Consolidated Financial Statements as of and for the three and six months ended June 30, 2023 and 2022 |
||||
Condensed Consolidated Statements of Income and Comprehensive Income |
F-2 |
|||
Condensed Consolidated Balance Sheets |
F-3 |
|||
Condensed Consolidated Statements of Changes in Shareholders’ Equity |
F-4 |
|||
Condensed Consolidated Statements of Cash Flows |
F-5 |
|||
Notes to Condensed Consolidated Financial Statements |
F-6 |
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
2023 |
2022 |
2023 |
2022 |
|||||||||||||
Revenue |
$ | $ | $ | $ | ||||||||||||
Operating expenses: |
||||||||||||||||
Cost of revenue (1) |
||||||||||||||||
Sales and marketing (1) |
||||||||||||||||
Research and development (1) |
||||||||||||||||
General and administrative (1) |
||||||||||||||||
Depreciation and amortization |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating income (loss) |
$ | $ | ( |
) | $ | $ | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Other income (expense): |
||||||||||||||||
Interest expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Interest income |
||||||||||||||||
Gain on foreign currency transactions |
||||||||||||||||
Gain (loss) on foreign currency remeasurement |
( |
) | ||||||||||||||
Loss on short-term investments |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Other, net |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other income (expense), net |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income (loss) before income tax |
$ | $ | ( |
) | $ | $ | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Income tax (expense) benefit |
( |
) | ( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
$ | $ | ( |
) | $ | $ | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income (expense): |
||||||||||||||||
Pension adjustments, net of tax |
( |
) | ( |
) | ||||||||||||
Loss on foreign currency translation |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive income (loss) |
$ | $ | ( |
) | $ | $ | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Earnings (loss) per share: |
||||||||||||||||
Basic |
$ | $ | ( |
) | $ | $ | ( |
) | ||||||||
Diluted |
$ | $ | ( |
) | $ | $ | ( |
) | ||||||||
Weighted average shares outstanding: |
||||||||||||||||
Basic |
||||||||||||||||
Diluted |
(1) | |
June 30, |
December 31, |
|||||||
2023 |
2022 |
|||||||
Assets |
(unaudited |
) |
||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Short-term investments |
||||||||
Accounts receivable, net |
||||||||
Prepaid expenses, and other assets |
||||||||
|
|
|
|
|||||
Total current assets |
$ | $ | ||||||
Property and equipment, net |
||||||||
Operating lease right-of-use |
||||||||
Intangible assets, net |
||||||||
Goodwill |
||||||||
Deferred tax asset |
||||||||
Other non-current assets |
||||||||
|
|
|
|
|||||
Total assets |
$ | $ | ||||||
|
|
|
|
|||||
Liabilities and Shareholders’ Equity |
||||||||
Accounts payable and accrued expenses |
$ | $ | ||||||
Short-term operating lease liabilities |
||||||||
Income taxes payable |
||||||||
Contract liabilities |
||||||||
Loss contingency |
||||||||
Current portion of borrowings with related party |
||||||||
Other current liabilities |
||||||||
|
|
|
|
|||||
Total current liabilities |
$ | $ | ||||||
Long-term borrowings with related party |
||||||||
Long-term operating lease liabilities |
||||||||
Other non-current liabilities |
||||||||
|
|
|
|
|||||
Total liabilities |
$ | $ | ||||||
|
|
|
|
|||||
Shareholders’ equity |
||||||||
Common stock, KRW |
||||||||
Additional paid-in-capital |
||||||||
Accumulated other comprehensive income |
||||||||
Retained earnings |
||||||||
|
|
|
|
|||||
Total shareholders’ equity |
$ | $ | ||||||
|
|
|
|
|||||
Total liabilities and shareholders’ equity |
$ | $ | ||||||
|
|
|
|
Common shares |
Common stock |
Additional paid-in- |
Accumulated other comprehensive income/(loss) |
Retained earnings (deficit) |
Total shareholders’ equity |
|||||||||||||||||||
Three months ended June 30, 2023 |
— |
|||||||||||||||||||||||
As of April 1, 2023 |
||||||||||||||||||||||||
Net income |
— | — | — | — | ||||||||||||||||||||
Pension adjustments, net of tax |
— | — | — | — | ||||||||||||||||||||
Loss on foreign currency translation, net of tax |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
As of June 30, 2023 |
