QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |||||||
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Large, accelerated filer | ¨ | Accelerated filer | ¨ | ||||||||
x | Smaller reporting company | ||||||||||
Emerging growth company |
Page | |||||
Item 1A. Risk Factors | |||||
September 30, 2022 | December 31, 2021 | ||||||||||
(Unaudited) | |||||||||||
ASSETS | |||||||||||
CURRENT ASSETS: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Trade receivables, net (allowance for doubtful accounts of $ | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
NON-CURRENT ASSETS: | |||||||||||
Long-term deposit | |||||||||||
Long-term restricted deposits | |||||||||||
Property and equipment, net | |||||||||||
Goodwill | |||||||||||
Intangible assets, net | |||||||||||
Operating lease right of use asset | |||||||||||
Other non-current assets | |||||||||||
Total non-current assets | |||||||||||
TOTAL ASSETS | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
CURRENT LIABILITIES: | |||||||||||
Trade payables | |||||||||||
Employees and payroll accruals | |||||||||||
Accrued expenses and other current liabilities | |||||||||||
Current portion of long-term debt | |||||||||||
Lease liabilities - current portion | |||||||||||
Total current liabilities | |||||||||||
NON-CURRENT LIABILITIES: | |||||||||||
Long-term debt | |||||||||||
Lease liabilities - non-current portion | |||||||||||
Other non-current liabilities | |||||||||||
Warrants liability | |||||||||||
Total non-current liabilities | |||||||||||
TOTAL LIABILITIES | |||||||||||
COMMITMENTS AND CONTINGENT LIABILITIES (Note 7) | |||||||||||
STOCKHOLDERS’ EQUITY: | |||||||||||
Common stock of $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||||||||||||||
Revenues | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Cost of revenues (1) | |||||||||||||||||||||||||||||||||||
Research and development (1) | |||||||||||||||||||||||||||||||||||
Sales and marketing (1) | |||||||||||||||||||||||||||||||||||
General and administrative (1) | |||||||||||||||||||||||||||||||||||
Depreciation, amortization and impairment | |||||||||||||||||||||||||||||||||||
Operating (loss) profit | ( | ( | |||||||||||||||||||||||||||||||||
Finance expenses (income), net | ( | ||||||||||||||||||||||||||||||||||
(Loss) profit before taxes | ( | ( | ( | ||||||||||||||||||||||||||||||||
Taxes on income | |||||||||||||||||||||||||||||||||||
Net loss | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Accretion of preferred stock to redemption value | ( | ( | |||||||||||||||||||||||||||||||||
Net loss attributable to common stockholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||
Net loss per stock attributable to common stockholders (2) | |||||||||||||||||||||||||||||||||||
Basic | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||
Diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||
Weighted-average number of stock used in computing net loss per stock attributable to common stockholders (2) | |||||||||||||||||||||||||||||||||||
Basic | |||||||||||||||||||||||||||||||||||
Diluted |
Temporary equity | Common stock | Treasury stock | Additional paid-in capital | Accumulated deficit | Total stockholders’ equity (deficit) | ||||||||||||||||||||||||||||||||||||||||||||||||
Number | Amount | Number | Amount | Number | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2020, | $ | $ | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||
Accretion of preferred stock to redemption value | — | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Stock options exercised | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2021 (unaudited) | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Accretion of preferred stock to redemption value | — | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Stock options exercised | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2021 (unaudited) | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Accretion of preferred stock to redemption value | — | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Stock options exercised | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Balance as of September 30, 2021 (unaudited) | $ | $ | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||
Temporary equity | Common stock | Treasury stock | Additional paid-in capital | Accumulated deficit | Total stockholders’ equity | ||||||||||||||||||||||||||||||||||||||||||||||||
Number | Amount | Number | Amount | Number | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2021 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
Common stock and equity awards issued for acquisition of TVS | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Stock options exercised | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2022 (unaudited) | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Stock options exercised | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Net profit | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2022 (unaudited) | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Stock options and RSUs exercised | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance as of September 30, 2022 (unaudited) | $ | $ | $ | ( | $ |
Nine months ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Cash flows from operating activities: | (Unaudited) | (Unaudited) | |||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Depreciation, amortization and impairment | |||||||||||
Stock-based compensation | |||||||||||
Change in fair value of warrants | ( | ||||||||||
Changes in operating assets and liabilities | |||||||||||
(Increase)/ decrease in trade receivables, net | ( | ||||||||||
(Increase)/ decrease in prepaid expenses and other current assets | ( | ||||||||||
Increase/ (decrease) in trade payables | ( | ||||||||||
Decrease in operating lease right of use assets | |||||||||||
Increase in employees and payroll accruals | |||||||||||
Decrease in operating lease liabilities | ( | ||||||||||
Increase in accrued expenses and other current liabilities | |||||||||||
Net cash (used in)/ provided by operating activities | ( | ||||||||||
Cash flows from investing activities: | |||||||||||
Acquisition of business, net of cash acquired | ( | ||||||||||
Internal use software capitalization | ( | ( | |||||||||
Purchase of property and equipment | ( | ( | |||||||||
Founders' note receivable | ( | ||||||||||
Decrease (increase) in deposits | ( | ||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Repayment of acquisition liability | ( | ||||||||||
Proceeds from loans | |||||||||||
Repayment of loans | ( | ||||||||||
Payment of SPAC merger transaction costs | ( | ||||||||||
Proceeds from exercise of options | |||||||||||
Net cash (used in)/ provided by financing activities | ( | ||||||||||
Decrease in cash, cash equivalents and restricted cash | ( | ( | |||||||||
Cash, cash equivalents and restricted cash at the beginning of the period | |||||||||||
Cash, cash equivalents and restricted cash at the end of the period | $ | $ | |||||||||
Supplemental disclosure of cash flows activities: | |||||||||||
(1) Cash paid during the period for: | |||||||||||
Income taxes paid, net of tax refunds | $ | $ | |||||||||
Interest | $ | $ | |||||||||
(2) Non-cash transactions: | |||||||||||
Business combination consideration paid in stock | $ | $ | |||||||||
Accretion of preferred stock to redemption value | $ | ||||||||||
Deferred offering cost included in accrued liabilities | $ | ||||||||||
Reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets | |||||||||||
Cash and cash equivalents | |||||||||||
Long-term restricted deposits | |||||||||||
Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statements of cash flows | $ | $ |
Three months ended September 30, 2022 | Three months ended September 30, 2021 | ||||||||||||||||||||||||||||||||||
Unaudited | Unaudited | ||||||||||||||||||||||||||||||||||
Under previous classification | Effect of change | As reported | Previously reported | Effect of change | As adjusted | ||||||||||||||||||||||||||||||
Cost of revenues | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||
Research and development | ( | ( | |||||||||||||||||||||||||||||||||
Sales and marketing | ( | ( | |||||||||||||||||||||||||||||||||
General and administrative | ( | ( | |||||||||||||||||||||||||||||||||
Depreciation, amortization and impairment | $ | $ | $ | $ | $ | $ |
Nine months ended September 30, 2022 | Nine months ended September 30, 2021 | ||||||||||||||||||||||||||||||||||
Unaudited | Unaudited | ||||||||||||||||||||||||||||||||||
Under previous classification | Effect of change | As reported | Previously reported | Effect of change | As adjusted | ||||||||||||||||||||||||||||||
Cost of revenues | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||
Research and development | ( | ( | |||||||||||||||||||||||||||||||||
Sales and marketing | ( | ( | |||||||||||||||||||||||||||||||||
General and administrative | ( | ( | |||||||||||||||||||||||||||||||||
Depreciation, amortization and impairment | $ | $ | $ | $ | $ | $ |
September 30, 2022 | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||
Assets: | |||||||||||||||||
Money market funds | $ | $ | $ | ||||||||||||||
Liabilities: | |||||||||||||||||
Warrants liability | $ | $ | $ |
December 31, 2021 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||
Assets: | |||||||||||||||||
Money market funds | $ | $ | $ | ||||||||||||||
Liabilities: | |||||||||||||||||
Warrants liability | $ | $ | $ |
September 30, | December 31, | September 30, | |||||||||||||||
2022 | 2021 | 2021 | |||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||||
Beginning of the period | $ | $ | $ | ||||||||||||||
Additions* | |||||||||||||||||
Change in fair value | ( | ||||||||||||||||
Conversion of Legacy Innovid Warrants on the Closing of the Transaction | ( | ||||||||||||||||
End of the period | $ | $ | $ |
September 30, | December 31, | ||||||||||
2022 | 2021 | ||||||||||
(Unaudited) | |||||||||||
Risk-free interest rate | % | % | |||||||||
Expected dividends | % | % | |||||||||
Expected term (years) | |||||||||||
Expected volatility | % | % |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||
Customer A | % | *) | % | *) | |||||||||||||||||||
Customer B | % | *) | *) | *) |
January 1, 2022 | |||||||||||
(Unaudited) | |||||||||||
ROU assets | Lease liabilities | ||||||||||
Real Estate | $ | $ | |||||||||
Cars | |||||||||||
Total operating leases | $ | $ |
Total value | ||||||||
Cash and cash equivalents | $ | |||||||
Accounts receivables | ||||||||
Other current assets | ||||||||
Property and equipment | ||||||||
Total tangible assets | ||||||||
Technology | ||||||||
Customer relationships | ||||||||
Trade name | ||||||||
Goodwill | ||||||||
Total assets acquired | ||||||||
Less: Deferred tax liabilities | ( | |||||||
Less: Other assumed liabilities | ( | |||||||
Net assets acquired | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||
Revenues | $ | $ | $ | $ | |||||||||||||||||||
Net loss | ( | ( | ( | ( |
Number of shares | |||||
Legacy Innovid common stock of January 1, 2021, | |||||
Warrant exercised | |||||
Stock option exercised | |||||
Conversion of redeemable convertible preferred stock into common stock | |||||
Conversion of Legacy Innovid Warrants | |||||
Exchanged into Innovid Corp. common stock on November 30, 2021 |
Total value | ||||||||
Cash - ION trust account and cash, net of redemptions | $ | |||||||
Cash - PIPE Investment, net of Secondary Sale Amount of $ | ||||||||
Less: Transaction costs paid | ( | |||||||
Less: Deferred underwriting fee paid | ( | |||||||
Proceeds from reverse recapitalization, net | ||||||||
Less: Accrued transaction costs not yet paid | ( | |||||||
Less: Company Warrant assumed as part of the Transaction | ( | |||||||
Plus: Transaction costs allocated to Company Warrant | ||||||||
Reverse recapitalization, net | $ |
September 30, 2022 | |||||||||||
(Unaudited) | |||||||||||
ROU assets | Lease liabilities | ||||||||||
Real Estate | $ | $ | |||||||||
Cars | |||||||||||
Total operating leases | $ | $ |
September 30, 2022 | ||||||||
(Unaudited) | ||||||||
Lease liabilities | ||||||||
Current lease liabilities | $ | |||||||
Non-current lease liabilities | ||||||||
Total lease liabilities | $ |
Three months ended September 30, 2022 | Nine months ended September 30, 2022 | ||||||||||
(Unaudited) | (Unaudited) | ||||||||||
Operating lease cost | $ | $ | |||||||||
Short term lease cost | |||||||||||
Variable lease cost | |||||||||||
Total lease cost | $ | $ |
Nine months ended September 30, 2022 | ||||||||
(Unaudited) | ||||||||
Cash paid for amounts included in the measurement of lease liabilities | $ | |||||||
Right of use assets obtained in exchange for new operating lease liabilities | $ | |||||||
Right of use assets obtained in exchange for operating lease liabilities upon lease modification | $ |
September 30, 2022 | |||||
(Unaudited) | |||||
2022 Remaining | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
Total undiscounted lease payments | $ | ||||
Less: Interest | ( | ||||
Total lease liabilities - operating | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||
Cost of goods sold | $ | $ | $ | $ | |||||||||||||||||||
Research and development | |||||||||||||||||||||||
Sales and marketing | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Amount of options | Weighted average exercise price | Weighted average remaining contractual term (in years) | Aggregate intrinsic value (in thousands) | ||||||||||||||||||||
Outstanding at beginning of period | $ | $ | |||||||||||||||||||||
Transfer between employee and consultant | |||||||||||||||||||||||
Granted | |||||||||||||||||||||||
Granted in acquisition | |||||||||||||||||||||||
Forfeited | ( | ||||||||||||||||||||||
Expired | ( | ||||||||||||||||||||||
Exercised | ( | ||||||||||||||||||||||
Outstanding at end of period | $ | $ | |||||||||||||||||||||
Exercisable options at end of period | $ | $ |
Amount of options | Weighted average exercise price | Weighted average remaining contractual term (in years) | Aggregate intrinsic value (in thousands) | ||||||||||||||||||||
Outstanding at beginning of period | $ | $ | |||||||||||||||||||||
Transfer between employee and consultant | ( | ||||||||||||||||||||||
Forfeited | ( | ||||||||||||||||||||||
Exercised | ( | ||||||||||||||||||||||
Outstanding at end of period | $ | $ | |||||||||||||||||||||
Exercisable options at end of period | $ | $ |
Number of share units | Weighted average grant date fair value | ||||||||||
Outstanding at beginning of period | |||||||||||
Granted | |||||||||||
Released | ( | ||||||||||
Forfeited | ( | ||||||||||
Outstanding at end of period | $ | ||||||||||
Number of share units | Weighted average grant date fair value | ||||||||||
Outstanding at beginning of period | |||||||||||
Granted | |||||||||||
Forfeited | ( | ||||||||||
Outstanding at end of period | $ | ||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||
US | $ | $ | $ | $ | |||||||||||||||||||
Canada | |||||||||||||||||||||||
APAC | |||||||||||||||||||||||
EMEA | |||||||||||||||||||||||
LATAM | |||||||||||||||||||||||
Total revenues | $ | $ | $ | $ |
September 30, | December 31, | ||||||||||
2022 | 2021 | ||||||||||
(Unaudited) | |||||||||||
Israel | $ | $ | |||||||||
US | |||||||||||
Rest of the World | |||||||||||
Total | $ | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net profit (loss) | ( | ( | ( | ( | |||||||||||||||||||
Accretion of preferred stock to redemption value | ( | ( | |||||||||||||||||||||
Net profit (loss) attributable to common stockholders - basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted-average number of stock used in computing net loss per stock attributable to common stockholders – | |||||||||||||||||||||||
Basic weighted average number of shares outstanding | |||||||||||||||||||||||
Diluted weighted average number of shares outstanding | |||||||||||||||||||||||
Net profit (loss) per stock attributable to common stockholders – | |||||||||||||||||||||||
Basic | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Diluted | $ | ( | $ | ( | $ | ( | $ | ( |
Three months ended September 30, | 0 | Nine months ended September 30, | |||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||
Preferred stock | |||||||||||||||||||||||
Unvested RSU outstanding | |||||||||||||||||||||||
Options outstanding | |||||||||||||||||||||||
Warrants outstanding |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | % of Revenue | (in thousands) | % of Revenue | (in thousands) | % of Revenue | (in thousands) | % of Revenue | ||||||||||||||||||||||||||||||||||||||||
Revenues | $ | 34,469 | 100 | % | $ | 23,469 | 100 | % | $ | 93,419 | 100 | % | $ | 64,324 | 100 | % | |||||||||||||||||||||||||||||||
Cost of revenues | 8,534 | 25 | % | 4,548 | 19 | % | 21,811 | 23 | % | 12,359 | 19 | % | |||||||||||||||||||||||||||||||||||
Research and development | 7,312 | 21 | % | 5,342 | 23 | % | 24,276 | 26 | % | 16,698 | 26 | % | |||||||||||||||||||||||||||||||||||
Sales and marketing | 13,726 | 40 | % | 8,689 | 37 | % | 38,397 | 41 | % | 23,366 | 36 | % | |||||||||||||||||||||||||||||||||||
General and administrative | 9,046 | 26 | % | 3,982 | 17 | % | 30,456 | 33 | % | 10,561 | 16 | % | |||||||||||||||||||||||||||||||||||
Depreciation, amortization and impairment | 1,882 | 5 | % | 156 | 1 | % | 3,481 | 4 | % | 487 | 1 | % | |||||||||||||||||||||||||||||||||||
Operating (loss) profit | (6,031) | (17) | % | 752 | 3 | % | (25,002) | (27) | % | 853 | 1 | % | |||||||||||||||||||||||||||||||||||
