0001178913-21-001037 | 20-F | XBRL Viewer

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Document and Entity Information	12 Months Ended
Document and Entity Information	Dec. 31, 2020 shares
Entity Central Index Key	0001365767
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Amendment Flag	false
Document Type	20-F
Document Registration Statement	false
Document Annual Report	true
Document Transition Report	false
Document Shell Company Report	false
Document Period End Date	Dec. 31, 2020
Entity File Number	001-33129
Entity Registrant Name	Allot Ltd.
Entity Incorporation State Country Code	IL
Entity Address, Address Line One	22 Hanagar Street
Entity Address, Address Line Two	Neve Ne’eman Industrial Zone B
Entity Address, City or Town	Hod-Hasharon
Entity Address, Country	IL
Entity Address, Postal Zip Code	4501317
Title of 12(b) Security	Ordinary Shares, par value ILS 0.10 per share
Trading Symbol	ALLT
Name of Exchange on which Security is Registered	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Auditor Attestation Flag	true
Entity Filer Category	Accelerated Filer
Entity Emerging Growth Company	false
Document Accounting Standard	U.S. GAAP
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	35,382,638
Business Contact [Member]
Contact Personnel Name	Rael Kolevsohn
Entity Address, Address Line One	22 Hanagar Street
Entity Address, Address Line Two	Neve Ne’eman Industrial Zone B
Entity Address, City or Town	Hod-Hasharon
Entity Address, Country	IL
Entity Address, Postal Zip Code	4501317
City Area Code	972
Local Phone Number	(9) 762-8419

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
CURRENT ASSETS:
Cash and cash equivalents	$ 23,599	$ 16,930
Restricted deposits	1,200	23,183
Short-term bank deposits	47,225	5,557
Available-for-sale marketable securities	27,178	61,012
Trade receivables (net of allowance for credit losses of $ 2,309 and $ 1,867 at December 31, 2020 and 2019, respectively)	20,685	29,008
Other receivables and prepaid expenses	14,205	6,528
Inventories	12,586	10,668
Total current assets	146,678	152,886
NON-CURRENT ASSETS:
Restricted deposits	0	10,913
Long-term bank deposits	215	0
Severance pay fund	434	387
Operating lease right-of-use assets	4,458	6,368
Deferred taxes	420	517
Other assets	2,975	926
Property and equipment, net	11,993	8,135
Intangible assets, net	2,744	3,354
Goodwill	31,683	31,683
Total non-current assets	54,922	62,283
Total assets	201,600	215,169
CURRENT LIABILITIES:
Trade payables	2,092	11,676
Employees and payroll accruals	14,138	12,041
Deferred revenues	26,658	36,360
Short-term operating lease liabilities	2,813	3,151
Other payables and accrued expenses	13,161	10,214
Total current liabilities	58,862	73,442
LONG-TERM LIABILITIES:
Deferred revenues	9,782	5,262
Long-term operating lease liabilities	1,835	3,820
Accrued severance pay	969	794
Total long-term liabilities	12,586	9,876
COMMITMENTS AND CONTINGENT LIABILITIES
SHAREHOLDERS' EQUITY:
Share capital - Ordinary shares of NIS 0.1 par value - Authorized: 200,000,000 shares at December 31, 2020 and 2019; Issued: 36,198,638 and 35,336,728 shares at December 31, 2020 and 2019, respectively; Outstanding: 35,382,638 and 34,520,728 shares at December 31, 2020 and 2019, respectively	896	871
Additional paid-in capital	283,065	276,112
Treasury stock at cost - 816,000 shares at December 31, 2020 and 2019.	(3,998)	(3,998)
Accumulated other comprehensive income (loss)	146	(525)
Accumulated deficit	(149,957)	(140,609)
Total shareholders' equity	130,152	131,851
Total liabilities and shareholders' equity	$ 201,600	$ 215,169

CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Thousands	Dec. 31, 2020 USD ($) shares	Dec. 31, 2019 USD ($) shares
Statement of Financial Position [Abstract]
Allowance for credit losses \| $	$ 2,309	$ 1,867
Ordinary shares, shares authorized	200,000,000	200,000,000
Ordinary shares, shares issued	36,198,638	35,336,728
Ordinary shares, shares outstanding	35,382,638	34,520,728
Treasury stock, shares	816,000	816,000

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Revenues:
Total revenues	$ 135,922	$ 110,100	$ 95,837
Cost of revenues:
Total cost of revenues	40,082	33,834	29,349
Gross profit	95,840	76,266	66,488
Operating expenses:
Research and development (net of grant participations of $ 339, $ 378 and $ 374 for the years ended December 31, 2020, 2019 and 2018, respectively)	43,447	31,461	25,418
Sales and marketing	47,528	47,105	40,849
General and administrative	13,894	6,678	10,416
Total operating expenses	104,869	85,244	76,683
Operating loss	(9,029)	(8,978)	(10,195)
Financial income, net	1,857	1,960	2,208
Loss before income tax expense	(7,172)	(7,018)	(7,987)
Income tax expense	2,176	1,641	2,428
Net loss	(9,348)	(8,659)	(10,415)
Unrealized gain (loss) on available-for-sale marketable securities	191	666	(216)
Net amount reclassified to earnings from available-for-sale marketable securities	(40)	4	(10)
Total comprehensive gain (loss) from available-for-sale marketable securities	151	670	(226)
Unrealized gain (loss) on foreign currency cash flow hedges transactions	723	(332)	(1,480)
Net amount reclassified to earnings from hedging transactions	(203)	(96)	903
Total comprehensive gain (loss) from hedge transactions	520	(428)	(577)
Total comprehensive loss	$ (8,677)	$ (8,417)	$ (11,218)
Net loss per share:
Basic and diluted	$ (0.27)	$ (0.25)	$ (0.31)
Weighted average number of shares used in per share computations of net loss:
Basic and diluted	35,007,201	34,250,582	33,710,507
Product [Member]
Revenues:
Total revenues	$ 92,524	$ 67,440	$ 56,169
Cost of revenues:
Total cost of revenues	28,524	22,743	20,061
Service [Member]
Revenues:
Total revenues	43,398	42,660	39,668
Cost of revenues:
Total cost of revenues	$ 11,558	$ 11,091	$ 9,288

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Statement [Abstract]
Grants participations excluded from research and development costs	$ 339	$ 378	$ 374

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Ordinary shares [Member]	Additional paid-in capital [Member]	Treasury Stock [Member]	Accumulated other comprehensive income (loss) [Member]	Accumulated deficit [Member]	Total
Balance at Dec. 31, 2017	$ 851	$ 268,487	$ (3,998)	$ 36	$ (122,247)	$ 143,129
Balance, shares at Dec. 31, 2017	33,483,262
Cumulative effect of new accounting standard (See Note 1)					712	712
Exercise of stock options and restricted stock units	$ 2	416				$ 418
Exercise of stock options and restricted stock units, shares	412,999					100,737
Stock-based compensation		2,862				$ 2,862
Other comprehensive income (loss)				(803)		(803)
Net loss					(10,415)	(10,415)
Balance at Dec. 31, 2018	$ 853	271,765	(3,998)	(767)	(131,950)	135,903
Balance, shares at Dec. 31, 2018	33,896,261
Exercise of stock options and restricted stock units	$ 18	974				$ 992
Exercise of stock options and restricted stock units, shares	624,467					223,295
Stock-based compensation		3,373				$ 3,373
Other comprehensive income (loss)				242		242
Net loss					(8,659)	(8,659)
Balance at Dec. 31, 2019	$ 871	276,112	(3,998)	(525)	(140,609)	$ 131,851
Balance, shares at Dec. 31, 2019	34,520,728					34,520,728
Exercise of stock options and restricted stock units	$ 25	1,810				$ 1,835
Exercise of stock options and restricted stock units, shares	861,910					290,828
Stock-based compensation		5,143				$ 5,143
Other comprehensive income (loss)				671		671
Net loss					(9,348)	(9,348)
Balance at Dec. 31, 2020	$ 896	$ 283,065	$ (3,998)	$ 146	$ (149,957)	$ 130,152
Balance, shares at Dec. 31, 2020	35,382,638					35,382,638

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

- Definition

Amount after tax and reclassification adjustments of other comprehensive income (loss).

+ References

+ Details

- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

+ References + Details

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Cash flows from operating activities:
Net loss	$ (9,348)	$ (8,659)	$ (10,415)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	4,312	4,359	3,834
Stock-based compensation	5,198	3,420	2,862
Capital loss	18		39
Increase (decrease) in accrued severance pay, net	128	(54)	16
Decrease (increase) in other assets	(2,048)	(326)	535
Decrease in accrued interest and amortization of premium on available-for sale marketable securities	357	343	804
Decrease (increase) in operating lease right-of-use asset	1,910	(6,368)
Increase (decrease) in operating leases liability	(2,323)	6,971
Decrease (increase) in trade receivables	8,323	(2,915)	(3,356)
Increase in other receivables and prepaid expenses	(7,272)	(3,168)	(1,101)
Increase in inventories	(1,918)	(253)	(3,448)
Decrease (increase) in long-term deferred taxes, net	96	(236)	20
Increase (decrease) in trade payables	(9,584)	3,863	1,945
Increase (decrease) in employees and payroll accruals	2,047	4,635	(1,178)
Increase (decrease) in deferred revenues	(5,182)	23,520	3,566
Increase (decrease) in other payables and accrued expenses	3,061	(9,040)	6,906
Net cash provided by (used in) operating activities	(12,225)	16,092	1,029
Cash flows from investing activities:
Decrease (increase) in restricted deposits	32,896	(33,374)	(294)
Redemption of (Investment in) short-term deposits	(41,883)	16,986	8,500
Purchase of property and equipment	(7,582)	(3,708)	(3,485)
Investment in available-for sale marketable securities	(1,219)	(39,950)	(34,777)
Proceeds from sales and maturity of available-for sale marketable securities	34,847	43,555	32,651
Acquisition of Netonomy, net of cash			(3,048)
Net cash provided by (used in) investing activities	17,059	(16,491)	(453)
Cash flows from financing activities:
Proceeds from exercise of stock options	1,835	993	418
Net cash provided by financing activities	1,835	993	418
Increase in cash and cash equivalents	6,669	594	994
Cash and cash equivalents at the beginning of the year	16,930	16,336	15,342
Cash and cash equivalents at the end of the year	23,599	16,930	16,336
Cash paid during the year for:
Taxes	410	473	$ 347
Non-cash activity:
Right-of-use assets obtained in the exchange for operating lease liabilities	$ 1,080	$ 1,208

GENERAL

12 Months Ended

Dec. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

GENERAL

NOTE 1:-GENERAL

a.Allot Ltd. (the "Company") was incorporated in November 1996 under the laws of the State of Israel. The Company is engaged in developing, selling and marketing of leading innovative network intelligence (“AllotSmart”) and security solutions (“AllotSecure”) for mobile and fixed service providers as well as enterprises worldwide. Our solutions are deployed globally for network and application analytics, traffic control and shaping, network-based security including mobile security, distributed denial of service (DDoS) protection, IoT security, and more. AllotSmart generates insightful intelligence that allows CSPs to analyze every packet of network, user, application and security data, CSPs can see, control and secure their networks, optimizing performance, minimizing costs and maximizing end-user QoE. AllotSecure provide security service for the mass market and SMB at home, at work and on the go for mobile, fixed and 5G converged networks. AllotSecure enables customers to detect security breaches and protect networks and network users from attacks.

The Company's Ordinary Shares are listed in the NASDAQ Global Select Market under the symbol "ALLT" from its initial public offering in November 2006. Since November 2010, the Company's Ordinary Shares have been listed for trading in the Tel Aviv Stock Exchange as well.

The Company holds thirteen wholly-owned subsidiaries (the Company together with said subsidiaries shall collectively be referred to as "Allot"): Allot Communications, Inc. in Burlington, Massachusetts, United-States (the "U.S. subsidiary"), which was incorporated in 1997 under the laws of the State of California, Allot Communication Europe SARL in Sophia, France (the "European subsidiary"), which was incorporated in 1998 under the laws of France, Allot Communications Japan K.K. in Tokyo, Japan (the "Japanese subsidiary"), which was incorporated in 2004 under the laws of Japan, Allot Communication (UK) Limited (the "UK subsidiary"), which was incorporated in 2006 under the laws of England and Wales, Allot Communications (Asia Pacific) Pte. Ltd. ("the Singaporean subsidiary"), which was incorporated in 2006 under the laws of Singapore, Allot India Private Limited. (the "Indian subsidiary”), which was incorporated in 2012 under the laws of India and commenced its activity in 2013, Allot Communications Africa (PTY) Ltd. (the "African subsidiary”), which was incorporated in 2013 under the laws of South Africa, Allot Communications (Hong Kong) Limited (the "HK subsidiary”), which was incorporated in 2013 under the laws of Hong-Kong, Allot Communications Spain, S.L. Sociedad Unipersonal (the "Spanish subsidiary”), which was incorporated in 2015 under the laws of Spain, Allot Communications (Colombia) S.A.S (the "Colombian subsidiary”), which was incorporated in 2015 under the laws of Colombia and Allot MexSub (the "Mexican subsidiary"), which was incorporated in 2015 under the laws of Mexico, Allot Turkey Komunikasion Hizmeleri limited (the “Turkish subsidiary”), which was incorporated in 2018 under laws of Turkey, Allot Australia (PTY) LTD (the “Australian subsidiary”), which was incorporated in 2018 under the laws of Australia.

F - 11

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 1:-GENERAL (Cont.)

The French, Singaporean, Indian, Colombian and U.S, subsidiaries are engaged in sales and marketing, technical support services and other services of the Company's products. The European (excluding Spanish), Japanese, UK, HK, African, Turkish and Australian subsidiaries are engaged in sales and marketing and other services.

The Spanish and Mexican subsidiaries commenced operations in 2015 and are engaged in the marketing, technical support and development activities of one of the Company's product lines.

b.Acquisition:

On January 14, 2018 (the "Netonomy acquisition date"), the Company entered into a purchase agreement with the shareholders of Netonomy LTD ("Netonomy"), a developer of software-based cybersecurity solutions for the connected home.

The total consideration for the acquisition was $3,765, which consisted of $ 3,180 paid in cash, holdback amount summing to $ 303 and additional contingent consideration at a fair value of $ 282 at the Netonomy acquisition date. As of December 31, 2020, the contingent consideration is estimated at a fair value of $ 834, The change in fair value of the contingent consideration was recorded to operating expenses.

According to the agreement, the holdback amount (“Holdback Amount”) summing to $ 1,100 would be held to partially satisfy any claims for indemnification. Such amount shall be paid in three installments consisting each one 40%, 40% and 20% of the Holdback amount following the first, second and 30-months anniversaries of the Closing Date, respectively. Notwithstanding the aforementioned, a sum of $ 797 out of the Holdback amount shall be paid provided that certain employees keep working in the Company during the here mentioned periods (“the Restricted Holdback Amount”). As of December 31, 2020 the Company has no Holdback liability.

In this agreement, the contingent consideration was payable over a two-and-a-half-year term, starting April 1, 2018 and ended September 30, 2020 ("Contingent Consideration Period") depending on the Company’s revenues from Netonomy’s technology, and has payments cap of $ 1,100. A maximum sum of $ 797 out of the contingent consideration amount shall be paid provided that certain employees keep working in the Company during the mentioned period. The obligations in respect of the holdback amount and the contingent consideration are presented under Other payables and accrued expenses.

As of December 31, 2020, the Contingent Consideration Period ended however, the Contingent Consideration was not settled yet.

F - 12

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 1:-GENERAL (Cont.)

The acquisition was accounted for using the purchase method of accounting in accordance with ASC No. 805, “Business Combinations” ("ASC No. 805"). Accordingly, the purchase price was allocated according to the estimated fair values of the assets acquired and liabilities assumed and the excess of the purchase price over the net tangible and identified intangible assets was assigned to goodwill. The fair value of intangible assets was determined by management with the assistance of a third-party valuation.

On July 2018, the merger of Netonomy with the Company was approved by the Israeli tax authorities with Allot as the receiving company and Netonomy as the transferring company and March 31, 2018 as the Merger Date.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date:

	Fair value

Non-current assets	$	4
Account Payable		(11	)
Other Payables		(142	)
IPR&D		3,659
Goodwill		121

Net assets acquired	$	3,631

The acquired assets are net of cash balance of $132.

