Exhibit 99.1
Otonomo Technologies Ltd.
Interim Unaudited Condensed
Consolidated Financial Statements
As at June 30, 2022
(Unaudited)
Otonomo Technologies Ltd.
Contents | Page |
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June 30 | December 31 | |||||||
2022 | 2021 | |||||||
Unaudited | Audited | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | 169,216 | 207,842 | ||||||
Short-term restricted cash | 255 | 237 | ||||||
Short-term investments | 98 | - | ||||||
Account receivables, net | 2,049 | 1,077 | ||||||
Other receivables and prepaid expenses | 2,519 | 2,683 | ||||||
Total current assets | 174,137 | 211,839 | ||||||
Non-current assets | ||||||||
Other long-term assets | 361 | 254 | ||||||
Property and equipment, net | 1,048 | 725 | ||||||
Operating lease right-of-use assets | 3,449 | - | ||||||
Intangible assets, net | 15,690 | 9,621 | ||||||
Goodwill | 13,827 | 37,000 | ||||||
Total non-current assets | 34,375 | 47,600 | ||||||
Total assets | 208,512 | 259,439 | ||||||
Liabilities and Shareholders' Equity | ||||||||
Current liabilities | ||||||||
Account payables | 1,201 | 312 | ||||||
Other payables and accrued expenses | 11,900 | 8,405 | ||||||
Deferred revenue | 341 | 35 | ||||||
Current portion of operating lease liabilities | 1,204 | - | ||||||
Current portion of contingent consideration | 5,120 | - | ||||||
Total current liabilities | 19,766 | 8,752 | ||||||
Non-current liabilities | ||||||||
Warrants for ordinary shares | 473 | 1,924 | ||||||
Operating lease liabilities, less current portion | 1,925 | - | ||||||
Contingent consideration, less current portion | 3,203 | - | ||||||
Total non-current liabilities | 5,601 | 1,924 | ||||||
Shareholders’ equity: | ||||||||
Ordinary shares, no par value; 450,000,000 shares authorized as at June 30, 2022 and December 31, 2021; | ||||||||
139,933,636 and 132,214,733 shares issued and outstanding as at June 30, 2022 and December 31, 2021, | ||||||||
respectively | - | - | ||||||
Additional paid-in capital | 365,532 | 349,825 | ||||||
Accumulated other comprehensive loss | (2,388 | ) | - | |||||
Accumulated deficit | (179,999 | ) | (101,062 | ) | ||||
Total shareholders’ equity | 183,145 | 248,763 | ||||||
Total liabilities and shareholders’ equity | 208,512 | 259,439 |
The accompanying notes are an integral part of the interim unaudited condensed consolidated financial statements.
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Six-month | Six-month | |||||||
period ended | period ended | |||||||
June 30 2022 | June 30 2021 | |||||||
Revenue | 2,951 | 496 | ||||||
Costs and operating expenses: | ||||||||
Cost of services | 1,341 | 423 | ||||||
Cloud infrastructure | 2,492 | 953 | ||||||
Research and development | 10,656 | 4,383 | ||||||
Sales and marketing | 10,503 | 2,682 | ||||||
General and administrative | 11,072 | 1,896 | ||||||
Depreciation and amortization | 1,728 | 64 | ||||||
Contingent consideration income | (1,541 | ) | - | |||||
Impairment of Goodwill | 37,000 | - | ||||||
Impairment of intangible assets | 8,785 | - | ||||||
Total costs and operating expenses | 82,036 | 10,401 | ||||||
Operating loss | (79,085 | ) | (9,905 | ) | ||||
Financial income (expenses), net | 428 | (3,142 | ) | |||||
Loss before income tax expense | (78,657 | ) | (13,047 | ) | ||||
Income tax expense | (280 | ) | (57 | ) | ||||
Net loss for the period | (78,937 | ) | (13,104 | ) | ||||
Net loss per share attributable to ordinary shareholders, basic and diluted | (0.58 | ) | (0.42 | ) | ||||
Weighted-average shares used in computing net loss per share attributable to ordinary shareholders, basic and diluted * | 135,725,885 | 31,517,618 | ||||||
Other comprehensive loss: | ||||||||
Foreign currency translation adjustments | (2,388 | ) | - | |||||
Total comprehensive loss for the period | (81,325 | ) | (13,104 | ) |
* The Company effected a share split as of the Recapitalization, all ordinary share and redeemable convertible preferred shares amounts were adjusted retroactively for all periods. See also Note 7 in Company’s audited consolidated financial statements for the year ended December 31, 2021.