Finance expenses (income), net | 4,962 | 14 | % | 707 | 3 | % | (10,655) | (11) | % | 3,878 | 6 | % | |||||||||||||||||||||||||||||||||||
(Loss) profit before taxes | (10,993) | — | 45 | — | % | (14,347) | (15) | % | (3,025) | (5) | % | ||||||||||||||||||||||||||||||||||||
Taxes on income | 839 | 2 | % | 304 | 1 | % | 634 | 1 | % | 829 | 1 | % | |||||||||||||||||||||||||||||||||||
Net loss | $ | (11,832) | (34) | % | $ | (259) | (1) | % | $ | (14,981) | (16) | % | $ | (3,854) | (6) | % | |||||||||||||||||||||||||||||||
Three months ended September 30, | |||||||||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||||||||
(in thousands) | % of Revenue | (in thousands) | % of Revenue | $ Variance | % Variance | ||||||||||||||||||||||||||||||
Cost of revenues | $ | 8,534 | 25 | % | $ | 4,548 | 19 | % | $ | 3,986 | 88 | % |
Nine months ended September 30, | |||||||||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||||||||
(in thousands) | % of Revenue | (in thousands) | % of Revenue | $ Variance | % Variance | ||||||||||||||||||||||||||||||
Cost of revenues | $ | 21,811 | 23 | % | $ | 12,359 | 19 | % | $ | 9,452 | 76 | % |
Three months ended September 30, | |||||||||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||||||||
(in thousands) | % of Revenue | (in thousands) | % of Revenue | $ Variance | % Variance | ||||||||||||||||||||||||||||||
Research and development | $ | 7,312 | 21 | % | $ | 5,342 | 23 | % | $ | 1,970 | 37 | % |
Nine months ended September 30, | |||||||||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||||||||
(in thousands) | % of Revenue | (in thousands) | % of Revenue | $ Variance | % Variance | ||||||||||||||||||||||||||||||
Research and development | $ | 24,276 | 26 | % | $ | 16,698 | 26 | % | $ | 7,578 | 45 | % |
Three months ended September 30, | |||||||||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||||||||
(in thousands) | % of Revenue | (in thousands) | % of Revenue | $ Variance | % Variance | ||||||||||||||||||||||||||||||
Sales and marketing | $ | 13,726 | 40 | % | $ | 8,689 | 37 | % | $ | 5,037 | 58 | % |
Nine months ended September 30, | |||||||||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||||||||
(in thousands) | % of Revenue | (in thousands) | % of Revenue | $ Variance | % Variance | ||||||||||||||||||||||||||||||
Sales and marketing | $ | 38,397 | 41 | % | $ | 23,366 | 36 | % | $ | 15,031 | 64 | % |
Three months ended September 30, | |||||||||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||||||||
(in thousands) | % of Revenue | (in thousands) | % of Revenue | $ Variance | % Variance | ||||||||||||||||||||||||||||||
General and administrative | $ | 9,046 | 26 | % | $ | 3,982 | 17 | % | $ | 5,064 | 127 | % |
Nine months ended September 30, | |||||||||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||||||||
(in thousands) | % of Revenue | (in thousands) | % of Revenue | $ Variance | % Variance | ||||||||||||||||||||||||||||||
General and administrative | $ | 30,456 | 33 | % | $ | 10,561 | 16 | % | $ | 19,895 | 188 | % |
Three months ended September 30, | |||||||||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||||||||
(in thousands) | % of Revenue | (in thousands) | % of Revenue | $ Variance | % Variance | ||||||||||||||||||||||||||||||
Depreciation, amortization and impairment | $ | 1,882 | 5 | % | $ | 156 | 1 | % | $ | 1,726 | 1106 | % |
Nine months ended September 30, | |||||||||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||||||||
(in thousands) | % of Revenue | (in thousands) | % of Revenue | $ Variance | % Variance | ||||||||||||||||||||||||||||||
Depreciation, amortization and impairment | $ | 3,481 | 4 | % | $ | 487 | 1 | % | $ | 2,994 | 615 | % |
Three months ended September 30, | |||||||||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||||||||
(in thousands) | % of Revenue | (in thousands) | % of Revenue | $ Variance | % Variance | ||||||||||||||||||||||||||||||
Finance expenses, net | $ | 4,962 | 14 | % | $ | 707 | 3 | % | $ | 4,255 | 602 | % |
Nine months ended September 30, | |||||||||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||||||||
(in thousands) | % of Revenue | (in thousands) | % of Revenue | $ Variance | % Variance | ||||||||||||||||||||||||||||||
Finance expenses (income), net | $ | (10,655) | (11) | % | $ | 3,878 | 6 | % | $ | (14,533) | (375) | % |
Three months ended September 30, | |||||||||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||||||||
(in thousands) | % of Revenue | (in thousands) | % of Revenue | $ Variance | % Variance | ||||||||||||||||||||||||||||||
Taxes on income | $ | 839 | 2 | % | $ | 304 | 1 | % | $ | 535 | 176 | % | |||||||||||||||||||||||
Nine months ended September 30, | |||||||||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||||||||
(in thousands) | % of Revenue | (in thousands) | % of Revenue | $ Variance | % Variance | ||||||||||||||||||||||||||||||
Taxes on income | $ | 634 | 1 | % | $ | 829 | 1 | % | $ | (195) | (24) | % |
Nine months ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Net cash (used in)/ provided by operating activities | $ | (10,089) | $ | 3,046 | |||||||
Net cash used in investing activities | (106,787) | (1,944) | |||||||||
Net cash provided by/ (used in) financing activities | 6,632 | (2,277) | |||||||||
Decrease in cash, cash equivalents and restricted cash | $ | (110,243) | $ | (1,175) |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
(in thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Net loss | $ | (11,832) | $ | (259) | $ | (14,981) | $ | (3,854) | |||||||||||||||
Net loss margin | (34) | % | (1) | % | (16) | % | (6) | % | |||||||||||||||
Depreciation, amortization and impairment (a) | 1,882 | 156 | 3,481 | 487 | |||||||||||||||||||
Stock-based compensation | 4,322 | 591 | 10,052 | 2,311 | |||||||||||||||||||
Finance expense (income), net (b) | 4,962 | 707 | (10,655) | 3,878 | |||||||||||||||||||
Transaction related expenses (c) | — | — | 392 | — | |||||||||||||||||||
Acquisition related expenses (d) | — | — | 4,971 | — | |||||||||||||||||||
Retention bonus expenses (e) | 1,290 | — | 2,290 | — | |||||||||||||||||||
Legal claims | 664 | — | 1,099 | — | |||||||||||||||||||
Other (f) | 739 | — | 915 | — | |||||||||||||||||||
Taxes on income | 839 | 304 | 634 | 829 | |||||||||||||||||||
Adjusted EBITDA | $ | 2,866 | $ | 1,499 | $ | (1,802) | $ | 3,651 | |||||||||||||||
Adjusted EBITDA margin | 8 | % | 6 | % | (2) | % | 6 | % |
Incorporated by Reference | |||||||||||||||||||||||
Exhibit Number | Description | Form | File No. | Exhibit | Filing date | Filed furnished herewith | |||||||||||||||||
2.1 | 8-K | 001-40048 | 2.1 | 06/29/21 | |||||||||||||||||||
3.1 | 10-K | 001-40048 | 3.1 | 03/18/22 | |||||||||||||||||||
3.2 | 8-K | 001-40048 | 3.2 | 12/06/21 | |||||||||||||||||||
4.1 | 8-K | 001-40048 | 4.1 | 12/06/21 | |||||||||||||||||||
4.2 | 8-K | 001-40048 | 4.2 | 12/06/21 | |||||||||||||||||||
4.3 | 8-K | 001-40048 | 4.1 | 02/18/21 | |||||||||||||||||||
10.1 | 10-Q | 001-40048 | 10.1 | 08/10/22 | |||||||||||||||||||
31.1 | * | ||||||||||||||||||||||
31.2 | * | ||||||||||||||||||||||
32.1 | ** | ||||||||||||||||||||||
32.2 | ** | ||||||||||||||||||||||
* | Filed herewith. | ||||||||||||||||||||||
** | Furnished herewith. |
INNOVID CORP. | ||||||||
Date: November 14, 2022 | By: | /s/ Zvika Netter | ||||||
Zvika Netter | ||||||||
Chief Executive Officer | ||||||||
Date: November 14, 2022 | By: | /s/ Tanya Andreev-Kaspin | ||||||
Tanya Andreev-Kaspin | ||||||||
Chief Financial Officer | ||||||||
1. | I have reviewed this Quarterly Report on Form 10-Q of Innovid Corp.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | |||||||||||||||||||||||||||||||||||||||||||||||||
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Zvika Netter | ||||||||
Zvika Netter Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Innovid Corp.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Tanya Andreev-Kaspin | ||||||||
Tanya Andreev-Kaspin Chief Financial Officer |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Trade receivables, allowance for doubtful receivables | $ 69 | $ 81 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 500,000,000 | |
Common stock, shares issued (in shares) | 133,492,514 | 119,017,380 |
Common stock, shares outstanding (in shares) | 133,492,514 | 119,017,380 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|||||
Income Statement [Abstract] | ||||||||
Revenues | $ 34,469 | $ 23,469 | $ 93,419 | $ 64,324 | ||||
Cost of revenues | [1] | 8,534 | 4,548 | 21,811 | 12,359 | |||
Research and development | [1] | 7,312 | 5,342 | 24,276 | 16,698 | |||
Sales and marketing | [1] | 13,726 | 8,689 | 38,397 | 23,366 | |||
General and administrative | [1] | 9,046 | 3,982 | 30,456 | 10,561 | |||
Depreciation, amortization and impairment | 1,882 | 156 | 3,481 | 487 | ||||
Operating (loss) profit | (6,031) | 752 | (25,002) | 853 | ||||
Finance expenses (income), net | 4,962 | 707 | (10,655) | 3,878 | ||||
(Loss) profit before taxes | (10,993) | 45 | (14,347) | (3,025) | ||||
Taxes on income | 839 | 304 | 634 | 829 | ||||
Net loss | (11,832) | (259) | (14,981) | (3,854) | ||||
Accretion of preferred stock to redemption value | 0 | (8,189) | 0 | (52,993) | ||||
Net loss attributable to common stockholders, basic | (11,832) | (8,448) | (14,981) | (56,847) | ||||
Net loss attributable to common stockholders, diluted | $ (11,832) | $ (8,448) | $ (14,981) | $ (56,847) | ||||
Net loss per stock attributable to common stockholders | ||||||||
Basic (in dollars per share) | [2] | $ (0.09) | $ (0.45) | $ (0.12) | $ (4.32) | |||
Diluted (in dollars per share) | [2] | $ (0.09) | $ (0.45) | $ (0.12) | $ (4.32) | |||
Weighted-average number of stocks used in computing net loss per stock attributable to common stockholders | ||||||||
Basic (in shares) | [2] | 132,959,511 | 18,849,710 | 129,768,724 | 13,157,022 | |||
Diluted (in shares) | [2] | 132,959,511 | 18,849,710 | 129,768,724 | 13,157,022 | |||
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) |
Nov. 30, 2021 |
---|---|
Income Statement [Abstract] | |
Exchange ratio | 1.337 |
OVERVIEW |
9 Months Ended |
---|---|
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
OVERVIEW | OVERVIEW Innovid Corp. together with its consolidated subsidiaries, the “Company” or “Innovid” is a leading independent software platform that provides ad serving and creative services for the creation, delivery, and measurement of TV ads across connected TV (“CTV”), mobile TV and desktop TV environments to advertisers, publishers and media agencies. Innovid Corp. was originally incorporated as ION Acquisition Corp. 2 Ltd. (“ION”), a special purpose acquisition company, in Cayman Islands on November 23, 2020. On November 30, 2021, ION and Innovid Inc. (“Legacy Innovid”) closed the transaction as described below (the “Transaction”). Through several merges and name change Innovid Corp. was established and continues Legacy Innovid operating activity. On November 30, 2021, ION consummated a series of merger transactions (the “Mergers”), whereby it acquired the business of Legacy Innovid. Immediately following the Mergers, ION changed its name to “Innovid Corp.” In addition, ION entered into certain subscription agreements (“PIPE Investment”). Further, in connection with the Closing, PIPE investors purchased equity securities of Legacy Innovid Stockholders (the “Secondary Sale Transaction”) for an aggregate purchase price of $68,855 (the “Secondary Sale Amount”). See Note 3 for further details. On February 28, 2022, the Company completed the acquisition of all outstanding shares of TVSquared (“TVS”), an independent global measurement and attribution platform for converged TV and a private company limited by shares incorporated under the laws of the Scotland. The Company acquired all the equity of TVSquared for an aggregate amount of $100,000 in cash, 11,549,465 shares of the Company common stock at fair value of $3.80 per share, and the issuance of 949,893 fully vested stock option of the Company at weighted average fair value of $3.49, subject to certain adjustments as defined in the Stock Purchase Agreement. See Note 3 for further details. The Company common stock and warrants commenced trading on the NYSE under the symbols “CTV” and “CTVWS,” respectively, on December 1, 2021. Innovid Corp. has subsidiaries in the US, Israel, Argentina, the UK, Germany and Australia.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a)Basis of presentation: The unaudited interim condensed consolidated financial statements have been prepared in accordance with US GAAP. Any reference in these notes to applicable guidance is meant to refer to the authoritative US GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by US GAAP for complete financial statements. The unaudited interim condensed consolidated financial statements reflect all adjustments, which are, in the opinion of management, necessary for a fair presentation have been included. The Company’s interim period results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. The condensed consolidated balance sheet on December 31, 2021, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by US GAAP for complete financial statements. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and footnotes included in the Company’s 2021 Annual Report on Form 10-K. The significant accounting policies applied in the annual consolidated financial statements of the Company as of December 31, 2021, have been applied consistently in these unaudited interim condensed consolidated financial statements, unless otherwise stated. (b)Prior period reclassification: During the second quarter of 2022, we presented depreciation and amortization expenses as a separate line item on our condensed consolidated statements of operations and all prior periods have been adjusted. Depreciation and amortization expenses were previously included in cost of sales and other operating expenses depending on the underlying asset’s function. Additionally, we no longer present gross profit as a subtotal on our condensed consolidated statements of operations. The reclassification is to better reflect the financial performance of transactions with customers as our business has evolved and include our most recent acquisition. The change provides more clarity about changes in cost of revenue and other operating expenses exclusive of depreciation and amortization, and better align with how our peers and competitors present their financial statements. In accordance with US GAAP, all periods presented below have been retrospectively adjusted to reflect the reclassification of cost of revenue and other operating expenses exclusive of depreciation and amortization. There was no net impact to loss from operations, net loss attributable to common stockholders or net loss per stock for any periods presented. The condensed consolidated balance sheets, condensed statements of changes in temporary equity and stockholders’ equity (deficit), and the condensed consolidated statements of cash flows are not affected by this reclassification. The effect of the change is as follows:
