materially and adversely affect our business, results of operations and financial condition.
Errors or delays in releasing software updates or allegations of unsatisfactory performance or errors, defects or failures in released software could cause us, to lose sales opportunities, increase our service costs, incur substantial software redesigning costs, lose customers or subject us to liability for damages and divert our resources from other tasks, any one of which could materially and adversely affect our business, results of operations and financial condition.
In a registered offering of securities pursuant to the Securities Act (including via the registration statement on Form S-8) or otherwise in accordance with Rule 144 under the Securities Act, the Cellebrite employees and other shareholders may sell large amounts of Ordinary Shares in the open market or in privately negotiated transactions, which could have the effect of increasing the volatility in the trading price of the Ordinary Shares or putting significant downward pressure on the price of the Ordinary Shares.
In a registered offering of securities pursuant to the Securities Act (including via the registration statement on Form S-8) or otherwise in accordance with Rule 144 under the Securities Act, Cellebrite shareholders may sell large amounts of Ordinary Shares in the open market or in privately negotiated transactions, which could have the effect of increasing the volatility in the trading price of the Ordinary Shares or putting significant downward pressure on the price of the Ordinary Shares.
Personnel may be more likely to leave us if the Ordinary Shares they own have significantly depreciated in value relative to the original purchase price of these shares or the exercise price of the options, or conversely, if the exercise price of the options that they hold are significantly above the trading price.
Personnel may be more likely to leave us if the Ordinary Shares they own have significantly depreciated in value relative to the original purchase price of these shares or the exercise price of the options, or conversely, if the exercise price of the options that they hold is significantly above the trading price.
If there is substantial turnover of customer personnel responsible for procurement and/or use of our solutions, our solutions may go unused or be adopted less broadly, and our ability to make additional sales may be substantially limited, which could negatively impact our business, results of operations, and growth prospects. 11 Table of Content If we fail to manage future growth effectively, our business could be harmed.
If there is substantial turnover of customer personnel responsible for procurement and/or use of our solutions, our solutions may go unused or be adopted less broadly, and our ability to secure license renewal or make additional sales may be substantially limited, which could negatively impact our business, results of operations, and growth prospects. 11 Table of Content If we fail to manage future growth effectively, our business could be harmed.
Our Advanced Services are provided from a strictly dedicated platform that combines authentication, authorization, networking, and observability into a single point, as well as internal processes intended to control access, usage, storage and retention of data.
Our Advanced Services are delivered from a strictly dedicated platform that combines authentication, authorization, networking, and observability into a single point, as well as internal processes intended to control access, usage, storage and retention of data.
Further, SUNCORPORATION is a controlling shareholder which may in the future control elections to our board of directors and, therefore may have significant influence over our business and policies. Risks Related to Ownership of the Ordinary Shares Our share price has been and will likely continue to be volatile, and shareholders may lose all or part of their investment.
Further, SUNCORPORATION is a controlling shareholder which may in the future control elections to our board of directors and, therefore may have significant influence over our business and policies. 47 Table of Content Risks Related to Ownership of the Ordinary Shares Our share price has been and will likely continue to be volatile, and shareholders may lose all or part of their investment.
Numerous releases of competitive products have occurred in recent history and are expected to continue in the future. We may not be able to compete effectively with current competitors and potential entrants into our marketplace.
Numerous releases of competitive products have occurred in recent years and are expected to continue in the future. We may not be able to compete effectively with current competitors and potential entrants into our marketplace.
Because of the long approval process that typically accompanies strategic initiatives or capital expenditures by our customers, our sales process may be prolonged, revenues delayed, with little or no control over any delays encountered by us.
Because of the long approval process that typically accompanies strategic initiatives or capital expenditures by our customers, our sales process may be prolonged, revenue delayed, with little or no control over any delays encountered by us.
Additionally, intercompany sales to our non-U.S. dollar functional currency international subsidiaries are transacted in U.S. dollars which could increase our foreign exchange rate risk caused by foreign currency transaction gains and losses. For non-U.S. dollar denominated sales, weakening of foreign currencies relative to the U.S. dollar generally leads us to raise international pricing, potentially reducing demand for our solutions.
Additionally, intercompany sales to our non-U.S. dollar functional currency international subsidiaries are transacted in U.S. dollars which could increase our foreign exchange rate risk caused by foreign currency transaction gains and losses. 16 Table of Content For non-U.S. dollar denominated sales, weakening of foreign currencies relative to the U.S. dollar generally leads us to raise international pricing, potentially reducing demand for our solutions.
Any decreased use of our solutions or limitation on our ability to export or sell our solutions would likely adversely affect our business, financial condition and results of operations. 32 Table of Content Differing regulatory and legal requirements and the possible enactment of additional regulations or restrictions on the use, import, export or re-export of our solutions or the provision of services, could delay, restrict, or prevent the sale or use of our solutions in some jurisdictions.
Any decreased use of our solutions or limitation on our ability to export or sell our solutions would likely adversely affect our business, financial condition and results of operations. 34 Table of Content Differing regulatory and legal requirements and the possible enactment of additional regulations or restrictions on the use, import, export or re-export of our solutions or the provision of services, delay, restrict, or prevent the sale or use of our solutions in some jurisdictions.
While customers can initiate contact with us using our website, the ultimate purchase in most cases is not made through our website and is made only after an interactive discussion with the customer. For example, our sales process may involve “know your customer” vetting and screening procedures which must take place prior to customer being approved.
While customers can initiate contact with us using our website, the ultimate purchase in most cases is not made through our website and is made only after an interactive discussion with the customer. For example, our sales process involves “know your customer” vetting and screening procedures which must take place prior to customer being approved.
Although prior known cyberattacks directed at us have not had a material impact on our financial results, and we are continuing to bolster our threat detection and mitigation processes and procedures, we cannot guarantee that past, future, or ongoing cyberattacks or other security breaches or incidents against us, if successful, will not have a material impact on our business or financial results, whether directly or indirectly.
Although prior known cyberattacks directed at us have not had a material impact on our business or financial results, and we are continuing to bolster our threat detection and mitigation processes and procedures, we cannot guarantee that past, future, or ongoing cyberattacks or incidents against us, if successful, will not have a material impact on our business or financial results, whether directly or indirectly.
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.
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 are subject to a variety of laws and regulations in Israel and abroad that involve matters central to our business, including privacy, data protection and personal information, rights of publicity, content, intellectual property, advertising, marketing, distribution, data security, data retention and deletion, electronic contracts and other communications, competition, consumer protection, telecommunications, product liability, taxation, labor and employment, economic or other trade prohibitions or sanctions, securities law compliance, and online payment services.
We are subject to a variety of laws and regulations in Israel and around the world that involve matters central to our business, including privacy, data protection and personal information, rights of publicity, content, intellectual property, advertising, marketing, distribution, data security, data retention and deletion, electronic contracts and other communications, competition, consumer protection, telecommunications, product liability, taxation, labor and employment, economic or other trade prohibitions or sanctions, securities law compliance, and online payment services.
We generally keep up to three quarters of inventory on hand for long lead-time components to mitigate this risk, which we believe would give us enough time to resolve shortage due to an issue with a particular supplier, but it might not be enough time to resolve a shortage that stems from resource scarcity.
We generally keep up to three quarters of inventory on hand for long lead-time components to mitigate this risk, which we believe would give us enough time to resolve shortage due to an issue with a particular supplier, but it might not be enough time to resolve a shortage that stems from general market scarcity.
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.
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; • analyst reports or press coverage of such reports, 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 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.
For more information, see “— We may be subject to information technology system breaches, failures, or disruptions that could harm our operations, financial condition or reputation. ” 33 Table of Content Given the global nature of our operations, we are subject to a variety of local, state, national, and international laws and directives and regulations in the United States and abroad related to privacy and data protection, data security, data storage, retention, transfer and deletion, technology protection, machine learning, AI and personal information.
For more information, see “— We may be subject to information technology system breaches, failures, or disruptions that could harm our operations, financial condition or reputation. ” 35 Table of Content Given the global nature of our operations, we are subject to a variety of local, state, national, and international laws and directives and regulations in the United States and abroad related to privacy and data protection, data security, data storage, retention, transfer and deletion, technology protection, AI and personal information.
Due to the sensitive nature of our work and our confidentiality obligations and despite our ongoing efforts to provide increased transparency, where possible, into our business, operations, and product capabilities, we may be unable to or limited in our ability to respond to such harmful coverage, which could have a negative impact on our business.
Due to the sensitive nature of our work and our confidentiality obligations and despite our ongoing efforts to provide increased transparency, when possible, into our business, operations, and product capabilities, we may be unable to or limited in our ability to effectively respond to such harmful coverage, which could have a negative impact on our business.
If an indemnification event will occur, our business results may be adversely affected. General Risk Factors Joint ventures, partnerships, and strategic alliances may have a material adverse effect on our business, results of operations and prospects. We intend to continue to enter into joint ventures, partnerships, and strategic alliances as part of our long-term business strategy.
If an indemnification event will occur, our business results may be adversely affected. 51 Table of Content General Risk Factors Joint ventures, partnerships, and strategic alliances may have a material adverse effect on our business, results of operations and prospects. We intend to continue to enter into joint ventures, partnerships, and strategic alliances as part of our long-term business strategy.
We have changed our pricing models in the past and expect that we may further change them from time to time in the future, including as a result of competition, global economic conditions, general reductions in our customers’ spending levels, pricing studies, or changes in how our solutions are broadly offered or consumed.
We have changed our pricing models in the past and expect that we will further change them from time to time in the future, including as a result of competition, global economic conditions, general reductions in our customers’ spending levels, pricing studies, delivert models or changes in how our solutions are broadly offered or consumed.
The occurrence of any of these risks could have a material adverse effect on our business, results of operations, and financial condition. Moreover, we cannot assure you that we would not be exposed to unknown liabilities. 52 Table of Content Our international operations expose us to business, political and economic risks that could cause our operating results to suffer.
The occurrence of any of these risks could have a material adverse effect on our business, results of operations, and financial condition. Moreover, we cannot assure you that we would not be exposed to unknown liabilities. Our international operations expose us to business, political and economic risks that could cause our operating results to suffer.
As a result, if revenue from international operations do not offset the expenses of establishing and maintaining foreign operations, our business, operating results and financial condition will suffer. If our goodwill or intangible assets become impaired, we may be required to record a significant charge to earnings.
As a result, if revenue from international operations do not offset the expenses of establishing and maintaining foreign operations, our business, operating results and financial condition will suffer. 54 Table of Content If our goodwill or intangible assets become impaired, we may be required to record a significant charge to earnings.
Furthermore, although we offer extensive training options to users, if customer personnel do not opt to enroll in training, stay current on the use of our solutions or are not well trained in the use of our solutions, customers may open more support tickets, turn to our technical support more often, demand the attention of our customer satisfaction teams, or may defer the deployment of our solutions and solutions, may deploy them in a more limited manner than originally anticipated, or may not deploy them at all.
Furthermore, although we offer extensive training options to customers, if customer personnel do not opt to enroll in training, stay current on the use of our solutions or are not well trained in the use of our solutions, customers may not realize the full value of our solutions, open more support tickets, turn to our technical support more often, demand the attention of our customer satisfaction teams, or may defer the deployment of our solutions and solutions, may deploy them in a more limited manner than originally anticipated, or may not deploy them at all.
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.
Our decisions not to do business within certain countries or with certain customers may alter our expectations surrounding our long-term financial benefits and results, which may harm our growth prospects, business, and results of operations.
Although to date, malicious activities directed at us have not had a material impact on our business nor, to our knowledge, have they impacted the integrity of the data that our solutions extract from devices, future malicious activities could compromise our solutions and cause us to incur liabilities that may have a material adverse impact on our reputation and business.
Although to date, malicious activities directed at us have not had a material impact on our business nor, to our knowledge, have they impacted the integrity of the data that our solutions extract from devices, analyze or store, future malicious activities could compromise our solutions and cause us to incur liabilities that may have a material adverse impact on our reputation and business.
While we maintain insurance coverage that we believe is adequate for our business, such coverage may not cover all potential costs and expenses associated with incidents that may occur in the future. We may be materially adversely affected by negative publicity related to our business and use of our products.
While we maintain insurance coverage that we believe is adequate for our business, such coverage may not cover all potential costs and expenses associated with incidents that may occur in the future. 19 Table of Content We may be materially adversely affected by negative publicity related to our business and use of our products.
Additionally, the IP ownership and license rights of new technologies such as AI have not been fully addressed by U.S. courts interpreting current and new laws or regulations, and the use or adoption of such technologies in our products and services may expose us to potential intellectual property claims; breach of a data license, software license, or website terms of service allegations; claimed violations of privacy rights; and other tort claims.
Additionally, the intellectual property ownership and license rights of new technologies such as those generated using AI have not been fully addressed by U.S. courts interpreting current and new laws or regulations, and the use or adoption of such technologies in our products and services may expose us to potential intellectual property claims; breach of a data license, software license, or website terms of service allegations; claimed violations of privacy rights; and other tort claims.
Government shutdowns, the use of continuing resolutions, and the federal debt ceiling can adversely affect our industry and the funding for our solutions. If appropriations were delayed or a government shutdown were to occur and were to continue for an extended period of time, we could be at risk of disruptions to our business.
Government shutdowns, the use of continuing resolutions, and the U.S federal debt ceiling could adversely affect our industry and the funding for our solutions. If appropriations were delayed or a government shutdown were to occur and were to continue for an extended period of time, we could be at risk of disruptions to our business.
Furthermore, if our contractual subscription terms were to shorten, it could lead to increased volatility of, and diminished visibility into, future recurring revenue. If our sales of new or recurring subscriptions and software-related support service contracts decline from current levels, our revenue and revenue growth may decline, and our business will suffer.
