UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F
(Mark One)
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR SECTION 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
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OR
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2021
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OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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OR
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Date of event requiring this shell company report
Commission file number 001-38929
Fiverr International Ltd.
(Exact name of Registrant as specified in its charter)
Not Applicable
(Translation of Registrant’s name into English)
State of Israel
(Jurisdiction of incorporation or organization)
Fiverr International Ltd.
8 Eliezer Kaplan St,
Tel Aviv 6473409, Israel
(Address of principal executive offices)
Micha Kaufman
Chief Executive Officer
Telephone: +972-72-2280910
Email: investors@fiverr.com
Fiverr International Ltd.
8 Eliezer Kaplan St,
Tel Aviv 6473409, Israel
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered, pursuant to Section 12(b) of the Act
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
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Ordinary shares, no par value |
FVRR |
The New York Stock Exchange |
Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
Indicate the number of outstanding shares of each of the issuer’s classes of capital stock or common stock as of the close of the period covered by the annual report. 36,761,108 ordinary shares.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☒ No ☐
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Yes ☐ No ☒
Note—Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☒ Large accelerated filer |
☐ Accelerated filer |
☐ Non-accelerated filer |
☐ Emerging growth company |
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
☒ U.S. GAAP |
☐ |
International Financial Reporting Standards as issued by the International Accounting Standards Board |
☐ Other |
If “Other” has been checked in response to the previous question indicate by check mark which financial statement item the registrant has elected to follow.
Item 17 ☐ Item 18 ☐
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
CONTENTS
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F - 1 |
• | “Active buyers” as of any given date means buyers who have ordered a Gig or other services on our platform within the last 12-month period, irrespective of cancellations. |
• | “Buyers” means users who order Gigs or other services on Fiverr. |
• | “Gig” or “Gigs” means the services offered on Fiverr. |
• | “Gross Merchandise Value” or “GMV” means the total value of transactions ordered through our platform, excluding value added tax, goods and services tax, service chargebacks and refunds. |
• | “Sellers” or “freelancers” means users who offer Gigs on our core platform. |
• | “Spend per buyer” as of any given date is calculated by dividing our GMV within the last 12-month period by the number of active buyers as of such date. |
• | “Take rate” for a given period means revenue for such period divided by GMV for such period. |
• | A regional or global health pandemic, including COVID-19, could severely affect our business, results of operations and financial condition due to impacts on our buyer and seller base and consumer and business spending more broadly, as well as impacts from remote work arrangements, actions taken to contain the disease or treat its impact and the speed and extent of the recovery; |
• | our growth depends on our ability to attract and retain a large community of buyers and freelancers, and the loss of our buyers and freelancers, or failure to attract new buyers and freelancers, could materially and adversely affect our business; |
• | we have incurred operating losses in the past, expect to incur operating losses in the future and may never achieve or maintain profitability; |
• | if we fail to maintain and enhance our brand, our business, results of operations and prospects may be materially and adversely affected; |
• | if the market for freelancers and the services they offer is not sustained or develops more slowly than we expect, our growth may slow or stall; |
• | if traffic to on our website declines for any reason, our growth may slow or stall; |
• | if we fail to maintain and improve the quality of our platform, we may not be able to attract and retain buyers and freelancers; |
• | we face significant competition, which may cause us to suffer from a weakened market position that could materially and adversely affect our results of operations; |
• | we or our third-party partners may experience a security breach, including unauthorized parties obtaining access to our users’ personal or other data, or any other data privacy or data protection compliance issue; |
• | changes in laws or regulations relating to consumer data privacy or data protection, or any actual or perceived failure by us to comply with such laws and regulations or our privacy policies, could materially and adversely affect our business; |
• | evolving privacy laws and regulations related to cross-border data transfer restrictions and data localization requirements may limit the use and adoption of our services, expose us to liability or otherwise adversely affect our business; |
• | our business may suffer if we do not successfully manage our current and potential future growth; |
• | our user growth and engagement on mobile devices depend upon effective operation with mobile operating systems, networks and standards that we do not control; |
• | we have a limited operating history under our current platform and pricing model, which makes it difficult to evaluate our business and prospects and increases the risks associated with your investment, and any future changes to our pricing model could materially and adversely affect our business; |
• | errors, defects or disruptions in our platform could diminish our brand, subject us to liability, and materially and adversely affect our business, prospects, financial condition and results of operations; |
• | our platform contains open source software components, and failure to comply with the terms of the underlying licenses could restrict our ability to market or operate our platform; |
• | expansion into markets outside the United States is important to the growth of our business, and if we do not manage the business and economic risks of international expansion effectively, it could materially and adversely affect our business and results of operations; |
• | if we are unable to maintain and expand our scale of operations and generate a sufficient amount of revenue to offset the associated fixed and variable costs, our results of operations may be materially and adversely affected; |
• | our operating results may fluctuate from quarter to quarter, which makes our future results difficult to predict; |
• | our business is subject to a variety of laws and regulations, both in the United States and internationally, many of which are evolving; and |
• | competition for highly skilled technical and other personnel is intense, and as a result we may fail to attract, recruit, retain and develop qualified employees, which could materially and adversely impact our business, financial condition and results of operations. |
A. | Selected Financial Data |
B. | Capitalization and Indebtedness |
C. | Reasons for the Offer and Use of Proceeds |
D. | Risk Factors |
• | traditional contingent workforce and staffing service providers and other outsourcing providers; |
• | online freelancer platforms that serve a diverse range of skill categories; |
• | other online and offline providers of products and services that allow freelancers to find work or to advertise their services, including personal and professional social networks, employment marketplaces, recruiting websites, job boards, classified ads and other traditional means of finding work; |
• | software and business services companies focused on talent acquisition, management or staffing management products and services; and |
• | businesses that provide specialized, professional services, including consulting, accounting, marketing and information technology services. |
• | recruiting and retaining talented and capable employees outside of Israel and the United States, and maintaining our company culture across all of our offices; |
• | recruiting and retaining contractors in the Ukraine, which is currently experiencing tensions with Russia; |
• | providing our platform and operating our business across a significant distance, in different languages and among different cultures, including the potential need to modify our platform and features to ensure that they are culturally appropriate and relevant in different countries; |
• | compliance with applicable international laws and regulations, including laws and regulations with respect to privacy, data protection, consumer protection and unsolicited email, and the risk of penalties to our users and individual members of management or employees if our practices are deemed to be out of compliance; |
• | operating in jurisdictions that do not protect intellectual property rights to the same extent as does the United States; |
• | compliance by us and our business partners with anti-corruption laws, import and export control laws, tariffs, trade barriers, economic sanctions and other regulatory limitations on our ability to provide our platform in certain international markets; |
• | political and economic instability; |
• | fluctuations in currency exchange rates; |
• | double taxation of our international earnings and potentially adverse tax consequences due to changes in the income and other tax laws of Israel, the United States or the international jurisdictions in which we operate; and |
• | higher costs of doing business internationally, including increased accounting, travel, infrastructure and legal compliance costs. |
• | our ability to maintain and grow our community of users; |
• | the demand for and types of skills and services that are offered on our platform by freelancers; |
• | spending patterns of buyers, including whether those buyers who use our platform frequently, or for larger services, reduce their spend or stop using our platform; |
• | seasonal spending patterns by buyers or work patterns by freelancers and seasonality in the labor market; |
• | fluctuations in the prices that freelancers charge buyers on our platform; |
• | changes to our pricing model; |
• | our ability to introduce new features and services and enhance our existing platform and our ability to generate significant revenue from new features and services; |
• | our ability to respond to competitive developments, including pricing changes and the introduction of new products and services by our competitors; |
• | the impact of outages of our platform and associated reputational harm; |
• | changes to financial accounting standards and the interpretation of those standards that may affect the way we recognize and report our financial results; |
• | increases in, and timing of, operating expenses that we may incur to grow and expand our business and to remain competitive; |
• | costs related to the acquisition of businesses, talent, technologies, or intellectual property, including potentially significant amortization costs and possible impairments; |
• | security or data privacy breaches and associated remediation costs; |
• | litigation, adverse judgments, settlements, or other litigation-related costs; |
• | changes in the common law, statutory, legislative, or regulatory environment, such as with respect to privacy and data protection, wage and hour regulations, worker classification (including classification of independent contractors or similar service providers and classification of employees as exempt or non-exempt), internet regulation, payment processing, global trade, or tax requirements; |
• | fluctuations in currency exchange rates; |
• | general economic and political conditions and government regulations in the countries where we currently have significant numbers of users, or where we currently operate or may expand in the future; and |
• | the COVID-19 pandemic or other pandemics, epidemics or global health emergencies. |
• | we may be held liable for the unauthorized use of an account holder’s credit card or bank account number and required by card issuers or banks to pay a chargeback or return fee, and if our chargeback or return rate becomes excessive, credit card networks may also require us to pay fines or other fees; |
• | we may be subject to additional risk and liability exposure, including negligence, fraud or other claims, if employees or third-party service providers misappropriate user information for their own gain or facilitate the fraudulent use of such information; |
• | bad actors may use our platform, including our payment processing and disbursement methods, to engage in unlawful or fraudulent conduct, such as money laundering, terrorist financing, fraudulent sale of services, breaches of security, leakage of data, piracy or misuse of software and other copyrighted or trademarked content, and other misconduct; |
• | users of our platform who are subjected or exposed to the unlawful or improper conduct of other users or other third parties, including law enforcement, may seek to hold us responsible for the conduct of other users and may lose confidence in our platform, decrease or cease to use our platform, seek to obtain damages and costs, or impose fines and penalties; |
• | if, for example, freelancers misstate their qualifications or location, provide misinformation, perform services they are not qualified or authorized to provide, or produce insufficient or defective work product or work product with a viral or other harmful effect, users or other third parties may seek to hold us responsible for the freelancers’ acts or omissions and may lose confidence in our platform, decrease or cease use of our platform, or seek to obtain damages and costs; and |
• | we may suffer reputational damage as a result of the occurrence of any of the above. |
• | our payment partners may be unable to effectively accommodate changing service needs, such as those which could result from rapid growth or higher volume, particularly in light of the COVID-19 pandemic, and the fact that some of our payment partners have a limited operating history; |
• | our payment partners could choose to terminate or not renew their agreements with us or only be willing to renew on different or less advantageous terms; |
• | our payment partners could reduce the services provided to us, cease doing business with us, or cease doing business altogether; |
• | our payment partners could be subject to delays, limitations or closures of their own businesses, networks or systems, causing them to be unable to process payments or disburse funds for certain periods of time; or |
• | we may be forced to cease doing business with payment processors if card association operating rules, certification requirements and laws, regulations or rules governing electronic funds transfers to which we are subject change or are interpreted to make it difficult or impossible for us to comply. |
• | Israeli corporate law regulates mergers and requires that a tender offer be effected when more than a specified percentage of shares in a company are purchased; |
• | Israeli corporate law does not provide for shareholder action by written consent, thereby requiring all shareholder actions to be taken at a general meeting of shareholders; |
• | our amended and restated articles of association divide our directors into three classes, each of which is elected once every three years; |
• | our amended and restated articles of association generally require a vote of the holders of a majority of our outstanding ordinary shares entitled to vote present and voting on the matter at a general meeting of shareholders (referred to as simple majority), and the amendment of a limited number of provisions, such as the provision dividing our directors into three classes, requires a vote of the holders of at least 65% of the total voting power of our shareholders; |
• | our amended and restated articles of association do not permit a director to be removed except by a vote of the holders of at least 65% of the total voting power of our shareholders and any amendment to such provision requires the approval of at least 65% of the total voting power of our shareholders; and |
• | our amended and restated articles of association provide that director vacancies may be filled by our board of directors. |
• | actual or anticipated fluctuations in our results of operations; |
• | variance in our financial performance from the expectations of market analysts; |
• | announcements by us or our competitors of significant business developments, changes in service provider relationships, acquisitions or expansion plans; |
• | short selling activities; |
• | changes in our take rate; |
• | our involvement in litigation; |
• | our sale of ordinary shares or other securities in the future; |
• | market conditions in our industry; |
• | changes in key personnel; |
• | the trading volume of our ordinary shares; |
• | changes in the estimation of the future size and growth rate of our markets; |
• | general economic and market conditions; and |
• | general economic and market conditions, including the impact of COVID-19. |
A. | History and Development of the Company |
B. | Business Overview |
We have achieved significant growth and scale since inception. In the years ended December 31, 2021, 2020 and 2019, our revenue was $297.7 million, $189.5 million and $107.1 million, respectively, a 57% and 77% increase, respectively, and we incurred net losses of $65.0 million, $14.8 million and $33.5 million, respectively. Geographically, the substantial majority of our revenue is generated from buyers in English speaking countries. As we expand our platform to include additional languages, we expect to deepen our penetration into Western Europe, Asia Pacific and Latin America, and the geographic mix of our revenue could therefore change over time. For a description of the principal markets in which we compete, including a breakdown of total revenues see Item 5. “Our Business Model”.
• | Traditional contingent workforce and staffing service providers and other outsourcing providers; |
• | Online freelancer platforms that serve a diverse range of skill categories; |
• | Other online and offline providers of products and services that allow freelancers to find work or to advertise their services, including personal and professional social networks, employment marketplaces, recruiting websites, job boards, classified ads and other traditional means of finding work; |
• | Software and business services companies focused on talent acquisition, management, invoicing, or staffing management products and services; and |
• | Businesses that provide specialized, professional services, including consulting, accounting, marketing and information technology services. |
• | Creating fair economic and social opportunities: fostering a level playing field and providing economic and business opportunities for talent across the world; |
• | Marketplace integrity and ethics: holding high standards for quality and integrity in our marketplace |
• | Empowering our people: building a diverse and inclusive workforce and company culture; and |
• | Climate change: reducing the carbon footprint by enabling remote work and driving responsible resource use. |
Our first ESG report that details the progress we have achieved and our initiatives under each of the pillars above is available on our investor relations website at investors.fiverr.com and is not incorporated by reference into this Annual Report. We believe that transparent and regular reporting is an essential step to holding ourselves accountable. We expect to continue to evolve our ESG strategy in the future as our ESG program matures.
You should read the following discussion together with “Selected financial data” and the consolidated financial statements and related notes included elsewhere in this Annual Report. The statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity and capital resources and other non-historical statements in this discussion are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in “Risk factors” and “Special note regarding forward- looking statements.” Our actual results may differ materially from those contained in or implied by any forward-looking statements.
