State of Israel | 7372 | Not applicable | ||||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
16 Abba Eban Blvd.
Herzliya Pituach 467256, Israel
+(972) 52-432-9955
John M. Greer Ryan J. Lynch Latham & Watkins LLP 811 Main Street, Suite 3700 Houston, Texas 77002 Tel: (713) 546-5400 | Joshua G. Kiernan Latham & Watkins LLP 99 Bishopsgate London EC2M 3XF United Kingdom Tel: (+44) (20) 7710-1000 | Amir Raz Perry Wildes Goldfarb Gross Seligman & Co. One Azrieli Center Tel Aviv 6701101, Israel +972 (3) 607-4444 |
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
The information in this document may change. The registrant may not complete the offer and issue these securities until the registration statement filed with the United States Securities and Exchange Commission is effective. This document is not an offer to sell these securities and it is not soliciting an offer to buy these securities, nor shall there be any sale of these securities, in any jurisdiction in which such offer, solicitation or sale is not permitted or would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. |

of
Otonomo Technologies Ltd.
for
Ordinary Shares
of
Otonomo Technologies Ltd.
and
Consent Solicitation
• | We have a limited operating history and may be unable to achieve or sustain profitability or accurately predict our future results; |
• | Our Cost Reduction Initiative and associated organizational changes may not adequately reduce our operating costs or improve operating margins, may lead to additional workforce attrition, and may cause operational disruptions; |
• | We have a limited operating history with a history of losses and expect to incur significant expenses and continuing losses for the foreseeable future; |
• | If we do not develop enhancements to our services and introduce new services that achieve market acceptance, our growth, business, results of operations and financial condition could be adversely affected; |
• | If we are unsuccessful at investing in growth opportunities, our business could be materially and adversely affected; |
• | We may need to raise additional funds in the future in order to execute our business plan and these funds may not be available to us when we need them. If we cannot raise additional funds when we need them, our business, prospects, financial condition and operating results could be negatively affected; |
• | We rely, in part, on partnerships to grow our business. These partnerships may not produce the expected financial or operating results we expect. In addition, if we are unable to enter into partnerships or successfully maintain them, our growth may be adversely impacted; |
• | In 2022, two customers accounted for a material portion of our revenue and, therefore, the loss of those customers could materially and adversely affect our business, results of operations and financial condition; |
• | Our business depends on expanding our base of data and insurance services consumers and consumers increasing their use of our services, and our inability to expand our base of consumers or any loss of consumers or decline in their use of our services could materially and adversely affect our business, results of operations and financial condition; |
• | If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards, changing regulations, and changing customer needs, requirements or preferences, our products may become less competitive; |
• | The market for our services and platform is new and unproven and may decline or experience limited growth and is dependent in part on consumers continuing to adopt our platform and use our services; |
• | We rely on the ability to access data from external providers at reasonable terms and prices. Our data providers might restrict our use of, or refuse to license, data, which could lead to our inability to access certain data or provide certain services and, as a result, materially and adversely affect our operating results and financial condition; |
• | If we are unable to expand our relationships with existing vehicle manufacturers (“OEMs”), vehicle fleet operators and other data providers, and add new OEMs, vehicle fleet operators and other data providers, our business, results of operations and financial condition could be adversely affected; |
• | Any failure to offer high quality user support may adversely affect our relationships with our consumers and prospective consumers, and adversely affect our business, results of operations and financial condition; |
• | Adverse conditions in the automotive industry or the global economy more generally could have adverse effects on our results of operations; |
• | The market in which we participate is intensely competitive, and if we do not compete effectively, our business, results of operations and financial condition could be harmed; |
• | We expect our results of operations to fluctuate on a quarterly and annual basis, which could cause the price of our securities to fluctuate or decline; |
• | Changes in tax laws or exposure to additional income tax liabilities could affect our future profitability; |
• | Changes in our product mix may impact our financial performance; |
• | We are highly dependent on the services of our CEO and founder, Ben Volkow; |
• | Our business depends on our ability to attract and retain highly skilled personnel and senior management; |
• | Our sales and operations in international markets expose us to operational, financial and regulatory risks; |
• | Our business is subject to the risks of earthquakes, fire, floods and other natural catastrophic events, global pandemics, and interruptions by man-made problems, such as network security breaches, computer viruses or terrorism. Material disruptions of our business or information systems resulting from these events could adversely affect our operating results; |
• | We are exposed to fluctuations in currency exchange rates that could adversely affect our financial results; |
• | Breaches of our networks or systems, or those of our data providers or partners, could degrade our ability to conduct our business, compromise the integrity of our products, platform and data, result in significant data losses and the theft of our intellectual property, damage our reputation, expose us to liability to third parties and require us to incur significant additional costs to maintain the security of our networks and data; |
• | Any disruption of service at the Cloud Service Providers that host our platform could harm our business; |
• | Climate change and related environmental issues may have an adverse effect on our business, financial condition and operating results; |
• | If we are unable to maintain The Floow’s existing relationships with insurance companies or establish new relationships with insurance companies, our business, results of operations, financial condition and growth potential could be adversely affected; |
• | Changes in the practices of insurance companies in the markets in which we provide our telematics services could adversely affect our business, results of operations, financial condition and growth potential; |
• | Failure to effectively combine vehicle and mobile data from Otonomo and The Floow could adversely affect our growth potential; |
• | Insurance products are highly regulated in the United States and other countries in which we operate; |
• | There is significant competition in the markets in which we offer our telematics services and products and our business, results of operations, financial condition and growth potential could be adversely affected if we fail to compete successfully; |
• | We may not obtain approval of the Warrant Amendment that would allow us to require that all outstanding warrants be exchanged for Ordinary Shares; and |
• | The other matters described in the section entitled “Risk Factors” of this Prospectus/Offer to Exchange. |
The Company | We are a leading one‑stop shop for mobility data. Otonomo fuels a data ecosystem of OEMs, fleets and service providers spanning the transportation, mobility and automotive industries. Our platform securely processes data globally from vehicles licensed on the platform and mobility demand data from multimodal sources, then reshapes and enriches it to accelerate time to market for new services that improve the mobility and transportation experience. We provide deeper visibility and actionable insights to empower strategic data‑driven decisions – taking the guesswork out of mobility and transportation planning, deployment and operations. |
Corporate Contact Information | We were incorporated in Israel on December 8, 2015 under the Israeli Companies Law, 5759 1999, and our principal executive office is located at 16 Abba Eban Blvd., Herzliya Pituach 467256, Israel. Our legal and commercial name is Otonomo Technologies Ltd. We are registered with the Israeli Registrar of Companies and our registration number is 51 53528-13. |
Warrants that qualify for the Offer | As of July 18, 2023, we had outstanding an aggregate of 13,824,976 warrants, including 8,624,976 public warrants and 5,200,000 private placement warrants. The warrants are governed by the Warrant Agreement, and each warrant is exercisable for one Ordinary Share at a price of $11.50 per share, subject to adjustments pursuant to the Warrant Agreement. Pursuant to the Offer, we are offering up to an aggregate of 3,456,244 Ordinary Shares in exchange for all of the outstanding warrants. |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and |
• | if, and only if, the reported last sale price of the Ordinary Shares equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period commencing on August 13, 2021 and ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders. |
Market Price of Our Shares | Our Ordinary Shares and public warrants are listed on Nasdaq under the symbols “OTMO” and “OTMOW,” respectively. See “Market Information, Dividends and Related Shareholder Matters.” |
The Offer | Each warrant holder who tenders warrants for exchange pursuant to the Offer will receive 0.25 Ordinary Shares for each warrant so exchanged. No fractional Ordinary Shares will be issued pursuant to the Offer. In lieu of issuing fractional shares, any holder of warrants who would otherwise have been entitled to receive a fractional share pursuant to the Offer will, after aggregating all such fractional shares of such holder, receive one additional whole Ordinary Share in lieu of such fractional shares. Our obligation to complete the Offer is not conditioned on the receipt of a minimum number of tendered warrants. |
The Consent Solicitation | In order to tender warrants in the Offer and Consent Solicitation, holders are required to consent (by executing the Letter of Transmittal and Consent or requesting that their broker or nominee consent on their behalf) to an amendment to the Warrant Agreement governing the warrants as set forth in the Warrant Amendment attached as Annex A to this Prospectus/Offer to Exchange. If adopted, the Warrant Amendment would permit the Company to require that all warrants that are outstanding upon the closing of the Offer be converted into Ordinary Shares at a ratio of 0.225 Ordinary Shares per warrant (a ratio which is 10% less than the exchange ratio applicable to the Offer). Upon such conversion, no warrants will remain outstanding. |
Purpose of the Offer and Consent Solicitation | The purpose of the Offer and Consent Solicitation is to attempt to simplify our capital structure and reduce the potentially dilutive impact of the warrants. See “The Offer and Consent Solicitation — Background and Purpose of the Offer and Consent Solicitation.” |
