Allot : Other Report or Announcement

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

(Mark One)

• REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

• ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023
  OR

• TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR
• SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company report..........................................
  For the transition period from ____________ to ____________
  Commission File Number 001-33129

ALLOT LTD

(Exact Name of Registrant as specified in its charter)

N/A

(Translation of Registrant's name into English)

ISRAEL

(Jurisdiction of incorporation or organization)

22 Hanagar Street

Neve Ne'eman Industrial Zone B

Hod-Hasharon 4501317

Israel

(Address of principal executive offices)

Rael Kolevsohn, Adv.

VP Legal Affairs & General Counsel

Allot Ltd

22 Hanagar Street

Neve Ne'eman Industrial Zone B

Hod-Hasharon 4501317, Israel

Tel/Fax: [phone]

(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
Ordinary Shares, par value ILS 0.10 per share	ALLT	The Nasdaq Stock Market, LLC

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 ordinary shares as of December 31, 2023:

38,376,939 ordinary shares, ILS 0.10 par value per share

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 definition 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 ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

† The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on the attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive- based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

International Financial Reporting

U.S. GAAP ☒Standards as issued by theOther ☐

International Accounting Standards Board ☐

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 ☒

					TABLE OF CONTENTS
PART I	4
ITEM 1: Identity of Directors, Senior Management and Advisers	4
ITEM 2: Offer Statistics and Expected Timetable	4
ITEM 3: Key Information	4
A. [Reserved]	4
B. Capitalization and Indebtedness	4
C. Reasons for Offer and Use of Proceeds	4
D. Risk Factors	4
ITEM 4: Information on Allot	30
A. History and Development of Allot	30
B. Business Overview	30
C. Organizational Structure	40
D. Property, Plant and Equipment	41
ITEM 4A: Unresolved Staff Comments	41
ITEM 5: Operating and Financial Review and Prospects	41
A. Operating Results	41
B. Liquidity and Capital Resources	47
C. Research and Development, Patents and Licenses	49
D. Trend Information	50
E. Critical Accounting Estimates	50
ITEM 6: Directors, Senior Management and Employees	55
A. Directors and Senior Management	55
B. Compensation of Officers and Directors	59
C. Board Practices	62
D. Employees	69
E. Share Ownership	70
ITEM 7: Major Shareholders and Related Party Transactions	73
A. Major Shareholders	73
B. Record Holders	73
C. Related Party Transactions	74
D. Interests of Experts and Counsel	74
ITEM 8: Financial Information	74
A. Consolidated Financial Statements and Other Financial Information.	74
B. Significant Changes	75
ITEM 9: The Offer and Listing	75
ITEM 10: Additional Information	75
A. Share Capital	75
B. Memorandum and Articles of Association	75
C. Material Contracts	80
D. Exchange Controls	80
E. Taxation	80
F. Dividends and Paying Agents	91
G. Statement by Experts	91
H. Documents on Display	91
I. Subsidiary Information	91
ITEM 11:Quantitative andQualitative Disclosures About Market Risk	92
ITEM 12: Description of Securities Other Than Equity Securities	93
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PART II	93
ITEM 13: Defaults, Dividend Arrearages and Delinquencies	93
ITEM 14: Material Modifications to the Rights of Security Holders and Use of Proceeds	93
A. Material Modifications to the Rights of Security Holders	93
B. Use of Proceeds	93
ITEM 15: Controls and Procedures	93
ITEM 16: Reserved	94
ITEM 16A: Audit Committee Financial Expert	94
ITEM 16B: Code of Ethics	94
ITEM 16C: Principal Accountant Fees and Services	95
ITEM 16D: Exemptions from the Listing Standards for Audit Committees	95
ITEM 16E: Purchase of Equity Securities by the Company and Affiliated Purchasers	95
ITEM 16F: Change in Registrant's Certifying Accountant	96
ITEM 16G: Corporate Governance	96
ITEM 16H: Mine Safety Disclosure	96
ITEM 16I: Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	96
ITEM 16J: Insider Trading Policies	96
ITEM 16K: Cybersecurity	97
PART III	98
ITEM 17: Financial Statements	98
ITEM 18: Financial Statements	98
ITEM 19: Exhibits	98
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PRELIMINARY NOTES

Terms

As used herein, and unless the context suggests otherwise, the terms "Allot," "Company," "we," "us" or "ours" refer to Allot Ltd.