Furthermore, if our contractual subscription terms were to shorten, it could lead to increased volatility of, and diminished visibility into, future recurring revenue. If our sales of new or recurring subscriptions and related professional service contracts decline from current levels, our revenue and revenue growth may decline, and our business will suffer.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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We also provide a decoding solution that converts the raw data extracted from mobile phones, tablets, computers, cloud-based applications, automobiles, open source information, GPS devices, memory sticks, drones, and call detail records (“CDRs”) as well as from other digital sources like the web into human readable format that can be used by relevant stakeholders.
We also provide a decoding solution that converts the raw binary data extracted from mobile phones, tablets, computers, cloud-based applications, automobiles, open source information, GPS devices, memory sticks, drones, and call detail records (“CDRs”) as well as from other digital sources like the web into human readable format that can be used by relevant stakeholders.
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.
However, currently, 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.
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.
Against the backdrop of these trends, many relevant agency personnel believe they do not 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.
Our recent growth with existing public sector customers has been primarily driven by upselling and cross-selling digital forensic software solutions with advanced access and extraction capabilities and, to a lesser extent, case and evidence management offerings to digital forensics units and cross-selling investigative analytics and other solutions to investigative units.
Our recent growth with existing Public Sector Customers has been primarily driven by upselling and cross-selling digital forensic software solutions with advanced access and extraction capabilities and, to a lesser extent, case and evidence management offerings and cross-selling investigative analytics and other solutions to investigative units.
(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.
(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., 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., and Cellebrite Federal Solutions Inc. which is 100% owned by Cellebrite Inc.
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.
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, organized crime, human trafficking, financial crimes including those involving cryptocurrency, corporate security, and intellectual property theft.
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.
In addition, we have offices in the following locations: Morristown, New Jersey; Ottawa, Canada; Singapore; New Delhi, India; 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.
We believe that Guardian is differentiated by: • Share and review functionality for reports and evidence benefiting from our best-in-class decoding capabilities; • Streamlined workflows to support the management of evidence within the Digital Forensic Unit; • Monitoring and audit logs that are critical to establishing and validating the chain of custody; • User access controls and permissioning capabilities; • Security and scalability; and • Optimized packaging and pricing aimed at enabling more customers to benefit from high-value Guardian functionality.
We believe that Guardian is differentiated by: • Share and review functionality for reports and evidence benefiting from our best-in-class decoding capabilities; • Streamlined workflows to support the management of evidence within the Digital Forensic Unit; 70 Table of Content • Monitoring and audit logs that are critical to establishing and validating the chain of custody; • User access controls and permissioning capabilities; • Security and scalability; and • Optimized packaging and pricing aimed at enabling more customers to benefit from high-value Guardian functionality.
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.
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 sales force in the EMEA, LATAM and Asia Pacific regions is augmented by reseller relationships.
Non-compliance with the GDPR and the UK equivalent legislation may result in administrative fines or monetary penalties of up to 4% of worldwide annual revenue in the preceding financial year or €20 million (whichever is higher) for the most serious infringements, and could result in proceedings against us by governmental entities or other related parties and may otherwise adversely impact our business, financial condition, and results of operations.
Non-compliance with the GDPR and the UK equivalent legislation may result in administrative fines or monetary penalties of up to 4% of worldwide annual revenue in the preceding financial year or €20 million (or GBP 17.5 million under the UK legislation), whichever is higher for the most serious infringements, and could result in proceedings against us by governmental entities or other related parties and may otherwise adversely impact our business, financial condition, and results of operations.
For more information, see “—Issues in the use of artificial intelligence (“AI”) (including machine learning) in our C2C Platform may result in reputational harm, liability or impact our financial results.” Intellectual Property Our suite of digital investigative solutions is based on proprietary software and related intellectual property rights.
For more information, see “—Issues in the use of artificial intelligence (“AI”) (including machine learning) in our C2C Platform may result in reputational harm, liability or impact our financial results.” Intellectual Property Our suite of DI 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 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. Sanctions and Export Controls We are subject to Israeli regulations controlling the export of encryption technology.
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.
However, public sector investigations still rely heavily 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 few years.
We also cross-sell and upsell our investigative solutions into the Investigative Units of our customers. In the private sector, we target primarily larger enterprises and service providers which are contracted by corporations to oversee Discovery and corporate investigatory activities.
We also cross-sell and upsell our investigative solutions into the Investigative & Intelligence Units of our customers. In the private sector, we target primarily larger enterprises and service providers which are contracted by corporations to oversee eDiscovery and corporate investigatory activities.
Cellebrite’s 2023 Enterprise Solutions Trends Survey revealed that 70 percent of eDiscovery professionals that were surveyed agreed that accessing data from offsite mobile phones and other digital sources is a major endpoint collection challenge. • Disruptive to productivity : Collecting data from the phones, computers and other devices that employees use for work can be disruptive to productivity especially if it requires the employees to lose access to the work device for an extended period of time. • Soaring data sources can lead to labor-intensive, expensive and time-consuming investigations : Employees often have the flexibility to use smartphones, tablets and computers to access a range of cloud-based applications, virtual meeting platforms, social media and messaging apps to do their jobs while also having those devices available for personal use.
Cellebrite’s Industry Trends Report revealed that 65 percent of eDiscovery professionals that were surveyed agreed that accessing data from offsite mobile phones and other digital sources is a major endpoint collection challenge. • Disruptive to productivity : Collecting data from the phones, computers and other devices that employees use for work can be disruptive to productivity especially if it requires the employees to lose access to the work device for an extended period of time. • Soaring data sources can lead to labor-intensive, expensive and time-consuming investigations : Employees often have the flexibility to use smartphones, tablets and computers to access a range of cloud-based applications, virtual meeting platforms, social media and messaging apps to do their jobs while also having those devices available for personal use.
More specifically, as a result of a search warrant or owner consent, our solutions help our users lawfully access and extract digital data, including deleted or hidden data, from the widest range of mobile phones, including smartphones, feature phones and basic phones, computers and cloud-based applications.
More specifically, as a result of a search warrant or owner consent, our solutions are designed to help our users lawfully access and extract digital data, including encrypted, deleted or hidden data, from the widest range of mobile phones, including smartphones, feature phones and basic phones, computers and cloud-based applications.
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.
For more information, see “ Part I, Item 10. Additional Information—H. Documents on Display .” B. BUSINESS OVERVIEW Our Mission Our mission is to provide the primary suite of digital investigative software solutions for public and private sector customers.
Guardian enables examiners and other personnel in Digital Forensics Units to securely share, review and manage digital evidence, thereby supporting increased collaboration with relevant stakeholders, including investigators and prosecutors. Use of Guardian enables customers to boost productivity, streamline investigations, and increase the admissibility of digital evidence during a trial.
Guardian enables examiners and other personnel in Digital Forensics Units to securely store, share, review and manage digital evidence, thereby strengthening the chain of custody for digital evidence, and supporting increased collaboration with relevant stakeholders, including investigators, and prosecutors. Use of Guardian enables customers to boost productivity, streamline investigations, and increase the admissibility of digital evidence during a trial.
For Enterprises and Service Providers: • Digital Forensic Software: Cellebrite’s digital forensic software for enterprises and service providers includes Inseyets for Enterprise, Endpoint Inspector, and Mobile Now. It enables legal, compliance and cybersecurity corporate staff to collect digital data from mobile phones, computers and business cloud-based applications. .
For Enterprises and Service Providers: • Digital Forensic Software: Cellebrite’s digital forensic software for enterprises and service providers includes Inseyets for Enterprise, Endpoint Inspector, and Endpoint Mobile Now. Cellebrite’s solutions enable legal, compliance and cybersecurity corporate staff to collect digital data from mobile phones, computers and business cloud-based applications.
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.
Overview Cellebrite is a leading provider of digital investigative solutions that help public and private sector customers around the world transform their investigative workflows and make digital evidence more accessible, actionable and defensible.
Scalable management platforms can assist law enforcement agencies to ensure compliance with agency protocols and various regulatory requirements, such as to strengthen the chain of custody, and in making it easier and faster to share evidence-related information among authorized parties in a verifiable, defensible, secure and scalable manner.
Scalable, secure management platforms can assist law enforcement agencies to ensure compliance with agency protocols and various regulatory requirements, thereby strengthening the chain of custody while making it easier and faster to share evidence-related information among authorized parties in a verifiable, defensible, secure and scalable manner.
Cellebrite’s remote and on-premise offerings capture the necessary data to advance eDiscovery and corporate investigations, which in turn, enables the customer to build a comprehensive digital picture , recover critical information, better understand cybersecurity intrusions , while protecting employees’ privacy.
Cellebrite’s digital forensic software offerings capture the necessary data to advance eDiscovery and corporate investigations, which in turn, enables the customer to build a comprehensive digital picture, recover critical information, better understand cybersecurity intrusions — all while protecting employees’ privacy.
As we drive greater adoption of our cloud-based solutions, we plan to continue making investments to further scale our infrastructure, aiming to achieve compliance with various technical program requirements, standards and certifications for deployment of our cloud-based solutions at scale by federal and state government customers.
As we drive greater adoption of our cloud-based solutions, we plan to continue making investments to further scale our Cellebrite Cloud Platform infrastructure, aiming to achieve compliance with various technical program requirements, standards and certifications for deployment of our cloud-based solutions at scale by federal and state government customers in the different regions we sell to.
Initial depl oyments by national, regional and local law enforcement agencies primarily involve our digital forensics software.
Initial deployments by national, regional and local law enforcement agencies primarily involve our digital forensics software.
The license contains customary undertakings from customers and additionally requires them not to use the software in violation of applicable laws (including laws with respect to privacy and other human rights and the rights of individuals), any human rights standards and best practices including internationally recognized human rights instruments, such as the Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights, and the International Labor Organization Declaration on Fundamental Principles and Rights at work, or in support of any illegal activity or to violate the rights of any third party.
The license contains customary undertakings from customers and additionally requires them not to use the software in violation of applicable laws (including laws with respect to privacy and other human rights and the rights of individuals), any human rights standards and best practices including internationally recognized human rights instruments, such as the Universal Declaration of Human Rights, or in support of any illegal activity or to violate the rights of any third party.
Cellebrite Advanced Services helps its customers reduce device backlog and address evolving technological workloads. Customers Cellebrite’s base of approximatel y 7,000 customers include approximately 5,300 federal, state and local agencies as well as approximately 1,700 corporations and service providers. In 2023, Cellebrite’s public sector customers represented more th an 90% of total revenue.
Cellebrite Advanced Services helps its customers reduce device backlog and address evolving technological workloads. Customers Cellebrite’s base of approximately 7,000 customers include approximately 5,300 federal, state and local agencies as well as approximately 1,700 corporations and service providers. In 2024, Cellebrite’s Public Sector Customers accounted for more than 90% of total revenue.
We believe that our offerings are differentiated by: • the breadth and depth of our mobile phone coverage as well as broad support for over 31,000 physical and virtual device profiles across mobile, laptop, computers, memory containers, applications, CDRs, etc.; • advanced capabilities for lawful access and complete extraction for the most advanced smartphones with extensive, unmatched Android coverage; • best-in-class decoding of digital data across the widest range of digital sources and thousands of applications, regardless of the digital forensics software used for extraction; and • pricing that is optimized to address a wide range of customer technical requirements and budgets. 66 Table of Content Within Digital Forensics Units, our Case and Evidence Management solution, Guardian, addresses a growing trend to manage digital evidence with a SaaS-based delivery model.
We believe that our offerings are differentiated by: • the breadth and depth of our mobile phone coverage as well as broad support for over 31,000 physical and virtual device profiles across mobile, laptop, computers, memory containers, applications, CDRs, etc.; • advanced capabilities for lawful access and complete extraction for the most advanced smartphones with extensive, unmatched Android coverage; • best-in-class decoding of digital data across the widest range of digital sources and thousands of applications, regardless of the digital forensics software used for extraction; and • pricing that is optimized to address a wide range of customer technical requirements and budgets.
As a result, there are more data sources involved in today’s corporate investigations. Without advanced processing and analytics, traditional review of these sources will require larger teams of professionals, which can be costly, may require third-party investigators and potentially invade user privacy. Just as important, plaintiffs, defendants and judges want access to the relevant data quicker.
Without advanced processing and analytics, traditional review of these sources will require larger teams of professionals, which can be costly, may require third-party investigators and potentially invade user privacy. Just as important, plaintiffs, defendants and judges want access to the relevant data quicker.
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.
We have also extended our reach into the Investigative & Intelligence 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.
We believe that our digital forensic software solutions for the private sector are differentiated by: • the ability to offer an integrated suite of solutions that support both remote and on-premise data collection for mobile, computer and business applications; • deployment flexibility with cloud, SaaS and traditional on-premise offerings; • targeted extraction to selectively collect specific information to help save time, money and protect user privacy; • integration with specialized, third-party processing and analytics systems typically used in corporate investigations and eDiscovery activities; and • packaging and pricing to optimize value for service providers. 67 Table of Content License Terms The license to use our products is granted to customers on a limited, non-transferable, non-sublicensable, territory and subscription basis.
We believe that our digital forensic software solutions for the private sector are differentiated by: • the ability to offer an integrated suite of solutions that support both remote and on-premise data collection for mobile, computer and business applications; • deployment flexibility with SaaS and traditional on-premise offerings; • targeted extraction to selectively collect specific information to help save time, money and protect user privacy; • integration with specialized, third-party processing and analytics systems typically used in corporate investigations and eDiscovery activities; and • packaging and pricing to optimize value for service providers.
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.
As a result, for the purposes of the GDPR and the UK equivalent legislation, we are not considered to be a controller regarding our customers' PII processed as part of the services provided to them and serve as a processor in a limited number of circumstances, within the meaning of those terms under applicable data privacy laws.
(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.
Name of Subsidiary Jurisdiction of Organization Cellebrite 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.
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.
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 currently stands to expire on May 15, 2026.
Other key digital forensic offerings purchased and deployed by customers at scale include UFED, Premium and Physical Analyzer. • Case and Evidence Management : Cellebrite’s Guardian solution is a centralized, scalable, secure case and evidence management SaaS-based platform.