IPR&D is related to new technology that is still under development. Netonomy’s solution provides a simple, reliable and secure network for connected homes through a minimal footprint agent installed on the home router, which provides visibility into the network and blocks external and internal attacks. Acquisition costs in a total amount of $49 were recorded to operating expenses. The Company started to depreciate the IPR&D asset from Q3 2019 as the R&D phase was completed and the related product was ready to be sold.

Unaudited pro forma condensed results of operations:

Pro forma results of operations related to this acquisition have not been prepared because they are not material to the Company’s consolidated Statements of Comprehensive Loss.

SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP").

a.Use of estimates:

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. The Company's management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

The novel coronavirus (“COVID-19”) pandemic has created, and may continue to create, significant uncertainty in macroeconomic conditions, and the extent of its impact on the Company’s operational and financial performance will depend on certain developments, including the duration and spread of the outbreak and the impact on the Company’s customers and its sales cycles. The Company considered the impact of COVID-19 on the estimates and assumptions and determined that there were no material adverse impacts on the consolidated financial statements for the period ended December 31, 2020. As events continue to evolve and additional information becomes available, the Company’s estimates and assumptions may change materially in future periods.

b. Financial statements in U.S. dollars:

The majority operation of the Company and its subsidiaries are generated in U.S. dollars ("dollar") or linked to the dollar. The Company's management believes that the dollar is the currency of the primary economic environment in which the Company and its subsidiaries operate. Thus, the functional and reporting currency of the Company and its subsidiaries is the dollar.

Accordingly, monetary accounts maintained in currencies other than the dollar are remeasured into U.S. dollars in accordance with Accounting Standards Codification No. 830, "Foreign Currency Matters" ("ASC No. 830"). All transactions gains and losses from the remeasurement of monetary balance sheet items are reflected in the statements of operations as financial income or expenses as appropriate.

c.Principles of consolidation:

The consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany balances and transactions have been eliminated upon consolidation.

d.Cash and cash equivalents:

The Company considers all unrestricted highly liquid investments which are readily convertible into cash, with a maturity of three months or less at the date of acquisition, to be cash equivalents.

e.Restricted deposits:

The restricted deposits are held in favor of financial institutions in respect of fulfillment of forward contracts and operating obligations.

F - 14

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

f.Short-term bank deposits:

Short-term bank deposits are deposits with maturities of more than three months but less than one year at the balance sheet date. The deposits are in dollars and bear interest at an annual weighted average rate of 0.85% and 2.33% at December 31, 2020 and 2019, respectively. In connection with the Company's hedging transactions, the Company is required to maintain compensating deposits balances in the bank. Out of the short-term bank deposits, a total of $2,500 is due to the hedging transactions as of December 31, 2020 and 2019.

g.Trade Receivable and Allowances:

Trade receivables are recorded and carried at the original invoiced amount which was recognized as revenues less an allowance for any potential uncollectible amounts. The Company makes estimates of expected credit losses for the allowance for doubtful accounts and allowance for unbilled receivables based upon its assessment of various factors, including historical experience, the age of the trade receivable balances, credit quality of its customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from customers. The estimated credit loss allowance is recorded as general and administrative expenses on the Company’s consolidated statements of income (loss).

The follow table displays a rollforward of the total allowance for credit losses for the years ended December 31, 2020, 2019, and 2018.

	2020			2019			2018

Total allowance for credit losses – January 1		1,867			1,415			1,292
Current-period provision for expected credit losses		1,894			866			504
Write-offs		(934	)		(3	)		(11	)
Recoveries collected		(518	)		(411	)		(370	)

Total allowance for credit losses – December 31		2,309			1,867			1,415

F - 15

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

h.Marketable securities:

Marketable securities consist mainly of corporate bonds. The Company determines the appropriate classification of marketable securities at the time of purchase and re-evaluates such designation at each balance sheet date. In accordance with FASB ASC No. 320 “Investments- Debt and Equity Securities,” the Company classifies marketable securities as available-for-sale. Available-for-sale securities are stated at fair value, with unrealized gains and losses reported in accumulated other comprehensive income (loss), a separate component of stockholders’ equity, net of taxes. Realized gains and losses on sales of marketable securities, as determined on a specific identification basis, are included in financial income, net. The amortized cost of marketable securities is adjusted for amortization of premium and accretion of discount to maturity, both of which, together with interest, are included in financial income, net. The Company has classified all marketable securities as short-term, even though the stated maturity date may be one year or more beyond the current balance sheet date, because it is probable that the Company will sell these securities prior to maturity to meet liquidity needs or as part of risk versus reward objectives.

Starting on January 1, 2020, as a result of the adoption of ASC 326, available-for-sale debt securities with an amortized cost basis in excess of estimated fair value are assessed to determine what amount of that difference, if any, is caused by expected credit losses. Expected credit losses on available-for-sale debt securities are recognized in interest and other income (expense), net, on the Company’s consolidated statements of income (loss), and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive income (loss) in stockholders' equity. As of December 31,2020, no credit loss impairment was recorded regarding the available for sale marketable securities.

Prior to the adoption of ASC 326, The Company's securities were reviewed for impairment in accordance with ASC 320. If such assets considered to be impaired, the impairment charge is recognized in earnings when a decline in the fair value of its investments below the cost basis is judged to be Other-Than-Temporary Impairment (OTTI). Factors considered in making such a determination include the duration and severity of the impairment, the reason for the decline in value, the potential recovery period and the Company's intent to sell, including whether it is more likely than not that the Company will be required to sell the investment before recovery of cost basis. Based on the above factors, the Company concluded that unrealized losses on its available-for-sale securities, for the years ended 2020, 2019 and 2018, were not OTTI.

i.Inventories:

Inventories are stated at the lower of cost or net realizable value. Inventory write-offs are provided to cover risks arising primarily from end of life products and from slow-moving items, technological obsolescence, and excess inventory. Inventory write-offs during the years ended December 31, 2020, 2019 and 2018 amounted to $ 1,928, $ 629 and $ 2,231, respectively, and were recorded in cost of revenues.

Provision for slow moving inventory as of December 31, 2020 and 2019 amounted to $ 4,624 and $ 2,839, respectively.

Inventory cost is determined using the weighted average cost method.

F - 16

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

j.Property and equipment, net:

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the assets at the following annual rates:

		%

Lab equipment		16 - 25
Computers and peripheral equipment		33
Office furniture		6
Equipment at customer site		16
Leasehold improvements		Over the shorter of the term of the lease or the useful life of the asset

k.Goodwill:

Goodwill represents the excess of the purchase price over the fair value of net assets of purchased businesses. Under Accounting Standards Codification No. 350, "Intangibles-Goodwill and Other" ("ASC No. 350"), goodwill is not amortized, but rather subject to an annual impairment test, or more often if there are indicators of impairment present. In accordance with ASC No. 350 the Company performs an annual impairment test at December 31 each year.

ASC 350 allows an entity to first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. If the qualitative assessment does not result in a more likely than not indication of impairment, no further impairment testing is required. If the Company elects not to use this option, or if the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then the Company prepares a quantitative analysis to determine whether the carrying value of reporting unit exceeds its estimated fair value. If the carrying value of a reporting unit exceeds its estimated fair value, the Company recognizes an impairment of goodwill for the amount of this excess, in accordance with the guidance in FASB Accounting Standards Update ("ASU") No. 2017-04, Intangibles - Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment, which we adopted as of January 1, 2020.

The Company operates in one operating segment, and this segment comprises its only reporting unit. The Company has performed an annual impairment analysis as of December 31, 2020 and determined that the carrying value of the reporting unit was lower than the fair value of the reporting unit. Fair value is determined using market value. During the years 2020, 2019 and 2018, no impairment losses were recorded.

F - 17

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

l.Impairment of long-lived assets and intangible assets subject to amortization:

Property and equipment and intangible assets subject to amortization are reviewed for impairment in accordance with ASC No. 360, "Accounting for the Impairment or Disposal of Long-Lived Assets," whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Intangible assets acquired in a business combination are recorded at fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets that are not considered to have an indefinite useful life are amortized over their estimated useful lives. Some of the acquired intangible assets are amortized over their estimated useful lives in proportion to the economic benefits realized. This accounting policy results in accelerated amortization of such customer relationships as compared to the straight-line method. All other intangible assets are amortized over their estimated useful lives on a straight-line basis.

The Company has performed an annual impairment analysis as of December 31, 2020 and determined that there were no circumstances indicate the asset’s carrying value may not be recoverable. During the years 2020, 2019 and 2018, no impairment losses were recorded.

m.Revenue recognition:

The Company generates revenues mainly from selling its products along with related maintenance and support services. At times, these arrangements may also include professional services, such as installation services or training. Some of the Company’s product sales are through resellers, distributors, OEMs and system integrators, all of whom are considered end-users. The Company also generates revenues from services, in which the Company provides network filtering and security services to its customers.

The Company adopted accounting standards codification 606, "Revenue from Contracts with Customers" ("ASC 606"), effective on January 1, 2018. The Company recognizes revenue under the core principle that transfer of control to the Company’s customers should be depicted in an amount reflecting the consideration the Company expects to receive. As such, the Company identifies a contract with a customer, identifies the performance obligations in the contract, determines the transaction price, allocates the transaction price to each performance obligation in the contract and recognizes revenues when (or as) the Company satisfies a performance obligation.

Some of the Company's contracts usually include combinations of products and services, that are capable of being distinct and accounted for as separate performance obligations. The products are distinct as the customer can derive the economic benefit of it without any professional services, updates or technical support. The Company allocates the transaction price to each performance obligation based on its relative standalone selling price out of the total consideration of the contract. For support, the Company determines the standalone selling prices based on the price at which the Company separately sells a renewal support contract on a stand-alone basis. For professional services, the Company determines the standalone selling prices based on the price at which the Company separately sells those services on a stand-alone basis. If the standalone selling price is not observable, the Company estimates the standalone selling price by taking into account available information such as geographic or regional specific factors, internal costs, profit objectives, and internally approved pricing guidelines related to the performance obligation.

Product revenue is recognized at a point in time when the performance obligation is being satisfied. Maintenance and support related revenues are deferred and recognized on a straight-line basis over the term of the applicable maintenance and support agreement. Professional services are usually recognized at a point in time when the performance obligation is being satisfied.

The Company also enters into service contracts, in which the Company provide security as a service solution to operators, which the Company considers as its customers. The Company's security as a service solution is offered to operators on a Revenue Share business model, where both the Company and the operator share the revenue generated from the operator's subscribers. Most of the Company's security as a service contracts contain a single performance obligation comprised of series of distinct goods and services satisfied over time. The contracts consideration is based on usage by the operator's subscribers. As such, the Company allocates the variable consideration in those contracts to distinct service periods in which the service is provided and recognizes revenue for each distinct service period.

F - 18

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Deferred revenue includes amounts received from customers for which revenue has not yet been recognized. Deferred revenues are classified as short and long-term based on their contractual term and recognized as (or when) the Company performs under the contract.

The portion of the transaction price allocated to remaining performance obligations represents contracts that have not yet been recognized that include deferred revenue and amounts not yet received that will be recognized as revenue in future periods. The aggregate amount of the transaction price allocated to remaining performance obligations that the Company expects to recognize is $ 110 million of which approximately $77 million is estimated to be recognized before December 31, 2021 and approximately $33 million is estimated to be recognized after December 31, 2021.

The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less.

The Company pays sales commissions to sales and marketing personnel based on their certain predetermined sales goals. The company evaluates its commission and capitalize only incremental commissions costs which are considered recoverable costs of obtaining a contract with a customer. These capitalized sales commissions costs are amortized over a period of benefit which is typically over the term of the customer contracts as initial commission rates are commensurate with the renewal commission rates. Amortization expenses related to these costs are included in sales and marketing expenses in the consolidated statements of operations. For the year ended December 31, 2020, the amortization of deferred commission was $1,286. The Company uses the practical expedient and does not assess the existence of a significant financing component when the difference between payment and revenue recognition is a year or less.

The Company estimated variable consideration related to product returns based on its experience with historical product returns and other known factors. Such provisions amounted to $290 and $163 as of December 31, 2020 and 2019, respectively. As of December 31, 2020 and 2019, this provision was recorded as part of other payables and accrued expenses.

Following the adoption of ASC 606 in January 1, 2018, the Company recognizes for term-based license agreements at the point in time when control transfers and the associated maintenance revenues over the contract period. Adoption of the standard has resulted in a reduction of deferred revenues of $712 that was recorded in accumulated deficit due to upfront recognition of license revenues from term licenses.

n.Cost of revenues:

Cost of revenues consists primarily of costs of materials and the cost of maintenance and services, resulting from costs associated with support, customer success and professional services.

F - 19

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

o.Advertising expenses:

Advertising expenses are charged to the statement of comprehensive loss, as incurred. Advertising expenses for the years ended December 31, 2020, 2019 and 2018 amounted to $ 1,103, $ 1,274 and $ 1,270, respectively.

p.Research and development costs:

Accounting Standards Codification No. 985-20, requires capitalization of certain software development costs subsequent to the establishment of technological feasibility.

Based on the Company's product development process, technological feasibility is established upon the completion of a working model. The Company does not incur material costs between the completion of a working model and the point at which the products are ready for general release. Therefore, research and development costs are charged to the consolidated statement of comprehensive loss as incurred.

q.Severance pay:

The liability in Israel for substantially all of the Company`s employees in respect of severance pay liability is calculated in accordance with Section 14 of the Severance Pay Law -1963 (herein- "Section 14"). Section 14 states that Company's contributions for severance pay shall be in line of severance compensation and upon release of the policy to the employee, no additional obligations shall be conducted between the parties regarding the matter of severance pay and no additional payments shall be made by the Company to the employee.

Furthermore, the related obligation and amounts deposited on behalf of such obligation under Section 14, are not stated on the balance sheet, because pursuant to the current ruling, they are legally released from the obligation to employees once the deposits have been paid.

There are a limited number of employees in Israel, for whom the Company is liable for severance pay. The Company's liability for severance pay for its Israeli employees was calculated pursuant to Section 14, based on the most recent monthly salary of its Israeli employees multiplied by the number of years of employment as of the balance sheet date for such employees.

The Company's liability was partly provided by monthly deposits with severance pay funds and insurance policies and the remainder by an accrual.

Severance expense for the years ended December 31, 2020, 2019 and 2018, amounted to $ 3,619, $ 2,249 and $ 1,950, respectively.

F - 20

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

r.Accounting for stock-based compensation:

The Company accounts for stock-based compensation in accordance with Accounting Standards Codification No. 718, "Compensation - Stock Compensation" ("ASC No. 718") that requires companies to estimate the fair value of equity-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company's consolidated statement of comprehensive loss. The Company recognizes compensation expenses for the value of its awards based on the straight-line method over the requisite service period of each of the awards, net of estimated forfeitures.

The Company accounted for changes in award terms as a modification in accordance with ASC 718. A modification to the terms of an award should be treated as an exchange of the original award for a new award with total compensation cost equal to the grant-date fair value of the original award plus the incremental value measured at the same date. Under ASC 718, the calculation of the incremental value is based on the excess of the fair value of the new (modified) award based on current circumstances over the fair value of the original award measured immediately before its terms are modified based on current circumstances.

The Company estimated the forfeiture rate based on historical forfeitures of equity awards and adjusted the rate to reflect changes in facts and circumstances if any. The Company adopted ASU 2016-09 in the first quarter of the fiscal year 2017 and elected to retain its existing accounting policy and estimate expected forfeitures.

