What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-22 compared with 2023-02-24 · 195 added, 260 removed, 992 unchanged (31% of the section changed)

6 unchanged sentences

Consolidated Statements of Comprehensive Loss

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

Consolidated Statements of Convertible and Redeemable Convertible Preferred Stock and Stockholders' Equity

Consolidated Statements of Cash Flows

4 unchanged sentences

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

and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive loss, 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, 2022, and the related notes (collectively referred to as the "consolidated financial statements").

and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive loss, convertible and redeemable convertible preferred stock and stockholders' equity and cash flows for each of the three years in the period ended December 31, 2023, 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, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S.

31 unchanged sentences

LONG-TERM ASSETS:

Marketable securities 5,844 —

Property and equipment, net 20,113 15,142

32 unchanged sentences

150,274,107 and 142,249,619 , shares issued as of December 31, 2023 and 2022, respectively;

134,564,429 and 126,925,104 outstanding as of December 31, 2022 and 2021, respectively

142,588,917 and 134,564,429 shares outstanding as of December 31, 2023 and 2022, respectively

Treasury stock –

2 unchanged sentences

Additional paid-in capital 471,635 439,644

Accumulated other comprehensive loss ( 301 ) —

Accumulated other comprehensive income (loss)

1,047 ( 301 )

Accumulated deficit ( 437,495 ) ( 391,129 )

24 unchanged sentences

Operating loss 38,655 56,379 32,675

Financial expenses, net 4,248 20,106 46,721

Financial expenses (income), net ( 1,200 ) 4,248 20,106

Loss before provision for income taxes 37,455 60,627 52,781

14 unchanged sentences

Other comprehensive loss:

Net unrealized losses on cash flow hedges ( 120 ) — —

Net unrealized losses on available-for-sale marketable securities ( 181 ) — —

Other comprehensive loss ( 301 ) — —

Net unrealized gains (losses) on cash flow hedges 1,118 ( 120 ) —

Net unrealized gains (losses) on available-for-sale marketable securities 230 ( 181 ) —

Other comprehensive income (loss) 1,348 ( 301 ) —

Comprehensive loss $ 45,018 $ 68,796 $ 59,351

2 unchanged sentences

AND SUBSIDIARIES

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

CONSOLIDATED STATEMENTS OF CONVERTIBLE AND REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY

dollars in thousands (except share data)

1 unchanged sentence

Number Amount Number Amount Number Amount Number Amount

Balance as of January 1, 2020 1,043,778 $ 1,921 15,779,322 $ 155,550 22,959,969 $ 2 7,685,190 $ ( 4,881 ) $ ( 882 ) $ — $ — $ ( 204,520 ) $ ( 210,281 )

Stock-based compensation expenses — — — — — — — — — 5,114 — — 5,114

Issuance of common stock upon exercise of stock options — — — — 1,281,438 — — — — 280 — — 280

Reclassification to equity of warrant to common stock — — — — — — — — — 3,057 — — 3,057

Issuance of common stock upon business combination — — — — 1,226,515 — — — — 2,578 — — 2,578

Accretion of redeemable convertible preferred stock — — — 2,641 — — — — — ( 2,641 ) — — ( 2,641 )

Net loss — — — — — — — — — — — ( 58,763 ) ( 58,763 )

Balance as of December 31, 2020 1,043,778 $ 1,921 15,779,322 $ 158,191 25,467,922 $ 2 7,685,190 $ ( 4,881 ) $ ( 882 ) $ 8,388 $ — $ ( 263,283 ) $ ( 260,656 )

17 unchanged sentences

Balance as of December 31, 2022 — $ — — $ — 134,564,429 $ 13 7,685,190 $ ( 4,881 ) $ — $ 439,644 $ ( 301 ) $ ( 391,129 ) $ 43,346

Stock-based compensation expenses — — — — — — — — — 30,756 — — 30,756

Issuance of common stock upon exercise of stock options, and release of restricted stock units — — — — 8,024,488 1 — — — 1,235 — — 1,236

Other comprehensive income

— — — — — — — — — — 1,348 — 1,348

Net loss — — — — — — — — — — — ( 46,366 ) ( 46,366 )

Balance as of December 31, 2023 — $ — — $ — 142,588,917 $ 14 7,685,190 $ ( 4,881 ) $ — $ 471,635 $ 1,047 $ ( 437,495 ) $ 30,320

The accompanying notes are an integral part of the consolidated financial statements.

