KALTURA INC 10-K

Item 9A. Controls and Procedures. 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. Evaluation of Disclosure Controls and Procedures 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. 125 Table of Contents 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. Item 9B. 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. Tsur and Mr. 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. Tsur and Mr. 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. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not Applicable. 126 Table of Contents PART III Item 10. 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): Name Age Position Executive Officers Ron Yekutiel 50 Chairman, Chief Executive Officer and Director Yaron Garmazi 58 Chief Financial Officer Michal Tsur 50 President and Chief Marketing Officer Non-Employee Directors Richard Levandov 68 Director Shay David 50 Director Ronen Faier 52 Director Naama Halevi Davidov 51 Director Eyal Manor (1) 49 Director (1) Commencing January 25, 2023. Executive Officers 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. Mr. 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. Mr. 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. Michal Tsur is one of our co-founders and has served as our President and Chief Marketing Officer since 2006. Prior to Kaltura, Dr. Tsur was a co-founder and Vice President of Cyota, Inc., an online security and anti-fraud solutions company, from 1999 to 2005. Dr. 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. Mr. 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. Mr. 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. Mr. Levandov was selected to serve on our board of directors because of his extensive experience in the venture capital industry. 127 Table of Contents Shay David is one of our co-founders and has served as a member of our board of directors since October 2006. Dr. 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. Dr. 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. 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. Dr. 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. Mr. 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. Mr. 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. Mr. 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. Dr. 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. Dr. Halevi Davidov served as our Chief Financial Officer from November 2012 to August 2017. Dr. Halevi Davidov has also served on the board of our subsidiary, Kaltura Asia Pte Ltd. since February 2015. Dr. 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. Dr. 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. Mr. 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. Mr. Manor received a Bachelor of Arts in Economics from the Tel Aviv University in 1994. Mr. 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. 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 2023 Annual Meeting of Stockholders, and such required information is incorporated herein by reference. 128 Table of Contents Item 11. Executive Compensation. 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. Item 12. 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. Item 13. 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. Item 14. 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 2023 Annual Meeting of Stockholders, and such information is incorporated herein by reference. 129 Table of Contents PART IV Item 15. Exhibits and Financial Statement Schedules (a)(1) 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. (a)(3) Exhibits. The following is a list of exhibits filed as part of this Annual Report on Form 10-K. Incorporated by Reference Filed/ Exhibit Number Exhibit Description Form File No. Exhibit Filing Date Furnished Herewith 3.1 Amended and Restated Certificate of Incorporation of Kaltura, Inc. 8-K 001-40644 3.1 7/23/2021 3.2 Certificate of Designations of Series A Junior Participating Preferred Stock of Kaltura, Inc. 8-K 001-40644 3.2 08/08/2022 3.3 Amended and Restated Bylaws of Kaltura, Inc. 8-K 001-40644 3.2 7/23/2021 4.1 Specimen Stock Certificate of Kaltura, Inc, S-1/A 333-253699 4.1 3/23/2021 4.2 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 4. 3 Description of Capital Stock. 10-K 001-40644 4.4 2/25/2022 4. 4 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 10.1 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 10.2 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 10.3 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. 10-K 001-40644 10.3 2/25/2022 130 10.4 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 10.5 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 10.6† Kaltura, Inc. 2007 Israeli Share Option Plan and form of option agreements thereunder. S-1/A 333-253699 10.4 3/23/2021 10.7† Kaltura, Inc. 2007 Stock Option Plan and form of option agreements thereunder. S-1/A 333-253699 10.5 3/23/2021 10.8† Kaltura, Inc. 2017 Equity Incentive Plan and form of option agreements thereunder. S-1/A 333-253699 10.6 3/23/2021 10.9† Kaltura, Inc. 2021 Incentive Award Plan. S-1/A 333-253699 10.7 3/23/2021 10.10† Form of Stock Option Award Agreement under the Kaltura, Inc. 2021 Incentive Award Plan. S-1/A 333-253699 10.8 3/23/2021 10.11† Form of Restricted Stock Unit Award Agreement under the Kaltura, Inc. 2021 Incentive Award Plan. S-1/A 333-253699 10.9 3/23/2021 10.12† Employment Agreement, dated as of May 1, 2012, by and between Kaltura Ltd. and Ron Yekutiel, as amended. 8-K 001-40644 10.1 04/05/2022 10.13† Consulting Agreement by and between Kaltura, Inc. and Ron Yekutiel, effective January 1, 2018, as amended. 8-K 001-40644 10.2 04/05/2022 10.14† 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 10.15† Employment Agreement, dated as of June 18, 2017, by and between Kaltura Ltd. and Yaron Garmazi, as amended. 8-K 001-40644 10.4 04/05/2022 10.16† Employment Agreement, dated as of April 1, 2018, by and between Kaltura Ltd. and Michal Tsur, as amended. 8-K 001-40644 10.5 04/05/2022 10.17†# Amendment to Employment Agreement, dated as of February 23, 2023, by and between Kaltura Ltd and Ron Yekutiel * 10.18†# Amendment to Consulting Agreement, dated as of February 23, 2023, by and between Kaltura Inc and Ron Yekutiel * 10.19†# Amendment to Consulting Agreement, dated as of February 23, 2023, by and between Kaltura Europe Limited and Ron Yekutiel * 10.20†# Amendment to Employment Agreement, dated as of February 23, 2023, by and between Kaltura Ltd and Yaron Garmazi * 10.21†# Amendment to Employment Agreement, dated as of February 23, 2023, by and between Kaltura Ltd and Michal Tsur * 10.22† Kaltura, Inc. Non-Employee Director Compensation Policy. S-1/A 333-253699 10.17 3/23/2021 10.23† Form of RSU Award Agreement Under 2021 Incentive Award Plan - For Israeli Participants 10-K 001-40644 10.20 02/25/2022 10.24† Form of Stock Option Award Agreement Under 2021 Incentive Award Plan - For Israeli Participants 10-K 001-40644 10.21 02/25/2022 10.25 Form of Indemnification Agreement between Kaltura, Inc. and its directors and officers. S-1/A 333-253699 10.18 3/23/2021 132 21.1 List of Subsidiaries of Kaltura, Inc. * 23.1 Consent of Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global, Independent Registered Public Accounting Firm. * 31.1 Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a). * 31.2 Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a). * 32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350. ** 32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350. ** 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) * * Filed herewith. ** Furnished herewith. † 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. Item 16. Form 10-K Summary None. 133 Table of Contents SIGNATURES 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. KALTURA, INC. Date: February 24, 2023 By: /s/ Ron Yekutiel Ron Yekutiel Chairman and Chief Executive Officer 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 Chairman and Chief Executive Officer and Director February 24, 2023 Ron Yekutiel (principal executive officer) /s/ Yaron Garmazi Chief Financial Officer February 24, 2023 Yaron Garmazi (principal financial officer and principal accounting officer) /s/ Richard Levandov Director February 24, 2023 Richard Levandov /s/ Shay David Director February 24, 2023 Shay David /s/ Ronen Faier Director February 24, 2023 Ronen Faier /s/ Naama Halevi Davidov Director February 24, 2023 Naama Halevi Davidov /s/ Eyal Manor Director February 24, 2023 Eyal Manor