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Item 9A. Controls and Procedures

2023-02-24 compared with 2022-02-25 · 189 added, 1495 removed, 77 unchanged (96% of the section changed)

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Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures,

management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance

of achieving the desired control objectives.

In addition, the design of disclosure controls and procedures must reflect the fact that

there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures

relative to their costs.

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive

Officer and Chief Financial Officer, evaluated, as of the end of the period covered by this Annual Report on Form 10-K, the effectiveness

of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act).

Based on that evaluation,

our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2021, due to the material weakness described

below, our disclosure controls and procedures were not effective at the reasonable assurance level.

Material Weaknesses

In connection with the preparation of the consolidated

financial statements included in the Prospectus, we concluded that there was a material weakness in our internal control over financial

In particular, we concluded that we did not have effective controls over the estimation of fair value in connection with stock-based

compensation expenses and re-measurement of liabilities in connection with warrants to purchase preferred and common stock.

we restated our consolidated financial statements as of and for the year ended December 31, 2020.

Remediation Activities

Management has been actively engaged in remediating the above-described material

weakness since March 2021.

During the fourth quarter of 2021, we continued to evaluate and improve our controls over the estimation of

fair value in connection with stock-based compensation.

This included hiring additional dedicated and experienced technical resources

to strengthen our corporate oversight over financial reporting and controls associated with complex accounting matters.

We have also begun

an evaluation of the tools and external service providers we utilize in connection with the estimation of fair value.

In addition, following

the IPO, we utilize the market price of our publicly-traded common stock in our calculation of fair value in connection with stock-based

compensation expenses.

The re-measurement of liabilities in connection with warrants to purchase our preferred and common stock was not

relevant to our financial reporting during the fourth quarter of 2021.

We believe we are making progress toward achieving the effectiveness

of our internal controls over the estimation of fair value in connection with stock-based compensation, and we have not identified any

additional material weaknesses in our internal control over financial reporting.

We will not be able to conclude whether the steps we

are taking will fully remediate the material weakness in our internal control over the estimation of fair value in connection with stock-based

compensation until we have completed our remediation efforts and subsequently evaluated their effectiveness.

Management’s annual report on internal

control over financial reporting

This Annual Report on Form 10-K does not include a report of

management’s assessment regarding our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under

the Exchange Act) or an attestation report of our independent registered accounting firm due to a transition period established by rules

of the SEC for newly public companies.

Additionally, our independent registered accounting firm will not be required to opine on the effectiveness

of our internal control over financial reporting pursuant to Section 404 until we are no longer an “emerging growth company”

as defined in the JOBS Act.

Changes in internal control over financial

Other than as described above, there were no changes in our internal

control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31,

2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated, as of the end of the period covered by this Annual Report on Form 10-K, the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act.

Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of December 31, 2022, such disclosure controls and procedures were effective at the reasonable assurance level.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act.

Our management conducted an assessment of the effectiveness of our internal control over financial reporting based on the criteria set forth in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

Based on this assessment, our management concluded that our internal control over financial reporting was effective as of December 31, 2022.

Our independent registered accounting firm will not be required to opine on the effectiveness of our internal control over financial reporting pursuant to Section 404 until we are no longer an “emerging growth company” as defined in the JOBS Act.

Remediation of Previously Disclosed Material Weakness

As previously disclosed in Part II, Item 9A.

“Controls and Procedures” in our Annual Report on Form 10-K for the year ended December 31, 2021 and our subsequent Quarterly Reports on Form 10-Q filed prior to this Annual Report on Form 10-K, we had identified a material weakness in our internal control over financial reporting.

In particular, we had concluded that we did not have effective controls over the estimation of fair value in connection with stock-based compensation expenses and re-measurement of liabilities in connection with warrants to purchase preferred and common stock.

As a result, we restated our consolidated financial statements as of and for the year ended December 31, 2020.

Management was actively engaged in remediating the above-described material weakness since March 2021.

The remediation measures we implemented include hiring additional dedicated and experienced technical resources to strengthen our corporate oversight over financial reporting and controls associated with complex accounting matters.

We also conducted an evaluation of the tools and external service providers we utilize in connection with the estimation of fair value.

In addition, following the IPO, we utilize the market price of our publicly-traded common stock in our calculation of fair value in connection with stock-based compensation expenses.

Upon designing and performing ongoing testing to ensure internal controls operational effectiveness as part of Sox-404a implementation, the management has concluded that the material weakness described above has been remediated.

The applicable controls have been in place for a sufficient period of time and management has concluded, through testing, that the controls operated effectively.

Changes in internal control over financial reporting

Except as described above in “Remediation of Previously Disclosed Material Weakness”, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other Information.

On February 23, 2023, the Company and the respective executive officer entered into amendments (the “Amendments”) to (i) the Employment Agreement, dated as of May 1, 2012, as amended, by and between Kaltura Ltd.

and Ron Yekutiel, the Company’s Chairman and Chief Executive Officer (the “Yekutiel Employment Agreement”), (ii) the Consulting Agreement, dated as of January 1, 2018, as amended, by and between the Company and Mr.

Yekutiel (the “Yekutiel US Consulting Agreement”), (iii) the Consulting Agreement, dated as of May 1, 2014, as amended, by and between Kaltura Europe Limited and Mr.

Yekutiel (the “Yekutiel UK Consulting Agreement), (iv) the Employment Agreement, dated as of June 18, 2017, as amended, by and between Kaltura Ltd.

and Yaron Garmazi, the Company’s Chief Financial Officer (the “Garmazi Employment Agreement”), and (v) the Employment Agreement, dated as of April 1, 2018, as amended, by and between Kaltura Ltd.

and Michal Tsur, the Company’s President and Chief Marketing Officer (the “Tsur Employment Agreement”).

Pursuant to the Amendments, under the Company’s 2023 Executive Compensation Plan, Mr.

Yekutiel, Dr.

Garmazi will receive up to 264,365, 152,245 and 168,528 restricted stock units, respectively (the “MBO RSUs”) under the Company’s 2021 Incentive Award Plan (the “2021 Plan”), which shall vest in full based upon achievement of 100% of certain performance targets set forth in the 2023 Executive Compensation Plan, and be eligible to earn additional annual “stretch” bonuses of up to $188,360, $108,474 and $120,076, respectively, which shall be paid in cash upon achievement of such performance targets above 100% attainment;

all, subject to and in accordance with the satisfaction of the aforementioned performance targets.

Following the end of the applicable year, the Compensation Committee of the Board of Directors of the Company will evaluate achievement of the performance targets and determine the number of MBO RSUs that will vest, and the amount of annual “stretch” bonuses that will be paid to each executive.

Further, the Amendments provide that under the 2021 Plan, each of Mr.

Yekutiel, Dr.

Garmazi would be entitled to receive 1,622,238, 553,618 and 766,036 restricted stock units, respectively (the “LTI RSUs”).

The LTI RSUs vest in quarterly installments over a two-year period commencing as of January 1, 2023 with the first quarterly vesting date on April 1, 2023, subject to continued employment through the vesting date.

In the event of a termination of service of any executive without Cause or by the executive for Good Reason (each as defined in the applicable award agreement) during the twelve (12) month period immediately following a Change in Control (as defined in the 2021 Plan), the LTI RSUs held by such executive will become vested in full on the date of such termination.

The foregoing descriptions of the Amendments are not complete and are qualified in their entirety by reference to the full and complete terms contained in the respective Amendment, copies of which are filed as Exhibits 10.17, 10.18, 10.19, 10.20 and 10.21, respectively, to this Annual Report on Form 10-K and are incorporated herein by reference.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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Directors, Executive Officers and Corporate Governance.

The following table provides information regarding our executive

officers and members of our board of directors (ages as of the date of this Annual Report on Form 10-K):

The following table provides information regarding our executive officers and members of our board of directors (ages as of the date of this Annual Report on Form 10-K):

Executive Officers

6 unchanged sentences

Naama Halevi Davidov

Eyal Manor (1)

(1) Commencing January 25, 2023.

Executive Officers

is one of our co-founders and has served as our Chief Executive Officer and as Chairman of our board of directors since October 2006.

Ron Yekutiel is one of our co-founders and has served as our Chief Executive Officer and as Chairman of our board of directors since October 2006.

Prior to Kaltura, Mr.

Yekutiel co-founded VisualGate Systems Inc., a video surveillance company, in 2003, and co-founded and lead GPSoft

Ltd and the Destinator business unit in Paradigm Advanced Technologies Inc., a GPS navigation and tracking company, in 2001.

serves as a member of the board of directors of Kaltura Asia Pte Ltd., an affiliate of Kaltura, Inc., and as a member of the board of

directors of various private companies.

He received a Master of Business Administration with honors from the Wharton School of the University

of Pennsylvania in 2005.

Yekutiel was selected to serve on our board of directors because of the perspective and experience he provides

as our co-founder and Chief Executive Officer, as well as his extensive experience with technology companies.

Yaron Garmazi

has served as our Chief Financial Officer since May 2017.

Yekutiel co-founded VisualGate Systems Inc., a video surveillance company, in 2003, and co-founded and lead GPSoft Ltd and the Destinator business unit in Paradigm Advanced Technologies Inc., a GPS navigation and tracking company, in 2001.

Yekutiel serves as a member of the board of directors of Kaltura Asia Pte Ltd., an affiliate of Kaltura, Inc., and as a member of the board of directors of various private companies.

He received a Master of Business Administration with honors from the Wharton School of the University of Pennsylvania in 2005.

Yekutiel was selected to serve on our board of directors because of the perspective and experience he provides as our co-founder and Chief Executive Officer, as well as his extensive experience with technology companies.

Yaron Garmazi has served as our Chief Financial Officer since May 2017.

Prior to joining Kaltura, Mr.

Garmazi served as the Chief Executive Officer

of Milestone Sport Ltd., a sports technology company, from 2016 to 2017, and as the Chief Financial Officer of Kontera, an online advertising

company, from 2007 to 2011.

He is a Certified Public Accountant (ISR) and received a Bachelor of Arts in Accounting and Business Management

from the Tel Aviv College of Management in 1993.

is one of our co-founders and has served as our President and Chief Marketing Officer since 2006.

Garmazi served as the Chief Executive Officer of Milestone Sport Ltd., a sports technology company, from 2016 to 2017, and as the Chief Financial Officer of Kontera, an online advertising company, from 2007 to 2011.

He is a Certified Public Accountant (ISR) and received a Bachelor of Arts in Accounting and Business Management from the Tel Aviv College of Management in 1993.

Michal Tsur is one of our co-founders and has served as our President and Chief Marketing Officer since 2006.

Prior to Kaltura, Dr.

a co-founder and Vice President of Cyota, Inc., an online security and anti-fraud solutions company, from 1999 to 2005.

post-doctoral fellow at Yale Law School from 2005 to 2006, and received a Doctoral degree from New York University in 2005 and a Bachelor

of Arts in Law and Economics from the Hebrew University of Jerusalem in 1996.

Tsur was a co-founder and Vice President of Cyota, Inc., an online security and anti-fraud solutions company, from 1999 to 2005.

Tsur was a post-doctoral fellow at Yale Law School from 2005 to 2006, and received a Doctoral degree from New York University in 2005 and a Bachelor of Arts in Law and Economics from the Hebrew University of Jerusalem in 1996.

Non-Employee Directors

Richard Levandov

has served as a member of our board of directors since 2007.

Levandov has also served as a general partner at Avalon Ventures, a venture

capital firm, since 2007 and as a general partner at Masthead Venture Partners, a venture capital firm, since 1999.

Levandov currently

sits on the board of directors of both Avalon Ventures and Masthead Venture Partners.

He received a Bachelor of Science in Management

from Binghamton University in 1976.

Levandov was selected to serve on our board of directors because of his extensive experience in

the venture capital industry.

is one of our co-founders and has served as a member of our board of directors since October 2006.

David previously held various roles

with us, including President and General Manager of Media and Telecom from 2016 to 2019, and Chief Revenue Officer from 2012 to 2015.

He co-founded Retrain.ai, an artificial intelligence company, in August 2020 and has served as its Chief Executive Officer and Chairman

of the board of directors since its founding.

David also currently serves on the board of directors of King Alfred School Society,

a co-educational independent day school.

Richard Levandov has served as a member of our board of directors since 2007.

Levandov has also served as a general partner at Avalon Ventures, a venture capital firm, since 2007 and as a general partner at Masthead Venture Partners, a venture capital firm, since 1999.

Levandov currently sits on the board of directors of both Avalon Ventures and Masthead Venture Partners.

He received a Bachelor of Science in Management from Binghamton University in 1976.

Levandov was selected to serve on our board of directors because of his extensive experience in the venture capital industry.

Shay David is one of our co-founders and has served as a member of our board of directors since October 2006.

David previously held various roles with us, including President and General Manager of Media and Telecom from 2016 to 2019, and Chief Revenue Officer from 2012 to 2015.

He co-founded Retrain.ai, an artificial intelligence company, in August 2020 and has served as its Chief Executive Officer and Chairman of the board of directors since its founding.

David also currently serves on the board of directors of King Alfred School Society, a co-educational independent day school.