The accompanying notes are an integral part of the interim unaudited condensed consolidated financial statements.
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Redeemable Convertible preferred shares | Ordinary shares | Additional paid-in capital | Accumulated other comprehensive loss | Accumulated deficit | Total | |||||||||||||||||||||||||||
Number of | USD | Number of | USD | USD | USD | USD | USD | |||||||||||||||||||||||||
Shares* | thousands | Shares* | thousands | thousands | thousands | thousands | thousands | |||||||||||||||||||||||||
Balance at December 31, 2021 | - | - | 132,214,733 | - | 349,825 | - | (101,062 | ) | 248,763 | |||||||||||||||||||||||
Shares issued related to the business acquisitions | - | - | 6,462,086 | - | 10,691 | - | - | 10,691 | ||||||||||||||||||||||||
Exercise of public warrants | - | - | 20 | - | ** | - | - | ** | ||||||||||||||||||||||||
Exercise of share options | - | - | 794,436 | - | 135 | - | - | 135 | ||||||||||||||||||||||||
Exercise of RSU | - | - | 462,361 | - | - | - | - | - | ||||||||||||||||||||||||
Share-based compensation | - | - | - | - | 4,881 | - | - | 4,881 | ||||||||||||||||||||||||
Net loss for the period | - | - | - | - | - | - | (78,937 | ) | (78,937 | ) | ||||||||||||||||||||||
Other comprehensive loss | - | - | - | - | - | (2,388 | ) | - | (2,388 | ) | ||||||||||||||||||||||
Balance at June 30, 2022 | - | - | 139,933,636 | - | 365,532 | (2,388 | ) | (179,999 | ) | 183,145 | ||||||||||||||||||||||
Balance at December 31, 2020 | 62,926,410 | 77,702 | 31,488,921 | - | 10,357 | - | (70,128 | ) | (59,771 | ) | ||||||||||||||||||||||
Exercise of warrants for redeemable convertible preferred shares | 1,179,456 | 10,896 | - | - | - | - | - | - | ||||||||||||||||||||||||
Exercise of share options | - | - | 43,520 | - | 27 | - | - | 27 | ||||||||||||||||||||||||
Share-based compensation | - | - | - | - | 1,048 | - | - | 1,048 | ||||||||||||||||||||||||
Net loss for the period | - | - | - | - | - | - | (13,104 | ) | (13,104 | ) | ||||||||||||||||||||||
Balance at June 30, 2021 | 64,105,866 | 88,598 | 31,532,441 | - | 11,432 | - | (83,232 | ) | (71,800 | ) |
The accompanying notes are an integral part of the interim unaudited condensed consolidated financial statements.