We believe our model reduces friction and uncertainties for both buyers and sellers. At the foundation of our platform lies an expansive catalog with over 550 categories of productized service listings, which we coined as Gigs. Each Gig has a clearly defined scope, duration and price, along with buyer generated reviews. Using either our search or navigation tools, buyers can easily find and purchase productized services, such as logo design, video creation and editing, website development and blog writing, with prices ranging from $5 to thousands of dollars. We call this the Service-as-a-Product (“SaaP”) model. Our approach fundamentally transforms the traditional freelancer staffing model into an e-commerce-like experience. In the year ended December 31, 2021, we had 4.2 million active buyers on our platform.
Our revenue is diversified and generated from a broad mix of digital services. Our platform includes over 550 categories across nine verticals, including Graphics & Design, Digital Marketing, Writing & Translation, Video & Animation, Music & Audio, Programming & Tech, Business, Data, and Lifestyle. For the years ended December 31, 2021, 2020 and 2019, no single category accounted for more than 15% of our core marketplace revenue. Category expansion continues to be a key strategy for our business.
• | “Active buyers” means buyers who have ordered a Gig or other services on Fiverr within the last 12-month period, irrespective of cancellations. An increase or decrease in the number of active buyers is a key indicator of our ability to attract and engage buyers. |
• | “Spend per buyer” is calculated by dividing our GMV within the last 12-month period by the number of active buyers as of such date. Spend per buyer is a key indicator of our buyers’ purchasing patterns and is impacted by an increase in our number of active buyers, buyers purchasing from more than one category, an increase in average price per purchase and our ability to acquire buyers with a higher lifetime value. |
As of December 31, | ||||||||
2021 | 2020 | |||||||
Active buyers (in thousands) | 4,217 | 3,418 | ||||||
Spend per buyer | $ | 242 | $ | 205 |
2021 | 2020 | 2019 | ||||||||||
(in thousands) | ||||||||||||
U.S. | $ | 154,360 | $ | 100,706 | $ | 57,938 | ||||||
Europe | 77,019 | 48,331 | 25,181 | |||||||||
Asia Pacific | 38,437 | 22,814 | 13,356 | |||||||||
Rest of the world | 24,991 | 15,715 | 9,374 | |||||||||
Israel | 2,855 | 1,944 | 1,224 | |||||||||
Total | $ | 297,662 | $ | 189,510 | $ | 107,073 |
Income taxes. As of December 31, 2021, we have not yet generated taxable income in Israel and the U.S. As of December 31, 2021, our net operating loss carryforwards for Israeli tax purposes amounted to approximately $ 115.0 million. As of December 31, 2021, we had net operating loss carryforwards for U.S. tax purposes in the amount of approximately $82.6 million, which is expected to be subject to certain limitations under Internal Revenue Code (“IRC”) Section 382 following changes in control that occurred upon acquisition of both Clear Voice, Working Not Working and CreativeLive.
A. | Operating Results |
Year ended December 31, | ||||||||
2021 | 2020 | |||||||
(in thousands) | ||||||||
Revenue | $ | 297,662 | $ | 189,510 | ||||
Cost of revenue | 51,723 | 33,188 | ||||||
Gross profit | 245,939 | 156,322 | ||||||
Operating expenses: | ||||||||
Research and development | 79,298 | 45,719 | ||||||
Sales and marketing | 159,365 | 94,379 | ||||||
General and administrative | 52,616 | 28,034 | ||||||
Total operating expenses | 291,279 | 168,132 | ||||||
Operating loss | (45,340 | ) | (11,810 | ) | ||||
Financial expense, net | (19,513 | ) | (2,800 | ) | ||||
Loss before income taxes | (64,853 | ) | (14,610 | ) | ||||
Income taxes | (159 | ) | (200 | ) | ||||
Net loss | $ | (65,012 | ) | $ | (14,810 | ) |
Year ended December 31, | ||||||||
2021 | 2020 | |||||||
(as a% of revenue) | ||||||||
Revenue | 100.0 | % | 100.0 | % | ||||
Cost of revenue | 17.4 | 17.5 | ||||||
Gross profit | 82.6 | 82.5 | ||||||
Operating expenses: | ||||||||
Research and development | 26.6 | 24.1 | ||||||
Sales and marketing | 53.5 | 49.8 | ||||||
General and administrative | 17.7 | 14.8 | ||||||
Total operating expenses | 97.9 | 88.7 | ||||||
Operating loss | (15.2 | ) | (6.2 | ) | ||||
Financial income (expense), net | (6.6 | ) | (1.5 | ) | ||||
Loss before income taxes | (21.8 | ) | (7.7 | ) | ||||
Income taxes | * | * | ||||||
Net loss | (21.8 | )% | (7.8 | )% |
B. | Liquidity and Capital Resources |
Since our inception, we have financed our operations primarily through equity financing. Our cash, cash equivalents, bank deposits and marketable securities were $641 million and $715.5 million as of December 31, 2021 and December 31, 2020, respectively. In addition, we had restricted cash and restricted deposits related to the loan to finance leasehold improvements in our office space of $3.0 million and $2.9 million as of December 31, 2021 and December 31, 2020, respectively.
Year ended December 31, | ||||||||
2021 | 2020 | |||||||
(in thousands) | ||||||||
Net cash provided by operating activities | $ | 38,037 | $ | 17,135 | ||||
Net cash used in investing activities | (229,470 | ) | (326,357 | ) | ||||
Net cash (used in) provided by financing activities | (2,397 | ) | 551,813 |
C. | Research and Development, Patents and Licenses, Etc. |
D. | Trend Information. |
E. | Critical Accounting Estimates |
Name | Position | |
Executive Officers | ||
Micha Kaufman | Co-Founder, Chief Executive Officer, Chairman of the Board | |
Ofer Katz | President and Chief Financial Officer | |
Hila Klein | Chief Operating Officer | |
Gali Arnon | Chief Marketing Officer | |
Gil Sheinfeld | Chief Technology Officer | |
Directors | ||
Philippe Botteri | Director | |
Adam Fisher | Director | |
Ron Gutler | Director | |
Gili Iohan | Director | |
Jonathan Kolber | Director | |
Nir Zohar | Director |
60
• | at least a majority of the shares held by all shareholders who are not controlling shareholders and do not have a personal interest in such matter, present and voting at such meeting, are voted in favor of the compensation package, excluding abstentions; or |
• | the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in such matter and who vote against the compensation package does not exceed two percent (2%) of the aggregate voting rights in the Company. |
Lead Independent Director or Chairperson | Member | |
Board of Directors | $97,500 | $65,000 |
Lead Independent Director or Chairperson | Member | |
Audit Committee | $20,000 | $8,000 |
Compensation Committee | $10,000 | $5,000 |
Nominating and Governance Committee | $7,500 | $4,500 |
Other Committee as Authorized by the Board of Directors | $7,500 | $4,500 |
• | the Class I directors are Philippe Botteri and Jonathan Kolber and their terms expire at our annual general meeting of shareholders to be held in 2023; |
• | the Class II directors are Adam Fisher and Nir Zohar, and their terms expire at our annual meeting of shareholders to be held in 2024; and |
• | the Class III directors are Micha Kaufman, Ron Gutler and Gili Iohan, and their terms expire at our annual meeting of shareholders to be held in 2022. |
• | at least a majority of the shares of non-controlling shareholders and shareholders that do not have a personal interest in the approval voted at the meeting are voted in favor (disregarding abstentions); or |
• | the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in such appointment voting against such appointment does not exceed two percent (2%) of the aggregate voting rights in the company. |
• | retaining and terminating our independent auditors, subject to the ratification of the board of directors, and in the case of retention, to that of the shareholders; |
• | pre-approving of audit and non-audit services and related fees and terms, to be provided by the independent auditors; |
• | overseeing the accounting and financial reporting processes of our company and audits of our financial statements, the effectiveness of our internal control over financial reporting and making such reports as may be required of an audit committee under the rules and regulations promulgated under the Exchange Act; |
• | reviewing with management and our independent auditor our annual and quarterly financial statements prior to publication or filing (or submission, as the case may be) to the SEC; |
• | recommending to the board of directors the retention and termination of the internal auditor, and the internal auditor’s engagement fees and terms, in accordance with the Companies Law as well as approving the yearly or periodic work plan proposed by the internal auditor; |
• | reviewing with our general counsel and/or external counsel, as deemed necessary, legal and regulatory matters that could have a material impact on the financial statements; |
• | identifying irregularities in our business administration, inter alia, by consulting with the internal auditor or with the independent auditor, and suggesting corrective measures to the board of directors; |
• | reviewing policies and procedures with respect to transactions (other than transactions related to the compensation or terms of services) between the Company and officers and directors, or affiliates of officers or directors, or transactions that are not in the ordinary course of the Company’s business and deciding whether to approve such acts and transactions if so required under the Companies Law; and |
• | establishing procedures for the handling of employees’ complaints as to the management of our business and the protection to be provided to such employees. |
• | recommending to the board of directors with respect to the approval of the compensation policy for office holders and, once every three years, regarding any extensions to a compensation policy that was adopted for a period of more than three years; |
• | reviewing the implementation of the compensation policy and periodically recommending to the board of directors with respect to any amendments or updates of the compensation policy; |
• | resolving whether or not to approve arrangements with respect to the terms of office and employment of office holders; and |
• | exempting, under certain circumstances, a transaction with our Chief Executive Officer from the approval of the general meeting of our shareholders. |
• | recommending to our board of directors for its approval a compensation policy in accordance with the requirements of the Companies Law as well as other compensation policies, incentive-based compensation plans and equity-based compensation plans, and overseeing the development and implementation of such policies and recommending to our board of directors any amendments or modifications the committee deems appropriate, including as required under the Companies Law; |
• | reviewing and approving the granting of options and other incentive awards to the Chief Executive Officer and other executive officers, including reviewing and approving corporate goals and objectives relevant to the compensation of our Chief Executive Officer and other executive officers, including evaluating their performance in light of such goals and objectives; |
• | approving and exempting certain transactions regarding office holders’ compensation pursuant to the Companies Law; and |
• | administering our equity-based compensation plans, including without limitation, approving the adoption of such plans, amending and interpreting such plans and the awards and agreements issued pursuant thereto, and making awards to eligible persons under the plans and determining the terms of such awards. |
• | such majority includes at least a majority of the shares held by shareholders who are not controlling shareholders and shareholders who do not have a personal interest in such compensation policy and who are present, in person or by proxy, and voting (excluding abstentions); or |
• | the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in the compensation policy and who vote against the policy does not exceed two percent (2%) of the aggregate voting rights in the Company. |
• | the education, skills, experience, expertise and accomplishments of the relevant office holder; |
• | the office holder’s position, responsibilities and prior compensation agreements with him or her; |
• | the ratio between the cost of the terms of employment of an office holder and the cost of the employment of other employees of the company, including employees employed through contractors who provide services to the company, in particular the ratio between such cost to the average and median salary of such employees of the company, as well as the impact of disparities between them on the work relationships in the company; |
• | if the terms of employment include variable components—the possibility of reducing variable components at the discretion of the board of directors and the possibility of setting a limit on the value of non-cash variable equity-based components; and |
• | if the terms of employment include severance compensation—the term of employment or office of the office holder, the terms of his or her compensation during such period, the company’s performance during such period, his or her individual contribution to the achievement of the company goals and the maximization of its profits and the circumstances under which he or she is leaving the company. |
• | with regards to variable components: |
• | with the exception of office holders who report directly to the Chief Executive Officer, determining the variable components on long-term performance basis and on measurable criteria; however, the company may determine that an immaterial part of the variable components of the compensation package of an office holder shall be awarded based on non-measurable criteria, if such amount is not higher than three monthly salaries per annum, while taking into account such office holder’s contribution to the company; |
• | the ratio between variable and fixed components, as well as the limit of the values of variable components at the time of their payment, or in the case of equity-based compensation, at the time of grant; |
• | a condition under which the office holder will return to the company, according to conditions to be set forth in the compensation policy, any amounts paid as part of his or her terms of employment, if such amounts were paid based on information later discovered to be wrong, and such information was restated in the company’s financial statements; |
• | the minimum holding or vesting period of variable equity-based components to be set in the terms of office or employment, as applicable, while taking into consideration long-term incentives; and |
• | a limit to retirement grants. |
• | overseeing and assisting our board in reviewing and recommending nominees for election as directors; |
• | assessing the performance of the members of our board; |
• | establishing and maintaining effective corporate governance policies and practices, including, but not limited to, developing and recommending to our board a set of corporate governance guidelines applicable to our company; and |