7 unchanged sentences

Net loss $ ( 46,366 ) $ ( 68,495 ) $ ( 59,351 )

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

Depreciation, amortization, and abandonment costs 2,707 2,412 7,677

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization 4,717 2,707 2,412

Stock-based compensation expenses 29,980 23,645 17,065

4 unchanged sentences

Loss (gain) on sale of property and equipment — 185 ( 757 )

Loss on foreign exchange 1,424 — —

Loss (income) on foreign exchange ( 728 ) 1,424 —

Changes in operating assets and liabilities:

Increase in trade receivables ( 11,277 ) ( 1,057 ) ( 6,274 )

Decrease (increase) in trade receivables 5,475 ( 11,277 ) ( 1,057 )

Decrease (increase) in prepaid expenses and other current assets and other assets, noncurrent 648 429 ( 2,299 )

Increase in deferred contract acquisition and fulfillment costs ( 6,561 ) ( 11,558 ) ( 18,051 )

Increase in trade payables 3,132 3,886 2,064

Increase (decrease) in trade payables ( 5,884 ) 3,132 3,886

Increase (decrease) in accrued expenses and other current liabilities 797 ( 1,937 ) 3,756

3 unchanged sentences

Operating lease right-of-use assets and lease liabilities, net ( 863 ) 527 —

Net cash provided by (used in) operating activities ( 46,828 ) ( 22,110 ) 5,804

Net cash used in operating activities ( 8,303 ) ( 46,828 ) ( 22,110 )

Cash flows from investing activities:

1 unchanged sentence

Proceeds from maturities of available-for-sale marketable securities 51,976 18,985 —

Net cash acquired in business combination — — 383

Purchases of property and equipment ( 2,607 ) ( 1,218 ) ( 1,876 )

7 unchanged sentences

Payment related to the conversion of Series F redeemable convertible preferred stock upon initial public offering — — ( 1,569 )

Proceeds from long-term loans, net of debt issuance cost — 41,915 2,000

Proceeds from long-term loans 3,500 — 41,915

Repayment of long-term loans ( 4,500 ) ( 3,000 ) ( 51,833 )

23 unchanged sentences

Conversion of convertible and redeemable convertible preferred stock to common stock upon initial public offering $ — $ — $ 161,261

Issuance of ordinary shares and warrant with respect to business combination $ — $ — $ 3,799

Unpaid deferred offering costs $ — $ — $ 976

Supplemental disclosure of cash flow information

42 unchanged sentences

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

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data)

Marketable Securities

4 unchanged sentences

Available-for-sale debt securities are carried at fair value, with the unrealized gains and losses, net of tax, reported in accumulated other comprehensive income (loss) in shareholders’ equity.

Realized gains and losses on sale of investments are included in financial income, net and are derived using the specific identification method for determining the cost of securities sold.

Realized gains and losses on sale of investments are included in financial expenses (income), net and are derived using the specific identification method for determining the cost of securities sold.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data)

The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity.

Such amortization together with interest on securities is included in financial income, net.

The Company’s securities are reviewed for impairment in accordance with ASC 320-10-35.

If such assets are considered to be impaired, the impairment charge is recognized in earnings when a decline in the fair value of its investments below the cost basis is judged to be other-than-temporary.

Factors considered in making such a determination include the duration and severity of the impairment, the reason for the decline in value, the potential recovery period and the Company’s intent to sell, including whether it is more likely than not that the Company will be required to sell the investment before recovery of cost basis.

For securities with an unrealized loss that the Company intends to sell, or it is more likely than not that the Company will be required to sell before recovery of their amortized cost basis, the entire difference between amortized cost and fair value is recognized in earnings.

For securities that do not meet these criteria, the amount of impairment recognized in earnings is limited to the amount related to credit losses, while declines in fair value related to other factors are recognized in other comprehensive income (loss).

The Company periodically evaluates its available-for-sale debt securities for impairment.

If the amortized cost of an individual security exceeds its fair value, the Company considers its intent to sell the security or whether it is more likely than not that it will be required to sell the security before recovery of its amortized basis.

If either of these criteria are met, the Company writes down the security to its fair value and records the impairment charge in financial expenses (income), net in the Consolidated Statements of Operations.

If neither of these criteria are met, the Company determines whether credit loss exists.

Credit loss is estimated by considering changes to the rating of the security by a rating agency, any adverse conditions specifically related to the security, as well as other factors.

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.

The allowance for credit losses is based on the Company's assessments of factors that may affect a customer's ability to pay.

The Company regularly reviews the adequacy of the allowance for credit losses 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.