Other legacy digital forensic offerings purchased and deployed by customers at scale in prior years include UFED, Premium and Physical Analyzer. 62 Table of Content • Case and Evidence Management : Cellebrite’s Guardian solution is a centralized, scalable, secure SaaS-based case and evidence management platform.
Within the Digital Forensics Units of larger customers, a multi-vendor environment is common in part because a customer may desire to verify findings from its primary solution on a secondary solution, or because certain solutions are optimized for certain device types or applications.
(which was merged with GrayShift in 2023), Microsystemation AB, Oxygen Forensics, Inc., and Exterro Inc. Within the Digital Forensics Units of larger customers, a multi-vendor environment is common in part because a customer may desire to verify findings from its primary solution on a secondary solution, or because certain solutions are optimized for certain device types or applications.
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.
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 US main offices are currently located in a 12,698 sq. ft facility that we lease in Vienna, Virginia USA, where the offices are used for our sales, marketing and other go-to-market activities in the Americas. Our lease for this facility was extended until April 30, 2028.
Our lease for this facility was extended until February 28, 2031. 76 Table of Content Our US main offices are currently located in a 12,698 sq. ft facility that we lease in Vienna, VA USA, where the offices are used for our sales, marketing and other go-to-market activities in the Americas.
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.
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.
Early case assessment has become increasingly necessary to provide more focused, relevant and narrow results in the review phase. • Large data volumes : With employees using so many different and disparate mobile phones, computers, tablets, platforms, systems and applications, organizations are challenged to identify and collect only the relevant data. • Understanding root causes for security breaches are critical to limiting the potential damage and preventing future intrusions : According to IBM’s 2023 Data Breach Report, it takes over 200 days on average for an organization to identify a breach and the average cost of a data breach was approximately $4.5 million.
Early case assessment has become increasingly necessary to provide more focused, relevant and narrow results in the review phase. • Large data volumes : With employees using so many different and disparate mobile phones, computers, tablets, platforms, systems and applications, organizations are challenged to identify and collect only the relevant data. • Understanding root causes for security breaches are critical to limiting the potential damage and preventing future intrusions : According to IBM’s 2024 Data Breach Report, it takes nearly 300 days on average for an organization to identify and contain a breach and the average cost of a data breach was approximately $4.9 million, a 10% increase from 2023. 61 Table of Content For enterprises, access to and insights into digital data is critical to advancing eDiscovery, corporate investigations and incidence response.
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.
Just as notable, advanced mobile phone security and application encryption makes it harder for law enforcement to access and extract relevant information. In recent years, Cellebrite’s Industry Trends reports consistently noted that approximately two-thirds of the mobile phones involved in an investigation enter the digital forensics lab locked.
With a strong financial foundation, our growth strategy also includes disciplined pursuit and evaluation of acquisition candidates that can help us accelerate innovation and speed time to market with C2C offerings, capabilities and features that can deepen existing customer relationships or enable us to expand our total addressable market, accelerate revenue growth, broaden our customer base, penetrate new buying centers within the installed customer base, or gain further scale with our SaaS offerings.
With a strong financial foundation, our growth strategy also includes disciplined pursuit and evaluation of acquisition candidates that can help us accelerate innovation and speed time to market with C2C offerings, capabilities and features that can deepen existing customer relationships or enable us to expand our total addressable market, accelerate revenue growth, broaden our customer base, penetrate new buying centers within the installed customer base, or gain further scale with our SaaS offerings. 67 Table of Content Research and Development Our ongoing investment in research and development is focused on enhancing our existing offerings with new features, functionality and capabilities as well as developing new offerings aiming to address evolving customer needs.
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.
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. We have established our leadership in digital forensics software primarily used by Digital Forensic Units within law enforcement agencies.
No organization accounted for more than 5% of our total 2023 revenue. Our top 25 customers accounted for 26% of total 2023 revenue. Our customer base is geographically diverse. For a breakdown of our revenues by geography, see Note 1 7 to our consolidated financial statements in “ Part III, Item 18.
Our top 25 customers accounted for 25% of total 2024 revenue, which compares with our top 25 customers accounting for 26% of total 2023 revenue. Our customer base is geographically diverse. For a breakdown of our revenue by geography, see Note 17 to our consolidated financial statements in “ Part III, Item 18.
Our technical customer support teams operate from multiple office locations around the world, providing responsive, native language assistance by phone and email during business hours in certain countries and on a 24-hour basis in other countries. We complement and augment our support teams with a range of online resources including those available through the MyCellebrite Learning Hub.
Our technical customer support teams operate from multiple office locations around the world, providing responsive, native language assistance by phone and email during business hours in certain countries and on a 24-hour basis in other countries.
On April 8, 2021, we entered into the Merger with TWC, a publicly listed special purpose acquisition company and Merger Sub in the USA. On August 30, 2021, the Merger was consummated and Merger Sub merged with and into TWC, the separate corporate existence of Merger Sub ceased and TWC became the surviving corporation and a wholly-owned subsidiary of Cellebrite.
On August 30, 2021, the Merger was consummated and Merger Sub merged with and into TWC, the separate corporate existence of Merger Sub ceased and TWC became the surviving corporation and a wholly-owned subsidiary of Cellebrite.
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 performance of such Advanced Services, we maintain such data securely with limited access, and delete such data following confirmation that the data has been received by the customer.
Investigative units within larger law enforcement agencies sometimes establish and manage multiple divisions or sub-units comprising teams of detectives, investigators, analysts or other specialized professionals who focus on specific crime types such as homicide, gangs, sex crimes, crimes against children, narcotics and many others, As of December 31, 2023, our total customers were approximately 7,000.
Investigative units within larger law enforcement agencies sometimes establish and manage multiple divisions or sub-units comprising teams of detectives, investigators, analysts or other specialized professionals who focus on specific crime types such as homicide, gangs, sex crimes, crimes against children, narcotics and many others. 64 Table of Content No organization accounted for more than 5% of our total 2024 revenue.
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.
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. According to multiple studies and reports, more than 90% of all reported crime has a digital element.
With the user’s consent, enterprise customers and service providers can use our portfolio of solutions to collect and review digital data, regardless of where the device is located.
With the user’s consent, enterprise customers and service providers can use our portfolio of solutions to collect and review digital data, regardless of where the device is located, an important capability in today’s work environment, where many of the employees work remotely, outside the enterprise IT environment.
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 addition, as part of the provision of our Advanced Services in which we serve as an outsourced lab, we extract data which may include sensitive data and PII, from digital sources that are sent to us by our customers.
Given the global nature of our operations, we are subject to a variety of local, state, national, and international laws and directives and regulations in the United States and abroad related to privacy and data protection, data security, data storage, retention, transfer and deletion, technology protection, and personal information.
Given the global nature of our operations, we are subject to a variety of local, state, national, and international laws and directives and regulations in the United States, the EU and the UK and abroad related to privacy and data protection, data security, data storage, retention, transfer and deletion, technology protection, and personal information. 73 Table of Content The United States has federal and state laws and regulations regarding privacy and information security, including consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), data breach notification laws, and personal data privacy laws.
Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, retention, disclosure, security, transfer, and other processing of data that identifies or may be used to identify or locate an individual.
Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, retention, disclosure, security, transfer, and other processing of data that identifies or may be used to identify or locate an individual. Some countries and regions have passed legislation that imposes significant obligations in connection with privacy, data protection, and information security, including the GDPR.
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.
We have internal processes for deleting such data shortly after the completion of the customer support. 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-based solution.
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.
These customers utilize our Inseyets family of digital forensics solutions 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 reviewed by and shared with investigators, analysts, prosecutors and other relevant professionals to promote legally sanctioned investigations.
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.
If this occurs and if we determine that this provision applies to some or all of our products, we may need to adapt our licensing, marketing and export practices to accommodate this regulatory change. 72 Table of Content 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.
Inseyets is designed to help law enforcement agencies of all sizes complete device examinations faster, thereby supporting their efforts to expedite investigations and reduce device backlog.
Inseyets is designed to help law enforcement agencies of all sizes complete device examinations faster, thereby supporting their efforts to expedite investigations and reduce device backlog. Cellebrite’s AI-powered capabilities within Inseyets enable examiners to quickly identify and validate potentially valuable digital evidence.
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 also lease a 1,445 square meters facility in Kiryat Malachi, Israel where the premises are used for our hardware factory.
Smaller agencies may operate digital forensic units with limited resources or cross-train certain staff to use digital forensics software and other related tools in support of their investigative efforts. In addition to use within digital forensics laboratories, we support customers who use our solutions in the field (outside of a traditional laboratory environment).
Smaller agencies may operate digital forensic units with limited resources or cross-train investigators and other staff to use digital forensics software and other related tools in support of their investigative efforts.
We may terminate any license, among other things, in the event of a material breach that is not cured after 30 days’ notice. In addition, we may disable the use of our software, among other things, if it is determined that our products were used in violation of the license or applicable laws.
We may terminate any license, among other things, in the event of a material breach that is not cured after 30 days’ notice.
In addition, we participate in and sponsor relevant industry events and trade shows, and use account-based marketing to build awareness, create demand and drive user adoption to support account growth. 65 Table of Content To attract and engage new customers, Cellebrite’s branding and public relations efforts uses a variety of channels to communicate, such as press releases, industry events, social media, content marketing, customer success stories and community engagement initiatives.
To attract and engage new customers, Cellebrite’s branding and public relations efforts uses a variety of channels to communicate, such as press releases, industry events, social media, content marketing, customer success stories and community engagement initiatives.
For the year ending December 31, 2023, our net churn was 10% , which reflects the cumulative impact of license downgrades, cancellations and price negotiations from customers, which is mostly impacted by license cancellations tied to time-based projects and specialized task forces that have ended; license cancellations associated with budget constraints, a dynamic that typically impacts smaller government agencies and enterprises; and our decision in recent years to withdraw from certain countries and not renew agreements with certain customers in order to ensure compliance with certain laws and regulations, adhere to our high standards for ethics and responsible business practices, or most effectively and efficiently achieve our business objectives. 62 Table of Content Strategy and Key Strategic Priorities Our growth is underpinned by an ongoing commitment to fund innovation and execute on our go-to-market initiatives intended to further expand the scope of existing customer relationships across our global installed customer base and, to a lesser extent, win business with new customers.
Our gross revenue retention is impacted by the cumulative impact of license downgrades, cancellations and price negotiations from customers, which is mostly impacted by license cancellations tied to time-based projects and specialized task forces that have ended; license cancellations associated with budget constraints, a dynamic that typically impacts smaller government agencies and enterprises; and our decision in recent years to withdraw from certain countries and not renew agreements with certain customers in order to ensure compliance with certain laws and regulations, adhere to our high standards for ethics and responsible business practices, or most effectively and efficiently achieve our business objectives.
We are domiciled in Israel and our registered office is currently located at 94 Shlomo Shmelzer Road, Petah Tikva 4970602, Israel, which also currently serves as our principal executive offices, and our telephone number is +972-(73) 394-8000.
Our registered office is currently located at 94 Shlomo Shmelzer Road, Petah Tikva 4970602, Israel, which also currently serves as our principal executive offices, and our telephone number is +972-(73) 394-8000. On April 8, 2021, we entered into the Merger with TWC, a publicly listed special purpose acquisition company and Merger Sub in the USA.
Financial Information . ” Historically, we generate the majority of our revenue in the second half of our fiscal year with 55%, 54% and 54% of total annual revenue occurring in the second half of 2023, 2022 and 2021, respectively. This trend primarily reflects the timing of subscription agreements for our on-premise software solutions with U.S.
Financial Information . ” Historically, we generate the majority of our revenue in the second half of our fiscal year with 54%, 54% and 54% of total annual revenue occurring in the second half of 2024, 2023 and 2022, respectively.
While we have an extensive global customer base that serves as the foundation for much of our growth, we continue to win business with new public and private sector customers.
Our ability to expand existing customer relationships is partially reflected in our 124% recurring revenue dollar-based net retention rate (NRR) as of December 31, 2024. While we have an extensive global customer base that serves as the foundation for much of our growth, we continue to win business with new public and private sector customers.
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.
Legal Proceedings See “ Part I, Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Legal Proceedings .” C. 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.
For Investigative Units: • Investigative Analytics: Cellebrite Pathfinder enables investigative teams to analyze vast volumes of digital data collected from disparate digital sources to accelerate investigations, surfacing leads, highlighting patterns and identifying important connections to help them in their efforts to resolve cases faster and more efficiently in support of legally sanctioned investigations.
The proper use of Guardian supports key stakeholders such as investigators, prosecutors and other authorized personnel in their efforts to accelerate investigations and resolve cases faster by providing them with the ability to instantly and securely access, review and analyze evidence files and documents in the cloud. • Investigative Analytics: Cellebrite Pathfinder enables investigative teams to analyze vast volumes of digital data collected from disparate digital sources to accelerate investigations, surfacing leads, highlighting patterns and identifying important connections to help them in their efforts to resolve cases faster and more efficiently in support of legally sanctioned investigations.
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.
In addition, we may disable the use of our software, among other things, if it is determined that our products were used in violation of the license or applicable laws. 71 Table of Content 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.
Customer Success & Technical Customer Support: We provide our customers with post-sale support to help customers maximize the utility of our offerings, address time-sensitive questions about the features and functionality of our solutions, and respond to technical issues that may arise.
In 2025, we plan to hold our first user conference, the C2C Summit, which will enable us to fortify existing customer relationships, showcase our solutions and provide high-quality educational sessions. 69 Table of Content Customer Success & Technical Customer Support: We provide our customers with post-sale support to help customers maximize the utility of our offerings, address time-sensitive questions about the features and functionality of our solutions, and respond to technical issues that may arise.