• | overseeing the Company’s risks, strategies, policies, programs and practices related to environmental, social and governance matters. |
• | an amendment to the company’s articles of association; |
• | an increase of the company’s authorized share capital; |
• | a merger; or |
• | interested party transactions that require shareholder approval. |
• | financial liability imposed on him or her in favor of another person pursuant to a judgment, settlement or arbitrator’s award approved by a court. However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company’s activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the abovementioned events and amount or criteria; |
• | reasonable litigation expenses, including attorneys’ fees, incurred by the office holder (1) as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (i) no indictment was filed against such office holder as a result of such investigation or proceeding; and (ii) no financial liability, such as a criminal penalty, was imposed upon him or her as a substitute for the criminal proceeding as a result of such investigation or proceeding or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent and (2) in connection with a monetary sanction; |
• | reasonable litigation expenses, including attorneys’ fees, incurred by the office holder or imposed by a court in proceedings instituted against him or her by the company, on its behalf or by a third-party or in connection with criminal proceedings in which the office holder was acquitted or as a result of a conviction for an offense that does not require proof of criminal intent; and |
• | expenses, including reasonable litigation expenses and legal fees, incurred by an office holder in relation to an administrative proceeding instituted against such office holder, or certain compensation payments made to an injured party imposed on an office holder by an administrative proceeding, pursuant to certain provisions of the Israeli Securities Law, 1968 (the “Israeli Securities Law”). |
• | a breach of the duty of loyalty to the company, to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company; |
• | a breach of the duty of care to the company or to a third-party, including a breach arising out of the negligent conduct of the office holder; |
• | a financial liability imposed on the office holder in favor of a third-party; |
• | a financial liability imposed on the office holder in favor of a third-party harmed by a breach in an administrative proceeding; and |
• | expenses, including reasonable litigation expenses and legal fees, incurred by the office holder as a result of an administrative proceeding instituted against him or her pursuant to certain provisions of the Israeli Securities Law. |
• | a breach of the duty of loyalty, except to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company; |
• | a breach of the duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder; |
• | an act or omission committed with intent to derive illegal personal benefit; or |
• | a fine, monetary sanction or forfeit levied against the office holder. |
As of December 31, | ||||||||||||
2021(*) | 2020(*) | 2019(*) | ||||||||||
Total Employees | 787 | 545 | 419 | |||||||||
Located in Israel | 580 | 426 | 330 | |||||||||
Located in the United States | 197 | 111 | 79 | |||||||||
Located in Europe | 10 | 8 | 10 | |||||||||
In Research and Development | 311 | 245 | 192 | |||||||||
In Marketing | 223 | 163 | 116 | |||||||||
In General and Administration | 109 | 70 | 73 | |||||||||
In Customer Care | 144 | 67 | 38 |
• | each person or entity known by us to own beneficially more than 5% of our outstanding shares; |
• | each of our directors and executive officers individually; and |
• | all of our executive officers and directors as a group. |
Name of beneficial owner | Number | % | ||||||
Principal Shareholders | ||||||||
BlackRock, Inc.(1) | 3,734,339 | 10.1 | % | |||||
Directors and Executive Officers | ||||||||
Micha Kaufman(2) | 2,382,354 | 6.4 | % | |||||
Ofer Katz | * | * | ||||||
Hila Klein | * | * | ||||||
Gali Arnon | * | * | ||||||
Gil Sheinfeld | * | * | ||||||
Philippe Botteri | * | * | ||||||
Adam Fisher | * | * | ||||||
Ron Gutler | * | * | ||||||
Gili Iohan | * | * | ||||||
Jonathan Kolber(3) | 2,933,612 | 8.0 | % | |||||
Nir Zohar | * | * | ||||||
All executive officers and directors as a group (11 persons) | 6,041,539 | 15.9 | % |
* | less than 1% |
(1) | Based on information reported on Schedule 13G/A filed on February 9, 2022, Blackrock, Inc., has sole voting power over 3,709,177 ordinary shares and sole dispositive power over 3,734,339 ordinary shares. The address of Blackrock, Inc, is 55 East 52nd St., New York, NY 10055. |
(2) | Based on information available to us, Mr. Kaufman holds 1,814,460 ordinary shares directly and 567,894 ordinary shares underlying options that are currently exercisable within 60 days of January 31, 2022, at a weighted-average exercise price of $31.27, which expire between 2025 and 2028. |
(3) | Based on information reported on a Schedule 13G/A filed on January 11, 2021 and information available to us, represents (a) 809,835 ordinary shares held by Mr. Kolber directly, (b) 1,939,665 ordinary shares held by Anfield Ltd., over which Mr. Kolber has sole voting power, and (c) 184,112 ordinary shares held by Artemis Asset Holding Limited, on behalf of the Jonathan Kolber Bare Trust, of which Mr. Kolber is the sole beneficiary. Mr. Kolber may be deemed to have beneficial ownership of all of these ordinary shares, and his business address is 12 Abba Even Blvd, Herzliya, Israel 4672530. |
• | amendments to our articles of association; |
• | appointment, termination or the terms of service of our auditors; |
• | appointment of external directors (if applicable); |
• | approval of certain related party transactions; |
• | increases or reductions of our authorized share capital; |
• | a merger; and |
• | the exercise of our board of director’s powers by a general meeting, if our board of directors is unable to exercise its powers and the exercise of any of its powers is required for our proper management. |
• |
• |
• |
• |
• |
• |
• |
• |
• |
• |
• |
• |
• |
• |
• |
• |
• |
• |
• |
• |
• |
• | amortization of the cost of purchased patent, rights to use a patent, and know how, which are used for the development or advancement of the Industrial Enterprise, over an eight-year period, commencing on the year in which such rights were first exercised; |
• | under limited conditions, an election to file consolidated tax returns with controlled Israeli Industrial Companies; and |
• | expenses related to a public offering are deductible in equal amounts over three years commencing on the year of the offering. |
• | The expenditures are approved by the relevant Israeli government ministry, determined by the field of research; |
• | The research and development must be for the promotion of the company; and |
• | The research and development is carried out by or on behalf of the company seeking such tax deduction. |
• | banks, financial institutions or insurance companies; |
• | real estate investment trusts or regulated investment companies; |
• | dealers or brokers; |
• | traders that elect to mark to market; |
• | tax exempt entities or organizations; |
• | “individual retirement accounts” and other tax deferred accounts; |
• | certain former citizens or long term residents of the United States; |
• | persons that are resident or ordinarily resident in or have a permanent establishment in a jurisdiction outside the United States; |
• | persons that acquired our ordinary shares pursuant to the exercise of any employee share option or otherwise as compensation for the performance of services; |
• | persons holding our ordinary shares as part of a “hedging,” “integrated” or “conversion” transaction or as a position in a “straddle” for U.S. federal income tax purposes; |
• | partnerships or other pass through entities and persons holding the ordinary shares through partnerships or other pass through entities; |
• | holders of Convertible Notes or ordinary shares acquired upon a conversion of Convertible Notes; or |
• | holders that own directly, indirectly or through attribution 10% or more of the total voting power or value of all of our outstanding shares. For purposes of this description, a “U.S. Holder” is a beneficial owner of our ordinary |
• | shares that, for U.S. federal income tax purposes, is: |
• | an individual who is a citizen or resident of the United States; |
• | a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States or any state thereof, including the District of Columbia; |
• | an estate the income of which is subject to U.S. federal income taxation regardless of its source; or |
• | a trust if such trust has validly elected to be treated as a United States person for U.S. federal income tax purposes or if (1) a court within the United States is able to exercise primary supervision over its administration and (2) one or more United States persons have the authority to control all of the substantial decisions of such trust. |
Our management is responsible for establishing and maintaining adequate internal control over our financial reporting, as such term is defined in Rule 13a-15(f) under 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. Based on this assessment, our management concluded that, as of December 31, 2021, our internal control over financial reporting was effective.
We will disclose on our website any amendment to, or waiver from, a provision of our Code of Ethics and Conduct that applies to our directors or executive officers to the extent required under the rules of the SEC or the NYSE. Our Code of Conduct is available on our website at www.fiverr.com The information contained on or through our website, or any other website referred to herein, is not incorporated by reference into this Annual Report.
2021 | 2020 | |||||||
(in thousands) | ||||||||
Audit Fees | $ | 782 | $ | 1,008 | ||||
Tax Fees | 282 | 704 | ||||||
All Other Fees | 8 | 17 | ||||||
Total | 1,072 | 1,729 |
Incorporation by Reference | ||||||
Filed / | ||||||
Exhibit No. | Description | Form | File No. | Exhibit No. | Filing Date | Furnished |
20-F | 001-38929 | 1.1 | 3/31/2020 | |||
20-F | 001-38929 | 2.1 | 3/31/2020 | |||
* | ||||||
* | ||||||
F-1 | 333-231533 | 10.3 | 5/16/2019 | |||
F-1 | 333-231533 | 10.4 | 5/16/2019 | |||
F-1 | 333-231533 | 10.5 | 5/16/2019 | |||
F-1 | 333-231533 | 10.6 | 5/16/2019 | |||
F-1 | 333-231533 | 10.7 | 5/16/2019 | |||
F-1/A | 333-231533 | 10.8 | 6/3/2019 | |||
S-8 | 333-248580 | 99.1 | 9/3/2020 | |||
20-F | 001-38929 | 4.10 | 2/18/21 | |||
6-K | 001-38929 | 4.1 | 10/13/2020 | |||
6-K | 001-38929 | 4.12 | 10/13/2020 | |||
6-K | 001-38929 | 10.1 | 10/13/2020 | |||
6-K | 001-38929 | 10.2 | 10/13/2020 |
6-K | 001-38929 | 10.3 | 10/13/2020 | ||||
6-K | 001-38929 | 10.4 | 10/13/2020 | ||||
6-K | 001-38929 | 10.5 | 10/13/2020 | ||||
6-K | 001-38929 | 10.6 | 10/13/2020 | ||||
6-K | 001-38929 | 10.7 | 10/13/2020 | ||||
6-K | 001-38929 | 10.8 | 10/13/2020 | ||||
6-K | 001-38929 | 10.9 | 10/13/2020 | ||||
6-K | 001-38929 | 10.10 | 10/13/2020 | ||||
* | |||||||
* | |||||||
* | |||||||
** | |||||||
** | |||||||
* | |||||||
101.INS | Inline XBRL Instance Document. | * | |||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document. | * | |||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | * | |||||
101.DEF | Inline XBRL Taxonomy 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 or arrangement. |
Date: February 17, 2022 | By: | /s/ Micha Kaufman | |
Name: | Micha Kaufman | ||
Title: | Chief Executive Officer | ||
Date: February 17, 2022 | By: | /s/ Ofer Katz | |
Name: | Ofer Katz | ||
Title: | President and Chief Financial Officer |
Fiverr International Ltd.
In U.S. dollars
Index
|
Page |
Report of independent auditors (PCAOB ID 1281) |
F-2 |
F-5 |
|
F-6 |
|
F-7 |
|
F-8 |
|
F-9 |
|
F-10 - F-34 |
F - 1
To the shareholders and the board of directors of
FIVERR INTERNATIONAL LTD.
Opinion on the financial statements
We have audited the accompanying consolidated balance sheets of Fiverr International Ltd. and subsidiaries (the Company) as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive loss, shareholders’ equity 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.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 17, 2022, expressed an unqualified opinion thereon.
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 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. 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.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.
F - 2
Description of the Matter
|
As described in Note 2s to the consolidated financial statements, the Company derives its revenue mainly from transaction fees and service fees. The Company earn transaction fees for enabling orders and providing other services and service fees to cover administrative fees. The Company’s revenue recognition process involves several applications responsible for the initiation, processing and recording of transactions, and the calculation of revenue in accordance with the Company’s accounting policy. The processing and recognition of revenue are highly automated and involves capturing and processing significant volumes of data.
|
Auditing the Company’s revenues was challenging and complex due to the high volume of individually-low- monetary-value transactions and the dependency on multiple applications, some of which are custom-made for the Company’s business, and data sources associated with the revenue recognition process. Given the complex automated systems utilized to capture, process, and ultimately record revenue, performing procedures to audit revenue required a high degree of auditor judgment and extensive audit effort.
|
How We Addressed the Matter in Our Audit
|
We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over the Company’s revenue recognition process. For example, with the assistance of IT professionals, we tested the controls over the initiation and recognition of transactions. We also tested the controls related to the key application interfaces between the Company’s self-developed systems, which included controls related to access to the relevant applications and data, changes to the relevant systems and interfaces, as well as controls over the configuration of the relevant applications.
|
Our substantive audit procedures included, among others, testing the completeness and accuracy of the underlying data within the Company’s accounting system, performing, with the assistance of our IT professionals, a recalculation of transaction fees and service fees recorded through the Company’s accounting system, and comparing to the Company’s recorded revenues. We performed, on a sample basis, transactions testing by agreeing the amounts recognized in the accounting system to third-party documentation. We also evaluated the Company’s disclosures included in Note 2s to the consolidated financial statements.
|
We have served as the Company’s auditor since 2011.