(c)Use of estimates: The preparation of the condensed consolidated financial statements in conformity with US 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. The COVID-19 pandemic created, and continues to create significant uncertainty in macroeconomic conditions, including supply chain disruptions and labor shortages. Further, other global events such as the war in the Ukraine and the current macro-economic inflationary environment could have an impact on our customers. Based on public reporting and our observations, some advertisers in certain industries decreased and may continue to decrease their short-term advertising spending considering some or all of these factors. This in turn could negatively impact our revenues from such advertisers. The Company has considered the impact of COVID-19 and other global events on its estimates and assumptions and determined that there were no material adverse impacts on the unaudited interim condensed consolidated financial statements for the three and nine-month period ended September 30, 2022 (unaudited). As events continue to evolve and additional information becomes available, the Company’s estimates and assumptions may change materially in future periods. (d)Software development costs: Software development costs, which are included in property and equipment, net, consists of capitalized costs related to purchase and develop internal-use software. The Company uses such software to provide services to its customers. The costs to purchase and develop internal-use software are capitalized from the time that the preliminary project stage is completed, and it is considered probable that the software will be used to perform the function intended. These costs include personnel and personnel-related employee benefits for employees directly associated with the software development and external costs of the materials or services consumed in developing or obtaining the software. Any costs incurred for upgrades and functionality enhancements of the software are also capitalized. Once this software is ready for use in providing the Company's services, these costs are amortized on a straight-line basis over the estimated useful life of the software, which is three years. The amortization is presented within depreciation and amortization in the condensed consolidated statements of operations. During the three and nine-month period ended September 30, 2022 (unaudited), the Company capitalized $3,749 and $7,755, respectively, related to internal-use software cost. In the third quarter of 2022, the Company recorded impairment charges of $537 related to an abandonment of certain projects for internal-use software. It is presented within depreciation, amortization and impairment in the condensed consolidated statement of operations. During the three-months period ended September 30, 2021, the Company capitalized $1,049 in internal-use software cost. There were no impairments of capitalized software costs in 2021. (e)Business combinations: The Company accounts for business combinations by applying the provisions of ASC 805, “Business Combination” (“ASC 805”) and allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Acquisition-related expenses are expensed as incurred. (f)Goodwill and intangible assets: Goodwill and certain other purchased intangible assets have been recorded in the Company's condensed consolidated financial statements because of acquisitions. Goodwill represents the excess of the purchase price in a business combination over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed. Goodwill is not amortized, but rather is subject to an impairment test. The Company allocates goodwill to reporting units based on the expected benefit from the business combination. Reporting units are evaluated when changes in the Company’s operating structure occur, and if necessary, goodwill is reassigned using a relative fair value allocation approach. ASC 350, Intangibles—Goodwill and other (“ASC 350”) requires goodwill to be tested for impairment at least annually and, in certain circumstances, between annual tests. The accounting guidance gives the option to perform a qualitative assessment to determine whether further impairment testing is necessary. The qualitative assessment considers events and circumstances that might indicate that a reporting unit's fair value is less than it carrying amount. If it is determined, as a result of the qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than it carrying amount, a quantitative test is performed. The Company elects to perform an annual impairment test of goodwill as of October 1 of each year, or more frequently if impairment indicators are present. For the three and nine months ended September 30, 2022 (unaudited) and September 30, 2021 (unaudited), no impairments of goodwill were recorded. Separately acquired intangible assets are measured on initial recognition at cost including directly attributable costs. Intangible assets acquired in a business combination are measured at fair value at the acquisition date. Intangible assets with a finite useful life are amortized over their useful life and reviewed for impairment whenever there is an indication that the asset may be impaired. For the three and nine months ended September 30, 2022 (unaudited) and September 30, 2021 (unaudited), no impairments of intangible assets were recorded. Technology and trade name are being amortized over the estimated useful life of approximately 6 and 8 years, respectively, using straight-line amortization method. The amortization of trade name, customer relationships and technology is presented within depreciation, amortization and impairment in the condensed consolidated statement of operations. (g)Fair value of financial instruments: The Company applies a fair value framework to measure and disclose its financial assets and liabilities. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value: Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - Includes other inputs that are directly or indirectly observable in the marketplace. Level 3 - Unobservable inputs which are supported by little or no market activity. The Company’s financial instruments consist of cash and cash equivalents, restricted deposits, trade receivables, net, trade payables, employees, and payroll accruals, accrued expenses and other current liabilities and current portion of long-term debts. Their historical carrying amounts are approximate fair values due to the short-term maturities of these instruments. The Company measures its investments in money market funds classified as cash equivalents and warrants liability at fair value. The following table present information about the Company’s financial instruments that are measured at fair value on a recurring basis:
The change in the fair value of the Level 3 warrant liability is summarized below:
* Additions during the year ended December 31, 2021, represent Company Warrant liability assumed in the Transaction. See Note 5 for further details. As of September 30, 2022 (unaudited), the Company’s warrants liability includes warrants that were originally issued in connection with the ION IPO, which were transferred to the Company as part of the Closing. The Company Warrants are recorded on the balance sheet at fair value with changes in fair value recognized through earnings. The Company has determined that the fair value of the Public Warrants at a specific date is determined by the closing price of the Company’s Public Warrants, traded under the symbol “CTVWS” and within Level 1 of the fair value hierarchy. The closing quoted price of the Public Warrants was $0.48 and $1.11 as of September 30, 2022 (unaudited) and December 31, 2021, respectively. The fair value of the Public Warrants was $1,518 and $3,510 as of September 30, 2022 (unaudited) and December 31, 2021, respectively. Gains and losses from the remeasurement of the warrants liability are recognized in “Finance expenses (income), net” in the condensed consolidated statements of operations. The Private Placement Warrants are classified as Level 3 as of September 30, 2022 (unaudited) and continue to be valued using the Black-Scholes option pricing model. The fair value of the Private Placement Warrants was $6,072 and $15,462 as of September 30, 2022 (unaudited) and December 31, 2021, respectively. Gains and losses from the remeasurement of the warrants liability are recognized in “Finance expenses (income), net” in the condensed consolidated statements of operations. The key inputs into the Black-Scholes model for the Private Placement Warrants were as follows:
Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instruments. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect these estimates. (h)Concentrations of credit risks: Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, deposits and trade receivables, net. Most of the Company’s cash and cash equivalents are invested in deposits with major banks in US and Israel. Generally, these investments may be redeemed upon demand and, therefore, bear minimal risk. The Company’s trade receivables, net is mainly derived from sales to customers located in the APAC, EMEA, and LATAM. The Company mitigates its credit risks by performing an ongoing credit evaluations of its customers’ financial conditions. The Company has no off-balance-sheet concentration of credit risk such as foreign exchange contracts, option contracts or other foreign hedging arrangements. Two of the Company’s customers accounted for more than 10% of the Company’s total revenues during the three months ended September 30, 2022 and one customer during the three months ended September 30, 2021.
*) less than 10% (i)Warrants: The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance. The assessment considers whether the warrants are freestanding financial instruments, meet the definition of a liability under ASC 480 and meet all the requirements for equity classification, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent reporting period end date while the warrants are outstanding. Warrants that meet all the criteria for equity classification, are required to be recorded as a component of additional paid-in capital. Warrants that do not meet all the criteria for equity classification, are required to be recorded as liabilities at their initial fair value on the date of issuance and remeasured to fair value at each balance sheet date thereafter. The liability-classified warrants are recorded under non-current liabilities. Changes in the estimated fair value of the warrants are recognized in “Financial expenses (income), net” in the condensed consolidated statements of operations. (j)Revenue recognition: The Company generates revenues from providing Advertising Services to advertisers, publishers, and media agencies. The services focus on standard, interactive and data driven digital video advertising. The Company’s revenue streams are ad serving, creative and measurement services. Ad serving services relate to utilizing Innovid’s platform to serve advertising impressions to various digital publishers across CTV, mobile TV, desktop TV, display, and other channels. Creative services relate to the design and development of interactive data-driven and dynamic ad formats by adding data, interactivity and dynamic features to standard ad units. The Company also provides measurement services through access to a measurement application in real time or by delivery of a report. Measurement services relate to analytics of advertisements and campaigns. The Company recognizes revenue when its customer obtains control of promised services in an amount that reflects the consideration that the Company expects to receive in exchange for those services. The Company recognizes revenue in accordance with ASC Topic 606, Revenue from contracts with customers (“ASC 606”) and determines revenue recognition through the following steps: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied. For arrangements with multiple performance obligations, which represent promises within an arrangement that are capable of being distinct and are separately identifiable, the Company allocates the contract consideration to all distinct performance obligations based on their relative SSP. SSP is typically estimated based on observable transactions when these services are sold on a standalone basis and expected cost plus a margin approach. Revenues related to ad serving services are recognized when impressions are delivered. The Company recognizes revenue from the display of impression-based ads in the contracted period in which the impressions are delivered. Impressions are considered delivered when an ad is displayed to users. Revenues related to creative services are recognized at a point in time when the Company delivers an ad unit. Creative services projects are usually delivered within a week. Revenues related to measurement services reports are recognized at a point in time, when the Company delivers the measurement report. Revenues related to the measurement services platform are recognized over time, since the customer simultaneously receives and consumes the benefits provided by the Company’s performance. Revenues for these measurement services are recognized over the service period. The Company’s accounts receivable, consist primarily of receivables related to providing ad serving, creative and measurement services, for which the Company’s contracted performance obligations have been satisfied, the amount has been billed and the Company has an unconditional right to payment. The Company typically bills customers monthly based on actual delivery. The payment terms vary, mainly with terms of 60 days or less. The typical contract term is 12 months or less for ASC 606 purposes. Some of the Company’s contracts can be cancelled without a cause. The Company has the unconditional right to payment for the services provided as of the date of the termination of the contracts. The Company applies the practical expedient in ASC 606 and does not adjust the promised amount of consideration for the effects of a significant financing component if the Company expects, at contract inception, that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Ad serving and creative services were 77.2% and 98.8% of the Company’s revenues for the three months ended September 30, 2022 (unaudited) and September 30, 2021 (unaudited), respectively, and were 80.9% and 98.6% of the Company’s revenues for the nine months ended September 30, 2022 (unaudited) and September 30, 2021 (unaudited). Measurement services were 22.5% and 1.1% for the three months ended September 30, 2022 (unaudited) and September 30, 2021 (unaudited), respectively, and were 18.8% and 0.9% of the Company’s revenues for the nine months ended September 30, 2022 (unaudited) and September 30, 2021 (unaudited). Costs to obtain a contract: Contract costs include commission programs to compensate sales employees for generating sales orders with new customers or for new services with existing customers. The commissions are commensurate. The Company elected to apply the practical expedient and recognize incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the Company otherwise would have recognized is one year or less. The Company did not capitalize any contract costs during the nine months ended September 30, 2022 (unaudited) and September 30, 2021 (unaudited), respectively. (k)Recently Adopted Accounting Pronouncements In February 2016, the FASB issued the ASU No. 2016-02, Leases (Topic 842). The standard outlines a comprehensive lease accounting model that supersedes the previous lease guidance and requires lessees to recognize lease liabilities and corresponding right-of-use (“ROU”) assets for all leases with lease terms greater than 12 months. The guidance also changes the definition of a lease and expands the disclosure requirements of lease arrangements. Innovid adopted the standard in the first quarter of 2022 using the modified retrospective method. Results for reporting periods beginning after December 31, 2021, have been presented in accordance with the standard, while results for prior periods have not been adjusted and continue to be reported in accordance with the Company's historical accounting. The cumulative effect of initially applying the new leases standard was recognized as an adjustment to the opening interim condensed consolidated balance sheet as of January 1, 2022 (unaudited). The Company elected a package of practical expedients for leases that commenced prior to January 1, 2022, and did not reassess historical conclusions on: (i) whether any expired or existing contracts are or contain leases; (ii) lease classification for any expired or existing leases; and (iii) initial direct costs capitalization for any existing leases. This standard has a significant impact on our condensed consolidated balance sheet but did not have a significant impact on the Company’s condensed consolidated statements of operations. The most significant effects relate to the recognition ROU assets and lease liabilities on interim condensed consolidated balance sheet for real estate and cars operating leases. Upon adoption, the Company recognized lease liabilities and corresponding ROU assets, adjusted for the accrued rent and remaining lease incentives received on the adoption date, as follows:
See Note 4 for further details. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). The new guidance eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for income taxes. Innovid adopted the standard in the first quarter of 2022. The adoption of the guidance did not have a material impact on the Company’s condensed consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities (i.e., deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This new guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. Historically, such amounts were recognized by the acquirer at fair value in acquisition accounting. The Company adopted the standard effective in the first quarter of 2022 on a prospective basis. The adoption of the guidance did not have a material impact on the Company’s condensed consolidated financial statements. (l)Recently issued accounting pronouncements not yet adopted by the Company: As an “emerging growth company,” the JOBS Act allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act. The adoption dates discussed below reflect this election. In August 2020, the FASB issued ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). The final guidance issued by the FASB for convertible instruments eliminates two of the three models in ASC 470-20 that require separate accounting for embedded conversion features. Separate accounting is still required in certain cases. Additionally, among other changes, the guidance eliminates some of the conditions for equity classification in ASC 815-40-25 for contracts in an entity’s own equity. The guidance also requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and include the effect of share settlement for instruments that may be settled in cash or shares, except for certain liability-classified share-based payment awards. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company is currently evaluating the potential impact of this guidance on its condensed consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. ASU 2016-13 requires enhanced qualitative and quantitative disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. ASU 2016-13 is effective for fiscal years beginning after December 15, 2022. The Company is currently evaluating the potential impact of this guidance on its condensed consolidated financial statements. Other guidance that has been issued since the end of our previous reporting period is not expected to have an impact on the Company’s condensed consolidated financial statements.
