10q10k10q10k.net
MIND CTI LTD

MIND CTI LTDMNDO财报

Nasdaq · 信息技术 · 计算机编程服务

MIND CTI Ltd. is a global provider of billing and customer care solutions and messaging services for voice, data, video and content services. Headquartered in Yokneam, Israel; the company also has offices in the United States of America, Iaşi in Romania and in Germany.

What changed in MIND CTI LTD's 20-F — 2022 vs 2023

Top changes in MIND CTI LTD's 2023 20-F

178 paragraphs added · 175 removed · 157 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

44 edited+10 added−4 removed140 unchanged
As an Israeli company subject to U.S. federal securities laws, we spend a significant amount of management time and resources to comply with laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, Securities and Exchange Commission, or SEC, regulations, Nasdaq listing rules and the Israeli Companies Law, 1999, or the Companies Law, or the Israeli Companies Law”.
As an Israeli company subject to U.S. federal securities laws, we spend a significant amount of management time and resources to comply with laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, Securities and Exchange Commission, or SEC, regulations, Nasdaq listing rules and the Israeli Companies Law, 1999, or the Companies Law, or the Israeli Companies Law.
If a significant number of messaging customers cease using, or reduce their usage of our products, it could harm our operations, financial reporting or financial results. 10 If we are unable to attract new messaging customers in a cost-effective manner, then our business, results of operations and financial condition would be adversely affected.
If a significant number of messaging customers cease using, or reduce their usage of our products, it could harm our operations, financial reporting or financial results. If we are unable to attract new messaging customers in a cost-effective manner, then our business, results of operations and financial condition would be adversely affected.
Given the likely volatility that exists for our ordinary shares, sales of a substantial number of our ordinary shares could cause the market price of our ordinary shares to decline. If we are characterized as a passive foreign investment company, our U.S. shareholders will be subject to adverse tax consequences.
Given the likely volatility that exists for our ordinary shares, sales of a substantial number of our ordinary shares could cause the market price of our ordinary shares to decline. 13 If we are characterized as a passive foreign investment company, our U.S. shareholders will be subject to adverse tax consequences.
Any damage or failure that interrupts or delays our operations could result in material harm to our business and expose us to material liabilities. The customer base for our billing and customer care products is characterized by small to medium size communication service providers, or CSPs.
Any damage or failure that interrupts or delays our operations could result in material harm to our business and expose us to material liabilities. 9 The customer base for our billing and customer care products is characterized by small to medium size communication service providers, or CSPs.
As a result, our reputation and our brand could be harmed, and our business, results of operations and financial condition may be adversely affected. We face a risk of litigation resulting from customer misuse of our messaging software to send unauthorized messages in violation of applicable laws.
As a result, our reputation and our brand could be harmed, and our business, results of operations and financial condition may be adversely affected. 12 We face a risk of litigation resulting from customer misuse of our messaging software to send unauthorized messages in violation of applicable laws.
In addition, there may never be significant demand for new billing and customer care software by providers of telecom services. 9 If we experience loss of one or more existing billing customers, we may suffer a decrease in revenues, reputation and profitability.
In addition, there may never be significant demand for new billing and customer care software by providers of telecom services. If we experience loss of one or more existing billing customers, we may suffer a decrease in revenues, reputation and profitability.
To deliver our messaging products, we rely on network service providers for our messaging services. We currently interconnect with network service providers around the world to enable the use by our customers of our messaging products over their networks. We expect that we will continue to rely heavily on network service providers for these services going forward.
We currently interconnect with network service providers around the world to enable the use by our customers of our messaging products over their networks. We expect that we will continue to rely heavily on network service providers for these services going forward.
This exclusive forum provision may limit a shareholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us, our directors, officers and employees. 16
This exclusive forum provision may limit a shareholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us, our directors, officers and employees.
The foregoing may under certain conditions be interpreted to apply to our software, depending upon the use of the open-source and the interpretation of the applicable open-source licenses. 8 We monitor our use of open-source code to avoid subjecting our products to conditions we do not intend.
The foregoing may under certain conditions be interpreted to apply to our software, depending upon the use of the open-source and the interpretation of the applicable open-source licenses. We monitor our use of open-source code to avoid subjecting our products to conditions we do not intend.
If our security measures for our software, hardware, services or cloud offerings are compromised and as a result, our data, our customers’ data or our IT systems are accessed improperly, made unavailable, or improperly modified, our products and services may be perceived as vulnerable, which may materially affect our business and result in potential legal liability.
If our security measures for our software, hardware, services or cloud offerings are compromised and as a result, our data, our customers’ data or our information technology, or IT, systems are accessed improperly, made unavailable, or improperly modified, our products and services may be perceived as vulnerable, which may materially affect our business and result in potential legal liability.
Subject to specified time limitations and legal procedures, under the rules of private international law currently prevailing in Israel, Israeli courts may enforce a U.S. judgment in a civil matter, including judgments based upon the civil liability provisions of the U.S. securities laws and including a monetary or compensatory judgment in a non-civil matter, provided that the following key conditions are met: ● subject to limited exceptions, the judgment is final and non-appealable; ● the judgment was given by a court competent under the laws of the state of the court and is otherwise enforceable in such state; ● the judgment was rendered by a court competent under the rules of private international law applicable in Israel; ● the laws of the state in which the judgment was given provide for the enforcement of judgments of Israeli courts; ● adequate service of process has been effected and the defendant has had a reasonable opportunity to present his arguments and evidence; ● the judgment and its enforcement are not contrary to the law, public policy, security or sovereignty of the State of Israel; ● the judgment was not obtained by fraud and does not conflict with any other valid judgment in the same matter between the same parties; and ● an action between the same parties in the same matter was not pending in any Israeli court at the time the lawsuit was instituted in the U.S. court.
There is little binding case law in Israel addressing these matters. 15 Subject to specified time limitations and legal procedures, under the rules of private international law currently prevailing in Israel, Israeli courts may enforce a U.S. judgment in a civil matter, including judgments based upon the civil liability provisions of the U.S. securities laws and including a monetary or compensatory judgment in a non-civil matter, provided that the following key conditions are met: ● subject to limited exceptions, the judgment is final and non-appealable; ● the judgment was given by a court competent under the laws of the state of the court and is otherwise enforceable in such state; ● the judgment was rendered by a court competent under the rules of private international law applicable in Israel; ● the laws of the state in which the judgment was given provide for the enforcement of judgments of Israeli courts; ● adequate service of process has been effected and the defendant has had a reasonable opportunity to present his arguments and evidence; ● the judgment and its enforcement are not contrary to the law, public policy, security or sovereignty of the State of Israel; ● the judgment was not obtained by fraud and does not conflict with any other valid judgment in the same matter between the same parties; and ● an action between the same parties in the same matter was not pending in any Israeli court at the time the lawsuit was instituted in the U.S. court.
If, for any taxable year, either (i) 75% or more of our gross income is passive income; or (ii) 50% or more of our assets, averaged over the year and generally determined based upon value, including cash (even if held as working capital), produce or are held to produce passive income, we may be characterized as a “passive foreign investment company”, or PFIC for United States federal income tax purposes.
If, for any taxable year, either (i) 75% or more of our gross income is passive income; or (ii) 50% or more of our assets, averaged over the year and generally determined based upon value, including cash (even if held as working capital), produce or are held to produce passive income, we may be characterized as a “passive foreign investment company”, or PFIC for U.S. federal income tax purposes.
Should we be assessed additional taxes, there could be a material adverse effect on our results of operations and financial condition. Our business may be negatively affected by exchange rate fluctuations. Approximately 52% of our revenues are denominated in Euro, and approximately 44% in U.S. dollars, or dollar.
Should we be assessed additional taxes, there could be a material adverse effect on our results of operations and financial condition. Our business may be negatively affected by exchange rate fluctuations. Approximately 53% of our revenues are denominated in Euro, and approximately 43% in U.S. dollars, or dollar.
We have a reputation for secure and reliable product offerings and related services, and we have invested a great deal of time and resources in protecting the integrity and security of our products, services and the internal and external data that we manage.
We have a reputation for secure and reliable product offerings and related services, and we have invested a great deal of time and resources in protecting the integrity and security of our products, services and the internal and external data that we manage. See Item 16K below.
Approximately 22% of our expenses are incurred in New Israeli Shekel, or NIS, and approximately 69% in Euro or linked to the Euro. At the same time, the majority of our cash reserves and investments are denominated in dollars, and our financial statements are denominated in dollars.
Approximately 12% of our expenses are incurred in New Israeli Shekel, or NIS, and approximately 74% in Euro or linked to the Euro. At the same time, the majority of our cash reserves and investments are denominated in dollars, and our financial statements are denominated in dollars.
We expect that there will continue to be new proposed laws, rules of self-regulatory bodies, regulations and industry standards concerning privacy, data protection and information security in the United States, the European Union and other jurisdictions, and we cannot yet determine the impact such future laws, rules, regulations and standards may have on our business.
We expect that there will continue to be new proposed laws, rules of self-regulatory bodies, regulations and industry standards concerning privacy, data protection and information security in the U.S., the EU and other jurisdictions, and we cannot yet determine the impact such future laws, rules, regulations and standards may have on our business.
They may use a wide variety of methods, which may include developing and deploying malicious software to attack our products third-party data, products or services incorporated into our own.
They may use a wide variety of methods, including by use of artificial intelligence, or AI, which may include developing and deploying malicious software to attack our products third-party data, products or services incorporated into our own.
If U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact, which can be a time-consuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel addressing these matters.
If U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact, which can be a time-consuming and costly process. Certain matters of procedure will also be governed by Israeli law.
If a court were to find the choice of forum provision contained in our articles of association to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially adversely affect our business, financial condition and results of operations.
If a court were to find the choice of forum provision contained in our articles of association to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially adversely affect our business, financial condition and results of operations. 14 Risks Relating to Our Location in Israel Potential political, economic and military conditions concerning Israel may harm our operating results.
Some of the provisions of our articles of association and Israeli law could, together or separately: ● discourage potential acquisition proposals; ● delay or prevent a change in control; and ● limit the price that investors might be willing to pay in the future for our ordinary shares. 15 In particular, our articles of association provide that our board of directors will be divided into three classes that serve staggered three-year terms and authorize our board of directors to adopt protective measures to prevent or delay a coercive takeover, including without limitation the adoption of a “Shareholder Rights Plan.” In addition, Israeli corporate law regulates mergers and acquisitions of shares through tender offers, requires approvals for transactions involving significant shareholders and regulates other matters that may be relevant to these types of transactions.
In particular, our articles of association provide that our board of directors will be divided into three classes that serve staggered three-year terms and authorize our board of directors to adopt protective measures to prevent or delay a coercive takeover, including without limitation the adoption of a “Shareholder Rights Plan.” In addition, Israeli corporate law regulates mergers and acquisitions of shares through tender offers, requires approvals for transactions involving significant shareholders and regulates other matters that may be relevant to these types of transactions.
The occurrence of errors or poor quality communications on our messaging products, whether caused by our platform or a network service provider, may result in the loss of our existing customers or the delay of adoption of our products by potential customers and may adversely affect our business, results of operations and financial condition. 11 We may have to lower our prices for messaging products or change our pricing model from time to time.
The occurrence of errors or poor quality communications on our messaging products, whether caused by our platform or a network service provider, may result in the loss of our existing customers or the delay of adoption of our products by potential customers and may adversely affect our business, results of operations and financial condition.
In addition, if our customers’ use of our messaging products will not adhere to privacy regulations and messaging rules, they and us may be blocked from sending more messages through specific channels and may be fined for such conduct.
In addition, if our customers’ use of our messaging products will not adhere to privacy regulations and messaging rules, they and us may be blocked from sending more messages through specific channels and may be fined for such conduct. Our failure to prevent such infringements could have a material adverse effect on our business.
Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security of personally identifiable information that identifies or may be used to identify an individual, such as names, telephone numbers, email addresses and, in some jurisdictions, IP addresses and other online identifiers. 5 For example, the General Data Protection Regulation, or GDPR, took effect in the European Union on May 25, 2018.
Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security of personally identifiable information that identifies or may be used to identify an individual, such as names, telephone numbers, email addresses and, in some jurisdictions, IP addresses and other online identifiers.