The Company does not have any off-balance sheet credit exposure related to its customers.

Derivatives and Hedging

7 unchanged sentences

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

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data)

Impairment of Long-Lived Assets

4 unchanged sentences

Intangible Assets, net

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

Intangible ass ets con sist 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:

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data)

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 re presents 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.

17 unchanged sentences

Operating lease expense is recognized on a straight-line basis over the lease term.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data)

Severance Pay

S everance 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.

5 unchanged sentences

Severance expenses recorded in Kaltura Israel for the years ended December 31, 2023, 2022 and 2021 amounted to $ 3,194 , $ 3,976 and $ 3,937 , respectively.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data)

The Company's employees in the U.S.

22 unchanged sentences

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)

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 subscriptions and post-contract services ("PCS") 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.

2 unchanged sentences

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.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data)

Determine the transaction price

18 unchanged sentences

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)

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

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

5 unchanged sentences

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

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data)

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

8 unchanged sentences

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.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data)

Internal-Use Software

16 unchanged sentences

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)

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.

For RSUs with performance conditions, expenses are recognized when it is probable that the performance condition will be achieved.

The probability of achievement is assessed periodically to determine whether the performance metric continues to be probable.

When there is a change in the probability of achievement, any cumulative effect of the change is recognized in the period of the change and the remaining unrecognized compensation will be amortized prospectively over the respective vesting period.

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

8 unchanged sentences

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.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data)

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.

18 unchanged sentences

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.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data)

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

6 unchanged sentences

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.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data)

Prior to the completion of the Company's initial public offering in July 2021 (“IPO”), the Company computed net loss per share using the two-class method required for participating securities.

14 unchanged sentences

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

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data)

Fair Value of Financial Instruments

8 unchanged sentences

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.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data)

Level 2 - 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.

10 unchanged sentences

The adoption dates discussed below reflect this election.

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2016-02, Leases (Topic 842), 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 the existing practice.

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

The Company adopted the guidance on January 1, 2022 using a modified retrospective transition approach.

It applied Topic 842 to all leases as of January 1, 2022 without adjusting the comparative periods presented.

The Company elected to adopt the practical expedients permitted under the transition guidance within the new guidance and carried forward the historical accounting relating to lease identification and classification, remaining lease terms, and initial direct costs.

Upon adoption, the Company recognized operating lease right-of-use assets and corresponding lease liabilities of $ 823 .

The adoption of Topic 842 did not have a material impact to the Company’s results of operations or cash flows.

See Note 7, Leases, for further information.

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 intra-period 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 became effective for the Company beginning January 1, 2022, and interim periods in fiscal years beginning January 1, 2023.

Early adoption is permitted.

The Company adopted this guidance on January 1, 2022, and the adoption did not have a material impact on its consolidated financial statements.

Recent Accounting Guidance Not Yet Adopted

In June 2016, the FASB issued ASU No.

1 unchanged sentence

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 does not expect that ASU 2016-13 will have a material impact on its consolidated financial statements and related disclosures.

The Company adopted this guidance using modified retrospective approach, effective on January 1, 2023.

The adoption did not have a material effect on its consolidated financial statements.

Recent Accounting Guidance Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which requires to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually.

KALTURA, INC.

2 unchanged sentences

dollars in thousands (except share and per share data)

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 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.

The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact of the adoption of this standard.

In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes - Improvements to Income Tax Disclosures” requiring enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid.

This ASU is effective for fiscal years beginning after December 15, 2024 on a prospective basis and retrospective application is permitted.

The Company is currently evaluating the impact of the adoption of this standard.

REVENUES FROM CONTRACTS WITH CUSTOMERS

30 unchanged sentences

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, 2022, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 171,660 , which consists of both billed consideration in the amount of $ 61,107 and unbilled consideration in the amount of $ 110,553 that the Company expects to recognize as revenue and was yet recognized on the balance sheet.

As of December 31, 2023, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 185,305 , which consists of both billed consideration in the amount of $ 62,733 and unbilled consideration in the amount of $ 122,572 that the Company expects to recognize as revenue and was not yet recognized on the balance sheet.

The Company expects to recognize 59 % of its remaining performance obligations as revenue in the year ending December 31, 2024, and the remainder thereafter.