||||||||||||||||||||||||
Three months ended June 30, 2022 |
||||||||||||||||||||||||
As of April 1, 2022 |
||||||||||||||||||||||||
Net income |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||
Pension adjustments, net of tax |
— | — | — | — | ||||||||||||||||||||
Loss on foreign currency translation, net of tax |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
As of June 30, 2022 |
||||||||||||||||||||||||
Common shares |
Common stock |
Additional paid-in- capital |
Accumulated other comprehensive income/(loss) |
Retained earnings (deficit) |
Total shareholders’ equity |
|||||||||||||||||||
Six months ended June 30, 2023 |
||||||||||||||||||||||||
As of January 1, 2023 |
||||||||||||||||||||||||
Net income |
— | — | — | — | ||||||||||||||||||||
Pension adjustments, net of tax |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
Loss on foreign currency translation |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
As of June 30, 2023 |
||||||||||||||||||||||||
Six months ended June 30, 2022 |
||||||||||||||||||||||||
As of January 1, 2022 |
||||||||||||||||||||||||
Net income |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||
Pension adjustments, net of tax |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
Loss on foreign currency translation, net of tax |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
As of June 30, 2022 |
Six months ended June 30, |
||||||||
2023 |
2022 |
|||||||
Cash flow from (used in) operating activities: |
||||||||
Net income (loss) |
$ | $ | ( |
) | ||||
Adjustments to reconcile net income to net cash from operating activities: |
||||||||
Depreciation and amortization |
||||||||
Gain on foreign currency remeasurement |
( |
) | ( |
) | ||||
Loss on short-term investments |
||||||||
Deferred taxes |
( |
) | ||||||
Working capital adjustments: |
||||||||
Accounts receivable |
( |
) | ||||||
Prepaid expenses, other current and non-current assets |
( |
) | ||||||
Accounts payable, accrued expenses and other payables |
( |
) | ||||||
Contract liabilities |
( |
) | ( |
) | ||||
Income tax payable |
||||||||
Other current and non-current liabilities |
( |
) | ||||||
Net cash flows from (used in) operating activities |
$ | ( |
) | $ | ||||
Cash flow from (used in) investing activities: |
||||||||
Purchases of intangible assets |
( |
) | ||||||
Purchases of property and equipment |
( |
) | ( |
) | ||||
Disposals of property and equipment |
||||||||
Purchases of short-term investments |
( |
) | ( |
) | ||||
Sales of short-term investments |
||||||||
Net cash flows from (used in) investing activities |
$ | $ | ( |
) | ||||
Cash flow from (used in) financing activities: |
||||||||
Net cash flows from (used in) financing activities: |
$ | $ | ||||||
Net foreign exchange difference on cash and cash equivalents |
( |
) | ( |
) | ||||
Net decrease in cash and cash equivalents |
$ | ( |
) | $ | ( |
) | ||
Cash and cash equivalents at beginning of period |
$ | $ | ||||||
Cash and cash equivalents at end of period |
$ | $ | ||||||
Cash paid during year for: |
||||||||
Interest |
||||||||
Income taxes |
$ | $ |
Revenue Concentration |
||||||||||||||||
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
2023 |
2022 |
2023 |
2022 |
|||||||||||||
Apple |
% | % | % | % | ||||||||||||
Facebook |
% | % | % | % | ||||||||||||
Google |
% | % | % | % | ||||||||||||
Accounts Receivable Concentration |
||||||||||||||||
As of June 30, |
As of December 31, |
|||||||||||||||
2023 |
2022 |
|||||||||||||||
Apple |
% | % | ||||||||||||||
Facebook |
% | % | ||||||||||||||
Google |
% | % |
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
2023 |
2022 |
2023 |
2022 |
|||||||||||||
Mobile |
$ | $ | $ | $ | ||||||||||||
Web |
||||||||||||||||
Total |
$ | $ | $ | $ | ||||||||||||
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
2023 |
2022 |
2023 |
2022 |
|||||||||||||
U.S. (1) |
$ | $ | $ | $ | ||||||||||||
International |
||||||||||||||||
Total |
$ | $ | $ | $ | ||||||||||||
(1) |
Geographic location is presented as being derived from the U.S. when data is not available. |
As of June 30, 2023 |
As of December 31, 2022 |
|||||||
Contract assets (1) |
$ | $ | ||||||
Contract liabilities |
(1) |
Contract assets are included within prepaid expenses and other assets in our consolidated balance sheet. |
June 30, 2023 |