Offer Period | The Offer and Consent Solicitation will expire on the Expiration Date, which is 11:59 p.m., Eastern Time, on August 21, 2023, or such later time and date to which we may extend. All warrants tendered for exchange pursuant to the Offer and Consent Solicitation, and all required related paperwork, must be received by the exchange agent by the Expiration Date, as described in this Prospectus/Offer to Exchange. |
Amendments to the Offer and Consent Solicitation | We reserve the right at any time or from time to time to amend the Offer and Consent Solicitation, including by increasing or (if the conditions to the Offer are not satisfied) decreasing the exchange ratio of Ordinary Shares issued for every warrant exchanged or by changing the terms of the Warrant Amendment. If we make a material change in the terms of the Offer and Consent Solicitation or the information concerning the Offer and Consent Solicitation, or if we waive a material condition of the Offer and Consent Solicitation, we will extend the Offer and Consent Solicitation to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(3) under the Exchange Act. See the section entitled “The Offer and Consent Solicitation — General Terms — Amendments to the Offer and Consent Solicitation.” |
Conditions to the Offer and Consent Solicitation | The Offer is subject to customary conditions, including the effectiveness of the registration statement of which this Prospectus/Offer to Exchange forms a part and the absence of any action or proceeding, statute, rule, regulation or order that would challenge or restrict the making or completion of the Offer. The Offer is not conditioned upon the receipt of a minimum number of tendered warrants. However, the Consent Solicitation is conditioned upon receiving the consent of holders of a majority of the number of the then outstanding public warrants (which is the minimum number required to amend the Warrant Agreement). We may waive some of the conditions to the Offer. See the section entitled “The Offer and Consent Solicitation — General Terms — Conditions to the Offer and Consent Solicitation.” |
Withdrawal Rights | If you tender your warrants for exchange and change your mind, you may withdraw your tendered warrants (and thereby automatically revoke the related consent to the Warrant Amendment) at any time prior to the Expiration Date, as described in greater detail in the section entitled “The Offer and Consent Solicitation — Procedure for Tendering Warrants for Exchange and Consenting to the Warrant Amendment — Withdrawal Rights.” If the Offer Period is extended, you may withdraw your tendered warrants (and thereby automatically revoke the related consent to the Warrant Amendment) at any time until the extended Expiration Date. In addition, tendered warrants that are not accepted by us for exchange by August 21, 2023 may thereafter be withdrawn by you until such time as the warrants are accepted by us for exchange. |
Participation by Directors, Officers and Affiliates | An entity affiliated with one of our directors holds warrants and may participate in the Offer. None of our directors, executive officers or affiliates are required to participate in the Offer. See “The Offer and Consent Solicitation — Interests of Directors, Executive Officers and Others.” |
Federal and State Regulatory Approvals | Other than compliance with the applicable federal and state securities laws, no federal or state regulatory requirements must be complied with and no federal or state regulatory approvals must be obtained in connection with the Offer and Consent Solicitation. |
Absence of Appraisal or Dissenters’ Rights | Holders of warrants do not have any appraisal or dissenters’ rights under applicable law in connection with the Offer and Consent Solicitation. |
U.S. Federal Income Tax Consequences of the Offer to U.S. Holders | For a U.S. Holder (as defined in the section entitled “Material U.S. Federal Income Tax Considerations”) of warrants who participates in the Offer, we intend to treat such U.S. Holder’s exchange of warrants for our Ordinary Shares in the Offer as a “recapitalization” within the meaning of Section 368(a)(1)(E) of the Code pursuant to which, subject to the discussion of the PFIC rules below under “Material U.S. Federal Income Tax Considerations — Passive Foreign Investment Company Rules — Effect of PFIC Rules on Offer and Warrant Amendment”) (i) such U.S. Holder should not recognize any gain or loss on the exchange of warrants for Ordinary Shares, (ii) such U.S. Holder’s aggregate tax basis in our Ordinary Shares received in the exchange should equal the U.S. Holder’s aggregate tax basis in such U.S. Holder’s warrants surrendered in the exchange, and (iii) such U.S. Holder’s holding period for our Ordinary Shares received in the exchange should include the U.S. Holder’s holding period for the surrendered warrants. However, because there is a lack of direct legal authority regarding the U.S. federal income tax consequences of the exchange of warrants for our Ordinary Shares, there can be no assurance in this regard and alternative characterizations are possible by the IRS or a court, including ones that would require U.S. Holders to recognize taxable income. |
Israeli Tax Consequences of the Offer | See “Material Israeli Tax Considerations.” |
No Recommendation | None of our board of directors, our management, our affiliates the dealer manager, the exchange agent, the information agent or any other person makes any recommendation on whether you should tender or refrain from tendering all or any portion of your warrants or consent to the Warrant Amendment, and no one has been authorized by any of them to make such a recommendation. |
Risk Factors | You should consider all the information contained in this Prospectus/Offer to Exchange in deciding whether or not to participate in the Offer and Consent Solicitation. In particular, you should consider the risk factors described in the section entitled “Risk Factors” beginning on page 14 of this Prospectus/Offer to Exchange. Such risks include, but are not limited to, the following: |
• | The Warrant Amendment, if adopted, will allow us to require that all outstanding warrants be converted into Ordinary Shares at a ratio 10% lower than the exchange ratio applicable to the Offer. |
• | The exchange of warrants for Ordinary Shares will increase the number of shares eligible for future resale and result in dilution to our shareholders. |
• | We have not obtained a third-party determination that the Offer or the Consent Solicitation is fair to warrant holders. |
• | There is no guarantee that tendering your warrants in the Offer will put you in a better future economic position. |
• | The number of Ordinary Shares offered in the Offer is fixed and will not be adjusted (subject to any amendment by us of the Offer and Consent Solicitation). The market price of our Ordinary Shares may fluctuate, and the market price of our Ordinary Shares when we deliver our Ordinary Shares in exchange for your warrants could be less than the market price at the time you tender your warrants. |
• | We may redeem your unexpired public warrants that are not exchanged prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless. |
• | The warrants that are not exchanged may have reduced liquidity and may be delisted by Nasdaq. |
• | The Israel Tax Authority (the “ITA”) may implement Israeli tax withholding requirements in a different manner than contemplated herein. |
• | The pending Merger may not be completed on the currently contemplated timeline or terms, or at all. |
• | The pendency of the Merger could adversely affect our business and operations. |
• | Otonomo will incur significant transaction and transition costs in connection with the Merger. |
• | If the Merger is not completed, the price of our Ordinary Shares may fluctuate significantly. |
• | Otonomo’s Cost Reduction Initiative and associated organizational changes may not adequately reduce its operating costs or improve operating margins, may lead to additional workforce attrition, and may cause operational disruptions. |
• | Otonomo has a limited operating history with a history of losses and expects to incur significant expenses and continuing losses for the foreseeable future. |
• | In 2022, two customers accounted for a material portion of Otonomo’s revenues and, therefore, the loss of those customers could materially and adversely affect its business, results of operations and financial condition. |
• | Otonomo’s business depends on expanding its base of data and insurance services consumers and consumers increasing their use of its services, and its inability to expand its base of consumers or any loss of consumers or decline in their use of its services could materially and adversely affect its business, results of operations and financial condition. |
• | Otonomo relies on the ability to access data from external providers at reasonable terms and prices. Otonomo’s data providers might restrict its use of, or refuse to license, data, which could lead to its inability to access certain data or provide certain services and, as a result, materially and adversely affect its operating results and financial condition. |
• | If Otonomo is unable to expand its relationships with existing OEMs and vehicle fleet operators and add new OEMs and vehicle fleet operators and other data providers, its business, results of operations and financial condition could be adversely affected. |
• | If Otonomo is unable to maintain The Floow’s existing relationships with insurance companies or establish new relationships with insurance companies, its business, results of operations, financial condition and growth potential could be adversely affected. |
• | Changes in the practices of insurance companies in the markets in which Otonomo provides its telematics services could adversely affect its business, results of operations, financial condition and growth potential. |
• | There is significant competition in the markets in which Otonomo offers its telematics services and products and its business, results of operations, financial condition and growth potential could be adversely affected if it fails to compete successfully. |
• | A market for Otonomo’s securities may not be sustained, which would adversely affect the liquidity and price of its securities. |
• | If Otonomo fails to comply with the continued listing requirements of Nasdaq, Otonomo would face possible delisting, which would result in a limited public market for its shares. |
• | The market price and trading volume of the Ordinary Shares may be volatile. |
Exchange Agent | The depositary and exchange agent for the Offer and Consent Solicitation is: |
Operations Center
Brooklyn, New York 11219
E-mail: ReorgVoluntary@equiniti.com
Dealer Manager | The dealer manager for the Offer and Consent Solicitation is: |
Additional Information | We recommend that our warrant holders review the registration statement on Form F-4, of which this Prospectus/Offer to Exchange forms a part, including the exhibits that we have filed with the SEC in connection with the Offer and Consent Solicitation and our other materials that we have filed with the SEC before making a decision on whether to tender for exchange in the Offer and consent to the Warrant Amendment. All reports and other documents we have filed with the SEC can be accessed electronically on the SEC’s website at www.sec.gov. |