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
TRANSACTION AND BUSINESS COMBINATION | TRANSACTION AND BUSINESS COMBINATION Business Combination On February 28, 2022, the Company completed the acquisition of TVS. TVS is an independent global measurement and attribution platform for converged TV and a private company limited by shares incorporated under the laws of Scotland. The Company acquired all the equity of TVS for an aggregate amount of $100,000 in cash, 11,549,465 shares of the Company common stock at fair value of $3.80 per share, and the issuance of 949,893 fully vested stock option of the Company at weighted average fair value of $3.49, subject to certain adjustments as defined in the Stock Purchase Agreement. The Company, through this acquisition, added a real-time, cross-platform service to its offerings, including measurement outcomes such as frequency and unique unduplicated reach and performance metrics. The combination of ad serving, and cross-platform measurement enables the buy- and sell-sides to solve fragmentation by unlocking a complete picture of advertising across the linear TV, CTV and digital video marketplaces. The acquisition of TVS has been accounted for as a business combination using the acquisition method of accounting. The acquisition method requires, among other things, that assets acquired, and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date. The valuation of assets acquired, and liabilities assumed, have not yet been finalized as of September 30, 2022 (unaudited). As a result, Innovid recorded preliminary estimates for the fair value of assets acquired and liabilities assumed as of the acquisition date. After the acquisition date, the Company made certain measurement period adjustments to the preliminary purchase price allocation. Finalization of the valuation during the measurement period could result in a change in the amounts recorded for the acquisition date fair value of intangible assets, goodwill, and income taxes among other items. Refer to Note 9 for disclosure related to measurement period adjustments as it relates to taxes. The completion of the valuation will occur no later than one year from the acquisition date. The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date (unaudited):
Intangible assets relate to technology, trade name and customer relationship of $17,075, $4,600, and $14,700, respectively. These are being amortized over the estimated useful life of approximately 6 years, 8 years, and 11 years, respectively. The estimated fair values of identifiable intangible assets were determined using the "income approach", which is a valuation technique that provides an estimate of the fair value of an asset based on market participant expectations of the cash flows an asset would generate over its remaining useful life. Some of the more significant assumptions inherent in the development of these asset valuations include the estimated net cash flows for each year for the appropriate discount rate necessary to measure the risk inherent in each future cash flow stream, the life cycle of each asset, competitive trends impacting the asset and each cash flow stream, as well as other factors. Goodwill was calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from the other assets acquired that could not be individually identified and separately recognized. Specifically, the goodwill recognized from the acquisition of TVS represents the value of additional growth potential of the revenue base from the creation of a single combined global organization and synergies related to combined IT efforts for enhancement of the existing and acquired technologies. The goodwill is not deductible for tax purposes. In addition to the purchase consideration, the Company entered cash compensation arrangements with certain employees, which amounted to $9,700 in aggregate and are subject to certain performance and employment conditions following the acquisition date. The Company incurred total transaction costs of $5,033 for the acquisition, of which $4,873 was incurred for the nine months ended September 30, 2022 (unaudited). Acquisition related transaction costs include legal, accounting fees and other professional costs directly related to the acquisition and are recognized in “general and administrative” in the condensed consolidated statements of operations. Pro Forma Financial Information (unaudited) The following table presents the unaudited pro forma combined results of Innovid and TVS for the three months and nine months ended September 30, 2022, and 2021 as if the acquisition of TVS had occurred on January 1, 2021:
The unaudited pro forma interim condensed combined financial information was prepared using the acquisition method of accounting and was based on the historical financial information of Innovid and TVS. In order to reflect the occurrence of the acquisition on January 1, 2021, the unaudited pro forma financial information includes adjustments to reflect incremental amortization expense to be incurred based on the current preliminary fair values of the identifiable intangible assets acquired and the reclassification of acquisition-related costs incurred during the three months and nine months ended September 30, 2022 (unaudited) to the three months and nine months ended September 30, 2021 (unaudited). The unaudited pro forma financial information is not necessarily indicative of what the condensed consolidated results of operations would have been had the acquisition been completed on January 1, 2021. In addition, the unaudited pro forma financial information is not a projection of future results of operations of the combined company. Transaction As discussed in Note 1, on November 30, 2021, the Transaction was closed. The Transaction was accounted for as a reverse recapitalization in accordance with US GAAP. Under this method of accounting, ION who was the legal acquirer, was treated as the “acquired” company for accounting purposes and the Transaction was treated as the equivalent of Innovid Corp. issuing stock for the net assets of ION, accompanied by a recapitalization. The net assets of ION are stated at historical cost, with no goodwill or other intangible assets recorded. Upon the Closing of the Transaction, among other things: All outstanding shares of Legacy Innovid common stock, Legacy Innovid redeemable convertible preferred stock, Legacy Innovid Warrants, and Secondary Sale Transaction of 6,885,486 shares to PIPE investors, were exchanged for 93,787,278 shares of common stock in Innovid Corp.
Holders of 19,585,174 shares of ION’s Class A common stock sold in its initial public offering (the “Initial Shares”) exercised their right to have such shares redeemed for a full pro rata portion of the trust account holding the proceeds from ION IPO, which was approximately $10.00 per share, or $195,888 in the aggregate. The remaining shares of ION Class A common stock, including total shares of ION Class B common stock converted to ION Class A common stock immediately prior to the Domestication, were automatically converted to 12,039,826 shares of common stock in Innovid Corp. After giving effect to the Transaction, the redemption of Initial Shares as described above and the consummation of the PIPE Investment, there were 118,941,618 shares of common stock issued and outstanding after the close of the Transaction. Innovid Corp received approximately $149,252 in cash proceeds, net of transaction costs paid. The Company has not paid an accrued liability of $3,185 directly related to the Transaction as of December 31, 2021. The following table reconciles the elements of the Transaction to the condensed consolidated statement of cash flows and the condensed consolidated statement of changes in temporary equity and stockholders’ equity for the year ended December 31, 2021.
During the six-month period ended June 30, 2022, the Company fully paid the accrued transaction costs of $3,185. As a result of the Transaction, each share of Legacy Innovid redeemable convertible preferred stock and common stock was converted into the right to receive approximately 1.337 shares of the common stock of the Company. Public Warrants and Private Placement Warrants As a result of the Transaction, the Company assumed the outstanding Public Warrants to purchase 3,162,500 shares of the Company’s common stock and the outstanding Private Placement Warrants to purchase 7,060,000 shares of the Company’s common stock. Each whole Warrant entitles the registered holder to purchase one share of the Company’s common stock at a price of $11.50 per share, at any time commencing 30 days after the Closing. The warrants expire five years after the completion of the Transaction.
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LEASES |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES | LEASES Innovid's lease portfolio primarily consists of real estate properties and cars. Short-term leases with a term of 12 months or less are not recorded on the balance sheet. Innovid does not separate lease components from non-lease components. The Company is a lessee in all its lease agreements. The Company records lease liabilities based on the present value of lease payments over the lease term. Innovid generally uses an incremental borrowing rate to discount its lease liabilities, as the rate implicit in the lease is typically not readily determinable. Certain lease agreements include renewal options that are under the Company's control. Innovid includes optional renewal periods in the lease term only when it is reasonably certain that Innovid will exercise its option. Variable lease payments are primarily related to payments to lessors for taxes, maintenance, insurance, and other operating costs. The Company's lease agreements do not contain any significant residual value guarantees or restrictive covenants. The Company has the following operating ROU assets and lease liabilities:
The following table summarizes the lease costs recognized in the interim condensed consolidated statement of operations:
As of September 30, 2022, the weighted-average remaining lease term and weighted-average discount rate for operating leases are 2.4 years and 3.1%, respectively. The following table presents supplementary cash flow information regarding the company's operating leases:
The following table summarizes the future payments of Innovid for its operating lease liabilities:
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WARRANTS LIABILITY |
9 Months Ended |
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Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
WARRANTS LIABILITY | WARRANTS LIABILITY Company Warrants As of September 30, 2022 (unaudited), the Company had 3,162,500 Public Warrants and 7,060,000 Private Warrants outstanding. Public Warrants Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of the Transaction and (b) one year from the closing of the Initial Public Offering. The Public Warrants will expire five years from the completion of the Transaction or earlier upon redemption or liquidation. Redemption of warrants when the price per Innovid Corp. ordinary share equals or exceeds $18.00. Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described with respect to the Private Placement Warrants): •in whole and not in part. •at a price of $0.01 per warrant. •upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and •if, and only if, the closing price of the Innovid Corp. ordinary shares equals or exceeds $18.00 per share (as adjusted) for any 20 trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption to the warrant holders. When the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. The Company has established the last of the redemption criterion discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and the Company issues a notice of redemption of the warrants, each warrant holder will be entitled to exercise the warrant prior to the scheduled redemption date. However, the price of the Company’s common shares may fall below the $18.00 redemption trigger price (as adjusted for share sub-divisions, share capitalization, reorganization, recapitalization and the like) as well as the $11.50 warrant exercise price after the redemption notice is issued. Redemption of warrants when the price per Innovid Corp. ordinary share equals or exceeds $10.00. Once the warrants become exercisable, the Company may redeem the outstanding warrants: •in whole and not in part. •at a price of $0.10 per warrant. •upon a minimum of 30 days’ prior written notice of redemption; if holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined based on the redemption date and the fair market value of the Innovid Corp. ordinary shares; and •if, and only if, the closing price of the Innovid Corp. ordinary shares equals or exceeds $10.00 per share (as adjusted) for any 20 trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption to the warrant holders. If the Company calls these Public Warrants for redemption, as described above, its management will have the option to require any holder that wishes to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger, or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below their exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. Private Placement Warrants The Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants and the Innovid Corp. ordinary shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of the Transaction subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable, except as described above, so long as they are held by the initial purchaser or its permitted transferees. The Company evaluated the Company Warrants (Public Warrants and Private Placement Warrants) in accordance with ASC 480, “Distinguishing Liabilities from Equity” and ASC 815-40, “Derivatives and Hedging — Contracts in Entity’s Own Equity” and concluded that a provision in the Warrant Agreement related to certain tender or exchange offers, as well as provisions that provided for potential changes to the settlement amounts dependent upon the characteristics of the holder of the warrant, preclude the Company Warrants from being accounted for as components of equity. As the warrants do not meet all the requirements for equity classification, the Company Warrants are recorded as liabilities on the Balance Sheets and measured at fair value at inception and at each reporting date in accordance with ASC 820, “Fair Value Measurement” with changes in fair value recognized in the Statements of Operations in the period of change. The Company Warrants’ fair value as of September 30, 2022 (unaudited) and December 31, 2021 was $7,590 and $18,972, respectively. Gains and losses related to the Company’s Warrants are recognized in “Finance expenses (income), net”. See Note 9 for further details.