He was a post-doctoral fellow at Yale Law School from 2007 to 2008, and received a Ph.D.

and Technology from Cornell University in 2008, a Master of Arts from New York University in 2003 and a Bachelor of Science in Computer

Science Philosophy from Tel Aviv University in 2001.

David was selected to serve on our board of directors because of the perspective

and experience he provides as our co-founder and his extensive experience in the media and technology fields.

has served on our board of directors since July 2021.

Faier has served as the Chief Financial Officer of SolarEdge Technologies, Inc.,

an energy management company, since January 2011.

in Science and Technology from Cornell University in 2008, a Master of Arts from New York University in 2003 and a Bachelor of Science in Computer Science Philosophy from Tel Aviv University in 2001.

David was selected to serve on our board of directors because of the perspective and experience he provides as our co-founder and his extensive experience in the media and technology fields.

Ronen Faier has served on our board of directors since July 2021.

Faier has served as the Chief Financial Officer of SolarEdge Technologies, Inc., an energy management company, since January 2011.

Prior to his role at SolarEdge, Mr.

Faier has served in various executive positions

at publicly traded companies such as SanDisk Corporation, a manufacturing company, VocalTec Communications, Inc., a telecom equipment

provider, and msystems Ltd., a flash storage device company.

Faier has served in various executive positions at publicly traded companies such as SanDisk Corporation, a manufacturing company, VocalTec Communications, Inc., a telecom equipment provider, and msystems Ltd., a flash storage device company.

Faier is a Certified Public Accountant in Israel.

He received a Master’s

of Business Administration from Tel Aviv University in 2000 and a Bachelor of Arts in Accounting and Economics from the Hebrew University

of Jerusalem in 1996.

Faier was selected to serve on our board of directors because of his extensive financial and public company

Davidov has served on our board of directors since July 2021.

Halevi Davidov has served as a Financial Consultant to Joytunes

Ltd., a developer of music learning software, since April 2021 and as a director of Gamida-Cell Ltd., since February 2022.

He received a Master’s of Business Administration from Tel Aviv University in 2000 and a Bachelor of Arts in Accounting and Economics from the Hebrew University of Jerusalem in 1996.

Faier was selected to serve on our board of directors because of his extensive financial and public company experience.

Naama Halevi Davidov has served on our board of directors since July 2021.

Halevi Davidov has served as a Financial Consultant to Joytunes Ltd., a developer of music learning software, since April 2021 and as a director of Gamida-Cell Ltd., since February 2022.

Prior to that, Dr.

Halevi served as Financial Advisor to Gloat Ltd., a talent marketplace platform, and to Healthy IO Ltd., a manufacturer

and marketer of medical equipment.

Halevi served as Financial Advisor to Gloat Ltd., a talent marketplace platform, and to Healthy IO Ltd., a manufacturer and marketer of medical equipment.

Halevi Davidov served as our Chief Financial Officer from November 2012 to August 2017.

1 unchanged sentence

since February 2015.

Halevi Davidov is a Certified

Public Accountant in Israel.

Halevi Davidov is a Certified Public Accountant in Israel.

She received a Ph.D.

in Strategy from Tel Aviv University in 2012, a Master’s in Business Administration

from Tel Aviv University in 2002 and Bachelor of Arts in Accounting and Economics from Tel Aviv University in 2000.

Halevi Davidov

was selected to serve on our board of directors because of her extensive knowledge of and experience with corporate financial strategy.

in Strategy from Tel Aviv University in 2012, a Master’s in Business Administration from Tel Aviv University in 2002 and Bachelor of Arts in Accounting and Economics from Tel Aviv University in 2000.

Halevi Davidov was selected to serve on our board of directors because of her extensive knowledge of and experience with corporate financial strategy.

Eyal Manor has served on our board of directors since January 2023.

Manor has served as Chief Product & Engineering Officer at Twilio since November 2021, overseeing the execution of Twilio’s CPaaS and Segment's CDP future product roadmap.

Prior to that, since 2016 to November 2021 Mr.

Manor served at various positions at Google, most recently as Vice President & General Manager at Google Cloud, where he led a portfolio of technologies, including Kubernetes, Serverless Developer Platforms, Marketplace, and other products.

In his previous roles with Google, Mr.

Manor was VP of Engineering in YouTube and spearheaded the development of Advertising products.

Before joining Google, Mr.

Manor founded Voice and Video SaaS streaming startup and was in an IAF Research Group.

Manor received a Bachelor of Arts in Economics from the Tel Aviv University in 1994.

Manor was selected to serve on our board of directors because of his vast experience in building successful SaaS products and innovative platform technologies.

Family Relationships

There are no family relationships among any of our directors

or executive officers.

There are no family relationships among any of our directors or executive officers.

Code of Business Conduct and Ethics

We have adopted a written code of business conduct and ethics that applies to our directors,

officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller,

or persons performing similar functions.

Our code of business conduct and ethics is available under the Corporate Governance section of

our website at investors.kaltura.com.

In addition, we intend to post on our website all disclosures that are required by law or the Nasdaq

rules concerning any amendments to, or waivers from, any provision of the code.

The reference to our website address does not constitute

incorporation by reference of the information contained at or available through our website, and you should not consider it to be a part

of this Annual Report on Form 10-K.

The remaining information required by this item will be included

under the headings “Election of Directors,” “Corporate Governance,” and, if applicable, “Delinquent

Section 16(a) Reports” in our definitive proxy statement for our 2022 Annual Meeting of Stockholders, and such required information

is incorporated herein by reference.

We have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

Our code of business conduct and ethics is available under the Corporate Governance section of our website at investors.kaltura.com.

In addition, we intend to post on our website all disclosures that are required by law or the Nasdaq rules concerning any amendments to, or waivers from, any provision of the code.

The reference to our website address does not constitute incorporation by reference of the information contained at or available through our website, and you should not consider it to be a part of this Annual Report on Form 10-K.

The remaining information required by this item will be included under the headings “Election of Directors,” “Corporate Governance,” and, if applicable, “Delinquent Section 16(a) Reports” in our definitive proxy statement for our 2023 Annual Meeting of Stockholders, and such required information is incorporated herein by reference.

Executive Compensation.

The information required by this item will be included under the headings “Executive

Compensation” and “Compensation Committee Interlocks and Insider Participation” in our definitive proxy statement for

our 2022 Annual Meeting of Stockholders, and such information is incorporated herein by reference.

Security Ownership

of Certain Beneficial Owners and Management and Related Stockholder Matters.

Securities Authorized for Issuance Under Equity Compensation Plans (as of December 31,

Plan Category

and Rights (1)

and Rights (2)

Remaining Available

Issuance Under Equity Compensation Plans (excluding securities in first column

Equity compensation plans approved by security holders

Equity compensation plans not approved by security holders

(1) Prior to our initial public offering, we granted awards under

our 2007 Stock Option Plan, 2007 Israeli Share Option and 2017 Equity Incentive Plan.

Following our initial public offering, we granted

awards under our 2021 Incentive Award Plan.

Refer to Note 13 of our audited consolidated financial statements included elsewhere in this

Annual Report on Form 10-K for additional information.

(2) The weighted average exercise price does not reflect the

shares that will be issued upon the vesting of restricted stock units, which have no exercise price.

(3) The number consists of 32,702,963 shares to be issued upon

exercise of options to purchase shares of common stock, and 4,924,417 shares to be issued upon the vesting of restricted stock units.

(4) As of December 31, 2021, we had 2,002,162 shares of

our common stock reserved for future issuance under our 2021 Incentive Award Plan.

The number of shares of common stock available for

issuance under the 2021 Incentive Award Plan will also include an annual increase on the first day of each fiscal year beginning on January

Refer to Note 13 of our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional

The remaining information required by this item will

be included under the heading “Security Ownership of Certain Beneficial Owners and Management” in our definitive proxy statement

for our 2022 Annual Meeting of Stockholders, and such required information is incorporated herein by reference.

Certain Relationships

and Related Transactions, and Director Independence.

The information required by this item will be included

under the headings “Certain Relationships and Related Person Transactions,” “Corporate Governance” and “Director

Independence” in our definitive proxy statement for our 2022 Annual Meeting of Stockholders, and such information is incorporated

herein by reference.

The information required by this item will be included under the headings “Executive Compensation” and, if applicable, “Compensation Committee Interlocks and Insider Participation” in our definitive proxy statement for our 2023 Annual Meeting of Stockholders, and such information is incorporated herein by reference.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this item will be included under the headings “Securities Authorized for Issuance Under Equity Compensation Plans” and “Security Ownership of Certain Beneficial Owners and Management” in our definitive proxy statement for our 2023 Annual Meeting of Stockholders, and such information is incorporated herein by reference.

Certain Relationships and Related Transactions, and Director Independence.

The information required by this item will be included under the headings “Certain Relationships and Related Person Transactions,” “Corporate Governance” and “Director Independence” in our definitive proxy statement for our 2023 Annual Meeting of Stockholders, and such information is incorporated herein by reference.

Principal Accountant Fees and Services.

The information required by this item will be included

under the heading “Independent Registered Public Accounting Firm Fees and Other Matters” in our definitive proxy statement

for our 2022 Annual Meeting of Stockholders, and such information is incorporated herein by reference.

The information required by this item will be included under the heading “Independent Registered Public Accounting Firm Fees and Other Matters” in our definitive proxy statement for our 2023 Annual Meeting of Stockholders, and such information is incorporated herein by reference.

Exhibits and Financial Statement Schedules

(a)(1) Financial Statements

The following documents are included on pages F-1 through F-57

attached hereto and are filed as part of this Annual Report on Form 10-K.

Index to Consolidated Financial Statements

Report of Independent Registered Public

Accounting Firm

Consolidated Balance Sheets as of December 31,

2021 and 2020

Consolidated Statements of Operations

for the years ended December 31, 2021, 2020 and 2019

Consolidated Statements of Convertible

and Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the years ended December 31, 2021, 2020 and

Consolidated Statements of Cash Flows

for the years ended December 31, 2021, 2020 and 2019

Notes to Consolidated Financial Statements

See Item 8 herein.

(a)(2) Financial Statement Schedules.

All financial statement schedules have been omitted because they

are not applicable, not required or the information required is shown in the financial statements or the notes thereto.

All financial statement schedules have been omitted because they are not applicable, not required or the information required is shown in the financial statements or the notes thereto.

(a)(3) Exhibits.

The following is a list of exhibits filed as part of this Annual

Report on Form 10-K.

Incorporated by Reference

Exhibit Description

and Restated Certificate of Incorporation of Kaltura, Inc.

and Restated Bylaws of Kaltura, Inc.

Stock Certificate of Kaltura, Inc,

Amended and Restated Investor Rights Agreement, dated as of July 22, 2016, by and among Kaltura, Inc.

and each of the investors listed

on Exhibit A thereto, as amended.

to Purchase Shares of Common Stock, dated as of March 26, 2020, issued by Kaltura, Inc.

to Zarom Holding Limited, as amended.

The following is a list of exhibits filed as part of this Annual Report on Form 10-K.

Incorporated by Reference Filed/

Exhibit Description Form File No.

Exhibit Filing

Amended and Restated Certificate of Incorporation of Kaltura, Inc.

8-K 001-40644 3.1 7/23/2021

Certificate of Designations of Series A Junior Participating Preferred Stock of Kaltura, Inc.

8-K 001-40644 3.2 08/08/2022

Amended and Restated Bylaws of Kaltura, Inc.

8-K 001-40644 3.2 7/23/2021

Specimen Stock Certificate of Kaltura, Inc,

S-1/A 333-253699

4.1 3/23/2021

Sixth Amended and Restated Investor Rights Agreement, dated as of July 22, 2016, by and among Kaltura, Inc.

and each of the investors listed on Exhibit A thereto, as amended.

S-1/A 333-253699

4.2 3/23/2021

Description of Capital Stock.

Agreement, dated as of January 14, 2021, by and among Kaltura, Inc., the several banks and other financial institutions or entities from

time to time party thereto, Silicon Valley Bank, as the Issuing Lender and the Swingline Lender, and SVB, as Administrative Agent.

Amendment to Credit Agreement, dated as of June 29, 2021, by and among Kaltura, Inc.

(the “Borrower”), the subsidiaries of

the Borrower party thereto, the several banks and other financial institutions or entities party thereto, and Silicon Valley Bank, as

the Administrative Agent, the Issuing Lender and the Swingline Lender.

Second Amendment to Credit Agreement, dated as of December 20, 2021, by and

among Kaltura, Inc.

(the “Borrower”), the subsidiaries of the Borrower party thereto, the several banks and other financial

institutions or entities party thereto, and Silicon Valley Bank, as the Administrative Agent, the Issuing Lender and the Swingline Lender.

and Collateral Agreement, dated as of January 14, 2021, by and among Kaltura, Inc., the other Grantors referred to therein, and Silicon

Valley Bank, as administrative agent.

dated as of January 14, 2021, by and among Kaltura Europe Limited and Kaltura, Inc., as Original Chargors, and Silicon Valley Bank, as

Administrative Agent, as supplemented.

10-K 001-40644 4.4 2/25/2022

Rights Agreement, dated as of August 7, 2022, between Kaltura, Inc.

and American Stock Transfer & Trust Company, LLC

8-K 001-40644 4.1 08/08/2022

Credit Agreement, dated as of January 14, 2021, by and among Kaltura, Inc., the several banks and other financial institutions or entities from time to time party thereto, Silicon Valley Bank, as the Issuing Lender and the Swingline Lender, and SVB, as Administrative Agent.