The following table sets forth the total stock-based compensation expense resulting from stock options, restricted share units and Phantoms granted to employees included in the consolidated statements of comprehensive loss, for the years ended December 31, 2020, 2019 and 2018:

	Year ended December 31,
	2020		2019		2018

Cost of revenues	$	355	$	264	$	316
Research and development		1,368		847		678
Sales and marketing		2,145		1,257		928
General and administrative		1,330		1,052		940

Total stock-based compensation expense	$	5,198	$	3,420	$	2,862

F - 21

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

The Company selected the binomial option pricing model as the most appropriate fair value method for its stock options awards with the following assumptions for the years ended December 31, 2018:

	Year ended December 31,
	2018

Suboptimal exercise multiple		2.9-3.5
Risk free interest rate		2.09%-3.05%
Volatility		26%-47%
Dividend yield		0%

The expected annual post-vesting and pre-vesting forfeiture rates affects the number of exercisable options. Based on the Company's historical experience, the pre-vesting and post-vesting are in the range of 0%-33% and 0%-41%, respectively, in the years 2020, 2019 and 2018. During 2019 and 2020 no options were granted by the Company.

The computations of expected volatility and suboptimal exercise multiple is based on the average of the Company's realized historical stock price. The computation of the suboptimal exercise multiple and the forfeiture rates are based on the grantee's expected exercise prior and post vesting termination behavior. The interest rate for a period within the contractual life of the award is based on the U.S. Treasury Bills yield curve in effect at the time of grant.

The Company currently has no plans to distribute dividends and intends to retain future earnings to finance the development of its business.

The expected life of the stock options represents the weighted-average period the stock options are expected to remain outstanding and is a derived output of the binomial model. The expected life of the stock options is impacted by all of the underlying assumptions used in the Company's model.

The option pricing model of the of restricted stock units ("RSUs") is based on the closing market value of the underlying shares at the date of grant.

s.Treasury stock:

In the past, the Company repurchased its Ordinary shares on the open market and holds such shares as treasury stock. The Company presents the cost to repurchase treasury stock as a reduction of shareholders' equity.

t.Concentration of credit risks:

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities, short-term bank deposits, trade receivables and derivative instruments.

F - 22

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

The majority of cash and cash equivalents and short-term deposits of the Company are invested in dollar deposits in major U.S. and Israeli banks. Such investments in the United States may be in excess of insured limits and are not insured in other jurisdictions. Generally, the cash and cash equivalents and short-term bank deposits may be redeemed upon demand, and therefore, bear minimal risk.

Marketable securities include investments in dollar linked corporate and government bonds. Marketable securities consist of highly liquid debt instruments with high credit standing. The Company’s investment policy, approved by the Board of Directors, limits the amount the Group may invest in any one type of investment or issuer, thereby reducing credit risk concentrations. Management believes that the portfolio is well diversified and, accordingly, minimal credit risk exists with respect to these marketable debt securities.

The Company's trade receivables are derived from sales to customers located in EMEA, as well as in APAC, Latin America and the United States. Concentration of credit risk with respect to trade receivables is limited by credit limits, ongoing credit evaluation and account monitoring procedures. The Company performs ongoing credit evaluations of its customers and establishes an allowance for credit losses on a specific basis. Allowance for credit losses amounted to $ 2,309 and $ 1,867 as of December 31, 2020 and 2019, respectively.

The Company utilizes foreign currency forward contracts to protect against risk of overall changes in exchange rates. The derivative instruments hedge a portion of the Company's non-dollar currency exposure. Counterparties to the Company’s derivative instruments are all major financial institutions and its exposure is limited to the amount of any asset resulting from the forward contracts.

u.Grants from the Israel Innovation Authority:

Participation grants from the Israel Innovation Authority (Previously known as the Office of the Chief Scientist) for research and development activity are recognized at the time the Company is entitled to such grants on the basis of the costs incurred and included as a deduction of research and development costs. Research and development non royalty bearing grants recognized amounted to $ 339, $ 378 and $ 374 in 2020, 2019 and 2018, respectively.

v.Income taxes:

The Company accounts for income taxes in accordance with Accounting Standards Codification No. 740, "Income Taxes" ("ASC No. 740"). ASC No. 740 prescribes the use of the liability method, whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

F - 23

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value if it is more likely than not that some portion or all of the deferred tax assets will not be realized. The deferred tax assets and liabilities are classified to non-current assets and liabilities, respectively.

ASC No. 740 contains a two-step approach to recognizing and measuring a liability for uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company classifies interest related to unrecognized tax benefits in taxes on income.

w.Basic and diluted net income (loss) per share:

Basic net income (loss) per share is computed based on the weighted average number of Ordinary Shares outstanding during each year. Diluted net income (loss) per share is computed based on the weighted average number of Ordinary Shares outstanding during each year, plus dilutive potential Ordinary Shares considered outstanding during the year, in accordance with FASB ASC 260 "Earnings Per Share".

For the years ended December 31, 2020, 2019 and 2018, all outstanding options and RSUs have been excluded from the calculation of the diluted net loss per share since their effect was anti-dilutive. See Note 16. The amount of those options and RSU’s was: 2,897,273, 3,105,801, 2,998,174 respectively.

x.Comprehensive loss:

The Company accounts for comprehensive loss in accordance with Accounting Standards Codification No. 220, "Comprehensive Income" ("ASC No. 220"). This statement establishes standards for the reporting and display of comprehensive loss and its components in a full set of general purpose financial statements. Comprehensive loss represents all changes in shareholders' equity during the period except those resulting from investments by, or distributions to shareholders. The Company determined that its items of other comprehensive loss relate to unrealized gains and losses on hedging derivative instruments and unrealized gains and losses on available-for-sale marketable securities.

F - 24

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

The following table shows the components and the effects on net loss of amounts reclassified from accumulated other comprehensive loss as of December 31, 2020:

	Year ended December 31, 2020
	Unrealized gain (losses) on marketable securities			Unrealized gains (losses) on cash flow hedges			Total

Balance as of December 31, 2019	$	321		$	(846	)	$	(525	)
Changes in other comprehensive income before reclassifications		191			723			914
Amounts reclassified from accumulated other comprehensive loss to:
Cost of revenues		-			(5	)		(5	)
Operating expenses		-			(198	)		(198	)
Financial income, net		(40	)		-			(40	)

Net current-period other comprehensive income		151			520			671

Balance as of December 31, 2020	$	472		$	(326	)	$	146

There was no income tax expense or benefit allocated to other comprehensive income, including reclassification adjustments for the year ended December 31, 2020.

y.Fair value of financial instruments:

The carrying amounts of short-term bank deposits, trade receivables, other receivables, trade payables and other payables approximate their fair value due to the short-term maturities of such instruments.

The Company measures its cash and cash equivalents, marketable securities, derivative instruments and earn-out considerations at fair value. Fair value is an exit price, representing the amount that would be received if the Company were to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability.

The Company uses a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1 -Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 -Include other inputs that are directly or indirectly observable in the marketplace, other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets with insufficient volume or infrequent transactions, or other inputs that are observable (model-derived valuations in which significant inputs are observable), or can be derived principally from or corroborated by observable market data; and

F - 25

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Level 3 -Unobservable inputs which are supported by little or no market activity.

The Company categorized each of its fair value measurements in one of those three levels of hierarchy. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The Company measures its marketable securities and foreign currency derivative contracts at fair value. Marketable securities and foreign currency derivative contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments.

The Company's earn-out considerations were classified within Level 3. In previous years, the valuation methodology used by the Company to calculate the fair value consideration is the discounted cash flow using the Monte-Carlo simulation method by taking into account, forecast future revenues, expected volatility of 42.5% for Optenet and 20.7% for Netonomy and the weighted average cost of debt of 2%.

As of December 31, 2020, no fair value measurement is required for both earn-outs. See Note 4.

z.Derivatives and hedging:

The Company accounts for derivatives and hedging based on Accounting Standards Codifiation No. 815, "Derivatives and Hedging" ("ASC No. 815").

The Company accounts for its derivative instruments as either assets or liabilities and carries them at fair value. Derivative instruments that are not designated and qualified as hedging instruments must be adjusted to fair value through earnings. For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated as cash flow hedges, the effective portion of the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income (loss) in shareholders' equity and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. As a result of adopting new accounting guidance discussed in Note 2, " Recently adopted accounting pronouncements," beginning January 1, 2019, gains and losses on the derivatives instruments that are designated and qualify as a cash flow hedge are recorded in accumulated other comprehensive income (loss) and reclassified into in the same accounting period in which the designated forecasted transaction or hedged item affects earnings. Prior to January 1, 2019, cash flow hedge ineffectiveness was separately measured and reported immediately in earnings. Cash flow hedge ineffectiveness was immaterial during 2018 and 2017. To apply hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions.

aa.Business combinations:

The Company accounts for business combinations in accordance with ASC No. 805. ASC No. 805 requires recognition of assets acquired, liabilities assumed, and any non-controlling interest at the acquisition date, measured at their fair values as of that date. Any excess of the fair value of net assets acquired over the purchase price is recorded as goodwill and any subsequent changes in estimated contingencies are to be recorded in earnings. In addition, changes in valuation allowance related to acquired deferred tax assets and acquired income tax positions are to be recognized in earnings.

F - 26

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

ab.Lease:

On January 1, 2019, the Company adopted ASU No. 2016-02, Leases (ASC 842). The Company determines if an arrangement is a lease and the classification of that lease at inception based on: (1) whether the contract involves the use of an identified asset, (2) whether the Company obtains the right to substantially all the economic benefits from the use of the asset throughout lease period, and (3) whether the Company has a right to direct the use of the asset. The Company elected to not recognize a lease liability and a right-of-use (“ROU”) asset for leases with a term of twelve months or less. The Company also elected the practical expedient to not separate lease and non-lease components for its leases.

ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make minimum lease payments arising from the lease. ROU assets are initially measured at amounts, which represents the discounted present value of the lease payments over the lease, plus any initial direct costs incurred. The lease liability is initially measured at lease commencement date based on the discounted present value of minimum lease payments over the lease term. The implicit rate within the company's operating leases is generally not determinable, therefore the Company uses the it's Incremental Borrowing Rate (“IBR”) based on the information available at commencement date in determining the present value of lease payments. The Company’s IBR is estimated to approximate the interest rate for collateralized borrowing with similar terms and payments and in economic environments where the leased asset is located. Certain leases include options to extend or terminate the lease.

An option to extend the lease is considered in connection with determining the ROU asset and lease liability when it is reasonably certain that the Company will exercise that option. An option to terminate is considered unless it is reasonably certain that the Company will not exercise the option.

Payments under our lease arrangements are primarily fixed, however, certain lease agreements contain variable payments, which are expensed as incurred and not included in the operating lease right-of-use assets and liabilities. Variable lease payments are primarily comprised of payments affected by common area maintenance and utility charges.

ac.Warranty costs:

The Company generally provides three months software and a one-year hardware warranty for its products. A provision is recorded for estimated warranty costs at the time revenues are recognized based on the Company's experience. Warranty expenses for the years ended December 31, 2020, 2019 and 2018 were immaterial.

ad.Recently Adopted Accounting Pronouncements:

On January 1, 2020, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments – Credit Losses on Financial Instruments” (“ASU 2016-13”), which requires that expected credit losses relating to financial assets be measured on an amortized cost basis and available-for-sale debt securities be recorded through an allowance for credit losses. ASU 2016-13 limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and also requires the reversal of previously recognized credit losses if fair value increases. The Company adopted ASU 2016-13 using the modified retrospective approach as of January 1, 2020. The adoption by the Company of the new guidance did not have a material impact on its consolidated financial statements.

On January 1, 2020, the Company adopted Accounting Standards Update (“ASU”) 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" ("ASU 2017-04"). ASU 2017-04 eliminates the requirement to measure the implied fair value of goodwill by assigning the fair value of a reporting unit to all assets and liabilities within that unit (the "Step 2 test") from the goodwill impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited by the amount of goodwill in that reporting unit. The adoption did not have a material impact on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (ASC 842). The standard requires the recognition of ROU assets and lease liabilities for all leases. The standard requires a modified retrospective transition approach to recognize and measure leases at the initial application.

F - 27

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

The Company adopted the standard as of January 1, 2019, using a modified retrospective transition approach and elected to use the effective date as the date of initial application. The Company adopted the ”package of practical expedients”, which permits it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs.

The standard had a material impact on the Company’s consolidated balance sheets which resulted in the recognition of ROU assets and lease liabilities of $6.7 million and $6.7 million, respectively, on January 1, 2019, which included reclassifying deferred rent and rent prepayments as components of the ROU assets. The standard did not have a material impact on the Company's consolidated statements of comprehensive income.

The Company adopted Accounting Standards Update (“ASU”) No. 2017- 12, “Derivatives and Hedging” (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which amended the eligibility criteria for hedged items and transactions to expand an entity’s ability to hedge nonfinancial and financial risk components. The new guidance eliminates the requirement to separately measure and present hedge ineffectiveness and aligns the presentation of hedge gains and losses with the underlying hedge item. The new guidance also simplifies the hedge documentation and hedge effectiveness assessment requirements. The amended presentation and disclosure requirements were adopted on a prospective basis, while any amendments to cash flow and net investment hedge relationships which existed on the date of adoption were applied on a “modified retrospective” basis, meaning a cumulative effect adjustment to the opening balance of retained earnings as of the beginning of the year of adoption. The new guidance was effective for the Company on January 1, 2019 and the adoption did not have a material impact on the Company’s consolidated financial statements.

ae.Recently Issued Accounting Pronouncement Not Yet Adopted:

In December 2019, the FASB issued Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740): “Simplifying the Accounting for Income Taxes” (ASU 2019-12), which simplifies the accounting for income taxes. This guidance will be effective for us in the first quarter of 2021 on a prospective basis, and early adoption is permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

AVAILABLE-FOR-SALE MARKETABLE SECURITIES

12 Months Ended

Dec. 31, 2020

Investments, Debt and Equity Securities [Abstract]

AVAILABLE-FOR-SALE MARKETABLE SECURITIES

NOTE 3:-AVAILABLE-FOR-SALE MARKETABLE SECURITIES

The following is a summary of available-for-sale marketable securities:

	December 31, 2020									December 31, 2019
		Amortized cost		Gross unrealized gain		Gross unrealized loss		Fair value			Amortized cost		Gross unrealized gain		Gross unrealized loss			Fair value

Available-for-sale - matures within one year:
Governmental debentures		$	-	$	-	$	-	$	-		$	449	$	1	$	-		$	450
Corporate debentures			12,611		97		-		12,708			30,928		79		(8	)		30,999

			12,611		97		-		12,708			31,377		80		(8	)		31,449
Available-for-sale - matures after one year through three years:
Governmental debentures			379		3		-		382			855		1		-			856
Corporate debentures			13,181		364		-		13,545			23,653		197		(7	)		23,843

			13,560		367		-		13,927			24,508		198		(7	)		24,699
Available-for-sale - matures after three years through five years:
Corporate debentures			535		8		-		543			4,806		58		-			4,864
			535		8		-		543			4,806		58		-			4,864
		$	26,706	$	472	$	-	$	27,178		$	60,691	$	336	$	(15	)	$	61,012

As of December 31, 2020, the Company had no investments with a significant unrealized loss for more than 12 months.

As of December 31,2020, no credit loss impairment was recorded regarding the available for sale marketable securities.

FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

NOTE 4:-FAIR VALUE MEASUREMENTS

In accordance with ASC No. 820, the Company measures its marketable securities and foreign currency derivative instruments at fair value. Cash equivalents and available for sale marketable securities are classified within Level 1 or Level 2. This is because these assets are valued using quoted market prices or alternative pricing sources and models utilizing market observable inputs.

In previous years, the earn-out liability related to the acquisitions of Optenet and Netonomy are classified within Level 3 because these liabilities were based on present value calculations and an external valuation model whose inputs include market interest rates, estimated operational capitalization rates and volatilities. The fair value of the consideration was determined according to discounted cash flow. As of December 31, 2020 no valuation was needed for both Openet and Netonomy earn-outs.

F - 29

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 4:-FAIR VALUE MEASUREMENTS (Cont.)