Additionally, by using the right solutions, enterprises and service providers will efficiently expedite their investigations, eliminate extraneous data that is unrelated to the scope of an investigation and minimize the amount of time that data collection disrupts employee productivity. 59 Table of Content Cellebrite’s Case-to-Closure (C2C) Platform For Digital Forensics Units • Digital Forensic Software: Cellebrite’s digital forensic software is used by examiners and other law enforcement professionals within the Digital Forensic Units of law enforcement agencies and by trained professionals across a wide range of federal or national agencies, to collect and review digital evidence from a wide range of digital sources when conducting legally sanctioned investigations.
Cellebrite’s Case-to-Closure (C2C) Platform • Digital Forensic Software: Cellebrite’s digital forensic software is used by examiners and other law enforcement professionals within the Digital Forensic Units of law enforcement agencies and by trained professionals across a wide range of federal or national agencies, to collect and review digital evidence from a wide range of digital sources when conducting legally sanctioned investigations.
Section 5A(4)(b) of Part 2 of Chapter 5 of the Wassenaar Arrangement Dual Use List includes a new provision which (while not specifically stating) appears to apply to digital forensic technologies.
Section 5A(4)(b) of Part 2 of Chapter 5 of the Wassenaar Arrangement Dual Use List includes a new provision which (while not specifically stating) appears to apply to digital forensic technologies. The Israeli Ministry of Defense has recently re-energized its commitment to implementing a reform in this field, cancelling the existing encryption control regime and applying the relevant Wassenaar provisions.
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.
States continue to revise and pass new privacy-related legislation. For example, California’s privacy law the CCPA, and follow-on legislation in the CPRA, provides for civil penalties for violations, as well as a private right of action for data breaches that may increase data breach litigation.
While we may not compete directly against many of these companies, spending on their products and services may be prioritized over spending on our offerings. Additionally, certain competitors may be able to leverage their technical expertise or sales resources to respond more effectively than we can to changing or emerging technologies, standards and regulations or customer requirements.
Additionally, certain competitors may be able to leverage their technical expertise or sales resources to respond more effectively than we can to changing or emerging technologies, standards and regulations or customer requirements. Within the Digital Forensics Units, our digital forensics software offerings primarily compete with Magnet Forensics Inc.
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.
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 with other businesses ”.
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.
However, obtaining that evidence is often complicated by the volume of structured and unstructured data contained on mobile phones and other digital sources that continues to grow. The average mobile phone contains more than 60,000 messages, 32,000 images and 1,000 videos. Cellebrite’s Industry Trends Report highlighted a 76% growth in digital data from devices in the past 3 years.
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 digital forensics collect & review software, case and evidence management, and investigative 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. 58 Table of Content For more than 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 Digital Investigative (DI) software solutions used to access, collect, review, extract, decode, decrypt, analyze, share and manage digital evidence across the investigative lifecycle.
Competition We deliver a broad set of capabilities across the Case to Closure investigative workflow to support an expansive, global customer base. We typically compete with specialized vendors who focus on addressing certain parts of the digital investigation lifecycle. Some competitors have a specialty in digital forensics software, while others primarily offer analytics tools.
We typically compete with specialized vendors who focus on addressing certain parts of the digital investigation lifecycle. Some competitors have a specialty in digital forensics software, while others primarily offer analytics tools. Nevertheless, consolidation in the industry in recent years has resulted in certain competitors providing a broader range of solutions.
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.
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.
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.
The final form, timeline, and effective date of a potential U.S. federal privacy law is uncertain at this time. 74 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.
As of December 31, 2023, we reported cash and cash equivalents, cash deposits, short-term marketable securities and long-term marketable securities totaling $331.8 million with no outstanding debt.
Our business has historically generated strong cash flow from operations and has been minimally capital intensive. As of December 31, 2024, we reported cash and cash equivalents, cash deposits, short-term marketable securities and long-term marketable securities totalin g $ 483.8 million with no outstanding debt.
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.
We utilize a combination of direct sales and indirect channels to reach Public Sector Customers. Account executives and sales managers directly manage relationships with our largest customers while dedicated inside sales teams typically work with smaller customers.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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We expect that our gross margin will fluctuate from period to period depending on the interplay of these various factors. Operating Expenses Operating expenses consists of research and development, sales and marketing and general and administrative.
We expect that our gross margin will fluctuate from period to period depending on the interplay of these various factors. Operating Expenses Operating expenses consists of research and development, sales and marketing and general and administrative expenses.
The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes.
The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes.
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.
We plan to continue to increase penetration within our existing customers with our Case-to-Closure Platform of DI 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.
These measures, which the Company refers to as our non-GAAP financial measures, are not prepared in accordance with GAAP. The Company believes that the non-GAAP financial measures provide a more meaningful comparison of its operational performance from period to period and offers investors and management greater visibility to the underlying performance of its business.
These measures, which the Company refers to as our non-GAAP financial measures, are not prepared in accordance with GAAP. The Company believes that the non-GAAP financial measures provide a meaningful comparison of its operational performance from period to period and offers investors and management greater visibility to the underlying performance of its business.
Financing Activities Cash provided by financing activities in the year ended December 31, 2023 was $21.8 million, mainly as a result of proceeds from exercise of stock options to shares of $19.1 million and proceeds from Employee Share Purchase Plan, net of $2.6 million.
Cash provided by financing activities in the year ended December 31, 2023 was $21.8 million, mainly as a result of proceeds from exercise of stock options to shares of $19.1 million and proceeds from Employee Share Purchase Plan of $2.6 million.
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.
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.
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.
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. 83 Table of Content Financial Expense, Net Financial expense, 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.
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.
Subscription services revenue is the revenue that is recognized over the life of the subscription and term-license revenue is the revenue that is immediately recognized upon the sale of an on-premise subscription license.
Allowance for credit losses on AFS debt securities are recognized as a charge in financial (expenses) income and other, net, on the consolidated statements of income, and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive income. As of December 31, 2023, no credit losses have been recorded.
Allowance for credit losses on AFS debt securities are recognized as a charge in financial (expenses) income and other, net, on the consolidated statements of income, and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive income. As of December 31, 2024, no credit losses have been recorded.
Material U.S Federal Income Tax Considerations — Non-U.S Holders - Tax Benefits Subsequent to the 2005 Amendmen t.” 84 Table of Content B. Liquidity and Capital Resources The following tables and narrative set forth our results of operations for the periods presented.
Material U.S Federal Income Tax Considerations — Non-U.S Holders - Tax Benefits Subsequent to the 2005 Amendmen t.” 89 Table of Content B. Liquidity and Capital Resources The following tables and narrative set forth our results of operations for the periods presented.
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.
Share-based Compensation We account 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.
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.
However, failure of one or more of these financial institutions is possible and could result in incurred losses. As of December 31, 2024, our cash, cash equivalents and short-term investments were primarily denominated in U.S. dollars.
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.
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 $9.5 million and $8.3 million, for the year ended December 31, 2024 and 2023, respectively.
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.
For a discussion of our cash flows for the year ended December 31, 2022, see “ Part I, Item 5. Operating and Financial Review Prospects—B.
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.
Non-GAAP Operating Income: Non-GAAP Operating Income is calculated as Operating Income plus issuance expenses, one-time expenses, share-based compensation expenses, amortization of intangible assets, and acquisition related costs.
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.
We recognize these costs and expenses upon occurrence. 82 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.
A valuation allowance is provided, if necessary, to reduce deferred tax assets to the amount that is more likely than not to be realized. Deferred tax assets and deferred tax liabilities are presented under long-term assets. The Company implements a two-step approach to recognize and measure uncertainty in income taxes.
A valuation allowance is provided, if necessary, to reduce deferred tax assets to the amount that is more likely than not to be realized. Deferred tax assets and deferred tax liabilities are presented under long-term assets. 95 Table of Content The Company implements a two-step approach to recognize and measure uncertainty in income taxes.
In determining the fair value of ordinary shares subsequent to the consummation of the Merger Agreement, the board of directors considered the grant date fair value for share-based awards as of the closing price of our ordinary shares on NASDAQ on the date of grant.
In determining the fair value of ordinary shares subsequent to the consummation of the Merger Agreement, the board of directors considered the grant date fair value for share-based awards as of the closing price of our ordinary shares on NASDAQ on the business day prior to the grant date.
Research and development expenses primarily consist of the cost of salaries and related costs for employees, subcontractors cost and depreciation of equipment. Our costs of research and development also include facility-related expenses, recruitment and training, information system licenses, hosting, support and others that contribute to the research and development operations.
Research and development expenses primarily consist of the cost of salaries and related costs for employees, subcontractors cost, consultation services and depreciation of equipment. Our costs of research and development also include facility-related expenses, recruitment and training, IT infrastructure, information system licenses, hosting, support and others that contribute to the research and development operations.
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.
During the fiscal years ended December 31, 2024 and 2023, our capital expenditures amounted to $10.6 million and $7.9 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.
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 .
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; • One-time expense adjustments, which may include unique and non-recurring items such as executive severance packages with exceptional terms; • To the extent that the above adjustments have an effect on tax expense, such an effect is excluded in the non-GAAP adjustment to net income; • Tax expense, 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. 81 Table of Content Key Components of Results of Operations Revenue Revenue consists of subscription, other non-recurring, and professional services. • Subscription .
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 $249 YoY ARR Growth 27% 33% Recurring revenue dollar-based net retention rate 125% 130% Adjusted EBITDA 61.9 25.9 Annual recurring revenue : ARR is defined as the annualized value of active term-based subscription license contracts and maintenance contracts related to other non-recurring in effect at the end of that period.
GAAP financial information, we monitor the following key metrics and non-GAAP financial measure in order to help us measure and evaluate the effectiveness of our operations: Year Ended December 31, 2024 2023 ($ in millions) Annual recurring revenue (ARR) $396 $316 YoY ARR Growth 25% 27% Recurring revenue dollar-based net retention rate 124% 125% Adjusted EBITDA 99.4 61.9 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.
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 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 the cost of salaries and related costs for employees, insurance, consultants and facility-related costs for our corporate management, finance, legal, IT, human resources, administrative personnel, and other corporate expenses.
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.
Tax Expense Tax expense (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. Significant judgments and estimates are required in determining the consolidated income tax expense.
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.
Our research and development spending totaled $98.4 million, $84.4 million and $80.6 million for the years ended December 31, 2024, 2023 and 2022 respectively. As described in “Part I, Item 3. Key Information—3.D.
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.
Contractual Obligations and Commitments As of December 31, 2024, we had commitments of $12.3 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.
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.
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.
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 .
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.
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.
Our cash, cash equivalents, short-term deposits and marketable securities were $483.8 million and $331.8 million as of December 31, 2024 and December 31, 2023, respectively. We derive our cash primarily from our business operations.
The Company has determined that the price adjustment rights, and the restricted sponsor shares are not indexed to Company’s stock since if a change of control occurs, all the shares underlying the price adjustment shares and the restricted sponsor shares will be issued regardless of the company’s stock price.
The Company had determined that the price adjustment rights, and the restricted sponsor shares were not indexed to Company’s stock since if a change of control occurs, all the shares underlying the price adjustment shares and the restricted sponsor shares would be issued regardless of the company’s stock price.
Sales and marketing expenses primarily consist of personnel, marketing, sales and business development personnel, travel expenses, and commissions earned by our sales personnel. Our costs of sales and marketing also include facility-related expenses, recruitment and training, information system licenses, hosting, support and others that contribute to the sales and marketing operations.
Sales and marketing expenses primarily consist of the cost of salaries and related costs for employees, marketing activities, travel expenses, and commissions earned by our sales personnel. Our costs of sales and marketing also include facility-related expenses, recruitment and training, information system licenses, hosting, support and others that contribute to the sales and marketing operations.
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.
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.
For more information, see “ Part I, Item 4. Information on the Company — B. Business Overview .” Our revenue was $325.1 million and $270.7 million for the years ended December 31, 2023 and 2022, respectively, representing a year-over-year increase of 20%.
For more information, see “ Part I, Item 4. Information on the Company — B. Business Overview .” Our revenue was $401.2 million and $325.1 million for the years ended December 31, 2024 and 2023, respectively, representing a year-over-year increase of 23%.
Taxes on Income Taxes on income increased by $5.6 million, or 12,404%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022, mainly as a result of profit for tax position in the Parent Company. For additional information regarding Israeli corporate tax, see - “Part I, Item 10. Additional Information — E.
Taxes on Income Taxes on income increased by $1.5 million, or 27%, for the year ended December 31, 2024, as compared with the year ended December 31, 2023, mainly as a result of profit for tax position in the Parent Company. For additional information regarding Israeli corporate tax, see - “Part I, Item 10. Additional Information — E.
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.
Overview Cellebrite is a leading provider of digital investigative (DI) solutions that are designed to help public and private sector customers around the world transform their investigative workflows and make digital evidence more accessible, actionable and defensible.
Expected Volatility ESPP — Was based on Cellebrite s historical share price volatility, on a daily basis, for 6 months. Expected dividend yield — The Company does not anticipate paying any dividends in the foreseeable future.
Expected volatility ESPP — Was based on Cellebrite’s historical share price volatility, on a daily basis, for 6 months. Expected dividend yield — The Company does not anticipate paying any dividends in the foreseeable future. Thus, the Company used 0% as its expected dividend yield.
In addition, management makes significant estimates and assumptions, which are uncertain, but believed to be reasonable. Significant estimates in valuing certain intangible assets include, but are not limited to future expected cash flows from acquired technology and acquired trademarks from a market participant perspective, useful lives and discount rates.
Significant estimates in valuing certain intangible assets include, but are not limited to future expected cash flows from acquired technology and acquired trademarks from a market participant perspective, useful lives and discount rates.
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.
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 31, 2021 and (iii) until the completion of the Warrant Redemption in the second half of 2024, the implied volatility of the Company’s publicly traded Warrants.
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.
Financing Activities Cash provided by financing activities in the year ended December 31, 2024 was $20.7 million, mainly as a result of proceeds from exercise of stock options to shares of $17.3 million and proceeds from Employee Share Purchase Plan of $3.3 million.
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 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.
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 .
We have seen an 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. • Prioritization of law enforcement funding.
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 .
Business Overview—Recent Acquisitions. ” 78 Table of Content 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 .