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CREDIT LINE AND OTHER BORROWINGS |
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Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
CREDIT LINE AND OTHER BORROWINGS | CREDIT LINE AND OTHER BORROWINGS Credit Line: On August 4, 2022, two wholly owned subsidiaries of the Company, Innovid LLC and TV Squared Inc, entered an amended and restated loan and security agreement with Silicon Valley Bank (the “2022 A&R Agreement”), to increase the revolving line of credit from $15,000 to $50,000 (the “New Revolving Credit Facility”). The interest for the New Revolving Credit Facility is payable monthly in arrears. The New Revolving Credit Facility bears interest at an annual rate equal to the greater of 4.25% and prime rate plus 0.75% on the outstanding principal of each credit extension. Additional fees include fees in an amount of 0.20% per annum of the average unused portion of the New Revolving Credit Facility to be paid quarterly in arrears. The Company will also pay non-refundable commitment fees of $40 and $75 at inception and first anniversary date, respectively. The maturity date of the 2022 A&R Agreement is June 30, 2024. The New Revolving Credit Facility is subject to certain customary conditions precedent to the credit extension as stated in the 2022 A&R Agreement. The New Revolving Credit Facility requires the Company to comply with all covenants, primarily maintaining an adjusted quick ratio of at least 1.30 to 1.00. As defined in the 2022 A&R Agreement “adjusted quick ratio” is the ratio of (a) quick assets to (b) current liabilities minus the current portion of deferred revenue. “Quick assets” are determined as the Company’s unrestricted cash plus accounts receivable, net, and is determined according to US GAAP. The Company is also required to maintain the minimum quarterly adjusted EBITDA as defined in the 2022 A&R Agreement if the Company does not maintain the quarterly adjusted quick ratio of at least 1.50 to 1.00. As of September 30, 2022 (unaudited), the Company is in compliance with all the covenants. As of September 30, 2022 (unaudited), the Company utilized $15,000 of the $50,000 credit line, $6,000 of which was drawn during 2020 and $9,000 was drawn during the second quarter of 2022. Interest expenses are recognized in “Finance expenses (income), net”. See Note 9 for further details. FINANCE EXPENSES (INCOME), NETThe Company recognizes the gains and losses from the remeasurement of the warrants liability related to Public Warrants and Private Placement Warrants in “Finance expenses (income), net” in the condensed consolidated statements of operations. The unrealized (loss)/gain from changes in the fair value of the Company Warrants for the three months and nine months period ended September 30, 2022 (unaudited) was ($4,564) and $11,382, respectively. The Company also recognized interest expenses in “Finance expenses (income), net” in the condensed consolidated statements of operations. Interest expenses for the three months ended September 30, 2022 (unaudited) and 2021 (unaudited) were $234 and $63, respectively. Interest expenses for the nine months ended September 30, 2022, and 2021 were $371 and $197, respectively.
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COMMITMENTS AND CONTINGENT LIABILITIES |
9 Months Ended |
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Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | COMMITMENTS AND CONTINGENT LIABILITIES (a)Pledges and bank guarantees: 1.In conjunction with the credit agreement and its amendments (see Note 6), Innovid pledged 65,000 common stock of its Israeli Subsidiary, NIS 0.01 par value each. 2.The Company’s subsidiaries pledged bank deposits in an aggregate amount of $862 in connection with an office rent agreement and credit cards. 3.Innovid Inc. obtained bank guarantees in an aggregate amount of $231 in connection with its office lease agreements. (b)Legal contingencies: On March 4, 2022, the Nielsen Claim was filed by Nielsen, LLC against TVS. TVS has filed its answer to the complaint and has also filed an opposed motion to transfer venue to the Southern District of New York. That motion is scheduled to be heard on November 14, 2022 and if unsuccessful the following hearing in the current venue would be scheduled for January 2023. The plaintiff has not specified the amount sought in the litigation.
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STOCK-BASED COMPENSATION |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock-based compensation expense is principally related to awards issued to employees pursuant to the Legacy Innovid Stock Option Plan (“Legacy Plan”) and 2021 Innovid Corp. Incentive Plan (“2021 Plan”) and is summarized as follows:
In connection with the awards granted to service providers and non-employee consultants, the Company recorded stock compensation expenses in the amount of $40 and $214 during the three months ended September 30, 2022 (unaudited) and 2021 (unaudited), respectively, and in the amount of $225 and $273, during the nine months ended September 30, 2022 (unaudited) and 2021 (unaudited), respectively. The majority of these expenses in 2022 were recorded in research and development and sales and marketing. The majority of these expenses in 2021 were recorded in general and administrative expenses. During the three and nine-month period ended September 30, 2022 (unaudited), the Company capitalized stock-based compensation expense of $290 and $780, respectively, in internal-use software cost. The Company stock-based compensation expense related to internal-use software cost for the same period in 2021 were immaterial. Stock Options Stock options may be granted to officers, directors, employees, and non-employee consultants of the Company. Each option granted under the Plan expires no later than 10 years from the date of grant. The options vest usually over four years from commencement of employment or services. Any options, which are forfeited or not exercised before expiration, become available for future grants. In connection with the TVS acquisition, Innovid issued 949,893 stock options to holders of TVS options for replacement options. These options were fully vested upon issuance due to acceleration upon acquisition and therefore do not require future service for vesting. The Company attributed a total amount of $152 to post acquisition service and recorded it as stock compensation expenses immediately after the acquisition closed. See Note 3 for further details. A summary of the employees’ stock option activity under the Legacy Plan and 2021 Plan for the nine months ended September 30, 2022 (unaudited) is as follows:
A summary of the consultants’ stock option activity under the Legacy Plan for the nine months ended September 30, 2022 (unaudited) is as follows:
As of September 30, 2022 (unaudited), the Company had approximately $5,401 of total unrecognized compensation cost related to non-vested stock options. That cost is expected to be recognized over a weighted-average period of 2.02 years. Restricted Stock Units In connection with the Company’s transition to its next life-cycle stage post Transaction, Restricted Stock Units (“RSUs”) may be granted to officers, directors, employees, and non-employee consultants of the Company, and generally vest over a - or four-year period. A summary of the employees’ RSU activity under the 2021 Plan for the nine months ended September 30, 2022 (unaudited) is as follows:
A summary of the consultants’ RSU activity under the 2021 Plan for the nine months ended September 30, 2022 (unaudited) is as follows:
The weighted-average grant-date fair value of RSUs generally is determined based on the number of units granted and the quoted price of Innovid’s common stock on the date of grant. As of September 30, 2022 (unaudited), $37,341 of unrecognized compensation cost related to RSUs is expected to be recognized as expense over the weighted average period of 2.20 years.
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FINANCE EXPENSES (INCOME), NET |
9 Months Ended |
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Sep. 30, 2022 | |
Other Income and Expenses [Abstract] | |
FINANCE EXPENSES (INCOME), NET | CREDIT LINE AND OTHER BORROWINGS Credit Line: On August 4, 2022, two wholly owned subsidiaries of the Company, Innovid LLC and TV Squared Inc, entered an amended and restated loan and security agreement with Silicon Valley Bank (the “2022 A&R Agreement”), to increase the revolving line of credit from $15,000 to $50,000 (the “New Revolving Credit Facility”). The interest for the New Revolving Credit Facility is payable monthly in arrears. The New Revolving Credit Facility bears interest at an annual rate equal to the greater of 4.25% and prime rate plus 0.75% on the outstanding principal of each credit extension. Additional fees include fees in an amount of 0.20% per annum of the average unused portion of the New Revolving Credit Facility to be paid quarterly in arrears. The Company will also pay non-refundable commitment fees of $40 and $75 at inception and first anniversary date, respectively. The maturity date of the 2022 A&R Agreement is June 30, 2024. The New Revolving Credit Facility is subject to certain customary conditions precedent to the credit extension as stated in the 2022 A&R Agreement. The New Revolving Credit Facility requires the Company to comply with all covenants, primarily maintaining an adjusted quick ratio of at least 1.30 to 1.00. As defined in the 2022 A&R Agreement “adjusted quick ratio” is the ratio of (a) quick assets to (b) current liabilities minus the current portion of deferred revenue. “Quick assets” are determined as the Company’s unrestricted cash plus accounts receivable, net, and is determined according to US GAAP. The Company is also required to maintain the minimum quarterly adjusted EBITDA as defined in the 2022 A&R Agreement if the Company does not maintain the quarterly adjusted quick ratio of at least 1.50 to 1.00. As of September 30, 2022 (unaudited), the Company is in compliance with all the covenants. As of September 30, 2022 (unaudited), the Company utilized $15,000 of the $50,000 credit line, $6,000 of which was drawn during 2020 and $9,000 was drawn during the second quarter of 2022. Interest expenses are recognized in “Finance expenses (income), net”. See Note 9 for further details. FINANCE EXPENSES (INCOME), NETThe Company recognizes the gains and losses from the remeasurement of the warrants liability related to Public Warrants and Private Placement Warrants in “Finance expenses (income), net” in the condensed consolidated statements of operations. The unrealized (loss)/gain from changes in the fair value of the Company Warrants for the three months and nine months period ended September 30, 2022 (unaudited) was ($4,564) and $11,382, respectively. The Company also recognized interest expenses in “Finance expenses (income), net” in the condensed consolidated statements of operations. Interest expenses for the three months ended September 30, 2022 (unaudited) and 2021 (unaudited) were $234 and $63, respectively. Interest expenses for the nine months ended September 30, 2022, and 2021 were $371 and $197, respectively.
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INCOME TAX |
9 Months Ended |
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Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | INCOME TAXThe Company recorded a provision for income taxes of $839 and $304 for the three months ended September 30, 2022 and 2021, respectively. The calculation of income taxes is based upon the estimated annual effective tax rates for the year applied to the current period loss before tax plus the tax effect of any significant unusual items, discrete events or changes in tax law. The majority of the expense is related to “discrete” items related to the expected current tax expense (federal, state and withholding tax) for loss companies which are excluded from the forecasted tax rate. |
SEGMENT REPORTING |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT REPORTING | SEGMENT REPORTINGThe Company operates as one operating segment, which primarily focuses on advertising, measurement, and creative services. Our CEO is the chief operating decision-maker, and manages and allocates resources to the operations of the Company on an entity-wide basis. Managing and allocating resources on an entity-wide basis enables the CEO to assess the overall level of resources available and how to best deploy these resources across functions and R&D projects based on needs and, as necessary, reallocate resources among the Company’s internal priorities and external opportunities to best support the long-term growth of the business. Revenue by geographical location are as follows:
The Company’s long-lived tangible assets by geographical location is as follows:
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BASIC AND DILUTED NET LOSS PER SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BASIC AND DILUTED NET LOSS PER SHARE | BASIC AND DILUTED NET LOSS PER SHARE Basic and diluted net loss per share attributable to common stockholders was calculated as follows:
Net loss per share calculations and potentially dilutive security amounts for all periods prior to the Transaction have been retrospectively adjusted to the equivalent number of shares outstanding immediately after the Transaction to affect the reverse recapitalization. The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net profit (loss) per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
9 Months Ended |
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Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation: The unaudited interim condensed consolidated financial statements have been prepared in accordance with US GAAP. Any reference in these notes to applicable guidance is meant to refer to the authoritative US GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by US GAAP for complete financial statements. The unaudited interim condensed consolidated financial statements reflect all adjustments, which are, in the opinion of management, necessary for a fair presentation have been included. The Company’s interim period results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. The condensed consolidated balance sheet on December 31, 2021, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by US GAAP for complete financial statements. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and footnotes included in the Company’s 2021 Annual Report on Form 10-K. The significant accounting policies applied in the annual consolidated financial statements of the Company as of December 31, 2021, have been applied consistently in these unaudited interim condensed consolidated financial statements, unless otherwise stated.
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Prior period reclassification | Prior period reclassification: During the second quarter of 2022, we presented depreciation and amortization expenses as a separate line item on our condensed consolidated statements of operations and all prior periods have been adjusted. Depreciation and amortization expenses were previously included in cost of sales and other operating expenses depending on the underlying asset’s function. Additionally, we no longer present gross profit as a subtotal on our condensed consolidated statements of operations. The reclassification is to better reflect the financial performance of transactions with customers as our business has evolved and include our most recent acquisition. The change provides more clarity about changes in cost of revenue and other operating expenses exclusive of depreciation and amortization, and better align with how our peers and competitors present their financial statements. In accordance with US GAAP, all periods presented below have been retrospectively adjusted to reflect the reclassification of cost of revenue and other operating expenses exclusive of depreciation and amortization. There was no net impact to loss from operations, net loss attributable to common stockholders or net loss per stock for any periods presented. The condensed consolidated balance sheets, condensed statements of changes in temporary equity and stockholders’ equity (deficit), and the condensed consolidated statements of cash flows are not affected by this reclassification.