24 unchanged sentences

MARKETABLE SECURITIES

The following is a summary of available-for-sale marketable securities as of December 31, 2022:

The following is a summary of available-for-sale marketable securities as of December 31, 2023 and December 31, 2022, respectively:

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

1 unchanged sentence

Corporate bonds $ 6,985 $ 4 $ — $ 6,989

Treasury 8,795 17 — 8,812

Commercial paper 8,855 — ( 5 ) 8,850

Agency bonds 8,037 9 ( 5 ) 8,041

$ 32,672 $ 30 $ ( 10 ) $ 32,692

Available-for-sale – matures after one year:

Corporate bonds $ 2,944 $ 14 $ — $ 2,958

Treasury 2,869 17 — 2,886

$ 5,813 $ 31 $ — $ 5,844

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

Available-for-sale – matures within one year:

Corporate bonds $ 9,305 $ — $ ( 66 ) $ 9,239

Municipal securities 1,751 — ( 4 ) 1,747

3 unchanged sentences

$ 41,524 $ 1 $ ( 182 ) $ 41,343

Based on the available evidence, the Company concluded that the gross unrealized losses on the marketable securities as of December 31, 2022 are temporary in nature.

There were no gains or losses from available-for-sale marketable securities that were reclassified out of accumulated other comprehensive income during the periods presented.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data)

As of December 31, 2023 and December 31, 2022 the Company did not record an allowance for credit losses for its available-for-sale marketable debt securities and all of the gross unrealized losses of the Company's marketable securities have been in a continuous loss position for less than 12 months.

There were no gains or losses from available-for-sale marketable securities that were reclassified out of accumulated other comprehensive loss during the periods presented.

FAIR VALUE MEASUREMENTS

13 unchanged sentences

Agency bonds Level 2 $ 8,041 $ 2,925

Long-term marketable securities:

Corporate bonds Level 2 $ 2,958 $ —

Treasury Level 2 $ 2,886 $ —

Prepaid expenses and other current assets:

Restricted bank deposits Level 2 $ 3,397 $ 2,600

Options and forward contracts designated as hedging instruments Level 2 $ 998 $ —

Other assets, noncurrent:

Restricted bank deposit Level 2 $ 1,025 $ —

Derivative instruments liability included in accrued expenses and other current liabilities:

Options and forward contracts designated as hedging instruments Level 2 $ — $ 120

Prior to the Company's IPO, the warrants to purchase preferred and common stock were measured at fair value using Level 3 inputs upon issuance and at each reporting date.

Inputs used to determine the estimated fair value of the warrants to purchase preferred and common stock as of the valuation date included expected term, the risk-free interest rate, volatility, and the fair value of underlying shares.

KALTURA, INC.

2 unchanged sentences

dollars in thousands (except share and per share data)

T he 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 $ 56,780 $ 17,111

Issuance of warrants — 1,221

Reclassification of warrant to common stocks to equity — ( 3,057 )

Reclassification of warrant to preferred stocks to mezzanine equity ( 1,149 ) —

Change in fair value of warrants 15,046 41,505

Conversion of warrants to common stock upon initial public offering ( 70,677 ) —

Balance at December 31, $ — $ 56,780

On February 3, 2021, SVB Financial Group (“SVB”) converted a Warrant t o 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.

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.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data)

DERIVATIVES AND HEDGING

4 unchanged sentences

Notional Amount of Foreign Currency Contracts

The Company had outstanding contracts designated as hedging instruments in the aggregate notional amount of $ 8,345 as of December 31, 2022.

The fair value of the Company’s outstanding contracts amounted to a liability of $ 120 as of December 31, 2022.

These liabilities were recorded under accrued expenses and other current liabilities.

Loss of $ 1,418 was reclassified from accumulated other comprehensive loss during the year ended December 31, 2022.

Such loss was reclassified from accumulated other comprehensive loss when the related expenses were incurred.

The Company had no outstanding contracts designated as hedging instruments as of December 31, 2021.

The Company had outstanding contracts designated as hedging instruments in the aggregate notional amount of $ 15,093 and $ 8,345 as of December 31, 2023 and December 31, 2022, respectively.

The fair value of the Company’s outstanding contracts amounted to an asset of $ 998 as of December 31, 2023 and a liability of $ 120 as of December 31, 2022.

These assets and liabilities were recorded under prepaid expenses and other current assets and accrued expenses and other current liabilities.

Losses of $ 2,241 and $ 1,418 was reclassified from accumulated other comprehensive income (loss) during the year ended December 31, 2023 and 2022, respectively.

Such losses was reclassified from accumulated other comprehensive income (loss) when the related expenses were incurred.

The Company did not enter into hedging contracts during the year ended December 31, 2021.