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.
Liquidity and Capital Resources ” in our Annual Report on Form 20-F for the fiscal year ended December 31, 2023, filed with the SEC on March 21, 2024, as amended by Amendment No. 1 to our Annual Report on Form 20-F filed with the SEC on April 12, 2024, which comparative information is herein incorporated by reference.
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.
Other non-recurring gross profit (loss) margin increased from (2)% to 6%, during the year ended December 31, 2024, as compared with the year ended December 31, 2023, mainly as a result of higher hardware revenue mix in 2024 and decreased shipping cost.
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.
Professional Services Professional services gross profit decreased by $0.4 million, or 4% during the year ended December 31, 2024, as compared with the year ended December 31, 2023.
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.
We recognize these costs and expenses upon occurrence, while HW components are recognized upon delivery. • 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 such as depreciation of equipment, facilities and IT related costs.
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.
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.
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.
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.
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.
Our market risk exposure is primarily a result of fluctuations in foreign currency exchange rates, interest rates and inflation. 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.
Thus, the Company used 0% as its expected dividend yield Business combination The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values.
Business combination The Company applies the provisions of ASC 805, “Business Combination” and allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.
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 .
This increase is primarily due to higher hardware sales. Cost of Professional Services Cost of professional services revenue increased by $0.1 million, or 1% for the year ended December 31, 2024, as compared with the year ended December 31, 2023 .
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.
Professional Services consists of revenue related to: (i) certified training sessions by Cellebrite Training; (ii) our advanced services; (iii) certain implementation services in connection with our software licenses; (iv) on premise contracted customer success and technical support; and (v) specific on-site services contracted by the Company with customers and delivered by Cellebrite personnel to support the ongoing operation of our solutions in collaboration with the customer.
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 expenses related to additional subscription revenue, such as hosting expenses, OEM expenses, customer success and customer support personnel expenses. Cost of Other Non-Recurring Cost of other non-recurring revenue increased by $2.4 million, or 18% for the year ended December 31, 2024, as compared with the year ended December 31, 2023 .
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.
Results of Operations The following tables and narrative set forth our results of operations for the periods presented. For a comparison of our results of operations for the years ended December 31, 2023 and 2022, see “ Part I, Item 5. Operating and Financial Review Prospects—A.
Cost of Revenue Cost of revenue consists of cost of subscription, cost of other non-recurring, and cost of professional services. • Cost of Subscription.
The revenue of professional services is recognized upon the delivery of our services. Cost of Revenue Cost of revenue consists of cost of subscription, cost of other non-recurring, and cost of professional services. • Cost of Subscription.
Restricted sponsor shares liability and Price adjustment shares liability The restricted Sponsor shares liability and Price adjustment shares are measured at fair value using Level 3 inputs. The Company has determined that the price adjustment shares, and the restricted sponsor shares are freestanding financing instruments since those rights are legally detachable and separately exercisable.
The Company had determined that the price adjustment shares, and the restricted sponsor shares were freestanding financing instruments since those rights are legally detachable and separately exercisable.
Finance (Expense) Income, net Finance (expense) income, net decreased by $228.5 million, or 191%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022, mainly d ue to revaluation of derivative warrants, sponsor earn out shares and price adjustment shares derived expenses in 2023 due to an increase in share price.
Finance Expense, net Finance expense, net increased by $224.1 million, or 206%, for the year ended December 31, 2024, as compared with the year ended December 31, 2023, mainly d ue to revaluation of derivative warrants, sponsors restricted shares and price adjustment shares derived expenses in 2024, all due to the increase in the Company’s share price.
The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the options. 89 Table of Content Expected volatility Options — Since the Company has a limited trading history of its Ordinary Shares, there is not sufficient historical volatility for the expected term of the share options.
Expected volatility Options — Since the Company has a limited trading history of its Ordinary Shares, there is not sufficient historical volatility for the expected term of the share options.
The following table provides a reconciliation of our operating income to Non-GAAP operating income: Year Ended December 31, 2023 2022 ($ 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.
The following table provides a reconciliation of our net income to Adjusted EBITDA: Year Ended December 31, 2024 2023 ($ in thousands) Net loss $ (283,007) $ (81,100) Financial expense 332,890 108,800 Tax expense 7,023 5,537 Depreciation expenses 7,258 6,664 Amortization of intangible assets 3,349 3,347 Issuance expenses — (345) One-time expense 1,068 — Share-based compensation expense 30,575 18,998 Acquisition related costs 221 45 Adjusted EBITDA 99,377 61,946 Adjusted EBITDA margin 25 % 19 % We believe that the use of non-GAAP operating income and Adjusted EBITDA is helpful to investors.
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 are also increasing our investment in SaaS and Cloud to address growing demand to use our solutions via these deployment options. 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 .
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.
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 $2.6 million and $3.1 million as of December 31, 2024 and 2023, respectively. 92 Table of Content Interest Rate Risk As of December 31, 2024, we had cash and cash equivalents of $191.7 million, short-term deposits of $153.7 million and short-term investments in marketable securities of $101.8 million.
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.
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.
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.
Investing Activities Cash used in investing activities in the year ended December 31, 2024 was $149.5 million, primarily as a result of the net investment in marketable securities of $67.8 million and maturities of short-term deposits, net of $68.3 million.
Unrealized gains and losses are reported in a separate component of shareholders' equity (deficiency) in accumulated other comprehensive income, net of taxes. Gains and losses are recognized when realized, on a specific identification basis, in the Company’s consolidated statements of income.
Gains and losses are recognized when realized, on a specific identification basis, in the Company’s consolidated statements of income.
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.
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.
Inherent in a Black-Scholes valuation model are assumptions related to expected share-price volatility, expiration, risk-free interest rate and dividend yield. The Company estimates the volatility of its common share based on historical volatility of select peer companies that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S.
The Company estimates the volatility of its common share based on historical volatility of select peer companies that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expiration of the warrants.
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.
A hypothetical 1% change in interest rates during any of the periods presented would not have had a material impact on our financial income for the year ended December 31, 2024. Inflation Risk Inflationary factors, such as increases in our cost of goods sold, may adversely affect our operating results.
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.
Subscription gross profit margin decreased from 93.1% to 92.6%, during the year ended December 31, 2024, as compared with the year ended December 31, 2023, mainly due to an increase in hosting expenses and customer success personnel expenses.
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.
This foreign currency exposure gives rise to market risk associated with exchange rate movements of the U.S. dollar against the NIS. Furthermore, we anticipate that a meaningful portion of our expenses will continue to be denominated in NIS.
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.
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. 97 Table of Content
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.
Other non-recurring Other non-recurring gross profit increased by $1.3 million, or 629%, during the year ended December 31, 2024, as compared with the year ended December 31, 2023.
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.
The increase primarily relates to higher salaries and related costs for employees and commissions earned by our sales personnel of $13.4 million, $ 2.0 million increase in travel expenses, and a $2.7 million increase in marketing activities.
Operating Results ” in our Annual Report on Form 20-F for the fiscal year ended December 31, 2022, filed with the SEC on April 27, 2023, which comparative information is herein incorporated by reference. 79 Table of Content Year ended December 31, 2023 2022 ($ 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.
Operating Results ” in our Annual Report on Form 20-F for the fiscal year ended December 31, 2023, filed with the SEC on March 21, 2024 as amended by Amendment No. 1 to our Annual Report on Form 20-F filed with the SEC on April 12, 2024, which comparative information is herein incorporated by reference. 84 Table of Content Year ended December 31, 2024 2023 ($ in thousands) Revenue: Subscription services $ 271,028 $ 209,751 Term-license 82,007 70,663 Total subscription 353,035 280,414 Other non-recurring 17,285 13,561 Professional services 30,883 31,135 Total Revenue 401,203 325,110 Cost of revenue: Cost of subscription services 26,004 19,219 Cost of term license — 6 Total cost of subscription 26,004 19,225 Cost of other non-recurring 16,200 13,766 Cost of professional services 20,389 20,240 Total cost of revenue 62,593 53,231 Gross profit $ 338,610 $ 271,879 Operating expenses: Research and development 98,415 84,386 Sales and marketing 132,389 110,813 General and administrative 50,900 43,443 Total operating expenses 281,704 238,642 Operating income 56,906 33,237 Financial expense, net (332,890) (108,800) Loss before tax expenses (275,984) (75,563) Tax expense 7,023 5,537 Net loss $ (283,007) $ (81,100) Other comprehensive income Unrealized (loss) income on hedging transactions, net of tax (487) 1,252 Unrealize income on marketable securities 113 506 Foreign currency translation adjustments 1,410 (1,039) Total other comprehensive income, net of tax 1,036 719 Total comprehensive loss $ (281,971) $ (80,381) Results of operations includes share-based compensation expenses: Year ended December 31, 2024 2023 ($ in thousands) Cost of revenue $ 2,227 $ 1,733 Research and development 6,663 4,673 Sales and marketing 10,216 $ 6,478 General and administrative 11,469 6,114 Total share-based compensation $ 30,575 $ 18,998 85 Table of Content Revenue Year Ended December 31, Change 2024 2023 Amount Percent ($ in thousands) Subscription services $ 271,028 $ 209,751 $ 61,277 29% Term-license 82,007 70,663 11,344 16% Total subscription 353,035 280,414 72,621 26% Other non-recurring 17,285 13,561 3,724 27% Professional services 30,883 31,135 (252) (1%) Total Revenue $ 401,203 $ 325,110 $ 76,093 23% Subscription Subscription revenue increased by $72.6 million, or 26% for the year ended December 31, 2024, as compared with the year ended December 31, 2023, primarily due to an increase related to the continuous adoption of solutions within our Inseyets suite of digital forensics offerings and, to a lesser extent, adoption of solutions within the Pathfinder and Guardian product families.
The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, the Company estimated the future expected cash flows from acquired core technology and acquired trade name from a market participant perspective, useful lives and discount rates.
When determining the fair values of assets acquired and liabilities assumed, the Company estimated the future expected cash flows from acquired core technology and acquired trade name from a market participant perspective, useful lives and discount rates. In addition, management makes significant estimates and assumptions, which are uncertain, but believed to be reasonable.
Services gross profit margin decreased from 39% to 35%, during the year ended December 31, 2023, as compared to the year ended December 31, 2022 , mainly as a result of lower CAS revenue offset by some training operational efficiency. 83 Table of Content Operating Expenses Year Ended December 31 Change 2023 2022 Amount Percent ($ in thousands) Operating expenses Research and development 84,386 80,620 3,766 5 % Sales and marketing 110,813 97,387 13,426 14 % General and administrative 43,443 40,854 2,589 6 % Total operating expenses $ 238,642 $ 218,861 $ 19,781 9 % Research and development Research and development expenses increased by $3.8 million, or 5%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022.
Services gross profit margin decreased from 35% to 34%, during the year ended December 31, 2024, as compared with the year ended December 31, 2023 , mainly as a result of lower training revenue and increased training materials expenses. 88 Table of Content Operating Expenses Year Ended December 31 Change 2024 2023 Amount Percent ($ in thousands) Operating expenses Research and development 98,415 84,386 14,029 17 % Sales and marketing 132,389 110,813 21,576 19 % General and administrative 50,900 43,443 7,457 17 % Total operating expenses $ 281,704 $ 238,642 $ 43,062 18 % Research and development Research and development expenses increased by $14.0 million, or 17%, for the year ended December 31, 2024, as compared with the year ended December 31, 2023.
Significant judgments and estimates are required in determining the consolidated income tax expense (income). Our income tax rate varies from Israel’s statutory income tax rates, mainly due to differing tax rates and regulations in foreign jurisdictions and other differences between expenses and expenses recognized by other tax authorities in relevant jurisdictions.
Our income tax rate varies from Israel’s statutory income tax rates, mainly due to differing tax rates and regulations in foreign jurisdictions and other differences between expenses and expenses recognized by other tax authorities in relevant jurisdictions. We expect this fluctuation in income tax rates, as well as its potential impact on our results of operations, to continue.
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.
Accordingly, the Company measured the warrants at their fair value. The warrants liability was subject to re-measurement at each balance sheet date until exercised, and any change in fair value was recognized in our statement of comprehensive (loss) income. During 2024, the Company decided to redeem all the outstanding warrants.
Professional Services Professional services revenue decreased by $2.2 million, or 7% for the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily due to reduced demand for Cellebrite Advanced Services as more customers adopted the advanced lawful access solutions. 81 Table of Content Cost of Revenue Year Ended December 31, Change 2023 2022 Amount Percent ($ in thousands) Cost of subscription services $ 19,219 $ 16,875 $ 2,344 14 % Cost of term license 6 425 (419) (99 %) Total subscription 19,225 17,300 1,925 11 % Cost of other non-recurring 13,766 12,987 779 6 % Cost of professional services 20,240 20,459 (219) (1 %) Cost of Revenue $ 53,231 $ 50,746 $ 2,485 5 % Cost of Subscription Cost of subscription services increased by $1.9 million, or 11% for the year ended December 31, 2023, as compared to the year ended December 31, 2022.
Professional Services Professional services revenue decreased by $0.3 million, or 1% for the year ended December 31, 2024, as compared with the year ended December 31, 2023, primarily due to reduced demand for Cellebrite Advanced Services as more customers adopted our advanced lawful access license solutions, and lower training revenue, partially offset by the incremental contribution of professional services associated with the former CyTech business that was acquired in July 2024. 86 Table of Content Cost of Revenue Year Ended December 31, Change 2024 2023 Amount Percent ($ in thousands) Cost of subscription services $ 26,004 $ 19,219 $ 6,785 35 % Cost of term-license — 6 (6) (100 %) Total subscription 26,004 19,225 6,779 35 % Cost of other non-recurring 16,200 13,766 2,434 18 % Cost of professional services 20,389 20,240 149 1 % Cost of Revenue $ 62,593 $ 53,231 $ 9,362 18 % Cost of Subscription Cost of subscription increased by $6.8 million, or 35% for the year ended December 31, 2024, as compared to the year ended December 31, 2023.