Cautionary Note Regarding Forward-Looking Statements

In addition to historical facts, this annual report on Form 20-F contains forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended (the "Securities Act"), Section 21E of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements on our current expectations and projections about future events. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, potential market opportunities and the effects of competition. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as "anticipates," "believes," "could," "seeks," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "projects," "should," "will," "would" or similar expressions that convey uncertainty of future events or outcomes and the negatives of those terms. These statements include but are not limited to:

• statements regarding projections of capital expenditures;
• statements regarding competitive pressures;
• statements regarding expected revenue growth;
• statements regarding the expected growth in demand of our products;
• statements regarding trends in mobile networks, including the development of a digital lifestyle, over-the-top applications, the need to manage mobile network traffic and cloud computing, among others;
• statements regarding our ability to develop technologies to meet our customer demands and expand our product and service offerings;
• statements regarding the acceptance and growth of our services by our customers;
• statements regarding the expected growth in the use of particular broadband applications;
• statements as to our ability to meet anticipated cash needs based on our current business plan;
• statements as to the impact of the rate of inflation and the political and security situation on our business;
• statements regarding the price and market liquidity of our ordinary shares;
• statements as to our ability to retain our current suppliers and subcontractors; and
• statements regarding our future performance, sales, gross margins, expenses (including share-based compensation expenses) and cost of revenues.

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These statements may be found in the sections of this annual report on Form 20-F entitled "ITEM 3: Key Information-Risk Factors," "ITEM 4: Information on Allot," "ITEM 5: Operating and Financial Review

and Prospects," "ITEM 10: Additional Information-Taxation-United States Federal Income Taxation-Passive Foreign Investment Company Considerations" and elsewhere in this annual report, including the

section of this annual report entitled "ITEM 4: Information on Allot-BusinessOverview-Overview" and "ITEM 4: Information on Allot-BusinessOverview-Industry Background," which contain information obtained from independent industry sources. Actual results could differ materially from those anticipated in these forward-looking statements due to various factors, including all the risks discussed in "ITEM 3: Key Information-Risk Factors" and elsewhere in this annual report.

All forward-looking statements in this annual report reflect our current views about future events and are based on assumptions and are subject to risks and uncertainties that could cause our actual results to differ materially from future results expressed or implied by the forward-looking statements. Many of these factors are beyond our ability to control or predict. You should not put undue reliance on any forward- looking statements. Unless we are required to do so under U.S. federal securities laws or other applicable laws, we do not intend to update or revise any forward-looking statements.

PART I

ITEM 1: Identity of Directors, Senior Management and Advisers

Not applicable.

ITEM 2: Offer Statistics and Expected Timetable

Not applicable.

ITEM 3: Key Information

1. [Reserved]
2. Capitalization and Indebtedness

Not applicable.

C. Reasons for Offer and Use of Proceeds

Not applicable.

D. Risk Factors

Summary of Risk Factors

Our business involves a high degree of risk. You should consider carefully the risks and uncertainties described below, together with the financial and other information contained in this annual report and our other filings with the U.S. Securities and Exchange Commission (the "SEC"). If any of the following risks actually occur, our business, financial condition and results of operations would suffer. In this case, the trading price of our ordinary shares would likely decline and you might lose all or part of your investment. This report also contains forward-looking statements that involve risks and uncertainties. Our results of operations could materially differ from those anticipated in these forward-looking statements, as a result of certain factors including the risks described below and elsewhere in this report and our other filings with the SEC. These risks are not the only ones we face. Additional risks that we currently do not know about or that we currently believe to be immaterial may also impair our business operations.