If we are not successful in defending against any such claims that may arise, we may be subject to injunctions and/or monetary damages or be required to remove the open-source code from our products. Such events could disrupt our operations and the sales of our products, which would negatively impact our revenues and cash flow.
If we are not successful in defending against any such claims that may arise, we may be subject to injunctions and/or monetary damages or be required to remove the open-source code from our products.
Moreover, under certain conditions, the use of open-source code to create derivative code may obligate us to make the resulting derivative code available to others at no cost. The circumstances under which our use of open-source code would compel us to offer derivative code at no cost are subject to varying interpretations.
The circumstances under which our use of open-source code would compel us to offer derivative code at no cost are subject to varying interpretations.
In addition, trading in shares of companies listed on the Nasdaq Global Market in general and trading in shares of technology companies in particular has been subjected to extreme price and volume fluctuations that have been unrelated or disproportionate to operating performance. These broad market and industry factors may depress our share price, regardless of our actual operating results.
We do not control these matters and any of them may adversely affect our share price. In addition, trading in shares of companies listed on the Nasdaq Global Market in general and trading in shares of technology companies in particular has been subjected to extreme price and volume fluctuations that have been unrelated or disproportionate to operating performance.
Future acquisitions could result in: ● potentially dilutive issuances of equity securities; ● the incurrence of debt and contingent liabilities; ● amortization of intangible assets; ● changes in our business model and margins; ● research and development write-offs; and ● other acquisiti on-related expenses.
Future acquisitions could result in: ● potentially dilutive issuances of equity securities; ● the incurrence of debt and contingent liabilities; ● amortization of intangible assets; ● changes in our business model and margins; ● research and development write-offs; and ● other acquisition-related expenses. In addition, we have limited experience with respect to negotiating an acquisition and operating an acquired business.
If our efforts to comply with GDPR or other applicable EU laws and regulations are not successful, we may be subject to penalties and fines that would adversely impact our business and results of operations, and our ability to conduct business in the EU could be significantly impaired.
If our efforts to comply with GDPR or other applicable EU laws and regulations are not successful, we may be subject to penalties and fines that would adversely impact our business and results of operations, and our ability to conduct business in the EU could be significantly impaired. 5 As well, we continue to see jurisdictions imposing data localization laws, which require personal information, or certain subcategories of personal information to be stored in the jurisdiction of origin.
Risks Relating to Our Location in Israel Potential political, economic and military conditions concerning Israel may harm our operating results. Most of our senior management is located in Israel. Accordingly, our operating results are directly influenced by economic, political and military conditions in and relating to Israel.
While the vast majority of our employees are located outside of Israel, most of our senior management is located in Israel. Accordingly, our operating results may be directly influenced by economic, political and military conditions in and relating to Israel.
Our articles of association provide that the competent courts of Tel Aviv, Israel are the exclusive forum for substantially all disputes between us and our shareholders under the Companies Law and the Securities Law, which could limit our shareholders’ ability to bring claims and proceedings against us, our directors, officers and other employees.
For example, Israeli tax law may subject a shareholder who exchanges his ordinary shares for shares in another corporation to taxation prior to the sale of the shares received in such stock-for stock swap. 16 Our articles of association provide that the competent courts of Tel Aviv, Israel are the exclusive forum for substantially all disputes between us and our shareholders under the Companies Law and the Securities Law, which could limit our shareholders’ ability to bring claims and proceedings against us, our directors, officers, and other employees.
The continued and uninterrupted performance of these services for our customers is critical to our success. Customers may become dissatisfied by any service failure that interrupts their business, which could lead them to stop using our messaging services. This could materially and adversely affect our reputation and business.
Customers may become dissatisfied by any service failure that interrupts their business, which could lead them to stop using our messaging services. This could materially and adversely affect our reputation and business. Changes to regulations or technology vendor rules could materially and adversely affect our business.
In addition, we have limited experience with respect to negotiating an acquisition and operating an acquired business. Due to the multiple risks and difficulties associated with any acquisition, there can be no assurance that we will be successful in achieving our expected strategic, operating and financial goals for any such acquisition.
Due to the multiple risks and difficulties associated with any acquisition, there can be no assurance that we will be successful in achieving our expected strategic, operating and financial goals for any such acquisition. If future acquisitions disrupt our operations, our business may suffer. 3 We may not be successful in the integration of our acquisitions.
Therefore, it may be difficult for a shareholder, or any other person or entity, to collect a judgment obtained in the United States against us or any of these persons, or to effect service of process upon these persons in the United States. 14 We have been informed by our legal counsel in Israel that it may be difficult to bring original actions in Israel to enforce civil liabilities under the Securities Act and the Securities Exchange Act of 1934, as amended, or the Exchange Act.
We have been informed by our legal counsel in Israel that it may be difficult to bring original actions in Israel to enforce civil liabilities under the Securities Act and the Securities Exchange Act of 1934, as amended, or the Exchange Act.
Risks Relating to our Messaging Business Our messaging business depends on customers increasing their use of our messaging products, and any loss of customers or decline in their use of our products could materially and adversely affect our business, results of operations and financial condition.
A product liability or professional indemnity claim, whether or not successful, could adversely affect our business by damaging our reputation, increasing our costs, and diverting the attention of our management team. 10 Risks Relating to our Messaging Business Our messaging business depends on customers increasing their use of our messaging products, and any loss of customers or decline in their use of our products could materially and adversely affect our business, results of operations and financial condition.
The consequences of holding shares in a PFIC are described below under “Additional Information - United States Federal Income Tax Consequences - Passive Foreign Investment Companies.” Prospective investors should consult with their own tax advisors with respect to the tax consequences applicable to them of investing in our Ordinary Shares. 13 Our articles of association provide that unless we consent to an alternative forum, the federal district courts of the United States shall be the exclusive forum for the resolution of any claims arising under the Securities Act of 1933, as amended, or the Securities Act, which may limit the ability of our shareholders to initiate litigation against us or increase the cost thereof.
Our articles of association provide that unless we consent to an alternative forum, the federal district courts of the United States shall be the exclusive forum for the resolution of any claims arising under the Securities Act of 1933, as amended, or the Securities Act, which may limit the ability of our shareholders to initiate litigation against us or increase the cost thereof.
We charge our customers based on their use of our messaging products. We expect that we may need to change our pricing from time to time. In the past we have sometimes reduced our prices either for individual customers in connection with long-term agreements or for a particular product.
We may have to lower our prices for messaging products or change our pricing model from time to time. We charge our customers based on their use of our messaging products. We expect that we may need to change our pricing from time to time.
The GDPR enhances data protection obligations for businesses and requires service providers (data processors) processing personal data on behalf of customers to cooperate with European data protection authorities, implement security measures and keep records of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to or greater of €20 million or 4% of global annual revenues.
For example, the General Data Protection Regulation, or GDPR, took effect in the EU on May 25, 2018. The GDPR enhances data protection obligations for businesses and requires service providers (data processors) processing personal data on behalf of customers to cooperate with European data protection authorities, implement security measures and keep records of personal data processing activities.
The market for our ordinary shares, as well as the prices of shares of other technology companies, has been volatile. The price of our ordinary shares has fluctuated significantly over the years. We do not control these matters and any of them may adversely affect our share price.
Risks Relating to our Ordinary Shares Our share price has fluctuated and could continue to fluctuate significantly. The market for our ordinary shares, as well as the prices of shares of other technology companies, has been volatile. The price of our ordinary shares has fluctuated significantly over the years.
Our failure to prevent such infringements could have a material adverse effect on our business. 12 System disruptions and failures may result in customer dissatisfaction, customer loss or both, which could materially and adversely affect our reputation and business. We provide real time messaging services to our customers.
System disruptions and failures may result in customer dissatisfaction, customer loss or both, which could materially and adversely affect our reputation and business. We provide real time messaging services to our customers. The continued and uninterrupted performance of these services for our customers is critical to our success.
As a result of our limited experience selling and marketing messaging products to enterprises, our efforts to sell to these potential customers may not be successful. If we are unable to increase the messaging revenue that we derive from enterprises, then our business, results of operations and financial condition may be adversely affected.
As a result of our limited experience selling and marketing messaging products to enterprises, our efforts to sell to these potential customers may not be successful.
There are also additional EU laws and regulations (and member states implementations thereof) which govern the protection of consumers and of electronic communications.
Noncompliance with the GDPR can trigger fines equal to or greater of €20 million or 4% of global annual revenues. There are also additional EU laws and regulations (and member states implementations thereof) which govern the protection of consumers and of electronic communications.
In addition, critics of the proposed judicial reforms in Israel warn that such reforms, if not moderated prior to enactment, may weaken Israel’s democratic institutions and therefore harm its economy. The situation in Israel or the region could adversely affect our operations if our customers and/or strategic partners believe that instability could affect our ability to fulfill our commitments.
The situation in Israel or the region could adversely affect our operations if our customers and/or strategic partners believe that instability could affect our ability to fulfill our commitments.
As well, we continue to see jurisdictions imposing data localization laws, which require personal information, or certain subcategories of personal information to be stored in the jurisdiction of origin. These regulations may inhibit our ability to expand into those markets or prohibit us from continuing to offer services in those markets without significant additional costs.
These regulations may inhibit our ability to expand into those markets or prohibit us from continuing to offer services in those markets without significant additional costs.
Changes in rules and regulations may prevent us from using some services, which may block our ability to grow our services and have a material adverse effect on our business. Risks Relating to our Ordinary Shares Our share price has fluctuated and could continue to fluctuate significantly.
We use messaging technologies and products, such as SMS and WhatsApp, to deliver messages from our customers to consumers. Changes in rules and regulations may prevent us from using some services, which may block our ability to grow our services and have a material adverse effect on our business.
Removed
If future acquisitions disrupt our operations, our business may suffer. 3 We may not be successful in the integration of our acquisitions.
Added
Such events could disrupt our operations and the sales of our products, which would negatively impact our revenues and cash flow. 8 Moreover, under certain conditions, the use of open-source code to create derivative code may obligate us to make the resulting derivative code available to others at no cost.
Removed
A product liability or professional indemnity claim, whether or not successful, could adversely affect our business by damaging our reputation, increasing our costs, and diverting the attention of our management team.
Added
If we are unable to increase the messaging revenue that we derive from enterprises, then our business, results of operations and financial condition may be adversely affected. 11 To deliver our messaging products, we rely on network service providers for our messaging services.
Removed
Changes to regulations or technology vendor rules could materially and adversely affect our business. We use messaging technologies and products, such as SMS and WhatsApp, to deliver messages from our customers to consumers.
Added
In the past we have sometimes reduced our prices either for individual customers in connection with long-term agreements or for a particular product.
Removed
For example, Israeli tax law may subject a shareholder who exchanges his ordinary shares for shares in another corporation to taxation prior to the sale of the shares received in such stock-for stock swap.
Added
These broad market and industry factors may depress our share price, regardless of our actual operating results.
Added
The consequences of holding shares in a PFIC are described below under “Additional Information - United States Federal Income Tax Consequences - Passive Foreign Investment Companies.” Prospective investors should consult with their own tax advisors with respect to the tax consequences applicable to them of investing in our Ordinary Shares.
Added
In October 2023, thousands of Hamas terrorists invaded Israel’s southern border towns near the Gaza Strip and carried out attacks on civilian and military targets that were extraordinary in scale and brutality. Hamas and other terrorist groups also launched extensive rocket attacks from the Gaza Strip against civilian targets in various parts of Israel.
Added
As a result, Israel declared war against Hamas, called up hundreds of thousands of reserve soldiers and launched an extensive military campaign against them. In parallel, border clashes between Israel and the Hezbollah terrorist group on Israel’s northern border with Lebanon have intensified and may escalate into a greater regional conflict.
Added
To date, our business and operations have not been adversely affected by the war. We have back-up IT systems and remote work ability that we expect will enable our operations to function well in the event of an emergency.
Added
Therefore, it may be difficult for a shareholder, or any other person or entity, to collect a judgment obtained in the United States against us or any of these persons, or to effect service of process upon these persons in the United States.
Added
Some of the provisions of our articles of association and Israeli law could, together or separately: ● discourage potential acquisition proposals; ● delay or prevent a change in control; and ● limit the price that investors might be willing to pay in the future for our ordinary shares.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