Effect of Foreign Currency Contracts on the Consolidated Statements of Operations

The effect of foreign currency contracts on the consolidated statements of operations during the year ended December 31, 2022 was as follows:

The effect of foreign currency contracts on the consolidated statements of operations during the year ended December 31, 2023 and 2022 was as follows:

Statement of Operations Location:

Year Ended December 31, 2022

Year Ended December 31, 2023 Year Ended December 31, 2022

Cost of revenue $ 326 $ 230

8 unchanged sentences

dollars in thousands (except share and per share data)

The Company leases its office facilities under non-cancelable agreements that expire at various dates through July 2027.

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").

For accounting purposes under ASC 842, the Lease commenced on January 11, 2022, resulting in a recording of a $ 4,108 right-of-use operating lease asset and operating lease liability.

On April 6, 2022, the Company entered into a new lease agreement as tenant related to a property in Israel (the "Lease").

The Lease provides that the Company will lease a new building containing approximately 5,926 square meters (approximately 63,784 square feet) .

The initial lease term is approximately 5.5 years with two options to extend of five years each.

The Company believes that it is reasonably certain that it will exercise the option for the first extension period, and accordingly includes this extension period as part of the lease term.

For accounting purposes under ASC 842, the Lease commenced on June 22, 2022, resulting in the recording of a $ 19,586 right-of-use operating lease asset and operating lease liability.

The Company leases its office facilities under agreements that expire at various dates through July 2032.

Components of operating lease expense were as follows:

Year Ended December 31, 2022

Year Ended December 31, 2023 Year Ended December 31, 2022

Operating lease cost $ 2,875 $ 2,827

2 unchanged sentences

Total $ 3,118 $ 3,264

Rent expenses under the previous lease accounting standard were $ 2,278 and $ 2,152 during the year ended December 31, 2021 and 2020, respectively.

Supplementary cash flow information related to operating leases was as follows:

Year Ended December 31, 2022

Year Ended December 31, 2023 Year Ended December 31, 2022

Cash paid for operating leases $ 3,353 $ 1,845

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data)

As of December 31, 2023, the weighted-average discount rate is 4.8 % and the weighted-average remaining term is 8.1 years.

5 unchanged sentences

Total operating lease liabilities $ 20,170

As of December 31, 2021, the minimum lease payments under operating leases, including payments for leases which had not commenced, were as follows:

Year Ending December 31, Rental of premises

Total $ 5,240

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data)

COMMITMENTS AND CONTINGENCIES

4 unchanged sentences

Total purchase commitment $ 86,529

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data)

The Company is occasionally a party to claims or litigation in the normal course of the business.

6 unchanged sentences

Restricted bank deposits 3,397 2,600

Derivative instrument 998 —

Other current assets 1,359 1,130

$ 8,410 $ 7,521

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data)

Property and Equipment, net

9 unchanged sentences

Depreciation expenses for the years ended December 31, 2023, 2022 and 2021 were $ 4,162 , $ 2,042 and $ 2,791 , respectively.

During the year ended December 31, 2022, the Company recorded a loss of $ 185 , mainly due to disposal of leasehold improvements associated with moving to the Company's temporary office in Israel.

The loss consisted of property, plant and equipment in a gross amount of $ 826 , and accumulated depreciation of $ 641 .

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data)

Other assets, noncurrent

1 unchanged sentence

Severance pay fund 1,685 1,855

Restricted deposit 1,025 —

Other 290 113

17 unchanged sentences

Customer relationship 3.25 $ 2,419

Tradename 0.42 $ 980

Accumulated amortization and impairments:

1 unchanged sentence

Customer relationship $ ( 2,253 )

Tradename $ ( 903 )

Intangible assets, net $ 689

19 unchanged sentences

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:

Loss (income) before taxes on income is comprised as follows:

Year Ended December 31,

3 unchanged sentences

Loss before taxes on income $ 37,455 $ 60,627 $ 52,781

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data)

The provision for income taxes was as follows:

1 unchanged sentence

2023 2022 2021

Current provision:

Federal $ — $ — $ —

1 unchanged sentence

Foreign 8,410 7,780 6,505

8,493 7,868 6,570

Deferred provision:

Federal 171 — —

State 247 — —

Foreign — — —

Total provision for income taxes $ 8,911 $ 7,868 $ 6,570

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, 2023 and 2022, 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 in the U.S.

KALTURA, INC.

2 unchanged sentences

dollars in thousands (except share and per share data)

As of December 31, 2022 and 2021, the Company has provided a full valuation allowance in respect of deferred tax assets.