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.
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. 96 Table of Content Warrant liability The Company classified the warrants assumed during the Merger (both public and private) as a liability pursuant to ASC 815-40 since the warrants did not meet the equity classification conditions.
The Company uses judgment in determining the SSP for its products and services. The Company typically assesses the SSP for its products and services on a periodic basis or when facts and circumstances change. To determine SSP, the Company maximizes the use of observable standalone sales and observable data, where available.
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”). The Company uses judgment in determining the SSP for its products and services. The Company typically assesses the SSP for its products and services on a periodic basis or when facts and circumstances change.

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

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Hogan also served on the board of Citrix from 2018 to 2022 when it was acquired by Vista Equity Partners. Prior to Kony, he was the executive vice president of Sales and Marketing for HP's $57B Enterprise Business in 2010 after serving as the head of HP's Software business from 2006 - 2009.
Hogan also served on the board of Citrix from 2018 to 2022 when it was acquired by Vista Equity Partners. Prior to Kony, he was the executive vice president of Sales and Marketing for HP's $57B Enterprise Business in 2010 after serving as the head of HP's Software business from 2006 to 2009.
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.
Termination of Employment . In the event of termination of a grantee’s employment or service with Cellebrite or any of its affiliates, all vested and exercisable options held by such grantee as of the date of termination may be exercised within three months after such date of termination, unless otherwise determined by the administrator.
In the event of termination of a grantee’s employment or service with Cellebrite or any of its affiliates, all vested and exercisable options held by such grantee as of the date of termination may be exercised within three months after such date of termination, unless otherwise determined by the administrator.
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.
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.
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.
For more information, see “— External Directors .” Each director, aside from our external directors, the Sponsor Director 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.
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.
The compensation policy must furthermore consider the following additional factors: • the knowledge, skills, expertise and accomplishments of the relevant office holder; • the office holder’s roles and responsibilities and prior compensation agreements with him or her; • the relationship between the terms offered and the average compensation of the other employees of the company, including those employed through manpower companies; • the impact of disparities in salary upon work relationships in the company; • the possibility of reducing variable compensation at the discretion of the board of directors; • the possibility of setting a limit on the exercise value of non-cash variable equity-based compensation; and • as to severance compensation, the period of service of the office holder, the terms of his or her compensation during such service period, the company’s performance during that period of service, the person’s contribution towards the company’s achievement of its goals and the maximization of its profits, and the circumstances under which the person is leaving the company. 125 Table of Content In addition, the Companies Law provides that the following matters must be included in the compensation policy (the "Compensation Policy Mandatory Provisions"): (i) the award of variable components must be based on long term and measurable performance criteria (other than non-material variable components, which may be based on non-measurable criteria taking into account the relevant person's contribution to the performance of the company); (ii) the company must set a ratio between fixed and variable pay, set a cap on the payment of any cash variable compensation components as of the payment of such components, and set a cap on the maximum cash value all non-cash variable components as of their grant date; (iii) the compensation policy must include a provision requiring the relevant person to return to the company any compensation that was awarded on the basis of financial figures that were subsequently restated; (iv) equity based variable compensation components should have an appropriate minimum vesting periods, which should be linked to long term performance objectives; and (v) the company must set a clear limit on termination payments.
The compensation policy must furthermore consider the following additional factors: • the knowledge, skills, expertise and accomplishments of the relevant office holder; • the office holder’s roles and responsibilities and prior compensation agreements with him or her; • the relationship between the terms offered and the average compensation of the other employees of the company, including those employed through manpower companies; • the impact of disparities in salary upon work relationships in the company; • the possibility of reducing variable compensation at the discretion of the board of directors; • the possibility of setting a limit on the exercise value of non-cash variable equity-based compensation; and • as to severance compensation, the period of service of the office holder, the terms of his or her compensation during such service period, the company’s performance during that period of service, the person’s contribution towards the company’s achievement of its goals and the maximization of its profits, and the circumstances under which the person is leaving the company. 130 Table of Content In addition, the Companies Law provides that the following matters must be included in the compensation policy (the "Compensation Policy Mandatory Provisions"): (i) the award of variable components must be based on long term and measurable performance criteria (other than non-material variable components, which may be based on non-measurable criteria taking into account the relevant person's contribution to the performance of the company); (ii) the company must set a ratio between fixed and variable pay, set a cap on the payment of any cash variable compensation components as of the payment of such components, and set a cap on the maximum cash value all non-cash variable components as of their grant date; (iii) the compensation policy must include a provision requiring the relevant person to return to the company any compensation that was awarded on the basis of financial figures that were subsequently restated; (iv) equity based variable compensation components should have an appropriate minimum vesting periods, which should be linked to long term performance objectives; and (v) the company must set a clear limit on termination payments.
The authorities and responsibilities of the lead independent director include, but are not be limited to, the following: • presiding as chairman of meetings of the board of directors at which the chairman of the board of directors is not present, including executive sessions of the independent members of the board of directors; • serving as liaison between the chairman of the board of directors and the independent members of the board of directors; • approving meeting agendas for the board of directors; • approving information sent to the board of directors; • approving meeting schedules to assure that there is sufficient time for discussion of all agenda items; • if so determined by the board of directors at such time, providing leadership and serving as temporary chairperson in the event of the inability of the chairperson to fulfill his/her role due to crisis or other event or circumstance which would make leadership by existing management inappropriate or ineffective, in which case the lead independent director shall have the authority to convene meetings of the full board of directors; • having the authority to call meetings of the independent members of the board of directors; and • if requested by major shareholders, ensuring that he or she is available for consultation and direct communication. 120 Table of Content Audit Committee Companies Law Requirements Under the Companies Law, the board of directors of a public company must appoint an audit committee.
The authorities and responsibilities of the lead independent director include, but are not be limited to, the following: • presiding as chairman of meetings of the board of directors at which the chairman of the board of directors is not present, including executive sessions of the independent members of the board of directors; • serving as liaison between the chairman of the board of directors and the independent members of the board of directors; • approving meeting agendas for the board of directors; • approving information sent to the board of directors; • approving meeting schedules to assure that there is sufficient time for discussion of all agenda items; • if so determined by the board of directors at such time, providing leadership and serving as temporary chairperson in the event of the inability of the chairperson to fulfill his/her role due to crisis or other event or circumstance which would make leadership by existing management inappropriate or ineffective, in which case the lead independent director shall have the authority to convene meetings of the full board of directors; • having the authority to call meetings of the independent members of the board of directors; and • if requested by major shareholders, ensuring that he or she is available for consultation and direct communication. 125 Table of Content Audit Committee Companies Law Requirements Under the Companies Law, the board of directors of a public company must appoint an audit committee.
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.
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. 123 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.
In addition, our compensation policy must be approved at least once every three years, first, by our board of directors, upon recommendation of our compensation committee, and second, by a majority of the Ordinary Shares present, in person or by proxy, and voting (excluding abstentions) at a general meeting of shareholders, provided that either: • such majority includes at least a majority of the shares held by shareholders who are not controlling shareholders and shareholders who do not have a personal interest in such compensation policy; or • the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in the compensation policy and who vote against the policy does not exceed two percent (2%) of the aggregate voting rights in the Company. 124 Table of Content Under special circumstances, the board of directors may approve the compensation policy despite the objection of the shareholders on the condition that the compensation committee and then the board of directors decide, on the basis of detailed grounds and after discussing again the compensation policy, that approval of the compensation policy, despite the objection of shareholders, is for the benefit of the company.
In addition, our compensation policy must be approved at least once every three years, first, by our board of directors, upon recommendation of our compensation committee, and second, by a majority of the Ordinary Shares present, in person or by proxy, and voting (excluding abstentions) at a general meeting of shareholders, provided that either: • such majority includes at least a majority of the shares held by shareholders who are not controlling shareholders and shareholders who do not have a personal interest in such compensation policy; or • the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in the compensation policy and who vote against the policy does not exceed two percent (2%) of the aggregate voting rights in the Company. 129 Table of Content Under special circumstances, the board of directors may approve the compensation policy despite the objection of the shareholders on the condition that the compensation committee and then the board of directors decide, on the basis of detailed grounds and after discussing again the compensation policy, that approval of the compensation policy, despite the objection of shareholders, is for the benefit of the company.
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.
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; 122 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.
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.
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; 128 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 at least one of our other directors (i) is an audit committee independent financial expert according to U.S. law and (ii) has accounting and financial expertise as defined under the Companies Law, then neither of our external directors is required to possess accounting and financial expertise as long as each possesses the requisite professional qualifications. 119 Table of Content A director with accounting and financial expertise is a director who, due to his or her education, experience and skills, possesses an expertise in, and an understanding of, financial and accounting matters and financial statements, such that he or she is able to understand the financial statements of the company and initiate a discussion about the presentation of financial data.
However, if at least one of our other directors (i) is an audit committee independent financial expert according to U.S. law and (ii) has accounting and financial expertise as defined under the Companies Law, then neither of our external directors is required to possess accounting and financial expertise as long as each possesses the requisite professional qualifications. 124 Table of Content A director with accounting and financial expertise is a director who, due to his or her education, experience and skills, possesses an expertise in, and an understanding of, financial and accounting matters and financial statements, such that he or she is able to understand the financial statements of the company and initiate a discussion about the presentation of financial data.
The 2019 Option Plan provides for granting options under various tax regimes, including, without limitation, in compliance with Section 102 (“Section 102”) of the Israeli Income Tax Ordinance (New Version), 5721-1961 (the “Ordinance”), unapproved Section 102 options, and Section 3(i) of the Ordinance.
Eligibility. The 2019 Option Plan provides for granting options under various tax regimes, including, without limitation, in compliance with Section 102 (“Section 102”) of the Israeli Income Tax Ordinance (New Version), 5721-1961 (the “Ordinance”), unapproved Section 102 options, and Section 3(i) of the Ordinance.
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.
Compensation—Compensation of Directors and Executive Officers .” 134 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.
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.
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.
A non-material portion of the Chief Executive Officer’s annual cash bonus, as provided in our compensation policy, may be based on a discretionary evaluation of the Chief Executive Officer’s overall performance by the compensation committee and the board of directors. 126 Table of Content The equity-based compensation under our compensation policy for our executive officers (including members of our board of directors) is designed in a manner consistent with the underlying objectives in determining the base salary and the annual cash bonus, with its main objectives being to enhance the alignment between the executive officers’ interests with our long-term interests and those of our shareholders and to strengthen the retention and the motivation of executive officers in the long term.
A non-material portion of the Chief Executive Officer’s annual cash bonus, as provided in our compensation policy, may be based on a discretionary evaluation of the Chief Executive Officer’s overall performance by the compensation committee and the board of directors. 131 Table of Content The equity-based compensation under our compensation policy for our executive officers (including members of our board of directors) is designed in a manner consistent with the underlying objectives in determining the base salary and the annual cash bonus, with its main objectives being to enhance the alignment between the executive officers’ interests with our long-term interests and those of our shareholders and to strengthen the retention and the motivation of executive officers in the long term.
In addition, a person who is subordinated, directly or indirectly, to the chief executive officer may not serve as the chairperson of the board of directors, the chairperson of the board of directors may not be vested with authorities that are granted to persons who are subordinated to the chief executive officer and the chairperson of the board of directors may not serve in any other position in the company or in a controlled subsidiary, but may serve as a director or chairperson of a controlled subsidiary. 116 Table of Content External Directors Under the Companies Law, companies incorporated under the laws of the State of Israel that are “public companies,” including companies with shares listed on Nasdaq are required to appoint at least two external directors.
In addition, a person who is subordinated, directly or indirectly, to the chief executive officer may not serve as the chairperson of the board of directors, the chairperson of the board of directors may not be vested with authorities that are granted to persons who are subordinated to the chief executive officer and the chairperson of the board of directors may not serve in any other position in the company or in a controlled subsidiary, but may serve as a director or chairperson of a controlled subsidiary. 121 Table of Content External Directors Under the Companies Law, companies incorporated under the laws of the State of Israel that are “public companies,” including companies with shares listed on Nasdaq are required to appoint at least two external directors.
Any such approval is subject to the terms of the Companies Law setting forth, among other things, the appropriate bodies of the company required to provide such approval and the methods of obtaining such approval. 128 Table of Content Disclosure of Personal Interests of an Office Holder and Approval of Certain Transactions The Companies Law requires that an office holder promptly disclose to the company any personal interest and all related material information known to such office holder concerning any existing or proposed transaction with the company, no later than the meeting of the board of directors in which the transaction is first considered.
Any such approval is subject to the terms of the Companies Law setting forth, among other things, the appropriate bodies of the company required to provide such approval and the methods of obtaining such approval. 133 Table of Content Disclosure of Personal Interests of an Office Holder and Approval of Certain Transactions The Companies Law requires that an office holder promptly disclose to the company any personal interest and all related material information known to such office holder concerning any existing or proposed transaction with the company, no later than the meeting of the board of directors in which the transaction is first considered.
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.
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.
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.
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.
In addition, if the compensation of a public company’s directors is inconsistent with the company’s compensation policy, then those inconsistent provisions must be separately considered by the compensation committee and board of directors, and approved by the shareholders by a special vote in one of the following two ways: • at least a majority of the shares held by all shareholders who are not controlling shareholders and do not have a personal interest in such matter, present and voting at such meeting, vote in favor of the inconsistent provisions of the compensation package, excluding abstentions; or • the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in such matter voting against the inconsistent provisions of the compensation package does not exceed two percent (2%) of the aggregate voting rights in the Company.
In addition, if the compensation of a public company’s directors is inconsistent with the company’s compensation policy, then those inconsistent provisions must be separately considered by the compensation committee and board of directors, and approved by the shareholders by a special vote in one of the following two ways: • at least a majority of the shares held by all shareholders who are not controlling shareholders and do not have a personal interest in such matter, present and voting at such meeting, vote in favor of the inconsistent provisions of the compensation package, excluding abstentions; or 104 Table of Content • the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in such matter voting against the inconsistent provisions of the compensation package does not exceed two percent (2%) of the aggregate voting rights in the Company.