S-1/A 333-253699

10.1 3/26/2021

First Amendment to Credit Agreement, dated as of June 29, 2021, by and among Kaltura, Inc.

(the “Borrower”), the subsidiaries of the Borrower party thereto, the several banks and other financial institutions or entities party thereto, and Silicon Valley Bank, as the Administrative Agent, the Issuing Lender and the Swingline Lender.

S-1/A 333-253699 10.1 7/12/2021

Second Amendment to Credit Agreement, dated as of December 20, 2021, by and among Kaltura, Inc.

10-K 001-40644 10.3 2/25/2022

Guarantee and Collateral Agreement, dated as of January 14, 2021, by and among Kaltura, Inc., the other Grantors referred to therein, and Silicon Valley Bank, as administrative agent.

S-1/A 333-253699

10.2 3/26/2021

Debenture, dated as of January 14, 2021, by and among Kaltura Europe Limited and Kaltura, Inc., as Original Chargors, and Silicon Valley Bank, as Administrative Agent, as supplemented.

S-1/A 333-253699

10.3 3/26/2021

Kaltura, Inc.

2007 Israeli Share Option Plan and form of option agreements thereunder.

S-1/A 333-253699 10.4 3/23/2021

Kaltura, Inc.

2007 Stock Option Plan and form of option agreements thereunder.

S-1/A 333-253699 10.5 3/23/2021

Kaltura, Inc.

2017 Equity Incentive Plan and form of option agreements thereunder.

S-1/A 333-253699 10.6 3/23/2021

Kaltura, Inc.

2021 Incentive Award Plan.

of Stock Option Award Agreement under the Kaltura, Inc.

S-1/A 333-253699 10.7 3/23/2021

Form of Stock Option Award Agreement under the Kaltura, Inc.

2021 Incentive Award Plan.

of Restricted Stock Unit Award Agreement under the Kaltura, Inc.

S-1/A 333-253699 10.8 3/23/2021

Form of Restricted Stock Unit Award Agreement under the Kaltura, Inc.

2021 Incentive Award Plan.

Agreement, dated as of May 1, 2012, by and between Kaltura Ltd.

S-1/A 333-253699 10.9 3/23/2021

Employment Agreement, dated as of May 1, 2012, by and between Kaltura Ltd.

and Ron Yekutiel, as amended.

Agreement by and between Kaltura, Inc.

8-K 001-40644 10.1 04/05/2022

Consulting Agreement by and between Kaltura, Inc.

and Ron Yekutiel, effective January 1, 2018, as amended.

Agreement by and between Kaltura Europe Limited and Ron Yekutiel, effective May 1, 2014, as amended.

Agreement, dated as of June 18, 2017, by and between Kaltura Ltd.

8-K 001-40644 10.2 04/05/2022

Consulting Agreement by and between Kaltura Europe Limited and Ron Yekutiel, effective May 1, 2014, as amended.

8-K 001-40644 10.3 04/05/2022

Employment Agreement, dated as of June 18, 2017, by and between Kaltura Ltd.

and Yaron Garmazi, as amended.

Agreement, dated as of April 1, 2018, by and between Kaltura Ltd.

8-K 001-40644 10.4 04/05/2022

Employment Agreement, dated as of April 1, 2018, by and between Kaltura Ltd.

and Michal Tsur, as amended.

Agreement, dated as of January 28, 2019, by and between Kaltura Ltd.

and Sergei Liakhovetsky, as amended.

8-K 001-40644 10.5 04/05/2022

Amendment to Employment Agreement, dated as of February 23, 2023, by and between Kaltura Ltd and Ron Yekutiel

Amendment to Consulting Agreement, dated as of February 23, 2023, by and between Kaltura Inc and Ron Yekutiel

Amendment to Consulting Agreement, dated as of February 23, 2023, by and between Kaltura Europe Limited and Ron Yekutiel

Amendment to Employment Agreement, dated as of February 23, 2023, by and between Kaltura Ltd and Yaron Garmazi

Amendment to Employment Agreement, dated as of February 23, 2023, by and between Kaltura Ltd and Michal Tsur

Kaltura, Inc.

Non-Employee Director Compensation Policy.

S-1/A 333-253699 10.17 3/23/2021

Form of RSU Award Agreement Under 2021 Incentive Award Plan - For Israeli Participants

Form of Stock Option Award Agreement Under 2021 Incentive Award Plan - For

Israeli Participants

of Indemnification Agreement between Kaltura, Inc.

10-K 001-40644 10.20 02/25/2022

Form of Stock Option Award Agreement Under 2021 Incentive Award Plan - For Israeli Participants

10-K 001-40644 10.21 02/25/2022

Form of Indemnification Agreement between Kaltura, Inc.

and its directors and officers.

S-1/A 333-253699 10.18 3/23/2021

List of Subsidiaries of Kaltura, Inc.

Consent of Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global,

Independent Registered Public Accounting Firm.

Consent of Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global, Independent Registered Public Accounting Firm.

Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).

4 unchanged sentences

Section 1350.

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File

because its XBRL tags are embedded within the Inline XBRL document

Inline XBRL Taxonomy Extension Schema Document

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Inline XBRL Taxonomy Extension Definition Linkbase Document

Inline XBRL Taxonomy Extension Label Linkbase Document

Inline XBRL Taxonomy Extension Presentation Linkbase Document

101.INS Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document *

101.SCH Inline XBRL Taxonomy Extension Schema Document *

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document *

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document *

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document *

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document *

104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) *

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** Furnished herewith.

† Indicates management contract or compensatory

† Indicates management contract or compensatory plan.

# The annex has been omitted pursuant to Item 601(a)(5) of Regulation S-K.

The registrant undertakes to furnish a supplemental copy of the annex to the SEC upon request.

Form 10-K Summary

KALTURA, INC.

CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2021

DOLLARS IN THOUSANDS

Report of Independent Registered Public Accounting Firm (PCAOB ID 1281 )

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Convertible and Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit)

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Kaltura, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Kaltura, Inc.

and subsidiaries (the Company) as of December 31, 2021 and 2020, the related consolidated statements of operations, convertible and redeemable convertible preferred stock and stockholders' equity (deficit) and cash flows for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with U.S.

generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

/s/ KOST FORER GABBAY & KASIERER

A Member of EY Global

We have served as the Company's auditor since 2007.

Tel-Aviv, Israel

February 25, 2022

KALTURA, INC.

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

dollars in thousands, except for share data )

CURRENT ASSETS:

Cash and cash equivalents

Trade receivables

Prepaid expenses and other current assets

Deferred contract acquisition and fulfillment costs, current

Total current assets

LONG-TERM ASSETS:

Property and equipment, net

Other assets, noncurrent

Deferred contract acquisition and fulfillment costs, noncurrent

Intangible assets, net

Total noncurrent assets

LIABILITIES, CONVERTIBLE AND REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:

Current portion of long-term loans

Current portion of long-term lease liabilities

Trade payables

Employees and payroll accruals

Accrued expenses and other current liabilities

Deferred revenue, current

Total current liabilities

NONCURRENT LIABILITIES:

Deferred revenue, noncurrent

Long-term loans, net of current portion

Other liabilities, noncurrent

Warrants to purchase preferred and common stock

Total noncurrent liabilities

TOTAL LIABILITIES

KALTURA, INC.

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

dollars in thousands, except for share data )

COMMITMENTS AND CONTINGENCIES (Note 10)

Convertible preferred stock, $ 0.0001 par value per share, 0 and 1,043,778 shares authorized, issued and outstanding as of December 31, 2021 and 2020;

aggregate liquidation preference of $ 0 and $ 1,921 as of December 31, 2021 and 2020, respectively

Redeemable convertible preferred stock, $ 0.0001 par value per share, 0 and 15,968,831 shares authorized as of December 31, 2021, and December 31, 2020, respectively;

0 and 15,779,322 issued and outstanding as of December 31, 2021, and December 31, 2020, respectively;

aggregate liquidation preference of $ 0 and $ 185,425 as of December 31, 2021, and 2020, respectively

Total mezzanine equity

STOCKHOLDERS' EQUITY (DEFICIT):

Preferred stock, $ 0.0001 par value per share, 20,000,000 and 0 shares authorized as of December 31, 2021, and 2020, respectively;

0 shares issued and outstanding as of December 31, 2021, and 2020

Common stock $ 0.0001 par value per share, 1,000,000,000 and 157,500,000 shares authorized as of December 31, 2021 and 2020, respectively;

134,610,294 and 33,153,112 , shares issued as of December 31, 2021 and 2020, respectively;

126,925,104 and 25,467,922 outstanding as of December 31, 2021 and 2020, respectively

Treasury stock -

7,685,190 shares of common stock, $ 0.0001 par value per share, as of December 31, 2021 and 2020

Additional paid-in capital

Receivables on account of stock

Accumulated deficit

Total stockholders' equity (deficit)

TOTAL LIABILITIES, CONVERTIBLE AND REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

KALTURA, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

dollars in thousands, except for share data )

Year ended December 31,

Subscriptions

Professional services

Total revenue

Cost of revenue:

Subscriptions

Professional services

Total cost of revenue

Operating expenses:

Research and development

Sales and marketing

General and administrative

Other operating expenses

Total operating expenses

Operating loss

Financial expenses, net

Loss before provision for income taxes

Provision for income taxes

Preferred stock accretion and cumulative undeclared dividends

Net loss attributable to common stockholders

Net loss per share attributable to common stockholders, basic and diluted

Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted

KALTURA, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CONVERTIBLE AND REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)

dollars in thousands (except share data)

preferred Stock

Redeemable convertible preferred Stock

Treasury stock

Additional paid-in capital

Accumulated deficit

Total stockholders' equity (deficit)

Balance as of January 1, 2019

Cumulative-effect adjustment for adoption of ASU 2014-09

Stock-based compensation expenses

Issuance of common stock upon exercise of stock options

Accretion of redeemable convertible preferred stock

Balance as of December 31, 2019

Stock-based compensation expenses

Issuance of common stock upon exercise of stock options

Reclassification to equity of warrant to common stock

Issuance of common stock upon business combination

Accretion of redeemable convertible preferred stock

Balance as of December 31, 2020

Issuance of preferred stock upon exercise of warrants

Loan forgiveness

Accretion of redeemable convertible preferred stock

Redemption of redeemable convertible preferred stock upon initial public offering

Conversion of convertible and redeemable convertible preferred stock to common stock upon initial public offering

Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and other issuance costs

Conversion of warrants to common stock upon initial public offering

Stock-based compensation expenses

Issuance of common stock upon exercise of stock options, and release of restricted stock units

Balance as of December 31, 2021

*) Represents an amount that is lower than $1

KALTURA, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

dollars in thousands

Year ended December 31,

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation, amortization, and abandonment costs

Stock-based compensation expenses

Amortization of deferred contract acquisition and fulfillment costs

Change in valuation of warrants to purchase preferred and common stock

Non-cash interest expenses

Non-cash expenses with respect to stockholders’ loans

Gain on sale of property and equipment

Changes in operating assets and liabilities:

Decrease (increase) in trade receivables

Increase in prepaid expenses and other current assets and other assets, noncurrent

Increase in deferred contract acquisition and fulfillment costs

Increase in trade payables

Increase (decrease) in accrued expenses and other current liabilities

Increase in employees and payroll accruals

Increase (decrease) in other liabilities, noncurrent

Increase (decrease) in deferred revenue

Net cash provided by (used in) operating activities

Cash flows from investing activities:

Net cash acquired in business combination

Purchases of property and equipment

Proceeds from sale of property and equipment

Capitalized internal-use software development costs

Purchase of intangible assets

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from initial public offering, net of underwriting discounts and commissions

Payment related to the conversion of Series F redeemable convertible preferred stock upon initial public offering

Proceeds from long-term loans, net of debt issuance cost

Repayment of long-term loans

Principal payments on finance leases

Proceeds from exercise of stock options

Payment of deferred offering costs

Net cash provided by (used in) financing activities

Net increase (decrease) in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at the beginning of the year

Cash, cash equivalents and restricted cash at the end of the year

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

dollars in thousands

Year ended December 31,

Supplemental disclosure of non-cash activity:

Purchase of property, equipment, internal-use software, and intangible asset in credit

Purchase of property and equipment by capital lease

Conversion of warrants to common stock upon initial public offering

Conversion of convertible and redeemable convertible preferred stock to common stock upon initial public offering

Issuance of ordinary shares and warrant with respect to business combination

Unpaid deferred offering costs

Supplemental disclosure of cash flow information

Cash paid for income taxes, net

Cash paid for interest

Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheet

Cash and cash equivalents

Restricted cash included in other assets, noncurrent

Total cash, cash equivalents, and restricted cash

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands ( except share and per share data )

Description of Business

Kaltura, Inc.

(together with its subsidiaries, the “Company”) was incorporated in October 2006 and commenced operations in January 2007.

The Company’s business operations are allocated between two main segments, Enterprise, Education, and Technology (“EE&T”) and Media and Telecom (“M&T”).