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

7 unchanged sentences

Stock based compensation 5,823 2,710

Intercompany payable 5,498 —

Other assets 77 49

1 unchanged sentence

Valuation allowance ( 101,237 ) ( 84,795 )

Total deferred tax assets $ 13,714 $ 8,751

Total deferred tax assets, net of valuation allowance $ 12,163 $ 13,714

Deferred tax liabilities:

Acquired Intangible Assets ( 798 ) ( 696 )

Intangible Assets ( 970 ) ( 798 )

Deferred contract acquisition and fulfillment costs ( 7,686 ) ( 8,782 )

2 unchanged sentences

Property and equipment — ( 138 )

Total deferred tax liabilities $ ( 13,714 ) $ ( 8,751 )

Total net deferred tax assets $ — $ —

Other ( 195 ) —

Total gross deferred tax liabilities $ ( 12,581 ) $ ( 13,714 )

Total net deferred tax liabilities $ ( 418 ) $ —

As of December 31, 2023, the U.S.

5 unchanged sentences

The remaining $ 114,778 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).

KALTURA, INC.

2 unchanged sentences

dollars in thousands (except share and per share data)

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.

14 unchanged sentences

Exchange rate differences ( 511 ) 332 ( 100 )

Return to provision adjustments ( 1,321 ) — —

Other ( 377 ) 185 688

13 unchanged sentences

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).

KALTURA, INC.

2 unchanged sentences

dollars in thousands (except share and per share data)

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.

21 unchanged sentences

Unrecognized Tax Benefits

Balance as of January 1, 2020 $ 2,665

Increases related to prior years' tax positions 311

Balance as of December 31, 2020 $ 3,863

Decreases related to prior years' tax positions ( 107 )

Increases related to current years' tax positions 738

17 unchanged sentences

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.

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:

KALTURA, INC.

2 unchanged sentences

dollars in thousands (except share and per share data)

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,

8 unchanged sentences

2023 2022 2021

Convertible and redeemable and convertible preferred stock — — 16,823,100

Warrants to purchase preferred and common stock — — 6,777,275

Outstanding stock options and RSUs 34,132,323 33,457,465 37,627,380

20 unchanged sentences

Operating expenses 150,889

Financial expenses, net 4,248

Financial income, net ( 1,200 )

Provision for income taxes 8,911

40 unchanged sentences

LONG-TERM LOAN

In January 2021, the Company 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 .

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, 2022, the current rate of interest under the Credit Facilities was equal to a rate per annum of 8.23 %, consisting of 4.73 % (the 3-month LIBOR rate as of December 31, 2022) 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.

In May 2023, the Company entered into an amendment (the "Fourth Amendment") to the then-existing Credit Agreement to replace the London Interbank Offered Rate (“LIBOR”) with the Secured Overnight Financing Rate (“SOFR”) as the benchmark rate under the Credit Agreement.

Prior to the Fourth Amendment, borrowings under the Credit Agreement would bear interest, at the Company's election, at (a) the Eurodollar Rate (as defined in the Credit Agreement as in effect prior to the Fourth Amendment) plus a margin of 3.50 % or (b) Alternative Base Rate (“ABR”) (as defined in the Credit Agreement) plus a margin of 2.50 %.

In December 2023, the Company entered into a new amendment to the then-existing Credit Agreement (the “Fifth Amendment”), which provides for a new term loan facility in the aggregate principal amount of $ 35,000 .

Commitments under the Revolving Credit Facility decreased to $ 25,000 .

Following the effectiveness of the Fifth Amendment, borrowings under the Credit Facilities bear interest, determined as follows:

(a) SOFR loans accrue interest at a rate per annum equal to Term SOFR (as defined in the Credit Agreement) plus 0.10 % per annum plus a margin of 2.50 % (the Adjusted Term SOFR (as defined in the Credit Agreement) is subject to a 1.00 % floor), and (b) ABR loans accrue interest at a rate per annum equal to the ABR plus a margin of 1.50 % (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, 2023, the current rate of interest under the Credit Facilities was equal to a rate per annum of 7.98 %, consisting of 5.38 % (the 3-month SOFR rate as of December 31, 2023), 0.10 % credit spread adjustment and the margin of 2.50 %.

The Term Loan Facility is payable in consecutive quarterly installments on the last day of each fiscal quarter in an amount equal to (i) $ 438 for installments payable on December 31, 2023 (deferred to January 9, 2024), through September 30, 2024, (ii) $ 656 for installments payable on December 31, 2024 through September 30, 2025, and (iii) $ 1,313 for installments payable on and after December 31, 2025.