25 edited+2 added−2 removed39 unchanged
MINDBill includes a monitoring tool that enables 24x7 operational control, proactive monitoring and historical analysis of the platform’s behavior. Enterprise Software Our enterprise product, known as PhonEX ONE, is used by corporations for telecom expense management, call accounting, traffic analysis and fraud detection. It allows organizations to more effectively manage their telecommunications resources.
MINDBill includes a monitoring tool that enables 24x7 operational control, proactive monitoring and historical analysis of the platform’s behavior. 20 Enterprise Software Our enterprise product, known as PhonEX ONE, is used by corporations for telecom expense management, call accounting, traffic analysis and fraud detection. It allows organizations to more effectively manage their telecommunications resources.
PhonEX ONE can be installed on-premises or in a cloud environment. 20 Some of its major advantages are: ● Quality of Service (QoS) Monitoring. PhonEX ONE enables quantification of the user’s perceived audio call quality so the organization can ensure the relevant communication quality of experience of its contact centers, calls between branches, out-going calls, etc.; ● User centric .
PhonEX ONE can be installed on-premises or in a cloud environment. Some of its major advantages are: ● Quality of Service (QoS) Monitoring. PhonEX ONE enables quantification of the user’s perceived audio call quality so the organization can ensure the relevant communication quality of experience of its contact centers, calls between branches, out-going calls, etc.; ● User centric .
Flexible real-time rating engine that facilitates a wide variety of billing plans and tariff parameters, content-based rates, rates based on the day of the week, time of the day, call origin and destination and multi-currency rates for international services; 19 ● Invoicing . Support for all stages of invoice generation, multiple billing cycles and invoice on demand.
Flexible real-time rating engine that facilitates a wide variety of billing plans and tariff parameters, content-based rates, rates based on the day of the week, time of the day, call origin and destination and multi-currency rates for international services; ● Invoicing . Support for all stages of invoice generation, multiple billing cycles and invoice on demand.
We intend to continue to develop our platform to support multiple messaging channels such as SMS, WhatsApp, RCS, Telegram and others in order to provide to our customers multiple messaging options for personal mobile communication; and Billing and Customer Care Solutions The key functionalities of our billing and customer care solutions are as follows: ● Mediation .
We intend to continue to develop our platform to support multiple messaging channels such as SMS, WhatsApp, RCS, Telegram and others in order to provide to our customers multiple messaging options for personal mobile communication; and 19 Billing and Customer Care Solutions The key functionalities of our billing and customer care solutions are as follows: ● Mediation .
Messaging Services Our messaging solutions are used by more than 100 enterprise customers, mostly in Germany. 23 Competition Billing and Customer Care Solutions Competition in the market for billing and customer care software is intense and we expect competition to continue to be strong.
Messaging Services Our messaging solutions are used by more than 100 enterprise customers, mostly in Germany. Competition Billing and Customer Care Solutions Competition in the market for billing and customer care software is intense and we expect competition to continue to be strong.
We believe that our competitive advantage is based on: ● our ability to rapidly deploy a complete turn-key product-based solution; ● our truly convergent platform using one database and one product catalog for both prepaid and postpaid subscribers; ● our solutions’ functionality, which includes billing, customer care, point-of-sale, mediation, provisioning, online charging for multiple services and online store (eCommerce) modules; ● our proven platform and our many years of experience to satisfy customer requirements; and ● our flexibility to meet customer requirements in a short time frame.
We believe that our competitive advantage is based on: ● our ability to rapidly deploy a complete turn-key product-based solution; ● our truly convergent platform using one database and one product catalog for both prepaid and postpaid subscribers; ● our solutions’ functionality, which includes billing, customer care, point-of-sale, mediation, provisioning, online charging for multiple services and online store (e-commerce) modules; ● our proven platform and our many years of experience to satisfy customer requirements; and ● our flexibility to meet customer requirements in a short time frame.
Business Overview Overview We develop, manufacture, market and implement convergent billing and customer care software solutions for communication service providers, including traditional wireline and wireless, voice over IP, or VoIP, broadband IP network operators, wireless internet service providers, or WISPs, LTE operators, cable operators and mobile virtual network operators, or MVNOs.
Business Overview Overview We develop, manufacture, market and implement convergent billing and customer care software solutions for communication service providers, including traditional wireline and wireless, voice over IP, or VoIP, broadband IP network operators, wireless internet service providers, or WISPs, LTE and 5G carriers, and mobile virtual network operators, or MVNOs.
This allows further customization and solution adjustment based on modules to be installed on different servers to support the system’s scalability and security. We utilize a business processes workflow environment that facilitates the implementation of tailored and automated business processes to fit our customers’ unique business rules.
We implement our software in a distributed configuration. This allows further customization and solution adjustment based on modules to be installed on different servers to support the system’s scalability and security. We utilize a business processes workflow environment that facilitates the implementation of tailored and automated business processes to fit our customers’ unique business rules.
We introduced our billing and customer care software in 1997. We believe that our customer base, high customer satisfaction and our reputation for offering high quality, reliable platform provide us with brand name recognition. We continually invest in research and development to enhance our products with additional modules to address the digitalization of the telecom industry.
We believe that our customer base, high customer satisfaction and our reputation for offering high quality, reliable platform provide us with brand name recognition. We continually invest in research and development to enhance our products with additional modules to address the digitalization of the telecom industry.
Organizational Structure Set forth below is a list of our significant subsidiaries: ● MIND Software Limited, a wholly owned subsidiary, incorporated in the United Kingdom; ● MIND Software, Inc., a wholly owned subsidiary, incorporated in the State of Delaware; ● MIND Software SRL., a wholly owned subsidiary of MIND Software Limited, incorporated in Romania; ● MIND CTI GmbH, a wholly owned subsidiary, incorporated in Germany; ● Message Mobile GmbH, a wholly owned subsidiary of MIND CTI GmbH, incorporated in Germany; and ● GTX GmbH, a wholly owned subsidiary of MIND CTI GmbH, incorporated in Germany.
Organizational Structure Set forth below is a list of our significant subsidiaries: ● MIND Software Limited, a wholly owned subsidiary, incorporated in the United Kingdom; ● MIND Software, Inc., a wholly owned subsidiary, incorporated in the State of Delaware; ● MIND Software SRL., a wholly owned subsidiary of MIND Software Limited, incorporated in Romania; ● MIND CTI GmbH, a wholly owned subsidiary, incorporated in Germany; and ● Message Mobile GmbH (with which our subsidiary GTX GmbH was merged in 2023), a wholly owned subsidiary of MIND CTI GmbH, incorporated in Germany.
The messaging services are used by businesses for direct communication with their customers for several reasons, such as customer care, notifications, appointments, OTPs (one-time passwords) and marketing. Our wholesale mobile messaging business offers wholesale messaging services and messaging termination services on our software platform.
The platform may be integrated with the customers' CRM or marketing automation platforms. The messaging services are used by businesses for direct communication with their customers for several reasons, such as customer care, notifications, appointments, OTPs (one-time passwords) and marketing. Our wholesale mobile messaging business offers wholesale messaging services and messaging termination services on our software platform.
It also includes an integral point of sale (POS) solution that extends our offering to cover all dealer, store and cashier management and sales cycle related activities. Our solution is built upon a multi-layered architecture supporting real-time distributed processing, achieving high performance, scalability and high availability. MINDBill can be installed on-premises or in a cloud environment.
It also includes an integral point of sale (POS) solution that extends our offering to cover all dealer, store and cashier management and sales cycle related activities. Our solution is built upon a multi-layered architecture supporting real-time distributed processing, achieving high performance, scalability and high availability.
We engage in a variety of marketing activities, including: ● participating in industry trade shows and special events; and ● conducting ongoing public and press relations programs. 22 Principal Markets The following table shows our revenues for each of the past three years classified by type of revenue and geographic region.
We engage in some marketing activities, including participating in industry trade shows and special events. 22 Principal Markets The following table shows our revenues for each of the past three years classified by type of revenue and geographic region.
The PhonEX ONE Guard and Alerter provide sophisticated tools for fraud prevention, alerting on phone misuse, budget surpass, possible toll fraud or other abnormal behaviors within the organization; and ● Multilingual and multicurrency . The built-in support of multiple languages and multiple currencies enables telecom expense management for multinational organizations.
The PhonEX ONE Guard and Alerter provide sophisticated tools for fraud prevention, alerting on phone misuse, budget surpass, possible toll fraud or other abnormal behaviors within the organization; and ● Multilingual and multicurrency .
Our platform helps our customers to reduce costly in-house development and the need to negotiate complex commercial agreements with service providers. 18 Our Strategy Our objective is to be a leader in the market for convergent billing and customer care software for tier 2 and tier 3 service providers, to increase our presence in mobile messaging and to remain as profitable as possible in an increasingly competitive environment.
Our Strategy Our objective is to be a leader in the market for convergent billing and customer care software for tier 2 and tier 3 service providers, to increase our presence in mobile messaging and to remain as profitable as possible in an increasingly competitive environment. We introduced our billing and customer care software in 1997.
The flexible and scalable architecture of PhonEX ONE meets the needs of large enterprises, supporting an unlimited number of extensions, users and sites, it provides full functionality through a web browser, based on Microsoft SQL database and the advanced ASP.NET technology. 17 In addition, from 2019, following the acquisitions of Message Mobile GmbH, or Message Mobile and GTX GmbH, or GTX, we offer enterprise messaging services and wholesale messaging services.
The flexible and scalable architecture of PhonEX ONE meets the needs of large enterprises, supporting an unlimited number of extensions, users and sites, it provides full functionality through a web browser, based on Microsoft SQL database and the advanced ASP.NET technology.
Our Communications Platform as a Service, or CPaaS, provides simple APIs with well-defined ways to easily integrate messaging into the enterprise’s legacy systems (such as CRM) or our own applications.
Our Communications Platform as a Service, or CPaaS, provides simple APIs with well-defined ways to easily integrate messaging into the enterprise’s legacy systems (such as CRM) or our own applications. Our platform helps our customers to reduce costly in-house development and the need to negotiate complex commercial agreements with service providers.
Years Ended December 31, 2022 2021 2020 (dollars in thousands) The Americas (total) $ 8,536 $ 9,421 $ 10,355 Sale of Licenses 64 72 482 Services 8,472 9,349 9,873 Asia Pacific and Africa (total) 808 838 392 Sale of Licenses 139 88 97 Services 669 750 295 Europe (total) 11,382 14,702 11,734 Sale of Licenses 297 792 513 Services 11,085 13,910 11,221 Israel (total) 825 1,366 893 Sale of Licenses 111 596 274 Services 714 770 619 Total 21,551 26,331 23,374 Sale of Licenses 611 1,548 1,366 Services 20,940 24,783 22,008 Customers Billing and Customer Care Solutions Our billing and customer care solutions have been installed for a large base of customers worldwide, including: ● Traditional telephony providers that evolved into quad-play providers, offering wireless, wireline, cable, content and internet services, such as Moldtelecom, Belize Telemedia and Docomo Pacific; ● Wireless telephony providers, LTE operators and MVNO’s, such as KDDI America, Inc. and Chat Mobility; ● Cable providers that also offer voice services, such as EastLink; and ● Mobile Virtual Network Enablers (MVNEs), such as Pelephone Communications Ltd.
Years Ended December 31, 2023 2022 2021 (dollars in thousands) The Americas (total) $ 7,897 $ 8,536 $ 9,421 Sale of Licenses 158 64 72 Services 7,739 8,472 9,349 Asia Pacific and Africa (total) 1,162 808 838 Sale of Licenses 33 139 88 Services 1,129 669 750 Europe (total) 11,633 11,382 14,702 Sale of Licenses 249 297 792 Services 11,384 11,085 13,910 Israel (total) 920 825 1,366 Sale of Licenses 118 111 596 Services 802 714 770 Total 21,612 21,551 26,331 Sale of Licenses 558 611 1,548 Services 21,054 20,940 24,783 Customers Billing and Customer Care Solutions Our billing and customer care solutions have been installed for a large base of customers worldwide, including: ● Traditional telephony providers that evolved into quad-play providers, offering wireless, wireline, cable, IPTV, content and internet services, such as Moldtelecom, Belize Telemedia and Docomo Pacific; ● Internet services providers that offer a triple play of broadband data, VoIP and video, such as Iskon, Vodafone Net and MSTelcom; ● Wireless telephony providers, LTE operators and MVNO’s, such as KDDI America, Inc. and Chat Mobility; ● Cable providers that also offer voice services, such as EastLink; and ● Mobile Virtual Network Enablers (MVNEs), such as Pelephone Communications Ltd. 23 Enterprise Software Our enterprise software products have been installed for a large base of customers worldwide, including international banking firms, global technology leaders, government agencies and other thousands of small to very large organizations.
These expenditures were mainly for the purchase of equipment and licenses for software tools to be used by our engineering teams. We currently have no material commitments for capital expenditures. B.
Principal Capital Expenditures During 2023, 2022 and 2021, the aggregate cash amount of our capital expenditures was $64 thousand, $130 thousand, and $82 thousand, respectively. These expenditures were mainly for the purchase of equipment and licenses for software tools to be used by our engineering teams. We currently have no material commitments for capital expenditures. 17 B.
Our Market Opportunity Billing and Customer Care Industry Billing and customer care are critical to telecommunications service providers as they enable them to manage customer relations, track and bill for usage, and launch, deploy and charge new services and bundles, marketing programs and rate plans.
In most cases, there are long-term contracts with other aggregators for the wholesale and termination services, but the prices are being negotiated ad-hoc based on demand. 18 Our Market Opportunity Billing and Customer Care Industry Billing and customer care are critical to telecommunications service providers as they enable them to manage customer relations, track and bill for usage, and launch, deploy and charge new services and bundles, marketing programs and rate plans.
These application program interfaces create an object-oriented, multi-layered architecture that support a distributed environment. Our object-oriented technology enables the design and implementation of software utilizing reusable business objects rather than complex procedural codes. We implement our software in a distributed configuration.
Technology Our software products are based on an open architecture, which was developed using industry standard API that enables it to readily integrate with other software applications. These application program interfaces create an object-oriented, multi-layered architecture that support a distributed environment. Our object-oriented technology enables the design and implementation of software utilizing reusable business objects rather than complex procedural codes.
Mobile Messaging Following the acquisition of Message Mobile and GTX in 2019, we offer messaging solutions to enterprise and wholesale customers.
The built-in support of multiple languages and multiple currencies enables telecom expense management for multinational organizations. 21 Mobile Messaging Following the acquisition of Message Mobile and GTX in 2019, we offer messaging solutions to enterprise and wholesale customers.
We plan to expand the range of services we offer and the technological vehicles used to deliver them to our customers, and to increase the rate of new customer acquisition by facilitating self-registration and on-boarding for new customers, and by offering competitive pricing and quality services. 21 Technology Our software products are based on an open architecture, which was developed using industry standard API that enables it to readily integrate with other software applications.
We plan to expand the range of services we offer and the technological vehicles used to deliver them to our customers, and to increase the rate of new customer acquisition by facilitating self-registration and on-boarding for new customers, and by offering competitive pricing and quality services.
Our enterprise mobile messaging platform enables enterprises to easily communicate with clients and partners via text / SMS, instant messaging or voice. The platform may be integrated with the customers’ CRM or marketing automation platforms.
In addition, from 2019, following the acquisitions of Message Mobile GmbH, or Message Mobile and GTX GmbH, or GTX, we offer enterprise messaging services and wholesale messaging services. Our enterprise mobile messaging platform enables enterprises to easily communicate with clients and partners via text / SMS, instant messaging or voice.
Our agent in the United States is MIND Software, Inc. and its principal offices are located at 10306 Eaton Pl., Suite 300, Fairfax, VA 22030, USA. Principal Capital Expenditures During 2022, 2021 and 2020, the aggregate cash amount of our capital expenditures was $130 thousand, $82 thousand, and $68 thousand, respectively.
Our agent in the United States is MIND Software, Inc. and its principal offices are located at 10306 Eaton Pl., Suite 300, Fairfax, VA 22030, USA. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information that is filed electronically with the SEC at http://www.sec.gov. Our website address is at https://mindcti.com.
Removed
In most cases, there are long-term contracts with other aggregators for the wholesale and termination services, but the prices are being negotiated ad-hoc based on demand.
Added
Information contained, or that can be accessed through, our website does not constitute a part of this annual report and is not incorporated by reference herein, and we have included our website address in this annual report solely for informational purposes.
Removed
Enterprise Software Our enterprise software products have been installed for a large base of customers worldwide, including international banking firms, global technology leaders, government agencies and other thousands of small to very large organizations.
Added
We enhanced our billing and customer care platform with optional modules that we developed in recent years, including online store (e-commerce), mobile app and self-service modules that enable high quality service with Omnichannel architecture. MINDBill can be installed on-premises or in a cloud environment.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