Tel-Aviv, Israel
February 17, 2022
/s/ KOST FORER GABBAY & KASIERER |
A Member of Ernst & Young Global |
|
Tel-Aviv, Israel February 17, 2022 |
December 31,
|
||||||||
2021
|
2020
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
71,151
|
$
|
268,030
|
||||
Marketable securities
|
118,150
|
129,372
|
||||||
Restricted cash |
2,919 |
- | ||||||
User funds
|
127,713
|
97,984
|
||||||
Bank deposits
|
134,000
|
90,000
|
||||||
Restricted deposit
|
35
|
346
|
||||||
Other receivables
|
14,250
|
5,418
|
||||||
Total current assets
|
468,218
|
591,150
|
||||||
Marketable securities
|
317,524
|
228,048
|
||||||
Property and equipment, net
|
6,555
|
6,265
|
||||||
Operating lease right-of-use assets, net
|
11,727
|
15,611
|
||||||
Intangible assets, net
|
49,221
|
5,884
|
||||||
Goodwill
|
77,270
|
11,240
|
||||||
Restricted deposit
|
15
|
2,589
|
||||||
Other non-current assets
|
1,040
|
415
|
||||||
Total assets
|
$
|
931,570
|
$
|
861,202
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Trade payables
|
$
|
8,699
|
$
|
3,622
|
||||
User accounts
|
118,616
|
92,027
|
||||||
Deferred revenue
|
12,145
|
5,957
|
||||||
Other account payables and accrued expenses
|
44,260
|
40,396
|
||||||
Operating lease liabilities
|
3,055
|
3,307
|
||||||
Current maturities of long-term loan
|
2,269
|
560
|
||||||
Total current liabilities
|
189,044
|
145,869
|
||||||
Long-term liabilities:
|
||||||||
Convertible notes
|
372,076
|
352,034
|
||||||
Operating lease liabilities
|
10,483
|
13,861
|
||||||
Long-term loan and other non-current liabilities
|
13,099
|
4,035
|
||||||
Total long-term liabilities
|
395,658
|
369,930
|
||||||
Total liabilities
|
$
|
584,702
|
$
|
515,799
|
||||
Commitments and contingencies (see note 11)
|
||||||||
Shareholders’ equity:
|
||||||||
Shares authorized: 75,000,000 ordinary shares with par value as of December 31, 2021 and 2020
|
||||||||
Shares issued and outstanding: 36,761,108 and 35,842,980 ordinary shares as of December 31, 2021 and 2020, respectively
|
-
|
-
|
||||||
Additional paid-in capital
|
585,548
|
517,444
|
||||||
Accumulated deficit
|
(237,585
|
)
|
(172,573
|
)
|
||||
Accumulated other comprehensive income (loss)
|
(1,095
|
)
|
532
|
|||||
Total shareholders’ equity
|
346,868
|
345,403
|
||||||
Total liabilities and shareholders’ equity
|
$
|
931,570
|
$
|
861,202
|
Year ended December 31,
|
||||||||||||
2021
|
2020
|
2019
|
||||||||||
Revenue
|
$
|
297,662
|
$
|
189,510
|
$
|
107,073
|
||||||
Cost of revenue
|
51,723
|
33,188
|
22,224
|
|||||||||
Gross profit
|
245,939
|
156,322
|
84,849
|
|||||||||
Operating expenses:
|
||||||||||||
Research and development
|
79,298
|
45,719
|
34,483
|
|||||||||
Sales and marketing
|
159,365
|
94,379
|
62,750
|
|||||||||
General and administrative
|
52,616
|
28,034
|
22,366
|
|||||||||
Total operating expenses
|
291,279
|
168,132
|
119,599
|
|||||||||
Operating loss
|
(45,340
|
)
|
(11,810
|
)
|
(34,750
|
)
|
||||||
Financial income (expenses), net
|
(19,513
|
)
|
(2,800
|
)
|
1,371
|
|||||||
Loss before income taxes
|
(64,853
|
)
|
(14,610
|
)
|
(33,379
|
)
|
||||||
Income taxes
|
(159
|
)
|
(200
|
)
|
(160
|
)
|
||||||
Net loss
|
$
|
(65,012
|
)
|
$
|
(14,810
|
)
|
$
|
(33,539
|
)
|
|||
Deemed dividend to protected ordinary shareholders
|
-
|
-
|
(632
|
)
|
||||||||
Net loss attributable to ordinary shareholders
|
$
|
(65,012
|
)
|
$
|
(14,810
|
)
|
$
|
(34,171
|
)
|
|||
Basic and diluted net loss per share attributable to ordinary shareholders
|
$
|
(1.81
|
)
|
$
|
(0.46
|
)
|
$
|
(1.67
|
)
|
|||
Basic and diluted weighted average ordinary shares
|
35,955,014
|
32,323,636
|
20,503,893
|
Year ended
December 31, |
||||||||||||
2021
|
2020
|
2019
|
||||||||||
Net loss
|
$
|
(65,012
|
)
|
$
|
(14,810
|
)
|
$
|
(33,539
|
)
|
|||
Marketable securities:
|
||||||||||||
Unrealized gain (loss)
|
(2,129
|
)
|
158
|
59
|
||||||||
Derivatives:
|
||||||||||||
Unrealized income
|
1,662
|
1,403
|
1,038
|
|||||||||
Amounts reclassified from accumulated other comprehensive loss
|
(1,160
|
)
|
(1,267
|
)
|
(261
|
)
|
||||||
Other comprehensive loss
|
(1,627
|
)
|
294
|
836
|
||||||||
Comprehensive loss
|
$
|
(66,639
|
)
|
$
|
(14,516
|
)
|
$
|
(32,703
|
)
|
Number of
ordinary shares and protected ordinary shares |
Share capital
and additional paid-in capital |
Accumulated
deficit |
Accumulated
other comprehensive income (loss) |
Total
shareholders’ equity |
||||||||||||||||
Balance as of December 31, 2018
|
25,525,370
|
$
|
178,164
|
$
|
(123,592
|
)
|
$
|
(598
|
)
|
$
|
53,974
|
|||||||||
Share-based compensation
|
-
|
9,009
|
-
|
-
|
9,009
|
|||||||||||||||
Exercise of share options and vested RSUs
|
162,247
|
857
|
-
|
-
|
857
|
|||||||||||||||
Issuance of protected ordinary shares, net of issuance cost of $60
|
192,358
|
4,340
|
-
|
-
|
4,340
|
|||||||||||||||
Issuance of ordinary shares in connection with IPO, net of issuance costs of $4,876
|
6,052,631
|
113,332
|
-
|
-
|
113,332
|
|||||||||||||||
Exercise of warrants
|
5,166
|
-
|
-
|
-
|
-
|
|||||||||||||||
Net loss
|
-
|
-
|
(33,539
|
)
|
-
|
(33,539
|
)
|
|||||||||||||
Deemed dividend related to the issuance of protected ordinary shares
|
-
|
632
|
(632
|
)
|
-
|
-
|
||||||||||||||
Other comprehensive income
|
-
|
-
|
-
|
836
|
836
|
|||||||||||||||
Balance as of December 31, 2019
|
31,937,772
|
$
|
306,334
|
$
|
(157,763
|
)
|
$
|
238
|
$
|
148,809
|
||||||||||
Share-based compensation
|
-
|
15,855
|
-
|
-
|
15,855
|
|||||||||||||||
Exercise of share options and vested RSUs
|
1,605,208
|
9,452
|
-
|
-
|
9,452
|
|||||||||||||||
Issuance of ordinary shares in connection with follow on offering, net of issuance costs of $1,109
|
2,300,000
|
129,853
|
-
|
-
|
129,853
|
|||||||||||||||
Equity component of convertible notes, net of issuance costs of $2,842
|
-
|
99,190
|
-
|
-
|
99,190
|
|||||||||||||||
Purchase of capped call
|
-
|
(43,240
|
)
|
-
|
-
|
(43,240
|
)
|
|||||||||||||
Net loss
|
-
|
-
|
(14,810
|
)
|
-
|
(14,810
|
)
|
|||||||||||||
Other comprehensive income
|
-
|
-
|
-
|
294
|
294
|
|||||||||||||||
Balance as of December 31, 2020
|
35,842,980
|
$
|
517,444
|
$
|
(172,573
|
)
|
$
|
532
|
$
|
345,403
|
||||||||||
Share-based compensation
|
-
|
55,654
|
-
|
-
|
55,654
|
|||||||||||||||
Exercise of share options, vested RSUs and ESPP
|
918,128
|
12,137
|
-
|
-
|
12,137
|
|||||||||||||||
Equity award assumed for acquisition
|
-
|
313
|
-
|
-
|
313
|
|||||||||||||||
Net loss
|
-
|
-
|
(65,012
|
)
|
-
|
(65,012
|
)
|
|||||||||||||
Other comprehensive loss
|
-
|
-
|
-
|
(1,627
|
)
|
(1,627
|
)
|
|||||||||||||
Balance as of December 31, 2021
|
36,761,108
|
$
|
585,548
|
$
|
(237,585
|
)
|
$
|
(1,095
|
)
|
$
|
346,868
|
Year ended
|
||||||||||||
December 31,
|
||||||||||||
2021
|
2020
|
2019
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net loss
|
$
|
(65,012
|
)
|
$
|
(14,810
|
)
|
$
|
(33,539
|
)
|
|||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
||||||||||||
Depreciation and amortization
|
6,876
|
4,338
|
3,571
|
|||||||||
Amortization of discount of marketable securities
|
7,903
|
1,091
|
(988
|
)
|
||||||||
Amortization of discount and issuance costs of convertible notes
|
20,029
|
4,036
|
-
|
|||||||||
Share -based compensation
|
55,407
|
15,815
|
8,899
|
|||||||||
Net loss (gain) from exchange rate fluctuations
|
242
|
|
(1,076
|
)
|
65
|
|
||||||
Loss from disposal of property and equipment
|
(13
|
)
|
-
|
-
|
||||||||
Changes in assets and liabilities:
|
||||||||||||
User funds
|
(29,729
|
)
|
(42,039
|
)
|
(16,209
|
)
|
||||||
Operating lease ROU assets and liabilities, net
|
253
|
1,068
|
-
|
|||||||||
Other receivables
|
(6,240
|
)
|
(1,777
|
)
|
(1,583
|
)
|
||||||
Trade payables
|
4,667
|
(127
|
)
|
240
|
||||||||
Deferred revenue
|
4,123
|
2,680
|
3,248
|
|||||||||
User accounts
|
26,589
|
39,014
|
13,277
|
|||||||||
Payment of contingent consideration
|
(507
|
)
|
(1,960
|
)
|
-
|
|||||||
Account payables, accrued expenses and other |
13,449
|
10,882
|
9,075
|
|||||||||
Net cash provided by (used in) operating activities
|
38,037
|
17,135
|
(13,944
|
)
|
||||||||
Investing activities:
|
||||||||||||
Investment in marketable securities
|
(282,450
|
)
|
(431,176
|
)
|
(214,306
|
) | ||||||
Proceeds from maturities of marketable securities
|
193,757
|
183,190
|
104,990
|
|||||||||
Acquisition of business, net of cash acquired
|
(97,084
|
)
|
-
|
(9,967
|
)
|
|||||||
Acquisition of intangible asset
|
-
|
(1,230
|
)
|
-
|
||||||||
Purchase of property and equipment
|
(1,684
|
)
|
(2,094
|
)
|
(1,016
|
)
|
||||||
Capitalization of internal-use software
|
(894
|
)
|
(711
|
)
|
(739
|
)
|
||||||
Other receivables and non-current assets
|
-
|
107
|
(40
|
)
|
||||||||
Bank and restricted deposits
|
(41,115
|
)
|
(74,443
|
)
|
(15,000
|
)
|
||||||
Net cash used in investing activities
|
(229,470
|
)
|
(326,357
|
)
|
(136,078
|
)
|
||||||
Financing activities:
|
||||||||||||
Proceeds from initial public offering, net
|
-
|
-
|
113,350
|
|||||||||
Proceeds from follow-on offering, net
|
-
|
129,853
|
-
|
|||||||||
Proceeds from issuance of convertible notes, net
|
(34
|
)
|
447,264
|
-
|
||||||||
Purchase of capped call
|
-
|
(43,240
|
)
|
-
|
||||||||
Proceeds from exercise of share options
|
8,294
|
9,189
|
773
|
|||||||||
Proceeds from issuance of protected ordinary shares, net
|
-
|
-
|
4,340
|
|||||||||
Payment of contingent consideration
|
(1,105
|
)
|
(2,040
|
)
|
-
|
|||||||
Tax withholding in connection with employees’ exercises of share options and vested RSUs
|
(8,987
|
)
|
11,311
|
-
|
||||||||
Repayment of long-term loan
|
(565
|
)
|
(524
|
)
|
(470
|
)
|
||||||
Net cash provided by (used in) financing activities
|
(2,397
|
)
|
551,813
|
117,993
|
||||||||
Effect of exchange rate fluctuations on cash and cash equivalents
|
(130
|
)
|
1,268
|
245
|
|
|||||||
Increase (decrease) in cash, cash equivalents and restricted cash |
(193,960
|
)
|
243,859
|
(31,784
|
) | |||||||
Cash and cash equivalents at the beginning of the year
|
268,030
|
24,171
|
55,955
|
|||||||||
Cash, cash equivalents and restricted cash at the end of the year |
$
|
74,070
|
$
|
268,030
|
$
|
24,171
|
||||||
Supplemental non-cash disclosure:
|
||||||||||||
Purchase of property and equipment
|
$
|
294
|
$
|
156
|
$
|
103
|
||||||
Share-based compensation capitalized in internal-use software
|
$
|
247
|
$
|
40
|
$
|
110
|
||||||
Contingent consideration
|
$
|
12,258
|
$
|
-
|
$
|
4,240
|
||||||
Lease liabilities arising from obtaining right-of-use assets
|
$
|
229
|
$
|
19,031
|
$
|
-
|
||||||
Supplemental cash flow disclosure:
|
||||||||||||
Cash paid for taxes
|
$
|
78
|
$
|
-
|
$
|
36
|
||||||
Cash paid for interest
|
$
|
107
|
$
|
115
|
$
|
131
|
Restricted cash includes cash that is legally restricted as to withdrawal or usage.
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data) (Continued)
|
|
%
|
Computers and peripheral equipment
|
|
33
|
Office furniture and equipment
|
|
7 – 15
|
Leasehold improvements
|
|
The shorter of the term of the lease or useful life of the asset
|
Costs incurred to develop internal-use software are capitalized and amortized over the estimated useful life of the software, which is generally three 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 design or 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 intangible assets.
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data) (Continued)
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data) (Continued)
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, bank deposits, investment in marketable securities, restricted deposit and derivatives, which are placed in major banks in Israel, Germany and the U.S.
The Company accounts for convertible notes in accordance with ASC Topic 815, “Derivatives and Hedging” and ASC Topic 470, “Debt”. The Company separately accounts for debt and equity components of convertible notes that may be settled in cash. The carrying amount of the debt component was based on the fair value of a similar hypothetical debt instrument excluding the conversion option.
The Company’s U.S. Subsidiaries have a 401(K) defined contribution plan covering certain employees in the U.S. All eligible employees may elect to contribute up to 100%, but generally not greater than $20.5 per year for employees under the age of 50, and $27.0 for employees over the age of 50, of their annual compensation to the plan through salary deferrals, subject to Internal Revenue Service limits. The U.S. Subsidiary matches up to 50% of the first 6% of employee contributions. The expenses recorded by the U.S. subsidiaries for matching contributions for the year ended December 31, 2021, 2020 and 2019 were immaterial.
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data) (Continued)
r.Leases:
The Company determines if an arrangement meets the definition of a lease at the inception of the lease.
ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease agreement. ROU asset is measured based on the discounted present value of the remaining lease payments, initial direct costs incurred and prepaid lease payments, excluding lease incentives. The lease liability is measured based on the discounted present value of the remaining lease payments. The discounted present value of remaining lease payments is computed using IBR based on the information available at the inception of the lease. The Company’s IBR was estimated to approximate the interest rate for collateralized borrowing with similar terms and payments and in economic environments where the leased asset was located.
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data) (Continued)
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data) (Continued)
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data) (Continued)
Basic and diluted net loss per share was presented in conformity with the two class method for participating securities for the year ended December 31, 2019 as a result of a deemed dividend related to the issuance of protected ordinary shares (see note 14).
The guidance had a material impact on the Company’s consolidated balance sheet which resulted in the recognition of operating lease ROU assets and lease liabilities of $18,526 and $19,031, respectively, on January 1, 2020, which included reclassification of rent prepayments as components of the ROU assets.
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data) (Continued)
The Company adopted this standard on January 1, 2022 using the modified retrospective approach. As of December 31, 2021 the adoption resulted in a reclassification of the equity component representing the conversion option of $78,160 from additional paid in capital to convertible notes and $21,030 from additional paid in capital to retained earnings. Interest expense would be reduced as a result of accounting for the convertible notes instrument as a single debt measured at its amortized cost.
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data) (Continued)
Cash paid
|
|
$
|
11,786
|
|
Fair-value of contingent consideration
|
|
|
4,240
|
|
Retention bonus
|
|
|
(1,450
|
)
|
Total fair value of consideration transferred
|
|
$
|
14,576
|
|
Fair value |
Amortization period
|
||||
Cash and cash equivalents
|
$
|
369
|
|||
Other tangible assets assumed |
523
|
||||
Developed technology
|
2,600
|
5 years
|
|||
Customer relationships
|
1,600
|
3 years
|
|||
Trade name
|
560
|
5 years
|
|||
Goodwill
|
9,859
|
||||
Total assets acquired |
15,511
|
||||
Total liabilities assumed |
935
|
||||
Net assets acquired
|
$
|
14,576
|
In January 2021, the Company acquired all the outstanding shares of Working Not Working, Inc. (“WnW”), a creative talent platform for a consideration of $9,922.