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Use of estimates | Use of estimates:The preparation of the condensed consolidated financial statements in conformity with US 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. The COVID-19 pandemic created, and continues to create significant uncertainty in macroeconomic conditions, including supply chain disruptions and labor shortages. Further, other global events such as the war in the Ukraine and the current macro-economic inflationary environment could have an impact on our customers. Based on public reporting and our observations, some advertisers in certain industries decreased and may continue to decrease their short-term advertising spending considering some or all of these factors. This in turn could negatively impact our revenues from such advertisers.The Company has considered the impact of COVID-19 and other global events on its estimates and assumptions and determined that there were no material adverse impacts on the unaudited interim condensed consolidated financial statements for the three and nine-month period ended September 30, 2022 (unaudited). As events continue to evolve and additional information becomes available, the Company’s estimates and assumptions may change materially in future periods. |
Software development costs | Software development costs:Software development costs, which are included in property and equipment, net, consists of capitalized costs related to purchase and develop internal-use software. The Company uses such software to provide services to its customers. The costs to purchase and develop internal-use software are capitalized from the time that the preliminary project stage is completed, and it is considered probable that the software will be used to perform the function intended. These costs include personnel and personnel-related employee benefits for employees directly associated with the software development and external costs of the materials or services consumed in developing or obtaining the software. Any costs incurred for upgrades and functionality enhancements of the software are also capitalized. Once this software is ready for use in providing the Company's services, these costs are amortized on a straight-line basis over the estimated useful life of the software, which is three years. The amortization is presented within depreciation and amortization in the condensed consolidated statements of operations. |
Business combinations | Business combinations:The Company accounts for business combinations by applying the provisions of ASC 805, “Business Combination” (“ASC 805”) and allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Acquisition-related expenses are expensed as incurred. |
Goodwill and intangible assets | Goodwill and intangible assets: Goodwill and certain other purchased intangible assets have been recorded in the Company's condensed consolidated financial statements because of acquisitions. Goodwill represents the excess of the purchase price in a business combination over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed. Goodwill is not amortized, but rather is subject to an impairment test. The Company allocates goodwill to reporting units based on the expected benefit from the business combination. Reporting units are evaluated when changes in the Company’s operating structure occur, and if necessary, goodwill is reassigned using a relative fair value allocation approach. ASC 350, Intangibles—Goodwill and other (“ASC 350”) requires goodwill to be tested for impairment at least annually and, in certain circumstances, between annual tests. The accounting guidance gives the option to perform a qualitative assessment to determine whether further impairment testing is necessary. The qualitative assessment considers events and circumstances that might indicate that a reporting unit's fair value is less than it carrying amount. If it is determined, as a result of the qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than it carrying amount, a quantitative test is performed. The Company elects to perform an annual impairment test of goodwill as of October 1 of each year, or more frequently if impairment indicators are present. For the three and nine months ended September 30, 2022 (unaudited) and September 30, 2021 (unaudited), no impairments of goodwill were recorded. Separately acquired intangible assets are measured on initial recognition at cost including directly attributable costs. Intangible assets acquired in a business combination are measured at fair value at the acquisition date. Intangible assets with a finite useful life are amortized over their useful life and reviewed for impairment whenever there is an indication that the asset may be impaired. For the three and nine months ended September 30, 2022 (unaudited) and September 30, 2021 (unaudited), no impairments of intangible assets were recorded. Technology and trade name are being amortized over the estimated useful life of approximately 6 and 8 years, respectively, using straight-line amortization method. The amortization of trade name, customer relationships and technology is presented within depreciation, amortization and impairment in the condensed consolidated statement of operations.
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Fair value of financial instruments | Fair value of financial instruments: The Company applies a fair value framework to measure and disclose its financial assets and liabilities. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value: Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - Includes other inputs that are directly or indirectly observable in the marketplace. Level 3 - Unobservable inputs which are supported by little or no market activity. The Company’s financial instruments consist of cash and cash equivalents, restricted deposits, trade receivables, net, trade payables, employees, and payroll accruals, accrued expenses and other current liabilities and current portion of long-term debts. Their historical carrying amounts are approximate fair values due to the short-term maturities of these instruments. The Company measures its investments in money market funds classified as cash equivalents and warrants liability at fair value.
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Concentration of credit risks | Concentrations of credit risks: Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, deposits and trade receivables, net. Most of the Company’s cash and cash equivalents are invested in deposits with major banks in US and Israel. Generally, these investments may be redeemed upon demand and, therefore, bear minimal risk. The Company’s trade receivables, net is mainly derived from sales to customers located in the APAC, EMEA, and LATAM. The Company mitigates its credit risks by performing an ongoing credit evaluations of its customers’ financial conditions. The Company has no off-balance-sheet concentration of credit risk such as foreign exchange contracts, option contracts or other foreign hedging arrangements.
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Warrants | Warrants: The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance. The assessment considers whether the warrants are freestanding financial instruments, meet the definition of a liability under ASC 480 and meet all the requirements for equity classification, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent reporting period end date while the warrants are outstanding.Warrants that meet all the criteria for equity classification, are required to be recorded as a component of additional paid-in capital. Warrants that do not meet all the criteria for equity classification, are required to be recorded as liabilities at their initial fair value on the date of issuance and remeasured to fair value at each balance sheet date thereafter. The liability-classified warrants are recorded under non-current liabilities. Changes in the estimated fair value of the warrants are recognized in “Financial expenses (income), net” in the condensed consolidated statements of operations. |
Revenue recognition | Revenue recognition:The Company generates revenues from providing Advertising Services to advertisers, publishers, and media agencies. The services focus on standard, interactive and data driven digital video advertising. The Company’s revenue streams are ad serving, creative and measurement services. Ad serving services relate to utilizing Innovid’s platform to serve advertising impressions to various digital publishers across CTV, mobile TV, desktop TV, display, and other channels. Creative services relate to the design and development of interactive data-driven and dynamic ad formats by adding data, interactivity and dynamic features to standard ad units. The Company also provides measurement services through access to a measurement application in real time or by delivery of a report. Measurement services relate to analytics of advertisements and campaigns. The Company recognizes revenue when its customer obtains control of promised services in an amount that reflects the consideration that the Company expects to receive in exchange for those services. The Company recognizes revenue in accordance with ASC Topic 606, Revenue from contracts with customers (“ASC 606”) and determines revenue recognition through the following steps: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied. For arrangements with multiple performance obligations, which represent promises within an arrangement that are capable of being distinct and are separately identifiable, the Company allocates the contract consideration to all distinct performance obligations based on their relative SSP. SSP is typically estimated based on observable transactions when these services are sold on a standalone basis and expected cost plus a margin approach. Revenues related to ad serving services are recognized when impressions are delivered. The Company recognizes revenue from the display of impression-based ads in the contracted period in which the impressions are delivered. Impressions are considered delivered when an ad is displayed to users. Revenues related to creative services are recognized at a point in time when the Company delivers an ad unit. Creative services projects are usually delivered within a week. Revenues related to measurement services reports are recognized at a point in time, when the Company delivers the measurement report. Revenues related to the measurement services platform are recognized over time, since the customer simultaneously receives and consumes the benefits provided by the Company’s performance. Revenues for these measurement services are recognized over the service period. The Company’s accounts receivable, consist primarily of receivables related to providing ad serving, creative and measurement services, for which the Company’s contracted performance obligations have been satisfied, the amount has been billed and the Company has an unconditional right to payment. The Company typically bills customers monthly based on actual delivery. The payment terms vary, mainly with terms of 60 days or less. The typical contract term is 12 months or less for ASC 606 purposes. Some of the Company’s contracts can be cancelled without a cause. The Company has the unconditional right to payment for the services provided as of the date of the termination of the contracts. The Company applies the practical expedient in ASC 606 and does not adjust the promised amount of consideration for the effects of a significant financing component if the Company expects, at contract inception, that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Costs to obtain a contract: Contract costs include commission programs to compensate sales employees for generating sales orders with new customers or for new services with existing customers. The commissions are commensurate. The Company elected to apply the practical expedient and recognize incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the Company otherwise would have recognized is one year or less. The Company did not capitalize any contract costs during the nine months ended September 30, 2022 (unaudited) and September 30, 2021 (unaudited), respectively.
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Recently Adopted Accounting Pronouncements and Recently issued accounting pronouncements not yet adopted by the Company | Recently Adopted Accounting Pronouncements In February 2016, the FASB issued the ASU No. 2016-02, Leases (Topic 842). The standard outlines a comprehensive lease accounting model that supersedes the previous lease guidance and requires lessees to recognize lease liabilities and corresponding right-of-use (“ROU”) assets for all leases with lease terms greater than 12 months. The guidance also changes the definition of a lease and expands the disclosure requirements of lease arrangements. Innovid adopted the standard in the first quarter of 2022 using the modified retrospective method. Results for reporting periods beginning after December 31, 2021, have been presented in accordance with the standard, while results for prior periods have not been adjusted and continue to be reported in accordance with the Company's historical accounting. The cumulative effect of initially applying the new leases standard was recognized as an adjustment to the opening interim condensed consolidated balance sheet as of January 1, 2022 (unaudited). The Company elected a package of practical expedients for leases that commenced prior to January 1, 2022, and did not reassess historical conclusions on: (i) whether any expired or existing contracts are or contain leases; (ii) lease classification for any expired or existing leases; and (iii) initial direct costs capitalization for any existing leases. This standard has a significant impact on our condensed consolidated balance sheet but did not have a significant impact on the Company’s condensed consolidated statements of operations. The most significant effects relate to the recognition ROU assets and lease liabilities on interim condensed consolidated balance sheet for real estate and cars operating leases. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). The new guidance eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. It also clarifies and simplifies other aspects of the accounting for income taxes. Innovid adopted the standard in the first quarter of 2022. The adoption of the guidance did not have a material impact on the Company’s condensed consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities (i.e., deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. This new guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. Historically, such amounts were recognized by the acquirer at fair value in acquisition accounting. The Company adopted the standard effective in the first quarter of 2022 on a prospective basis. The adoption of the guidance did not have a material impact on the Company’s condensed consolidated financial statements. (l)Recently issued accounting pronouncements not yet adopted by the Company: As an “emerging growth company,” the JOBS Act allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act. The adoption dates discussed below reflect this election. In August 2020, the FASB issued ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). The final guidance issued by the FASB for convertible instruments eliminates two of the three models in ASC 470-20 that require separate accounting for embedded conversion features. Separate accounting is still required in certain cases. Additionally, among other changes, the guidance eliminates some of the conditions for equity classification in ASC 815-40-25 for contracts in an entity’s own equity. The guidance also requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and include the effect of share settlement for instruments that may be settled in cash or shares, except for certain liability-classified share-based payment awards. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Company is currently evaluating the potential impact of this guidance on its condensed consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. ASU 2016-13 requires enhanced qualitative and quantitative disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. ASU 2016-13 is effective for fiscal years beginning after December 15, 2022. The Company is currently evaluating the potential impact of this guidance on its condensed consolidated financial statements. Other guidance that has been issued since the end of our previous reporting period is not expected to have an impact on the Company’s condensed consolidated financial statements.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effect of Change in Income Statement | The effect of the change is as follows:
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Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table present information about the Company’s financial instruments that are measured at fair value on a recurring basis:
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Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The change in the fair value of the Level 3 warrant liability is summarized below:
* Additions during the year ended December 31, 2021, represent Company Warrant liability assumed in the Transaction. See Note 5 for further details.
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Schedule of Key Inputs for Valuation of Private Placement Warrants | The key inputs into the Black-Scholes model for the Private Placement Warrants were as follows:
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Schedules of Concentration of Risk, by Risk Factor | Two of the Company’s customers accounted for more than 10% of the Company’s total revenues during the three months ended September 30, 2022 and one customer during the three months ended September 30, 2021.
*) less than 10%
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Schedule of Operating ROU Assets and Lease Liabilities | Upon adoption, the Company recognized lease liabilities and corresponding ROU assets, adjusted for the accrued rent and remaining lease incentives received on the adoption date, as follows:
The Company has the following operating ROU assets and lease liabilities:
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TRANSACTION AND BUSINESS COMBINATION (Tables) |
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Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Values of the Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date (unaudited):
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Schedule of Pro Forma Financial Information | The following table presents the unaudited pro forma combined results of Innovid and TVS for the three months and nine months ended September 30, 2022, and 2021 as if the acquisition of TVS had occurred on January 1, 2021:
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Schedule of Reverse Recapitalization | All outstanding shares of Legacy Innovid common stock, Legacy Innovid redeemable convertible preferred stock, Legacy Innovid Warrants, and Secondary Sale Transaction of 6,885,486 shares to PIPE investors, were exchanged for 93,787,278 shares of common stock in Innovid Corp.
The following table reconciles the elements of the Transaction to the condensed consolidated statement of cash flows and the condensed consolidated statement of changes in temporary equity and stockholders’ equity for the year ended December 31, 2021.