48 edited+6 added−6 removed35 unchanged
Taxes on income are comprised of current and deferred taxes. On a regular basis, we estimate our actual current tax exposures and assess temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred taxes, which are included in our consolidated balance sheet.
Taxes on Income. Taxes on income are comprised of current and deferred taxes. On a regular basis, we estimate our actual current tax exposures and assess temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred taxes, which are included in our consolidated balance sheet.
The weakening of the dollar in in relation to the Euro and the NIS would have a negative effect on our profitability because we incur a significant portion of our expenses, mainly personnel expenses, in Euro and NIS.
The weakening of the dollar in relation to the Euro and the NIS would have a negative effect on our profitability because we incur a significant portion of our expenses, mainly personnel expenses, in Euro and NIS.
Net Cash Provided by Operating Activities . Net cash provided by operating activities in 2022 was $4.6 million, attributable to our net income of $5.3 million, non-cash related items, net, in the amount of $0.5 million, a net decrease in operating assets and liabilities items in the amount of $1.3 million.
Net cash provided by operating activities in 2022 was $4.6 million, attributable to our net income of $5.3 million, non-cash related items, net, in the amount of $0.5 million, a net decrease in operating assets and liabilities items in the amount of $1.3 million.
Goodwill is subject to an annual impairment test or more frequently if impairment indicators are present. Goodwill impairment is deemed to exist if the net book value of a reporting unit exceeds its estimated fair value. When we perform such analysis, we determine the fair value of a reporting unit, using discounted cash flows.
Goodwill is subject to an annual impairment test or more frequently if impairment indicators are present. Goodwill impairment is deemed to exist if the net book value of a reporting unit exceeds its estimated fair value. When we perform such an analysis, we determine the fair value of a reporting unit, using discounted cash flows.
Because exchange rates between the NIS and the Euro to the dollar fluctuate continuously, exchange rate fluctuations and especially larger periodic devaluations would have an impact on our revenues, profitability and period-to-period comparisons of our results. The effects of foreign currency remeasurements are reported in our consolidated financial statements in current operations. B.
Because exchange rates between the NIS and the Euro to the dollar fluctuate continuously, exchange rate fluctuations and especially larger periodic devaluations would have an impact on our revenues, profitability and period-to-period comparisons of our results. The effects of foreign currency remeasurements are reported in our consolidated financial statements in current operations. 30 B.
All transaction gains and losses from remeasurement of monetary balance sheet items denominated in non-dollar currencies are reflected in the statements of income as financial income or expenses, as appropriate.
All transaction gains and losses from remeasurement of monetary balance sheet items denominated in non-dollar currencies are reflected in the statements of operations as financial income or expenses, as appropriate.
Accordingly, our new customers in 2022 provided lower initial proceeds. Also, the telecommunication market is undergoing consolidation and intensifying competition, and we have lost a few customers. We expect that these trends will negatively impact our revenues and profitability in 2023.
Accordingly, our new customers in 2022 and in 2023 provided lower initial proceeds. Also, the telecommunication market is undergoing consolidation and intensifying competition, and we have lost a few customers. We expect that these trends will continue to negatively impact our revenues and profitability in 2024.
Since 2003, we have distributed aggregate cash dividends of $5.54 per share to our shareholders, including $0.26 per share in March 2021, $0.26 per share in April 2022 and the dividend of $0.24 per share that we declared in March 2023. For information about our dividend policy, please see Item 8 “Financial Information - Dividend Policy.” 31 C.
Since 2003, we have distributed aggregate cash dividends of $5.78 per share to our shareholders, including $0.26 per share in April 2022, $0.24 per share in March 2023, and the dividend of $0.24 per share that we declared in March 2024. For information about our dividend policy, please see Item 8 “Financial Information - Dividend Policy.” 31 C.
Subscribers expect customer support, uninterrupted service and full digitalization, while telcos seek ways to reduce workforce and increase profitability. Our solutions address those challenges as it enables them to rapidly deploy all types of services for prepaid and postpaid, residential and business customers.
Subscribers expect customer support, uninterrupted service and full digitalization, while telcos seek ways to reduce workforce and increase profitability. Our solutions address those challenges as they enable them to rapidly deploy all types of services for prepaid and postpaid, residential and business customers.
In 2022, services represented 97% of our total revenues and license fees represented 3% of our total revenues. 25 In 2022, one customer accounted for approximately 12% of our total revenues. In 2021and 2020, no customer accounted for more than 10% of our total revenues. We expect to continue to derive sizeable revenues from a small number of changing customers.
In 2023, services represented 97% of our total revenues and license fees represented 3% of our total revenues. In 2023 and 2022, one customer accounted for approximately 12% of our total revenues. In 2021, no customer accounted for more than 10% of our total revenues. We expect to continue to derive sizeable revenues from a small number of changing customers.
In 2022, financial income consisted of interest income on short-term bank deposits and marketable securities in the aggregate amount of $262 thousand, together with interest income on a long-term balance with a customer in the amount of $58 thousand, offset by a loss from currency exchange rate fluctuations in the aggregate amount of $99 thousand, interest on tax assessments in the aggregate amount of $60 thousand, realized and unrealized loss from marketable securities in the aggregate amount of $45 thousand and bank charges in an aggregate amount of $23 thousand.
In 2022, financial income consisted of interest income on short-term bank deposits and marketable securities in the aggregate amount of $262 thousand and interest income on a long-term trade receivable in the amount of $58 thousand, offset by a loss from currency exchange rate fluctuations in the aggregate amount of $99 thousand, interest on tax assessments in the aggregate amount of $60 thousand, realized and unrealized loss from marketable securities in the aggregate amount of $45 thousand and bank charges in an aggregate amount of $23 thousand.
Our Functional Currency The currency of the primary economic environment in which we operate is the dollar. Although 52% of our revenues are denominated in Euro, approximately 44% of our revenues are denominated in dollars and the vast majority of our cash reserves and investments are denominated in dollars.
Our Functional Currency The currency of the primary economic environment in which we operate is the dollar. Although 53% of our revenues are denominated in Euro, approximately 43% of our revenues are denominated in dollars and the vast majority of our cash reserves and investments are denominated in dollars.
Since 2003, our cash dividends amount to approximately $5.54 per share (including the dividend declared in March 2023 in respect of 2022). The amount per share that we distributed in each of 2022 and 2021 was $0.26, and a dividend of $0.24 per share was declared in March 2023.
Since 2003, our cash dividends amount to approximately $5.78 per share (including the dividend declared in March 2024 in respect of 2023). The amount per share that we distributed in 2023 was $0.24, in 2022 was $0.26, and a dividend of $0.24 per share was declared in March 2024.
No impairment of goodwill was required following the annual assessment performed during each of 2021 and 2022. Financial Income, net.
Impairment of Goodwill . No impairment of goodwill was required following the annual assessment performed during each of 2022 and 2023. 29 Financial Income, net.
Our solution reduces the Total Cost of Ownership (TCO) with its end-to-end capabilities, its built-in mediation, provisioning, point-of-sale and automated business processes. MIND enhanced its solutions with eCommerce, Mobile App and Self-service modules that enable high quality service with Omnichannel architecture.
Our solutions reduce the Total Cost of Ownership (TCO) with its end-to-end capabilities, its built-in mediation, provisioning, point-of-sale and automated business processes. MIND enhanced its solutions with e-commerce, Mobile App and Self-service modules that enable high quality service with Omnichannel architecture.
On September 25, 2019, we acquired GTX GmbH, a company based in Germany offering global SMS services for B-2-B customers, providing business partners a robust and easy-to-use system to send SMS messages to end-users at the best possible quality and attractive pricing, acting as a one-stop-platform for clients aiming to extend their messaging activities on different channels, e.g., WhatsApp, Chatbot on Messenger and Rich Communication Services (RCS).
Its messaging platform enables enterprises to easily communicate with clients and partners via text / SMS, voice and instant messaging services like WhatsApp, Facebook Messenger and Telegram. 25 On September 25, 2019, we acquired GTX GmbH, a company based in Germany offering global SMS services for B-2-B customers, providing business partners a robust and easy-to-use system to send SMS messages to end-users at the best possible quality and attractive pricing, acting as a one-stop-platform for clients aiming to extend their messaging activities on different channels, e.g., WhatsApp, Chatbot on Messenger and Rich Communication Services (RCS).
The weakening of the Euro in relation to the dollar would have a negative effect on our revenues because we incur a significant portion of our revenues in Euro.
The weakening of the dollar in relation to the Euro would have a significant positive effect on our revenues because we incur the majority of our revenues in Euro.
The following table presents the geographic distribution of our revenues: Years Ended December 31, 2022 2021 (% of revenues) The Americas 39.6 % 35.8 % Europe 52.8 55.8 Asia Pacific and Africa 3.8 3.2 Israel 3.8 5.2 Total 100.0 % 100.0 % Our revenues in the Americas decreased from $9.4 million in 2021 to $8.5 million in 2022.
The following table presents the geographic distribution of our revenues: Years Ended December 31, 2023 2022 (% of revenues) The Americas 36.5 % 39.6 % Europe 53.8 52.8 Asia Pacific and Africa 5.3 3.8 Israel 4.4 3.8 Total 100 % 100.0 % Our revenues in the Americas decreased from $8.5 million in 2022 to $7.9 million in 2023.
Research and development costs related to software products are expensed as incurred until the “technological feasibility” of the product has been established. Because of the relatively short time period between “technological feasibility” and product release, no software development costs have been capitalized. We expect to continue to make investments in research and development. Selling and Marketing Expenses .
Because of the relatively short time period between “technological feasibility” and product release, no software development costs have been capitalized. We expect to continue to make investments in research and development. Selling and Marketing Expenses .
Operating Results The following discussion of our results of operations for the years ended December 31, 2022 and 2021, including the percentage data in the following table, is based upon our statements of operations contained in our consolidated financial statements for those years, and the related notes thereto, included in Item 18 : Years Ended December 31, 2022 2021 (% of revenues) Revenues 100.0 % 100.0 % Cost of revenues 46.6 47.3 Gross profit 53.4 52.7 Research and development 16.2 15.4 Selling and marketing 4.5 5.3 General and administrative 7.1 6.1 Operating income 25.6 25.9 Financial income, net 0.4 0.2 Income before taxes on income 26.1 26.1 Taxes on income 1.5 3.5 Net income 24.5 % 22.6 % Comparison of the Year Ended December 31, 2022 to the Year Ended December 31, 2021 Revenues Years Ended December 31, 2022 2021 (dollars in millions) % Change License sales $ 0.6 $ 1.5 (60.5 )% Services 20.9 24.8 (15.5 )% Total revenues $ 21.5 $ 26.3 (18.1 )% Total revenues decreased from $26.3 million in 2021 to $21.5 million in 2022, mainly attributable to a decrease in revenues in our messaging segment, from $12.0 million in 2021 to $7.7 million in 2022.
Operating Results The following discussion of our results of operations for the years ended December 31, 2023 and 2022, including the percentage data in the following table, is based upon our statements of operations contained in our consolidated financial statements for those years, and the related notes thereto, included in Item 18: Years Ended December 31, 2023 2022 (% of revenues) Revenues 100.0 % 100.0 % Cost of revenues 49.7 46.6 Gross profit 50.3 53.4 Operating expenses: Research and development 16.3 16.2 Selling and marketing 5.4 4.5 General and administrative 6.6 7.1 Total operating expenses 28.3 27.8 Operating income 22.0 25.6 Financial income, net 3.6 0.4 Income before taxes on income 25.6 26.1 Taxes on income 1.6 1.5 Net income 24.0 % 24.5 % 27 Comparison of the Year Ended December 31, 2023 to the Year Ended December 31, 2022 Revenues Years Ended December 31, 2023 2022 (dollars in millions) % Change License sales $ 0.6 $ 0.6 (8.7 )% Services 21.0 20.9 0.5 % Total revenues $ 21.6 $ 21.5 0.3 % Total revenues increased from $21.5 million in 2022 to $21.6 million in 2023, attributable to an increase in revenues in our messaging segment, from $7.7 million in 2022 to $8.0 million in 2023, offset by a decrease in enterprise products that are part of our billing and related services segment from $2.3 million in 2022 to $2.1 million in 2023.
Our selling and marketing expenses consist primarily of compensation, overhead and related costs, for sales and marketing personnel, the operation of international sales offices, sales commissions, marketing programs, public relations, promotional materials, travel expenses, trade shows and exhibition expenses. General and Administrative Expenses .
Our selling and marketing expenses consist primarily of compensation, overhead and related costs, for sales and marketing personnel, sales commissions, marketing programs, promotional materials, travel expenses and trade shows expenses. General and Administrative Expenses .
In 2022, our taxes on income in the amount of $330 thousand included taxes on income, mainly in Israel, in the amount of $335 thousand and a decrease in deferred taxes in the amount of $7 thousand, offset by a refund in Germany in the amount of $39 thousand.
In 2022, our taxes on income in the amount of $330 thousand included current taxes on income, mainly in Israel, in the amount of $335 thousand and deferred taxes in the amount of $7 thousand, offset by a net refund outside of Israel in the amount of $12 thousand.
Net cash provided by operating activities in 2021 was $6.9 million, attributable to our net income of $5.9 million, non-cash related items, net, in the amount of $0.3 million, a net increase in operating assets and liabilities items in the amount of $0.6 million.
Net cash provided by operating activities in 2023 was $4.1 million, attributable to our net income of $5.2 million, non-cash related items, net, in the amount of $0.5 million, a net decrease in operating assets and liabilities items in the amount of $1.6 million.
We invested in research and development $3.4 million (or 16.2% of total revenues) in 2022 and $4.1 million (or 15% of total revenues) in 2021. The decrease in 2022 was mainly due to a decrease in personnel expenses. Our engineering department comprised approximately 82 employees as of December 31, 2022. D.
We invested in research and development $3.5 million (or 16.3% of total revenues) in 2023 and $3.4 million (or 16.2% of total revenues) in 2022. The increase in 2023 was mainly due to an increase in personnel expenses, required in order to retain talent. Our engineering department comprised approximately 82 employees as of December 31, 2023. D.
In 2022, 54% of our total revenues were derived from providing our billing and customer care software, 35% of our total revenues were derived from enterprise messaging and payment solutions and 11% of our total revenues were derived from providing our enterprise software.
In 2023, 53% of our total revenues were derived from providing our billing and customer care software, 37% of our total revenues were derived from enterprise messaging and payment solutions and 10% of our total revenues were derived from providing our enterprise software.