The remaining unpaid balance on the Term Loan Facility is due and payable on December 21, 2026, 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.

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

As of December 31, 2023, the Company met these covenants.

11 unchanged sentences

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.

The Company has the following common stock reserved for future issuance:

The Company has the following common stock reserved for future issuance as of December 31, 2023:

December 31, 2023

3 unchanged sentences

Total 37,653,460

On October, 6, 2022, 613,255 warrants to common stock were exercised into 613,255 shares of common stock.

Equity Incentive Plans

12 unchanged sentences

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

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data)

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").

2 unchanged sentences

in addition, certain shares of common stock subject to awards under the Old Plans, such as those subject to expirations, terminations, exercise and tax-related withholding, or failures to vest, will become available for issuance under the 2021 Plan.

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data)

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 unchanged sentences

On January 1, 2023, the number of shares of common stock authorized for issuance under the 2021 Plan automatically increased by 6,728,221 shares pursuant to the terms of the 2021 Plan.

During 2023, the Company granted to its officers RSUs under the 2021 Plan which shall vest based upon achievement of certain performance targets set forth in the 2023 Executive Compensation Plan, and additional RSUs that vest in quarterly installments over a period of up to three years commencing as of January 1, 2023 with the first quarterly vesting date on April 1, 2023, subject to continued employment through the vesting dates.

Stock Options

11 unchanged sentences

16,745,670 $ 2.89 6.01 $ 5,378

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:

KALTURA, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

dollars in thousands (except share and per share data)

Expected volatility 62 % 50 %

Risk-free interest rate 1.31 % - 1.34 %

0.4 % - 0.8 %

Dividend yield — % — %

Expected life 5.81 5.83

These assumptions and estimates were determined as follows:

(1) 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.

(2) 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.

(3) 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.

(4) Expected volatility - The expected volatility is based on historical volatility over the most recent period commensurate with the expected term of the option.

As the Company has a short trading history for its common stock, when the Company's trading period is shorter than the expected term, 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.

(5) 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, and 2020 was $ 2.45 and $ 3.80 per option, respectively.

The weighted average grant-date fair value of the service-based awards granted in the year ended December 31, 2021, was $ 2.45 per option.

The total grant-date fair value of the service-based awards that vested during the years ended December 31, 2023, 2022 and 2021, was $ 11,409 , $ 12,763 and $ 13,152 , respectively.

The aggregate intrinsic value of options exercised during the years ended December 31, 2023, 2022 and 2021, was $ 3,169 , $ 5,272 and $ 5,437 , 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 41 %

Risk-free interest rate 0.94 %

Dividend yield — %

(1) 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.

KALTURA, INC.

2 unchanged sentences

dollars in thousands (except share and per share data)

(2) 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.

The following table summarizes the RSU activity for the year ended December 31, 2023:

23 unchanged sentences

On August 7, 2022, the Board of Directors of the Company approved and declared a dividend distribution of one preferred stock purchase right (each, a “Right”) for each share of common stock of the Company outstanding at the close of business on August 22, 2022.

Each Right will entitle the registered holder thereof, after the Rights become exercisable and until August 6, 2023 (or the earlier redemption, exchange, or termination of the Rights), to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $ 0.0001 per share (the "Series A Preferred"), of the Company at a price of $ 13.00 per one one-thousandth of a share of the Series A Preferred.

The complete terms of the Rights are set out in a Rights Agreement, dated August 7, 2022, between the Company and American Stock Transfer & Trust Company, LLC as rights agent (the “Rights Agreement”).

The Rights expired in accordance with their terms on August 6, 2023.

KALTURA, INC.

2 unchanged sentences

dollars in thousands (except share and per share data)

The Board of Directors of the Company adopted the Rights Agreement to protect stockholders from coercive of otherwise unfair takeover tactics.

The Rights will cause substantial dilution to any person or group that acquires beneficial ownership of 10% (20% in the case of a passive institutional investor) or more of the common stock without the approval of the Board of Directors of the Company.

The Rights are designed to promote the fair and equal treatment of all stockholders of the Company and ensure that the Board remains in the best position to discharge its fiduciary duties to the Company and its stockholders.

Neither the Rights Agreement nor the Rights should interfere with any merger, tender or exchange offer or other business combination approved by the Board of Directors of the Company.