The Company has developed a platform for video creation, management, and collaboration.

The Company's platform enables companies, educational institutions, and other organizations to cost-effectively launch advanced online video experiences, including for Over-the-top (“OTT”) Television, Cloud TV, web video publishing, video-based teaching, learning, and training, video-based marketing, and video-based collaboration.

The Company’s core offerings consist of various Software-as-a-Service (“SaaS”) products and solutions and a Platform-as-a-Service (“PaaS”).

Initial Public Offering

On July 23, 2021, the Company completed its initial public offering (“IPO”), in which the Company issued and sold 15,000,000 shares of its common stock at an offering price of $ 10.00 per share.

On August 6, 2021, the underwriters of the IPO exercised in full their option to purchase 2,250,000 additional shares of common stock at the offering price of $ 10.00 per share.

The Company received net proceeds of $ 155,598 after deducting underwriting discounts and commissions of $ 12,075 , and other issuance costs of $ 4,827 .

Immediately prior to the closing of the IPO, all convertible and redeemable convertible preferred shares then outstanding automatically converted into 76,262,942 shares of common stock and warrants to purchase preferred and common stock were automatically converted into 7,067,699 shares of common stock.

Pursuant to the terms of a certain warrant to purchase common stock (the “Series F Warrant”), and in the case of the Series F redeemable convertible preferred stock, of the Certificate of Incorporation (as in effect immediately prior to the IPO), the Company was required to make certain cash payments to SSIG (Special Situations Investing Group II, LLC, an affiliate of Goldman Sachs & Co.

LLC) if the initial public offering price per share at which shares of the common stock were sold (the “Actual IPO Price”) was less than the price per share used to calculate the number of shares issuable upon the automatic cashless exercise of the Series F Warrant or the conversion of the Series F convertible and redeemable preferred stock, as the case may be (the “Estimated Price”).

Accordingly, because the Actual IPO Price was less than the Estimated Price, the Company was required to make a cash payment to SSIG in the amount of $ 1,569 in connection with the closing of the IPO, and it made such payment in July 2021.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S.

Use of Estimates:

The preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.

The Company evaluates on an ongoing basis its assumptions, including those related to contingencies, income tax uncertainties, stock-based compensation cost, fair value measurement of warrants and accretion of redeemable stocks (both prior to the IPO), fair value and useful life of intangible assets, as well as in estimates used in applying the revenue recognition policy.

The Company bases these estimates on historical and anticipated results, trends and various other assumptions that it believes are reasonable under the circumstances, including assumptions as to future events.

Actual results could differ from those estimates.

Due to the Coronavirus (“COVID-19”) pandemic, there has been uncertainty and disruption in the global economy and financial markets.

The Company is not aware of any specific event or circumstance that would require a material update to its estimates or judgments or an adjustment of the carrying value of its assets or liabilities as of December 31, 2021.

While there was not a material impact to the Company’s consolidated financial statements as of and for the year ended December 31, 2021, these estimates may change, as new events occur and additional information is obtained, as well as other factors related to COVID-19 and its variants that could result in material impacts to the Company’s consolidated financial statements in future reporting periods.

Financial Statements in U.S.

The currency of the primary economic environment in which the operations of Kaltura Inc.

and its subsidiaries are conducted is the U.S.

thus, the dollar is the functional currency of Kaltura Inc.

and its subsidiaries.

Accordingly, monetary accounts maintained in currencies other than the U.S.

dollar are remeasured into U.S.

dollars in accordance with Statement of the Accounting Standard Codification ("ASC") 830 "Foreign Currency Matters" ("ASC 830").

All transaction gains and losses of the remeasured monetary balance sheet items are reflected in the statements of operations as financial income or expenses, as appropriate.

Principles of Consolidation:

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.

Intercompany transactions and balances have been eliminated upon consolidation.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Cash and Cash Equivalents:

Cash equivalents are short term, highly liquid investments that are readily convertible to cash with original maturities of three months or less, at the date acquired.

Restricted Cash:

Restricted cash is primarily invested in deposits held to maturity, stated at cost, which also approximates their fair value, and are used as security for the Company's liabilities.

These deposits are used mainly as security for rent payments, and the Company's credit cards.

Restricted cash is presented in the balance sheet as part of other assets, noncurrent.

Trade Receivables:

Trade receivables are recorded at the invoiced amount and includes also amounts for which revenue has been recognized but not invoiced.

The allowance for doubtful accounts is based on the Company's assessment of the collectability of accounts.

The Company regularly reviews the adequacy of the allowance for doubtful accounts based on a combination of factors, including an assessment of the current customer's aging balance, the nature and size of the customer, the financial condition of the customer, and the amount of any receivables in dispute.

There were no material write-offs for allowance of doubtful accounts recognized in the periods presented.

Property and Equipment, net:

Property and equipment are stated at cost, net of accumulated depreciation.

Depreciation is calculated using the straight-line method over the estimated useful lives of the assets:

Computers and peripheral equipment

Office furniture and equipment

Leasehold improvements

Over the shorter of the related lease period or the life of the asset

Impairment of Long-Lived Assets:

The long-lived assets of the Company are reviewed for impairment in accordance with ASC 360, “Property, Plant and Equipment” (“ASC 360”), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets.

If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

There were no impairment charges to long-lived assets during the periods presented.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Intangible Assets, net:

Intangible assets consist primarily of customer relationships, technology and trade name.

The intangible assets are amortized over their estimated useful lives in proportion to the economic benefits realized.

Intangible assets consist primarily of customer relationships, technology, and trade name.

The intangible assets are amortized over their estimated useful lives in proportion to the economic benefits realized.

Amortization for the intangible assets was recognized over the following periods:

Customer relationships

Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations using the acquisition method of accounting, which requires that the assets acquired and liabilities assumed be recorded at the date of acquisition at their respective fair values.

Goodwill is subject to an impairment test at the reporting unit level at least annually in the fourth quarter, or more frequently if events or changes in circumstances indicate that goodwill may be impaired.

The Company identified two reporting units - EE&T and M&T.

Goodwill impairment is deemed to exist if the net book value of a reporting unit exceeds its estimated fair value.

An impairment loss is recognized in an amount equal to the excess.

There were no impairment charges to goodwill during the periods presented.

Leases are classified at the inception date as either a capital lease or an operating lease.

The Company assesses a lease to be a capital lease if any of the following conditions exist:

a) ownership is transferred to the lessee by the end of the lease term, b) there is a bargain purchase option, c) the lease term is at least 75% of the property’s estimated remaining economic life or d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date.

A capital lease is accounted for as if there were an acquisition of an asset and an incurrence of an obligation at the inception of the lease.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Capital lease assets are included in property and equipment, net in the Company’s balance sheets.

Operating lease costs are recognized as rent expense on a straight-line basis over the applicable lease terms.

Warrants to Purchase Preferred and Common Stock:

Warrants to purchase the Company’s redeemable convertible preferred stock were classified as a liability on the balance sheet and measured at fair value at each reporting date.

Warrants to purchase the Company`s common stock are presented as equity, unless they are redeemable and classified as a liability.

For the warrants classified as a liability, prior to the IPO, the Company measured the warrants at fair value by applying the Option Pricing Method (“OPM”) in each reporting period until they are exercised or expired, with changes in the fair value being recognized in the Company’s statement of operations under financial expenses, net.

Upon the closing of the Company’s IPO, all the warrants to purchase preferred and common stock that were classified as a liability, were converted into 7,067,699 shares of common stock, after giving effect to the Stock Split (see Note 13(e) for further information), and to certain adjustments for the warrants to purchase common stock, which were based on the equity valuation implied by the midpoint of the price range set forth on the cover page of the preliminary prospectus related to the Company’s IPO.

Severance Pay:

The majority of Kaltura Israel's agreements with its employees in Israel are in accordance with section 14 of the Israeli Severance Pay Law.

Upon contribution of the full amount of the employee's monthly salary and release of the policy to the employee, no additional legal obligation exists between the parties and no additional payments are made by the Company to the employee;

therefore related assets and liabilities are not presented in the balance sheet.

For Kaltura Israel employees who are not subject to section 14, the Company calculated the liability for severance pay pursuant to the Severance Pay Law based on the most recent salary of these employees multiplied by the number of years of employment as of the balance sheet date.

Kaltura Israel's liability for these employees is fully provided for via monthly deposits with severance pay funds, insurance policies and an accrual.

The value of these deposits is recorded as an asset on the Company's balance sheet in other assets,

Severance expenses recorded in Kaltura Israel for the years ended December 31, 2021, 2020 and 2019 amounted to $ 3,937 , $ 2,565 and $ 2,212 , respectively.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

The Company's employees in the U.S.

receive severance benefits in the event of an involuntary termination that increase in accordance with their tenure and base salary.

The Company accounts for post-employment benefits in accordance with ASC Topic No.

712, Compensation – Nonretirement Post-employment Benefits.

These benefits, primarily severance, are not accrued until the amount can be reasonably estimated.

Severance expenses recorded in the U.S.

for the years ended December 31, 2021, 2020 and 2019 were immaterial.

Israeli Employees Defined Contribution Plan:

The Company has established a pension contribution plan with respect to Kaltura Israel's employees.

Under the plan, Kaltura Israel contributed up to 6.5 % of each employee's monthly salary toward the plan.

Employees are entitled to amounts accumulated in the plan upon reaching retirement age, subject to any applicable law.

Defined contribution pension plan expenses for the years ended December 31, 2021, 2020 and 2019 amounted to $ 3,108 , $ 2,061 and $ 1,722 , respectively.

Deferred Offering Costs:

Deferred offering costs consisting primarily of accounting, legal, and other fees related to the Company's IPO, were capitalized and offset against proceeds from the IPO.

Total IPO issuance costs were $ 4,827 , of which $ 1,082 incurred during 2020, and additional $ 3,745 was incurred during 2021.

There were no unpaid IPO issuance costs in accounts payable or prepaid IPO issuance costs in prepaid expenses as of December 31, 2021.

Revenue Recognition:

The Company recognizes revenue under Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”).

Under ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services.

The Company applies judgment in identifying and evaluating terms and conditions in contracts which may impact revenue recognition.

To determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, the Company performs the following steps:

1) Identify the contract with a customer

The Company considers the terms and conditions of contracts with customers and its customary business practices in identifying contracts under ASC 606.

The Company determines it has a contract with a customer when the contract is approved, each party’s rights regarding the services to be transferred can be identified, payment terms for the services can be identified, it has been determined that the customer has the ability and intent to pay, and the contract has commercial substance.

The Company applies judgment in determining the customer’s ability and intent to pay, which is based on a variety of factors, including the customer’s historical payment experience or, in the case of a new customer, credit and financial information pertaining to the customer.

The Company engages in formal, written, and binding contracts with its customers that create enforceable rights and obligations between the parties and state each party’s rights regarding the license and services to be transferred and the terms of payment.

The Company evaluates the probability of collection of the consideration that it is entitled to receive in exchange for the subscriptions and professional services it transfers to the customer.

The Company records trade receivables and related contract liabilities for non-cancelable contracts with customers when the right to consideration is unconditional.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

2) Identify the performance obligations in the contract

Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the goods or service either on its own or together with other resources that are readily available from the Company or from third-parties, and are distinct in the context of the contract, whereby the transfer of the goods or services is separately identifiable from other promises in the contract.

The Company provides subscriptions to its Video Experience Cloud, which powers live, real-time, and on-demand video experiences.

The Company provides access to its platform either as a cloud-based service ("SaaS" or "PaaS") or, less commonly, as a license to software installed on the customer's premises ("On-Prem") all together defined as subscriptions in the statement of operations.

Professional Services (“PS”) consist of integration, configuration and customization activities.

In some of the Company's arrangements, PS are accounted for as a separate performance obligation.

However, in some of the Company’s SaaS and PaaS arrangements the Company determined that the PS are solely set up activities that do not transfer goods or services to the customer and therefore are not accounted for as a separate performance obligation.

3) Determine the transaction price

The transaction price is determined based on the consideration which the Company is expected to be entitled to in exchange for transferring the promised goods or services to the customer.

This transaction price is exclusive of amounts collected on behalf of third parties, such as sales tax and value-added tax.

The Company rarely provides its customers with price concessions.

The Company's contracts usually include a fixed amount of consideration, as well as variable consideration for overage usage that, in most cases, is not considered probable at the inception of the contract.

Revenue accounted for as variable consideration for overages usage is recognized when the uncertainty is resolved, usually when the customer exceeds its committed usage threshold (i.e., overages are consumed) and the overages are invoiced.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

The Company rarely has contracts for which the difference between the payment date and the revenue recognition timing is more than 12 months.

The primary purpose of the Company’s payment terms is to provide customers with a simple and predictable way to purchase the Company’s subscriptions, not to provide customers with financing.

In addition, the Company has elected to apply the practical expedient for financing component for transactions in which the difference between the payment date and the revenue recognition timing is up to 12 months.

4) Allocate the transaction price to performance obligations in the contract

If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation.

Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price (“SSP”).

When applicable, the Company allocates the transaction price between the separate performance obligations according to their SSP, which is based on the price at which the performance obligation is sold separately.

If the SSP is not observable through past transactions, the Company estimates the SSP taking into account available information, including, but not limited to, pricing practices, market conditions, and the economic life of the software.

