424B3 1 d190408d424b3.htm 424B3 424B3

Filed pursuant to Rule 424(b)(3)
SEC File No. 333-258223

PROSPECTUS SUPPLEMENT NO. 1

(to Prospectus dated August 10, 2021)

 

LOGO

ironSource Ltd.

133,254,045 CLASS A ORDINARY SHARES

 

 

This prospectus supplement updates, amends and supplements the prospectus dated August 10, 2021 (as supplemented or amended from time to time, the “Prospectus”), which forms a part of our Registration Statement on Form F-1 (Registration No. 333-258223). Capitalized terms used in this prospectus supplement and not otherwise defined herein have the meanings specified in the Prospectus.

This prospectus supplement is being filed to update, amend and supplement the information included in the Prospectus with information on ironSource’s second quarter 2021 financial results, which is set forth below.

This prospectus supplement is not complete without the Prospectus. This prospectus supplement should be read in conjunction with the Prospectus, which is to be delivered with this prospectus supplement, and is qualified by reference thereto, except to the extent that the information in this prospectus supplement updates or supersedes the information contained in the Prospectus. Please keep this prospectus supplement with your Prospectus for future reference.

Our Class A ordinary shares are listed on the New York Stock Exchange under the symbol “IS.” On August 23, 2021, the closing price for our Class A ordinary shares on the New York Stock Exchange was $9.01 per share.

 

 

Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 30 of this Prospectus and other risk factors contained in the documents incorporated by reference therein for a discussion of information that should be considered in connection with an investment in our securities.

Neither the Securities and Exchange Commission, the Israeli Securities Authority nor any state securities commission has approved or disapproved of these securities or determined if the Prospectus or this prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense.

 

 

The date of this prospectus supplement is August 24, 2021.


IRONSOURCE LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands, except for number of shares and par value)

(Unaudited)

 

     June 30,      December 31,  
     2021      2020  

Assets

     

Current assets:

     

Cash and cash equivalents

   $ 706,797      $ 200,672  

Short-term deposits

     —          17,627  

Accounts receivable, net of allowances of $793 and $724 as of June 30, 2021 and December 31, 2020, respectively

     186,844        151,503  

Other current assets

     35,654        15,711  
  

 

 

    

 

 

 

Total current assets

     929,295        385,513  

Long-term restricted cash

     2,881        2,415  

Deferred tax assets

     3,412        161  

Operating lease right-of-use asset

     33,571        36,780  

Property, equipment and software, net

     24,646        23,077  

Investment in equity securities

     20,000        —    

Goodwill

     205,842        79,156  

Intangible assets, net

     31,344        8,084  

Other non-current assets

     4,782        650  
  

 

 

    

 

 

 

Total assets

   $ 1,255,773      $ 535,836  
  

 

 

    

 

 

 

 

F-1


IRONSOURCE LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS (continued)

(U.S. dollars in thousands, except for number of shares and par value)

(Unaudited)

 

     June 30,     December 31,  
     2021     2020  

Liabilities and shareholders’ equity

    

Current liabilities:

    

Accounts payable

   $ 178,884     $ 155,476  

Current maturities of long-term loan

     —         9,725  

Operating lease liabilities

     7,334       7,429  

Other current liabilities

     31,771       34,034  
  

 

 

   

 

 

 

Total current liabilities

     217,989       206,664  

Long-term loan, net of current maturities

     —         74,684  

Deferred tax liabilities

     1,037       2,521  

Long-term operating lease liabilities

     29,969       32,241  

Other non-current liabilities

     1,761       280  
  

 

 

   

 

 

 

Total liabilities

     250,756       316,390  
  

 

 

   

 

 

 

Commitments and contingencies

    

Shareholders’ equity:

    

Class A ordinary share, no par value; 10,000,000,000 shares authorized at June 30, 2021 and December 31, 2020; 627,508,621 and 320,133,022 issued and outstanding at June 30, 2021 and December 31, 2020, respectively(1)

     —         —    

Class B ordinary share, no par value; 1,500,000,000 shares authorized at June 30, 2021 and December 31, 2020; 385,108,621 and 320,133,022 issued and outstanding at June 30, 2021 and December 31, 2020, respectively(1)

     —         —    

2019 ordinary shares, NIS 0.01 par value, 25,006,298 authorized, issued and outstanding at December 31, 2020

     —         72  

Treasury shares, at cost, 6,745,955 Class A ordinary shares held at June 30, 2021

     (67,460 )     —    

Additional paid-in capital(1)

     985,106       152,251  

Retained earnings

     87,371       67,123  
  

 

 

   

 

 

 

Total shareholders’ equity

     1,005,017       219,446  
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 1,255,773     $ 535,836  
  

 

 

   

 

 

 

 

(1)

Per share amounts have been adjusted, on a retroactive basis, for all periods presented, to reflect both the distribution of Class B ordinary shares and the Stock Split, together representing a ratio of 9.98 of each share.