The Company's financial net assets measured at fair value on a recurring basis, including accrued interest components, consisted of the following types of instruments as of December 31, 2020 and 2019, respectively:

	As of December 31, 2020
	Fair value measurements using input type
	Level 1		Level 2			Level 3		Total

Available-for-sale marketable securities	$	-	$	27,178		$	-	$	27,178
Foreign currency derivative contracts		-		(952	)		-		(952	)

Total financial net assets	$	-	$	26,226		$	-	$	26,226

	As of December 31, 2019
	Fair value measurements using input type
	Level 1		Level 2			Level 3			Total

Available-for-sale marketable securities	$	-	$	61,012		$	-		$	61,012
Foreign currency derivative contracts		-		(871	)		-			(871	)
Earn-out liability		-		-			(1,100	)		(1,100	)

Total financial net assets	$	-	$	60,141		$	(1,100	)	$	59,041

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

DERIVATIVE INSTRUMENTS

12 Months Ended

Dec. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS

NOTE 5:-DERIVATIVE INSTRUMENTS

The Company enters into hedge transactions with a major financial institution, using derivative instruments, primarily forward contracts and options to purchase and sell foreign currencies, in order to reduce the net currency exposure associated with anticipated expenses (primarily salaries and related expenses that are designated as cash flow hedges), trade receivables and forecasted revenues denominated in currencies other than U.S. dollar.

F - 30

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 5:-DERIVATIVE INSTRUMENTS (Cont.)

The Company currently hedges such future exposures for a maximum period of two years. However, the Company may choose not to hedge certain foreign currency exchange exposures for a variety of reasons, including but not limited to immateriality, accounting considerations and the prohibitive economic cost of hedging particular exposures. There can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in foreign currency exchange rates.

The Company records all derivatives on the consolidated balance sheets at fair value in accordance with ASC No. 820 at Level 2. Cash flow hedges are recorded in other comprehensive income (loss) until the hedged item is recognized in earnings. The Company does not enter into derivative transactions for trading purposes. The net income (loss) recognized in "Financial income (expense), net" during the years ended December 31, 2020, 2019 and 2018 was $1,200, $534 and $1,480, respectively.

The Company had a net unrealized loss associated with cash flow hedges of $326 and $846 recorded in other comprehensive loss as of December 31, 2020 and 2019, respectively. As of December 31, 2020 and 2019, the Company had outstanding hedge transactions in the net amount of $ 8,700 and $ 36,169, respectively.

The fair value of the outstanding foreign exchange contracts recorded by the Company on its consolidated balance sheets as of December 31, 2020 and 2019, as assets and liabilities are as follows:

Foreign exchange forward and		December 31,
options contracts	Balance sheet	2020			2019

Fair value of foreign exchange hedge transactions	Other receivables and prepaid expenses	$	2,258		$	158
Fair value of foreign exchange hedge transactions	Other payables and accrued expenses		(3,224	)		(1,041	)

Total derivatives designated as hedging instruments	Other Comprehensive loss	$	(326	)	$	(846	)

Gain or loss on the derivative instruments, which partially offset the foreign currency impact from the underlying exposures, reclassified from other comprehensive loss to operating expenses and cost of revenues for the years ended December 31, 2020, 2019 and 2018 were $ 203, $ (96) and $ 903, respectively.

Non-designated hedges:

The Company also uses foreign currency forward contracts to mitigate variability in gains and losses generated from the re-measurement of certain monetary assets and liabilities denominated in foreign currencies. These derivatives do not qualify for special hedge accounting treatment. These derivatives are carried at fair value with changes recorded in financial income, net. Changes in the fair value of these derivatives are largely offset by the re-measurement of the underlying assets and liabilities. The derivatives have maturities of up to twelve months.

F - 31

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 5:-DERIVATIVE INSTRUMENTS (Cont.)

As of December 31, 2020 and 2019, the Company’s outstanding non-hedge transactions were $ 13,773 and $ 15,741, respectively.

The fair value of the outstanding non-designated foreign exchange contracts recorded by the Company on its consolidated balance sheets as of December 31, 2020 and 2019, as assets and liabilities are as follows:

Foreign exchange forward and		December 31,
options contracts	Balance sheet	2020			2019

Fair value of foreign exchange non-designated hedge transactions	Other receivables and prepaid expenses	$	-		$	12

Fair value of foreign exchange non-designated hedge transactions	Other payables and accrued expenses		(13	)		-

Total derivatives non-designated as hedging instruments		$	(13	)	$	12

OTHER RECEIVABLES AND PREPAID EXPENSES

12 Months Ended

Dec. 31, 2020

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

OTHER RECEIVABLES AND PREPAID EXPENSES

NOTE 6:-OTHER RECEIVABLES AND PREPAID EXPENSES

	December 31,
	2020		2019

Prepaid expenses	$	6,495	$	3,957
Government authorities		2,403		1,773
Prepayment to OEM		2,359		-
Foreign currency derivative contracts		2,285		170
Short-term lease deposits		231		195
Grants receivable from the OCS		103		-
Others		329		433

	$	14,205	$	6,528

INVENTORIES

12 Months Ended

Dec. 31, 2020

Inventory Disclosure [Abstract]

INVENTORIES

NOTE 7:-INVENTORIES

	December 31,
	2020		2019

Raw materials	$	1,299	$	1,264
Finished goods		11,287		9,404

	$	12,586	$	10,668

As of December 31, 2020 and 2019, the finished products line item above includes deferral of the cost of goods sold for which revenue was not yet recognized in the amount of approximately $ 4,246 and $ 2,958, respectively.

PROPERTY AND EQUIPMENT, NET

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT, NET

NOTE 8:-PROPERTY AND EQUIPMENT, NET

	December 31,
	2020		2019
Cost:
Lab equipment	$	17,624	$	17,548
Computers and peripheral equipment		13,090		22,374
Office furniture and equipment		1,454		1,356
Leasehold improvements		3,134		2,557
Lease equipment		2,976		930

		38,278		44,765
Accumulated depreciation:
Lab equipment		13,511		14,548
Computers and peripheral equipment		10,501		20,145
Office furniture and equipment		575		659
Leasehold improvements		1,224		1,162
Lease equipment		474		116

		26,285		36,630

Depreciated cost	$	11,993	$	8,135

Depreciation expense for the years ended December 31, 2020, 2019 and 2018 was $ 3,704, $ 2,752 and $ 2,203, respectively.

F - 33

ALLOT LTD.

INTANGIBLE ASSETS, NET

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS, NET

NOTE 9:-INTANGIBLE ASSETS, NET

a.The following table shows the Company's intangible assets for the periods presented:

	Weighted Average Useful life		December 31,
	(Years)		2020		2019
Original Cost:

Technology		3.8	$	9,111	$	9,111
Backlog		2.8		1,877		1,877
Customer relationships		4.4		3,592		3,592
IP R&D		6		3,659		3,659

			$	18,239	$	18,239
Accumulated amortization:

Technology			$	9,111	$	9,111
Backlog				1,877		1,877
Customer relationships				3,592		3,592
IP R&D				915		305

			$	15,495	$	14,885

Amortized cost			$	2,744	$	3,354

F - 34

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 9:-INTANGIBLE ASSETS, NET (Cont.)

b.Amortization expense for the years ended December 31, 2020, 2019 and 2018 were $ 610, $ 1,607 and $ 1,631, respectively.

c.Estimated amortization expense for the years ending:

Year ending December 31,

2021			610
2022			610
2023			610
Thereafter			914

Total			2,744

OTHER PAYABLES AND ACCRUED EXPENSES

12 Months Ended

Dec. 31, 2020

Payables and Accruals [Abstract]

OTHER PAYABLES AND ACCRUED EXPENSES

NOTE 10:-OTHER PAYABLES AND ACCRUED EXPENSES

	December 31,
	2020		2019

Accrued expenses	$	4,920	$	3,887
Government authorities		3,723		3,061
Foreign currency derivative contracts		3,237		1,041
Holdback and contingent earnout		837		1,575
Provision for returns		290		163
Advances from customers		7		253
Others		147		234

	$	13,161	$	10,214

COMMITMENTS AND CONTINGENT LIABILITIES

12 Months Ended

Dec. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENT LIABILITIES

NOTE 11:-COMMITMENTS AND CONTINGENT LIABILITIES

a.Lease commitments:

The Group's facilities are leased under several lease agreements for periods ending up to 2023, with options to extend the leases ending up to 2026.

In addition, the Company has various operating lease agreements with respect to motor vehicles.

Lease expenses of office rent and vehicles for the years ended December 31, 2020, 2019 and 2018 were approximately $3,282, $3,129 and $2,934, respectively. Expenses for short-term leases in 2020 were $ 119.

F - 35

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 11:-COMMITMENTS AND CONTINGENT LIABILITIES (Cont.)

The following table represents the weighted-average remaining lease term and discount rate:

		Year ended December 31, 2020

Weighted average remaining lease term		2.02 years
Weighted average discount rate		1.8%

The discount rate was determined based on the estimated collateralized borrowing rate of the Company, adjusted to the specific lease term and location of each lease.

Maturities of operating lease liabilities were as follows:

Year ending December 31,
2021	$	2,836
2022		1,358
2023		368
2024		120
2025 and thereafter		61

Total lease payments	$	4,743

Less - imputed interest	$	(95	)

Present value of lease liabilities	$	4,648

During the year ended December 31, 2020 the short-term maturities of operating lease liabilities which were not recognized under ASU No. 2016-02, Leases (ASC 842) were $ 139.

b.Major subcontractor:

The Company currently depends on one subcontractor to manufacture and provide certain hardware, warranty and support components for its traffic management systems. If the subcontractor experiences delays, disruptions, quality control problems or a loss in capacity, shipments of products may be delayed and the Company's ability to deliver such products could be materially adversely affected. In the event that the Company terminates its business connection with the subcontractor, it will have to compensate the subcontractor for certain inventory costs, as specified in the agreement with the subcontractor.

c.Liens and guarantees:

As of December 31, 2020, the Company has provided bank guarantees in respect of prepayments from customers in an aggregate amount of approximately $ 501, in addition to bank guarantees in favor of leases agreements in an aggregate amount of approximately $ 503.

F - 36

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 11:-COMMITMENTS AND CONTINGENT LIABILITIES (Cont.)

d.Litigations:

As of December 31, 2020, there are no open litigation against the Company.

SHAREHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2020

Stockholders' Equity Note [Abstract]

SHAREHOLDERS' EQUITY

NOTE 12:-SHAREHOLDERS' EQUITY

a.Company's shares:

As of December 31, 2020, the Company's authorized share capital consists of NIS 20,000,000 divided into 200,000,000 Ordinary Shares, par value NIS 0.1 per share. Ordinary Shares confer on their holders the right to receive notice to participate and vote in general meetings of the Company, the right to a share in the excess of assets upon liquidation of the Company, and the right to receive dividends if declared.

b.Stock option plan:

A summary of the Company's stock option activity, pertaining to its option plans for employees and related information is as follows:

	Year ended December 31,
	2020					2019					2018
	Number of shares upon exercise			Weighted average exercise price		Number of shares upon exercise			Weighted average exercise price		Number of shares upon exercise			Weighted average exercise price

Outstanding at beginning of year		1,453,741		$	7.59		1,736,143		$	7.26		2,189,297		$	7.63
Granted		-		$	-		-		$	-		62,200		$	5.91
Forfeited		(28,657	)	$	17.47		(59,107	)	$	10.05		(414,617	)	$	9.79
Exercised		(290,828	)	$	6.25		(223,295	)	$	4.36		(100,737	)	$	4.07

Outstanding at end of year		1,134,256		$	7.68		1,453,741		$	7.59		1,736,143		$	7.26

Exercisable at end of year		1,065,498		$	7.83		1,240,005		$	8.01		1,281,665		$	8.02

Vested and expected to vest		1,132,007		$	7.68		1,442,990		$	7.61		1,464,802		$	7.65

The aggregate intrinsic value represents the total intrinsic value (the difference between the Company's closing stock price on the last trading day of the fiscal years 2020, 2019 and 2018 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders if all option holders exercised their options on December 31, 2020, 2019 and 2018, respectively. This amount may change based on the fair market value of the Company's stock. The total intrinsic value of options outstanding at December 31, 2020, 2019 and 2018, were $ 4,578, $ 3,510 and $ 1,518, respectively.

F - 37

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 12:-SHAREHOLDERS' EQUITY (Cont.)

The total intrinsic value of exercisable options at December 31, 2020, 2019 and 2018, were approximately $ 4,226, $ 2,791 and $ 1,058, respectively. The total intrinsic value of options vested and expected to vest at December 31, 2020, 2019 and 2018, were approximately $ 4,568, $ 3,399 and $ 1,246, respectively.

The total intrinsic value (the difference between the Company's closing stock price on the exercise date and the exercise price) of options exercised during the years ended December 31, 2020, 2019 and 2018 were approximately $ 1,437, $ 769 and $ 201, respectively. The weighted-average grant-date fair value of the options granted during the year ended on December 31, 2018 was $ 2.89. No options were granted during 2020 and 2019. The number of options vested during the year ended December 31, 2020 was 116,321. The weighted-average remaining contractual life of the outstanding options as of December 31, 2020 is 2.67 years. The weighted-average remaining contractual life of exercisable options as of December 31, 2020 is 2.58 years.

The options outstanding as of December 31, 2020, have been classified by exercise price, as follows:

Exercise price		Shares upon exercise of options outstanding as of December 31, 2020		Weighted average remaining contractual life		Shares upon exercise of options exercisable as of December 31, 2020
				Years

$	23.31-27.58		49,500		1.66		49,500
$	15.2-17.07		46,936		1.02		46,936
$	10.0 -14.68		140,150		2.74		140,150
$	5.01-9.7		360,605		2.27		319,253
$	0.1-4.95		537,065		3.16		509,659

			1,134,256				1,065,498

The following provides a summary of the restricted stock unit activity for the Company for the two years ended December 31, 2020:

	Year ended December 31,
	2020					2019
	Number of shares upon exercise			Weighted average share price		Number of shares upon exercise			Weighted average share price

Outstanding at beginning of year		1,652,060		$	6.53		1,252,031		$	5.45
Granted		869,250		$	10.96		1,001,000		$	7.53
Vested		(570,000	)	$	10.69		(401,904	)	$	7.53
Forfeited		(188,293	)	$	10.01		(199,067	)	$	7.61

Unvested at end of year		1,763,017		$	8.63		1,652,060		$	6.53

As of December 31, 2020, $ 120 and $ 13,091 unrecognized compensation cost related to stock options and RSUs respectively is expected to be recognized over a weighted average vesting period of 2.33 years.

F - 38

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 12:-SHAREHOLDERS' EQUITY (Cont.)

Under the terms of the above option plans, options may be granted to employees, officers, directors and various service providers of the Company and its subsidiaries. The options vest over a four-year period, subject to the continued employment of the employee. The options generally expire no later than ten years from the date of the grant. The exercise price of the options at the date of grant under the plans may not be less than the nominal value of the shares into which such options are exercised, any options, which are forfeited or cancelled before expiration, become available for future grants. As of December 31, 2020, 72,373 Ordinary shares are available for future issuance under the option plans.

In addition to granting stock options, the Company granted 869,250 and 1,001,000 RSUs in 2020 and 2019, respectively under the 2016 option plan. RSUs vest over a period of between three to four years, subject to the continued employment of the employee. RSUs that are cancelled or forfeited become available for future grants.

TAXES ON INCOME

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

TAXES ON INCOME

NOTE 13:-TAXES ON INCOME

a.Corporate tax rates:

The Israeli corporate income tax rate was 23% in 2020, 2019 and 2018.

b.Foreign Exchange Regulations:

Commencing in taxable year 2012, the Company has elected to measure its taxable income and file its tax return under the Israeli Income Tax Regulations (Principles Regarding the Management of Books of Account of Foreign Invested Companies and Certain Partnerships and the Determination of Their Taxable Income) 1986 ("Foreign Exchange Regulations"). Under the Foreign Exchange Regulations, an Israeli company must calculate its tax liability in U.S. Dollars according to certain rules. The tax liability, as calculated in U.S. Dollars is translated into NIS according to the exchange rate as of December 31st of each year.

c.Tax benefits under Israel's law for the Encouragement of Capital Investments, 1959 ("the Law"):

In 1998, the production facilities of the Company related to its computational technologies were granted the status of an "Approved Enterprise" under the Law. In 2004, an expansion program was granted the status of "Approved Enterprise". According to the provisions of the Law, the Company has elected the alternative track of benefits and has waived Government grants in return for tax benefits. The period of tax benefits, detailed above, is limited to the earlier of 12 years from the commencement of production, or 14 years from the approval date.

F - 39

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 13:-TAXES ON INCOME (Cont.)