5) Recognize revenue when or as the Company satisfies a performance obligation

Revenue is recognized at the time the related performance obligation is satisfied by transferring the promised good or service to the customer.

Revenue is recognized when control of the good or services is transferred to the customer, in an amount that reflects the consideration expected to be received in exchange for those services.

A customer obtains control of a good or service if it has the ability to direct the use of and obtain substantially all of the remaining benefits from the good or service.

Revenue from SaaS and PaaS subscriptions is recognized ratably over the time of the subscription, beginning from the date in which the customer is granted access to the subscription.

Revenue from the sale of a term license in On-Prem deals is recognized at a point in time in which the license is delivered to the customer.

Revenue from post-contract services ("PCS") included in On-Prem projects is recognized ratably over the time of the PCS.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Revenue from PS that is accounted for as a separate performance obligation is recognized upon rendering of the service.

Contract Costs

Some of the sales commissions and bonuses earned by the Company's employees and management are considered incremental and recoverable costs of obtaining a contract with a customer.

Sales commissions and bonuses for new contracts are deferred and then amortized consistently with the pattern of revenue recognition for each performance obligation for contracts for which the commissions were earned, mainly on a straight-line basis, over a period of benefit that the Company has estimated to be mainly five years.

This period of benefit was determined by taking into consideration the technology's useful life.

Sales bonuses for renewal contracts are deferred and then amortized on a straight-line basis over the related contractual renewal period.

The Company classifies deferred costs as current or noncurrent based on the timing of when the Company expects to recognize the expense.

Amortization of sales commissions are consistent with the pattern of revenue recognition of each performance obligation and are included mainly in sales and marketing expense in the consolidated statements of operations.

The Company periodically reviews these deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit.

There were no impairment losses recorded during the periods presented.

The Company capitalizes costs incurred to fulfill its contracts when the costs relate directly to a contract and are expected to generate resources that will be used to satisfy the performance obligation under the contract and are expected to be recovered through revenues generated under the contract.

Costs to fulfill contracts are expensed to cost of revenue on a straight-line basis over a period of five years which reflects the technological useful life.

Cost of Revenue:

Cost of subscription revenue consists primarily of employee-related costs including payroll, benefits and stock-based compensation expense for operations and customer support teams, costs of cloud hosting providers and other third-party service providers, amortization of capitalized software development costs and acquired technology and allocated overhead costs.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Cost of professional services consists primarily of personnel costs of our professional services organization, including payroll, benefits, and stock-based compensation expense, allocated overhead costs and other third-party service providers.

Research and Development Costs:

Research and development costs are charged to the statements of operations as incurred, except to the extent that such costs are associated with internal-use software that qualifies for capitalization.

Internal-Use Software:

Costs incurred to develop internal-use software are capitalized and amortized over the estimated useful life of the software, which is generally five years.

In accordance with ASC Topic, 350-40, "Internal-Use Software," capitalization of costs to develop internal-use software begins when preliminary development efforts are successfully completed, the Company has committed project funding and it is probable that the project will be completed and the software will be used as intended.

Costs related to the maintenance of internal-use software are expensed as incurred.

The Company periodically reviews internal-use software costs to determine whether the projects will be completed, placed in service, removed from service or replaced by other internally developed or third-party software.

If the asset is not expected to provide any future benefit, the asset is retired, and any unamortized cost is expensed.

Capitalized internal-use software costs are recorded under property and equipment, net.

When events or changes in circumstances require, the Company assesses the likelihood of recovering the cost of internal-use software.

If the net book value is not expected to be fully recoverable, internal-use software would be impaired to its fair value.

During the years ended December 31, 2021, 2020 and 2019, the Company capitalized $ 4,838 , $ 1,893 and $ 249 of software development costs, respectively.

No impairment was recorded for the years ended December 31, 2021, 2020 and 2019.

Advertising Costs:

Advertising costs are expensed as incurred and include marketing activities, demand generation, events, public relations and brand-building activities.

Advertising costs for the years ended December 31, 2021, 2020 and 2019, amounted to $ 5,057 , $ 3,143 and $ 2,156 , respectively, and are included in sales and marketing expenses in the consolidated statements of operations.

Stock-Based Compensation:

The Company accounts for stock-based compensation in accordance with ASC 718,"Compensation - Stock Compensation" ("ASC 718").

ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model.

The value of the portion of the award is recognized as an expense over the requisite service periods in the Company's consolidated statements of operations.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Service-Based Awards

The Company grants stock option awards and restricted stock units (“RSUs”), that vest only based upon the satisfaction of a service condition.

The Company selected the Black-Scholes option-pricing model as the most appropriate fair value method for its option awards.

The option-pricing model requires a number of assumptions, of which the most significant are the fair value of its common stock, the expected stock price volatility, expected option term, risk-free interest rates and expected dividend yield.

The assumptions used to determine the fair value of the option awards represent management’s best estimates.

These estimates involve inherent uncertainties and the application of management’s judgment.

For RSUs, the Company determines the grant-date fair value of the RSUs as the fair value of the Company’s common stock on the grant date.

The Company recognizes compensation cost for options and stock awards that have a graded vesting schedule and contain only service condition on a straight-line basis over the requisite service period for the entire award.

Forfeitures are accounted for as they occur instead of estimating the number of awards expected to be forfeited.

Market-Based Awards

The Company has granted three of its executives stock options that vest only upon the satisfaction of market-based conditions.

The market-based conditions reflect specific prices for the Company’s common stock, which must be exceeded for each tranche of the grant to vest.

For market-based awards, the Company determined the grant-date fair value utilizing a Monte Carlo simulation model, which incorporates various assumptions including expected stock price volatility, risk-free interest rates, expected exercise behavior for vested options, expected date of a qualifying event and expected form and timing of a liquidity event.

The Company estimated the volatility of the common stock on the date of grant based on the weighted average historical stock price volatility of comparable publicly-traded companies.

Because the option does not qualify as “plain vanilla” per SEC Staff Accounting Bulletin 107, the expected term cannot be estimated based on the simplified model described in the Bulletin.

In order to address the term, the Monte Carlo simulation model includes an assumption about the price level at which vested options are expected to be exercised (the “Sub Optimal Exercise” factor).

The risk-free interest rate is based on the U.S.

Treasury yield curve in effect at the time of grant.

The rate used is based on the expected term of the option.

The Company recognizes compensation expenses for the value of its market-based awards based on the accelerated attribution method over the estimated requisite service period of each of the awards.

The Company has determined that there is no explicit or implicit service period for the awards, and therefore the requisite service period is based on the derived service period.

The derived service period is the term calculated in the Monte Carlo valuation model as described above.

The derived service period is the median duration of the simulated price paths in which the option tranche vests, which is determined by the above assumptions.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Business Combination:

The Company accounted for business combination in accordance with ASC 805, "Business combinations".

ASC 805 requires recognition of assets acquired, liabilities assumed, and any non-controlling interest at the acquisition date, measured at fair values as of that date.

Any excess of the fair value of net assets acquired over purchase price and any subsequent changes in estimated contingencies are to be recorded in earnings.

Acquisition related costs are expensed to the statement of operations in the period incurred.

Income Taxes:

The Company accounts for income taxes in accordance with ASC 740, "Income Taxes".

This codification prescribes the use of the asset and liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and for carry-forward tax losses.

Deferred taxes are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value if it is more likely than not that some portion or all of the deferred tax asset will not be realized.

The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740, "Income Taxes".

Accounting guidance addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements, under which a company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.

The tax benefits recognized in the consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement.

Accordingly, the Company reports a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return (see also Note 14).

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Net Loss per Share Attributable to Common Stockholders:

The Company's basic net loss per share is calculated by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period, without consideration of potentially dilutive securities.

The diluted net loss per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury share method or the if-converted method based on the nature of such securities.

Diluted net loss per share is the same as basic net loss per share in periods when the effects of potentially dilutive shares of common stock are anti-dilutive.

Prior to the IPO, the Company computed net loss per share using the two-class method required for participating securities.

The two-class method requires income available to common stockholder for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed.

The Company considered its convertible preferred stock to be participating securities as the holders of the convertible preferred stock would be entitled to dividends that would be distributed to the holders of common stock, on a pro-rata basis, assuming the conversion of all outstanding shares of convertible preferred stock into common stock.

These participating securities did not contractually require the holders of such stock to participate in the Company’s losses.

As such, net loss for the periods presented was not allocated to the Company’s participating securities.

Concentration of Credit Risks:

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restricted cash and trade receivables.

The majority of the Company's and its subsidiaries' cash and cash equivalents and restricted cash are invested with major banks in Israel, the United Kingdom and the United States.

Such investments in the United States may be in excess of insured limits and are not insured in other jurisdictions.

However, in general, these investments may be redeemed upon demand and therefore bear minimal risk.

The Company's trade receivables are geographically dispersed and derived from sales to customers mainly in the United States, Europe and Asia.

Concentration of credit risk with respect to trade receivables is limited by credit limits, ongoing credit evaluation and account monitoring procedures.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Major customer data as a percentage of total revenues:

The following table sets forth a customer that represented 10% or more of the Company’s total revenue in each of the periods set forth below:

Customer A (Media and Telecom)

*) Represents an amount that is lower than 10% of the Company’s total revenue.

Fair Value of Financial Instruments:

ASC 820, "Fair Value Measurements and Disclosures", defines fair value as the price that would be received to sell an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date.

In determining fair value, the Company uses various valuation approaches.

ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available.

Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company.

Unobservable inputs are inputs that reflect the Company's assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access.

Valuation adjustments and block discounts are not applied to Level 1 instruments.

Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.

Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The carrying amounts of cash and cash equivalents, restricted cash, trade receivables, prepaid expenses and other current assets, employees and payroll accruals, trade payables, accrued expenses and other current liabilities, current portion of long-term loans and current portion of long-term lease approximate their fair value due to the short-term maturities of such instruments.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Legal Contingencies:

From time to time, the Company or one of its subsidiaries become involved in legal proceedings or is subject to claims arising in its ordinary course of business.

Such matters are generally subject to many uncertainties and outcomes and are not predictable with assurance.

Specifically, the Company might be subject to contractual penalties, including liquidated damages, as well as breach of contract claims, which could result in litigation and cause the Company to incur additional costs, including in the form of additional damages or settlement payments.

The Company accrues for contingencies when the loss is probable and it can reasonably estimate the amount of any such loss.

Recently Adopted Pronouncements:

As an "emerging growth company," the Jumpstart Our Business Startups Act ("JOBS Act") allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies.

The Company has elected to use this extended transition period under the JOBS Act.

The adoption dates discussed below reflect this election.

In August 2018, the FASB issued ASU No.

2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40):

Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal use software.

The new standard requires capitalized costs to be amortized on a straight-line basis generally over the term of the arrangement, and the financial statement presentation for these capitalized costs would be the same as that of the fees related to the hosting arrangements.

The Company adopted this guidance prospectively on January 1, 2021, and the adoption did not have a material impact on its consolidated financial statements.

In January 2017, the FASB issued Accounting Standards Update No.

2017-04 (ASU 2017-04) "Intangibles-Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill Impairment." ASU 2017-04 eliminates step two of the goodwill impairment test and specifies that goodwill impairment should be measured by comparing the fair value of a reporting unit with its carrying amount.

Additionally, the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets should be disclosed.

ASU 2017-04 is effective for annual or interim goodwill impairment tests performed in fiscal years beginning after December 15, 2021;

early adoption is permitted.

The Company early adopted ASU 2017-04 during 2021, and the adoption did not have an impact on its consolidated financial statements and related disclosures.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Recent Accounting Guidance Not Yet Adopted:

In February 2016, the FASB issued ASU No.

2016-02, Leases , which would require lessees to put all leases on their balance sheets, whether operating or financing, while continuing to recognize the expenses on their income statements in a manner similar to current practice.

The guidance states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term.

In June 2020, the FASB issued ASU No.

2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842):

Effective Dates for Certain Entities , which defers the effective date of ASU 2016-02 for non-public entities to fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022.

The guidance will be effective for the Company beginning January 1, 2022, and interim periods in fiscal years beginning January 1, 2023.

The Company elected to adopt the guidance beginning on the first quarter of 2022, using a modified retrospective transition approach, which applies the provisions of the new guidance at the effective date without adjusting the comparative periods presented.

The Company also elected certain practical expedients permitted under the transition guidance within the new guidance, which allows it to carry forward the historical accounting relating to lease identification and classification for existing leases upon adoption and to keep leases with an initial term of 12 months or less off its consolidated balance sheets.

The Company elected not to separate lease and non-lease components for all classes of underlying assets.

While the adoption remains in progress, the Company expects that the adoption will result in the recognition of operating lease right of use assets and operating lease liabilities that were not previously recognized, which will increase total assets and liabilities on its Consolidated Balance Sheets by approximately $ 823 .

In addition, a material portion of the Company’s leases are denominated in NIS.

As a result, the associated lease liabilities will be remeasured using the current exchange rate in the future reporting periods, which may result in material foreign exchange gains or losses.

Except for the impact of remeasuring the NIS denominated lease liability, the Company does not expect the adoption of Topic 842 to have a material impact to its Consolidated Statements of Operations or Cash Flows.