The results of operations of WnW were consolidated in the Company’s financial statements commencing the date of acquisition.
The agreement stipulated additional contingent payments which are not included in the total consideration to the shareholders of WnW in an aggregate amount of up to $3,500 subject to the continuing employment, out of which the Company recorded $1,500 under operating expenses for the year ended December 31, 2021.
The table below summarizes the preliminary fair value of the acquired assets and assumed liabilities and the goodwill as of the acquisition date:
Fair value |
Amortization period
|
||||
Cash and cash equivalents
|
$
|
910
|
|||
Other tangible assets assumed |
369
|
||||
Creative relationships
|
4,252
|
10 years
|
|||
Customer relationships
|
812
|
2 years
|
|||
Trade name |
362
|
3 years
|
|||
Goodwill
|
4,525
|
||||
Total assets acquired
|
11,230
|
||||
Total liabilities
|
(1,308
|
)
|
|||
Net assets acquired
|
$
|
9,922
|
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data) (Continued)
The Company incurred approximately $292 in acquisition expenses for the year ended December 31, 2021 recorded under general and administrative expenses.
Pro forma results of operations related to this acquisition have not been presented because they are not material to the Company’s consolidated statements of operations.
In October 2021, the Company acquired all of the outstanding shares of CreativeLive, Inc. (“CreativeLive”), an online learning platform for a consideration of $9,332. The results of operations of CreativeLive were consolidated in the Company’s financial statements commencing the date of acquisition.
The agreement stipulated additional payments which were not included in the consideration including a paymeny to employees of CreativeLive by shareholders for past services in the amount of $1,500 paid at closing and retention bonus of $1,500 subject to the continuing employment, out of which the Company recorded $375 under operating expenses for the year ended December 31, 2021.
The agreement also stipulated contingent payments to shareholders of CreativeLive in an aggregate amount of up to $1,500 subject to certain milestones to be paid after 18 months.
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data) (Continued)
The table below summarizes the preliminary fair value of the acquired assets and assumed liabilities and the goodwill as of the acquisition date:
Fair value |
Amortization period
|
||||
Cash and cash equivalents
|
$
|
2,066
|
|||
Other tangible assets assumed |
552
|
||||
Courses
|
1,311
|
2 years
|
|||
Customer relationships
|
1,447
|
2 years
|
|||
Technology
|
1,522
|
4 years
|
|||
Trade name |
557
|
5 years
|
|||
Goodwill
|
5,139
|
||||
Total assets acquired
|
12,594
|
||||
Deferred revenue and other liabilities assumed |
(3,262
|
)
|
|||
Net assets acquired
|
$
|
9,332
|
The Company incurred approximately $121 in acquisition expenses for the year ended December 31, 2021 recorded under general and administrative expenses.
Pro forma results of operations related to this acquisition have not been presented because they are not material to the Company’s consolidated statements of operations.
d. Stoke Talent acquisition
In November 2021, the Company acquired all the outstanding shares of Stoke Talent Ltd. (“Stoke”) a freelance management system for a cash amount of $93,084. According to the agreement unvested company options held by continuing employees of Stoke, were terminated, and substituted with a substitute award of the Company.
The results of operations of Stoke were consolidated in the Company’s financial statements commencing the date of acquisition.
The agreement stipulated additional contingent payments to shareholders of Stoke in an aggregate amount of up to $15,000 subject to certain milestones to be paid after one year. The fair-value of the contingent consideration as of the acquisition date was $12,258 and measured based on the estimated future cash outflows, utilizing the Monte Carlo simulation. As of December 31, 2021, $12,258 were recorded under other non-current liabilities.
|
Fair value
|
Amortization period
|
|||
Cash and cash equivalents
|
$
|
12,278
|
|||
Other tangible assets assumed |
1,160
|
||||
Developed technology
|
35,691
|
7 years
|
|||
Customer relationships
|
506
|
5 years
|
|||
Trade name
|
752
|
6 years
|
|||
Goodwill
|
56,367
|
||||
Total assets acquired
|
106,754
|
||||
Total liabilities assumed
|
(1,099
|
) | |||
Net assets acquired
|
$
|
105,655
|
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data) (Continued)
The Company incurred approximately $97 in acquisition expenses for the year ended December 31, 2021 recorded under general and administrative expenses.
Pro forma results of operations related to this acquisition have not been presented because they are not material to the Company’s consolidated statements of operations.
In August 4, 2020 the Company acquired Sharon Lee Thony Consulting LLC a digital marketing agency for a consideration amount of $1,250 paid in cash. The transaction was accounted for as asset acquisition mainly resulting in a recognition of a workforce intangible asset.
|
|
December 31, 2021
|
|
|||||||||
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
48,264
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Restricted cash |
2,919 |
- | - | |||||||||
Money market funds
|
|
|
19,091
|
|
|
|
-
|
|
|
|
-
|
|
Deposits
|
|
|
3,796
|
|
|
|
-
|
|
|
|
-
|
|
Bank Deposits
|
|
|
134,000
|
|
|
|
-
|
|
|
|
-
|
|
Restricted deposits
|
|
|
50
|
|
|
|
-
|
|
|
|
-
|
|
Marketable securities
|
|
|
-
|
|
|
|
435,674
|
|
|
|
-
|
|
Asset derivatives
|
|
|
-
|
|
|
|
822
|
|
|
|
-
|
|
Liability derivatives
|
|
|
-
|
|
|
|
(4
|
)
|
|
|
-
|
|
Contingent consideration
|
|
|
-
|
|
|
|
-
|
|
|
|
(13,858
|
)
|
|
|
$
|
208,120
|
|
|
$
|
436,492
|
|
|
$
|
(13,858
|
)
|
|
|
December 31, 2020
|
|
|||||||||
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
35,448
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Money market funds
|
|
|
223,474
|
|
|
|
-
|
|
|
|
-
|
|
Deposits
|
|
|
9,108
|
|
|
|
-
|
|
|
|
-
|
|
Bank Deposits
|
|
|
90,000
|
|
|
|
-
|
|
|
|
-
|
|
Restricted deposits
|
|
|
2,935
|
|
|
|
-
|
|
|
|
-
|
|
Marketable securities
|
|
|
-
|
|
|
|
357,420
|
|
|
|
-
|
|
Asset derivatives
|
|
|
-
|
|
|
|
314
|
|
|
|
-
|
|
Liability derivatives
|
|
|
-
|
|
|
|
(12
|
)
|
|
|
-
|
|
Contingent consideration
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,725
|
)
|
|
|
$
|
360,965
|
|
|
$
|
357,722
|
|
|
$
|
(2,725
|
)
|
Fair value as of December 31, 2020
|
|
$
|
(2,725
|
)
|
Payment
|
|
|
1,612
|
|
Current year acquisitions |
(12,258 |
) | ||
Revaluation
|
|
|
(487
|
)
|
Fair value as of December 31, 2021
|
|
$
|
(13,858
|
)
|
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data) (Continued)
Note 5: Marketable securities
As of December 31, 2021, the amortized cost, unrealized holding gains and losses and fair value of marketable securities were as follows:
Amortized
|
Unrealized
|
Unrealized
|
||||||||||||||
Cost
|
gains
|
losses
|
Fair Value
|
|||||||||||||
Municipal and U.S. treasury bonds
|
$
|
47,325
|
$
|
2
|
$
|
(237
|
)
|
$
|
47,090
|
|||||||
Corporate bonds
|
390,261
|
33
|
(1,710
|
)
|
388,584
|
|||||||||||
Total
|
$
|
437,586
|
$
|
35
|
$
|
(1,947
|
)
|
$
|
435,674
|
As of December 31, 2020, the amortized cost, unrealized holding gains and losses and fair value of marketable securities were as follows:
Amortized
|
Unrealized
|
Unrealized
|
||||||||||||||
Cost
|
gains
|
losses
|
Fair Value
|
|||||||||||||
Municipal and U.S. treasury bonds
|
$
|
54,580
|
$
|
37
|
$
|
(15
|
)
|
$
|
54,602
|
|||||||
Corporate bonds
|
302,623
|
320
|
(125
|
)
|
302,818
|
|||||||||||
Total
|
$
|
357,203
|
$
|
357
|
$
|
(140
|
)
|
$
|
357,420
|
The following table summarizes the fair value and amortized cost of the available-for-sale securities by contractual maturity as of December 31, 2021:
Amortized
Cost |
Fair Value
|
|||||||
Due within one year
|
$
|
118,238
|
$
|
118,150
|
||||
Due after one year through two years
|
319,348
|
317,524
|
||||||
Total
|
$
|
437,586
|
$
|
435,674
|
|
|
December 31,
|
|
|||||
|
|
2021
|
|
|
2020
|
|
||
Leasehold improvements
|
|
$
|
6,182
|
|
|
$
|
5,820
|
|
Computers and peripheral equipment
|
|
|
4,513
|
|
|
|
3,504
|
|
Office furniture and equipment
|
|
|
1,570
|
|
|
|
1,181
|
|
|
|
|
12,265
|
|
|
|
10,505
|
|
Less—accumulated depreciation
|
|
|
(5,710
|
)
|
|
|
(4,240
|
)
|
|
|
$
|
6,555
|
|
|
$
|
6,265
|
|
Depreciation expenses were $1,739, $1,207 and $920 for the years ended December 31, 2021, 2020 and 2019, respectively.
December 31,
|
||||||||
2021
|
2020
|
|||||||
Developed technology
|
$
|
41,133
|
$
|
3,920
|
||||
Capitalized internal-use software
|
5,857
|
4,596
|
||||||
Customer relationships
|
5,425
|
2,660
|
||||||
Creative relationships
|
4,252
|
-
|
||||||
Trade name
|
2,841
|
1,170
|
||||||
Courses
|
1,312
|
-
|
||||||
Workforce
|
1,250
|
1,250
|
||||||
62,070
|
13,596
|
|||||||
Less—accumulated amortization
|
(12,849
|
)
|
(7,712
|
)
|
||||
$
|
49,221
|
$
|
5,884
|
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data) (Continued)
Note 8: —Derivatives and hedging
Year ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Cost of revenue |
$ |
(35 |
) |
$ |
(87 |
) |
$ |
(17 |
) | |||
Research and development |
(717 |
) |
(655 |
) |
(142 |
) | ||||||
Sales and marketing |
(266 |
) |
(311 |
) |
(59 |
) | ||||||
General and administrative |
(142 |
) |
(214 |
) |
(43 |
) | ||||||
$ |
(1,160 |
) |
$ |
(1,267 |
) |
$ |
(261 |
) |
Note 9: —Other account payables and accrued expenses
December 31,
|
||||||||
2021
|
2020
|
|||||||
Accrued expenses
|
$
|
23,645
|
$
|
15,471
|
||||
Accrued employee and government authorities
|
16,649
|
12,283
|
||||||
Tax withholding in connection with employees’ exercises of share options and vested RSUs
|
2,348
|
11,335
|
||||||
Contingent consideration
|
1,600
|
1,220
|
||||||
Other
|
18
|
87
|
||||||
$
|
44,260
|
$
|
40,396
|
Note 10: —Leases
|
December 31, | |||||||
2021 |
2020 |
|||||||
Fixed cost and variable cost that depend on an index |
$ | 3,258 | $ | 3,192 | ||||
Short term lease cost |
136 | 277 | ||||||
Sublease income |
(705 | ) | (792 | ) | ||||
|
$ | 2,689 | $ | 2,677 |
Weighted average remaining lease term as of December 31, 2021 |
4.63 years |
|||
Weighted average discount rate |
2.33% |
|
The minimum lease payments for the Company’s ROU assets over the remaining lease periods as of December 31, 2021, were as follows:
2022 |
$ |
3,437 |
||
2023 |
3,118 |
|||
2024 |
2,575 |
|||
2025 |
2,575 |
|||
2026 and after |
2,575 |
|||
Total undiscounted lease payments |
14,280 |
|||
Less: imputed interest |
(742 |
) |
||
Present value of lease liabilities |
$ |
13,538 |
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data) (Continued)
Note 11: —Commitments and contingencies
From time to time, the Company may be involved in various claims and legal proceedings. The Company reviews the status of each matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated the Company would accrue a liability for the estimated loss. As of December 31, 2021 and 2020, the Company is not involved in any claims or legal proceedings which require accrual of liability for the estimated loss.
a. |
Convertible notes
|
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data) (Continued)
Financial expenses related to the convertible senior notes for the year ended December 31, 2021 and 2020 were as follows:
December 31, |
|||||||
2021 |
2020 |
||||||
Amortization of discount
|
$
|
19,473
|
$ | 3,677 | |||
Amortization of issuance costs
|
556
|
359 |
|||||
$
|
20,029
|
$ |
4,036 |
b. |
Capped call
|
December 31,
|
||||||||
2021
|
2020
|
|||||||
Contingent consideration (Note 3a and 3d)
|
$
|
12,258
|
$
|
1,505
|
||||
Long-term loan less current maturities of long-term loan
|
-
|
2,147
|
||||||
Other
|
841
|
383
|
||||||
$
|
13,099
|
$
|
4,035
|
Note 14: —Shareholders’ equity
a.In June 2019 the Company closed an IPO whereby 6,052,631 ordinary shares were sold by the Company to the public (inclusive of 789,473 ordinary shares pursuant to the full exercise of an overallotment option granted to the underwriters). The aggregate net proceeds received by the Company from the offering were $113,332 net of underwriting discounts and other offering costs.
b.On June 2, 2020 the Company closed a follow on offering whereby 2,300,000 ordinary shares were sold by the Company to the public, (inclusive of 300,000 ordinary shares pursuant to the full exercise of an overallotment option granted to the underwriters). The aggregate net proceeds received by the Company from the offering were $129,853 net of underwriting discounts and other offering costs.
c.The number of authorized shares as of December 31, 2021 and 2020 was 75,000,000.
d.Holders of ordinary shares are entitled to one vote per share and dividends whenever funds are legally available and when, as, and if declared by the Company’s board of directors.