December 31, 2022 |
|||||||||||||||||||||||||||||||||||
Useful life | Gross amount | Accumulated amortization |
Impairment | Net amount | Gross amount | Accumulated amortization |
Impairment | Net amount | ||||||||||||||||||||||||||||
Goodwill |
$ | $ | — | $ | ( |
) | $ | $ | $ | — | $ | ( |
) | $ | ||||||||||||||||||||||
Trademarks |
— | ( |
) | — | ( |
) | ||||||||||||||||||||||||||||||
Customer relationships |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Purchased technology |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Development costs |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Software |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Total |
$ | $ | ( |
) | $ | ( |
) | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||||
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
2023 |
2022 |
2023 |
2022 |
|||||||||||||
Amortization Expense |
$ | $ | $ | $ |
As of June 30, 2023 |
As of December 31, 2022 |
|||||||
4.60% Senior Notes due to related party due 2024 |
$ | $ | ||||||
|
|
|
|
|||||
Total debt |
||||||||
Less: Short-term debt |
||||||||
|
|
|
|
|||||
Total Long-term debt |
$ | $ |
As of June 30, 2023 |
As of December 31, 2022 |
|||||||
Operating lease right-of-use |
$ | $ | ||||||
Accrued rent |
||||||||
|
|
|
|
|||||
Total operating lease right-of-use |
$ | $ | ||||||
|
|
|
|
|||||
Short-term operating lease liabilities |
||||||||
Long-term operating lease liabilities |
||||||||
|
|
|
|
|||||
Total operating lease liabilities |
$ | $ |
Six months ended |
Six months ended |
|||||||
June 30, 2023 |
June 30, 2022 |
|||||||
Cash paid for amounts included in the measurement of operating lease liabilities |
$ | $ |
Three months ended June 30, 2023 |
Currency Translation Adjustments |
Defined Benefit Pension Plan |
Total |
|||||||||
Balance at April 1, 2023 |
$ | $ | ( |
) | $ | |||||||
Foreign currency translation loss, net of tax |
( |
) | — | ( |
) | |||||||
Actuarial gain/(loss), net of tax |
— | |||||||||||
|
|
|
|
|
|
|||||||
Balance as of June 30, 2023 |
$ | $ | ( |
) | $ | |||||||
|
|
|
|
|
|
|||||||
Three months ended June 30, 2022 |
Currency Translation Adjustments |
Defined Benefit Pension Plan |
Total |
|||||||||
Balance at April 1, 2022 |
$ | $ | ( |
) | $ | |||||||
Foreign currency translation loss, net of tax |
( |
) | — | ( |
) | |||||||
Actuarial gain/(loss), net of tax |
— | |||||||||||
|
|
|
|
|
|
|||||||
Balance as of March 31, 2022 |
$ | $ | ( |
) | $ | |||||||
|
|
|
|
|
|
Six months ended June 30, 2023 |
Currency Translation Adjustments |
Defined Benefit Pension Plan |
Total |
|||||||||
Balance at January 1, 2023 |
$ | $ | ( |
) | $ | |||||||
Foreign currency translation loss, net of tax |
( |
) | — | ( |
) | |||||||
Actuarial gain/(loss), net of tax |
— | ( |
) | ( |
) | |||||||
|
|
|
|
|
|
|||||||
Balance as of June 30, 2023 |
$ | $ | ( |
) | $ | |||||||
|
|
|
|
|
|
|||||||
Six months ended June 30, 2022 |
Currency Translation Adjustments |
Defined Benefit Pension Plan |
Total |
|||||||||
Balance at January 1, 2022 |
$ | $ | ( |
) | $ | |||||||
Foreign currency translation loss, net of tax |
( |
) | — | ( |
) | |||||||
Actuarial gain/(loss), net of tax |
— | ( |
) | ( |
) | |||||||
|
|
|
|
|
|
|||||||
Balance as of June 30, 2022 |
$ | $ | ( |
) | $ | |||||||
|
|
|
|
|
|
Three months ended June 30, |
Six months ended June 30, |
Statement of Income and Comprehensive Income Line Item | ||||||||||||||||
2023 |
2022 |
2023 |
2022 |
|||||||||||||||
Royalty expense (see Note 11) |
$ |
$ |
$ |
$ |
Cost of revenue | |||||||||||||
Interest expense (see Note 5) |
Interest expense | |||||||||||||||||
Rent expense (see Note 9) |
General and administrative expense | |||||||||||||||||
Other expense |
General and administrative expense |
At June 30, |
At December 31, |
Statement of Consolidated Balance Sheet Line Item | ||||||||
2023 |
2022 |
|||||||||
4.6% Senior Notes with related party |
$ | $ | Short-Term borrowing with related party | |||||||
4.6% Senior Notes with related party |
$ | Long-Term borrowing with related party | ||||||||
Royalties and other expenses |
A/P and accrued expenses | |||||||||
|
Short-term operating lease liabilities | |||||||||
Accrued interest on 4.6% Senior Notes with related party |
Other non-current liabilities | |||||||||
|
Long-term lease liabilities |