In June 2016, the FASB issued ASU No.

2016-13, Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments , which replaces the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected.

The guidance will be effective for the Company beginning January 1, 2023, and interim periods therein.

Early adoption is permitted.

The Company is currently evaluating the effect that ASU 2016-13 will have on its consolidated financial statements and related disclosures.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

In December 2019, the FASB issued ASU No.

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing a variety of exceptions within the framework of ASC 740.

These exceptions include the exception to the incremental approach for intraperiod tax allocation in the event of a loss from continuing operations and income or a gain from other items (such as other comprehensive income), and the exception to using general methodology for the interim period tax accounting for year-to-date losses that exceed anticipated losses.

The guidance will be effective for the Company beginning January 1, 2022, and interim periods in fiscal years beginning January 1, 2023.

Early adoption is permitted.

The Company does not expect that ASU 2019-12 will have a material impact on its consolidated financial statements and related disclosures.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities in accordance with Accounting Standards Codification Topic 606.

ASU 2021-08 is effective for fiscal years beginning after December 15, 2022 and early adoption is permitted.

While the Company is continuing to assess the timing of adoption and the potential impacts of ASU 2021-08, it does not expect ASU 2021-08 to have a material effect, if any, on its consolidated financial statements.

In March 2020, the Company acquired all of the issued and outstanding capital stock of Newrow, Inc., a Delaware privately held corporation (“Newrow”), through a share exchange agreement.

Newrow develops and sells real-time video communication software solutions.

The acquisition is intended to support the Company's plans to continue strengthening its technological capabilities and the depth of its product offering.

The acquisition has been accounted for as a business combination.

The total purchase price was $ 3,799 paid through issuance of 1,226,515 shares of the Company's common stock.

In addition, there is a contingent consideration comprised of a warrant to purchase up to 613,255 shares of the Company's common stock subject to certain performance targets.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

ACQUISITIONS (Cont.)

The Company accounted for this transaction as a business combination and allocated the purchase consideration to assets acquired and liabilities assumed based on preliminary estimated fair values, as presented in the following table:

Warrant to common stock

Total purchase consideration

Identified intangible assets

Net liabilities assumed, net of cash acquired

Cash acquired

Goodwill of $ 1,689 , none of which is deductible for tax purposes, was recorded in connection with the Newrow acquisition, and was primarily attributed to synergies arising from the acquisition and the value of the acquired workforce.

The goodwill was allocated to the Enterprise, Education and Technology segment.

The following table presents details of the identified intangible assets acquired:

Estimated Useful Life

Developed technology

Customers relationship

Transaction costs incurred by the Company in connection with the Newrow acquisition were approximately $ 91 during the year ended December 31, 2020, and were recorded within general and administrative expenses in the consolidated statements of operations.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses

Government institutions

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

PROPERTY AND EQUIPMENT, NET

Composition of property and equipment is as follows:

Computers and peripheral equipment

Office furniture and equipment

Leasehold improvements

Capital leases of computers and peripheral equipment

Internal use software

Accumulated depreciation

Depreciated cost

Depreciation expenses for the years ended December 31, 2021, 2020 and 2019 were $ 1,407 , $ 2,791 and $ 3,860 , respectively.

During the year ended December 31, 2021, the Company disposed fully depreciated assets in a gross amount of $ 1,849 .

During the year ended December 31, 2020, the Company abandoned its data centers, and recorded abandonment costs of $ 3,969 in the consolidated statement of operations as general and administrative expenses and disposed of total assets in a gross amount of $ 16,886 .

OTHER ASSETS, NONCURRENT

Restricted cash

Severance pay fund

Issuance costs

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

GOODWILL AND INTANGIBLE ASSETS, NET

Intangible Assets:

December 31, 2021

Weighted average remaining useful life (in years)

Gross carrying amount:

Customer relationship

Accumulated amortization and impairments:

Customer relationship

Intangible assets, net

December 31, 2020

Weighted average remaining useful life (in years)

Gross carrying amount:

Customer relationship

Accumulated amortization and impairments:

Customer relationship

Intangible assets, net

During the year ended December 31, 2021, 2020 and 2019, the Company recorded amortization expenses in the amount of $ 1,005 , $ 917 and $ 630 , respectively, included in cost of revenue and sales and marketing expenses in the statements of operations.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

GOODWILL AND INTANGIBLE ASSETS, NET (Cont.)

The estimated future amortization expense of intangible assets as of December 31, 2021, is as follows:

In April 2018, the Company acquired some of the assets of Rapt Media, Inc.

(the "Assets") for a consideration that varied depending on the gains that the Assets derived during a three-year period (the “Period”) following the closing date of the purchase of the Assets (the "Transaction").

The Transaction was accounted for as an asset acquisition.

The Company recognized an asset and liability simultaneously when revenue derived from the Assets was recognized.

The useful life of the Assets is four years from the Transaction's closing date.

The Period ended in April 2021, when up to that date, the Company had capitalized an amount of $ 595 .

During the years ended December 31, 2021, 2020 and 2019, the Company capitalized $ 79 , $ 163 and $ 202 , respectively, with respect to the Transaction.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

GOODWILL AND INTANGIBLE ASSETS, NET (Cont.)

Changes in goodwill for the years ending December 31, 2021, 2020 and 2019, were as follows:

Enterprise, Education and Technology

Media and Telecom

Balance as of January 1, 2019

Balance as of January 1, 2020

Balance as of January 1, 2021

Balance as of December 31, 2021

Since the Company's inception, no goodwill impairment charges were recorded.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

LONG-TERM LOAN

In February 2011, the Company entered into a long-term loan and security agreement with a bank (the "2011 Loan Agreement").

During the years 2012-2019 the Company entered into several modifications, pursuant to which the long-term credit line was increased to an amount equal to $ 20,000 out of which the Company drew an amount of $ 18,000 .

Loan repayment date was extended from February 2017 to February 2020 in one installment.

In February 2020 the Company drew an additional amount of $ 2,000 as part of the Ninth Modification to the 2011 Loan Agreement.

The outstanding principal amount accrued interest at a floating per annum rate equal to the prime rate.

As of December 31, 2020, the Company's outstanding loan balance was $ 20,000 .

In April 2012, the Company entered into a long-term loan and security agreement (the "Additional Loan Agreement"), which provided the Company a long-term line of credit.

During the years 2012-2018 the Company entered into three modifications to the agreement, pursuant to which the long-term credit line was increased to an amount equal to $ 30,000 .

The Company used the entire credit line pursuant to which the loan repayment date was extended to November 2020.

Pursuant to the last amendment, the loan is to be repaid in 36 monthly equal installments.

The outstanding principal amount accrued interest at a floating per annum rate equal to four and a half percentage ( 4.5 %) points above the prime rate , subject to a 9.50 % floor and a 12.00 % maximum.

As of December 31, 2020, the Company's outstanding loan balance under the Additional Loan Agreement was $ 28,160 .

In January 2021, the Company refinanced all amounts outstanding under the existing loan agreements, terminated all outstanding commitments, and entered into a new credit agreement (the “Credit Agreement”) with an existing lender, which provides for a new senior secured term loan facility in the aggregate principal amount of $ 40,000 (the “Term Loan Facility”) and a new senior secured revolving credit facility in the aggregate principal amount of $ 10,000 (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Credit Facilities”).

In June 2021, the Company entered into an amendment to the Credit Agreement (the “First Amendment”).

Pursuant to the First Amendment, the Company borrowed an additional aggregate principal amount of $ 12,500 and increased commitments under the Revolving Credit Facility to $ 35,000 .

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

LONG-TERM LOAN (Cont.)

In December 2021, the Company repaid in full its outstanding principal amount under the Revolving Credit Facility.

As of December 31, 2021, the total commitments under the Revolving Credit Facility are available for future borrowings.

Borrowings under the Credit Facilities are subject to interest, determined as follows:

(a) Eurodollar loans accrue interest at a rate per annum equal to the Eurodollar rate plus a margin of 3.50 % (the Eurodollar rate is calculated based on the Credit Agreement, subject to a 1.00 % floor, divided by 1.00 minus the maximum effective reserve percentage for Eurocurrency funding), and (b) Alternate Base Rate (“ABR”) loans accrue interest at a rate per annum equal to the ABR plus a margin of 2.50 % (ABR is equal to the highest of (i) the prime rate and (ii) the Federal Funds Effective Rate plus 0.50 %, subject to a 2.00 % floor).

As of December 31, 2021, the current rate of interest under the Credit Facilities was equal to a rate per annum of 4.50 %, consisting of the 1.00 % floor and the margin of 3.50 %.

The Term Loan Facility is payable in consecutive quarterly installments on the last day of each fiscal quarter in an amount equal to (i) $ 250 for installments payable on April 1, 2021, through December 31, 2021, (ii) $ 750 for installments payable on March 31, 2022 through December 31, 2022, and (iii) $ 1,500 for installments payable on and after March 31, 2023.

The remaining unpaid balance on the Term Loan Facility is due and payable on January 14, 2024, together with accrued and unpaid interest on the principal amount to be paid to, but excluding, the payment date.

Amounts outstanding under the Credit Facilities may be voluntarily prepaid at any time and from time to time, in whole or in part, without premium or penalty.

Under the terms of the Credit Facilities, the Company is obligated to maintain certain covenants as defined therein.

As of December 31, 2021, the Company met these covenants.

The aggregate principal annual maturities according to the Credit Facilities agreements are as follows:

Year ending December 31,

The carrying amounts of the loans approximate their fair value.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses

Accrued taxes

COMMITMENTS AND CONTINGENCIES

Lease Commitments:

The Company is engaged in operating lease arrangements for its worldwide offices.

Future minimum annual payments under non-cancelable operating leases for the period remaining subsequent to December 31, 2021, are as follows:

Year ending December 31,

Total rent expenses for the years ended December 31, 2021, 2020 and 2019 were $ 2,278 , $ 2,152 and $ 2,121 , respectively.

During the fourth quarter of 2021, the Company entered into a non-cancelable operating lease agreement for an office that contains approximately 13,815 square feet in New York, New York (the "Lease").

The Lease commenced in January 2022, after the balance sheet date.

Future payments associated with the Lease are reflected in the table above.

The Lease will increase the right-of-use asset and corresponding lease liability in accordance with ASC 842.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

COMMITMENTS AND CONTINGENCIES (Cont.)

Purchase Commitments:

The Company has entered into various non-cancelable agreements with third-party providers for use of mainly cloud and other services, under which it committed to minimum and fixed purchases through the year ending December 31, 2026.

The following table presents details of the aggregate future non-cancelable purchase commitments under such agreements as of December 31, 2021:

Year ending December 31,

Total purchase commitment

Capital Leases:

As of December 31, 2021, the Company has a liability to make lease payments of $ 147 under capital leases.

All payments will be made during 2022.

REVENUES FROM CONTRACTS WITH CUSTOMERS

The following tables presents disaggregated revenue by category:

Year ended December 31, 2021

Enterprise, Education

and Technology

Media and Telecom

Percentage of revenue

Professional services

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

REVENUES FROM CONTRACTS WITH CUSTOMERS (Cont.)

Year e nded December 31, 2020

Enterprise, Education

and Technology

Media and Telecom

Percentage of revenue

Professional services

Year ended December 31, 2019

Enterprise, Education

and Technology

Media and Telecom

Percentage of revenue

Professional services

Contract Balances:

Contract liabilities consist of deferred revenue.

Revenue is deferred when the Company invoices in advance of performance under a contract.

The current portion of the deferred revenue balance is recognized as revenue during the 12-month period after the balance sheet date.

The noncurrent portion of the deferred revenue balance is recognized as revenue following the 12-month period after the balance sheet date.

Substantially all the revenue that was included in the deferred revenue, current as of January 1, 2021, was recognized as revenue during 2021.

Remaining Performance Obligations:

Remaining performance obligations represent the amount of contracted future revenue that has not yet been recognized, including both deferred revenue and contracted amounts that will be invoiced and recognized as revenue in future periods.

As of December 31, 2021, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 185,484 , which consists of both billed consideration in the amount of $ 53,642 and unbilled consideration in the amount of $ 131,842 that the Company expects to recognize as revenue and was yet recognized on the balance sheet.

The Company expects to recognize 57 % of its remaining performance obligations as revenue in the year ending December 31, 2022, and the remainder thereafter.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

REVENUES FROM CONTRACTS WITH CUSTOMERS (Cont.)

Costs to Obtain a Contract:

The following table represents a roll forward of costs to obtain a contract:

Year ended December 31,

Beginning balance

Additions to deferred contract acquisition costs during the period

Amortization of deferred contract acquisition costs

Ending balance

Deferred contract acquisition costs, current

Deferred contract acquisition costs, noncurrent

Total deferred costs to obtain a contract

Costs to Fulfill a Contract

The following table represents a roll forward of costs to fulfill a contract:

Year ended December 31,

Beginning balance

Additions to deferred costs to fulfill a contract during the period

Amortization of deferred costs to fulfill a contract

Ending balance

Deferred fulfillment costs, current

Deferred fulfillment costs, noncurrent

Total deferred costs to fulfill a contract

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

FAIR VALUE MEASUREMENTS

In July 2016, as part of the Company's stock and warrant purchase agreement with a new investor, the Company issued the new investor a warrant to purchase 7,146,490 shares of common stock of the Company (subject to certain adjustments, as described below) with an exercise price of $ 0.0001 per share.