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data) (Continued)
e.During the second quarter of 2019, the Company’s board of directors and the Company’s shareholders approved a 1-for 6.69 reverse share split of the Company’s ordinary shares and protected ordinary shares. As a result of the reverse share split, (i) every 6.69 authorized, issued and outstanding ordinary share or protected ordinary share was decreased to one share of authorized, issued and outstanding ordinary share or protected ordinary share, (ii) the number of ordinary shares into which each outstanding warrant or option to purchase an ordinary share is exercisable was proportionally decreased on a 1-for 6.69 basis, and (iii) all share prices and exercise prices were proportionally increased. All ordinary shares and protected ordinary shares, share options, warrants, exercise prices, per share data and loss per share amounts have been adjusted retroactively for all periods presented in these financial statements to reflect the 1-for 6.69 reverse share split.
f.Immediately prior to the closing of the IPO 18,654,270 protected ordinary shares were exchanged for ordinary shares upon the adoption of the Company’s amended and restated articles of association.
g.Share options and RSUs:
In 2011, the board of directors adopted the 2011 share option plan for employees, officers, directors and consultants (the “2011 Plan”). Each share option granted under the 2011 Plan expires no later than ten years from the date of grant. The vesting period of the share options is generally four years. As of December 31, 2019, the Company is no longer granting any awards under the 2011 Plan.
In 2019, the board of directors adopted the 2019 share incentive plan (the “2019 Plan”) for employees, officers, directors and consultants. The 2019 Plan provides for the grant of share options (including incentive share options and non-qualified share options), ordinary shares, restricted shares, RSUs and other share-based awards.
Each share option granted under the 2019 Plan expires no later than seven years from the date of grant. The vesting period of the share options is generally four years.
As of December 31, 2021 the total of ordinary shares available for future grants under the 2019 Plan was 2,589,023.
The following table summarizes the status of the share options as of and for the year ended December 31, 2021:
December 31, 2021
|
||||||||||||
Number of
share options |
Weighted-average
exercise price |
Weighted-average
remaining contractual term (in years) |
||||||||||
Outstanding at the beginning of the year
|
3,223,443
|
17.22
|
7.20
|
|||||||||
Granted
|
388,886
|
239.26
|
||||||||||
Exercised
|
(651,771
|
)
|
12.36
|
|||||||||
Forfeited
|
(51,960
|
)
|
25.52
|
|||||||||
Outstanding at the end of the year
|
2,908,598
|
47.85
|
6.04
|
|||||||||
Exercisable at the end of the year
|
1,694,321
|
20.25
|
5.83
|
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data) (Continued)
The weighted-average grant-date fair value of share options granted was $130.95 , $27.85 and $11.99 per share for the years ended December 31, 2021, 2020 and 2019, respectively.
The fair value of these share options was estimated on the grant date based on the following weighted average assumptions for:
Year ended December 31,
|
|||||||
2021
|
2020
|
2019
|
|||||
Volatility
|
50.0% – 55%
|
|
46% – 50%
|
|
50%
|
|
|
Expected term in years
|
3.67 – 4.61
|
4.42 – 4.56
|
5.0 – 6.11
|
||||
Risk-free interest rate
|
0.43% –1.11%
|
|
0.2% – 1.41%
|
1.52% – 2.59%
|
|
||
Estimated fair value of underlying ordinary shares
|
170.35 -323.10
|
27.90 – 158.89
|
12.8 – 22.64
|
||||
Dividend yield
|
0%
|
|
0%
|
|
0%
|
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data) (Continued)
The share options outstanding under the 2011 plan as of December 31, 2021 have been separated into exercise price groups as follows:
Outstanding
|
Exercisable
|
|||||||||||||||
Exercise price
|
Number of share options
|
Weighted average remaining contractual life (in years)
|
Number of share options
|
Weighted
average
remaining
contractual life
(years)
|
||||||||||||
$0.00-$1.87
|
326,020
|
4.80
|
288,650
|
4.52
|
||||||||||||
$2.00-$4.75
|
187,917
|
4.99
|
187,917
|
4.99
|
||||||||||||
$5.55-$8.70
|
315,302
|
6.51
|
278,633
|
6.50
|
||||||||||||
$10.84
|
57,120
|
6.42
|
38,611
|
6.36
|
||||||||||||
$12.78
|
775,979
|
6.89
|
409,426
|
6.75
|
||||||||||||
$18.46-$23.08
|
224,445
|
7.07
|
152,708
|
7.05
|
||||||||||||
$24.79
|
221,873
|
4.60
|
138,045
|
4.60
|
||||||||||||
$25.82-$27.90
|
198,358
|
5.13
|
86,398
|
5.13
|
||||||||||||
$80.29-$217.49
|
225,695
|
5.64
|
68,443
|
5.56
|
||||||||||||
$236.62-$323.10
|
375,889
|
5.39
|
45,490
|
6.25
|
||||||||||||
Total
|
2,908,598
|
6.04
|
1,694,321
|
5.83
|
||||||||||||
Aggregate intrinsic value
|
$
|
191,531
|
$
|
158,328
|
Intrinsic value represents the potential amount receivable by the option holders had all option holders exercised their share options as of such date.
The aggregate intrinsic value of the exercised share options was $142,419, $128,463 and $$2,715 for the years ended December 31, 2021, 2020 and 2019, respectively.
The grant-date fair value of vested share options was $25,536, $12,620 and $5,768 for the years ended December 31, 2021, 2020 and 2019, respectively.
The following table summarizes the status of RSUs as of and for:
December 31, 2021
|
||||||||
Number of RSUs
|
Weighted-average grant date fair value
|
|||||||
Outstanding at the beginning of the year
|
638,160
|
78.89
|
||||||
Granted
|
457,645
|
262.83
|
||||||
Vested
|
(237,298
|
)
|
114.67
|
|||||
Forfeited
|
(80,347
|
)
|
147.07
|
|||||
Outstanding at the end of the year
|
778,160
|
169.07
|
h.Employee Share Purchase Plan:
On August 2020, the Company adopted the 2020 Employee Share Purchase Plan (the “ESPP”). As of December 31, 2020, a total of 410,000 shares were reserved for issuance under the ESPP. In addition, on the first day of each calendar year beginning on January 1, 2022 and ending on and including January 1, 2030, the number of shares available for issuance under the ESPP will be increased by the lesser of 1% of the shares outstanding on the final day of the immediately preceding calendar year, as determined on a fully diluted basis, and such smaller number of shares as determined by the Company’s board of directors. According to the ESPP, eligible employees may use up to 15% of their salaries to purchase ordinary shares. The price of an ordinary share purchased under the ESPP is equal to 85% of the lower of the fair market value of the ordinary share on the beginning of each offering period or on the purchase date. As of December 31, 2021, 29,059 ordinary shares had been purchased under the ESPP. The ESPP is compensatory and, as such, results in recognition of compensation cost.
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data) (Continued)
The fair value of ESPP was estimated on the grant date based on the following weighted average assumptions for:
Year ended December 31,
|
||||||||||||
2021
|
2020
|
2019
|
||||||||||
Volatility
|
86.0-86.4
|
%
|
61.9
|
%
|
-
|
|||||||
Expected term in years
|
0.5
|
0.5
|
|
|||||||||
Risk-free interest rate
|
0.03-0.08
|
%
|
0.09
|
%
|
-
|
|||||||
Estimated fair value of underlying ordinary shares
|
131.88-206.07
|
196.89
|
-
|
|||||||||
Dividend yield
|
0
|
%
|
0
|
%
|
-
|
Share-based compensation costs are recorded in the consolidated statements of operations were as follows:
Year ended December 31,
|
||||||||||||
2021
|
2020
|
2019
|
||||||||||
Cost of revenue
|
$
|
1,436
|
$
|
384
|
$
|
142
|
||||||
Research and development
|
20,008
|
5,842
|
3,197
|
|||||||||
Sales and marketing
|
14,106
|
3,084
|
1,853
|
|||||||||
General and administrative
|
19,857
|
6,505
|
3,707
|
|||||||||
$
|
55,407
|
$
|
15,815
|
$
|
8,899
|
Note 15: —Financial income (expenses), net
|
|
Year ended December 31, |
|
|||||||||
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
|||
Bank charges and other financial expenses |
|
$ |
(134 |
) |
|
$ |
(369 |
) |
|
$ |
(323 |
) |
Amortization of discount and issuance costs of convertible notes |
|
|
(20,029 |
) |
|
|
(4,036 |
) |
|
|
- |
|
Exchange rate gain (loss), net |
|
|
(1,273 |
) |
|
|
(262 |
) |
|
|
(195 |
) |
Interest income |
|
|
1,923 |
|
|
|
1,867 |
|
|
|
1,889 |
|
|
|
$ |
(19,513 |
) |
|
$ |
(2,800 |
) |
|
$ |
1,371 |
|
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data) (Continued)
Note 16: —Income taxes
Fiver International Ltd.’s subsidiaries are separately taxed under the domestic tax laws of the jurisdiction of incorporation of each entity.
a.Loss before income taxes:
The following are the domestic and foreign components of the Company’s loss before income taxes:
b.Income taxes:
The following are the domestic and foreign components of the Company’s income taxes:
c.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.
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data) (Continued)
Year ended December 31, |
||||||||
2021 |
2020 |
|||||||
Deferred tax assets: |
||||||||
Net operating loss carryforwards |
$ |
44,480 |
$ |
29,280 |
||||
Research and development expenses carryforward |
2,262 |
4,031 |
||||||
Other reserves |
1,630 |
1,089 |
||||||
Share-based compensation |
7,584 |
1,386 |
||||||
Operating lease liabilities |
1,033 |
3,969 |
||||||
Issuance costs |
630 |
2,316 |
||||||
$ |
57,619 |
$ |
42,071 |
|||||
Deferred tax liabilities: |
||||||||
Operating lease ROU assets |
998 |
3,609 |
||||||
Convertible notes |
17,275 |
21,881 |
||||||
Acquired Intangible assets |
2,253 |
- | ||||||
Accrued and other |
603 |
84 |
||||||
Total deferred tax liability |
$ |
21,129 |
$ |
25,574 |
||||
Total deferred tax assets, net |
36,490 |
16,497 |
||||||
Less—valuation allowance |
(36,490 |
) |
(16,497 |
) |
||||
Total deferred tax assets, net of valuation allowance |
$ |
- |
$ |
- |
Based on the available evidence, management believes that it is more likely than not that certain of its deferred tax assets relating to net operating loss carryforwards and other temporary differences will not be realized and accordingly, a valuation allowance has been provided.
d. The reconciliation of the Company’s theoretical income tax expense to actual income tax expense is as follows:
Year ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Loss before income taxes |
$ |
(64,853 |
) |
$ |
(14,610 |
) |
$ |
(33,379 |
) |
|||
Statutory tax rate |
23 |
% |
23 |
% |
23 |
% |
||||||
Theoretical tax benefit |
14,916 |
3,360 |
7,677 |
|||||||||
Increase (decrease) in effective tax rate due to: |
||||||||||||
Change in valuation allowance |
(4,474 |
) |
(2,558 |
) |
(4,872 |
) |
||||||
Effect of entities with different tax rates |
(28 |
) |
(47 |
) |
38 |
|
||||||
Non-deductible expenses |
(11,501 |
) |
(2,964 |
) |
(3,015 |
) |
||||||
Impact of different tax rate on temporary differences |
(462 |
) |
(119 |
) |
- |
|||||||
Excess tax benefit on stock based compensation |
1,562 |
2,178 |
4 |
|||||||||
Other |
(172 |
) |
(50 |
) |
8 |
|
||||||
Effective income taxes |
$ |
(159 |
) |
$ |
(200 |
) |
$ |
(160 |
) |
e.Net operating loss carryforward:
As of December 31, 2021, the Company had an indefinite Net Operating Losses (“NOL”) carryforward for Israeli tax purposes of approximately $114,981. These NOL carryforwards can be carried forward and offset against taxable income. The Company also had a NOL carryforward for U.S. tax purposes of approximately $82,550 as of December 31, 2021. NOL’s for U.S. Federal income tax purposes (“Federal NOL’s”) generated in the years ended December 31, 2014 through 2017 will begin to expire in 2035 for federal income tax purposes. Federal NOL’s originating before January 1, 2018, are eligible to offset taxable income, if not otherwise limited under Internal Revenue Code (“IRC”) 382 limitations. Federal NOL’s generated after December 31, 2017, have an infinite carryforward period and are subject to 80% deduction limitation based upon pre-NOL deduction taxable income. All of the federal NOL’s of the Company are expected to be subject to certain limitations under 382 following that change in control that occurred upon acquisition of both ClearVoice, Working Not Working, Inc. and CreativeLive.
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data) (Continued)
f.Basis of taxation:
The Israeli corporate tax rate was 23% for the years ended December 31, 2021, 2020 and 2019.
The Company has elected 2012 to be its election year to be eligible for “Beneficiary Enterprise” standing under amendment No. 60 to tax benefits section No. 51 to the Law for the Encouragement of Capital Investments, 1959 (the “Law”).
Pursuant to the provisions of the Law, in the event that the Company is profitable for tax purposes, the Company’s undistributed income will be tax- exempt for a period of two years beginning from the year in which taxable income is first earned. In the remaining years of benefits (between three to eight years, depending on the level of non-Israeli investments), the Company will be liable to reduced corporate tax at the rate of 10% to 25%, based on the percentage of foreign ownership.
Any income derived from sources other than from the Beneficiary Enterprise would be subject to the statutory corporate tax rate.
The period of tax benefits described above is subject to limits of 12 years from the year of election.
The entitlement to the above benefits is conditional upon the Company’s fulfilling the conditions stipulated by the Law, regulations published there under and the letters of approval for the specific investments in “Beneficiary Enterprise.” In the event of failure to comply with these conditions, the benefits may be cancelled, and the Company may be required to refund the amount of the benefits, in whole or in part, including interest.
In December 2016, the Economic Efficiency Law (Legislative Amendments for Applying the Economic Policy for the 2017 and 2018 Budget Years), published Amendment No. 73 to the Law for the Encouragement of Capital Investments (the “2017 Amendment”) which reduces the corporate income tax rate to 24% (instead of 25%) effective from January 1, 2017 and to 23% effective from January 1, 2018. In addition, according to the 2017 Amendment, a preferred enterprise located in development area A will be subject to a tax rate of 7.5% instead of 9% effective from January 1, 2017 and thereafter (the tax rate applicable to preferred enterprises located in other areas remains at 16%).
In December 2016, pursuant to amendment No. 73 to the law, the tax rate on preferred Technological Enterprise income was reduced to 12%. This amendment became effective in January 2017. The Company is currently evaluating the scope of the amendment.