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Below is a high-level overview of the risks that we and those in our industry face, and is intended to enhance the readability and accessibility of our disclosures. These risks include, but are not limited to:

• general economic and business conditions, including fluctuations of interest and inflation rates, which may affect demand for our technology and solutions;
• the effects of fluctuations in currency on our results of operation and financial condition;
• our ability to achieve profitability, such as through keeping pace with advances in technology and achieving market acceptance and increasing the functionality of our products and offering additional features and products;
• the impact of the telco operator's Go To Market strategy and implementation efforts, on the success of a Revenue Share deal of our Security-as-a-service ("SECaaS") Solution;
• the impacts of new market and technology trends on our enterprise market;
• our reliance on our network intelligence solutions for significant revenues;
• impacts to our revenues and operational risk as a result of making sales to large service providers;
• technological risks, including network encryption, live network failures and software or hardware errors;
• our ability to retain and recruit key personnel and maintain satisfactory labor relations;
• supply chain interruption and the ability, and lead time, of our suppliers to provide certain hardware due to the global semiconductor shortage;
• our dependence on third parties for products that make up a material portion of our business;
• the ability of our suppliers to provide, or refusal of our customers to implement, the single or limited sources from which certain hardware and software components for our products are made;
• sales disruptions or costs arising from a loss of rights to use the third-party solutions we integrate with our products;
• our ability to increase sales of Allot Secure products;
• our ability to comply with international regulatory regimes wherever we conduct business, including governmental requirements and initiatives related to the telecommunication industry and data privacy;
• potential misuse of our products by governmental or law enforcement customers;
• risks related to our proprietary rights and information, including our ability to protect the intellectual property embodied in our technology, to defend against third-party infringement claims, and protect our IT systems from disruptions;
• risks related to our ordinary shares, including volatile share prices and tax consequences for U.S. shareholders;
• our status as a foreign private issuer and related exemptions with respect thereto;
• exposure to unexpected or uncertain tax liabilities or consequences as a result of changes to fiscal and tax policies;
• conditions and requirements as a result of being incorporated in Israel, including economic volatility and obligations to perform military service;
• costs and business impacts of complying with the requirements of the Israeli government grants received for research and development expenditures;
• costs and business impacts of litigation and other legal and regulatory proceedings encountered in the course of business;
• our ability to successfully identify, manage and integrate acquisitions; and
• other factors as described in the section below.

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Economic and External Risks

Unfavorable or unstable economic conditions in the markets in which we operate could have a material adverse effect on our business, financial condition or operating results.

In recent years, economies worldwide have demonstrated instability. Negative economic conditions in the global economy or certain regions such as the European Market, from which we derived 43% of our revenues in 2023, could cause a decrease in spending on the types of products and services that we offer.

Additionally, if the worldwide economy remains unstable or further deteriorates, enterprises, telecommunication carriers and service providers in affected regions may significantly reduce or postpone capital investments, which could result in reductions in sales of our products or services, longer sales cycles, slower adoption of new technologies and increased price competition in such regions. Such circumstances would have a material adverse effect on our results of operations and cash flows.

Further, because a substantial portion of our operating expenses consists of salaries, we may not be able to reduce our operating expenses in line with any reduction in revenues and, therefore, may not be able to continue to generate increased revenues and manage our costs to achieve profitability.

The global semiconductor chip shortage could delay or disrupt the ability of our suppliers to manufacture and deliver certain hardware that is necessary to our operations.

The global semiconductor chip supply shortage has had, and continues to have, wide-ranging effects across our industry. The shortage has been reported since early 2021 and has caused challenges in the manufacturing industry and impacted our supply chain and production as well. While the semiconductor chip shortage has begun to improve, we still face uncertainties and our ability to source the components that use semiconductor chips may be adversely affected in the future. Component delivery lead times are expected to increase, which may cause delays in our production and increase the cost to obtain components with available semiconductor chips. To the extent this semiconductor chip shortage continues, we may experience delays, increased costs, and an inability to fulfill engineering design changes or customer demand, each of which could adversely impact our results of operations.