The warrant expires in July 2026.

The warrant is exercisable immediately prior to the occurrence of a Triggering Event (as such term is defined in the warrant agreement), or in connection with an exercise of co-sale rights.

If the warrant is exercised in connection with a Liquidation Event or Qualified IPO (each as defined in the warrant agreement), the number of shares issuable upon such exercise will be subject to certain adjustments based on the equity valuation implied by such Liquidation Event or Qualified IPO.

In addition, the warrant has a redemption right which entitles the holder, at its sole discretion, to redeem the warrant after the fifth anniversary from the issuance date.

In October 2015, as part of the Second Modification to the Additional Loan Agreement, the Company issued the lender a warrant to purchase 32,841 shares of Series E redeemable convertible preferred stock with an exercise price of $ 15.223 per share.

The warrant expires in October 2025.

In 2014, 2012 and 2011, the Company issued warrants to purchase 68,965 shares of Series E redeemable convertible preferred stock with an exercise price of $ 10.15 per share, 56,285 shares of Series D redeemable convertible preferred stock with an exercise price of $ 5.33 per share and 31,414 shares of Series C redeemable convertible preferred stock with an exercise price of $ 3.82 per share, respectively.

As part of the third amendment to the loan agreement, the expiration date of the preferred D and E warrants have been extended to October 2025.

The above-mentioned transactions were accounted for in accordance with ASC 815-40, "Derivatives and Hedging - Contracts in Entity`s Own Equity," ("ASC 815") and ASC 480-10, "Distinguishing Liabilities from Equity" ("ASC 480").

Prior to the IPO, the warrants were recorded as a liability in the Company's balance sheet and measured at fair value at each reporting date.

On March 26, 2020, as part of Newrow acquisition, the Company issued to Newrow's former stockholders a warrant to purchase 613,255 shares of common stock subject to certain performance target (the “Newrow Warrant").

The Newrow Warrant was recorded as a liability in the Company's balance sheet and was measured at fair value at each interim reporting date.

During 2020, the Company recorded remeasurement expenses related to the Newrow Warrant in the amount of $ 1,836 .

During November 2020, the performance target was achieved, and the Newrow Warrant was reclassified to stockholders' equity (deficit).

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

FAIR VALUE MEASUREMENTS (Cont.)

During the years ended December 31, 2021, 2020 and 2019, the Company recorded financial expenses from changes in the warrants' fair value in the amount of $ 15,046 , $ 41,505 and $ 5,300 (see also Note 2aa), respectively.

Prior to the IPO, the Company measured the warrants that were classified as a liability at fair value by applying the OPM in each reporting period until they are exercised or expired, with changes in fair values being recognized in the Company's consolidated statement of operations as financial income or expenses.

The key assumptions used in the OPM for the valuation of the warrants upon re- measurement were as follows:

Risk-free interest rate

Dividend yield

Expected life (years)

Dividend yield - was based on the fact that the Company has not paid dividends to its stockholders in the past and does not expect to pay dividends to its stockholders in the foreseeable future.

Expected volatility - was calculated based on actual historical stock price movements of companies in the same industry over the term that is equivalent to the expected term of the option.

Risk-free interest - based on yield rate of non-index linked U.S.

Federal Reserve treasury stock.

Expected life - the expected life was based on the expected maturity date of the warrants.

The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis based on the fair value hierarchy as of December 31, 2020:

December 31, 2020

Warrants to purchase preferred and common stock

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

FAIR VALUE MEASUREMENTS (Cont.)

The following table sets forth a summary of the changes in the fair value of the warrants to purchase preferred and common stock:

Year ended December 31,

Balance at January 1

Issuance of warrants

Reclassification of warrant to common stocks to equity

Reclassification of warrant to preferred stocks to mezzanine equity

Change in fair value of warrants

Conversion of warrants to common stock upon initial public offering

Balance at December 31

Upon the closing of the Company’s IPO, the warrants to purchase preferred and common stock were converted into 7,067,699 shares of common stock.

The final re-measurement of the warrants was based upon the publicly available stock price on the conversion date.

CONVERTIBLE AND REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)

Convertible and Redeemable Convertible Preferred Stock:

Upon the closing of the Company’s IPO, Series A, B, C, D, D-1 and E of its convertible and redeemable convertible preferred stock automatically converted into 68,325,487 shares of common stock after giving effect to certain adjustments in connection with the 1-to-4.5 forward stock split (the “Stock Split”, see paragraph {d} “Stock Split” within this Note for further information).

With respect to Series F redeemable convertible preferred stock, the mechanism of its conversion was determined using a price per share equal to 102 % of the offering price of $ 10.00 per share.

As a result, the Company issued 7,937,455 shares of common stock, after giving effect to the Stock Split.

As of December 31, 2021, there were no shares of convertible and redeemable convertible preferred stock issued and outstanding.

In connection with the IPO, the Company amended and restated its Certificate of Incorporation to change the authorized preferred stock to 20,000,000 shares of preferred stock, all with a par value of $ 0.0001 per share.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

CONVERTIBLE AND REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (Cont.)

Composition of convertible and redeemable convertible preferred stock capital of $ 0.0001 as of December 31, 2020:

December 31, 2020

Issued and outstanding

Aggregate liquidation preference

Number of shares

Series A Preferred stock

Series B Preferred stock

Series C Preferred stock

Series D Preferred stock

Series D-1 Preferred stock

Series E Preferred stock

Series F Preferred stock

Convertible and redeemable convertible Preferred stock

On February 3, 2021, SVB Financial Group (“SVB”) converted a Warrant to Purchase Stock issued on February 3, 2011 (the “Series C Warrant”) into shares of the Company’s Series C Convertible Preferred Stock pursuant to the cashless conversion mechanism described in the Series C Warrant.

The conversion was exercised for all 31,414 shares covered by the Series C Warrant and resulted in the net issuance of 27,011 shares of the Company’s Series C Convertible Preferred Stock.

Pursuant to the terms of the Series C Warrant, the number of net shares issued was determined by dividing (a) the aggregate fair market value of the shares otherwise issuable upon exercise of the Series C Warrant minus the aggregate exercise price of such shares by (b) the fair market value of one share of the Company’s Series C Convertible Preferred Stock.

Common Stock:

The shares of common stock confer upon their holders the right to receive notice to participate and vote in general stockholders meetings of the Company, and the right to receive dividends, if declared, and to participate in the distribution of the surplus assets of the Company upon liquidation of the Company, as more fully described in the Company's Certificate of Incorporation.

In connection with the IPO, the Company amended and restated its Certificate of Incorporation to change the authorized common stock to 1,000,000,000 shares of common stock, all with a par value of $ 0.0001 per share.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

CONVERTIBLE AND REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (Cont.)

Receivables on Account of Stock:

In May 2015, the Company entered into loan agreements with certain of its executive employees for the purpose of exercising vested options (the “Employee Loan Agreements”).

In accordance with the Employee Loan Agreements, the amounts granted to the borrowers shall automatically be forgiven and deemed to have been repaid in full upon the consummation of an Exempted IPO, as such term is defined in the Employee Loan Agreements.

In February 2021, the Employee Loan Agreements were amended such that the loans would be automatically forgiven and deemed to have been repaid in full immediately prior to the public filing by the Company of a registration statement under the Securities Act of 1933, as amended.

In March 2021, the loans were fully forgiven.

Following the forgiveness of the loans, the Company recorded an expense for the year ended December 31, 2021, in the amount of $ 1,724 included in other operating expenses in the consolidated statement of operations.

The amount included the tax gross-up expense that was paid by the Company following the forgiveness.

Equity Incentive Plans:

2007 and 2017 Equity Incentive Plans

Under the Company's 2007 U.S.

and Israeli Stock Option Plans ("the 2007 Plans"), options were granted to officers, directors, employees, advisors and consultants of the Company or its subsidiaries.

In 2017, the Company adopted a new equity incentive plan, the "2017 Equity Incentive Plan" (the "2017 Plan" and together with the 2007 Plans, the "Old Plans"), and extended the term of the 2007 Israeli Stock Option Plan and the term of the options already granted thereunder for an additional ten-year period.

Each option granted under the Old Plans is exercisable until the earlier of ten years (or 20 years if granted under the 2007 Israeli Stock Option Plan) from the date of the grant of the option.

The options vest primarily over a four year period.

Any options that are forfeited or not exercised before expiration become available for future grants.

In December 2020, the Company granted to three of its officers, market-based options at an exercise price of $ 13.34 per share.

The options vest based on the achievement of specific share price targets such that 25% of the award will vest upon the fair market value of a share of common stock increasing fifty percent (50%) above the exercise price;

an additional 25% of such award will vest upon the fair market value of a share increasing one-hundred percent (100%) above the exercise price;

an additional 25% will vest upon the fair market value of a share increasing one-hundred and fifty percent (150%) above the exercise price;

and the remaining 25% of the award will vest upon the fair market value increasing two-hundred percent (200%) above the exercise price.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

CONVERTIBLE AND REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (Cont.)

Following the Company’s IPO, no additional awards will be granted under the Old Plans.

However, the Old Plans will continue to govern the terms and conditions of the outstanding awards previously granted under the Old Plans.

2021 Incentive Award Plan

Effective upon the effectiveness of the registration statement for the IPO, the Company adopted the 2021 Incentive Award Plan (the “2021 Plan”, and together with the Old Plans, the "Plans").

The 2021 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, RSUs, and other stock or cash-based awards to the Company’s officers, directors, employees, advisors, and consultants.

A total of 8,500,000 shares of the Company’s common stock were initially reserved for issuance pursuant to the 2021 Plan.

In addition, the number of shares of common stock reserved for issuance under the 2021 Plan includes certain shares of common stock subject to awards under the Old Plans, in the case of certain occurrences such as expirations, terminations, exercise and tax-related withholding, or failures to vest.

The number of shares of common stock available for issuance under the 2021 Plan will also include an annual increase on the first day of each fiscal year beginning on January 1, 2022, equal to the lesser of:

5% of the aggregate number of shares of common stock outstanding on the final day of the immediately preceding calendar year;

Such smaller number of shares of common stock as is determined by the Board of Directors.

Under the 2021 Plan, the exercise price of options granted is generally at least equal to the fair market value of the Company’s common stock on the date of grant.

The term of the options generally may not exceed ten years.

Additionally, the exercise price of any options granted to a 10% stockholder shall not be less than 110% of the fair market value of the common stock on the date of grant, and the term of such option grant shall not exceed five years.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

CONVERTIBLE AND REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (Cont.)

Stock Options

A summary of the Company's stock option activity with respect to options granted under the Plans is as follows:

Number of Options

Average exercise price

Weighted remaining contractual term

Outstanding as of January 1, 2021

Outstanding as of December 31, 2021

Exercisable options at end of the year

The fair value of each service-based award is estimated on the date of grant using the Black-Scholes model that uses the assumptions noted in the following table:

Expected volatility

Risk-free interest rate

1.31 % - 1.34

Dividend yield

Expected life (years)

These assumptions and estimates were determined as follows:

Fair value of common stock – Prior to the IPO, the fair value was determined by the Company's Board of Directors, with input from management and assisted by valuation reports prepared by a third-party valuation specialist.

After the IPO, the fair value of the common stock underlying the options was the Company’s closing stock price on the Nasdaq Global Select Market on the grant date.

Risk-free interest rate - The risk-free rate for the expected term of the options is based on the yields of U.S.

Treasury securities with maturities appropriate for the expected term of the employee share option awards.

Expected life - The expected life represents the period that options are expected to be outstanding.

For option grants that are considered to be "plain vanilla," the Company determines the expected term using the simplified method.

The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the options.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

CONVERTIBLE AND REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (Cont.)

Expected volatility - Since the Company has no trading history of its ordinary shares, the expected volatility is derived from the average historical share volatilities of several unrelated public companies within the Company's industry that the Company considers to be comparable to its own business over a period equivalent to the option's expected term.

Expected dividend yield - The Company has never declared or paid any cash dividends and does not presently plan to pay cash dividends in the foreseeable future.

As a result, an expected dividend yield of zero percent was used.

The weighted average grant-date fair value of the service-based awards granted in the years ended December 31, 2021, 2020 and 2019 was $ 2.45 , $ 3.80 and $ 1.13 per option, respectively.

The total grant-date fair value of the service-based awards that vested during the years ended December 31, 2021, 2020 and 2019, was $ 13,152 , $ 3,615 and $ 2,377 , respectively.

The aggregate intrinsic value of options exercised during the years ended December 31, 2020 and 2019, was $ 8,842 and $ 837 , respectively.

The fair value of each market-based award is estimated on the date of grant using the Monte Carlo model that uses the assumptions noted in the following table:

Expected volatility

Risk-free interest rate

Dividend yield

Expected volatility - Because the Company had no trading history of its shares of common stock, the expected volatility was derived from the average historical share volatilities of several unrelated public companies within the Company's industry that the Company considers to be comparable to its own business over a period equivalent to the option's expected term.

Risk-free interest rate - The risk-free rate for the expected term of the options is based on the yields of U.S.