 

F-2


IRONSOURCE LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(U.S. dollars in thousands, except share and per share amounts)

(Unaudited)

 

     Three Months Ended
June 30,
     Six Months Ended
June 30,
 
     2021      2020      2021      2020  

Revenue

   $ 135,036      $ 73,958      $ 254,749      $ 135,164  

Cost of revenue

     22,765        13,556        42,905        25,103  
  

 

 

    

 

 

    

 

 

    

 

 

 

Gross profit

     112,271        60,402        211,844        110,061  
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating expenses:

           

Research and development

     23,161        11,471        43,571        21,600  

Sales and marketing

     52,181        28,239        100,902        47,411  

General and administrative

     20,686        6,781        36,233        13,483  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total operating expenses

     96,028        46,491        180,706        82,494  
  

 

 

    

 

 

    

 

 

    

 

 

 

Income from operations

     16,243        13,911        31,138        27,567  

Financial expenses, net

     977        1,204        2,006        2,176  
  

 

 

    

 

 

    

 

 

    

 

 

 

Income from continuing operations before income taxes

     15,266        12,707        29,132        25,391  

Income taxes

     5,262        1,994        8,884        3,788  
  

 

 

    

 

 

    

 

 

    

 

 

 

Income from continuing operations, net of income taxes

     10,004        10,713        20,248        21,603  

Income from discontinued operations, net of income taxes

     —          12,487        —          24,788  
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income

   $ 10,004      $ 23,200      $ 20,248      $ 46,391  
  

 

 

    

 

 

    

 

 

    

 

 

 

Basic net income per ordinary share:(1)

           

Continuing operations

     0.01        0.01        0.02        0.02  

Discontinued operations

     —          0.01        —          0.03  
  

 

 

    

 

 

    

 

 

    

 

 

 

Basic net income per ordinary share

   $ 0.01      $ 0.02      $ 0.02      $ 0.05  
  

 

 

    

 

 

    

 

 

    

 

 

 

Weighted-average ordinary shares outstanding—basic

     658,950,556        636,188,253        652,122,890        635,000,653  
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted net income per ordinary share:(1)

           

Continuing operations

     0.01        0.01        0.02        0.02  

Discontinued operations

     —          0.01        —          0.03  
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted net income per ordinary share

   $ 0.01      $ 0.02      $ 0.02      $ 0.05  
  

 

 

    

 

 

    

 

 

    

 

 

 

Weighted-average ordinary shares outstanding—diluted

     746,974,212        681,273,631        729,329,729        674,803,455  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)

Per share amounts have been adjusted, on a retroactive basis, for all periods presented, to reflect both the distribution of Class B ordinary shares and the Stock Split, together representing a ratio of 9.98 of each share.

 

F-3


IRONSOURCE LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands)

(Unaudited)

 

     Three months Ended
June 30,
    Six months Ended
June 30,
 
     2021     2020     2021     2020  
     (Unaudited)     (Unaudited)  

Cash flows from operating Activities

        

Net income from continuing operations

   $ 10,004     $ 10,713     $ 20,248     $ 21,603  

Adjustments to reconcile net income to net cash provided by operating activities:

        

Depreciation and amortization

     5,874       4,138       11,217       8,139  

Share-based compensation expenses

     20,664       2,509       37,474       5,341  

Non-cash lease expense

     615       (369     842       (10

Effect of exchange rate changes on cash and cash equivalents and restricted cash

     1,107       (723     (139     448  

Interest accrued and other financial expenses

     521       (22     628       108  

Deferred income taxes, net

     99       (413     (728     (695

Changes in operating assets and liabilities:

        

Accounts receivable

     (38,015     (8,411     (38,866     (5,263

Other current assets

     (3,894     3,700       (18,644     1,780  

Other non-current assets

     (4,740     (1,563     (8,037     (1,542

Accounts payable

     27,025       4       20,368       2,935  

Other current liabilities

     (7,404     5,604       (1,553     (416

Other long-term liabilities

     438       34       1,481       42  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by continuing operating activities

     12,294       15,201       24,291       32,470  

Net cash provided by (used in) discontinued operating activities

     —         14,487       (5,168     30,974  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities

     12,294       29,688       19,123       63,444  
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows from investing activities

        

Purchase of property, plant and equipment

     (287     (291     (760     (831

Capitalized software development costs

     (2,587     (2,836     (5,602     (5,765

Purchase of intangible assets

     —         —         (1,950     —    

Acquisitions, net of cash acquired

     —         —         (90,184     —    

Purchase of equity investment

     (20,000     —         (20,000     —    

Investments in short-term deposits

     —         —         —         (5,000

Maturities of short-term deposits

     —         —         17,590       8,100  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in continuing investing activities

     (22,874     (3,127     (100,906     (3,496

Net cash used in discontinued investing activities

     —         (1,488     —         (2,940
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

     (22,874     (4,615     (100,906     (6,436
  

 

 

   

 

 

   

 

 

   

 

 

 

 

F-4


IRONSOURCE LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(U.S. dollars in thousands)

(Unaudited)

 

     Three months Ended
June 30,
    Six months Ended
June 30,
 
     2021     2020     2021     2020  
     (Unaudited)     (Unaudited)  

Cash flows from financing activities

        

Repayment of long-term loan

     (82,500     (1,250     (85,000     (2,500

Proceeds from Recapitalization transaction, net

     673,953         672,893       —    

Exercise of options

     45       272       342       661  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided (used in) continuing financing activities

     591,498       (978     588,235       (1,839

Net cash provided (used in) discontinued financing activities

     —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided (used in) financing activities

     591,498       (978     588,235       (1,839
  

 

 

   

 

 

   

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents and restricted cash

     (1,107     723       139       (448

Net change in cash and cash equivalents and restricted cash

     580,918       24,095       506,452       55,169  

Cash and cash equivalents and restricted cash at beginning of the period

     129,867       121,122       203,087       91,219  
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents and restricted cash at end of the period

   $ 709,678     $ 145,940     $ 709,678     $ 145,940  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

F-5