Our international operations expose us to the risk of fluctuations in currency exchange rates.

Our revenues are generated primarily in U.S. dollars and a major portion of our expenses are denominated in U.S. dollars. As a result, we consider the U.S. dollar to be our functional currency. A significant portion of our revenues are also generated in Euros. Other significant portions of our expenses are denominated in Israeli shekel (ILS) and, to a lesser extent, in Euros and other currencies. Our ILS-denominated expenses consist principally of salaries and related personnel expenses. We anticipate that a material portion of our expenses will continue to be denominated in ILS. In the past years, we have experienced material fluctuations between the ILS and the U.S. dollar and we anticipate that the ILS will continue to fluctuate against the U.S dollar in the future. In 2023, the ILS depreciated by approximately 3% against the U.S. dollar, while in 2022 the ILS depreciated by approximately 11.6% against the U.S. dollar. In 2023, the Euro depreciated by approximately 3.7% against the U.S. dollar, and in 2022 the Euro appreciated by approximately 5.8% against the U.S. dollar. As the U.S dollar weakens against the ILS, we are exposed to negative impact on our results of operations. Moreover, if the U.S. dollar strengthens against the Euro, our results of operations generated by revenue in the EUR may be negatively impacted.

We translate sales and other results denominated in foreign currency into U.S. dollars for our financial statements. During periods of a strengthening dollar, our reported international sales and earnings have been, and could continue to be, reduced because foreign currencies may translate into fewer U.S. dollars.

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We use derivative financial instruments, such as foreign exchange forward contracts, in an effort to mitigate the risk of changes in foreign exchange rates on forecasted cash flows. We may not purchase derivative instruments adequately to insulate ourselves from foreign currency exchange risks. Volatility in the foreign currency markets may make hedging our foreign currency exposures challenging. In addition, because a portion of our revenue is not earned in U.S. dollars, fluctuations in exchange rates between the U.S. dollar and the currencies in which such revenue is earned may have a material adverse effect on our results of operations and financial condition. We could be adversely affected when the U.S. dollar strengthens relative to the local currency between the time of a sale and the time we receive payment, which would be collected in the devalued local currency. Accordingly, if there is an adverse movement in one or more exchange rates, we might suffer significant losses and our results of operations may otherwise be adversely affected. Uncertainty in global market conditions has resulted in and may continue to cause significant volatility in foreign currency exchange rates which could increase these risks. As our international operations expand, our exposure to these risks also increases.

The invasion of Ukraine by Russia, and the related disruptions to the global economy and financial markets, has affected and could continue to adversely affect our operations in Ukraine and with our service provider in Poland, as well as our business, financial condition and results of operations as a whole.

We are currently engaged with two subcontractors in Ukraine and Poland to support our research and development activities. The Russian invasion of Ukraine in February 2022 and sanctions on Belarus have had a minimal impact on the operations of our subcontractors thus far. However, we may experience interruptions or delays in the services that the Polish company provide to us in the future due to them employing Belarus employees.

In response to the conflict, the United States, the European Union, Japan and the United Kingdom, among others, have announced targeted economic sanctions on Russia, the regions of Donetsk and Luhansk, certain Russian citizens and enterprises, including financial measures such as freezing Russia's central bank assets and limiting its ability to access its dollar reserves. The continuation of the conflict may trigger a series of additional economic and other sanctions enacted by the United States and other countries, as well as counter responses by the governments of Russia or other jurisdictions, which could adversely affect the global financial markets generally, levels of economic activity, and increase financial markets volatility. The potential impact of bans, sanction programs and boycotts on our business is uncertain at the current time due to the fluid nature of the military conflict and international responses to it, but it could result in a material adverse effect on our business, financial condition, and results of operations. In addition, the potential impacts include supply chain and logistics disruptions, financial impacts including volatility in commodity prices, foreign exchange rates and interest rates, inflationary pressures on raw materials and energy, heightened cybersecurity threats and other restrictions.

Risks Related to our Business and Results of Operations

We have a history of losses and may not be able to achieve or maintain profitability in the future.