In 2021, financial income consisted of interest income on short-term bank deposits and income on marketable securities in the aggregate amount of $112 thousand, offset by loss from currency exchange rate fluctuations in the aggregate amount of $8 thousand, and bank charges in an aggregate amount of $49 thousand. Taxes on Income.
In 2023, financial income mainly consisted of interest income on short-term bank deposits and marketable securities in the aggregate amount of $737 thousand and gains from currency exchange rate fluctuations in the aggregate amount of $50 thousand, offset by bank charges in an aggregate amount of $27 thousand.
Cost of revenues also includes, among other things, software license fees to third parties, primarily Oracle, hardware, travel expenses and shipping costs. In the messaging segment, the cost of revenues consists primarily of fees paid to network providers.
In the billing and related services segment, the cost of revenues consists primarily of direct labor costs and overhead expenses related to software installation and maintenance. Cost of revenues also includes, among other things, software license fees to third parties, primarily Oracle, hardware, travel expenses and shipping costs.
Our general and administrative expenses consist primarily of compensation, overhead and related costs for executives and administrative personnel, professional fees, directors’ fees, insurance, provisions for doubtful accounts and other general corporate expenses. 26 Financial Income, Net .
Our general and administrative expenses consist primarily of compensation, overhead and related costs for executives and administrative personnel, professional fees, directors’ fees, insurance, costs related to being a public company, allowance for credit losses and other general corporate expenses. Financial Income, Net .
Revenues from services decreased from $24.8 million in 2021 to $ 20.9 million in 2022, primarily as a result of the decrease in revenues in our messaging segment discussed above.
Revenues from services increased from $20.9 million in 2022 to $ 21.0 million in 2023, primarily as a result of the increase in revenues in our messaging segment discussed above.
As of December 31, 2022, we had $5.2 million in cash and cash equivalents and $12.0 million in short-term bank deposits, and our working capital was $15.1 million. In our opinion, our working capital is sufficient for our requirements for the foreseeable future. 30 The majority of our cash and cash equivalents and our deposits are denominated in dollars.
As of December 31, 2023, we had $3.0 million in cash and cash equivalents and $13.6 million in short-term bank deposits and marketable securities, and our working capital was $15.2 million. In our opinion, our working capital is sufficient for our requirements for the foreseeable future.
Our arrangements with the network service providers require us to pay fees based on the volume of text messages sent, as well as telephone numbers acquired by us to service our customers. Research and Development Expenses . Our research and development expenses consist primarily of compensation, overhead and related costs for research and development personnel and depreciation of equipment.
In the messaging segment, the cost of revenues consists primarily of fees paid to network providers. Our arrangements with the network service providers require us to pay fees based on the volume of text messages sent, as well as telephone numbers acquired by us to service our customers. Research and Development Expenses .
General and administrative expenses decreased from $1.6 million in 2021 to $1.5 million in 2022, mainly due to a decrease in administrative personnel expenses. General and administrative expenses as a percentage of revenues increased from 6.1% in 2021 to 7.1% in 2022, mainly due to the significant decrease in total revenues. Impairment of Goodwill .
General and administrative expenses decreased from $1.5 million in 2022 to $1.4 million in 2023, mainly due to a collection of doubtful debt from one customer and decrease in administrative personnel expenses. General and administrative expenses as a percentage of total revenues decreased from 7.1% in 2022 to 6.6% in 2023, mainly due to the abovementioned decrease in expenses.
The aggregate cash amount of our capital expenditures was $130 thousand and $82 thousand in 2022 and 2021, respectively. These expenditures were principally for the purchase of equipment, mainly for the upgrade of our hosted platform that services the messaging segment, vehicles and for our engineering teams.
These expenditures were principally for the purchase of equipment, mainly for the upgrade of our hosted platform that services the messaging segment, vehicles and for our engineering teams.
Cash Deposits As of December 31, 2022, we had approximately $12.0 million in bank deposits with maturities of between three and twelve months. Marketable Securities As of December 31, 2022, we held marketable securities of approximately $174 thousand. Net Cash Used in Investing Activities . In 2022, we decreased our investments in short-term bank deposits by $2.0 million.
Marketable Securities As of December 31, 2023, we held marketable securities of approximately $182 thousand. Net Cash Used in Investing Activities . In 2023, we increased our investments in short-term bank deposits by $1.4 million. In 2022, we decreased our investments in short-term bank deposits by $2.0 million. Net Cash Used in Financing Activities .
Selling and marketing expenses decreased from $1.4 million in 2021 to $1.0 million in 2022, mainly attributable to a decrease in commissions and personnel expenses. Selling and marketing expenses as a percentage of total revenues decreased from 5.3% in 2021 to 4.5% in 2022, mainly due to the above-mentioned decrease. General and Administrative Expenses .
Selling and marketing expenses increased from $1.0 million in 2022 to $1.1 million in 2023, mainly attributable to an increase in expenses for customer acquisition costs. Selling and marketing expenses as a percentage of total revenues increased from 4.5% in 2022 to 5.4% in 2023, mainly due to the abovementioned increase. General and Administrative Expenses .
Revenues from our enterprise products increased slightly from $2.2 million in 2021 to $2.3 million in 2022. The increase was primarily attributed to a few major upgrades to the latest version at existing customers. Nevertheless, we continue to expect that this market will generally decline. 27 Revenues from licenses decreased from $1.5 million in 2021 to $0.6 million in 2022.
The decrease was primarily attributed to a few one-time major upgrades to the latest version at existing customers in 2022. We continue to expect that this market will generally decline. Revenues from licenses were $0.6 million in each of 2022 and 2023.
In the messaging segment, revenues are derived from customers using our messaging software platform, when the messaging service has been rendered, i.e., the messages are delivered to recipient. We provide a revenue breakdown for our billing and customer care software, our messaging solutions and our enterprise call management software.
In the messaging segment, revenues are derived from customers using our messaging software platform, when the messaging service has been rendered, i.e., the messages are delivered to recipient. All the revenues in the messaging segment are recognized as services revenues.
Net Operating Working Capital As of December 31, 2022, net operating working capital was $15.1 million, compared with $15.0 million as of December 31, 2021. The increase of $0.2 million is mainly due to a decrease in tax and other accruals, offset by a decrease in our cash position.
The decrease in net cash provided by operating activities of $0.5 million from 2022 to 2023 is mainly due to extended payment terms for one of our customers. Net Operating Working Capital As of December 31, 2023, net operating working capital was $15.2 million, compared to $15.1 million as of December 31, 2022.
Research and development expenses as a percentage of total revenues increased from 15.4% in 2021 to 16.2 % in 2022, due to the significant decrease in total revenues, offset by the decrease in research and development expenses. Selling and Marketing Expenses .
The increase in our research and development expenses by 1.2% in 2023, compared to 2022 was primarily due to an increase in personnel expenses. Research and development expenses as a percentage of total revenues slightly increased from 16.2% in 2022 to 16.3% in 2023, due to the abovementioned increase in personnel expenses. Selling and Marketing Expenses .
In 2021, our taxes on income in the amount of $936 thousand included taxes on income, mainly in Israel and in Germany, in the amount of $992 thousand ($687 thousand in Israel and $305 thousand in Germany) and an increase in deferred taxes in the amount of $96 thousand. 29 For a comparison of the year ended December 31, 2021 to the year ended December 31, 2020, please refer to Item 5 in our annual report on Form 20-F for the year ended December 31, 2021, filed with the SEC on April 11, 2022.
For a comparison of the year ended December 31, 2022 to the year ended December 31, 2021, please refer to Item 5 in our annual report on Form 20-F for the year ended December 31, 2022, filed with the SEC on March 14, 2023.
The increase was primarily attributed to the significant decrease in our messaging segment, which operates with lower gross margins than our billing segment. 28 Operating Expenses Years Ended December 31, 2022 2021 (dollars in millions) % Change Research and development $ 3.4 $ 4.1 (13.6 )% Selling and marketing 1.0 1.4 (31.2 )% General and administrative 1.5 1.6 (4.9 )% Total operating expenses $ 5.9 $ 7.1 (15.1 )% Research and Development .
Operating Expenses Years Ended December 31, 2023 2022 (dollars in millions) % Change Research and development $ 3.5 $ 3.4 1.2 % Selling and marketing 1.1 1.0 20.4 % General and administrative 1.4 1.5 (7.0 )% Total operating expenses $ 6.1 $ 5.9 2.2 % Research and Development .
Revenues from our billing and customer care solutions for service providers decreased from $12.1 million in 2021 to $11.5 million in 2022. The decrease was primarily attributed to the loss of one large customer and the lower revenues from our new customers. We expect a future trend of market decline due to shrinking relevant telecom markets and strong competition.
Revenues from our billing and customer care solutions for service providers were $11.5 million in each of 2022 and 2023. We expect a future trend of market decline due to shrinking relevant telecom markets and strong competition. Revenues from our messaging segment were substantially positively impacted by translation differences as a result of appreciation of the Euro against the dollar.
We believe that this information provides a better understanding of our performance and allows investors to make a more informed judgment about our business. Cost of Revenues . In the billing and related services segment, the cost of revenues consists primarily of direct labor costs and overhead expenses related to software installation and maintenance.
We provide a revenue breakdown for our billing and customer care software, our messaging solutions and our enterprise call management software. We believe that this information provides a better understanding of our performance and allows investors to make a more informed judgment about our business. 26 Cost of Revenues .
The decrease was primarily due to the reduced budgets allocated by CSPs to replace or upgrade their billing solutions and the loss of a few customers in this area. We expect this trend to continue. Our revenues in Europe significantly decreased from $14.7 million in 2021 to $11.3 million in 2022.
The decrease was primarily due to the loss of a few customers in this region during 2022. We expect this trend to continue. Our revenues in Europe increased from $11.3 million in 2022 to $11.6 million in 2023. The increase was primarily attributed to the increase in revenues in our messaging segment.
Cost of Revenues Years Ended December 31, 2022 2021 (dollars in millions) % Change Cost of sales of license $ 0.10 $ 0.09 25.5 % Cost of services 9.9 12.36 (19.6 )% Total cost of revenues $ 10.0 $ 12.45 (19.3 )% Total cost of revenues in 2022 decreased by $2.4 million, or 19.3%, compared with 2021, primarily due to the decrease in revenues in our messaging segment, which generated cost of revenues of approximately $6.6 million during 2022 and cost of revenues of approximately $9.0 million in 2021.
Our revenues in Israel increased from $0.8 million in 2022 to $0.9 million in 2023, mainly due to a significant follow-on order for customizations from an existing customer, an Israeli carrier, in 2023. 28 Cost of Revenues Years Ended December 31, 2023 2022 (dollars in millions) % Change Cost of sales of license $ 0.1 $ 0.1 6.5 % Cost of services 10.6 9.9 7.0 % Total cost of revenues $ 10.7 $ 10.0 7.0 % Total cost of revenues in 2023 increased by $0.7 million, or 7%, compared with 2022, primarily due to the increase in our messaging segment revenues and the increase in personnel expenses.
Gross profit as a percentage of total revenues increased from 52.7% in 2021 to 53.4% in 2022.
The percentage of total revenues in Europe increased from 52.8% in 2022 to 53.8% in 2023, due to the same reason.
In 2021, we increased our investments in short-term bank deposits by $6.9 million, and we decreased our investments in marketable securities by $1.4 million. Net Cash Used in Financing Activities . In each of 2022 and 2021, our financing activities used $5.2 million due to a cash dividend of $5.2 million. Capital Expenditures .
In 2023, our financing activities included a cash dividend of $4.9 million. In 2022, our financing activities included a cash dividend of $5.2 million. Capital Expenditures . The aggregate cash amount of our capital expenditures was $64 thousand and $130 thousand in 2023 and 2022, respectively.
Our revenues in Israel decreased from $1.4 million in 2021 to $0.8 million in 2022, mainly due to the one-time sale of licenses to one of our customers in Israel during 2021.
Our revenues in Euro increased from €7.3 million in 2022 to €7.4 million in 2023, while in dollars the increase is from $7.7 million in 2022 to $8.0 million in 2023. Revenues from our enterprise products decreased from $2.3 million in 2022 to $2.1 million in 2023.
Removed
Its messaging platform enables enterprises to easily communicate with clients and partners via text / SMS, voice and instant messaging services like WhatsApp, Facebook Messenger and Telegram.
Added
In 2023, GTX was merged with Message Mobile to form one legal entity that operates in the messaging segment.
Removed
This decrease is mainly due to unusual higher revenues in 2021 that was primarily attributed to the high messages volumes in Q2 and Q3 of 2021, related to specific COVID-19 regulations in Germany that were temporary in nature and did not represent a trend.
Added
Our research and development expenses consist primarily of compensation, overhead and related costs for research and development personnel and depreciation of equipment. Research and development costs related to software products are expensed as incurred until the “technological feasibility” of the product has been established.
Removed
The decrease was mainly attributed to the fact that in 2021 we received a one-time large increase in license revenues, based on an increase in the number of subscribers at two customers.
Added
Gross profit as a percentage of total revenues decreased from 53.4% in 2022 to 50.3% in 2023. The decrease was primarily due to the increase in our messaging segment which operates with significantly lower gross margins and the increase in personnel expenses.
Removed
The decrease was primarily attributed to the decrease in revenues in our messaging segment, offset by an increase in revenues from our billing segment resulting mainly from the sales of upgrades to the latest version to two existing customers. The percentage of total revenues in Europe decreased from 55.8% in 2021 to 52.8% in 2022, due to the same reason.
Added
In 2023, our taxes on income in the amount of $359 thousand included current taxes on income, mainly in Israel, in the amount of $ 353 thousand and deferred taxes in the amount of $ 6 thousand.
Removed
The decrease in our research and development expenses by 13.6% in 2022 compared to 2021 was primarily due to a decrease in personnel expenses.
Added
The majority of our cash and cash equivalents, our short-term bank deposits and marketable securities are denominated in dollars. Net Cash Provided by Operating Activities .
Removed
The decrease in net cash provided by operating activities of $2.3 million from 2021 to 2022 reflects mainly the decrease of $1.9 million in operating assets and liabilities items from 2021 to 2022 and the decrease of $0.6 million in our net income from 2021 to 2022.
Added
The increase of $0.1 million is mainly due to a decrease in our cash position, offset by a decrease of $0.4 million in deferred revenues and increase of $0.3 million in prepaid expenses and other current assets. Cash Deposits As of December 31, 2023, we had approximately $13.4 million in bank deposits with maturities of between three and twelve months.