On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was enacted into law. The new legislation represents fundamental and dramatic modifications to the U.S. tax system. The Act contains several key tax provisions that will impact the Company’s U.S. subsidiaries, including the reduction of the maximum U.S. federal corporate income tax rate from 35% to 21%, effective January 1, 2018. Other significant changes under the Act include, among others, a one-time repatriation tax on accumulated foreign earnings, a limitation of net operating loss deduction to 80% of taxable income, and indefinite carryover of post-2017 net operating losses. The Act also repeals the corporate alternative minimum tax for tax years beginning after December 31, 2017. Losses generated prior to January 1, 2018 will still be subject to the 20-year carryforward limitation and the alternative minimum tax. Other potential impacts due to the Act include the repeal of the domestic manufacturing deduction, modification of taxation of controlled foreign corporations, a base erosion anti-abuse tax, modification of interest expense limitation rules, modification of limitation on deductibility of excessive executive compensation, and taxation of global intangible low-taxed income.
The Company has evaluated the effect of the adoption of the Act on its financial statements and adjusted accordingly its tax rate for 2018 and beyond, therefore the impact of the change of the tax rate on the deferred tax assets net was recorded in 2017.
g.Tax assessments:
As of December 31, 2021, the Company had open tax years for the periods between 2016 and 2021 in Israel and for the periods between 2017 and 2021 for the U.S. subsidiaries. The Company has NOL’s in the US from prior tax periods which may be subject to examination in future periods.
Fiverr International Ltd. and subsidiaries
Notes to consolidated financial statements
U.S. dollars (in thousands, except share and per share data) (Continued)
|
|
Year ended December 31,
|
|
|||||||||
|
|
2021
|
|
|
2020
|
|
|
2019
|
|
|||
U.S.
|
|
$
|
154,360
|
|
|
$
|
100,706
|
|
|
$
|
57,938
|
|
Europe
|
|
|
77,019
|
|
|
|
48,331
|
|
|
|
25,181
|
|
Asia Pacific
|
|
|
38,437
|
|
|
|
22,814
|
|
|
|
13,356
|
|
Rest of the world
|
|
|
24,991
|
|
|
|
15,715
|
|
|
|
9,374
|
|
Israel
|
|
|
2,855
|
|
|
|
1,944
|
|
|
|
1,224
|
|
|
|
$
|
297,662
|
|
|
$
|
189,510
|
|
|
$
|
107,073
|
|
WHEREAS, |
Indemnitee is an Office Holder (“Nosse Misra”), as such term is defined in the Companies Law, 5759-1999, as amended (the “Companies
Law” and “Office Holder” respectively), of the Company;
|
WHEREAS, |
both the Company and Indemnitee recognize the increased risk of litigation and other claims being asserted against Office Holders of companies and that highly competent persons have become more reluctant to serve corporations as directors
and officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to, and activities on
behalf of, companies;
|
WHEREAS, |
the Amended and Restated Articles of Association of the Company (the “Articles”) authorize the Company to indemnify and advance expenses to its Office Holders and provide for insurance and
exculpation to its Office Holders, in each case, to the fullest extent permitted by applicable law, and this Agreement is provided to Indemnitee in accordance with applicable law, the Articles and all requisite corporate approvals;
|
WHEREAS, |
the Company has determined that (i) the increased difficulty in attracting and retaining competent persons is detrimental to the best interests of the Company’s shareholders and that the Company should act to assure such persons that there
will be increased certainty of such protection in the future, and (ii) it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest
extent permitted by applicable law, so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;
|
WHEREAS, |
the Company acknowledges that Indemnitee is relying on the obligations of the Company set forth in this Agreement in agreeing to serve the Company, which obligations are therefore irrevocable; and
|
WHEREAS, |
in recognition of Indemnitee’s need for substantial protection against loss arising from the Indemnitee’s liability, including costs and expenses incurred by the Indemnitee due to his or her position as an Office Holder, in order to assure
Indemnitee’s continued service to the Company in an effective manner and, in part, in order to provide Indemnitee with specific contractual assurance that the indemnification, insurance and exculpation afforded by the Articles will be
available to Indemnitee, the Company wishes to undertake in this Agreement for the indemnification of and the advancing of expenses to Indemnitee to the fullest extent permitted by applicable law and as set forth in this Agreement and provide
for insurance and exculpation of Indemnitee as set forth in this Agreement.
|
1. |
INDEMNIFICATION AND INSURANCE.
|
1.1. |
The Company hereby undertakes to indemnify Indemnitee to the fullest extent permitted by applicable law and the Articles, as each may be amended from time to time, for any liability and expense specified in Sections 1.1.1 through 1.1.4
below, imposed on Indemnitee due to or in connection with an act performed by such Indemnitee, either prior to or after the date hereof, in Indemnitee’s capacity as an Office Holder, including, without limitation, as a director, officer,
employee, agent, observer or fiduciary of the Company, any subsidiary thereof or any other corporation, collaboration, partnership, joint venture, trust or other enterprise, in which Indemnitee serves at any time at the request of the Company
(the “Corporate Capacity”). The term “act performed in Indemnitee’s capacity as an Office Holder” shall include, without limitation, any act, omission and failure to act and any other circumstances
relating to or arising from Indemnitee’s service in a Corporate Capacity. Notwithstanding the foregoing, in the event that the Office Holder is the beneficiary of an indemnification undertaking provided by a subsidiary of the Company or any
other entity, with respect to his or her Corporate Capacity with such subsidiary or entity, then the indemnification obligations of the Company hereunder with respect to such Corporate Capacity shall only apply to the extent that the
indemnification by such subsidiary or other entity does not actually fully cover the indemnifiable liabilities and expenses relating thereto. The following shall be hereinafter
referred to as “Indemnifiable Events”:
|
1.1.1. |
a financial liability imposed on Indemnitee in favor of another person by any court judgment, including a judgment given as a result of a settlement or an arbitrator’s award which has been confirmed by a court in respect of an act
performed by the Indemnitee. For purposes of Section 1 of this Agreement, the term “person” shall include, without limitation, a natural person, firm, partnership, joint venture, trust, company,
corporation, limited liability entity, unincorporated organization, estate, government, municipality, or any political, governmental, regulatory or similar agency or body;
|
1.1.2. |
reasonable Expenses (as defined below) expended by Indemnitee as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (1) no
indictment (as defined in the Companies Law) was filed against such Indemnitee as a result of such investigation or proceeding; and (2) no financial liability in lieu of a criminal proceeding (as defined in the Companies Law) was imposed upon
him or her as a result of such investigation or proceeding or if such financial liability was imposed, it was imposed with respect to an offence that does not require proof of criminal intent, or in connection with a financial sanction;
|
1.1.3. |
reasonable Expenses expended by Indemnitee or that were imposed on Indemnitee by a court in a proceeding filed against the Indemnitee by the Company or in its name or by any other person or in a criminal charge in respect of which the
Indemnitee was acquitted or in a criminal charge in respect of which the Indemnitee was convicted for an offence that does not require proof of criminal intent;
|
1.1.4. |
a financial liability imposed upon Indemnitee and reasonable Expenses expended by Indemnitee as a result of an administrative proceeding instituted against Indemnitee. Without derogating from the generality of the foregoing, such liability
or Expense will include a payment which Indemnitee is obligated to make to an injured party as set forth in Section 52(54)(a)(1)(a) of the Israeli Securities Law, 1968 – 5728 (the “Securities Law”) and
Expenses that Indemnitee incurred in connection with a proceeding under Chapters H'3, H'4 or I'1 of the Securities Law; and
|
1.1.5. |
any other event, occurrence, matter or circumstance under any law with respect to which the Company may, or will be able to, indemnify the Indemnitee (including, without limitation in accordance with Section 50P of the Israeli Economic
Competition Law, 5758-1988 (the “RTP Law”), if and to the extent applicable).
|
1.2. |
Notwithstanding anything herein to the contrary, the Company’s undertaking to indemnify the Indemnitee in advance under Section 1.1.1 shall only be with respect to events described in Exhibit A
hereto. The Board of Directors of the Company (the “Board”) has determined that the categories of events listed in Exhibit A are likely to occur in light
of the operations of the Company. The maximum amount of indemnification payable by the Company under Section 1.1.1 of this Agreement with respect to all persons with respect to whom the Company undertook to indemnify under agreements similar
to this Agreement (the “Indemnifiable Persons”), for all events described in Exhibit A shall be as set forth in Exhibit
A hereto (the “Limit Amount”). If the Limit Amount is insufficient to cover all the indemnity amounts payable with respect to all Indemnifiable Persons, then such amount shall be
allocated to such Indemnifiable Persons pro rata according to the percentage of their culpability, as finally determined by a court in the relevant claim, or, absent such determination or in the event such persons are parties to different
claims, based on an equal pro rata allocation among such Indemnifiable Persons. The Limit Amount payable by the Company as described in Exhibit A is deemed by the Company to be reasonable in
light of the circumstances. The indemnification provided under Section 1.1.1 herein shall not be subject to the limitations imposed by this Section 1.2 and Exhibit A if and to the extent such
limits are no longer required by the Companies Law.
|
1.3. |
If so requested by Indemnitee, and subject to the Company’s repayment and reimbursement rights set forth in Sections 3 and 5 below, the Company shall pay amounts to cover Indemnitee’s Expenses with respect to which Indemnitee is entitled
to be indemnified under Section 1.1 above, as and when incurred. The payments of such amounts shall be made by the Company directly to the Indemnitee’s legal and other advisors, as soon as practicable, but in any event no later than fifteen
(15) days after written demand by such Indemnitee therefor to the Company, and any such payment shall be deemed to constitute indemnification hereunder. All amounts paid as indemnification hereunder shall be grossed up to cover any tax
payment that Indemnitee may be required to make if the indemnification payments are taxable, subject to the Limit Amount if required by applicable law. As part of the aforementioned undertaking, the Company will make available to Indemnitee
any security or guarantee that Indemnitee may be required to post in accordance with an interim decision given by a court, governmental or administrative body, or an arbitrator, including for the purpose of substituting liens imposed on
Indemnitee’s assets.
|
1.4. |
The Company’s obligation to indemnify Indemnitee and advance Expenses in accordance with this Agreement shall be for such period as Indemnitee shall be subject to any actual, possible or threatened claim, action, suit, demand or proceeding
or any inquiry or investigation, whether civil, criminal or investigative, arising out of the Indemnitee’s service in the Corporate Capacity as described in Section 1.1 above, whether or not Indemnitee is still serving in such position (the “Indemnification Period).
|
1.5. |
The Company undertakes that, subject to the mandatory limitations under applicable law and the Articles, as in effect from time to time, as long as it may be obligated to provide indemnification and advance Expenses under this Agreement,
the Company will purchase and maintain in effect directors’ and officers’ liability insurance, which will include coverage for the benefit of the Indemnitee, providing coverage in amounts as reasonably determined by the Board; provided that,
the Company shall have no obligation to obtain or maintain directors and officers insurance policy if the Company determines in good faith that such insurance is not reasonably available, the premium costs for such insurance are
disproportionate to the amount of coverage provided, or the coverage provided by such insurance is so limited by exclusions that it provides an insufficient benefit. The Company hereby undertakes to notify the Indemnitee thirty (30) days
prior to the expiration or termination of such directors’ and officers’ liability insurance.
|
1.6. |
The Company undertakes to give prompt written notice of the commencement of any claim hereunder to the insurers in accordance with the procedures set forth in each of the policies. The Company shall thereafter diligently take all actions
reasonably necessary under the circumstances to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such action, suit, proceeding, inquiry or investigation in accordance with the terms of such policies. The
above shall not derogate from Company’s authority to freely negotiate or reach any compromise with the insurer which is reasonable at the Company’s sole discretion provided that the Company shall act in good faith and in a diligent manner.
|
1.7. |
In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee
has requested it, and the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption.
|
2. |
SPECIFIC LIMITATIONS ON INDEMNIFICATION.
|
3. |
REPAYMENT OF EXPENSES.
|
3.1. |
In the event that the Company provides or is required to provide indemnification with respect to Expenses hereunder and at any time thereafter the Company determines, based on advice from its legal counsel, that the Indemnitee was not
entitled to such payments, the amounts so indemnified by the Company will be promptly repaid by Indemnitee, unless the Indemnitee disputes the Company’s determination, in which case the Indemnitee’s obligation to repay to the Company shall be
postponed until such dispute is resolved by a court of competent jurisdiction in a final and non-appealable order.
|
3.2. |
Indemnitee’s obligation to repay the Company for any Expenses or other sums paid hereunder shall be deemed as a loan given to Indemnitee by the Company subject to the minimum interest rate prescribed by Section 3(9) of the Income Tax
Ordinance [New Version], 1961, or any other legislation replacing it, which is not considered a taxable benefit.
|
4. |
SUBROGATION.
|
5. |
REIMBURSEMENT.
|
6. |
EFFECTIVENESS.
|
7. |
NOTIFICATION AND DEFENSE OF CLAIM.
|
7.1. |
The Company will be entitled to participate therein at its own expense.
|
7.2. |
Except as otherwise provided below, the Company, alone or jointly with any other indemnifying party similarly notified, will be entitled to assume the defense thereof, with counsel selected by the Company. Indemnitee shall have the right
to employ his or her own counsel in such action, suit or proceeding, but the fees and expenses of such counsel incurred after notice from the Company of its assumption of the defense thereof shall be at the expense of Indemnitee, unless:
(i) the employment of counsel by Indemnitee has been authorized in writing by the Company; (ii) the Company shall have, in good faith, reasonably concluded that there may be a conflict of interest under the law and rules of attorney
professional conduct applicable to such claim between the Company and Indemnitee in the conduct of the defense of such action; or (iii) the Company has not in fact employed counsel to assume the defense of such action within reasonable time,
in which cases the reasonable fees and expenses of Indemnitee’s counsel shall be at the expense of the Company. The Company shall not be entitled to assume the defense of any action, suit or proceeding brought by or on behalf of the Company
or as to which the Company shall have reached the conclusion specified in (ii) above.
|
7.3. |
The Company shall not be liable to indemnify Indemnitee under this Agreement for any amounts or expenses paid in connection with a settlement of any action, claim or otherwise, effected without the Company’s prior written consent.