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.
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, 2024, there were no awards related to Ordinary Shares outstanding under the 2019 Plan. Administration.
Our board has determined that Dafna Gruber is an audit committee financial expert as defined by the SEC rules. 121 Table of Content Audit Committee Role Our board of directors has adopted an audit committee charter setting forth the responsibilities of the audit committee, which are consistent with the Companies Law, the SEC rules, and the Nasdaq corporate governance rules.
Our board has determined that Dafna Gruber is an audit committee financial expert as defined by the SEC rules. 126 Table of Content Audit Committee Role Our board of directors has adopted an audit committee charter setting forth the responsibilities of the audit committee, which are consistent with the Companies Law, the SEC rules, and the Nasdaq corporate governance rules.
Gerner earned a BA in Accounting and Economics from Tel-Aviv University and a Master’s degree in Innovation Management from Swinburne University. 92 Table of Content Ronnen Armon is our Chief Products & Technologies Officer, a position which he has held since joining Cellebrite in July 2020.
Gerner earned a BA in Accounting and Economics from Tel-Aviv University and a Master’s degree in Innovation Management from Swinburne University. 98 Table of Content Ronnen Armon is our Chief Products & Technologies Officer, a position which he has held since joining Cellebrite in July 2020.
The court may also remove an external director from office, if it determines, at the request of the company, a board member, a shareholder or a creditor that the board member is not able to fulfil his role or if such board member was convicted by a foreign court of certain specific offences.
The court may also remove an external director from office, if it determines, at the request of the company, a board member, a shareholder or a creditor that the board member is not able to fulfil his role or if such board member was convicted by a foreign court of certain specific offenses.
An Israeli company may not indemnify or insure an office holder against any of the following: • a breach of the duty of loyalty, except 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 committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder; • an act or omission committed with intent to derive illegal personal benefit; or • a fine, monetary sanction, or forfeit levied against the office holder.
An Israeli company may not indemnify or insure an office holder against any of the following: 136 Table of Content • a breach of the duty of loyalty, except 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 committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder; • an act or omission committed with intent to derive illegal personal benefit; or • a fine, monetary sanction, or forfeit levied against the office holder.
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.
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: 116 Table of Content • 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.
An Israeli company may indemnify an office holder from the following liabilities and expenses incurred for acts performed as an office holder, either in advance of an event or following an event, provided a provision authorizing such indemnification is contained in its articles of association: • a financial liability imposed on him or her in favor of another person pursuant to a judgment, including a settlement or arbitrator’s award approved by a court.
An Israeli company may indemnify an office holder from the following liabilities and expenses incurred for acts performed as an office holder, either in advance of an event or following an event, provided a provision authorizing such indemnification is contained in its articles of association: 135 Table of Content • a financial liability imposed on him or her in favor of another person pursuant to a judgment, including a settlement or arbitrator’s award approved by a court.
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.
Our board of directors has determined that each of our directors, other than 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.
Arrangements for Election of Directors and Members of Management Our directors, aside from our external directors, were generally appointed by a simple majority vote of holders of our Ordinary Shares, participating and voting (in person or by proxy) at the annual general meeting of our shareholders.
Arrangements for Election of Directors Our directors, aside from our external directors, were generally appointed by a simple majority vote of holders of our Ordinary Shares, participating and voting (in person or by proxy) at the annual general meeting of our shareholders.
The 2021 Plan provides for the grant of equity-based incentive awards to our employees, directors, officers, consultants, advisors and other persons or entities who provide services to us in order to incentivize them to increase their efforts on behalf of the Company and to promote the success of the Company’s business. Shares Available for Grants .
The 2021 Plan provides for the grant of equity-based incentive awards to our employees, directors, officers, consultants, advisors and other persons or entities who provide services to us in order to incentivize them to increase their efforts on behalf of the Company and to promote the success of the Company’s business. 113 Table of Content Shares Available for Grants .
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.
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.
Notwithstanding the foregoing, the administrator may upon such event amend, modify or terminate the terms of any option as it shall deem, in good faith, appropriate. 2019 Restricted Share and Restricted Share Units Plan Cellebrite’s 2019 Restricted Share and Restricted Share Units Plan (the “2019 Plan”) was adopted by its board of directors on June 17, 2019.
Notwithstanding the foregoing, the administrator may upon such event amend, modify or terminate the terms of any option as it shall deem, in good faith, appropriate. 110 Table of Content 2019 Restricted Share and Restricted Share Units Plan Cellebrite’s 2019 Restricted Share and Restricted Share Units Plan (the “2019 Plan”) was adopted by its board of directors on June 17, 2019.
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 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 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.
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.
Certain awards under the 2021 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. Each Award Agreement shall provide the vesting schedule for the award as determined by the administrator.
Certain awards under the 2021 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. 114 Table of Content Each Award Agreement shall provide the vesting schedule for the award as determined by the administrator.
Any options which are unvested as of the date of such termination or which are vested but not then exercised within the 12 months period following such date, will terminate and the shares covered by such options shall be made available for issuance under the 2021Share Incentive Plan.
Any options which are unvested as of the date of such termination or which are vested but not then exercised within the 12 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.
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.
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.
Except as permitted by Section 423 of the Code, with respect to the Non-Section 423 Component, such special terms may not be more favorable than the terms of rights granted under the Section 423 Component to eligible employees who are residents of the United States. Offering Periods.
Except as permitted by Section 423 of the Code, with respect to the Non-Section 423 Component, such special terms may not be more favorable than the terms of rights granted under the Section 423 Component to eligible employees who are residents of the United States. 117 Table of Content Offering Periods.
As of the date of this annual report, the Amended Articles provide in respect of future director appointment rights that (i) one director is to be nominated by the Sponsor and reasonably acceptable to Cellebrite; and (ii) two directors are be nominated by SUNCORPORATION and reasonably acceptable to Cellebrite.
As of the date of this annual report, the Amended Articles provide in respect of future director appointment rights that (i) one director is to be nominated by the Sponsor and reasonably acceptable to Cellebrite; and (ii) two directors are be nominated by SUNCORPORATION and reasonably acceptable to Cellebrite. Our external directors, Mses.
The 2008 Plan provides for options to purchase shares which may be made available from the authorized but unissued shares of Cellebrite or from shares held in Cellebrite’s treasury and not reserved for some other purpose. Exercise.
The 2008 Plan provides for options to purchase shares which may be made available from the authorized but unissued shares of Cellebrite or from shares held in Cellebrite’s treasury and not reserved for some other purpose. 106 Table of Content Exercise.
The role of the Ethics and Integrity Committee is to advise the board on matters pertaining to evolving international law, ethical considerations related to responsible business practices and requirements under law and regulations applied to the sale and use of our technologies. D.
The role of the Ethics and Integrity Committee is to advise the board on matters pertaining to evolving international law, ethical considerations related to responsible business practices and requirements under law and regulations applied to the sale and use of our technologies. 137 Table of Content D.
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.
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, unless a lower number is determined by our board of directors.
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.
This amount includes approxim ately $0.5 million set aside or accrued to provide for pension, severance, retirement or similar benefits or expenses, but does not include business travel, relocation, professional and business association dues and expenses reimbursed to home office holders, and other benefits commonly reimbursed or paid by companies in Israel or the US.
With respect to restricted share awards, grantees will possess all incidents of ownership of the restricted shares, including the right to vote and receive dividends on such shares. Dividends. Grantees holding restricted share awards will be entitled to receive dividends and other distributions with respect to the shares underlying the restricted share award.
With respect to restricted share awards, grantees will possess all incidents of ownership of the restricted shares, including the right to vote and receive dividends on such shares. 115 Table of Content Dividends. Grantees holding restricted share awards will be entitled to receive dividends and other distributions with respect to the shares underlying the restricted share award.
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.
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.
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 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. Eligibility.
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.
As of the date of this Annual Report, 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. 120 Table of Content • 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.
Tadmor Eilat was Global VP of Human Resources at CyberArk for 6 years. Prior to CyberArk, Ms. Tadmor Eilat served as the Global VP of Human Resources at BitTech/ BetaMedia for 3 years, and before that, she was the General Manager of HRISRAEL for 2 years and the VP of HR of Cal-Auto Group for 3 years. Ms.
Tadmor Eilat served as the Global VP of Human Resources at BitTech/ BetaMedia for 3 years, and before that, she was the General Manager of HRISRAEL for 2 years and the VP HR of Cal-Auto Group for 3 years. Ms.
Gruber served as the Chief Financial Officer of NICE Systems Ltd., a public company traded on Nasdaq and TASE. responsible, inter alia, for finance, operation, MIS and IT, legal and investor relations. From 1996 until 2007, Ms. Gruber was part of Alvarion Ltd., a public company traded on Nasdaq and TASE, mostly as Chief Financial Officer. Ms.
Gruber served as the Chief Financial Officer of NICE Systems Ltd., a public company traded on Nasdaq and TASE. responsible, inter alia, for finance, operation, MIS and IT, legal and investor relations. From 1996 until 2007, Ms. Gruber held position at Alvarion Ltd., a public company traded on Nasdaq and TASE, mostly as Chief Financial Officer. Ms.
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.
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.
For clarity, for purposes of the 2019 Plan, military leave, paid maternity or paternity leave or paid sick leave are not deemed unpaid leave of absence. Transactions.
For clarity, for purposes of the 2019 Plan, military leave, paid maternity or paternity leave or paid sick leave are not deemed unpaid leave of absence. 112 Table of Content Transactions.
In the event of a share split, reverse share split, bonus shares (stock dividend), recapitalization, combination or reclassification of our shares, all only if such event generally applies to all shares, the administrator in its sole discretion shall make an appropriate adjustment in the number of shares related to each outstanding option and to the number of shares reserved for issuance under the 2008 Plan, to the class and kind of shares subject to the 2008 Plan, as well as the exercise price per share of each outstanding option, as applicable, the terms and conditions concerning vesting and exercisability and the term and duration of outstanding options, or any other terms that the administrator adjusts in its discretion, or the type or class of security, asset or right underlying the option (which need not be only that of Cellebrite, and may be that of the surviving corporation or any affiliate thereof or such other entity party to any of the above transactions); provided that any fractional shares resulting from such adjustment shall be rounded to the nearest whole share.
In the event of a share split, reverse share split, bonus shares (stock dividend), recapitalization, combination or reclassification of our shares, all only if such event generally applies to all shares, the administrator in its sole discretion shall make an appropriate adjustment in the number of shares related to each outstanding option and to the number of shares reserved for issuance under the 2008 Plan, to the class and kind of shares subject to the 2008 Plan, as well as the exercise price per share of each outstanding option, as applicable, the terms and conditions concerning vesting and exercisability and the term and duration of outstanding options, or any other terms that the administrator adjusts in its discretion, or the type or class of security, asset or right underlying the option (which need not be only that of Cellebrite, and may be that of the surviving corporation or any affiliate thereof or such other entity party to any of the above transactions); provided that any fractional shares resulting from such adjustment shall be rounded to the nearest whole share. 107 Table of Content In the event of a dissolution of liquidation of Cellebrite, the board shall notify each optionee who holds unexercised options as soon as practicable prior to the effective date of such event.
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.
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.
With regard to tax withholding, exercise price and purchase price obligations arising in connection with options under the 2019 Option Plan, the administrator may, in its discretion, among others, accept cash or otherwise provide for net withholding of shares in a cashless exercise mechanism. Transferability. Neither the options nor any right in connection with such options are assignable or transferable.
With regard to tax withholding, exercise price and purchase price obligations arising in connection with options under the 2019 Option Plan, the administrator may, in its discretion, among others, accept cash or otherwise provide for net withholding of shares in a cashless exercise mechanism. Transferability.
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.
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 (or over one year with respect to grants to our non-employee directors) on account of the grants given in previous years.
If the Chief Executive Officer serves as the chairperson of the board of directors or if the chairperson is not independent under Nasdaq rules, the guidelines provide that the non-management board members must designate an independent director to serve as the lead independent director.
If the Chief Executive Officer serves as the chairperson of the board of directors or if the chairperson is not independent under Nasdaq rules, the guidelines provide that the non-management board members must designate an independent director to serve as the lead independent director. We have designated Michael D. Capellas to serve as our lead independent director.
Gruber serves as a Chief Financial Officer of Netafim Ltd., a private company, and prior to that as chief financial officer in various companies including Aqua security Ltd. and Clal Industries Ltd. From 2007 to 2015, Ms.
Gruber served as Chief Financial Officer of Netafim Ltd., a private company until the end of 2024, and prior to that as chief financial officer of various companies including Aqua security Ltd. and Clal Industries Ltd. From 2007 to 2015, Ms.
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.
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.
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.
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.
COMPENSATION Aggregate Compensation of Executive Officers and Directors The aggregate compensation, including share-based compensation, paid by us and our subsidiaries to our executive officers and directors for the year ended December 31, 2023 was approximat ely $12.6 million.
COMPENSATION Aggregate Compensation of Executive Officers and Directors The aggregate compensation, including share-based compensation, paid by us and our subsidiaries to Cellebrite DI Ltd.’s executive officers and directors for the year ended December 31, 2024 was approximat ely $16.6 million.
An RSU represents the right to receive a number of Ordinary Shares equal to the number of units earned. RSUs are settled following vesting and (if applicable) exercise as provided under the terms of the award agreement.
The administrator may award RSUs to any eligible grantee, including under Section 102 of the Ordinance. An RSU represents the right to receive a number of Ordinary Shares equal to the number of units earned. RSUs are settled following vesting and (if applicable) exercise as provided under the terms of the award agreement.
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).
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.
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.
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.
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.
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.
Among our full-time employees as of December 31, 2023, 280 were in North America, 526 were in Israel, 124 were in Europe, 58 were in Asia Pacific and 20 in Latin America. Our employees are driven by the ability to accelerate justice for the public safety as well as contributing directly to a safer corporate environment. E.