We have a history of net losses in the last ten years. We had a net loss of $63 million in 2023 and $32 million in 2022. In the future, we intend to continue to invest significantly in research and development and sales and marketing, which we believe will contribute to our future growth. We can provide no assurance that we will be able to achieve or maintain profitability, and we may incur losses in the future if we do not generate sufficient revenues.

Our inability to streamline operations and improve cost efficiencies could result in the contraction of our business and the implementation of significant cost cutting measures.

We have undertaken, and may continue to undertake, efforts to streamline operations and improve cost efficiencies. We may not realize, in full or in part, the anticipated benefits, savings and improvements in our operating results from these efforts due to unforeseen difficulties, delays or unexpected costs. If we are unable to realize the expected operational efficiencies and cost savings, our operating results and financial condition would be adversely affected. We also cannot guarantee that we will not have to undertake additional workforce reductions in the future. Furthermore, our workforce reductions may be further disruptive to our operations. For example, our workforce reductions could yield unanticipated consequences, such as adversely impacting our ability to perform our contractual obligations in a timely manner and at required level of quality, attrition beyond planned staff reductions, increased difficulties in our day-to-day operations and reduced employee morale. In addition, while positions have been eliminated, certain functions necessary to our reduced operations remain, and we may be unsuccessful in distributing the duties and obligations of departed employees among our remaining employees. We may also discover that the reductions in workforce and cost cutting measures will make it difficult for us to pursue new opportunities and initiatives and require us to hire qualified replacement personnel, which may require us to incur additional and unanticipated costs and expenses. Moreover, there is no assurance we will be successful in our efforts. Our failure to successfully accomplish any of the above activities and goals may have a material adverse impact on our business, financial condition, and results of operations.

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Our future growth and prospects depend significantly on our ability to grow revenues from the recurring revenue share Security-as-a-service offering.

We generated 11% of our revenues in 2023, 6% of our revenues in 2022 and 3% of our revenues in 2021 from our SECaaS offering. While we continue to forecast significant future expansion of our SECaas business, the growth of our SECaaS recurring revenue model has been slower than originally anticipated. We will need to expand the number of recurring security revenue deals and the end user penetration within existing customers to achieve the goals that we have set for our business. This will involve a number of steps. Initially, we need to persuade Communication Service Providers (CSPs) as to the benefits that Allot Secure can offer them in terms of driving additional revenue. Those CSPs, with our support, will then need to persuade their customers, consumers and small and medium-sized businesses, to subscribe for security services. We expect that we will need to demonstrate the value that our services offer and add new features to both (i) retain customers in the face of competition and (ii) to capitalize on opportunities where CSPs currently using our competitors' products are considering a change. We face significant challenges in growing our security business and our failure to do so would adversely impact our future growth and prospects.

Our revenues and business may be adversely affected if we do not effectively compete in the markets in which we operate, or expand into new markets.

We compete against large companies in a rapidly evolving and highly competitive sector of the networking technology and security markets, which offer, or may offer in the future, competing technologies, including partial or alternative solutions to operators' and enterprises' challenges, and which, similarly to us, intensely pursue the largest service providers (referred to as Tier 1 operators) as well as large enterprises. Our ability to effectively compete in these markets may be limited since our competitors may have greater financial resources, significant market share and established relationships with operators and distribution channels.

Our Deep Packet Inspection (DPI) technology enabled offerings face significant competition from router and switch infrastructure companies that integrate functionalities into their platforms, addressing some of the same types of issues that our products are designed to address.

Our security products are offered to operators and are deployed in their networks, enabling them to provide security services to their end customers. Such products face significant competition from companies that directly offer to end customers security applications to be installed on their devices; companies that approach that directly offer cloud security products to the business enterprise sector through distribution channels; and companies that offer security products bundled with other products. By offering our security products to operators that provide security services to both business enterprises and individual end customers, we aim to expand the reach of our products. However, this business model may prove to be slower to market or less effective than our competitors' models, in which case our business and growth prospects may be harmed.

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