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LEASES (Tables) |
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Schedule of Operating ROU Assets and Lease Liabilities | Upon adoption, the Company recognized lease liabilities and corresponding ROU assets, adjusted for the accrued rent and remaining lease incentives received on the adoption date, as follows:
The Company has the following operating ROU assets and lease liabilities:
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Summary of Lease Cost | The following table summarizes the lease costs recognized in the interim condensed consolidated statement of operations:
The following table presents supplementary cash flow information regarding the company's operating leases:
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Schedule of Operating Lease, Liability, Maturity | The following table summarizes the future payments of Innovid for its operating lease liabilities:
|
STOCK-BASED COMPENSATION (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Share Based Compensation Expenses | Stock-based compensation expense is principally related to awards issued to employees pursuant to the Legacy Innovid Stock Option Plan (“Legacy Plan”) and 2021 Innovid Corp. Incentive Plan (“2021 Plan”) and is summarized as follows:
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Schedule of Share Based Payment Arrangement, Option, Activity | A summary of the employees’ stock option activity under the Legacy Plan and 2021 Plan for the nine months ended September 30, 2022 (unaudited) is as follows:
A summary of the consultants’ stock option activity under the Legacy Plan for the nine months ended September 30, 2022 (unaudited) is as follows:
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Schedule of Share Based Payment Arrangement, Restricted Stock Unit, Activity | A summary of the employees’ RSU activity under the 2021 Plan for the nine months ended September 30, 2022 (unaudited) is as follows:
A summary of the consultants’ RSU activity under the 2021 Plan for the nine months ended September 30, 2022 (unaudited) is as follows:
|
SEGMENT REPORTING (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenue and Property and Equipment, by Geographical Areas | Revenue by geographical location are as follows:
The Company’s long-lived tangible assets by geographical location is as follows:
|
BASIC AND DILUTED NET LOSS PER SHARE (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | Basic and diluted net loss per share attributable to common stockholders was calculated as follows:
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net profit (loss) per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:
|
OVERVIEW (Details) - USD ($) $ / shares in Units, $ in Thousands |
9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2022 |
Nov. 30, 2021 |
Sep. 30, 2022 |
Dec. 31, 2021 |
|
Business Acquisition [Line Items] | ||||
Secondary sale amount | $ 68,855 | $ 68,855 | ||
TV Squared | ||||
Business Acquisition [Line Items] | ||||
Payments to acquire | $ 100 | |||
Shares issued as consideration (in shares) | 11,549,465 | |||
Share price (in dollars per share) | $ 3.80 | |||
Issued, fully vested stock option (in shares) | 949,893 | 949,893 | ||
Weighted average fair value (in dollars per share) | $ 3.49 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
|
Summary of Significant Accounting Policies [Line Items] | |||||
Goodwill impairment | $ 0 | $ 0 | $ 0 | $ 0 | |
Intangible asset impairment | $ 0 | $ 0 | $ 0 | $ 0 | |
Payment term | 60 days | ||||
Ad serving and creative services | 77.20% | 98.80% | 80.90% | 98.60% | |
Measurement serving services | 22.50% | 1.10% | 18.80% | 0.90% | |
Level 1 | Public | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Exercise price per share (in dollars per share) | $ 0.48 | $ 0.48 | $ 1.11 | ||
Fair value | $ 1,518,000 | $ 1,518,000 | $ 3,510,000 | ||
Level 3 | Private Placement | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Fair value | 6,072,000 | $ 6,072,000 | $ 15,462,000 | ||
Technology | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Intangible asset useful life | 6 years | ||||
Trade name | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Intangible asset useful life | 8 years | ||||
Software development costs | |||||
Summary of Significant Accounting Policies [Line Items] | |||||
Useful lives (in years) | three years | ||||
Capitalization cost | 3,749,000 | $ 1,049,000 | $ 7,755,000 | ||
Asset Impairment Charges | $ 537,000 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - Fair Value, Recurring - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Level 1 | ||
Assets: | ||
Money market funds | $ 39,250 | $ 4,515 |
Liabilities: | ||
Warrants liability | 1,518 | 3,510 |
Level 2 | ||
Assets: | ||
Money market funds | 0 | 0 |
Liabilities: | ||
Warrants liability | 0 | 0 |
Level 3 | ||
Assets: | ||
Money market funds | 0 | 0 |
Liabilities: | ||
Warrants liability | $ 6,072 | $ 15,462 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation (Details) - Fair Value, Recurring - Warrants Liability - Level 3 - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended | |
---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning of the period | $ 15,462 | $ 499 | $ 499 |
Additions | 0 | 0 | 18,427 |
Change in fair value | (9,390) | 3,191 | 1,616 |
Conversion of Legacy Innovid Warrants on the Closing of the Transaction | 0 | 0 | (5,080) |
End of the period | $ 6,072 | $ 3,690 | $ 15,462 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Warrants Follows at Initial Measurement (Details) - Private Placement |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2022 |
Dec. 31, 2021 |
|
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Risk-free interest rate | 4.10% | 1.24% |
Expected dividends | 0.00% | 0.00% |
Expected term (years) | 4 years 2 months 12 days | 4 years 10 months 24 days |
Expected volatility | 80.00% | 55.00% |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Concentration Risk (Details) - Revenue Benchmark - Customer Concentration Risk |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2022 |
Sep. 30, 2022 |
|
Customer A | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 12.00% | 10.00% |
Customer B | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 13.00% |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Operating Lease Liabilities and ROU Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Jan. 01, 2022 |
Dec. 31, 2021 |
---|---|---|---|
Summary of Significant Accounting Policies [Line Items] | |||
ROU assets | $ 3,217 | $ 0 | |
Lease liabilities | 4,183 | ||
Accounting Standards Update 2016-02 | |||
Summary of Significant Accounting Policies [Line Items] | |||
ROU assets | $ 3,928 | ||
Lease liabilities | 5,531 | ||
Real Estate | |||
Summary of Significant Accounting Policies [Line Items] | |||
ROU assets | 3,187 | ||
Lease liabilities | 4,156 | ||
Real Estate | Accounting Standards Update 2016-02 | |||
Summary of Significant Accounting Policies [Line Items] | |||
ROU assets | 3,878 | ||
Lease liabilities | 5,482 | ||
Cars | |||
Summary of Significant Accounting Policies [Line Items] | |||
ROU assets | 30 | ||
Lease liabilities | $ 27 | ||
Cars | Accounting Standards Update 2016-02 | |||
Summary of Significant Accounting Policies [Line Items] | |||
ROU assets | 50 | ||
Lease liabilities | $ 49 |
TRANSACTION AND BUSINESS COMBINATION - Narrative (Details) |
9 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 28, 2022
USD ($)
$ / shares
shares
|
Nov. 30, 2021
USD ($)
$ / shares
shares
|
Sep. 30, 2022
USD ($)
shares
|
Dec. 31, 2021
USD ($)
shares
|
Jun. 30, 2022
USD ($)
shares
|
Mar. 31, 2022
shares
|
Dec. 01, 2021
shares
|
Sep. 30, 2021
shares
|
Jun. 30, 2021
shares
|
Mar. 31, 2021
shares
|
Jan. 01, 2021
shares
|
Dec. 31, 2020
shares
|
|
Related Party Transaction [Line Items] | ||||||||||||
Goodwill | $ | $ 114,678,000 | $ 4,555,000 | ||||||||||
Ordinary shares, shares issued (in shares) | shares | 133,492,514 | 119,017,380 | ||||||||||
Ordinary shares, shares outstanding (in shares) | shares | 133,492,514 | 119,017,380 | ||||||||||
Accrued transaction cost, not yet paid | $ | $ 3,185,000 | |||||||||||
Accrued transaction costs | $ | $ 3,185,000 | |||||||||||
Exchange ratio | 1.337 | |||||||||||
Number of securities callable by warrants (in shares) | shares | 1 | |||||||||||
Exercisable term from closing of business combination | 30 days | |||||||||||
Expiration term of warrant (in years) | 5 years | |||||||||||
Common stock | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Per unit price (in dollars per share) | $ / shares | $ 11.50 | |||||||||||
Ordinary shares, shares outstanding (in shares) | shares | 133,492,514 | 119,017,380 | 132,411,715 | 132,088,772 | 19,085,969 | 18,319,305 | 17,037,306 | 16,275,609 | ||||
Public Warrants | Common stock | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Shares issued in transaction (in shares) | shares | 3,162,500 | |||||||||||
Private Placement Warrants | Common stock | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Shares issued in transaction (in shares) | shares | 7,060,000 | |||||||||||
ION | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Goodwill | $ | $ 0 | |||||||||||
Other intangible assets | $ | 0 | |||||||||||
Aggregate value | $ | $ 149,252,000 | |||||||||||
ION | IPO | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Shares issued in transaction (in shares) | shares | 19,585,174 | |||||||||||
Per unit price (in dollars per share) | $ / shares | $ 10.00 | |||||||||||
Gross proceeds | $ | $ 195,888,000 | |||||||||||
Conversion of stock (in shares) | shares | 12,039,826 | |||||||||||
Innovid Corp | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Exchanged into Innovid Corp. common stock on November 30, 2021 (in shares) | shares | 93,787,278 | |||||||||||
Ordinary shares, shares outstanding (in shares) | shares | 16,275,609 | |||||||||||
Exercisable term from closing of business combination | 30 days | |||||||||||
Expiration term of warrant (in years) | 5 years | |||||||||||
PIPE Investors | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Ordinary shares, shares issued (in shares) | shares | 118,941,618 | |||||||||||
Ordinary shares, shares outstanding (in shares) | shares | 118,941,618 | |||||||||||
PIPE Investors | Secondary Sale | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Shares issued in transaction (in shares) | shares | 6,885,486 | |||||||||||
TV Squared | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Payments to acquire | $ | $ 100,000 | |||||||||||
Shares issued as consideration (in shares) | shares | 11,549,465 | |||||||||||
Share price (in dollars per share) | $ / shares | $ 3.80 | |||||||||||
Issued, fully vested stock option (in shares) | shares | 949,893 | 949,893 | ||||||||||
Weighted average fair value (in dollars per share) | $ / shares | $ 3.49 | |||||||||||
Business combination, compensation expense | $ | $ 9,700,000 | |||||||||||
Acquisition related costs | $ | $ 5,033,000 | |||||||||||
Goodwill | $ | 110,123,000 | |||||||||||
TV Squared | General and administrative | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Acquisition related costs | $ | $ 4,873,000 | |||||||||||
TV Squared | Technology | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Finite-lived intangible assets acquired | $ | $ 17,075,000 | |||||||||||
Acquired finite-lived intangible assets, weighted average useful life | 6 years | |||||||||||
TV Squared | Trade name | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Finite-lived intangible assets acquired | $ | $ 4,600,000 | |||||||||||
Acquired finite-lived intangible assets, weighted average useful life | 8 years | |||||||||||
TV Squared | Customer relationships | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Finite-lived intangible assets acquired | $ | $ 14,700,000 | |||||||||||
Acquired finite-lived intangible assets, weighted average useful life | 11 years |
TRANSACTION AND BUSINESS COMBINATION - Fair Values of the Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Feb. 28, 2022 |
Dec. 31, 2021 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Goodwill | $ 114,678 | $ 4,555 | |
TV Squared | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 5,318 | ||
Accounts receivables | 3,507 | ||
Other current assets | 1,912 | ||
Property and equipment | 154 | ||
Total tangible assets | 10,891 | ||
Goodwill | 110,123 | ||
Total assets acquired | 157,389 | ||
Less: Deferred tax liabilities | (1,624) | ||
Less: Other assumed liabilities | (3,727) | ||
Net assets acquired | 152,038 | ||
TV Squared | Technology | |||
Business Acquisition [Line Items] | |||
Intangible assets | 17,075 | ||
TV Squared | Customer relationships | |||
Business Acquisition [Line Items] | |||
Intangible assets | 14,700 | ||
TV Squared | Trade name | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 4,600 |
TRANSACTION AND BUSINESS COMBINATION - Pro Forma Financial Information (Details) - TV Squared - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Business Acquisition [Line Items] | ||||
Revenues | $ 34,469 | $ 29,486 | $ 97,736 | $ 80,044 |
Net loss | $ (11,832) | $ (1,826) | $ (11,205) | $ (21,330) |
TRANSACTION AND BUSINESS COMBINATION - Common Stock in Innovid Corp (Details) - shares |
Nov. 30, 2021 |
Sep. 30, 2022 |
Dec. 31, 2021 |
Jan. 01, 2021 |
---|---|---|---|---|
Business Acquisition [Line Items] | ||||
Legacy Innovid common stock of January 1, 2021 (in shares) | 133,492,514 | 119,017,380 | ||
Innovid Corp | ||||
Business Acquisition [Line Items] | ||||
Legacy Innovid common stock of January 1, 2021 (in shares) | 16,275,609 | |||
Warrant exercised (in shares) | 132,392 | |||
Stock options exercised (in shares) | 3,180,943 | |||
Conversion of redeemable convertible preferred stock into common stock (in shares) | 73,690,340 | |||
Conversion of Legacy Innovid warrants ( in shares) | 507,994 | |||
Exchanged into Innovid Corp. common stock on November 30, 2021 (in shares) | 93,787,278 |
TRANSACTION AND BUSINESS COMBINATION - Transaction to Cash Flow and Changes in Temporary Equity and Stockholders’ Equity (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Nov. 30, 2021 |
Dec. 31, 2021 |
|
Related Party Transaction [Line Items] | ||
Less: Transaction costs paid | $ (31,160) | |
Less: Deferred underwriting fee paid | (6,199) | |
Proceeds from reverse recapitalization, net | 149,252 | |
Less: Accrued transaction costs not yet paid | (3,185) | |
Less: Company Warrant assumed as part of the Transaction | (22,791) | |
Plus: Transaction costs allocated to Company Warrant | 2,750 | |
Reverse recapitalization, net | 126,026 | |
Secondary sale amount | $ 68,855 | 68,855 |
PIPE Investors | ||
Related Party Transaction [Line Items] | ||
Cash - PIPE Investment, net of Secondary Sale Amount of $68,855 | 131,145 | |
ION | ||
Related Party Transaction [Line Items] | ||
Cash - ION trust account and cash, net of redemptions | $ 55,466 |
LEASES - Schedule of Operating ROU Assets and Lease Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Operating Leases Assets And Liabilities [Line Items] | ||
ROU assets | $ 3,217 | $ 0 |
Lease liabilities | 4,183 | |
Real Estate | ||
Operating Leases Assets And Liabilities [Line Items] | ||
ROU assets | 3,187 | |
Lease liabilities | 4,156 | |
Cars | ||
Operating Leases Assets And Liabilities [Line Items] | ||
ROU assets | 30 | |
Lease liabilities | $ 27 |
LEASES - Schedule of Lease liability (Details) - USD ($) $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Leases [Abstract] | ||
Current lease liabilities | $ 1,904 | $ 0 |
Non-current lease liabilities | 2,279 | $ 0 |
Total lease liabilities | $ 4,183 |
LEASES - Lease Costs Recognized In The Condensed Consolidated Statement Of Earnings (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2022 |
Sep. 30, 2022 |
|
Leases [Abstract] | ||
Operating lease cost | $ 466 | $ 1,413 |
Short term lease cost | 126 | 334 |
Variable lease cost | 10 | 20 |