Among our full-time employees as of December 31, 2024, 546 were in Israel, 344 were in North America, 189 were in Europe, 64 were in Asia Pacific and 24 in Latin America. Our employees are driven by the ability to accelerate justice for the public safety as well as contributing directly to a safer corporate environment. E.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A. DIRECTORS AND SENIOR MANAGEMENT The following persons who serve as Cellebrite’s executive officers and directors, including their ages as of March 21, 2024. Biographies of the executive officers and directors are also included below.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A. DIRECTORS AND SENIOR MANAGEMENT The following persons who serve as Cellebrite’s executive officers and directors, including their ages as of March 18, 2025. Biographies of the executive officers and directors are also included below. Name Age Position Executive Officers Thomas E.
Hogan is a Director of Cellebrite and the Executive Chairman of the Board of Directors, a position which he has held since 2023. Mr. Hogan served as an Operating Managing Director for Vista Equity Partners from January, 2021 to February, 2023. During his Vista tenure Mr.
Hogan is a Director of Cellebrite and the Interim Chief Executive Officer, positions which he has held since August 2023 and January 2025, respectively. Mr. Hogan served as an Operating Managing Director for Vista Equity Partners from January 2021 to February 2023. During his Vista tenure Mr.
Authorized Shares. The maximum number of shares of our common stock which was initially available for issuance under the ESPP was not to exceed 1,871,687 shares, equal to 1% of our outstanding shares immediately after the closing of the Merger. In 2023 the Company issued a total of 587,579 shares with respect to ESPP.
Authorized Shares. The maximum number of shares of our common stock which was initially available for issuance under the ESPP was not to exceed 1,871,687 shares, equal to 1% of our outstanding shares immediately after the closing of the Merger.
All securities, if any, received by a grantee with respect to restricted shares as a result of any stock split, stock dividend, combination of shares, or other similar transaction shall be subject to the restrictions applicable to the original award. Restricted Share Units . The administrator may award RSUs to any eligible grantee, including under Section 102 of the Ordinance.
All securities, if any, received by a grantee with respect to restricted shares as a result of any stock split, stock dividend, combination of shares, or other similar transaction shall be subject to the restrictions applicable to the original award. 111 Table of Content Restricted Share Units .
In the event of termination of a grantee’s employment or service with Cellebrite or any of its affiliates, all unvested awards shall terminate as of the grantee’s date of termination, except as otherwise provided in the award agreement or unless otherwise determined by the Board or the administrator. 106 Table of Content In the event of termination of a grantee’s employment or service with Cellebrite or any of its affiliates due to such grantee’s death, retirement or “disability” (as defined in the 2019 Plan), all then-unvested held by such grantee as of the date of termination shall become fully vested.
In the event of termination of a grantee’s employment or service with Cellebrite or any of its affiliates due to such grantee’s death, retirement or “disability” (as defined in the 2019 Plan), all then-unvested held by such grantee as of the date of termination shall become fully vested.
The committee is currently compris ed of seven indu stry 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.
Ethics and Integrity Advisory Committee The Company has an Ethics and Integrity Committee, which serves as an advisory body to the board of directors. The committee is currently compris ed of seven indu stry 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.
Gerner was Chief Financial Officer at Leiman Schlussel from November 1998 to January 2000. She also served as a Senior Manager at Ernst & Young from 1991 to 1996 and Head of Section at the Israeli Defense Force from 1988 to 1990. Ms.
She also served as a Senior Manager at Ernst & Young from 1991 to 1996 and Head of Section at the Israeli Defense Force from 1988 to 1990. Ms.
All above mentioned awards shall be accelerated in certain change of control events. 98 Table of Content Compensation of Directors and Executive Officers Directors Under the Companies Law, the compensation of a public company’s directors requires the approval of (i) its compensation committee, (ii) its board of directors and (iii) the approval of its shareholders at a general meeting, unless exempted pursuant to regulations promulgated under the Companies Law.
Compensation of Directors and Executive Officers Directors Under the Companies Law, the compensation of a public company’s directors requires the approval of (i) its compensation committee, (ii) its board of directors and (iii) the approval of its shareholders at a general meeting, unless exempted pursuant to regulations promulgated under the Companies Law.

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Item 7. Management's Discussion & Analysis

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

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As the managing members of True Wind Capital Management GP, LLC, James H. Greene Jr. and Adam H. Clammer may be deemed to have or share beneficial ownership of the Ordinary Shares held directly by TWC Tech Holdings II, LLC.
Greene Jr. and Adam H. Clammer (as the managing members of True Wind Capital Management GP, LLC) may be deemed to have or share beneficial ownership of the Ordinary Shares held directly by TWC Tech Holdings II, LLC.
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.
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. 141 Table of Content C. INTERESTS OF EXPERTS AND COUNSEL Not applicable.
The Company security holders shall be entitled to vote their unvested Restricted Sponsor Shares and receive dividends and other distribution, and to have all other economic rights, in each case, with respect to such Restricted Sponsor Shares while they remain unvested.
The Company’s security holders shall be entitled to vote their unvested Restricted Sponsor Shares and receive dividends and other distributions, and to have all other economic rights, in each case, with respect to such Restricted Sponsor Shares while they remain unvested.
As set forth in the Merger Agreement, holders of the Ordinary Shares and vested RSUs, in each case as of immediately prior to the Effective Time, are eligible to receive up to 15,000,000 Ordinary Shares that will vest in 3 tranches of 5,000,000 upon achievement of the triggering events (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 20 trading-days within any 30 trading-day period.) or upon a Change of Control (as defined in Merger Agreement) before the five (5) year anniversary of the Closing Date.
As set forth in the Merger Agreement, holders of the Ordinary Shares and vested RSUs, in each case as of immediately prior to the Merger, are eligible to receive up to 15,000,000 Ordinary Shares issuable in three tranches of 5,000,000 if at any time during the Price Adjustment Period the price of Ordinary Shares was greater than or equal to $12.50, $15.00 and $17.50, respectively, over any 20 trading-days within any 30 trading-day period.) or upon a Change of Control (as defined in Merger Agreement) before the five year anniversary of the closing date of the Merger.
TWC Employee SPAC Aggregator II, LLC is the managing member of TWC SPAC Aggregator II, LLC. True Wind Capital Management, L.P. is the managing member of TWC Employee SPAC Aggregator II, LLC. True Wind Capital Management GP, LLC is the general partner of True Wind Capital Management, L.P.
TWC Employee SPAC Aggregator II, LLC is the managing member of TWC SPAC Aggregator II, LLC. True Wind Capital Management, L.P. is the managing member of TWC Employee SPAC Aggregator II, LLC. True Wind Capital Management GP, LLC is the general partner of True Wind Capital Management, L.P. (collectively, the True Wind Entities"). The True Wind Entities and James H.
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.
Both the current Distribution Agreement and its expected renewal were approved by our audit committee on February 11, 2024 and March 13, 2025, respectively, following our audit committee’s determination that neither the current Distribution Agreement nor its expected renewal is an "extraordinary transaction" under the Companies Law. 140 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 eligible to vest in 3 tranches of 3,000,000, 3,000,000 and 1,500,000 if at any time during the Price Adjustment Period (as defined in the Merger Agreement) the price of our Ordinary Shares is greater than or equal to $12.50, $15.00 and $30.00, respectively, over any twenty trading days within any thirty trading day period.
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.
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.
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.
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.
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.
Richardson * * Dafna Gruber * * Nadine Baudot-Trajtenberg * * All Executive Officers and Directors as a Group 3,026,080 1.3% ____________ * Less than 1% 139 Table of Content (1) According to a Schedule 13G/A filed with the SEC on February 10, 2025, SUNCORPORATION is the sole beneficial owner of the Ordinary Shares.
In the event of a post-Closing change of control transaction involving the Company, any Restricted Sponsor Shares not previously vested will vest and will be entitled to participate in the change of control transaction. The probability of such event was considered by the Company.
In the event of a post-Closing change of control transaction involving the Company, any Restricted Sponsor Shares not previously vested will vest and will be entitled to participate in the change of control transaction. Upon the expiration of the Price Adjustment Period, any unvested shares that have not vested as of such time will be forfeited.
Its address is 250 Asahi, Kochino-cho, Konan, Aichi 483-8555, Japan. SUNCORPORATION is a publicly traded company on the Tokyo Stock Exchange.
Its address is 250 Asahi, Kochino-cho, Konan, Aichi 483-8555, Japan. SUNCORPORATION is a publicly traded company on the Tokyo Stock Exchange. On April 19, 2024, an affiliate of TWC Tech Holdings II, LLC announced that it had acquired approximately 19% of the common shares of SUNCORPORATION.
Unless otherwise indicated, we believe that all persons named in the table below have sole voting and investment power with respect to all Ordinary Shares beneficially owned by them. To our knowledge, no Ordinary Shares beneficially owned by any executive officer, or director have been pledged as security.
The percentage of Ordinary Shares beneficially owned is computed on the basis of 239,470,062 Ordinary Shares outstanding as of March 11, 2025. 138 Table of Content Unless otherwise indicated, we believe that all persons named in the table below have sole voting and investment power with respect to all Ordinary Shares beneficially owned by them.
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.
The address of each the persons named in this footnote is c/o True Wind Capital Management, L.P., Four Embarcadero Center, Suite 2100, San Francisco, CA 94111. (3) See footnote (2) above. Based on the Schedule 13D filed with the SEC on September 17, 2024 and on other information known to the company, as of February 18, 2025 Mr.
Under the proposed Distribution Agreement, SUNCORPORATION will be the non-exclusive distributor for the promotion, marketing and sale of our mobile solutions in Japan.
RELATED PARTY TRANSACTIONS The below is a description of all reportable related party transactions since January 1, 2024: Distribution Agreement with SUNCORPORATION Under a Distribution Agreement with SUNCORPORATION, dated April 4, 2024, SUNCORPORATION acts as a non-exclusive distributor for the promotion, marketing and sale of our mobile solutions in Japan.
All of our shareholders, including the shareholders listed below, have the same voting rights attached to their Ordinary Shares.
To our knowledge, no Ordinary Shares beneficially owned by any executive officer, or director have been pledged as security. All of our shareholders, including the shareholders listed below, have the same voting rights attached to their Ordinary Shares. Unless otherwise noted below, each shareholder’s address is 94 Shlomo Shmelzer Road, Petah Tikva 4970602, Israel.
Removed
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.
Added
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.
Removed
Hogan * * Elly Keinan * * Adam H.
Added
Number of Ordinary Shares Beneficially Owned Percentage of Outstanding Ordinary Shares 5% Holders: SUNCORPORATION (1) 106,065,324 44.3% True Wind Capital Management (2) 13,861,007 5.8% Name and Address of Beneficial Owners Executive Officers and Directors Thomas E.
Removed
(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.
Added
Hogan * * Marcus Jewell * * Dana Gerner * * Sigalit Shavit * * Ronnen Armon * * David Gee * * Ayala Berler Shapira * * Zohar Tadmor-Eilat * * Ryusuke Utsumi * * Yonatan Domnitz * * Michael D. Capellas * * Elly Keinan * * Adam H.
Removed
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.
Added
Clammer (3) * * Brandon Van Buren * * Troy K.
Removed
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.
Added
(2) Based on the Schedule 13D filed with the SEC on September 17, 2024, and on other information known to the company, as of February 18, 2025 TWC Tech Holdings II, LLC directly held 13,861,007 Ordinary Shares of which 12,361,007 are vested and 1,500,000 are subject to transfer restrictions pending the satisfaction of certain performance-based vesting conditions.
Removed
All of the reporting persons disclaim any beneficial ownership of the reported shares other than to the extent of any pecuniary interest they may have therein, directly or indirectly. The address of each of the persons named in this footnote is 3 Arik Einstein St., Building B, 9 floor, Herzliya, 4659071, Israel.
Added
Clammer may be deemed the beneficial owner of 14,611,007 Ordinary Shares as follows: (i) 13,861,007 Ordinary Shares beneficially owned through TWC Tech Holdings and (ii) 750,000 Ordinary Shares directly held by two family trusts of which Mr.
Removed
(3) According to a Schedule 13D filed with the SEC on September 9, 2021, reflects 5,887,500 vested ordinary shares, 7,500,000 unvested ordinary shares and 9,666,667 ordinary shares underlying the Company’s Warrants owned by TWC Tech Holdings II, LLC. The 7,500,000 unvested ordinary shares carry full voting rights while they remain unvested and are thus shown as beneficially owned.
Added
Clammer is trustee or has the indirect power to acquire assets by virtue of a right of substitution of assets, and (iii) 50,422 Ordinary Shares held directly by Mr. Clammer that were obtained by Mr. Clammer by virtue of his position as a member of the board of directors of the Issuer.
Removed
This number consists of t he 23,054,167 s hares beneficially owned through TWC Tech Holdings II, LLC and 750,000 s hares held by two family trusts of which Mr. Clammer is trustee or has the indirect power to acquire assets by virtue of a right of substitution of assets.
Added
Registered Holders Based on a review of the information provided to us by our transfer agent, as of December 31, 2024, there were 23 registered holders of our shares in the United States, including Cede & Co., the nominee of the Depository Trust Company, together holding approximately 56.3% of our outstanding Ordinary Shares.
Removed
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.
Added
The current agreement is set to expire at the end of March 2025. We intend to renew the engagement with SUNCORPORATION upon the agreement’s expiration.
Removed
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.
Added
As of December 31, 2024, two of the Restricted Sponsor Shares Triggering Events have occurred resulting in the vesting of an aggregate of 6,000,000 Restricted Sponsor Shares and the removal of restrictions on such shares.
Removed
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.
Added
As of December 31, 2024, all three of the Price Adjustment Share Triggering Events have occurred and we have issued 11,495,722 Price Adjustment Shares out of a possible 15,000,000 Price Adjustment Shares. As of the date of this Annual Report, we have issued the full 15,000,000 Price Adjustment Shares.

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