Selected Unaudited Pro Forma Condensed Combined Statement of Operations Data (in thousands, except per share amounts) | Three months ended March 31, 2023 | Year ended December 31, 2022 | ||||||
Revenues | $ | 51,417 | $ | 194,581 | ||||
Net loss | (32,000 | ) | (144,336 | ) | ||||
Net loss per share attributable to common stockholders: | ||||||||
Basic and Diluted | (0.05 | ) | (0.26 | ) |
Selected Unaudited Pro Forma Condensed Combined Balance Sheet Data (in thousands) | As of March 31, 2023 | |||
Total assets | $ | 197,452 | ||
Total liabilities | 124,181 | |||
Total stockholder’s equity | 73,271 |
• | the market price of our securities could decline; |
• | we will be required to pay our costs relating to the Merger, such as legal, accounting, financial advisor, filing and integration costs that have already been incurred or will continue to be incurred until the closing of the Merger, whether or not the Merger is completed; |
• | if the Merger Agreement is terminated and our board of directors seeks another merger, our shareholders cannot be certain that we will be able to find another party willing to enter into a transaction as attractive to us as the Merger; |
• | we could be subject to litigation related to any failure to complete Merger or related to any enforcement proceeding commenced against us to perform our obligations under the Merger Agreement; |
• | we will not realize the benefit of the time and resources, financial and otherwise, committed by our management to matters relating to Merger that could have been devoted to pursuing other beneficial opportunities; and |
• | we may experience reputational harm due to the adverse perception of any failure to successfully complete the Merger or negative reactions from the financial markets or from our suppliers, customers, employees and other commercial relationships; and |
• | any of these risks could adversely affect our business, results of operations and financial condition. Similarly, delays in the completion of the Merger could, among other things, result in additional transaction costs, loss of revenue or other negative effects associated with delay and uncertainty about completion of the Merger and could adversely affect our business, results of operations and financial condition. |
• | if the Merger Agreement is terminated under certain specified circumstances, Otonomo will be required to pay Urgently a termination fee of up to $3.0 million; |
• | the price of the Ordinary Shares may decline and could fluctuate significantly; and |
• | the incurrence of costs related to the Merger, such as financial advisor, legal and accounting fees, a majority of which must be paid even if the Merger is not completed. |
• | Otonomo’s engineering team, the development of new products, features and functionality and enhancements in its Connected Fleet platform and the Otonomo Connected Insurance Tech Business; |
• | research and development; and |
• | general administration costs, including legal costs, accounting costs, and other expenses related to being a public company. |
• | The timing of revenues generated in any quarter; |
• | Pricing changes Otonomo may adopt to drive market adoption or in response to competitive pressure; |
• | Otonomo’s ability to retain its existing customers and attract new customers; |
• | Otonomo’s ability to integrate acquired companies and businesses; |
• | Otonomo’s ability to develop, introduce and sell services and products in a timely manner that meet customer requirements; |
• | Disruptions in its sales channels or termination of its relationship with partners; |
• | Delays in customers’ purchasing cycles or deferments of customers’ purchases in anticipation of new services or updates from it or its competitors; |
• | Fluctuations in demand pressures for its products; |
• | The mix of services sold in any quarter; |
• | The timing and rate of broader market adoption of its data service platform; |
• | Market acceptance of its services and further technological advancements by its competitors and other market participants; |
• | Any change in the competitive dynamics of its markets, including consolidation of competitors, regulatory developments and new market entrants; |
• | Changes in the source, cost, availability of and regulations pertaining to materials it uses; |
• | Adverse litigation, judgments, settlements or other litigation‑related costs, or claims that may give rise to such costs; |
• | Foreign currency fluctuations, interest rates, inflation, recession risks and economic recovery timing; and |
• | General economic, industry and market conditions, including trade disputes. |
• | Changes in tax laws or the regulatory environment; |
• | Changes in accounting and tax standards or practices; |
• | Changes in the composition of operating income by tax jurisdiction; and |
• | Otonomo’s operating results before taxes. |
• | Foreign currency exchange rate fluctuations; political and economic instability, international terrorism and anti‑American sentiment, particularly in emerging markets; |
• | Rising inflation in the economies in which Otonomo operates and its ability to control costs, including operating expenses; |
• | Potential for violations of anti‑corruption laws and regulations, such as those related to bribery and fraud; |
• | Preference for locally branded products, and laws and business practices favoring local competition; |
• | Potential consequences of, and uncertainty related to, the “Brexit” process in the United Kingdom, which could lead to additional expense and complexity in doing business there; |
• | Delayed revenue recognition; |
• | Less effective protection of intellectual property; |
• | Stringent regulation of the autonomous or other systems, or products using its products and rigorous consumer protection and product compliance regulations, including but not limited to General Data Protection Regulation in the European Union, European competition law, the Restriction of Hazardous Substances directive, the Waste Electrical and Electronic Equipment directive and the European Ecodesign directive that are costly to comply with, and may vary from country to country; |
• | Difficulties and costs of staffing and managing foreign operations; |
• | Import and export laws and the impact of tariffs; and |
• | Changes in local tax and customs duty laws or changes in the enforcement, application or interpretation of such laws. |
• | accepting vehicle location as a preferred security product; |
• | requiring or providing a premium discount for using location and recovery services and products; and |
• | mandating or encouraging the use of its telematics services, or similar services and products, for drivers. |
• | lower overall demand for goods and services, leading to reduced profitability; |
• | reduced credit availability; |
• | higher borrowing costs; |
• | reduced liquidity; |
• | volatility in credit, equity and foreign exchange markets; and |
• | bankruptcies. |
• | the realization of any of the risk factors presented in this Prospectus/Offer to Exchange; |
• | actual or anticipated differences in its estimates, or in the estimates of analysts, for its revenues, Adjusted EBITDA, results of operations, level of indebtedness, liquidity or financial condition; |
• | additions and departures of key personnel; |
• | failure to comply with the requirements of Nasdaq; |
• | failure to comply with the Sarbanes‑Oxley Act or other laws or regulations; |
• | future issuances, sales, resales or repurchases or anticipated issuances, sales, resales or repurchases, of its securities including due to the expiration of contractual lock‑up agreements; |
• | publication of research reports about Otonomo; |
• | the performance and market valuations of other similar companies; |
• | failure of securities analysts to initiate or maintain coverage of it, changes in financial estimates by any securities analysts who follow it or its failure to meet these estimates or the expectations of investors; |
• | new laws, regulations, subsidies, or credits or new interpretations of existing laws applicable to Otonomo; |
• | commencement of, or involvement in, litigation involving Otonomo; |
• | broad disruptions in the financial markets, including sudden disruptions in the credit markets; |
• | speculation in the press or investment community; |
• | actual, potential or perceived control, accounting or reporting problems; |
• | changes in accounting principles, policies and guidelines; and |
• | other events or factors, including those resulting from infectious diseases, health epidemics and pandemics (such as the COVID-19 pandemic), natural disasters, war, acts of terrorism or responses to these events. |
• | labor availability and costs for hourly and management personnel; |
• | profitability of its products, especially in new markets and due to seasonal fluctuations; |
• | changes in interest rates; |
• | impairment of long‑lived assets; |
• | macroeconomic conditions, both internationally and locally; |
• | changes in consumer preferences and competitive conditions; |
• | expansion to new markets; and |
• | fluctuations in commodity prices. |
• | its shareholders’ proportionate ownership interest in it will decrease; |
• | the amount of cash available per share, including for payment of dividends in the future, may decrease; |
• | the relative voting strength of each previously outstanding Ordinary Share may be diminished; and |
• | the market price of the Ordinary Shares may decline. |
• | The accompanying notes to the unaudited pro forma condensed combined financial information; |
• | The separate unaudited condensed consolidated financial statements of Urgently as of and for the three months ended March 31, 2023 and the related notes, included elsewhere in this Prospectus/Offer to Exchange; |
• | The separate audited consolidated financial statements of Urgently as of and for the year ended December 31, 2022 and the related notes, included in this Prospectus/Offer to Exchange; |
• | The separate unaudited condensed consolidated financial statements of Otonomo as of and for the three months ended March 31, 2023 and the related notes, included elsewhere in this Prospectus/Offer to Exchange; |
• | The separate audited consolidated financial statements of Otonomo as of and for the year ended December 31, 2022 and the related notes, included in this Prospectus/Offer to Exchange; and |
• | The section of this Prospectus/Offer to Exchange entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” |
Historical | Pro Forma Combined | |||||||||||||||||||
Urgently | Otonomo | Transaction Accounting Adjustments Note 3 | Notes | |||||||||||||||||
Assets | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 7,730 | $ | 23,102 | — | $ | 30,832 | |||||||||||||
Restricted cash | 1,050 | 302 | — | 1,352 | ||||||||||||||||
Short-term deposits | — | 50,101 | — | 50,101 | ||||||||||||||||
Marketable securities | — | 56,264 | — | 56,264 | ||||||||||||||||
Accounts receivable, net | 30,452 | 970 | — | 31,422 | ||||||||||||||||
Prepaid expenses and other current assets | 1,233 | 1,896 | — | 3,129 | ||||||||||||||||
Total current assets | 40,465 | 132,635 | — | 173,100 | ||||||||||||||||
Right-of-use assets | 2,316 | 1,792 | — | 4,108 | ||||||||||||||||
Property and equipment, net | 403 | 918 | — | 1,321 | ||||||||||||||||
Intangible assets, net | 31 | — | 18,000 | 3A | 18,031 | |||||||||||||||
Other non-current assets | 501 | 391 | — | 892 | ||||||||||||||||
Total assets | $ | 43,716 | $ | 135,736 | $ | 18,000 | $ | 197,452 | ||||||||||||
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Deficit | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Accounts payable | $ | 12,023 | $ | 5,310 | $ | — | $ | 17,333 | ||||||||||||
Accrued expenses | 22,254 | 6,548 | 13,993 | 3B | 42,795 | |||||||||||||||
Accrued interest | 8,784 | — | (8,784 | ) | 3C | — | ||||||||||||||
Deferred revenue, current | 62 | 186 | — | 248 | ||||||||||||||||
Current lease liabilities | 714 | 653 | — | 1,367 | ||||||||||||||||
Current portion of contingent consideration | — | 2,292 | — | 2,292 | ||||||||||||||||
Current portion of long-term debt | 53,786 | — | — | 53,786 | ||||||||||||||||
Total current liabilities | 97,623 | 14,989 | 5,209 | 117,821 | ||||||||||||||||
Long-term lease liabilities | 1,964 | 1,005 | — | 2,969 | ||||||||||||||||
Long-term debt, net | 50,206 | — | (50,206 | ) | 3D | — | ||||||||||||||
Derivative liability | 33,368 | — | (32,876 | ) | 3D | 492 | ||||||||||||||
Warrant liability | 10,324 | 160 | (10,324 | ) | 3D | 160 | ||||||||||||||
Other long-term liabilities | 2,739 | — | — | 2,739 | ||||||||||||||||
Total liabilities | 196,224 | 16,154 | (88,197 | ) | 124,181 | |||||||||||||||
Redeemable convertible preferred stock | 46,334 | — | (46,334 | ) | 3D | — | ||||||||||||||
Stockholders’ deficit: | ||||||||||||||||||||
Common stock | 14 | — | 586 | 3E | 600 | |||||||||||||||
Additional paid-in capital | 48,390 | 372,515 | (124,328 | ) | 3E | 296,577 | ||||||||||||||
Accumulated other comprehensive loss | — | (5,024 | ) | 5,024 | 3E | — | ||||||||||||||
Accumulated deficit | (247,246 | ) | (247,909 | ) | 271,249 | 3E | (223,906 | ) | ||||||||||||
Total stockholders’ equity (deficit) | (198,842 | ) | 119,582 | 152,531 | 73,271 | |||||||||||||||
Total liabilities, redeemable convertible preferred stock and stockholders’ deficit | $ | 43,716 | $ | 135,736 | $ | 18,000 | $ | 197,452 |
Historical | ||||||||||||||||||||
Urgently | Otonomo | Transaction Accounting Adjustments Note 4 | Notes | Pro Forma Combined | ||||||||||||||||
Revenues | $ | 49,578 | $ | 1,839 | $ | — | $ | 51,417 | ||||||||||||
Cost of revenues | 40,319 | 1,204 | — | 41,523 | ||||||||||||||||
Cloud infrastructure | — | 754 | — | 754 | ||||||||||||||||
Gross margin | 9,259 | (119 | ) | — | 9,140 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||
Research and development | 3,742 | 3,550 | — | 7,292 | ||||||||||||||||
Sales and marketing | 1,072 | 4,642 | — | 5,714 | ||||||||||||||||
Operations and support | 7,201 | — | — | 7,201 | ||||||||||||||||
General and administrative | 7,480 | 7,344 | — | 14,824 | ||||||||||||||||
Depreciation and amortization | 72 | 87 | 1,000 | 4B | 1,159 | |||||||||||||||
Contingent consideration expense | — | 1,381 | — | 1,381 | ||||||||||||||||
Total operating expenses | 19,567 | 17,004 | 1,000 | 37,571 | ||||||||||||||||
Operating loss | (10,308 | ) | (17,123 | ) | (1,000 | ) | (28,431 | ) | ||||||||||||
Other income (expense), net: | ||||||||||||||||||||
Interest expense, net | (10,951 | ) | 1,239 | 6,045 | 4C | (3,667 | ) | |||||||||||||
Change in fair value of derivative liability | (111 | ) | — | 111 | 4C | — | ||||||||||||||
Change in fair value of warrant liability | 3,633 | (5 | ) | (3,633 | ) | 4D | (5 | ) | ||||||||||||
Foreign exchange loss | (11 | ) | 140 | — | 129 | |||||||||||||||
Loss before provision for income taxes | (17,748 | ) | (15,749 | ) | 1,523 | (31,974 | ) | |||||||||||||
Provision for income taxes | — | 26 | — | 26 | ||||||||||||||||
Net loss | $ | (17,748 | ) | $ | (15,775 | ) | $ | 1,523 | $ | (32,000 | ) | |||||||||
Loss per share: | ||||||||||||||||||||
Basic and diluted | $ | (1.27 | ) | $ | (0.11 | ) | $ | (0.05 | ) | |||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||
Basic and diluted | 13,937 | 142,426 | 599,894 |
Historical | ||||||||||||||||||||
Urgently | Otonomo | Transaction Accounting Adjustments Note 4 | Notes | Pro Forma Combined | ||||||||||||||||
Revenues | $ | 187,589 | $ | 6,992 | $ | — | $ | 194,581 | ||||||||||||
Cost of revenues | 167,442 | 3,367 | — | 170,809 | ||||||||||||||||
Cloud infrastructure | — | 4,777 | — | 4,777 | ||||||||||||||||
Gross margin | 20,147 | (1,152 | ) | — | 18,995 | |||||||||||||||
�� | ||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Research and development | 16,733 | 22,573 | — | 39,306 | ||||||||||||||||
Sales and marketing | 5,647 | 21,761 | — | 27,408 | ||||||||||||||||
Operations and support | 36,893 | — | — | 36,893 | ||||||||||||||||
General and administrative | 14,129 | 22,059 | 13,993 | 4A | 50,181 | |||||||||||||||
Depreciation and amortization | 297 | 2,749 | 1,510 | 4B | 4,556 | |||||||||||||||
Impairment of goodwill/intangibles | — | 72,041 | (72,041 | ) | 4E | — | ||||||||||||||
Contingent consideration income | — | (8,954 | ) | — | (8,954 | ) | ||||||||||||||
Total operating expenses | 73,699 | 132,229 | (56,538 | ) | 149,390 | |||||||||||||||
Operating loss | (53,552 | ) | (133,381 | ) | 56,538 | (130,395 | ) | |||||||||||||
Other income (expense), net: | ||||||||||||||||||||
Interest expense, net | (31,447 | ) | 1,857 | 15,285 | 4C | (14,305 | ) | |||||||||||||
Change in fair value of derivative liability | (4,077 | ) | — | 4,077 | 4C | — | ||||||||||||||
Change in fair value of warrant liability | (5,809 | ) | 1,769 | 5,809 | 4D | 1,769 | ||||||||||||||
Warrant expense | (1,009 | ) | — | 1,009 | 4D | — | ||||||||||||||
Foreign exchange loss | (88 | ) | (1,171 | ) | — | (1,259 | ) | |||||||||||||
Loss before provision for income taxes | (95,982 | ) | (130,926 | ) | 82,718 | (144,190 | ) | |||||||||||||
Provision for income taxes | — | 146 | — | 146 | ||||||||||||||||
Net loss | $ | (95,982 | ) | $ | (131,072 | ) | $ | 82,718 | $ | (144,336 | ) | |||||||||
Loss per share: | ||||||||||||||||||||
Basic and diluted | $ | (10.54 | ) | $ | (0.95 | ) | $ | (0.26 | ) | |||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||
Basic and diluted | 9,104 | 138,363 | 559,074 |
(in thousands, except exchange ratio and share price) | ||||
Otonomo shares outstanding as of March 31, 2023 | 143,589 | |||
Exchange Ratio, as defined in the Merger Agreement | 1.42 | |||
Urgently stock to be issued in exchange | 203,178 | |||
Urgently estimated stock value at March 31, 2023 | $ | 0.45 | ||
Estimated consideration | $ | 91,430 |
Estimated common stock value | Consideration | Bargain purchase gain | ||||||||||
(in thousands, except per share amounts) | ||||||||||||
Increase of 10% | $ | 0.50 | $ | 100,573 | $ | 37,009 | ||||||
Decrease of 10% | $ | 0.41 | $ | 82,287 | $ | 55,295 |
(in thousands) | ||||
Cash and cash equivalents | $ | 23,102 | ||
Restricted cash | 302 | |||
Short-term deposits | 50,101 | |||
Marketable securities | 56,264 | |||
Accounts receivable | 970 | |||
Prepaid expenses and other current assets | 1,896 | |||
Right-of-use assets | 1,792 | |||
Property and equipment, net | 918 | |||
Intangible assets | 18,000 | |||
Other non-current assets | 391 | |||
Total assets acquired | 153,736 | |||
Accounts payable | 5,310 | |||
Accrued expenses and other payables | 6,548 | |||
Deferred revenue | 186 | |||
Current portion of contingent consideration | 2,292 | |||
Lease liabilities | 1,658 | |||
Warrant liability | 160 | |||
Total liabilities assumed | 16,154 | |||
Net assets acquired | 137,582 | |||
Purchase price | 91,430 | |||
Bargain purchase gain | $ | 46,152 |
Preliminary fair value | Estimated useful life | |||||||
(in thousands) | (in years) | |||||||
Customer contracts | $ | 3,000 | 3 | |||||
Software | 15,000 | 5 | ||||||
$ | 18,000 |
A. | Reflects the capitalization of the preliminary purchase accounting adjustments for estimated intangible assets based on the acquisition method of accounting. |
B. | Reflects the accrual of Urgently and Otonomo estimated transaction costs. |
C. | Reflects the elimination of accrued interest on convertible notes that will convert into common stock at the time of the Merger. |
D. | Reflects adjustments to remove Urgently’s long-term debt, derivative liability, warrant liability, and redeemable convertible preferred stock due to the expected conversion of convertible notes (and the corresponding derivative liability) and the exchange of the outstanding warrants (“Urgently Warrants”) to acquire shares of Urgently common stock or shares of Urgently’s preferred stock, par value $0.001 per share (“Urgently Preferred Stock”), and Urgently Preferred Stock into Urgently common stock at the time of the Merger. Certain of the Urgently’s convertible notes are convertible pursuant to their terms in connection with the transactions contemplated in connection with the Merger. Urgently has sought and is in the process of obtaining consents from the holders of its outstanding convertible notes that are not automatically convertible to amend such convertible notes to provide for their conversion in connection with the transactions contemplated in connection with the Merger. Similarly, certain outstanding Urgently Warrants are automatically exercisable into Urgently common stock pursuant to their terms in connection with the transactions contemplated in connection with the Merger. In connection with the signing of the Merger Agreement, Urgently sought and obtained consents from the holders of its outstanding redeemable convertible preferred stock to convert such shares into Urgently common stock in connection with and contingent upon the closing of the Merger. |
E. | Reflects adjustments to Urgently’s stockholder’s equity for the conversion of convertible notes, incentive plan awards, and Urgently Warrants into Urgently common stock at the time of the Merger; the elimination of Otonomo’s historical common stock, additional paid-in capital, accumulated other comprehensive income, and accumulated deficit; the accrual of estimated transaction costs related to the Merger; and the stock consideration component of the Merger. |
(in thousands) | Common stock | Additional paid-in capital | Accumulated other comprehensive income | Accumulated deficit | ||||||||||||
Conversion of Urgently Preferred Stock, convertible notes, incentive plan awards, and Urgently Warrants to Urgently common stock | $ | 383 | $ | 156,960 | $ | — | $ | (8,819 | ) | |||||||
Elimination of Otonomo’s historical shareholders’ equity | — | (372,515 | ) | 5,024 | 247,909 | |||||||||||
Accrual of Urgently and Otonomo estimated transaction costs | — | — | — | (13,993 | ) | |||||||||||
Estimated merger consideration | 203 | 91,227 | — | 46,152 | ||||||||||||
$ | 586 | $ | (124,328 | ) | $ | 5,024 | $ | 271,249 |
A. | For the year ended December 31, 2022, reflects an adjustment to record estimated transaction costs related to the Merger, which Urgently and Otonomo are expected to incur after March 31, 2023 and up until the date of the Merger. These additional merger transaction costs, which include investment banking fees, legal and professional fees, and lender fees, are not included in the annual financial information of Otonomo and Urgently for the year ended December 31, 2022 presented in the first two columns in the pro-forma condensed statements above. These merger transaction costs are not expected to affect the combined company’s income statement beyond 12 months after the Merger date. Approximately $8.2 million of transaction costs incurred are included in the historical statements of operations for Urgently and Otonomo for the three months ended March 31, 2023. |
B. | Reflects the adjustments to eliminate Otonomo’s historical amortization expense and impairment of goodwill and intangible assets, and to record new amortization expense based on the fair value of the identifiable acquired intangible assets: |
Three months ended March 31, 2023 | Year ended December 31, 2022 | |||||||
(in thousands) | ||||||||
Elimination of Otonomo’s historical amortization expense | $ | — | $ | (2,490 | ) | |||
Amortization of acquired intangible assets | 1,000 | 4,000 | ||||||
$ | 1,000 | $ | 1,510 |
C. | Reflects the adjustments to eliminate historical interest expense and changes in fair value of derivative liabilities related to convertible notes of Urgently that will convert into common stock at the time of the Merger. |
D. | Reflects the adjustments to eliminate historical changes in fair value of Urgently Warrants and warrant expense related to liability-classified warrants of Urgently that will convert to equity at the time of the Merger |
E. | Reflects the adjustments to eliminate Otonomo’s historical impairment of goodwill and intangible assets. |
• | the registration statement, of which this Prospectus/Offer to Exchange forms a part, shall have become effective under the Securities Act, and shall not be the subject of any stop order or proceeding seeking a stop order; |
• | no action or proceeding by any government or governmental, regulatory or administrative agency, authority or tribunal or any other person, domestic or foreign, shall have been threatened, instituted or pending before any court, authority, agency or tribunal that directly or indirectly challenges the making of the Offer, the tender of some or all of the warrants pursuant to the Offer or otherwise relates in any manner to the Offer; |
• | there shall not have been any action threatened, instituted, pending or taken, or approval withheld, or any statute, rule, regulation, judgment, order or injunction threatened, proposed, sought, promulgated, enacted, entered, amended, enforced or deemed to be applicable to the Offer or Consent Solicitation or us, by any court or any authority, agency or tribunal that, in our reasonable judgment, would or might, directly or indirectly, (i) make the acceptance for exchange of, or exchange for, some or all of the warrants illegal or otherwise restrict or prohibit completion of the Offer or Consent Solicitation, or (ii) delay or restrict our ability, or render us unable, to accept for exchange or exchange some or all of the warrants; and |
• | there shall not have occurred (i) any general suspension of trading in securities in U.S. or Israeli securities or financial markets; (ii) a declaration of a banking moratorium or any suspension of payments in respect to banks in the United States or Israel; (iii) any limitation (whether or not mandatory) by any government or governmental, regulatory or administrative authority, agency or instrumentality, domestic or foreign, or other event that, in our reasonable judgment, would or would be reasonably likely to affect the extension of credit by banks or other lending institutions; or (iv) a natural disaster, a significant worsening of the ongoing COVID-19 pandemic, an outbreak of a pandemic or contagious disease other than COVID-19, or a commencement or significant worsening of a war or armed hostilities or other national or international calamity, including but not limited to, catastrophic terrorist attacks against Israel, the United States or their respective citizens, which, in our reasonable judgment, is or may be materially adverse to us or otherwise makes it inadvisable for us to proceed with the Offer and Consent Solicitation. |
• | the exchange agent must receive, prior to the Expiration Date a properly transmitted Agent’s Message (as defined herein); or |
• | the exchange agent must receive, prior to the Expiration Date, as applicable, a timely confirmation of book-entry transfer of such public warrants into the exchange agent’s account at DTC according to the procedure for book-entry transfer described below. |
• | inform your nominee of your interest in tendering you warrant pursuant to the Offer and Consent Solicitation; and |
• | instruct your nominee to tender all warrants you wish to be tendered in the Offer and Consent Solicitation into the exchange agent’s account at DTC in accordance with DTC’s procedure for transfer at or prior to the Expiration Date. |
• | the tender is made by or through an Eligible Institution; |
• | the exchange agent receives by hand, mail, overnight courier, facsimile or electronic mail transmission, prior to the Expiration Date, a properly completed and duly executed Notice of Guaranteed Delivery in the form we have provided with this Prospectus/Offer to Exchange, with signatures guaranteed by an Eligible Institution; and |
• | a confirmation of a book-entry transfer into the exchange agent’s account at DTC of all warrants delivered electronically, together with a properly completed and duly executed Letter of Transmittal and Consent with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message in accordance with ATOP), and any other documents required by the Letter of Transmittal and Consent, must be received by the exchange agent within two days that NYSE is open for trading after the date the exchange agent receives such Notice of Guaranteed Delivery. |
Name | Aggregate Number of Warrants Beneficially Owned | Percentage of Warrants Beneficially Owned(1) | ||||||
Jonathan Huberman(2) | 5,200,000 | 37.6 | % |
(1) | Determined based on 13,824,976 warrants, representing 8,624,976 public warrants and 5,200,000 private placement warrants outstanding as of July 18, 2023. |
(2) | Consists of private placement warrants to purchase 5,200,000 Ordinary Shares held by Software Acquisition Holdings II LLC, of which Mr. Huberman is a member. Mr. Huberman disclaims any beneficial ownership of the reported securities other than to the extent of any pecuniary interest he may have therein, directly or indirectly. |
• | Provide software-based telematics for key vehicle metrics – vehicle location, speed, harsh driving events and trip information, without aftermarket hardware; |
• | Monitor all connected vehicles in a fleet via a single interface, including critical vehicle metrics such as vehicle status, trip information, current maintenance, and alerts; and |
• | Help improve the safety of customers and vehicles by automating vehicle maintenance requirements, including alerts for upcoming services, past due maintenance, and emergency maintenance needs. |
• | allows data providers and consumers to efficiently outsource consent management, data processing and data structuring, allowing them to benefit from vehicle data while remaining focused on their core business; |
• | presents significant cost reductions for data providers that only need to integrate with one partner instead of multiple data consumers; |
• | presents significant cost reductions for data consumers by allowing them to work with one integration partner. This provides data consumers with data in a structured and usable format, instead of dealing with the challenges of contracting multiple OEMs and managing multiple stakeholders and formats; |
• | facilitates use cases of aggregate data that require certain coverage levels; |
• | eliminates reliance on OBD II aftermarket devices in favor of data marketplaces that provide the same data and other data points continuously and in a more user‑friendly format; and |
• | ensures data quality and accuracy for data consumers by replacing smartphone data with more sanitized data, thereby lowering risk of fraud and inaccuracy. |
• | Historical data reports: CSV reports contain historical, aggregated vehicle data. Historical data reports are triggered by a RESTful API call with parameters that define a region (e.g., city), and time span for the report. Report generation may take minutes or hours to complete. Several historical reports exist for different data types (e.g., vehicle data points and vehicle trips). |
• | Vehicle status: A near‑real time RESTful API returns the last known status of a specific vehicle. Vehicle data information is used by personal driver applications, such as fueling and parking. Additionally, we provide bulk vehicle status for receiving the last known status of one or more vehicles. This interface can be particularly useful for fleets. |
• | Streaming: This is a “push” mechanism that continuously streams real‑time data to data consumers. Streaming uses HTTP POST requests and can send both aggregate and personal vehicle data. A stream is created upon subscribing. Stream subscription defines one or more data filters such as desired vehicle area (i.e., city), and maximal point latency. Streaming is optimal for applications that require real‑time, rich vehicle data. |
• | Events: An event is defined by a logical rule on a vehicle data point. When a rule is evaluated to be true, an event message is triggered and sent to the data consumer. For example, an event message would be sent to the data consumer through a fueling application whenever a vehicle travels in a certain radius from a gas station while below the 10% fuel level. Events receive the data they need in real‑time, enabling applications to save processing power and network bandwidth. Events can be used for both personal and aggregated data. This capability is currently under development. |
• | Market and customer feedback suggests that there are multiple catalysts that will enable a step-change in telematics-based insurance adoption, with mobile apps, impact of COVID-19, regulation changes and significant advances in the accuracy and capability of telematics increasing the appeal of these solutions. |
• | Emergence of mobile app solutions (rather than installation of expensive black boxes) enables a more widespread adoption across all age groups as the cost is significantly lower and becomes attractive for all driver demographics. The accuracy and functionality of these solutions has also increased considerably in the last 5-10 years. |
• | During COVID-19 the volume of miles-driven decreased for many drivers, resulting in an increasing proportion of drivers exploring pay-as-you-drive (PAYD) policies that use telematics to track level of activity. |
• | New regulation in the UK prevents insurers from raising prices for existing customers above those offered to new customers, which has increased the importance of insurers’ ability to better evaluate existing customers and reward the low-risk customers through better pricing / discounts and rewards. This is enabled through pay-how-you-drive (PHYD) policies that use telematics to track not only user’s level of activity but also driving behavior. |
• | Growing ecosystem and data pool. There are dozens of potential customer groups and thousands of potential data consumers for vehicle data utilization. These include product‑related players, such as OEMs and Tier 1 suppliers, vehicle‑related service providers, such as fleet operators, and other organizations in the extended ecosystem, such as smart cities, insurance companies and telecom operators. Overall, we believe many customer groups will join the ecosystem and expand their usage of external vehicle data. A growing number of service providers actively use external vehicle data, and we believe that the number of service providers using such data is likely to continue to increase moving forward. As 4G/5G mobile network ubiquity increases, the volume of data and parameters being sent from vehicles to OEM clouds is growing exponentially. |
• | Unique technological needs and high onboarding costs for data providers. The increasing volume and scope of vehicle data requires data providers to integrate complex data processing, cleaning, accounting, consent, multiple APIs and data structuring technologies. OEMs often lack the capabilities to implement these technologies and do not have the desire to develop them internally due to the substantial investments required for building and maintaining the data infrastructure. Tapping into the vast potential of data utilization also requires data providers to individually contract and integrate with multiple data consumers, which results in high marginal costs per each new data consumer acquired. Onboarding each new consumer also requires the involvement of multiple organizational functions, such as IT, legal and procurement. The onboarding process is often too expensive to justify the investment for data providers, especially when data consumers are small or medium‑sized businesses. Without significant reduction of onboarding costs, the ability of data providers to efficiently scale their utilization efforts is limited. |
• | Technological and cost constraints on data consumers. Lack of consistent formats or data standards across OEMs, or even across different models manufactured by the same OEM, requires data consumers to work with multiple stakeholders in different data formats and on different APIs. In addition, contracting with multiple OEMs involves conducting lengthy and costly negotiation and integration efforts by legal, privacy and technology resources with multiple parties. For some use cases, data consumers require certain levels of vehicle coverage in a specific area (e.g., smart city applications may need at least 2% coverage) and contracting OEMs directly would not be sufficient for their needs. |
• | Regulatory‑driven opportunities. Recent developments in regulation of vehicle data and connected cars, such as Regulation (EU) 2018/858 requiring OEMs to share connected car data with third parties, as well as emerging industry standards (such as NEVADA Share & Secure, which are intended to enable the secure transmission of data generated in the vehicle and make it usable for public authorities and industry), promote open access to vehicle data and neutrality, while also challenging OEMs by requiring them to supply the scale and ability to technically and legally align with the hundreds of service providers seeking access to vehicle data. With the removal of barriers to vehicle data accessibility, more organizations will be able to access and utilize vehicle data, and more data‑driven services are expected to become available. |
• | Compliance challenges. Data providers collecting, processing or sharing vehicle data must ensure that their collection, processing and use of vehicle data is compliant with personal data protection regulations, such as GDPR and CCPA, which often require prior consent. While free, informed and specific consents may be required from every vehicle user whose personal data is collected, obtaining compliant consents from drivers and passengers not related to the vehicle’s legal owner involves practical concerns for OEMs. The need for explicit consent for sharing data with separate service providers requires OEMs to provide advanced consent flows and consent management capabilities that can be seamlessly integrated. It has proven to be challenging for the OEMs to manage data compliance on very large scale with no consent management standards available. |
Year Ended December 31, | ||||||||||||
2022 | 2021 | 2020 | ||||||||||
USD thousands | USD thousands | USD thousands | ||||||||||
Americas | 3,283 | 176 | 43 | |||||||||
APAC | 188 | 329 | 164 | |||||||||
EMEA | 3,521 | 1,218 | 187 | |||||||||
Total revenues | 6,992 | 1,723 | 394 |
Period Ended March 31, | ||||||||
2023 | 2022 | |||||||
USD thousands | USD thousands | |||||||
Americas | 830 | 344 | ||||||
APAC | 27 | 11 | ||||||
EMEA | 982 | 676 | ||||||
Total revenues | 1,839 | 1,031 |
Period Ended March 31, | Change | Change | ||||||||||||||
2023 | 2022 | $ | % | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Americas | $ | 830 | $ | 344 | $ | 486 | 141 | % | ||||||||
APAC | $ | 27 | $ | 11 | $ | 16 | 145 | % | ||||||||
EMEA | $ | 982 | $ | 676 | $ | 306 | 45 | % | ||||||||
Total | $ | 1,839 | $ | 1,031 | $ | 808 | 78 | % |
Period Ended March 31, | Change | Change | ||||||||||||||
2023 | 2022 | $ | % | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Cost of services | $ | 1,204 | $ | 380 | $ | 824 | 217 | % | ||||||||
Cloud infrastructure | $ | 754 | $ | 1,158 | $ | (404 | ) | (35 | )% | |||||||
Research and development | $ | 3,550 | $ | 4,727 | $ | (1,177 | ) | (26 | )% | |||||||
Sales and marketing | $ | 4,642 | $ | 4,410 | $ | 232 | 5 | % | ||||||||
General and administrative | $ | 7,344 | $ | 5,022 | $ | 2,322 | 48 | % | ||||||||
Depreciation and amortization | $ | 87 | $ | 455 | $ | (368 | ) | (81 | )% | |||||||
Contingent consideration income | $ | 1,381 | $ | — | �� | $ | 1,381 | 100 | % | |||||||
Total costs of services and operating expenses | $ | 18,962 | $ | 16,152 | $ | 2,810 | 17 | % |
Period Ended March 31, | Change | Change | ||||||||||||||
2023 | 2022 | $ | % | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Financial (Expense) Income, Net | $ | 1,374 | $ | 1,027 | $ | 347 | 34 | % |
Year Ended December 31, | Change | Change | ||||||||||||||
2022 | 2021 | $ | % | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Americas | $ | 3,283 | $ | 176 | $ | 3,107 | 1,765 | % | ||||||||
APAC | $ | 188 | $ | 329 | $ | (141 | ) | (43 | )% | |||||||
EMEA | $ | 3,521 | $ | 1,218 | $ | 2,303 | 189 | % | ||||||||
Total | $ | 6,992 | $ | 1,723 | $ | 5,269 | 306 | % |
Year Ended December 31, | Change | Change | ||||||||||||||
2022 | 2021 | $ | % | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Cost of services | $ | 3,367 | $ | 953 | $ | 2,414 | 253 | % | ||||||||
Cloud infrastructure | $ | 4,777 | $ | 2,814 | $ | 1,963 | 70 | % | ||||||||
Research and development | $ | 22,573 | $ | 12,077 | $ | 10,496 | 87 | % | ||||||||
Sales and marketing | $ | 21,761 | $ | 9,435 | $ | 12,326 | 131 | % | ||||||||
General and administrative | $ | 22,059 | $ | 11,904 | $ | 10,155 | 85 | % | ||||||||
Depreciation and amortization | $ | 2,749 | $ | 532 | $ | 2,217 | 417 | % | ||||||||
Contingent consideration income | $ | (8,954 | ) | $ | — | $ | (8,954 | ) | 100 | % | ||||||
Impairment of Goodwill | $ | 49,686 | $ | — | $ | 49,686 | 100 | % | ||||||||
Impairment of intangible assets | $ | 22,355 | $ | — | $ | 22,355 | 100 | % | ||||||||
Total costs of services and operating expenses | $ | 140,373 | $ | 37,715 | $ | 102,658 | 272 | % |
Year Ended December 31, | Change | Change | ||||||||||||||
2022 | 2021 | $ | % | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Financial (Expense) Income, Net | $ | 2,455 | $ | 5,280 | $ | (2,825 | ) | (54 | )% |
Period Ended March 31, | Year Ended December 31, | |||||||||||||||
(Dollars in thousands) | 2023 | 2022 | 2022 | 2021 | ||||||||||||
(Dollars in thousands) | ||||||||||||||||
Net cash used in operating activities | $ | (11,799 | ) | $ | (11,446 | ) | $ | (56,373 | ) | $ | (33,361 | ) | ||||
Net cash provided by (used in) investing activities | $ | 12,448 | $ | (54 | ) | $ | (127,808 | ) | $ | 2,680 | ||||||
Net cash provided by financing activities | $ | 62 | $ | 83 | $ | 140 | $ | 223,776 | ||||||||
Foreign currency effect on cash and cash equivalents and short-term restricted cash | $ | (101 | ) | $ | — | $ | (1,244 | ) | $ | — | ||||||
Net increase (decrease) in cash and cash equivalents and short-term restricted cash equivalents | $ | 610 | $ | (11,270 | ) | $ | (185,285 | ) | $ | 193,095 |
• | Identification of the contract, or contracts, with a customer; |
• | Identification of the performance obligations in the contract; |
• | Determination of the transaction price; |
• | Allocation of the transaction price to the performance obligations in the contract; and |
• | Recognition of revenue when, or as, the Company satisfies a performance obligation. |
Name | Age | Position(s) |
Ben Volkow | 49 | Chief Executive Officer, Founder and Director |
Bonnie Moav | 45 | Chief Financial Officer |
Aldo Monteforte | 56 | Chief Executive Officer of The Floow |
Andrew Geisse | 66 | Director |
Benny Schnaider | 65 | Director |
Jonathan Huberman | 58 | Director |
Meir Moshe | 69 | Director |
Vered Raviv Schwarz | 54 | Director |
• | a director who is, or at any time during the past three years was, an employee of our company; or |
• | a director who accepted or who has a family member who accepted any compensation from our company in excess of $120,000 during any period of 12 consecutive months within the three years preceding the independence determination (subject to certain exclusions, including, among other things, compensation for board or board committee service). |
• | a director who is a family member of an individual who is, or at any time during the past three years was employed by us as an executive officer; |
• | a director who is or has a family member who is a partner in, of a controlling shareholder of, or an executive officer of an entity to which we made, or from which our company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenue for that year or $200,000, whichever is greater (subject to certain exclusions); |
• | a director of our company who is or has a family member who is employed as an executive officer of another entity where, at any time during the past three years, any of the executive officers of our company served on the compensation committee of such other entity; or |
• | a director who is or has a family member who is a current partner of our outside auditor, or at any time during the past three years was a partner or employee of our outside auditor, and who worked on our audit. |
• | We follow the quorum requirement for shareholder meetings. As permitted under the Companies Law, pursuant to the Amended and Restated Articles of Association of Otonomo (the “Otonomo Articles”) the quorum required for an ordinary meeting of shareholders will consist of at least two shareholders present in person, by proxy or by other voting instrument in accordance with the Companies Law, who hold at least 25% of the voting power of its shares (and in an adjourned meeting, with some exceptions, any number of shareholders), instead of 33 1/3% of the issued share capital required under the Nasdaq corporate governance rules. |
• | We intend to adopt and approve material changes to equity incentive plans in accordance with the Companies Law which does not impose a requirement of shareholder approval for such actions. In addition, we intend to follow Israeli corporate governance practice instead of the Nasdaq corporate governance rule which requires shareholder approval prior to an issuance of securities in connection with equity based compensation of officers, directors, employees, or consultants; and |
• | We follow Israeli corporate governance practice instead of the Nasdaq corporate governance rule requiring shareholder approval for certain dilutive events (such as issuances that will result in a change of control, certain transactions other than a public offering involving issuances of a 20% or greater interest in Otonomo and certain acquisitions of the stock or assets of another company). |
• | at least a majority of the shares of non controlling shareholders or shareholders that do not have a personal interest in the approval voted at the meeting are voted in favor (disregarding abstentions); or |
• | the total number of shares of non‑controlling shareholders and shareholders who do not have a personal interest in such appointment voting against such appointment does not exceed 2% of the aggregate voting rights in the company. |
• | recommending to the board of directors the retention and termination of the internal auditor, and the internal auditor’s engagement fees and terms, in accordance with the Companies Law as well as approving the yearly or periodic work plan proposed by the internal auditor; |
• | identifying irregularities in our business administration, including by consulting with the internal auditor or with the independent auditor, and suggesting corrective measures to the board of directors; |
• | reviewing policies and procedures with respect to transactions (other than transactions related to the compensation or terms of services) between the company and officers and directors, or affiliates of officers or directors, or transactions that are not in the ordinary course of the Company’s business and deciding whether to approve such acts and transactions if so required under the Companies Law; and |
• | establishing procedures for the handling of employees’ complaints as to the management of our business and the protection to be provided to such employees. |
• | recommending to the board of directors with respect to the approval of the compensation policy for “office holders” (a term used under the Companies Law, which essentially means directors and executive officers) and, once every three years, regarding any extensions to a compensation policy that has been in effect for a period of more than three years; |
• | reviewing the implementation of the compensation policy and recommending from time to time to the board of directors with respect to any amendments or updates of the compensation plan; |
• | resolving whether or not to approve arrangements with respect to the terms of office and employment of office holders; and |
• | exempting, under certain circumstances, from the requirement of approval by the general meeting of shareholders, transactions with a candidate to serve as the chief executive officer of our company. |
• | such majority includes at least a majority of the shares held by shareholders who are not controlling shareholders and do not have a personal interest in such compensation policy and who are present and voting (excluding abstentions); or |
• | the total number of shares of non controlling shareholders and shareholders who do not have a personal interest in the compensation policy and who vote against the policy, does not exceed 2% of the company’s aggregate voting rights. |
• | the education, skills, experience, expertise and accomplishments of the relevant office holder; |
• | the office holder’s position, responsibilities and prior compensation agreements with him or her; |
• | the ratio between the cost of the terms of employment of an office holder and the cost of the employment of other employees of the company, including employees employed through contractors who provide services to the company, in particular the ratio between such cost, the average and median salary of the employees of the company, as well as the impact of such disparities on the work relationships in the company; |
• | if the terms of employment include variable components the possibility of reducing variable components at the discretion of the board of directors and the possibility of setting a limit on the value of non cash variable equity based components; and |
• | if the terms of employment include severance compensation the term of employment or office of the office holder, the terms of his or her compensation during such period, the company’s performance during the such period, his or her individual contribution to the achievement of the company goals and the maximization of its profits and the circumstances under which he or she is leaving the company. |
• | with regard to variable components of compensation: |
• | with the exception of office holders who report directly to the chief executive officer, provisions determining the variable components on the basis of long term performance and on measurable criteria; however, the company may determine that an immaterial part of the variable components of the compensation package of an office holder shall be awarded based on non measurable criteria, if such amount is not higher than three monthly salaries per annum, while taking into account such office holder’s contribution to the company; and |
• | the ratio between variable and fixed components, as well as the limit on the values of variable components at the time of their grant. |
• | a condition under which the office holder will return to the company, according to conditions to be set forth in the compensation policy, any amounts paid as part of his or her terms of employment, if such amounts were paid based on information later to be discovered to be wrong, and such information was restated in the company’s financial statements; |
• | the minimum holding or vesting period of variable equity based components to be set in the terms of office or employment, as applicable, while taking into consideration long term incentives; and |
• | a limit on retirement grants. |
• | overseeing and assisting its board in reviewing and recommending nominees for election as directors; |
• | assessing the performance of the members of the board; and |
• | establishing and maintaining effective corporate governance policies and practices, including, but not limited to, developing and recommending to our board of directors a set of corporate governance guidelines applicable to our Company. |
• | a financial liability imposed on him or her in favor of another person pursuant to a judgment, including a settlement or arbitrator’s award approved by a court. However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company’s activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the abovementioned events and amount or criteria; |
• | reasonable litigation expenses, including attorneys’ fees, incurred by the office holder as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (i) no indictment was filed against such office holder as a result of such investigation or proceeding; and (ii) no financial liability, such as a criminal penalty, was imposed upon him or her as a substitute for the criminal proceeding as a result of such investigation or proceeding or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; and |
• | reasonable litigation expenses, including attorneys’ fees, incurred by the office holder or imposed by a court in proceedings instituted against him or her by the company, on its behalf or by a third party or in connection with criminal proceedings in which the office holder was acquitted or as a result of a conviction for an offense that does not require proof of criminal intent. |
• | a breach of the duty of loyalty to the company, to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company; |
• | a breach of the duty of care to the company or to a third party, including a breach arising out of the negligent conduct of the office holder; |
• | a financial liability imposed on the office holder in favor of a third party; |
• | a financial liability imposed on the office holder in favor of a third party harmed by a breach in an administrative proceeding; and |
• | reasonable litigation expenses, including attorneys’ fees, incurred by the office holder as a result of an administrative proceeding instituted against him or her. |
• | a breach of the duty of loyalty, except to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company; |
• | a breach of the duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder; |
• | an act or omission committed with intent to derive illegal personal benefit; or |
• | a fine or forfeit levied against the office holder. |
• | at least a majority of the shares held by all shareholders who are not controlling shareholders and do not have a personal interest in such matter, present and voting at such meeting, are voted in favor of the compensation package, excluding abstentions; or |
• | the total number of shares of non‑controlling shareholders and shareholders who do not have a personal interest in such matter voting against the compensation package does not exceed 2% of the aggregate voting rights in Otonomo. |
• | amendments to the Otonomo Articles; |
• | appointment or termination of our auditors; |
• | election of directors, including external directors (unless otherwise determined in Otonomo Articles); |
• | approval of certain related party transactions; |
• | increases or reductions of our authorized share capital; |
• | a merger; and |
• | the exercise of our board of directors’ powers by a general meeting, if our board of directors is unable to exercise its powers and the exercise of any of its powers is required for our proper management. |
• | a financial liability imposed on him or her in favor of another person pursuant to a judgment, including a settlement or arbitrator’s award approved by a court. However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company’s activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the abovementioned events and amount or criteria; |
• | reasonable litigation expenses, including attorneys’ fees, incurred by the office holder as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (i) no indictment was filed against such office holder as a result of such investigation or proceeding; and (ii) no financial liability, such as a criminal penalty, was imposed upon him or her as a substitute for the criminal proceeding as a result of such investigation or proceeding or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; and |
• | reasonable litigation expenses, including attorneys’ fees, incurred by the office holder or imposed by a court in proceedings instituted against him or her by the company, on its behalf or by a third-party or in connection with criminal proceedings in which the office holder was acquitted or as a result of a conviction for an offense that does not require proof of criminal intent. |
• | a breach of the duty of loyalty to the company, to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company; |
• | a breach of the duty of care to the company or to a third-party, including a breach arising out of the negligent conduct of the office holder; |
• | a financial liability imposed on the office holder in favor of a third-party; |
• | a financial liability imposed on the office holder in favor of a third-party harmed by a breach in an administrative proceeding; and |
• | reasonable litigation expenses, including attorneys’ fees, incurred by the office holder as a result of an administrative proceeding instituted against him or her. |
• | a breach of the duty of loyalty, except to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company; |
• | a breach of the duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder; |
• | an act or omission committed with intent to derive illegal personal benefit; or |
• | a fine or forfeit levied against the office holder. |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and |
• | if, and only if, the reported last sale price of the Ordinary Shares equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period commencing on August 13, 2021 and ending on the third trading day prior to the date the company sends the notice of redemption to the warrant holders. |
• | financial institutions or financial services entities; |
• | broker-dealers; |
• | taxpayers that are subject to the mark-to-market accounting rules with respect to our Ordinary Shares or warrants; |