|
7.4. |
The Company shall have the right to conduct the defense as it sees fit in its sole discretion (provided that the Company shall conduct the defense in good faith and in a diligent manner and that the Company and its counsel shall keep the
Indemnitee reasonably notified on a regular basis of all events in the action), including the right to settle or compromise any claim or to consent to the entry of any judgment against Indemnitee without the consent of the Indemnitee,
provided that, the amount of such settlement, compromise or judgment does not exceed the Limit Amount (if applicable) and is fully indemnifiable pursuant to this Agreement (subject to Section 1.2 of this Agreement) and/or applicable law, and
any such settlement, compromise or judgment does not impose any penalty or limitation on Indemnitee without the Indemnitee’s prior written consent. The Indemnitee’s consent shall not be required if the settlement includes a complete release
of Indemnitee, does not contain any admission of wrong-doing by Indemnitee, and includes monetary sanctions only as provided above. In the case of criminal proceedings, the Company and/or its legal counsel will not have the right to plead
guilty or agree to a plea-bargain in the Indemnitee’s name without the Indemnitee’s prior written consent. Neither the Company nor Indemnitee will unreasonably withhold or delay its consent to any proposed settlement.
|
7.5. |
Indemnitee shall fully cooperate with the Company and shall give the Company all information and access to documents, files and to his or her advisors and representatives as shall be within Indemnitee’s power, in every reasonable way as
may be required by the Company with respect to any claim that is the subject matter of this Agreement and in the defense of other claims asserted against the Company (other than claims asserted by Indemnitee), provided that the Company shall
cover all expenses, costs and fees incidental thereto such that the Indemnitee will not be required to pay or bear such expenses, costs and fees.
|
8. |
EXCULPATION.
|
9. |
NON-EXCLUSIVITY.
|
10. |
PARTIAL INDEMNIFICATION.
|
11. |
BINDING EFFECT.
|
12. |
SEVERABILITY.
|
13. |
NOTICE.
|
14. |
GOVERNING LAW; JURISDICTION.
|
15. |
ENTIRE AGREEMENT AND TERMINATION.
|
16. |
NO MODIFICATION AND NO WAIVER.
|
17. |
ASSIGNMENTS; NO THIRD PARTY RIGHTS.
|
18. |
INTERPRETATION; DEFINITIONS.
|
19. |
COUNTERPARTS.
|
Fiverr International Ltd.
|
|
By:
|
|
Name and title:
|
Indemnitee:
|
|
Name:
|
|
Signature:
|
|
Address:
|
CATEGORY OF INDEMNIFIABLE EVENT
|
LIMIT AMOUNT PER EACH SPECIFIC EVENT WITHIN THIS CATEGORY OF EVENTS
|
||
1.
|
Claims in connection with employment relationships with and/or by employees or consultants of the Company, and in connection with business relations between the Company and its employees,
independent contractors, customers, suppliers, partners and various service providers.
|
the greater of (i) an amount equal to 25% of our shareholders’ equity on a consolidated basis, based on our most recent financial statements made publicly available before the date on which the indemnity payment
is made, (ii) $350 million, and (iii) ten percent (10%) of the Company Total Market Cap (which shall mean the average closing price of the Company’s ordinary shares over the 30 trading days prior to the actual payment of indemnification
multiplied by the total number of issued and outstanding shares of the Company as of the date of actual payment) (the “Maximum Amount”).
|
|
2.
|
Negotiations, execution, delivery and performance of agreements of any kind or nature, anti-competitive acts, acts of commercial wrongdoing, approval of corporate actions including the
approval of and recommendation or information provided to shareholders with respect to corporate actions, the approval of the acts of the Company’s management, their guidance and their supervision, actions concerning the approval of
transactions with Office Holders or shareholders, including controlling persons, actions pursuant to or in accordance with the policies and procedures of the Company (whether or not such policies and procedures are published) and claims of
failure to exercise business judgment and a reasonable level of proficiency, expertise and care or any other applicable standard with respect to the Company’s business.
|
The Maximum Amount
|
|
3.
|
Violation, infringement, misappropriation, dilution and other misuse of copyrights, patents, designs, trade secrets and any other intellectual property rights, acts in connection with the
registration, assertion or protection of rights to intellectual property and the defense of claims related to intellectual property, breach of confidentiality obligations, acts in regard of invasion of privacy including with respect to
databases or personal information, acts in connection with slander and defamation, and claims in connection with publishing or providing any information, including any filings with any governmental authorities, whether or not required under
any applicable laws.
|
The Maximum Amount
|
|
4.
|
Violations of securities laws of any jurisdiction, including without limitation, claims under the U.S. Securities Act of 1933, as amended from time to time, or the U.S. Exchange Act of 1934,
as amended from time to time, or under the Israeli Securities Law, as amended from time to time, fraudulent disclosure claims, failure to comply with any securities authority or any stock exchange disclosure or other rules and any other
claims relating to relationships with investors, debt holders, shareholders, holders of any other equity or debt instrument of the Company and the investment community and any claims related to the Sarbanes-Oxley Act of 2002, as amended from
time to time; claims relating to or arising out of financing arrangements, any breach of financial covenants or other obligations towards lenders or debt holders of the Company, class actions, violations of laws requiring the Company to
obtain regulatory and governmental licenses, permits and authorizations in any jurisdiction; actions taken in connection with the issuance, purchase, holding or disposition of any type of securities of Company, including, without limitation,
the grant of options, warrants or other rights to purchase any of the same or any offering of the Company’s securities to private investors or to the public, and listing of such securities, or the offer by the Company to purchase securities
from the public or from private investors or other holders, and any undertakings, representations, warranties and other obligations related to any such offering, listing or offer or to the Company’s status as a public company or as an issuer
of securities.
|
The Maximum Amount
|
5.
|
Liabilities arising in connection with development of any products or services developed, distributed, rendered, sold, provided, licensed or marketed by the Company, and any actions or
omission in connection with the distribution, provision, sale, marketing, license or use of such products or services, including without limitation in connection with professional liability and product liability claims.
|
The Maximum Amount
|
|
6.
|
The offering of securities by the Company to the public, including the offering of securities by a shareholder in connection with a secondary offering.
|
The gross proceeds raised by the Company and/or any selling shareholder in such public offering
|
|
7.
|
The offering of securities by the Company to private investors or the offer by the Company to purchase securities from the public and/or from private investors or other holders pursuant to a
prospectus, agreements, notices, reports, tenders and/or other proceedings.
|
The Maximum Amount
|
|
8.
|
Events in connection with change in ownership or in the structure of the Company, its reorganization, dissolution, winding up, any other arrangements concerning creditors rights or any
decision concerning any of the foregoing, including but not limited to, merger, sale or acquisition of assets, division, spin off, divestiture, change in capital.
|
The Maximum Amount
|
|
9.
|
Any claim or demand made in connection with any transaction not in the ordinary course of business of the Company, including the sale, lease or purchase of, or the receipt or any grant of any
rights with respect to, any assets or business.
|
The Maximum Amount
|
|
10.
|
Any claim or demand made by any third party suffering any personal injury and/or bodily injury or damage to business or personal property or any other type of damage through any act or
omission attributed to the Company, or its employees, agents or other persons acting or allegedly acting on its behalf, including, without limitation, failure to make proper safety arrangements for the Company or its employees and liabilities
arising from any accidental or continuous damage or harm to the Company’s employees, its contractors, its guests and visitors as a result of an accidental or continuous event, or employment conditions, permanent or temporary, in the Company’s
offices.
|
The Maximum Amount
|
11.
|
Any claim or demand made directly or indirectly in connection with complete or partial failure, by the Company or its directors, officers and employees, to pay, report, keep applicable
records or otherwise, of any foreign, federal, state, county, local, municipal or city taxes or other compulsory payments of any nature whatsoever, including, without limitation, income, sales, use, transfer, excise, value added,
registration, severance, stamp, occupation, customs, duties, real property, personal property, capital stock, social security, unemployment, disability, payroll or employee withholding or other withholding, including any interest, penalty or
addition thereto, whether disputed or not.
|
The Maximum Amount
|
|
12.
|
Any administrative, regulatory or judicial actions, orders, decrees, suits, demands, demand letters, directives, claims, liens, investigations, proceedings or notices of noncompliance or
violation by any governmental entity or other person alleging the failure to comply with any statute, law, ordinance, rule, regulation, order or decree of any governmental entity applicable to the Company or any of its businesses, assets or
operations, or the terms and conditions of any operating certificate or licensing agreement.
|
The Maximum Amount
|
|
13.
|
Participation and/or non-participation at the Company’s Board meetings, bona fide expression of opinion and/or voting and/or abstention from voting at the Company’s Board meetings, including,
in each case, any committee thereof.
|
The Maximum Amount
|
|
14.
|
Review and approval of the Company’s financial statements and any specific items or matters within, including any action, consent or approval related to or arising from the foregoing,
including, without limitations, execution of certificates for the benefit of third parties related to the financial statements.
|
The Maximum Amount
|
|
15.
|
Violation of laws, rules or regulations requiring the Company to obtain regulatory and governmental licenses, permits and authorizations (including without limitation relating to export,
import, encryption, antitrust or competition authorities) or laws related to any governmental grants in any jurisdiction.
|
The Maximum Amount
|
|
16.
|
Resolutions and/or actions relating to investments in the Company and/or its subsidiaries and/or affiliated companies and/or the purchase and sale of assets, including the purchase or sale of
companies and/or businesses, and/or investment in corporate or other entities and/or investments in traded securities and/or any other form of investment.
|
The Maximum Amount
|
17.
|
Liabilities arising out of advertising, including misrepresentations regarding the Company's products or services and unlawful distribution of emails.
|
The Maximum Amount
|
|
18.
|
An announcement or statement, including a position taken or an opinion or representation made in good faith by the Office Holder in the course of his duties or in conjunction with his duties,
whether in public or in private, including during a meeting of the Board of Directors of the Company or any of the committees thereof.
|
The Maximum Amount
|
|
19.
|
Management of the Company’s bank accounts, including money management, foreign currency deposits, securities, loans and credit facilities, credit cards, bank guarantees, letters of credit,
consultation agreements concerning investments including with portfolio managers, hedging transactions, options, futures, and the like.
|
The Maximum Amount
|
|
20.
|
Any action or decision in relation to protection of work safety and/or working conditions, including with respect to provisions of the law, procedures or standards as applicable in or outside
of Israel with relating to protection of work safety, pertaining, inter alia, to contamination, health protection, production processes, distribution, use, treatment, storage and transportation of certain materials, including in connection
with corporal damage, property and environmental damages.
|
The Maximum Amount
|
|
21.
|
Any liability arising under any administrative, regulatory, judicial or civil actions orders, decrees, suits, demands, demand letters, directives, claims, liens, investigations, proceedings
or notices of noncompliance or violation of Section 50P of the RTP Law.
|
The Maximum Amount
|
|
22.
|
All actions, consents and approvals relating to a distribution of dividends, in cash or otherwise, or to any other “distribution” as such term is defined under the Companies Law.
|
The Maximum Amount
|
|
23.
|
Any administrative, regulatory, judicial, civil or criminal, actions orders, decrees, suits, demands, demand letters, directives, claims, liens, investigations, proceedings or notices of
noncompliance, violation or breaches alleging potential responsibility, liability, loss or damage (including potential responsibility or liability for costs of enforcement, investigation, cleanup, governmental response, removal or
remediation, property damage or penalties, or for contribution, indemnification, cost recovery, compensation or injunctive relief), whether alleged or claimed by customers, consumers, regulators, shareholders or others, arising out of, based
on or related to: (a) cyber security, cyber-attacks, data loss or breaches, unauthorized access to databases and use or disclosure of information contained therein, not preventing or detecting the breach or failing to otherwise disclose or
respond to the breach; (b) circumstances forming the basis of any violation of any law, permit, license, registration or other authorization required under applicable law governing data security, data protection, network security, information
systems, privacy or any cyber environment (including, users, networks, devices, software, processes, information systems, databases, information in storage or transit, applications, services, and systems that can be connected directly or
indirectly to networks); (c) failure to implement a reporting system or control, or failure to monitor or oversee the operation of such a system; (d) data destruction, extortion, theft, hacking, and denial of service attacks; losses or
liabilities to others caused by errors and omissions, failure to safeguard data or defamation; or (e) security-audit, post-incident public relations and investigative expenses, criminal reward funds, data breach/privacy crisis management
(including, management of an incident, investigation, remediation, data subject notification, call management, credit checking for data subjects, legal costs, court attendance and regulatory fines), extortion liability (including, losses due
to a threat of extortion, professional fees related to dealing with the extortion), or network security liability (including, losses as a result of denial of access, costs related to data on third-parties and costs related to the theft of
data on third-party systems).
|
The Maximum Amount
|
|
Aggregate Limit Amount for all events together.
|
The Maximum Amount
|
* |
Any reference in this Exhibit A to the Company shall include the Company and any entity in which the Indemnitee serves in a Corporate Capacity.
|
Legal Name of Subsidiary
|
Jurisdiction of Organization
|
|
ClearVoice, Inc.
|
United States
|
|
CreativeLive, Inc.
|
United States
|
|
Fiverr, Inc.
|
United States
|
|
Fiverr Germany GmbH
|
Germany
|
|
Fiverr Limited
|
Cyprus
|
|
Sharon Lee Thony Consulting, LLC
|
United States
|
|
Stoke Talent, Inc.
|
United States
|
|
Stoke Talent Ltd.
|
Israel
|
|
Working Not Working, Inc.
|
United States
|
1. |
I have reviewed this annual report on Form 20-F of Fiverr International Ltd.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made,
not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and
for, the periods presented in this report;
|
4. |
The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect,
the company’s internal control over financial reporting; and
|
5. |
The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors
(or persons performing the equivalent functions):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and
report financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
Date: February 17, 2022
|
By:
|
/s/ Micha Kaufman
|
Micha Kaufman
|
||
Chief Executive Officer
(Principal Executive Officer)
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of,
and for, the periods presented in this report;
|
4. |
The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c) |
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
|
(d) |
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect,
the company’s internal control over financial reporting; and
|
5. |
The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors
(or persons performing the equivalent functions):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control overfinancial reporting which are reasonably likely to adversely affect the company’s ability to record, process,summarize and
report financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
Date: February 17, 2022
|
By:
|
/s/ Ofer Katz
|
Ofer Katz
|
||
President and Chief Financial Officer
(Principal Financial Officer)
|
1. |
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and
|
2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: February 17, 2022
|
By:
|
/s/ Micha Kaufman
|
Micha Kaufman
|
||
Chief Executive Officer
(Principal Executive Officer)
|
1. |
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and
|
2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: February 17, 2022
|
By:
|
/s/ Ofer Katz
|
Ofer Katz
|
||
President and Chief Financial Officer
(Principal Financial Officer)
|
/s/ KOST FORER GABBAY &
KASIERER
|
Kost Forer Gabbay & Kasierer
|
A Member of Ernst & Young Global
|
Tel-Aviv, Israel
|
February 17, 2022
|