Total lease cost | $ 602 | $ 1,767 |
LEASES - Narrative (Details) |
Sep. 30, 2022 |
---|---|
Leases [Abstract] | |
Operating lease, weighted average remaining lease term | 2 years 4 months 24 days |
Operating lease, weighted average discount rate, percent | 3.10% |
LEASES - Supplementary Cash Flow Information (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2022
USD ($)
| |
Leases [Abstract] | |
Cash paid for amounts included in the measurement of lease liabilities | $ 1,688 |
Right of use assets obtained in exchange for new operating lease liabilities | 0 |
Right of use assets obtained in exchange for operating lease liabilities upon lease modification | $ 610 |
LEASES - Schedule of Operating Lease Liabilities Maturity (Details) $ in Thousands |
Sep. 30, 2022
USD ($)
|
---|---|
Leases [Abstract] | |
2022 Remaining | $ 471 |
2023 | 2,160 |
2024 | 1,035 |
2025 | 695 |
Total undiscounted lease payments | 4,361 |
Less: Interest | (178) |
Total lease liabilities - operating | $ 4,183 |
WARRANTS LIABILITY (Details) - USD ($) $ / shares in Units, $ in Thousands |
9 Months Ended | |||
---|---|---|---|---|
Dec. 30, 2021 |
Nov. 30, 2021 |
Sep. 30, 2022 |
Dec. 31, 2021 |
|
Derivative [Line Items] | ||||
Fractional shares issued upon exercise (in shares) | 0 | |||
Exercisable term from closing of business combination | 30 days | |||
Expiration term of warrant (in years) | 5 years | |||
Threshold period for not to transfer, assign or sell any shares or warrants after completion of initial business combination | 30 days | |||
Innovid Corp | ||||
Derivative [Line Items] | ||||
Exercisable term from closing of business combination | 30 days | |||
Exercisable term, from closing of public offering | 1 year | |||
Expiration term of warrant (in years) | 5 years | |||
Exercise price per share (in dollars per share) | $ 11.50 | |||
Public Warrants | ||||
Derivative [Line Items] | ||||
Warrants outstanding (in shares) | 3,162,500 | |||
Private Warrants | ||||
Derivative [Line Items] | ||||
Warrants outstanding (in shares) | 7,060,000 | |||
Redemption Of Warrant Price Per Share Equals Or Exceeds 18.00 | Innovid Corp | ||||
Derivative [Line Items] | ||||
Redemption of warrants, reference price (in dollars per share) | 18.00 | |||
Redemption price of warrants (in dollars per share) | $ 0.01 | |||
Number of consecutive trading days | 30 days | |||
Initial public offering per share (in dollars per share) | $ 18.00 | |||
Redemption of warrants, threshold trading days | 20 days | |||
Minimum threshold written notice period for redemption of warrants | 30 days | |||
Redemption Of Warrant Price Per Share Equals Or Exceeds 10.00 | Innovid Corp | ||||
Derivative [Line Items] | ||||
Redemption of warrants, reference price (in dollars per share) | $ 10.00 | |||
Redemption price of warrants (in dollars per share) | $ 0.10 | |||
Number of consecutive trading days | 30 days | |||
Initial public offering per share (in dollars per share) | $ 10.00 | |||
Redemption of warrants, threshold trading days | 20 days | |||
Minimum threshold written notice period for redemption of warrants | 30 days | |||
Private Placement Warrants | ||||
Derivative [Line Items] | ||||
Derivative liability fair value | $ 7,590 | $ 18,972 |
CREDIT LINE AND OTHER BORROWINGS (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Aug. 04, 2023 |
Aug. 04, 2022 |
Jun. 30, 2022 |
Dec. 31, 2020 |
Sep. 30, 2022 |
Aug. 03, 2022 |
|
Revolving Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit | $ 50 | $ 15 | ||||
Prime rate (percent) | 0.75% | |||||
Average annual fee unused portion (in percent) | 0.20% | |||||
Non-refundable commitment fees | $ 40 | |||||
Line of credit quick ratio | 1.30 | |||||
Quarterly adjusted quick ratio | 1.50 | |||||
Revolving Credit Facility | Forecast | Subsequent Event | ||||||
Line of Credit Facility [Line Items] | ||||||
Non-refundable commitment fees | $ 75 | |||||
Revolving Credit Facility | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Annual interest rate (in percent) | 4.25% | |||||
Line of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Proceeds from line of credit | $ 6,000 | |||||
Line of Credit | Amended Credit Agreement Maturing December 2020 | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit | $ 15,000 | |||||
Line of credit maximum borrowing capacity | $ 50,000 | |||||
Proceeds from line of credit | $ 9,000 |
COMMITMENTS AND CONTINGENT LIABILITIES (Details) - USD ($) $ / shares in Units, $ in Thousands |
Sep. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Commitments and Contingencies [Line Items] | ||
Ordinary shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Bank guarantees | $ 231 | |
Israeli Subsidiary | ||
Commitments and Contingencies [Line Items] | ||
Bank deposits pledged | $ 862 | |
Subsidiaries | ||
Commitments and Contingencies [Line Items] | ||
Shares of subsidiary pledged (in shares) | 65,000 | |
Ordinary shares, par value (in dollars per share) | $ 0.01 |
STOCK-BASED COMPENSATION - Stock Option Activity Under Plan (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock based compensation expenses | $ 152 | |||
Legacy Plan and 2021 Plan | Employees | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock based compensation expenses | $ 4,283 | $ 377 | 9,828 | $ 2,038 |
Cost of goods sold | Legacy Plan and 2021 Plan | Employees | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock based compensation expenses | 307 | 14 | 795 | 34 |
Research and development | Legacy Plan and 2021 Plan | Employees | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock based compensation expenses | 1,039 | 90 | 2,438 | 319 |
Sales and marketing | Legacy Plan and 2021 Plan | Employees | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock based compensation expenses | 1,391 | 128 | 3,500 | 400 |
General and administrative | Legacy Plan and 2021 Plan | Employees | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock based compensation expenses | $ 1,546 | $ 145 | $ 3,095 | $ 1,285 |
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Feb. 28, 2022 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock based compensation expenses | $ 152 | ||||
Capitalized stock-based compensation expense | $ 290 | 780 | |||
Cost not yet recognized | 5,401 | $ 5,401 | |||
Period for cost yet to be recognized | 2 years 7 days | ||||
TV Squared | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Issued, fully vested stock option (in shares) | 949,893 | 949,893 | |||
Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Cost not yet recognized | 37,341 | $ 37,341 | |||
Period for cost yet to be recognized | 2 years 2 months 12 days | ||||
Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expiration period | 10 years | ||||
Minimum | Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 3 years | ||||
Maximum | Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
Service Providers and Non-Employee Consultants | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock based compensation expenses | $ 40 | $ 214 | $ 225 | $ 273 |
STOCK-BASED COMPENSATION - Stock Option Activity (Details) $ / shares in Units, $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2022
USD ($)
$ / shares
shares
|
Dec. 31, 2021
USD ($)
$ / shares
shares
|
|
Employees | ||
Amount of options | ||
Outstanding at the beginning of the period (in shares) | shares | 11,122,648 | |
Transfer between employee and consultant (in shares) | shares | 40,118 | |
Granted (in shares) | shares | 2,041,956 | |
Granted in acquisition (in shares) | shares | 949,893 | |
Forfeited (in shares) | shares | (118,837) | |
Expired (in shares) | shares | (18,653) | |
Exercised (in shares) | shares | (2,845,702) | |
Outstanding at the end of the period (in shares) | shares | 11,171,423 | 11,122,648 |
Exercisable options at the end of the period (in shares) | shares | 6,587,903 | |
Weighted average exercise price | ||
Outstanding at the beginning of the period (in USD per share) | $ / shares | $ 0.82 | |
Transfer between employee and consultant (in USD per share) | $ / shares | 0.64 | |
Granted (in USD per share) | $ / shares | 2.09 | |
Granted in acquisition (in USD per share) | $ / shares | 0.31 | |
Forfeited (in USD per share) | $ / shares | 1.10 | |
Expired (in USD per share) | $ / shares | 0.90 | |
Exercised (in USD per share) | $ / shares | 0.28 | |
Outstanding at the end of the period (in USD per share) | $ / shares | 1.14 | $ 0.82 |
Exercisable exercise price at the end of the period (in USD per share) | $ / shares | $ 0.71 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures | ||
Outstanding option, weighted average remaining contractual term (in years) | 7 years 7 months 13 days | 6 years 10 months 13 days |
Outstanding exercisable, weighted average remaining contractual term (in years) | 6 years 9 months 3 days | |
Outstanding intrinsic value at the beginning of the period | $ | $ 64,818 | |
Outstanding intrinsic value at the end of the period | $ | 17,515 | $ 64,818 |
Outstanding exercisable intrinsic value at the end of the period | $ | $ 13,202 | |
Consultants | ||
Amount of options | ||
Outstanding at the beginning of the period (in shares) | shares | 179,627 | |
Transfer between employee and consultant (in shares) | shares | 40,118 | |
Forfeited (in shares) | shares | (460) | |
Exercised (in shares) | shares | (69,298) | |
Outstanding at the end of the period (in shares) | shares | 69,751 | 179,627 |
Exercisable options at the end of the period (in shares) | shares | 62,227 | |
Weighted average exercise price | ||
Outstanding at the beginning of the period (in USD per share) | $ / shares | $ 0.31 | |
Transfer between employee and consultant (in USD per share) | $ / shares | 0.64 | |
Forfeited (in USD per share) | $ / shares | 2.81 | |
Exercised (in USD per share) | $ / shares | 0.30 | |
Outstanding at the end of the period (in USD per share) | $ / shares | 0.48 | $ 0.31 |
Exercisable exercise price at the end of the period (in USD per share) | $ / shares | $ 0.46 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures | ||
Outstanding option, weighted average remaining contractual term (in years) | 4 years 5 months 12 days | 2 years 4 months 2 days |
Outstanding exercisable, weighted average remaining contractual term (in years) | 4 years 1 month 13 days | |
Outstanding intrinsic value at the beginning of the period | $ | $ 1,139 | |
Outstanding intrinsic value at the end of the period | $ | 156 | $ 1,139 |
Outstanding exercisable intrinsic value at the end of the period | $ | $ 144 |
STOCK-BASED COMPENSATION - Restricted Stock Unit Activity (Details) |
9 Months Ended |
---|---|
Sep. 30, 2022
$ / shares
shares
| |
Employees | |
Number of share units | |
Outstanding at the beginning of the period (in shares) | shares | 0 |
Granted (in shares) | shares | 8,446,838 |
Released (in shares) | shares | (10,669) |
Forfeited (in shares) | shares | (778,388) |
Outstanding at the ending of the period (in shares) | shares | 7,657,781 |
Weighted average grant date fair value | |
Outstanding at the beginning of the period (in USD per share) | $ / shares | $ 0 |
Granted (in USD per share) | $ / shares | 5.98 |
Released (in USD per share) | $ / shares | 6.60 |
Forfeited (in USD per share) | $ / shares | 6.46 |
Outstanding at the ending of the period (in USD per share) | $ / shares | $ 5.93 |
Consultants | |
Number of share units | |
Outstanding at the beginning of the period (in shares) | shares | 0 |
Granted (in shares) | shares | 176,151 |
Forfeited (in shares) | shares | (5,387) |
Outstanding at the ending of the period (in shares) | shares | 170,764 |
Weighted average grant date fair value | |
Outstanding at the beginning of the period (in USD per share) | $ / shares | $ 0 |
Granted (in USD per share) | $ / shares | 6.52 |
Forfeited (in USD per share) | $ / shares | 6.60 |
Outstanding at the ending of the period (in USD per share) | $ / shares | $ 6.51 |
FINANCE EXPENSES (INCOME), NET (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Warrant | ||||
Short-term Debt [Line Items] | ||||
(Loss) gain from changes in the fair value | $ (4,564) | $ 11,382 | ||
Paycheck Protection Program | ||||
Short-term Debt [Line Items] | ||||
Debt related interest expense | $ 234 | $ 63 | $ 371 | $ 197 |
INCOME TAX (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Income Tax Disclosure [Abstract] | ||
Provision for income taxes | $ 839 | $ 304 |
SEGMENT REPORTING - Narrative (Details) |
9 Months Ended |
---|---|
Sep. 30, 2022
segment
| |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
SEGMENT REPORTING - Revenue and Property and Equipment, by Geographical Areas (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
|
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues | $ 34,469 | $ 23,469 | $ 93,419 | $ 64,324 | |
Long-lived tangible assets | 14,936 | 14,936 | $ 4,840 | ||
US | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues | 31,579 | 21,324 | 84,531 | 58,270 | |
Long-lived tangible assets | 11,542 | 11,542 | 3,051 | ||
Canada | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues | 390 | 345 | 880 | 799 | |
APAC | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues | 1,013 | 790 | 2,969 | 2,182 | |
EMEA | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues | 1,280 | 619 | 4,323 | 1,842 | |
LATAM | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues | 207 | $ 391 | 716 | $ 1,231 | |
Israel | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Long-lived tangible assets | 2,823 | 2,823 | 1,495 | ||
Rest of the World | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Long-lived tangible assets | $ 571 | $ 571 | $ 294 |
BASIC AND DILUTED NET LOSS PER SHARE - Basic and Diluted Net loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|||
Numerator: | ||||||||||
Net loss | $ (11,832) | $ 4,300 | $ (7,449) | $ (259) | $ (1,659) | $ (1,936) | $ (14,981) | $ (3,854) | ||
Accretion of preferred stock to redemption value | 0 | (8,189) | 0 | (52,993) | ||||||
Net loss attributable to common stockholders, basic | (11,832) | (8,448) | (14,981) | (56,847) | ||||||
Net loss attributable to common stockholders, diluted | $ (11,832) | $ (8,448) | $ (14,981) | $ (56,847) | ||||||
Denominator: | ||||||||||
Weighted-average number of stocks used in computing net loss per stock attributable to common stockholders - Basic weighted average number of shares outstanding (in shares) | [1] | 132,959,511 | 18,849,710 | 129,768,724 | 13,157,022 | |||||
Weighted-average number of stocks used in computing net loss per stock attributable to common stockholders -Diluted weighted average number of shares outstanding (in shares) | [1] | 132,959,511 | 18,849,710 | 129,768,724 | 13,157,022 | |||||
Net profit (loss) per stock attributable to common stockholders – basic (in dollars per share) | [1] | $ (0.09) | $ (0.45) | $ (0.12) | $ (4.32) | |||||
Net profit (loss) per stock attributable to common stockholders – diluted (in dollars per share) | [1] | $ (0.09) | $ (0.45) | $ (0.12) | $ (4.32) | |||||
|
BASIC AND DILUTED NET LOSS PER SHARE - Securities Excluded from Computation of Earnings Per Share (Details) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Preferred stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Securities excluded from computation of earnings per share (in shares) | 0 | 73,690,340 | 0 | 73,690,340 |
Unvested RSU outstanding | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Securities excluded from computation of earnings per share (in shares) | 7,827,545 | 0 | 7,827,545 | 0 |
Options outstanding | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Securities excluded from computation of earnings per share (in shares) | 11,241,174 | 11,774,686 | 11,241,174 | 11,774,686 |
Warrants outstanding | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Securities excluded from computation of earnings per share (in shares) | 10,222,500 | 680,271 | 10,222,500 | 680,271 |
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