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Six-month | Six-month | |||||||
period ended | period ended | |||||||
June 30 | June 30 | |||||||
2022 | 2021 | |||||||
Cash flows from operating activities | ||||||||
Net loss | (78,937 | ) | (13,104 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 1,728 | 64 | ||||||
Share-based compensation | 4,881 | 1,048 | ||||||
Revaluation of warrants | (1,451 | ) | 3,165 | |||||
Impairment of Goodwill | 37,000 | - | ||||||
Impairment of intangible assets | 8,785 | - | ||||||
Contingent consideration income | (1,541 | ) | - | |||||
Deferred tax expense (benefit) | (12 | ) | - | |||||
Changes in operating assets and liabilities: | ||||||||
Account receivables | (141 | ) | (109 | ) | ||||
Other receivables and prepaid expenses | 1,279 | (887 | ) | |||||
Other payables and accrued expenses | 1,085 | 176 | ||||||
Account payables | 319 | 120 | ||||||
Deferred revenue | (35 | ) | (190 | ) | ||||
Other assets and liabilities | (271 | ) | (1 | ) | ||||
Net cash used in operating activities | (27,311 | ) | (9,718 | ) | ||||
Cash flows from investing activities | ||||||||
Purchases of property and equipment | (137 | ) | (90 | ) | ||||
Short-term investments, net | (98 | ) | 8,000 | |||||
Other long-term assets, net | (95 | ) | (1 | ) | ||||
Payments for business acquisitions, net of cash acquired | (11,020 | ) | - | |||||
Net cash provided by (used in) investing activities | (11,350 | ) | 7,909 | |||||
Cash flows from financing activities | ||||||||
Proceeds from exercise of share options and warrants | 135 | 27 | ||||||
Net cash provided by financing activities | 135 | 27 | ||||||
Foreign currency effect on cash and cash equivalents and short-term restricted cash | (82 | ) | - | |||||
Net decrease in cash and cash equivalents and short-term restricted cash equivalents | (38,608 | ) | (1,782 | ) | ||||
Cash and cash equivalents and short-term restricted cash equivalents at the beginning of the period | 208,079 | 14,984 | ||||||
Cash and cash equivalents and Short-term restricted cash equivalents as at end of the period | 169,471 | 13,202 | ||||||
Appendix A – Material non-cash financing activities: | ||||||||
Conversion of warrants to redeemable convertible preferred shares | - | 10,896 | ||||||
Shares issued related to the business acquisitions | 10,691 | - |
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Otonomo Technologies Ltd. (together with its subsidiaries, “Otonomo”, or the “Company”) was incorporated as an Israeli corporation in December 2015. The Company provides an automotive data service platform enabling car manufacturers, drivers, and service providers to be part of a connected ecosystem as well as mobility intelligence which transforms vast amounts of anonymized data and activity signals into actionable, impactful, and valuable insights. The Company’s solutions are designed to run in public clouds. |
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A summary of RSU activity and related information under the Company's equity incentive plan and the RSU award is as follows:
Weighted Average | ||||||||
Number of | grant date | |||||||
Options | Fair Value | |||||||
Unvested Balance at January 1, 2022 | 3,838,865 | |||||||
Granted * | 5,898,662 | $ | 2.08 | |||||
Vested | (403,024 | ) | $ | 5.46 | ||||
Forfeited | (130,234 | ) | $ | 3.87 | ||||
Unvested Balance at June 30, 2022 | 9,204,269 |
* The RSU awards generally vest over four years, with no exercise price.
The share-based compensation expenses by line item in the accompanying condensed consolidated statements of comprehensive loss is summarized as follows:
Six-months | Six-months | |||||||
period ended | period ended | |||||||
June 30 | June 30 | |||||||
2022 | 2021 | |||||||
USD thousand | USD thousand | |||||||
Cost of Services | 13 | - | ||||||
Research and development | 1,138 | 534 | ||||||
Sales and marketing | 1,467 | 200 | ||||||
General and administrative | 2,263 | 314 | ||||||
4,881 | 1,048 |
June 30 | December 31 | |||||||
2022 | 2021 | |||||||
Value of warrant per share | $ | 0.09 | $ | 0.37 | ||||
Number of ordinary shares issuable upon exercise of warrants | 5,200,000 | 5,200,000 | ||||||
Fair value of warrant liability (in USD thousand) | $ | 473 | $ | 1,924 |
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Note 4 - Warrants for ordinary shares (cont'd)
June 30 | December 31 | |||||||
2022 | 2021 | |||||||
Volatility | 68.5 | % | 41.0 | % | ||||
Risk-free interest rate | 3.01 | % | 1.2 | % | ||||
Expected dividends | 0.0 | % | 0.0 | % | ||||
Expected life (in years) | 4.12 | 4.6 |
The Company leases its headquarters in Israel. The lease agreement will expire in December 2022, and contains a renewal option of 2 years, which are reasonably certain to be exercised and therefore are factored into our determination of lease payments. In Addition, the Company acquired operating lease right-of-use assets and liabilities in Sheffield, UK, through the recent business combination of The Floow, which their lease agreements will expire in September 2027 and December 2029.
The following table presents the maturity of lease liabilities under the Company’s non-cancelable operating leases as Follows:
| USD thousand | ||
Six months ending December 31, 2022 | 538 | ||
2023 | 1,076 | ||
2024 | 1,076 | ||
2025 | 185 | ||
2026 | 185 | ||
Thereafter | 260 | ||
Total undiscounted minimum lease payments | 3,320 | ||
Less: Imputed interest | (191 | ) | |
3,129 |
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Note 6 - Business Combinations
Fair Value | Useful life | |||||||
USD thousand | In years | |||||||
Net tangible assets and liabilities assumed (current and non-current) | (1,355 | ) | ||||||
Customer Relationships | 9,454 | 8 | ||||||
Technology | 7,881 | 5 | ||||||
Trademark | 435 | 2 | ||||||
Goodwill | 14,934 | |||||||
31,349 |
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Note 6 - Business Combinations (cont'd)
The Floow acquisition (cont'd)
Contingent Consideration
As part of the purchase agreement, and as mentioned above, the Company is obligated to pay additional consideration to the former shareholders of The Floow (the "Sellers"), contingent upon achievement of certain future revenue of The Floow.
The Sellers will have 24 months following July 1, 2022 (the "Completion Date"), to earn the additional consideration of up to $12,000 thousand in cash and up to 6,545,454 of the Company’s ordinary shares in 2 tranches paid every 12 months.
As of acquisition, the Company evaluated the contingent consideration accrual related to the earnout provision in the amount of $9,864 thousand, which is reported in Current and Non-current contingent consideration in the accompanying condensed consolidated balance sheets. The Company used a probability-weighted future cash flows approach to estimate the contingent consideration. The amount accrued was discounted to include the present value of the liability. During the quarter ended June 30, 2022, the contingent consideration accrual decreased by $1,541 thousand that recorded under the contingent consideration income in the interim unaudited condensed consolidated statements of comprehensive loss.
Pro Forma on acquisitions
Six-month | Six-month | |||||||
Period ended | Period ended | |||||||
June 30 | June 30 | |||||||
2022 | 2021 | |||||||
USD thousands | USD thousands | |||||||
Revenue | 4,550 | 4,935 | ||||||
Net loss | 80,458 | 19,334 |
The pro forma financial information for all periods presented above has been calculated after adjusting the results of Neura and The Floow to reflect the business combination accounting effects resulting from these acquisitions, including the amortization expense from acquired intangible assets and the share-based compensation expenses for unvested share options as though the acquisition had been completed on January 1, 2021. The historical consolidated financial statements have been adjusted in the pro forma combined financial statements to give effect to pro forma events that are directly attributable to the business combination and factually supportable. The pro forma financial information is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of 2021.
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Six-month | Six-month | |||||||
period ended | period ended | |||||||
June 30 | June 30 | |||||||
2022 | 2021* | |||||||
In USD thousands, except share data | ||||||||
Numerator: | ||||||||
Net loss | (78,937 | ) | (13,104 | ) | ||||
Denominator: | ||||||||
Weighted-average shares used in computing net loss per share | ||||||||
attributable to ordinary shareholders, basic and diluted | 135,725,885 | 31,517,618 | ||||||
Net loss per share attributable to ordinary shareholders, basic | ||||||||
and diluted | (0.58 | ) | (0.42 | ) |
The potential shares of ordinary shares that were excluded from the computation of diluted net loss per share attributable to ordinary shareholders for the periods presented because including them would have been anti-dilutive are as follows:
Six-month | Six-month | |||||||
period ended | period ended | |||||||
June 30 | June 30 | |||||||
2022 | 2021* | |||||||
In USD thousands, except share data | ||||||||
Convertible redeemable preferred shares | - | 63,387,656 | ||||||
Warrants to convertible redeemable preferred shares | - | 1,081,168 | ||||||
Unvested RSU | 6,241,041 | - | ||||||
Outstanding share options | 7,725,144 | 9,351,584 | ||||||
Total | 13,966,185 | 73,820,408 |
*The Company effected a share split as of the Recapitalization, all ordinary share and redeemable convertible preferred shares amounts were adjusted retroactively for all periods. See also Note 7 in Company’s audited consolidated financial statements for the year ended December 31, 2021.
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