Item 6. [Reserved]

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

34 edited+3 added−6 removed47 unchanged
At the meeting our shareholders also approved that the remuneration of those of our external directors who our Board classifies as “expert external directors” (as such term is defined in the Israeli Companies Law) will be 20% more than the remuneration of non-expert external directors. C.
At the meeting our shareholders also approved that the remuneration of those of our external directors who our Board classifies as “expert external directors” (as such term is defined in the Israeli Companies Law) will be 20% more than the remuneration of non-expert external directors. 35 C.
All the members of our audit committee are “independent directors” under the Nasdaq rules and meet the additional qualifications for membership on an audit committee and a compensation committee under applicable law. 37 Internal Auditor Under the Companies Law, the board of directors must appoint an internal auditor proposed by the audit committee.
All the members of our audit committee are “independent directors” under the Nasdaq rules and meet the additional qualifications for membership on an audit committee and a compensation committee under applicable law. Internal Auditor Under the Companies Law, the board of directors must appoint an internal auditor proposed by the audit committee.
Monica Iancu is a member of Class I, Itay Barzilay and Joseph Tenne are members of Class II and Meir Nissensohn and Amnon Neubach are members of Class III. At each annual general meeting of shareholders, directors will be elected by a simple majority of the votes cast for a three-year term to succeed the directors whose terms then expire.
Monica Iancu is a member of Class I, Itay Barzilay and Joseph Tenne are members of Class II and Amnon Neubach is a member of Class III. At each annual general meeting of shareholders, directors will be elected by a simple majority of the votes cast for a three-year term to succeed the directors whose terms then expire.
Abramovich holds a B.A. degree in Accounting from The Jerusalem School for Business Administration, Hebrew University, and he is a Certified Public Accountant in Israel. Gilad Parness. Mr. Parness has served as our Vice President of Sales since June 2020. He joined MIND in 2004 as a team leader in MINDBill Support. Mr.
Abramovich holds a B.A. degree in Accounting from The School of Business Administration at the Hebrew University of Jerusalem, and he is a Certified Public Accountant in Israel. 33 Gilad Parness. Mr. Parness has served as our Vice President of Sales since June 2020. He joined MIND in 2004 as a team leader in MINDBill Support. Mr.
Board Practices Board of Directors Our board is divided into three classes of directors, denominated Class I, Class II and Class III. The term of Class I will expire in 2025, Class II in 2023 and Class III in 2024.
Board Practices Board of Directors Our board is divided into three classes of directors, denominated Class I, Class II and Class III. The term of Class I will expire in 2025, Class II in 2026 and Class III in 2024.
Accordingly, gains derived from options awarded to our Israeli employees and held by a trustee for two years from the date of grant, will generally be taxed as capital gains at a rate of 25%, and we will generally not be entitled to recognize an expense for the award of such options. On September 2, 2021, Ms.
Accordingly, gains derived from options awarded to our Israeli employees and held by a trustee for two years from the date of grant, will generally be taxed as capital gains at a rate of 25%, and we will generally not be entitled to recognize an expense for the award of such options. On June 5, 2023, Ms.
Compensation of Directors and Executive Officers The aggregate direct remuneration paid to all persons who served in the capacity of director or executive officer during 2022 was $1.6 million, including $0.1 million that was set aside for pension and retirement benefits.
Compensation of Directors and Executive Officers The aggregate direct remuneration paid to all persons who served in the capacity of director or executive officer during 2023 was $1.5 million, including $0.08 million that was set aside for pension and retirement benefits.
During 2022, we granted to our executive officers under our option plans options to purchase 106,000 ordinary shares at exercise price of $0.003 per share. All these options expire in 2027. 35 The table below outlines the compensation granted to our five most highly compensated office holders during or with respect to the year ended December 31, 2022.
During 2023, we granted to our executive officers under our option plans options to purchase 28,000 ordinary shares at exercise price of $0.003 per share. All these options expire in 2028. The table below outlines the compensation granted to our five most highly compensated office holders during or with respect to the year ended December 31, 2023.
Share Ownership As of March 1, 2023, Monica Iancu beneficially owned 3,316,625, or 16.5% of our ordinary shares. None of our other directors or members of senior management beneficially owns 1% or more of our ordinary shares. We have established stock option plans to provide for the issuance of options to our directors, officers and employees.
Share Ownership As of March 1, 2024, Monica Iancu beneficially owned 3,121,527, or 15.5% of our ordinary shares. None of our other directors or members of senior management beneficially owns 1% or more of our ordinary shares. We have established stock option plans to provide for the issuance of options to our directors, officers and employees.
Iancu adopted a Rule 10b5-1 Sale Plan in order to establish a systematic program by which Oppenheimer & Co. Inc. is instructed to sell on Nasdaq up to 1,800,000 ordinary shares held by her pursuant to the guidelines set forth therein. As of March 1, 2023, no shares were sold under this plan. 40
Iancu adopted a Rule 10b5-1 Sale Plan in order to establish a systematic program by which Oppenheimer & Co. Inc. is instructed to sell on Nasdaq up to 1,800,000 ordinary shares held by her pursuant to the guidelines set forth therein. As of March 1, 2024, 195,098 shares had been sold under this plan.
The numbers and breakdowns of our employees as of the end of the past three years are set forth in the following table: As of December 31, 2022 2021 2020 Approximate numbers of employees by geographic location Israel 24 23 25 Romania 116 124 147 United States - - - Germany 13 13 16 Total workforce 153 160 188 Approximate numbers of employees by category of activity General and administration 15 14 15 Research and development 97 103 115 Professional services and customer support 32 32 47 Sales and marketing 9 11 11 Total workforce 153 160 188 E.
The numbers and breakdowns of our employees as of the end of the past three years are set forth in the following table: As of December 31, 2023 2022 2021 Approximate numbers of employees by geographic location Israel 23 24 23 Romania 110 116 124 Germany 11 13 13 Total workforce 144 153 160 Approximate numbers of employees by category of activity General and administration 15 15 14 Research and development 90 97 103 Professional services and customer support 31 32 32 Sales and marketing 8 9 11 Total workforce 144 153 160 E.
Tenne holds a B.A. degree in Accounting and Economics and an M.B.A. degree from Tel Aviv University, and he is a Certified Public Accountant in Israel. Itay Barzilay. Mr. Barzilay has served as a director of our company since May 2020. Since 2019 Mr. Barzilay has served as the CFO of Personetics. From 2010 to 2019, Mr.
(TASE) from 2021 to 2024 . Mr. Tenne holds a B.A. degree in Accounting and Economics and an M.B.A. degree from Tel Aviv University, and he is a Certified Public Accountant in Israel. Itay Barzilay. Mr. Barzilay has served as Chairman of the Board since 2023 and a director of our company since May 2020. Since 2019 Mr.
Tenne served as a director at Enzymotec Ltd. from 2013 to 2018, at Orbotech Ltd. from 2014 to 2019 and at Ratio Oil Exploration (Finance) from 2005 to 2021. From 1997 to 2003, Mr. Tenne was a partner in Kesselman & Kesselman, Certified Public Accountants in Israel and a member of PricewaterhouseCoopers International Limited (PwC Israel). Mr.
Tenne was a partner in Kesselman & Kesselman, Certified Public Accountants in Israel and a member of PricewaterhouseCoopers International Limited (PwC Israel). Mr. Tenne served as a director at Enzymotec Ltd. (NASDAQ) from 2013 to 2018, at Orbotech Ltd. (NASDAQ) from 2014 to 2019, at Ratio Energies (Finance) (TASE) from 2005 to 2021, and at Highcon Systems Ltd.
Barzilay held a number of finance leadership positions at Amdocs and most recently served as Vice President Finance for Amdocs Technology & Media and for Amdocs Global Services (NASDAQ: DOX). From 2008 to 2010, Mr. Barzilay was the CFO of MIND. From 2004 to 2008, Mr. Barzilay served in several finance management roles with Avaya. Mr.
Barzilay has served as the CFO of Personetics. From 2010 to 2019, Mr. Barzilay held a number of finance leadership positions at Amdocs and most recently served as Vice President Finance for Amdocs Technology & Media and for Amdocs Global Services (NASDAQ: DOX). From 2008 to 2010, Mr. Barzilay was the CFO of MIND. From 2004 to 2008, Mr.
Our audit committee also serves as (i) our compensation committee, as described below, and (ii) our nominations committee, authorized to recommend all director nominees for the selection of the board of directors, provided that no such recommendation is required in cases, if any, where the right to nominate a director legally belongs to a third party.
We have adopted an audit committee charter, which sets forth the qualifications, powers and responsibilities of our audit committee. 36 Our audit committee also serves as (i) our compensation committee, as described below, and (ii) our nominations committee, authorized to recommend all director nominees for the selection of the board of directors, provided that no such recommendation is required in cases, if any, where the right to nominate a director legally belongs to a third party.
Directors and Senior Management The following table sets forth certain information regarding our directors and executive officers as of the date of filing of this Annual Report: Name Age Position Monica Iancu 65 President and Chief Executive Officer, Director Arie Abramovich 36 Chief Financial Officer Gilad Parness 54 Vice President Sales Oren Tanhum 52 Vice President, Professional Services Shoval Cohen Nissan 48 Vice President, Information Technology Victor Balteanu 43 Vice President Engineering Marian Scurtu 45 Vice President Customer Success Liviu Serea 68 General Manager, MIND Romania Meir Nissensohn 79 Chairman of the Board of Directors Joseph Tenne 67 Director and Chairman of the Audit Committee Itay Barzilay 48 Director Amnon Neubach 79 Director 33 The background of each of our directors and executive officers is as follows: Monica Iancu.
Directors and Senior Management The following table sets forth certain information regarding our directors and executive officers as of the date of filing of this Annual Report: Name Age Position Monica Iancu 66 President and Chief Executive Officer, Director Arie Abramovich 37 Chief Financial Officer Gilad Parness 55 Vice President Sales Oren Tanhum 53 Vice President, Professional Services Shoval Cohen Nissan 49 Vice President, Information Technology Victor Balteanu 44 Vice President Engineering Marian Scurtu 46 Vice President Customer Success Liviu Serea 69 General Manager, MIND Romania Joseph Tenne 68 Director and Chairman of the Audit Committee Itay Barzilay 49 Chairman of the Board of Directors Amnon Neubach 80 Director The background of each of our directors and executive officers is as follows: Monica Iancu.
Tenne served as the CFO of Ormat Technologies, Inc. (NYSE). From 2003 to 2004, Mr. Tenne served as the CFO of Treofan Germany GmbH & Co. KG, a German private company. Mr.
From 2005 to 2013, Mr. Tenne served as the CFO of Ormat Technologies, Inc. (NYSE and TASE) and Ormat Industries Ltd. (TASE). From 2003 to 2004, Mr. Tenne served as the CFO of Treofan Germany GmbH & Co. KG, a German private company. From 1997 to 2003, Mr.
Under Israeli case law, the non-competition undertakings of employees may not be enforceable. 39 D. Employees In the years ended December 31, 2022, 2021, and 2020 our total number of employees was 153, 160, and 188 respectively.
Under Israeli case law, the non-competition undertakings of employees may not be enforceable. D. Employees As of December 31, 2023, 2022, and 2021 our total number of employees was 144, 153, and 160, respectively.
The shareholder approval must be by a majority of the shares voted on the matter, provided that either: ● at least a majority of the shares of shareholders who have no personal interest in the transaction and who vote on the matter vote in favor thereof; or ● the shareholders who have no personal interest in the transaction who vote against the transaction do not represen t more than two percent of the voting rights in the company.
The shareholder approval must be by a majority of the shares voted on the matter, provided that either: ● at least a majority of the shares of shareholders who have no personal interest in the transaction and who vote on the matter vote in favor thereof; or ● the shareholders who have no personal interest in the transaction who vote against the transaction do not represent more than two percent of the voting rights in the company. 38 Shareholders generally have the right to examine any document in the company’s possession pertaining to any matter that requires shareholder approval.
The duty of loyalty of an office holder includes a duty to: ● refrain from any conflict of interest between the performance of his duties in the company and the performance of his other duties or his personal affairs; ● refrain from any activity that is competitive with the company; ● refrain from exploiting any business opportunity of the company to receive a personal gain for himself or others; and ● disclose to the company any information or documents relating to a company’s affairs which the office holder has received due to his position as an office holder.
The duty of loyalty of an office holder includes a duty to: ● refrain from any conflict of interest between the performance of his duties in the company and the performance of his other duties or his personal affairs; ● refrain from any activity that is competitive with the company; ● refrain from exploiting any business opportunity of the company to receive a personal gain for himself or others; and ● disclose to the company any information or documents relating to a company’s affairs which the office holder has received due to his position as an office holder. 37 Disclosure of Personal Interest of an Office Holder The Companies Law requires that an office holder of a company disclose to the company any personal interest that he may have and all related material information known to him, in connection with any existing or proposed transaction by the company.
A transaction that is adverse to the company’s interest may not be approved. If the transaction is an extraordinary transaction, approval of both the audit committee and the board of directors is required. Under specific circumstances, shareholder approval may also be required.
If the transaction is an extraordinary transaction, approval of both the audit committee and the board of directors is required. Under specific circumstances, shareholder approval may also be required.
Serea managed a local company involved in hardware assembly, distribution and support. Mr. Serea holds a M.Sc. degree in Electronics and Telecommunications from the Politechnic Institute of Iasi. Meir Nissensohn. Mr. Nissensohn has served as our Chairman of the Board since 2020 and as a director of our company since 2014. Mr.
Serea managed a local company involved in hardware assembly, distribution and support. Mr. Serea holds a M.Sc. degree in Electronics and Telecommunications from the Politechnic Institute of Iasi. Joseph Tenne. Mr. Tenne has served as a director of our company since August 2014. . Mr. Tenne serves as a director at AudioCodes Ltd. (NASDAQ), at OPC Energy Ltd.
(NASDAQ and TASE), which was sold in 2021 to ZOLL Medical Corporation, and from 2014 to 2017 he served as its Vice President Finance and CFO. Mr. Tenne serves as a director at AudioCodes Ltd., at OPC Energy Ltd., at Highcon Systems Ltd., at Electreon Wireless Ltd., and at Sapir Corp Ltd. From 2005 to 2013, Mr.
(TASE), at Electreon Wireless Ltd. (TASE), at Tarya Israel Ltd. (TASE), and at Sapir Corp Ltd. (TASE). From 2017 to 2023, Mr. Tenne served as a financial executive at Itamar Medical Ltd. (NASDAQ and TASE), which was sold in 2021 to ZOLL Medical Corporation, and from 2014 to 2017 he served as its Vice President Finance and CFO.
In determining the number of directors required to have such expertise, the board of directors must consider, among other things, the type and size of the company and the scope and complexity of its operations.
In determining the number of directors required to have such expertise, the board of directors must consider, among other things, the type and size of the company and the scope and complexity of its operations. Our board of directors has determined that we require one director with the requisite financial and accounting expertise.
Unless otherwise is determined by our Board, any award granted under the 2011 Share Incentive Plan will have a four-year vesting schedule, such that 50% of the award will vest on the second anniversary of the commencement date and 25% of the award will vest on each of the third and fourth anniversaries of the commencement date.
Unless otherwise is determined by our Board, any award granted under the 2011 Share Incentive Plan will have a four-year vesting schedule, such that 50% of the award will vest on the second anniversary of the commencement date and 25% of the award will vest on each of the third and fourth anniversaries of the commencement date. 39 As of March 1, 2024, options to purchase 501,000 ordinary shares were outstanding and options for 2,395,790 ordinary shares had been exercised.
On May 4, 2017, our board of directors resolved that each of our external directors will be entitled to receive an annual fee of $13,200 and a participation fee of $680 per meeting. On August 9, 2017, payment in the same amounts to each of our non-executive directors was approved by our shareholders.
All amounts reported in this column represent incremental cost of the Company. On May 4, 2017, our board of directors resolved that each of our external directors will be entitled to receive an annual fee of $13,200 and a participation fee of $680 per meeting.
Under Israeli law, an extraordinary transaction is a transaction: ● other than in the ordinary course of business; ● other than on market terms; or ● that is likely to have a material i mpact on the company’s profitability, assets or liabilities. 38 Approval of Related Party Transactions Once an office holder complies with the above disclosure requirement, the board of directors may approve a transaction between the company and an office holder, or a third party in which an office holder has a personal interest.
Approval of Related Party Transactions Once an office holder complies with the above disclosure requirement, the board of directors may approve a transaction between the company and an office holder, or a third party in which an office holder has a personal interest. A transaction that is adverse to the company’s interest may not be approved.
Barzilay is a Certified Public Accountant, holds a BA in Accounting and Economics from Tel Aviv University and an MBA from NYU’s Stern School of Business. Amnon Neubach. Mr. Neubach had served as an external director of our company from 2001 until 2014 and rejoined our board of directors in 2021. Mr.
Barzilay served in several finance management roles with Avaya. Mr. Barzilay is a Certified Public Accountant, holds a BA in Accounting and Economics from Tel Aviv University and an MBA from NYU’s Stern School of Business. 34 Amnon Neubach. Mr.
We refer to the five individuals for whom disclosure is provided herein as our “Covered Executives.” Summary Compensation Table Name of Officer Position of Officer Salary Cash Bonus (1) Equity-Based Compensation (2) All Other Compensation (3) Total ($) Monica Iancu President and Chief Executive Officer 240,000 240,000 - 58,368 538,368 Ran Mendelaw Chief Financial Officer (4) 88,560 21,443 - 41,803 151,806 Gilad Parness Vice President Sales 115,477 28,591 29,630 49,856 223,554 Shoval Cohen Nisaan Vice President, Information Technology 115,590 28,591 92,240 52,748 289,169 Oren Tanhum Vice President, Professional Services 101,256 25,017 29,630 46,816 202,719 (1) Amounts reported in this column represent annual incentive bonuses granted to the Covered Executives or commissions based on performance-metric formulas set forth in their respective employment agreements.
We refer to the five individuals for whom disclosure is provided herein as our “Covered Executives.” Summary Compensation Table Name of Officer Position of Officer Salary Cash Bonus (1) Equity-Based Compensation (2) All Other Compensation (3) Total ($) Monica Iancu President and Chief Executive Officer 240,000 240,000 - 53,853 533,853 Arie Abramovich Chief Financial Officer 76,981 4,337 30,463 37,817 149,598 Gilad Parness Vice President Sales 105,025 26,023 - 45,550 176,598 Shoval Cohen Nisaan Vice President, Information Technology 105,116 26,023 - 49,548 180,687 Oren Tanhum Vice President, Professional Services 92,105 22,770 - 42,586 157,461 (1) Amounts reported in this column represent annual incentive bonuses granted to the Covered Executives or commissions based on performance-metric formulas set forth in their respective employment agreements.
As of March 1, 2023, options to purchase 452,500 ordinary shares were outstanding and options for 2,335,290 ordinary shares had been exercised. The options vest over four years, primarily commencing on the date of grant. Generally, options not previously exercised will expire five years after they are granted.
The options vest over four years, primarily commencing on the date of grant. Generally, options not previously exercised will expire five years after they are granted.
Our board of directors has determined that we require one director with the requisite financial and accounting expertise. 36 Audit Committee Under the Companies Law, our board of directors is required to appoint an audit committee, comprised of at least three directors. The members of the audit committee must satisfy certain independence standards under the Companies Law.
Audit Committee Under the Companies Law, our board of directors is required to appoint an audit committee, comprised of at least three directors. The members of the audit committee must satisfy certain independence standards under the Companies Law. Our audit committee consists of Mr. Joseph Tenne (Chairman of the audit committee), Mr. Itay Barzilay and Mr. Amnon Neubach.
Neubach holds a B.A. degree in Economics and Business Administration and an M.A. degree in Economics, both from Bar Ilan University. To the best of our knowledge, there are no family relationships between any of the directors or members of senior management named above.
To the best of our knowledge, there are no family relationships between any of the directors or members of senior management named above.
Neubach served as Chairman of the Tel Aviv Stock Exchange Ltd. from 2014 to 2021. Mr. Neubach has served in various privately held companies and public companies as a director, a member of executive committees and in some as chairman of the board. Mr.
Neubach has served in various privately held companies and public companies as a director, a member of executive committees and in some as chairman of the board. Mr. Neubach holds a B.A. degree in Economics and Business Administration and an M.A. degree in Economics, both from Bar Ilan University.
Shareholders generally have the right to examine any document in the company’s possession pertaining to any matter that requires shareholder approval. If this information is made public in Israel or elsewhere, we will file the information with the SEC in the United States.
If this information is made public in Israel or elsewhere, we will file the information with the SEC in the United States.
Removed
Nissensohn served as the Chairman of the Board of Directors and Chief Executive Officer of IBM Israel Ltd. from 1996 to 2012, having joined IBM Israel as a computer programmer in 1969. Since his retirement from IBM, he serves in several Boards of Directors and is involved in various business initiatives. Mr.
Added
Neubach had served as an external director of our company from 2001 until 2014 and rejoined our board of directors in 2021. Mr. Neubach served as Chairman of the Tel Aviv Stock Exchange Ltd. from 2014 to 2021. Mr.
Removed
Nissensohn holds a B.Sc. in Industrial Engineering from the Technion – Israeli Institute of Technology, and an M.B.A. from Tel Aviv University. 34 Joseph Tenne. Mr. Tenne has served as a director of our company since August 2014. Since May 2017, Mr. Tenne serves as a financial executive at Itamar Medical Ltd.
Added
On August 9, 2017, payment in the same amounts to each of our non-executive directors was approved by our shareholders.
Removed
All amounts reported in this column represent incremental cost of the Company. (4) Mr. Mendelaw resigned and was replaced as Chief Financial Officer by Arie Abramovich in December 2022.
Added
Under Israeli law, an extraordinary transaction is a transaction: ● other than in the ordinary course of business; ● other than on market terms; or ● that is likely to have a material impact on the company’s profitability, assets or liabilities.
Removed
Our audit committee consists of Mr. Joseph Tenne (Chairman of the audit committee), Mr. Itay Barzilay, Mr. Amnon Neubach and Mr. Meir Nissensohn.
Removed
We have adopted an audit committee charter, which sets forth the qualifications, powers and responsibilities of our audit committee.
Removed
Disclosure of Personal Interest of an Office Holder The Companies Law requires that an office holder of a company disclose to the company any personal interest that he may have and all related material information known to him, in connection with any existing or proposed transaction by the company.

Item 7. Management's Discussion & Analysis

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

6 edited+0 added−0 removed0 unchanged
Item 7. Major Shareholders and Related Party Transactions A. Major Shareholders The following table sets forth certain information regarding the beneficial ownership of our ordinary shares as of March 1, 2023, unless otherwise specified, by each person who is known to own beneficially 5% or more of the outstanding ordinary shares.
Item 7. Major Shareholders and Related Party Transactions A. Major Shareholders The following table sets forth certain information regarding the beneficial ownership of our ordinary shares as of March 1, 2024, unless otherwise specified, by each person who is known to own beneficially 5% or more of the outstanding ordinary shares.
The number of record holders in the United States is not representative of the number of beneficial holders nor is it representative of where such beneficial holders are resident since many of these ordinary shares were held of record by brokers or other nominees.
The number of record holders in the United States is not representative of the number of beneficial holders nor is it representative of where such beneficial holders are resident since many of these ordinary shares were held of record by brokers or other nominees. As of March 1, 2023, Ms.
In addition to this amount, there were also 17,186,019 shares held by the Depositary Trust Company in the United States.
In addition to this amount, there were also 17,441,618 shares held by the Depositary Trust Company in the United States.
(3) Based on a Schedule 13G filed with the SEC on February 10, 2023. As of March 1, 2023, there were nine holders of record of our ordinary shares in the United States who collectively held less than 1% of our outstanding ordinary shares.
(3) Based on a Schedule 13G/A filed with the SEC on February 8, 2024. (4) Based on a Schedule 13G/A filed with the SEC on February 14, 2024. As of March 1, 2024, there were eight holders of record of our ordinary shares in the United States who collectively held less than 1% of our outstanding ordinary shares.
Name of Beneficial Owners Total Shares Beneficially Owned Percentage of Ordinary Shares (1) Monica Iancu 3,316,625 (2) 16.5 % Morgan Stanley and affiliates 1,085,327 (3) 5.4 % (1) Based on 20,124,326 ordinary shares outstanding on March 1, 2023. (2) Based on a Schedule 13G/A filed with the SEC on March 5, 2015.
Name of Beneficial Owners Total Shares Beneficially Owned Percentage of Ordinary Shares (1) Monica Iancu 3,121,527 (2) 15.5 % Morgan Stanley and affiliates 1,091,018 (3) 5.4 % A-6684 Capital Ltd. 1,051,000 (4) 5.2 % (1) Based on 20,184,826 ordinary shares outstanding as of March 1, 2024. (2) Based on a Schedule 13G/A filed with the SEC on January 29, 2024.
On February 12, 2021, Invesco Ltd. reported beneficial ownership of 1,216,450 ordinary shares (constituting 6.1% of our outstanding ordinary shares), and on February 2, 2023, Invesco reported beneficial ownership of 609,450 ordinary shares (constituting 3.0% of our outstanding ordinary shares). B. Related Party Transactions None. C. Interests of Experts and Counsel Not applicable.
Iancu had beneficial ownership of 3,316,625 ordinary shares, constituting 16.5% of our outstanding shares. B. Related Party Transactions None. C. Interests of Experts and Counsel Not applicable. 40

Other MNDO 10-K year-over-year comparisons