According to the provisions of the Law under the alternative track, the Company's income attributable to the Approved Enterprise program may be tax-exempt for a period of two years commencing with the year it first earns taxable income, and subject to corporate taxes at the reduced rate of 10% to 25%, for an additional period of five to eight years depending upon the level of foreign ownership of the Company.

The Law was significantly amended effective April 1, 2005 ("the 2005 - Amendment"). The 2005 - Amendment includes revisions to the criteria for investments qualified to receive tax benefits as a Beneficiary Enterprise and among other things, simplifies the approval process. The Amendment applies to new investment programs. Therefore, investment programs commencing after December 31, 2004, do not affect the approved programs of the Company. The Company elected 2006 and 2009 as "year of election" under the 2005 - Amendment. As at December 31, 2020 the Beneficiary Enterprise programs are no longer in effect as the 12-year activation period commencing on the election year has ended.

In addition, the 2005-Amendment provides that terms and benefits included in any letter of approval already granted will remain subject to the provisions of the Law as they were on the date of such approval. Therefore, the Company's existing Approved Enterprise will generally not be subject to the provisions of the 2005 - Amendment.

The entitlement to the Approved Enterprise benefits is contingent upon the fulfillment of the conditions stipulated in the Law, regulations published thereunder and the criteria set forth in the specific letters of approval. In the event of failure to comply with these conditions, the benefits may be canceled and the Company may be required to refund the amount of the benefits, in whole or in part, including interest and linked to changes in the Israeli CPI. As of December 31, 2020, management believes that the Company meets the aforementioned conditions.

If the Company pays a dividend out of exempt income derived from the Approved and Beneficiary Enterprise, it will be subject to corporate tax in respect of the gross amount distributed, including any taxes thereon, at the rate which would have been applicable had it not enjoyed the alternative benefits, generally 10%-25%, depending on the percentage of the Company's Ordinary shares held by foreign shareholders. The dividend recipient is subject to withholding tax at the rate of 15% applicable to dividends from approved enterprises, if the dividend is distributed during the tax exemption period or within twelve years thereafter. The Company currently has no plans to distribute dividends and intends to retain future earnings to finance the development of its business.

As of December 31, 2020, there is no income earned by the Company Israel’s “Approved Enterprises” and “Beneficiary Enterprise”.

Income from sources other than the "Approved and Beneficiary Enterprise" during the benefit period will be subject to tax at the regular corporate tax rate.

As of January 1, 2011, new legislation amending the Law came into effect (the "2011 Amendment"). The 2011 Amendment introduced a new status of "Preferred Company" and "Preferred Enterprise", replacing the then existing status of "Beneficiary Company" and "Beneficiary Enterprise".

F - 40

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 13:-TAXES ON INCOME (Cont.)

Similarly to "Beneficiary Company", a Preferred Company is an industrial company owning a Preferred Enterprise which meets certain conditions (including a minimum threshold of 25% export). However, under this legislation the requirement for a minimum investment in productive assets was cancelled.

Under the 2011 Amendment, a uniform corporate tax rate will apply to all qualifying income of the Preferred Company, as opposed to the former law, which was limited to income from the Approved Enterprises and Beneficiary Enterprise during the benefits period. The uniform corporate tax rate was 9% in areas in Israel designated as Development Zone A and 16% elsewhere in Israel during 2016 and 2017. Effective July 1, 2021 income of a Preferred Enterprise attributable to assets other than the industrial assets of the company, such as marketing intangibles, will be subject to the standard corporate tax rate.

A dividend distributed from income which is attributed to a Preferred Enterprise/Special Preferred Enterprise will be subject to withholding tax at source at the following rates: (i) Israeli resident corporation – 0%, (ii) Israeli resident individual – 20% as of 2014 and thereafter (iii) non-Israeli resident - 20% as of 2014 and thereafter subject to a reduced tax rate under the provisions of an applicable double tax treaty.

In December 2016, the Economic Efficiency Law (Legislative Amendments for Applying the Economic Policy for the 2017 and 2018 Budget Years), 2016 which includes Amendment 73 to the Law for the Encouragement of Capital Investments ("the 2016 - Amendment") was published. According to the 2016 - 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%).

The December 2016 amendment also prescribes special tax tracks for technological enterprises, the new tax tracks under the amendment are as follows:

Technological preferred enterprise - an enterprise whose total consolidated revenues (parent company and all subsidiaries) is less than NIS 10 billion. A technological preferred enterprise, as defined in the Law, which is located in the center of Israel will be subject to tax at a rate of 12% on profits deriving from intellectual property as such is determined by applying the specifications of the Law and the regulations promulgated thereunder (in development area A - a tax rate of 7.5%).

Special technological preferred enterprise - an enterprise whose total consolidated revenues (parent company and all subsidiaries) exceeds NIS 10 billion. Such enterprise will be subject to tax at a rate of 6% on profits deriving from intellectual property, regardless of the enterprise’s geographical location. Income of the Preferred Technological Enterprise or a Special Preferred Technological Enterprise, which is not derived from its intellectual property is subject to tax at the ordinary corporate tax rate.

Under the transition provisions of the 2016 Amendment, the Company may decide to irrevocably implement the new law while waiving benefits provided under the current law or to remain subject to the current law.

F - 41

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 13:-TAXES ON INCOME (Cont.)

d.Tax benefits under the law for the Encouragement of Industry (Taxes), 1969 (the "Encouragement Law"):

The Encouragement Law, provides several tax benefits for industrial companies. An industrial company is defined as a company resident in Israel, at least 90% of the income of which in a given tax year exclusive of income from specified Government loans, capital gains, interest and dividends, is derived from an industrial enterprise owned by it. An industrial enterprise is defined as an enterprise whose major activity in a given tax year is industrial production activity.

Management believes that the Company is currently qualified as an "industrial company" under the Encouragement Law and as such, enjoys tax benefits, including: (1) deduction of purchase of know-how and patents and/or right to use a patent over an eight-year period; (2) the right to elect, under specified conditions, to file a consolidated tax return with additional related Israeli industrial companies and an industrial holding company; (3) accelerated depreciation rates on equipment and buildings; and (4) expenses related to a public offering on the Tel-Aviv Stock Exchange and on recognized stock markets outside of Israel, are deductible in equal amounts over three years.

Eligibility for benefits under the Encouragement Law is not subject to receipt of prior approval from any governmental authority. No assurance can be given that the Israeli tax authorities will agree that the Company qualifies, or, if the Company qualifies, then the Company will continue to qualify as an industrial company or that the benefits described above will be available to the Company in the future.

e.Pre-tax income (loss) is comprised as follows:

	Year ended December 31,
	2020			2019			2018

Domestic	$	(8,722	)	$	(8,934	)	$	(9,877	)
Foreign		1,550			1,916			1,890

	$	(7,172	)	$	(7,018	)	$	(7,987	)

F - 42

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 13:-TAXES ON INCOME (Cont.)

f.A reconciliation of the theoretical tax expenses, assuming all income is taxed at the statutory tax rate applicable to the income of the Company and the actual tax expenses is as follows:

	Year ended December 31,
	2020			2019			2018

Loss before taxes on income	$	(7,172	)	$	(7,018	)	$	(7,987	)

Theoretical tax income computed at the Israeli statutory tax rate (23% for the years 2020, 2019 and 2018, respectively)	$	(1,650	)	$	(1,614	)	$	(1,837	)

Changes in valuation allowance		1,979			951			1,189
Increase in losses and temporary differences due to change in Israeli corporate and “Approved Enterprise" tax		-			-			659
Write off of prepaid and withholding taxes		1,066			1,536			1,828
Foreign tax rates differences related to subsidiaries		35			44			50
Non-deductible expenses		72			470			147
Other expenses and Exchange rate differences		(383	)		(143	)		(82	)
Non-deductible share-based compensation expense		557			397			474
Change in expense associated with tax positions for current year		500			-			-

Actual tax expense	$	2,176		$	1,641		$	2,428

g.Income tax expense is comprised as follows:

	Year ended December 31,
	2020		2019			2018

Current taxes	$	513	$	341		$	580
Deferred taxes expense (benefit)		97		(236	)		20
Write off of prepaid and withholding taxes		1,066		1,536			1,828
Change in expense associated with tax positions for current year		500		-			-

	$	2,176	$	1,641		$	2,428

F - 43

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 13:-TAXES ON INCOME (Cont.)

h.Net operating losses carry forward:

The Company has accumulated net operating losses for tax purposes as of December 31, 2020, in the amount of approximately $82,080, which may be carried forward and offset against taxable income in the future for an indefinite period. In December 2014, the Israeli Tax Authorities approved a final tax ruling with respect to the Company’s acquisition of Oversi. According to the ruling, the net operating losses on the merger date may be offset against taxable income annually with a limitation of up to 14% of the total accumulated losses but no more than 50% of the Company's taxable income. As of December 31, 2020, the Company recorded a full valuation allowance with respect to its deferred tax assets in Allot Ltd. and wrote-off prepaid and withholding taxes of $4,991 as the Company does not expect to utilize these tax assets in the near future. In addition, the Company has accumulated capital losses for tax purposes as of December 31, 2020, of approximately $27,243, which may be carried forward and offset against taxable capital gains in the future for an indefinite period but are limited as stated above with regard to the Oversi merger. Management currently believes that since the Company has a history of losses, and uncertainty with respect to future taxable income, it is more likely than not that the deferred tax assets regarding the loss carry forwards will not be utilized in the foreseeable future. Thus, a valuation allowance was provided to reduce deferred tax assets to their realizable value.

The U.S. subsidiary has accumulated losses for U.S. federal income tax return purposes of approximately $ 4,669 and $ 7,434 for state taxes. The federal accumulated losses for tax purposes expire between 2026 and 2037. The state accumulated losses for tax purposes began to expire in 2014. As of December 31, 2020, the Company recorded a partial valuation allowance with respect to its deferred tax assets in the US Subsidiary.

A portion of the losses are subject to limitations of Internal Revenue Code, Section 382, which in general provides that utilization of net operating losses is subject to an annual limitation if an ownership change results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50 percentage points over a three-year period. The annual limitations may result in the expiration of losses before utilization.

i.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. Significant components of the Company's deferred income taxes are as follows:

F - 44

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 13:-TAXES ON INCOME (Cont.)

	December 31,
	2020			2019
Deferred tax assets:
Operating and capital loss carryforwards	$	26,731		$	22,353
Research and development		2,602			5,496
Employee benefits		1,368			1,062
Intangible assets		282			489
Other temporary differences mainly relating to reserve and allowances		1,607			2,024

Deferred tax asset before valuation allowance		32,590			31,424
Valuation allowance		(27,652	)		(25,880	)
Deferred tax asset net of valuation allowance		4,938			5,544

Deferred tax liability:
Intangible assets		3,493			3,562
Other temporary differences mainly relating to reserve and allowances		1,025			1,465
Net deferred tax asset	$	420		$	517

As of December 31, 2020, the Company has provided a valuation allowance of approximately $27.6 million in respect of the Company’s deferred tax assets resulting from tax loss carryforwards and other temporary differences. Realization of deferred tax assets is dependent upon future earnings, if any, the time and amount of which are uncertain. As the Company has accumulated net operating losses for tax purposes as of December 31, 2020, in the amount of approximately $82,080, so it is more likely than not that sufficient taxable income will not be available for the tax losses to be utilized in the future. Therefore, a valuation allowance was recorded to reduce the deferred tax assets to their recoverable amounts.

j.As of December 31, 2020, the Company’s provision in respect of ASC 740-10 is $743. $500 were added in 2020 due to the risk that selling in different countries will be considered by tax authorities as permanent establishment. The accrued interest and penalties related to the provision in income taxes are immaterial.

The Company conducts business globally and, as a result, the Company or one or more of its subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world, including such major jurisdictions as Israel, France, and the United States. With a few exceptions, the Company is no longer subject to Israeli tax assessment through the year 2015 and the Spanish and U.S. subsidiaries have final tax assessments through 2015 and 2016, respectively. The Company is currently under audit by the Israeli Tax Authorities for the years 2015– 2016.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

GEOGRAPHIC INFORMATION

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

GEOGRAPHIC INFORMATION

NOTE 14:-GEOGRAPHIC INFORMATION

Allot operates in a single reportable segment. Revenues are based on the location of the Company's channel partners which are considered as end customers, as well as direct customers of the Company:

	Year ended December 31,
	2020		2019		2018

Europe	$	94,644	$	36,199	$	45,730
Asia and Oceania		23,519		42,994		22,018
Americas		8,131		16,576		14,363
Middle East and Africa		9,628		14,331		13,726

	$	135,922	$	110,100	$	95,837

F - 45

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 14:-GEOGRAPHIC INFORMATION (Cont.)

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

	Year ended December 31,
	2020		2019		2018

1^st Customer		43%		16%		22%
2^nd Customer		11%		11%		-

		54%		27%		22%

A total percentage of 83%, 76% and 74% of the Company’s revenues for the years ended December 31, 2020, 2019 and 2018, respectively are attributed to network intelligence solutions, while 17%, 24% and 26% are attributed to security solutions for the years ended December 31, 2020, 2019 and 2018, respectively.

The following presents total long-lived assets as of December 31, 2020 and 2019:

	December 31,
	2020		2019
Long-lived assets:
Israel	$	14,210	$	12,764
Other		2,241		1,739

	$	16,451	$	14,503

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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-Topic 280
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-Section 50
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-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Paragraph 22
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI http://asc.fasb.org/topic&trid=2134510

+ Details

FINANCIAL INCOME (EXPENSES), NET

12 Months Ended

Dec. 31, 2020

Other Income and Expenses [Abstract]

FINANCIAL INCOME (EXPENSES), NET

NOTE 15:- FINANCIAL INCOME (EXPENSES), NET

	Year ended December 31,
	2020		2019		2018

Financial income:
Interest income	$	1,754	$	2,551	$	2,696
Exchange rate differences and other		231		-		305

Financial expenses:
Exchange rate differences and other		-		334		-
Amortization/accretion of premium/discount on marketable securities, net		128		257		793

	$	1,857	$	1,960	$	2,208

EARNINGS (LOSS) PER SHARE

12 Months Ended

Dec. 31, 2020

Net loss per share:

EARNINGS (LOSS) PER SHARE

NOTE 16:-EARNINGS (LOSS) PER SHARE

The following table sets forth the computation of basic and diluted net loss per share:

	Year ended December 31,
	2020			2019			2018
Numerator:
Net loss	$	(9,348	)	$	(8,659	)	$	(10,415	)

Denominator:
Weighted average number of shares outstanding used in computing basic and diluted net loss per share		35,007,201			34,250,582			33,710,507

Basic and diluted net loss per share	$	(0.27	)	$	(0.25	)	$	(0.31	)

SUBSEQUENT EVENT

12 Months Ended

Dec. 31, 2020

Subsequent Events [Abstract]

SUBSEQUENT EVENT

NOTE 17:-SUBSEQUENT EVENT

On February 17, 2021, a former employee filed a claim against the Company alleging that he is entitled to compensation for unfair dismissal by the Company. The claim is still in its preliminary stage and the Company cannot estimate the chances of the claim to be accepted.

SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Use of estimates

a.Use of estimates:

Financial statements in U.S. dollars

b. Financial statements in U.S. dollars:

Principles of consolidation

c.Principles of consolidation:

The consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany balances and transactions have been eliminated upon consolidation.

Cash and cash equivalents

d.Cash and cash equivalents:

The Company considers all unrestricted highly liquid investments which are readily convertible into cash, with a maturity of three months or less at the date of acquisition, to be cash equivalents.

Restricted deposits

e.Restricted deposits:

The restricted deposits are held in favor of financial institutions in respect of fulfillment of forward contracts and operating obligations.

Short-term bank deposits

f.Short-term bank deposits:

Trade Receivable and Allowances

g.Trade Receivable and Allowances:

The follow table displays a rollforward of the total allowance for credit losses for the years ended December 31, 2020, 2019, and 2018.

	2020			2019			2018

Total allowance for credit losses – January 1		1,867			1,415			1,292
Current-period provision for expected credit losses		1,894			866			504
Write-offs		(934	)		(3	)		(11	)
Recoveries collected		(518	)		(411	)		(370	)

Total allowance for credit losses – December 31		2,309			1,867			1,415

Marketable securities

h.Marketable securities:

Inventories

i.Inventories:

Provision for slow moving inventory as of December 31, 2020 and 2019 amounted to $ 4,624 and $ 2,839, respectively.

Inventory cost is determined using the weighted average cost method.

Property and equipment, net

j.Property and equipment, net:

		%

Lab equipment		16 - 25
Computers and peripheral equipment		33
Office furniture		6
Equipment at customer site		16
Leasehold improvements		Over the shorter of the term of the lease or the useful life of the asset

Goodwill

k.Goodwill:

Impairment of long-lived assets and intangible assets subject to amortization

l.Impairment of long-lived assets and intangible assets subject to amortization:

Revenue recognition

m.Revenue recognition:

F - 18

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Cost of revenues

n.Cost of revenues:

Cost of revenues consists primarily of costs of materials and the cost of maintenance and services, resulting from costs associated with support, customer success and professional services.

F - 19

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Advertising expenses

o.Advertising expenses:

Research and development costs

p.Research and development costs:

Accounting Standards Codification No. 985-20, requires capitalization of certain software development costs subsequent to the establishment of technological feasibility.

Severance pay

q.Severance pay:

The Company's liability was partly provided by monthly deposits with severance pay funds and insurance policies and the remainder by an accrual.

Severance expense for the years ended December 31, 2020, 2019 and 2018, amounted to $ 3,619, $ 2,249 and $ 1,950, respectively.

F - 20

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Accounting for stock-based compensation

r.Accounting for stock-based compensation:

	Year ended December 31,
	2020		2019		2018

Cost of revenues	$	355	$	264	$	316
Research and development		1,368		847		678
Sales and marketing		2,145		1,257		928
General and administrative		1,330		1,052		940

Total stock-based compensation expense	$	5,198	$	3,420	$	2,862

F - 21

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

The Company selected the binomial option pricing model as the most appropriate fair value method for its stock options awards with the following assumptions for the years ended December 31, 2018:

	Year ended December 31,
	2018

Suboptimal exercise multiple		2.9-3.5
Risk free interest rate		2.09%-3.05%
Volatility		26%-47%
Dividend yield		0%

The Company currently has no plans to distribute dividends and intends to retain future earnings to finance the development of its business.

The option pricing model of the of restricted stock units ("RSUs") is based on the closing market value of the underlying shares at the date of grant.

Treasury stock

s.Treasury stock:

Concentration of credit risks

t.Concentration of credit risks:

F - 22

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Grants from the Israel Innovation Authority

u.Grants from the Israel Innovation Authority:

Income taxes

v.Income taxes:

F - 23

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Basic and diluted net income (loss) per share

w.Basic and diluted net income (loss) per share:

Comprehensive loss

x.Comprehensive loss:

F - 24

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

The following table shows the components and the effects on net loss of amounts reclassified from accumulated other comprehensive loss as of December 31, 2020:

	Year ended December 31, 2020
	Unrealized gain (losses) on marketable securities			Unrealized gains (losses) on cash flow hedges			Total

Balance as of December 31, 2019	$	321		$	(846	)	$	(525	)
Changes in other comprehensive income before reclassifications		191			723			914
Amounts reclassified from accumulated other comprehensive loss to:
Cost of revenues		-			(5	)		(5	)
Operating expenses		-			(198	)		(198	)
Financial income, net		(40	)		-			(40	)

Net current-period other comprehensive income		151			520			671

Balance as of December 31, 2020	$	472		$	(326	)	$	146

There was no income tax expense or benefit allocated to other comprehensive income, including reclassification adjustments for the year ended December 31, 2020.

Fair value of financial instruments

y.Fair value of financial instruments:

The Company uses a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1 -Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

F - 25

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Level 3 -Unobservable inputs which are supported by little or no market activity.

As of December 31, 2020, no fair value measurement is required for both earn-outs. See Note 4.

Derivatives and hedging

z.Derivatives and hedging:

The Company accounts for derivatives and hedging based on Accounting Standards Codifiation No. 815, "Derivatives and Hedging" ("ASC No. 815").

Business combinations

aa.Business combinations:

Lease

ab.Lease:

Warranty costs

ac.Warranty costs:

Recently Adopted Accounting Pronouncements

ad.Recently Adopted Accounting Pronouncements:

F - 27

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 2:-SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Recently Issued Accounting Pronouncement Not Yet Adopted

ae.Recently Issued Accounting Pronouncement Not Yet Adopted:

GENERAL (Tables)

12 Months Ended

Dec. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of pro forma revenue and net loss

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date:

	Fair value

Non-current assets	$	4
Account Payable		(11	)
Other Payables		(142	)
IPR&D		3,659
Goodwill		121

Net assets acquired	$	3,631

SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Schedule of Estimated Useful Lives at an Annual Rate

		%

Lab equipment		16 - 25
Computers and peripheral equipment		33
Office furniture		6
Equipment at customer site		16
Leasehold improvements		Over the shorter of the term of the lease or the useful life of the asset

Schedule of Allowance of Credit Losses

The follow table displays a rollforward of the total allowance for credit losses for the years ended December 31, 2020, 2019, and 2018.

	2020			2019			2018

Total allowance for credit losses – January 1		1,867			1,415			1,292
Current-period provision for expected credit losses		1,894			866			504
Write-offs		(934	)		(3	)		(11	)
Recoveries collected		(518	)		(411	)		(370	)

Total allowance for credit losses – December 31		2,309			1,867			1,415

Schedule of Stock-Based Compensation Expense

	Year ended December 31,
	2020		2019		2018

Cost of revenues	$	355	$	264	$	316
Research and development		1,368		847		678
Sales and marketing		2,145		1,257		928
General and administrative		1,330		1,052		940

Total stock-based compensation expense	$	5,198	$	3,420	$	2,862

Schedule of Stock-Based Compensation Assumptions

The Company selected the binomial option pricing model as the most appropriate fair value method for its stock options awards with the following assumptions for the years ended December 31, 2018:

	Year ended December 31,
	2018

Suboptimal exercise multiple		2.9-3.5
Risk free interest rate		2.09%-3.05%
Volatility		26%-47%
Dividend yield		0%

Schedule of Accumulated Other Comprehensive Income

The following table shows the components and the effects on net loss of amounts reclassified from accumulated other comprehensive loss as of December 31, 2020:

	Year ended December 31, 2020
	Unrealized gain (losses) on marketable securities			Unrealized gains (losses) on cash flow hedges			Total

Balance as of December 31, 2019	$	321		$	(846	)	$	(525	)
Changes in other comprehensive income before reclassifications		191			723			914
Amounts reclassified from accumulated other comprehensive loss to:
Cost of revenues		-			(5	)		(5	)
Operating expenses		-			(198	)		(198	)
Financial income, net		(40	)		-			(40	)

Net current-period other comprehensive income		151			520			671

Balance as of December 31, 2020	$	472		$	(326	)	$	146

There was no income tax expense or benefit allocated to other comprehensive income, including reclassification adjustments for the year ended December 31, 2020.

AVAILABLE-FOR-SALE MARKETABLE SECURITIES (Tables)

12 Months Ended

Dec. 31, 2020

Investments, Debt and Equity Securities [Abstract]

Summary of Available-for-Sale Marketable Securities

The following is a summary of available-for-sale marketable securities:

	December 31, 2020									December 31, 2019
		Amortized cost		Gross unrealized gain		Gross unrealized loss		Fair value			Amortized cost		Gross unrealized gain		Gross unrealized loss			Fair value

Available-for-sale - matures within one year:
Governmental debentures		$	-	$	-	$	-	$	-		$	449	$	1	$	-		$	450
Corporate debentures			12,611		97		-		12,708			30,928		79		(8	)		30,999

			12,611		97		-		12,708			31,377		80		(8	)		31,449
Available-for-sale - matures after one year through three years:
Governmental debentures			379		3		-		382			855		1		-			856
Corporate debentures			13,181		364		-		13,545			23,653		197		(7	)		23,843

			13,560		367		-		13,927			24,508		198		(7	)		24,699
Available-for-sale - matures after three years through five years:
Corporate debentures			535		8		-		543			4,806		58		-			4,864
			535		8		-		543			4,806		58		-			4,864
		$	26,706	$	472	$	-	$	27,178		$	60,691	$	336	$	(15	)	$	61,012

FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

Schedule of Financial Assets Measured at Fair Value on a Recurring Basis

NOTE 4:-FAIR VALUE MEASUREMENTS (Cont.)

	As of December 31, 2020
	Fair value measurements using input type
	Level 1		Level 2			Level 3		Total

Available-for-sale marketable securities	$	-	$	27,178		$	-	$	27,178
Foreign currency derivative contracts		-		(952	)		-		(952	)

Total financial net assets	$	-	$	26,226		$	-	$	26,226

	As of December 31, 2019
	Fair value measurements using input type
	Level 1		Level 2			Level 3			Total

Available-for-sale marketable securities	$	-	$	61,012		$	-		$	61,012
Foreign currency derivative contracts		-		(871	)		-			(871	)
Earn-out liability		-		-			(1,100	)		(1,100	)

Total financial net assets	$	-	$	60,141		$	(1,100	)	$	59,041

DERIVATIVE INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2020

Designated as Hedging Instrument [Member]

Schedule of the Fair Value of Open Foreign Exchange Contracts

The fair value of the outstanding foreign exchange contracts recorded by the Company on its consolidated balance sheets as of December 31, 2020 and 2019, as assets and liabilities are as follows:

Foreign exchange forward and		December 31,
options contracts	Balance sheet	2020			2019

Fair value of foreign exchange hedge transactions	Other receivables and prepaid expenses	$	2,258		$	158
Fair value of foreign exchange hedge transactions	Other payables and accrued expenses		(3,224	)		(1,041	)

Total derivatives designated as hedging instruments	Other Comprehensive loss	$	(326	)	$	(846	)

Not Designated as Hedging Instrument [Member]

Schedule of the Fair Value of Open Foreign Exchange Contracts

Foreign exchange forward and		December 31,
options contracts	Balance sheet	2020			2019

Fair value of foreign exchange non-designated hedge transactions	Other receivables and prepaid expenses	$	-		$	12

Fair value of foreign exchange non-designated hedge transactions	Other payables and accrued expenses		(13	)		-

Total derivatives non-designated as hedging instruments		$	(13	)	$	12

OTHER RECEIVABLES AND PREPAID EXPENSES (Tables)

12 Months Ended

Dec. 31, 2020

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Other Accounts Receivable and Prepaid Expenses

	December 31,
	2020		2019

Prepaid expenses	$	6,495	$	3,957
Government authorities		2,403		1,773
Prepayment to OEM		2,359		-
Foreign currency derivative contracts		2,285		170
Short-term lease deposits		231		195
Grants receivable from the OCS		103		-
Others		329		433

	$	14,205	$	6,528

INVENTORIES (Tables)

12 Months Ended

Dec. 31, 2020

Inventory Disclosure [Abstract]

Schedule of Inventory

	December 31,
	2020		2019

Raw materials	$	1,299	$	1,264
Finished goods		11,287		9,404

	$	12,586	$	10,668

PROPERTY AND EQUIPMENT, NET (Tables)

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

	December 31,
	2020		2019
Cost:
Lab equipment	$	17,624	$	17,548
Computers and peripheral equipment		13,090		22,374
Office furniture and equipment		1,454		1,356
Leasehold improvements		3,134		2,557
Lease equipment		2,976		930

		38,278		44,765
Accumulated depreciation:
Lab equipment		13,511		14,548
Computers and peripheral equipment		10,501		20,145
Office furniture and equipment		575		659
Leasehold improvements		1,224		1,162
Lease equipment		474		116

		26,285		36,630

Depreciated cost	$	11,993	$	8,135

INTANGIBLE ASSETS, NET (Tables)

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets

a.The following table shows the Company's intangible assets for the periods presented:

	Weighted Average Useful life		December 31,
	(Years)		2020		2019
Original Cost:

Technology		3.8	$	9,111	$	9,111
Backlog		2.8		1,877		1,877
Customer relationships		4.4		3,592		3,592
IP R&D		6		3,659		3,659

			$	18,239	$	18,239
Accumulated amortization:

Technology			$	9,111	$	9,111
Backlog				1,877		1,877
Customer relationships				3,592		3,592
IP R&D				915		305

			$	15,495	$	14,885

Amortized cost			$	2,744	$	3,354

Schedule of Estimated Amortization Expense

c.Estimated amortization expense for the years ending:

Year ending December 31,

2021			610
2022			610
2023			610
Thereafter			914

Total			2,744

OTHER PAYABLES AND ACCRUED EXPENSES (Tables)

12 Months Ended

Dec. 31, 2020

Payables and Accruals [Abstract]

Schedule of Other Payables and Accrued Expenses

NOTE 10:-OTHER PAYABLES AND ACCRUED EXPENSES

	December 31,
	2020		2019

Accrued expenses	$	4,920	$	3,887
Government authorities		3,723		3,061
Foreign currency derivative contracts		3,237		1,041
Holdback and contingent earnout		837		1,575
Provision for returns		290		163
Advances from customers		7		253
Others		147		234

	$	13,161	$	10,214

COMMITMENTS AND CONTINGENT LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Schedule of Weighted-Average Remaining Lease Term and Discount Rate

The following table represents the weighted-average remaining lease term and discount rate:

		Year ended December 31, 2020

Weighted average remaining lease term		2.02 years
Weighted average discount rate		1.8%

Schedule of Maturities of Operating Lease Liabilities

Maturities of operating lease liabilities were as follows:

Year ending December 31,
2021	$	2,836
2022		1,358
2023		368
2024		120
2025 and thereafter		61

Total lease payments	$	4,743

Less - imputed interest	$	(95	)

Present value of lease liabilities	$	4,648

SHAREHOLDERS' EQUITY (Tables)

12 Months Ended

Dec. 31, 2020

Stockholders' Equity Note [Abstract]

Schedule of Stock Option Activity

A summary of the Company's stock option activity, pertaining to its option plans for employees and related information is as follows:

	Year ended December 31,
	2020					2019					2018
	Number of shares upon exercise			Weighted average exercise price		Number of shares upon exercise			Weighted average exercise price		Number of shares upon exercise			Weighted average exercise price

Outstanding at beginning of year		1,453,741		$	7.59		1,736,143		$	7.26		2,189,297		$	7.63
Granted		-		$	-		-		$	-		62,200		$	5.91
Forfeited		(28,657	)	$	17.47		(59,107	)	$	10.05		(414,617	)	$	9.79
Exercised		(290,828	)	$	6.25		(223,295	)	$	4.36		(100,737	)	$	4.07

Outstanding at end of year		1,134,256		$	7.68		1,453,741		$	7.59		1,736,143		$	7.26

Exercisable at end of year		1,065,498		$	7.83		1,240,005		$	8.01		1,281,665		$	8.02

Vested and expected to vest		1,132,007		$	7.68		1,442,990		$	7.61		1,464,802		$	7.65

Schedule of Stock Options Outstanding

The options outstanding as of December 31, 2020, have been classified by exercise price, as follows:

Exercise price		Shares upon exercise of options outstanding as of December 31, 2020		Weighted average remaining contractual life		Shares upon exercise of options exercisable as of December 31, 2020
				Years

$	23.31-27.58		49,500		1.66		49,500
$	15.2-17.07		46,936		1.02		46,936
$	10.0 -14.68		140,150		2.74		140,150
$	5.01-9.7		360,605		2.27		319,253
$	0.1-4.95		537,065		3.16		509,659

			1,134,256				1,065,498

Summary of Restricted Stock Unit Activity

The following provides a summary of the restricted stock unit activity for the Company for the two years ended December 31, 2020:

	Year ended December 31,
	2020					2019
	Number of shares upon exercise			Weighted average share price		Number of shares upon exercise			Weighted average share price

Outstanding at beginning of year		1,652,060		$	6.53		1,252,031		$	5.45
Granted		869,250		$	10.96		1,001,000		$	7.53
Vested		(570,000	)	$	10.69		(401,904	)	$	7.53
Forfeited		(188,293	)	$	10.01		(199,067	)	$	7.61

Unvested at end of year		1,763,017		$	8.63		1,652,060		$	6.53

TAXES ON INCOME (Tables)

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Schedule of Pre-tax Income (Loss)

e.Pre-tax income (loss) is comprised as follows:

	Year ended December 31,
	2020			2019			2018

Domestic	$	(8,722	)	$	(8,934	)	$	(9,877	)
Foreign		1,550			1,916			1,890

	$	(7,172	)	$	(7,018	)	$	(7,987	)

Schedule of the Reconciliation of the Theoretical Tax Expenses

f.A reconciliation of the theoretical tax expenses, assuming all income is taxed at the statutory tax rate applicable to the income of the Company and the actual tax expenses is as follows:

	Year ended December 31,
	2020			2019			2018

Loss before taxes on income	$	(7,172	)	$	(7,018	)	$	(7,987	)

Theoretical tax income computed at the Israeli statutory tax rate (23% for the years 2020, 2019 and 2018, respectively)	$	(1,650	)	$	(1,614	)	$	(1,837	)

Changes in valuation allowance		1,979			951			1,189
Increase in losses and temporary differences due to change in Israeli corporate and “Approved Enterprise" tax		-			-			659
Write off of prepaid and withholding taxes		1,066			1,536			1,828
Foreign tax rates differences related to subsidiaries		35			44			50
Non-deductible expenses		72			470			147
Other expenses and Exchange rate differences		(383	)		(143	)		(82	)
Non-deductible share-based compensation expense		557			397			474
Change in expense associated with tax positions for current year		500			-			-

Actual tax expense	$	2,176		$	1,641		$	2,428

Schedule of Income Tax Expense

g.Income tax expense is comprised as follows:

	Year ended December 31,
	2020		2019			2018

Current taxes	$	513	$	341		$	580
Deferred taxes expense (benefit)		97		(236	)		20
Write off of prepaid and withholding taxes		1,066		1,536			1,828
Change in expense associated with tax positions for current year		500		-			-

	$	2,176	$	1,641		$	2,428

Schedule of Deferred Income Taxes

F - 44

ALLOT LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

U.S. dollars in thousands, except share and per share data

NOTE 13:-TAXES ON INCOME (Cont.)

	December 31,
	2020			2019
Deferred tax assets:
Operating and capital loss carryforwards	$	26,731		$	22,353
Research and development		2,602			5,496
Employee benefits		1,368			1,062
Intangible assets		282			489
Other temporary differences mainly relating to reserve and allowances		1,607			2,024

Deferred tax asset before valuation allowance		32,590			31,424
Valuation allowance		(27,652	)		(25,880	)
Deferred tax asset net of valuation allowance		4,938			5,544

Deferred tax liability:
Intangible assets		3,493			3,562
Other temporary differences mainly relating to reserve and allowances		1,025			1,465
Net deferred tax asset	$	420		$	517

GEOGRAPHIC INFORMATION (Tables)

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Schedule of Revenues by Geographic Location

Allot operates in a single reportable segment. Revenues are based on the location of the Company's channel partners which are considered as end customers, as well as direct customers of the Company:

	Year ended December 31,
	2020		2019		2018

Europe	$	94,644	$	36,199	$	45,730
Asia and Oceania		23,519		42,994		22,018
Americas		8,131		16,576		14,363
Middle East and Africa		9,628		14,331		13,726

	$	135,922	$	110,100	$	95,837

Schedule of Major Customers

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

	Year ended December 31,
	2020		2019		2018

1^st Customer		43%		16%		22%
2^nd Customer		11%		11%		-

		54%		27%		22%

Schedule of Long-Lived Assets by Geographic Location

The following presents total long-lived assets as of December 31, 2020 and 2019:

	December 31,
	2020		2019
Long-lived assets:
Israel	$	14,210	$	12,764
Other		2,241		1,739

	$	16,451	$	14,503

FINANCIAL INCOME (EXPENSES), NET (Tables)

12 Months Ended

Dec. 31, 2020

Other Income and Expenses [Abstract]

Schedule of Financial Income, Net

	Year ended December 31,
	2020		2019		2018

Financial income:
Interest income	$	1,754	$	2,551	$	2,696
Exchange rate differences and other		231		-		305

Financial expenses:
Exchange rate differences and other		-		334		-
Amortization/accretion of premium/discount on marketable securities, net		128		257		793

	$	1,857	$	1,960	$	2,208

EARNINGS (LOSS) PER SHARE (Tables)

12 Months Ended

Dec. 31, 2020

Net loss per share:

Schedule of the Computation of Basic and Diluted Net Earnings (Loss) per Share

The following table sets forth the computation of basic and diluted net loss per share:

	Year ended December 31,
	2020			2019			2018
Numerator:
Net loss	$	(9,348	)	$	(8,659	)	$	(10,415	)

Denominator:
Weighted average number of shares outstanding used in computing basic and diluted net loss per share		35,007,201			34,250,582			33,710,507

Basic and diluted net loss per share	$	(0.27	)	$	(0.25	)	$	(0.31	)

GENERAL (Narrative) (Details) - USD ($) $ in Thousands		12 Months Ended
GENERAL (Narrative) (Details) - USD ($) $ in Thousands	Jan. 14, 2018	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Apr. 02, 2019
Business Acquisition [Line Items]
Cash paid to acquire entity				$ 3,048
Acquisition transaction costs		303
Net cash acquired assets		132
Acquisition costs recorded to operating expenses		49
Netonomy LTD [Member]
Business Acquisition [Line Items]
Acquisition date	Jan. 14, 2018
Cash paid to acquire entity	$ 3,180
Total purchase consideration	3,631
Fair value of contingent liability	$ 282	$ 834
Payment term for contingent consideration	2 years 6 months
Holdback amount	$ 1,100
Restricted holdback amount	$ 797				$ 797
Description of claims for indemnification	paid in three installments consisting each one 40%, 40% and 20% of the Holdback amount following the first, second and 30-months anniversaries of the Closing Date

GENERAL (Schedule of Estimated Fair Values of Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Jan. 14, 2018
Business Acquisition [Line Items]
Goodwill	$ 31,683	$ 31,683
Netonomy LTD [Member]
Business Acquisition [Line Items]
Non-current assets			$ 4
Account Payable			(11)
Other Payables			(142)
IPR&D			3,659
Goodwill			121
Net assets acquired			$ 3,631

SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Jan. 02, 2019	Dec. 31, 2017
Restricted Cash and Cash Equivalents Items [Line Items]
Short-term deposits, weighted average interest rate	0.85%	2.33%
Short-term bank deposits due to hedging transacations	$ 2,500	$ 2,500
Inventory write-offs	1,928	629	$ 2,231
Cumulative inventory write-off	4,624	2,839
Impairment of intangible assets
Reserve for sales returns	290	163
Advertising expenses	1,103	1,274	1,270
Severance expense	3,619	2,249	1,950
Allowance for credit losses	2,309	1,867	1,415		$ 1,292
Grants participations excluded from research and development costs	$ 339	378	374
Weighted average cost of debt	2.00%
Changes in deferred revenue	$ 712
ROU assets	4,458	6,368		$ 6,700
ROU lease liabilites	4,648			$ 6,700
Remaining performance obligations as of the balance date for long-term	110,000
Amortization of deferred commission	1,286
Revenues	$ 135,922	$ 110,100	$ 95,837
Restricted Stock Units (RSUs) [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Outstanding options and warrants excluded from the calculation of diluted income per share	2,897,273	3,105,801	2,998,174
Optenet [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Expected volatility	42.50%
Netonomy [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Expected volatility	20.70%
Minimum [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Annual pre-vesting forfeiture rate	0.00%	0.00%	0.00%
Annual post-vesting forfeiture rate	0.00%	0.00%	0.00%
Remaining performance obligations as of the balance date for short-term	$ 77,000
Maximum [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Annual pre-vesting forfeiture rate	33.00%	33.00%	33.00%
Annual post-vesting forfeiture rate	41.00%	41.00%	41.00%
Remaining performance obligations as of the balance date for long-term	$ 33,000

SIGNIFICANT ACCOUNTING POLICIES (Schedule of Allowance of Credit Losses) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Accounting Policies [Abstract]
Total allowance for credit losses - January 1	$ 1,867	$ 1,415	$ 1,292
Current-period provision for expected credit losses	1,894	866	504
Write-offs	(934)	(3)	(11)
Recoveries collected	(518)	(411)	(370)
Total allowance for credit losses - December 31	$ 2,309	$ 1,867	$ 1,415

SIGNIFICANT ACCOUNTING POLICIES (Schedule of Estimated Useful Lives at Annual Rates) (Details)	12 Months Ended
	Dec. 31, 2020
Lab equipment [Member] \| Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives, annual rate	16.00%
Lab equipment [Member] \| Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives, annual rate	25.00%
Computers and peripheral equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives, annual rate	33.00%
Office furniture and equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives, annual rate	6.00%
Equipment at customer site [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives, annual rate	16.00%
Leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	Over the shorter of the term of the lease or the useful life of the asset

SIGNIFICANT ACCOUNTING POLICIES (Schedule of Stock-Based Compensation Expense) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	$ 5,198	$ 3,420	$ 2,862
Cost of revenues [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	355	264	316
Research and development [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	1,368	847	678
Sales and marketing [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	2,145	1,257	928
General and administrative [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	$ 1,330	$ 1,052	$ 940

SIGNIFICANT ACCOUNTING POLICIES (Schedule of Stock-Based Compensation Assumptions) (Details)	12 Months Ended
	Dec. 31, 2018
Accounting Policies [Abstract]
Suboptimal exercise multiple, minimum	2.9
Suboptimal exercise multiple, maximum	3.5
Risk free interest rate, minimum	2.09%
Risk free interest rate, maximum	3.05%
Volatility, minimum	26.00%
Volatility, maximum	47.00%
Dividend yield	0.00%

SIGNIFICANT ACCOUNTING POLICIES (Schedule of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	$ (525)
Changes in other comprehensive income (loss) before reclassifications	914
Amounts reclassified from accumulated other comprehensive income (loss) to :
Net current-period other comprehensive income (loss)	671	$ 242	$ (803)
Balance	146	(525)
Unrealized gains (losses) on cash flow hedges [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	(846)
Changes in other comprehensive income (loss) before reclassifications	723
Amounts reclassified from accumulated other comprehensive income (loss) to :
Net current-period other comprehensive income (loss)	520
Balance	(326)	(846)
Unrealized gain (losses) on marketable securities [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	321
Changes in other comprehensive income (loss) before reclassifications	191
Amounts reclassified from accumulated other comprehensive income (loss) to :
Net current-period other comprehensive income (loss)	151
Balance	472	$ 321
Cost of revenues [Member]
Amounts reclassified from accumulated other comprehensive income (loss) to :
Amounts reclassified from accumulated other comprehensive income	(5)
Cost of revenues [Member] \| Unrealized gains (losses) on cash flow hedges [Member]
Amounts reclassified from accumulated other comprehensive income (loss) to :
Amounts reclassified from accumulated other comprehensive income	(5)
Cost of revenues [Member] \| Unrealized gain (losses) on marketable securities [Member]
Amounts reclassified from accumulated other comprehensive income (loss) to :
Amounts reclassified from accumulated other comprehensive income
Operating expenses [Member]
Amounts reclassified from accumulated other comprehensive income (loss) to :
Amounts reclassified from accumulated other comprehensive income	(198)
Operating expenses [Member] \| Unrealized gains (losses) on cash flow hedges [Member]
Amounts reclassified from accumulated other comprehensive income (loss) to :
Amounts reclassified from accumulated other comprehensive income	(198)
Operating expenses [Member] \| Unrealized gain (losses) on marketable securities [Member]
Amounts reclassified from accumulated other comprehensive income (loss) to :
Amounts reclassified from accumulated other comprehensive income
Financial income, net [Member]
Amounts reclassified from accumulated other comprehensive income (loss) to :
Amounts reclassified from accumulated other comprehensive income	(40)
Financial income, net [Member] \| Unrealized gains (losses) on cash flow hedges [Member]
Amounts reclassified from accumulated other comprehensive income (loss) to :
Amounts reclassified from accumulated other comprehensive income
Financial income, net [Member] \| Unrealized gain (losses) on marketable securities [Member]
Amounts reclassified from accumulated other comprehensive income (loss) to :
Amounts reclassified from accumulated other comprehensive income	$ (40)

AVAILABLE-FOR-SALE MARKETABLE SECURITIES (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Debt Securities, Available-for-sale [Line Items]
Amortized cost	$ 26,706	$ 60,691
Gross unrealized gain	472	336
Gross unrealized loss		(15)
Fair value	27,178	61,012
Available-for-sale securities matures within one year [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized cost	12,611	31,377
Gross unrealized gain	97	80
Gross unrealized loss		(8)
Fair value	12,708	31,449
Available-for-sale securities matures within one year [Member] \| Governmental debentures [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized cost		449
Gross unrealized gain		1
Gross unrealized loss
Fair value		450
Available-for-sale securities matures within one year [Member] \| Corporate debentures [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized cost	12,611	30,928
Gross unrealized gain	97	79
Gross unrealized loss		(8)
Fair value	12,708	30,999
Available-for-sale securities matures after one year through three years [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized cost	13,560	24,508
Gross unrealized gain	367	198
Gross unrealized loss		(7)
Fair value	13,927	24,699
Available-for-sale securities matures after one year through three years [Member] \| Governmental debentures [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized cost	379	855
Gross unrealized gain	3	1
Gross unrealized loss
Fair value	382	856
Available-for-sale securities matures after one year through three years [Member] \| Corporate debentures [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized cost	13,181	23,653
Gross unrealized gain	364	197
Gross unrealized loss		(7)
Fair value	13,545	23,843
Available-for-sale securities matures after three year through five years [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized cost	535	4,806
Gross unrealized gain	8	58
Gross unrealized loss
Fair value	543	4,864
Available-for-sale securities matures after three year through five years [Member] \| Corporate debentures [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized cost	535	4,806
Gross unrealized gain	8	58
Gross unrealized loss
Fair value	$ 543	$ 4,864

FAIR VALUE MEASUREMENTS (Schedule of Financial Assets Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale marketable securities	$ 27,178	$ 61,012
Foreign currency derivative contracts	(952)	(871)
Earn-out liability		(1,100)
Total financial net assets	26,226	59,041
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale marketable securities
Foreign currency derivative contracts
Earn-out liability
Total financial net assets
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale marketable securities	27,178	61,012
Foreign currency derivative contracts	(952)	(871)
Earn-out liability
Total financial net assets	26,226	60,141
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale marketable securities
Foreign currency derivative contracts
Earn-out liability		(1,100)
Total financial net assets		$ (1,100)

DERIVATIVE INSTRUMENTS (Narrative) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Net losses recognized from currency transactions	$ 1,200	$ 534	$ 1,480
Unrealized gain (loss) on forward contracts, net	(326)	(846)
Outstanding hedge transactions	8,700	36,169
Non-designated hedge transactions	13,773	15,741
Gain (loss) on derivative instruments reclassified from OCI to operating expenses	$ 203	$ (96)	$ 903

DERIVATIVE INSTRUMENTS (Schedule of the Fair Value Open Foreign Exchange Contracts) (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Fair value of foreign exchange hedge transactions	$ 2,258	$ 158
Fair value of foreign exchange hedge transactions	(3,224)	(1,041)
Total derivatives designated as hedging instruments	$ (326)	$ (846)

DERIVATIVE INSTRUMENTS (Schedule of the Fair value of the outstanding non-designated foreign exchange contracts) (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Derivative Instruments Schedule Of Fair Value Of Outstanding Non-designated Foreign Exchange Contracts
Fair value of foreign exchange non-designated hedge transactions		$ 12
Fair value of foreign exchange non-designated hedge transactions	(13)
Total derivatives non-designated as hedging instruments	$ (13)	$ 12

OTHER RECEIVABLES AND PREPAID EXPENSES (Schedule of Other Accounts Receivable and Prepaid Expenses) (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepaid expenses	$ 6,495	$ 3,957
Government authorities	2,403	1,773
Prepayment to OEM	2,359
Foreign currency derivative contracts	2,285	170
Short-term lease deposits	231	195
Grants receivable from the OCS	103
Others	329	433
Other receivables and prepaid expenses	$ 14,205	$ 6,528

INVENTORIES (Details) - USD ($) $ in Thousands	12 Months Ended
INVENTORIES (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Inventory Disclosure [Abstract]
Raw materials	$ 1,299	$ 1,264
Finished goods	11,287	9,404
Total inventory	12,586	10,668
Cost of goods sold, deferred finished goods inventory	$ 4,246	$ 2,958

PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Property, Plant and Equipment [Line Items]
Cost	$ 38,278	$ 44,765
Accumulated depreciation	26,285	36,630
Deprecated cost	11,993	8,135
Depreciation	3,704	2,752	$ 2,203
Lab equipment [Member]
Property, Plant and Equipment [Line Items]
Cost	17,624	17,548
Accumulated depreciation	13,511	14,548
Computers and peripheral equipment [Member]
Property, Plant and Equipment [Line Items]
Cost	13,090	22,374
Accumulated depreciation	10,501	20,145
Office furniture and equipment [Member]
Property, Plant and Equipment [Line Items]
Cost	1,454	1,356
Accumulated depreciation	575	659
Leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Cost	3,134	2,557
Accumulated depreciation	1,224	1,162
Lease equipment [Member]
Property, Plant and Equipment [Line Items]
Cost	2,976	930
Accumulated depreciation	$ 474	$ 116

INTANGIBLE ASSETS, NET (Narrative) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 610	$ 1,607	$ 1,631

INTANGIBLE ASSETS, NET (Schedule of Intangible Assets) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Finite-Lived Intangible Assets [Line Items]
Cost	$ 18,239	$ 18,239
Accumulated amortization	15,495	14,885
Total	$ 2,744	3,354
Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful life (Years)	3 years 9 months 18 days
Cost	$ 9,111	9,111
Accumulated amortization	$ 9,111	9,111
Backlog [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful life (Years)	2 years 9 months 18 days
Cost	$ 1,877	1,877
Accumulated amortization	$ 1,877	1,877
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful life (Years)	4 years 4 months 24 days
Cost	$ 3,592	3,592
Accumulated amortization	$ 3,592	3,592
IP R&D [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Useful life (Years)	6 years
Cost	$ 3,659	3,659
Accumulated amortization	$ 915	$ 305

INTANGIBLE ASSETS, NET (Schedule of Estimated Amortization Expense) (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
2021	$ 610
2022	610
2023	610
Thereafter	914
Total	$ 2,744	$ 3,354

OTHER PAYABLES AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
OTHER PAYABLES AND ACCRUED EXPENSES [Abstract]
Accrued expenses	$ 4,920	$ 3,887
Government authorities	3,723	3,061
Foreign currency derivative contracts	3,237	1,041
Holdback and contingent earnout	837	1,575
Provision for returns	290	163
Advances from customers	7	253
Others	147	234
Total other payables and accrued expenses	$ 13,161	$ 10,214

COMMITMENTS AND CONTINGENT LIABILITIES (Narrative) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Rent expense	$ 3,282	$ 3,129	$ 2,934
Maturity of operating liability	139
Bank guarantees	501
Guarantees in favor of lease	503
Short-term lease expense	$ 119

COMMITMENTS AND CONTINGENT LIABILITIES (Schedule of Weighted-Average Remaining Lease Term and Discount Rate) (Details)	Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Weighted-average remaining lease term	2 years 7 days
Weighted-average discount rate	1.80%

COMMITMENTS AND CONTINGENT LIABILITIES (Schedule of Maturities of Operating Lease Liabilities) (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Jan. 02, 2019
Commitments and Contingencies Disclosure [Abstract]
2021	$ 2,836
2022	1,358
2023	368
2024	120
2025 and thereafter	61
Total lease payments	4,743
Less - imputed interest	(95)
Present value of lease liabilities	$ 4,648	$ 6,700

SHAREHOLDERS' EQUITY (Narrative) (Details) $ in Thousands	12 Months Ended
SHAREHOLDERS' EQUITY (Narrative) (Details) $ in Thousands	Dec. 31, 2020 USD ($) shares	Dec. 31, 2019 USD ($) shares	Dec. 31, 2018 USD ($)	Dec. 31, 2018 USD ($) ₪ / shares	Dec. 31, 2020 ₪ / shares	Dec. 31, 2019 ₪ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share capital, amount authorized	$ 20,000
Ordinary shares, shares authorized \| shares	200,000,000	200,000,000
Ordinary shares, par value per share \| ₪ / shares					₪ 0.1	₪ 0.1
Purchase of ordinary shares
Intrinsic value of options outstanding	4,578	3,510	$ 1,518	$ 1,518
Intrinsic value of options exercisable	4,226	2,791	1,058	1,058
Intrinsic value of options vested and expected to vest	4,568	3,399	1,246	$ 1,246
Intrinsic value of options exercised	$ 1,437	$ 769	$ 201
Stock options vested during period \| shares	116,321
Weighted average remaining contractual life of options outstanding	2 years 8 months 1 day
Weighted-average remaining contractual life of exercisable options	2 years 6 months 29 days
Weighted-average grant-date fair value of the options granted \| ₪ / shares				$ 2.89
Stock Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to non-vested stock options	$ 120
Unrecognized compensation cost, recognition period	2 years 3 months 29 days
Shares available for future issuance \| shares	72,373
Vesting period for plan	4 years
Options, expiration period	10 years
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to non-vested stock options	$ 13,091
Unrecognized compensation cost, recognition period	2 years 3 months 29 days
Granted \| shares	869,250	1,001,000
Restricted Stock Units (RSUs) [Member] \| 2006 option plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period for plan	4 years
Restricted Stock Units (RSUs) [Member] \| 2016 option plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted \| shares	869,250	1,001,000

SHAREHOLDERS' EQUITY (Schedule of Stock Option Activity) (Details) - $ / shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Number of shares upon exercise
Outstanding at beginning of year	1,453,741	1,736,143	2,189,297
Granted			62,200
Forfeited	(28,657)	(59,107)	(414,617)
Exercised	(290,828)	(223,295)	(100,737)
Outstanding at end of year	1,134,256	1,453,741	1,736,143
Exercisable at end of year	1,065,498	1,240,005	1,281,665
Vested and expected to vest	1,132,007	1,442,990	1,464,802
Weighted average exercise price
Outstanding at beginning of year	$ 7.59	$ 7.26	$ 7.63
Granted			5.91
Forfeited	17.47	10.05	9.79
Exercised	6.25	4.36	4.07
Outstanding at end of year	7.68	7.59	7.26
Exercisable at end of year	7.83	8.01	8.02
Vested and expected to vest	$ 7.68	$ 7.61	$ 7.65

SHAREHOLDERS' EQUITY (Schedule of Options Outstanding) (Details) - $ / shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Shares upon exercise of options outstanding as of December 31, 2019	1,134,256	1,453,741	1,736,143	2,189,297
Weighted average remaining contractual life	2 years 8 months 1 day
Shares upon exercise of options exercisable as of December 31, 2019	1,065,498	1,240,005	1,281,665
$23.31-27.58 [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Prices, minimum	$ 23.31
Exercise Prices, maximum	$ 27.58
Shares upon exercise of options outstanding as of December 31, 2019	49,500
Weighted average remaining contractual life	1 year 7 months 28 days
Shares upon exercise of options exercisable as of December 31, 2019	49,500
$15.2-17.07 [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Prices, minimum	$ 15.2
Exercise Prices, maximum	$ 17.07
Shares upon exercise of options outstanding as of December 31, 2019	46,936
Weighted average remaining contractual life	1 year 7 days
Shares upon exercise of options exercisable as of December 31, 2019	46,936
$10.0-14.68 [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Prices, minimum	$ 10.0
Exercise Prices, maximum	$ 14.68
Shares upon exercise of options outstanding as of December 31, 2019	140,150
Weighted average remaining contractual life	2 years 8 months 26 days
Shares upon exercise of options exercisable as of December 31, 2019	140,150
$5.01-9.7 [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Prices, minimum	$ 5.01
Exercise Prices, maximum	$ 9.7
Shares upon exercise of options outstanding as of December 31, 2019	360,605
Weighted average remaining contractual life	2 years 3 months 7 days
Shares upon exercise of options exercisable as of December 31, 2019	319,253
$0.1-4.95 [Member]
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Exercise Prices, minimum	$ 0.1
Exercise Prices, maximum	$ 4.95
Shares upon exercise of options outstanding as of December 31, 2019	537,065
Weighted average remaining contractual life	3 years 1 month 28 days
Shares upon exercise of options exercisable as of December 31, 2019	509,659

SHAREHOLDERS' EQUITY (Summary of Restricted Stock Unit Activity) (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Number of shares upon exercise
Outstanding at beginning of year	1,652,060	1,252,031
Granted	869,250	1,001,000
Vested	(570,000)	(401,904)
Forfeited	(188,293)	(199,067)
Unvested at end of year	1,763,017	1,652,060
Weighted average share price
Outstanding at beginning of year	$ 6.53	$ 5.45
Granted	10.96	7.53
Vested	10.69	7.53
Forfeited	10.01	7.61
Unvested at end of year	$ 8.63	$ 6.53

TAXES ON INCOME (Narrative) (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Taxes On Income [Line Items]
Revenues		$ 135,922	$ 110,100	$ 95,837
Israeli Income tax rate		23.00%	23.00%	23.00%
Tax-exempt period		2 years
Dividend, withholding tax rate		15.00%
Patent use right, period		8 years
Expense deductible period		3 years
Net operating loss carry forwards		$ 82,080
Net operating loss offset limitation, percentage of accumulated losses		14.00%
Net operating loss offset limitation, percentage of taxable income		50.00%
Capital loss carry forwards		$ 27,243
Provision		743
Amounts added to provision for ASC 740-10 during year		$ 500
Israeli resident corporation [Member]
Taxes On Income [Line Items]
Dividend, withholding tax rate		0.00%	0.00%	0.00%
Israeli resident individual [Member]
Taxes On Income [Line Items]
Dividend, withholding tax rate		20.00%	20.00%	20.00%
non-Israeli resident [Member]
Taxes On Income [Line Items]
Dividend, withholding tax rate		20.00%	20.00%	20.00%
Minimum [Member]
Taxes On Income [Line Items]
Change in corporate tax rate		10.00%
Tax-exempt period		5 years
Maximum [Member]
Taxes On Income [Line Items]
Change in corporate tax rate		25.00%
Tax-exempt period		8 years
Preferred Enterprise [Member]
Taxes On Income [Line Items]
Revenues	$ 10,000,000
Israeli Income tax rate	12.00%
Special Technological Preferred Enterprise [Member]
Taxes On Income [Line Items]
Revenues	$ 10,000,000
Israeli Income tax rate	6.00%
Israel [Member]
Taxes On Income [Line Items]
Write-off prepaid and withholding taxes		$ 4,991
United States of America [Member] \| Minimum [Member]
Taxes On Income [Line Items]
Net operating loss carry forwards		$ 4,669
Expiration of operating loss carry forward		Dec. 31, 2026
United States of America [Member] \| Maximum [Member]
Taxes On Income [Line Items]
Net operating loss carry forwards		$ 7,434
Expiration of operating loss carry forward		Dec. 31, 2037
Development Zone A [Member]
Taxes On Income [Line Items]
Israeli Income tax rate					9.00%	9.00%
Change in corporate tax rate		7.50%
Outside Development Zone [Member]
Taxes On Income [Line Items]
Israeli Income tax rate					16.00%	16.00%

TAXES ON INCOME (Schedule of Pre-tax Income (Loss)) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Domestic	$ (8,722)	$ (8,934)	$ (9,877)
Foreign	1,550	1,916	1,890
Pre-tax income (loss)	$ (7,172)	$ (7,018)	$ (7,987)

TAXES ON INCOME (Schedule of the Reconciliation of the Theoretical Tax Expense) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Loss before taxes on income	$ (7,172)	$ (7,018)	$ (7,987)
Theoretical tax income computed at the Israeli statutory tax rate (23% for the years 2020, 2019 and 2018, respectively)	(1,650)	(1,614)	(1,837)
Changes in valuation allowance	1,979	951	1,189
Increase in losses and temporary differences due to change in Israeli corporate and "Approved Enterprise" tax			659
Write off of prepaid and withholding taxes	1,066	1,536	1,828
Foreign tax rates differences related to subsidiaries	35	44	50
Non-deductible expenses	72	470	147
Other expenses and Exchange rate differences	(383)	(143)	(82)
Non-deductible share-based compensation expense	557	397	474
Change in expense associated with tax positions for current year	500
Income tax expense	$ 2,176	$ 1,641	$ 2,428
Israeli Income tax rate	23.00%	23.00%	23.00%

TAXES ON INCOME (Schedule of Income Tax Expense (Benefit)) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Current taxes	$ 513	$ 341	$ 580
Deferred taxes expense (benefit)	97	(236)	20
Write off of prepaid and withholding taxes	1,066	1,536	1,828
Change in expense associated with tax positions for current year	500
Income tax expense	$ 2,176	$ 1,641	$ 2,428

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

TAXES ON INCOME (Schedule of Deferred Income Taxes) (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Deferred tax assets:
Operating and capital loss carryforwards	$ 26,731	$ 22,353
Research and development	2,602	5,496
Employee benefits	1,368	1,062
Intangible assets	282	489
Other temporary differences mainly relating to reserve and allowances	1,607	2,024
Deferred tax asset before valuation allowance	32,590	31,424
Valuation allowance	(27,652)	(25,880)
Deferred tax asset net of valuation allowance	4,938	5,544
Deferred tax liability:
Intangible assets	3,493	3,562
Other temporary differences mainly relating to reserve and allowances	1,025	1,465
Net deferred tax asset	$ 420	$ 517

GEOGRAPHIC INFORMATION (Schedule of Revenue by Geographic Location) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	$ 135,922	$ 110,100	$ 95,837
Europe [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	94,644	36,199	45,730
Asia And Oceania [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	23,519	42,994	22,018
Americas [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	8,131	16,576	14,363
Middle East And Africa [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Revenues	$ 9,628	$ 14,331	$ 13,726

- Definition

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
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-Paragraph 28
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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-Section S99
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-Subparagraph (SX 210.5-03(1))
-URI http://asc.fasb.org/extlink&oid=120395209&loc=SL114868664-224227

+ Details

GEOGRAPHIC INFORMATION (Schedule of Major Customers) (Details)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Network intelligence solutions [Member]
Revenue, Major Customer [Line Items]
Concentration risk percentage	83.00%	76.00%	74.00%
Security Solutions [Member]
Revenue, Major Customer [Line Items]
Concentration risk percentage	17.00%	24.00%	26.00%
Sales [Member]
Revenue, Major Customer [Line Items]
Concentration risk percentage	54.00%	27.00%	22.00%
Sales [Member] \| Customer A [Member]
Revenue, Major Customer [Line Items]
Concentration risk percentage	43.00%	16.00%	22.00%
Sales [Member] \| Customer B [Member]
Revenue, Major Customer [Line Items]
Concentration risk percentage	11.00%	11.00%

GEOGRAPHIC INFORMATION (Schedule of Long-Lived Assets) (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Segment Reporting, Asset Reconciling Item [Line Items]
Long-lived assets	$ 16,451	$ 14,503
Israel [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Long-lived assets	14,210	12,764
Other [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Long-lived assets	$ 2,241	$ 1,739

FINANCIAL INCOME (EXPENSES), NET (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Financial income:
Interest income	$ 1,754	$ 2,551	$ 2,696
Exchange rate differences and other	231		305
Financial expenses:
Exchange rate differences and other		334
Amortization/accretion of premium/discount on marketable securities, net	128	257	793
Financial and other expenses, total	$ 1,857	$ 1,960	$ 2,208

EARNINGS (LOSS) PER SHARE (Schedule of Basic and Diluted Net Earnings (loss) Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Numerator:
Net loss	$ (9,348)	$ (8,659)	$ (10,415)
Weighted average number of shares used in per share computations of net earnings (loss):
Weighted average number of shares outstanding used in computing basic and diluted net loss per share	35,007,201	34,250,582	33,710,507
Basic and diluted net loss per share	$ (0.27)	$ (0.25)	$ (0.31)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details