Treasury securities with maturities appropriate for the expected term of the employee share option awards.

The weighted average fair value of the market-based awards granted in the year ended December 31, 2020, was $ 2.26 per option.

These costs are expected to be recognized over a weighted-average period of approximately five and a half years from December 2020.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

CONVERTIBLE AND REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (Cont.)

The following table summarizes the RSU activity for the year ended December 31, 2021:

Weighted Average

Grant Date Fair

Value per Share

Outstanding as of December 31, 2020

RSUs forfeited

Unvested and Outstanding as of December 31, 2021

Stock-Based Compensation Expense

The stock-based compensation expense by line item in the accompanying consolidated statement of operations is summarized as follows:

Year ended December 31,

Cost of revenue

Research and development

Sales and marketing

General and administrative

Total expenses

As of December 31, 2021, there were $ 62,275 of total unrecognized compensation cost related to non-vested stock-based compensation arrangements granted under the Plans.

These costs are expected to be recognized over a weighted-average period of approximately three years.

In March 2021, the Company’s board of directors and the stockholders of the Company approved a four and a half ( 4.5 )-for-one forward stock split of the Company’s common stock, which became effective on March 19, 2021.

The par value of each class of capital stock was not adjusted as a result of this forward stock split.

All common stock, redeemable convertible preferred stock, stock options, warrants, and per share information presented within these consolidated financial statements have been adjusted to reflect this forward stock split on a retroactive basis for all periods presented.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

The Company's subsidiaries are separately taxed under the domestic tax laws of the jurisdiction of incorporation of each entity.

Loss before taxes on income is comprised as follows:

Year ended December 31,

Loss before taxes on income

The provision for income taxes was as follows:

Year ended December 31,

Total provision for income taxes

Deferred Income Taxes:

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

As of December 31, 2021 and 2020, the Company has provided a full valuation allowance in respect of deferred tax assets.

Management currently believes that it is more likely than not that the deferred tax regarding the tax loss carry forwards and other temporary differences will not be realized in the foreseeable future.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

INCOME TAXES (Cont.)

Significant components of the Company's deferred tax assets are as follows:

Deferred tax assets:

Net operating losses carryforward

Disallowed business interest expense

Other temporary differences

Deferred tax assets before valuation allowance

Valuation allowance

Total deferred tax assets

Deferred tax liabilities:

Acquired Intangible Assets

Deferred contract costs

Property and equipment

Total deferred tax liabilities

Deferred tax assets, net

Net Operating Losses Carry Forward:

As of December 31, 2021, the U.S.

parent company had a net U.S.

operating loss carry forward ("NOLs") for federal income tax purposes of approximately $ 274,821 and U.S.

state NOLs of approximately $ 167,944 .

Out of the operating losses attributed to the U.S.

parent company, $ 169,095 were generated before January 1, 2018, and are subject to the 20-year carryforward period.

The remaining $ 105,726 can be carried forward indefinitely but are subject to the 80% taxable income limitation.

Utilization of the U.S.

net operating losses above may be subject to substantial annual limitations due to the "change in ownership" provisions of the Internal Revenue Code of 1986 and similar state provisions.

The annual limitation may result in the expiration of substantial net operating losses before utilization (the 80% limitation was waived for NOLs utilized in 2019 and 2020 under the CARES Act).

The Company has analyzed the impact of Section 382 on its NOLs through 2020 and believes that the NOLs are not materially limited by Section 382.

However, any future changes of ownership could impact the Company’s ability to utilize NOLs.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

INCOME TAXES (Cont.)

A reconciliation of the Company's theoretical income tax expense to actual income tax expense is as follows:

Year ended December 31,

Loss before tax as reported at the consolidated statement of operations

Statutory tax rate

Theoretical tax benefit

Non-deductible expenses and other permanent differences

Remeasurement of warrants to fair value

Share-based compensation

Change in valuation allowance

State taxes, net of federal benefit

Income tax at rate other than the U.S.

statutory tax rate

Exchange rate differences

Total tax expenses

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

INCOME TAXES (Cont.)

The Tax Cuts and Jobs Act:

On December 22, 2017, the U.S.

enacted the Tax Cuts and Jobs Act, a comprehensive tax law that includes significant changes to the taxation of business entities.

These changes include several key tax provisions, among others:

(i) a permanent reduction to the statutory federal corporate income tax rate from 35 % to 21 % effective for tax years beginning after December 31, 2017;

(ii) a partial limitation on the tax deductibility of business interest expenses;

(iii) a shift of the U.S.

taxation of multinational corporations from a tax on worldwide income to a territorial system (along with certain rules designed to prevent erosion of the U.S.

income tax base) and (iv) a one-time deemed repatriation tax on accumulated offshore earnings held in cash and illiquid assets, with the latter taxed at a lower rate.

Tax Laws Applicable to the Company's Subsidiary in Israel:

The Israeli corporate tax rate was 23 % for the years ended December 31, 2021 and 2020.

However, the effective tax rate payable by a company that derives income from a "Benefited Enterprise" or a "Preferred Enterprise" (as discussed below) may be considerably less.

Capital gains derived by an Israeli company are generally subject to the prevailing corporate tax rate.

Tax benefits by virtue of the Law for the Encouragement of Capital Investments, 1959 ("the Investment Law"):

Until tax year 2014, Kaltura Israel utilized various tax benefits by virtue of the "Benefited Enterprise" status granted to its enterprise, pursuant to the Investment Law.

Kaltura Israel elected benefits under the alternative track of benefits according to which it was exempt from income tax in the first two years (from the date Kaltura Israel earned taxable income).

If a dividend is distributed out of tax exempt income earned by a Benefited Enterprise the amount distributed will be subject to corporate tax at the rate that would have otherwise been applicable on the Benefited Enterprise income.

Dividends paid out of income attributed to a Beneficiary Enterprise are generally subject to withholding tax at source at the rate of 15 % or such lower rate as may be provided in an applicable tax treaty.

As of December 31, 2021, approximately $ 607 was derived from tax exempt profits earned by Kaltura Israel's "Beneficiary Enterprise." The Company and its Board of Directors have determined that such tax-exempt income will not be distributed as dividends and intends to reinvest the amount of its tax-exempt income earned by Kaltura Israel.

Accordingly, no provision for deferred income taxes has been provided on income attributable to Kaltura Israel's "Beneficiary Enterprise" as such income is essentially permanently reinvested.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

INCOME TAXES (Cont.)

If Kaltura Israel's retained tax-exempt income is distributed, the income would be taxed at the applicable corporate tax rate as if it had not elected the alternative tax benefits under the Investment Law and an income tax liability of up to $ 152 would be incurred as of December 31, 2021.

In 2011, new legislation amending the Investment Law was adopted.

Under this new legislation, a unified corporate tax rate applied to all qualifying income generated by a "Preferred Company" through its Preferred Enterprise (as such terms are defined in the Investment Law) as of January 1, 2011.

Industrial Companies under the Preferred Enterprise status according to the new law as amended in July 2013, and starting January 1, 2014 are entitled to a uniform reduced corporate tax rate of 9% in areas in Israel designated as Development Zone A and 16% elsewhere in Israel .

The 2011 Amendment also provided transitional provisions to address companies already enjoying current benefits under the Investment Law.

Under the transition provisions, the Company decided to irrevocably implement the new law, effective January 1, 2015.

Dividends distributed from income which is attributed to a “Preferred Enterprise” will be subject to withholding tax at source at the rate of 20 % or such lower rate as may be provided in an applicable tax treaty.

Kaltura Israel's income from other sources is subject to tax at the regular Corporate Income rate.

As of December 31, 2021 and 2020, $ 2,355 and $ 1,803 of undistributed earnings held by the Company's foreign subsidiaries are designated as indefinitely reinvested.

If these earnings were re-patriated to the US, they could be subject to income taxes and to an adjustment for foreign tax credits and foreign withholding taxes.

Tax assessment:

Generally, in U.S.

federal and state taxing jurisdictions, tax periods in which certain loss and credit carryovers are generated remain open for audit until such time as the limitation period ends for the year in which such losses or credits are utilized.

Kaltura Israel received final tax assessments through 2016 while the rest of the Company's subsidiaries did not have any final tax assessments as of December 31, 2021.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

INCOME TAXES (Cont.)

Uncertain tax position:

A reconciliation of the opening and closing amounts of total unrecognized tax benefits is as follows:

Unrecognized Tax Benefits

Balance as of January 1, 2019

Increases related to prior years' tax positions

Increases related to current years' tax positions

Balance as of December 31, 2019

Increases related to prior years' tax positions

Increases related to current years' tax positions

Balance as of December 31, 2020

Decrease related to prior years' tax positions

Increases related to current years' tax positions

Balance as of December 31, 2021

As of December 31, 2021 the total amount of gross unrecognized tax benefits was $ 4,494 and if recognized, would favorably impact the Company's effective tax rate.

The Company recognizes interest related to uncertain tax positions in income tax expense.

For the years ended December 31, 2021, 2020 and 2019, the Company recorded $ 171 , $ 90 and $ 97 of interest expenses accordingly related to uncertain tax positions.

The Company currently does not expect uncertain tax positions to change significantly over the next 12 months, except in the case of settlements with tax authorities, the likelihood and timing of which is difficult to estimate.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

SELECTED STATEMENT OF OPERATIONS DATA

Year ended December 31,

Financial income:

Interest income

Financial expenses:

Remeasurement of warrants to fair value

Interest expense

Foreign currency translation adjustments, net

Financial expenses, net

NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS :

The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders for the periods presented:

Year ended December 31,

Preferred stock accretion and cumulative dividends

Total loss attributable to common stockholders

Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted

Net loss per share attributable to common stockholders, basic and diluted

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS (Cont.) :

Instruments potentially exercisable for common stock that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been anti-dilutive are as follows:

Year ended December 31,

Convertible and redeemable and convertible preferred stock

Warrants to purchase preferred and common stock

Outstanding stock options and RSUs

REPORTABLE SEGMENTS AND GEOGRAPHICAL INFORMATION

Reportable segments:

ASC 280, Segment Reporting, establishes standards for reporting information about operating segments.

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

The Company's chief operating decision maker is its Chief Executive Officer ("CODM").

The Company's CODM does not regularly review asset information by segments and, therefore, the Company does not report asset information by segment.

The Company organizes its operations in two segments:

Enterprise, Education and Technology and Media and Telecom.

The Enterprise, Education and Technology segment represents products related to industry solutions for education customers, and media services (except for Media and Telecom customers).

The Media and Telecom segment primarily represents TV solutions that are sold to media and telecom operators.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

REPORTABLE SEGMENTS AND GEOGRAPHICAL INFORMATION (Cont.)

The measurement of the reportable operating segments is based on the same accounting principles applied in these financial statements, which includes certain corporate overhead allocations.

December 31, 2021

Education and

Media and Telecom

Operating expenses

Financial expenses, net

Provision for income taxes

December 31, 2020

Enterprise, Education and

Media and Telecom

Operating expenses

Financial expenses, net

Provision for income taxes

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

REPORTABLE SEGMENTS AND GEOGRAPHICAL INFORMATION (Cont.)

December 31, 2019

Education and

Media and Telecom

Operating expenses

Financial expenses, net

Provision for income taxes

Geographical information:

Revenue by location is determined by the billing address of the customer.

Total revenues from external customers on the basis of the Company's geographical areas are as follows:

Year ended December 31,

United States (“US”)

Europe, the Middle East and Africa (“EMEA”)

No other individual country accounted for more than 10% of the Company’s revenue for all periods presented.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data )

REPORTABLE SEGMENTS AND GEOGRAPHICAL INFORMATION (Cont.)

The following presents long-lived assets as of December 31, 2021 and 2020, based on geographical areas:

RELATED PARTIES

In June 2019, the Company entered into an agreement with a certain shareholder under which the shareholder received a one-year subscription to use the Company's software.

Under the agreement, the shareholder has made minimum, non-cancellable, revenue commitments in the amount of $ 548 .

During 2021 and 2020, the Company and the shareholder renewed the agreement.

During the years ended December 31, 2021, 2020 and 2019, the Company recognized total revenue of $ 501 , $ 524 and $ 357 , respectively, related to this agreement.

As of December 31, 2021 and 2020, there was no trade receivables balance outstanding associated with this shareholder, and deferred revenue, current was $ 167 and $ 161 , respectively.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

4 unchanged sentences

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.

Name Title Date

/s/ Ron Yekutiel

1 unchanged sentence

February 24, 2023

(principal executive officer)

Ron Yekutiel (principal executive officer)

/s/ Yaron Garmazi

Chief Financial Officer

February 25, 2022

Yaron Garmazi

(principal financial officer and principal accounting officer)

Chief Financial Officer February 24, 2023

Yaron Garmazi (principal financial officer and principal accounting officer)

/s/ Richard Levandov

February 25, 2022

Director February 24, 2023

Richard Levandov

/s/ Shay David

February 25, 2022

Director February 24, 2023

/s/ Ronen Faier

February 25, 2022

Director February 24, 2023

/s/ Naama Halevi Davidov

February 25, 2022

Director February 24, 2023

Naama Halevi Davidov

/s/ Eyal Manor

Director February 24, 2023

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures