DISCLOSURES ABOUT MARKET RISK We are subject to a number of risks similar to those of other companies of similar size in our industry, including, but not limited to, the need for successful development of products, the need for additional capital (or financing) to fund operating losses, competition from substitute products and services from larger companies, protection of proprietary technology, patent litigation, dependence on key individuals and risks associated with changes in information technology. We have incurred net losses since our inception, have an accumulated deficit as of December 31, 2021, of $445.7 million and expect to incur future additional losses. Our long-term success is dependent upon our ability to successfully market our existing services and increase our revenues to ultimately achieve profitable operations. We are exposed to market risk in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of foreign currency exchange rates and interest rates, which are discussed in detail below. Foreign Currency Risk The U.S. dollar is our functional currency. The majority of our revenue was denominated in U.S. dollars for the years ended December 31, 2021, 2020 and 2019, however certain expenses comprising our cost of revenue and operating expenses were denominated in NIS, mainly payroll and rent. This foreign currency exposure gives rise to market risk associated with exchange rate movements of the U.S. dollar against the NIS. Furthermore, we anticipate that a material portion of our expenses will continue to be denominated in NIS. A decrease of 5% in the U.S. dollar to NIS exchange rate would have increased our cost of revenue and operating expenses by approximately 1% during each of the years ended December 31, 2021, 2020 and 2019. If the NIS fluctuates significantly against the U.S. dollar, it may have a negative impact on our results of operations. To reduce the impact of foreign exchange risks associated with forecasted future cash flows and the volatility in our Consolidated Statements of Operations, we have established a hedging program during the year ended December 31, 2021 as further described in Note 2 to our audited consolidated financial statements included in Item 18 of this annual report. Foreign currency contracts are generally utilized in this hedging program. Our foreign currency contracts are short-term in duration. We do not enter into derivative instruments for trading or speculative purposes. We account for our derivative instruments as either assets or liabilities and carry them at fair value in the Consolidated Balance Sheets. The accounting for changes in the fair value of the derivative depends on the intended use of the derivative and the resulting designation. Our hedging program reduces but does not eliminate the impact of currency exchange rate movements. During the years ended December 31, 2020 and 2019, we did not hedge our foreign currency exchange risk. 122 Our derivatives expose us to credit risk to the extent that the counterparties may be unable to meet the terms of the agreement. We seek to mitigate such risk by limiting our counterparties to major financial institutions and by spreading the risk across a number of major financial institutions. However, failure of one or more of these financial institutions is possible and could result in incurred losses. As of December 31, 2021, the notional amount of our outstanding foreign exchange contracts was $43.5 million, of which $36.0 million met the requirements of hedge accounting. The table below provides information regarding our derivative instruments held in order to limit the exposure to exchange rate fluctuation as of December 31, 2021 (in thousands of dollars). Maturity in 2022 Derivatives designated as hedging instruments: Foreign exchange contracts: NIS $ 36,013 Derivatives not designated as hedging instruments: Foreign exchange contracts: GBP 4,054 Euro 2,830 AUD 581 7,465 Total $ 43,478 Interest Rate Risk We believe that we have no significant exposure to interest rate risk, as we have no significant long-term loans. However, our future interest income may fall short of expectations due to changes in market interest rates.