SELECTED STATEMENT OF OPERATIONS DATA

3 unchanged sentences

Interest income $ 2,735 $ 962 $ 5

Foreign currency translation adjustments, net 2,169 — —

Financial expenses:

5 unchanged sentences

3,704 5,210 20,111

Financial expenses, net $ 4,248 $ 20,106 $ 46,721

ACCUMULATED OTHER COMPREHENSIVE LOSS

Financial expenses (income), net $ ( 1,200 ) $ 4,248 $ 20,106

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table summarizes the changes in accumulated other comprehensive loss by component, net of tax, during the year ended December 31, 2023:

Net Unrealized Losses on Available-for-Sale Securities Instruments Net Unrealized Losses on Derivatives Designated as Hedging Instruments Total

Net Unrealized Income (Losses) on Available-for-Sale Securities Instruments Net Unrealized Income (Losses) on Derivatives Designated as Hedging Instruments Total

Balance as of December 31, 2022 $ ( 181 ) $ ( 120 ) $ ( 301 )

Other comprehensive loss before reclassifications ( 181 ) ( 1,643 ) ( 1,824 )

Other comprehensive income (loss) before reclassifications 230 ( 1,155 ) ( 925 )

Net realized losses reclassified from accumulated other comprehensive income — 2,273 2,273

Other comprehensive loss ( 181 ) ( 120 ) ( 301 )

Other comprehensive income 230 1,118 1,348

Balance as of December 31, 2023 $ 49 $ 998 $ 1,047

3 unchanged sentences

dollars in thousands (except share and per share data)

There was no accumulated other comprehensive loss activity during the year ended December 31, 2021.

Net Unrealized Losses on Available-for-Sale Securities Instruments Net Unrealized Income (Losses) on Derivatives Designated as Hedging Instruments Total

Balance as of December 31, 2021 $ — $ — $ —

Other comprehensive loss before reclassifications ( 181 ) ( 1,643 ) ( 1,824 )

Net realized losses reclassified from accumulated other comprehensive income — 1,523 1,523

Other comprehensive loss ( 181 ) ( 120 ) ( 301 )

Balance as of December 31, 2022 $ ( 181 ) $ ( 120 ) $ ( 301 )

There was no accumulated other comprehensive income (loss) activity during the year ended December 31, 2021.

RESTRUCTURING ACTIVITIES

3 unchanged sentences

The Company does not expect to incur additional costs related to the 2022 Restructuring Plan.

The following table is a reconciliation of the beginning and ending restructuring liability for the year ended December 31, 2022, related to the 2022 Restructuring Plan:

EE&T M&T Total

Balance as of December 31, 2021 $ — $ — $ —

Accrual and accrual adjustments 1,012 226 1,238

Cash payments ( 739 ) ( 224 ) ( 963 )

Balance as of December 31, 2022 $ 273 $ 2 $ 275

The restructuring liability for severance and termination benefits is reflected in "Employees and payroll accruals" in the consolidated balance sheet as of December 31, 2022.

2023 Reorganization Plan

On January 3, 2023, after the balance sheet date, the Board of Directors of the Company approved a re-organization plan (the “2023 Reorganization Plan”) that included, among other things, downsizing approximately 11 % of the Company’s current workforce and adapting the Company's organizational structure, roles, and responsibilities accordingly.

The 2023 Restructuring Plan is focused on realigning the Company’s operations to further increase efficiency and productivity, in reaction to the worsening economic climate and outlook.

The 2023 Restructuring Plan's main objectives are to position the Company for lower demand, spend, and available budgets from prospects across the Company's market segments, align the Company's business strategy in light of these market conditions and support the Company’s growth initiatives and return path to profitability.

In connection with the 2023 Reorganization Plan, the Company expects to incur net pre-tax charges of approximately $ 1,000 , primarily for severance and related costs, all of which are expected to be expensed in the first quarter of 2023.

All of these charges are expected to result in cash expenditures.

The 2023 Reorganization Plan is expected to be substantially completed in the first half of 2023.

On January 3, 2023, the Board of Directors of the Company approved a re-organization plan (the “2023 Reorganization Plan”) that included, among other things, downsizing approximately 11 % of the Company’s workforce and adapting the Company's organizational structure, roles, and responsibilities accordingly.

During the year ended December 31, 2023, in connection with the 2023 Reorganization Plan, the Company recorded expenses of $ 973 , all for one time employee termination benefits.

The Company does not expect to incur additional costs related to the 2023 Reorganization Plan.

As of December 31, 2023, the Company has paid its full obligations regarding all restructuring activities and therefore there is no additional balance to be paid.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

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 8. Financial Statements and Supplementary Data