• | persons required to accelerate the recognition of any item of gross income with respect to our Ordinary Shares or warrants as a result of such income being recognized on an applicable financial statement; |
• | tax-exempt entities; |
• | governments or agencies or instrumentalities thereof; |
• | insurance companies; |
• | mutual funds; |
• | pension plans; |
• | individual retirement accounts or other tax-deferred accounts; |
• | regulated investment companies or real estate investment trusts; |
• | partnerships (including entities or arrangements treated as partnerships for U.S. federal income tax purposes); |
• | U.S. expatriates or former long-term residents of the United States; |
• | persons that directly, indirectly or constructively own ten percent or more (by vote or value) of our capital stock; |
• | S corporations; |
• | trusts and estates; |
• | persons that acquired their warrants pursuant to an exercise of employee share options, in connection with employee share incentive plans or otherwise as compensation; |
• | persons that hold Ordinary Shares or warrants as part of a straddle, constructive sale, constructive ownership transaction, hedging, wash sale, synthetic security, conversion or other integrated or similar transaction; |
• | U.S. Holders (as defined below) whose functional currency is not the U.S. dollar; or |
• | “controlled foreign corporations,” “passive foreign investment companies” or corporations that accumulate earnings to avoid U.S. federal income tax. |
• | an individual who is a citizen or resident of the United States; |
• | a corporation (or other entity that is treated as a corporation for U.S. federal income tax purposes) that is created or organized (or treated as created or organized) in or under the laws of the United States or any state thereof or the District of Columbia; |
• | an estate whose income is subject to U.S. federal income tax regardless of its source; or |
• | a trust if (1) a U.S. court can exercise primary supervision over the administration of such trust and one or more United States persons have the authority to control all substantial decisions of the trust or (2) it has a valid election in place to be treated as a United States person. |
• | the U.S. Holder’s gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for our Ordinary Shares (which may include the U.S. Holder’s holding period for warrants exchanged for Ordinary Shares pursuant to the Offer); |
• | the amount allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain or received the excess distribution, or to the period in the U.S. Holder’s holding period before the first day of our first taxable year in which we are a PFIC, will be taxed as ordinary income; |
• | the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highest tax rate in effect for that year and applicable to the U.S. Holder without regard to the U.S. Holder’s other items of income and loss for such year; and |
• | an additional tax equal to the interest charge generally applicable to underpayments of tax will be imposed on the U.S. Holder with respect to the tax attributable to each such other taxable year of the U.S. Holder. |
• | certifies, by properly completing the “Declaration of Status for Israeli Income Tax Purposes” attached to the Letter of Transmittal and Consent (the “Residency Declaration”), that such warrant holder (1) holds less than 5% of the outstanding shares of the Company (as applied to the warrants on an as-exercised basis); (2) is not, and was not on any date since the warrants were acquired, a resident of Israel for tax purposes; and (3) acquired its warrants on or after the date of the IPO. Such Residency Declaration will require warrant holders to provide additional specific statements for this purpose. In case the tendering warrant holder was not able to timely complete and deliver the Residency Declaration, the Warrant Agent will withhold (through an Israeli withholding agent appointed by the Company) Israeli withholding tax and will be entitled to sell an applicable number of Ordinary Shares (or, in the case of any merger or consolidation of Otonomo with or into another entity, shares of common stock of the other entity) to satisfy such tax withholding requirement, in which case the number of shares that the holder will receive in exchange for its warrants will be reduced accordingly; or |
• | provides the Warrant Agent, as instructed in the Letter of Transmittal and Consent, with a valid certificate of exemption or tax approval from the ITA in form and substance reasonably satisfactory to the Company (a “Valid Tax Certificate”), applying withholding tax at a lesser rate than that described above or otherwise granting a specific exemption from Israeli withholding tax. In such case, the Warrant Agent will withhold (through an Israeli withholding agent appointed by the Company) Israeli withholding tax at the rate prescribed by such Valid Tax Certificate (or not withhold, if such warrant holder is entitled to a full exemption) and will be entitled to sell an applicable number of Ordinary Shares (or, in the case of any merger or consolidation of Otonomo with or into another entity, shares of common stock of the other entity) to satisfy such tax withholding requirement, in which case the number of shares that the holder will receive in exchange for its warrants will be reduced accordingly. |
• | amortization of the cost of purchased patents, rights to use a patent, and know-how, which were purchased in good faith and are used for the development or advancement of the Industrial Enterprise, over an eight-year period, commencing on the year in which such rights were first exercised; |
• | under limited conditions, an election to file consolidated tax returns with controlled Israeli Industrial Companies; and |
• | expenses related to a public offering are deductible in equal amounts over three years commencing with the year of the offering. |
• | the expenditures are approved by the relevant Israeli government ministry, which depends on the field of research; |
• | the research and development must be for the promotion of the company; and |
• | the research and development is carried out by or on behalf of the company seeking such tax deduction. |
• | each person, or group of affiliated persons, known by us to beneficially own more than 5% of our outstanding Ordinary Shares; |
• | each member of our board of directors and each of our other executive officers; and |
• | all of our directors and executive officers as a group. |
Name and Address of Beneficial Owner(1) | Number of Ordinary Shares | % | ||||||
5% Shareholders of Otonomo | ||||||||
Aptiv Financial Services (Luxembourg) S.à.r.l.(2) | 9,398,274 | 6.5 | % | |||||
Mithaq Capital SPC(3) | 33,310,690 | 23.0 | % | |||||
Directors and Executive Officers of Otonomo | ||||||||
Benjamin Volkow(4) | 16,804,343 | 11.6 | % | |||||
Bonnie Moav(5) | 502,234 | * | ||||||
Aldo Monteforte(6) | 1,083,989 | * | ||||||
Jonathan Huberman(7) | 6,795,512 | 4.5 | % | |||||
Andrew Geisse(8) | 4,359,150 | 3.0 | % | |||||
Benny Schnaider(9) | 1,057,389 | * | ||||||
Vered Raviv Schwarz(10) | 156,462 | * | ||||||
Meir Moshe(11) | 138,462 | * | ||||||
All Directors and Executive Officers of Otonomo as a Group (8 Individuals) | 30,897,541 | 20.4 | % |
* | Denotes less than 1% |
(1) | Unless otherwise noted, the business address of each of the following entities or individuals is c/o Otonomo Technologies Ltd., 16 Abba Eban Blvd., Herzliya Pituach 467256, Israel. |
(2) | According to the Schedule 13G/A filed on February 2, 2023, Aptiv PLC (NYSE: APTV) is the ultimate beneficial owner of Aptiv Financial Services (Luxembourg) S.à.r.l. The members of the board of directors of Aptiv PLC may be deemed to have shared voting and dispositive control over the shares. The members of the board of directors of Aptiv PLC are Kevin P. Clark, Richard L. Clemmer, Nancy E. Cooper, Joseph L. (Jay) Hooley, Merit E. Janow, Sean O. Mahoney, Paul M. Meister, Robert K. (Kelly) Ortberg, Colin J. Parris, and Ana G. Pinczuk. The business address of each of the foregoing is 5 Hanover Quay, Grand Canal Dock, Dublin, D02 VY79, Ireland. |
(3) | According to the Schedule 13D/A filed on August 10, 2022 by Mithaq Capital SPC, Mithaq Capital SPC, Turki Saleh A. AlRajhi and Muhammad Asif Seemab have shared voting and dispositive power over 33,310,690 Ordinary Shares. The business address of Mithaq Capital SPC and the other beneficial owners is Mithaq Capital SPC, c/o Synergy, Anas Ibn Malik Road, Al Malqa, Riyadh 13521 Saudi Arabia. |
(4) | Consists of 16,480,079 Ordinary Shares held directly by Mr. Volkow and 324,264 Ordinary Shares subject to options and RSUs exercisable within 60 days of June 1, 2023. |
(5) | Consists of Ordinary Shares subject to options and RSUs exercisable within 60 days of June 1, 2023. |
(6) | Consists of 982,171 Ordinary Shares held directly by Mr. Monteforte and 101,818 Ordinary Shares subject to RSUs exercisable within 60 days of June 1, 2023. |
(7) | Consists of: (a) 5,200,000 Ordinary Shares underlying warrants exercisable within 60 days of June 1, 2023 held by Software Acquisition Holdings II LLC, of which Mr. Huberman is a member; (b) 1,439,050 Ordinary Shares held by 211 LV LLC, of which Mr. Huberman is a member; and (c) 156,462 Ordinary Shares subject to RSUs exercisable within 60 days of June 1, 2023. Mr. Huberman disclaims any beneficial ownership of the reported securities other than to the extent of any pecuniary interest he may have therein, directly or indirectly. The business address for Mr. Huberman is 1980 Festival Plaza Drive, Ste. 300, Las Vegas, Nevada 89135. |
(8) | Consists of: (a) 1,044,697 Ordinary Shares held by Andrew M and Jane S Geisse 2000 Trust (Mr. Geisse is affiliated with Andrew M and Jane S Geisse 2000 Trust and may be deemed to have beneficial ownership with respect to these shares); (b) 3,136,751 Ordinary Shares held by Mr. Geisse; and (c) 177,702 Ordinary Shares held by Marla Bay Advisors, LLC (Mr. Geisse is affiliated with Marla BayAdvisors, LLC and may be deemed to have beneficial ownership with respect to these options). |
(9) | Consists of: (a) 554,110 Ordinary Shares; and (b) 491,233 Ordinary Shares subject to options or RSUs exercisable within 60 days of June 1, 2023. |
(10) | Consists of Ordinary Shares subject to options and RSUs exercisable within 60 days of June 1, 2023. |
(11) | Consists of Ordinary Shares subject to options and RSUs exercisable within 60 days of June 1, 2023. |
Contents | Page |
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 1057) | F-3 |
F-4 | |
F-5 | |
F-6 | |
F-7 | |
F-8 |

Somekh Chaikin
Tel-Aviv, Israel
Somekh Chaikin, an Israeli partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
December 31 | December 31 | |||||||
2022 | 2021 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | 22,448 | 207,842 | ||||||
Short-term restricted cash | 346 | 237 | ||||||
Short-term deposits | 62,262 | - | ||||||
Marketable securities | 55,587 | - | ||||||
Trade receivables, net | 1,271 | 1,077 | ||||||
Other receivables and prepaid expenses | 3,043 | 2,683 | ||||||
Total current assets | 144,957 | 211,839 | ||||||
Non-current assets | ||||||||
Other long-term assets | 606 | 254 | ||||||
Property and equipment, net | 1,043 | 725 | ||||||
Operating lease right-of-use assets, net | 2,040 | - | ||||||
Intangible assets, net | - | 9,621 | ||||||
Goodwill | - | 37,000 | ||||||
Total non-current assets | 3,689 | 47,600 | ||||||
Total assets | 148,646 | 259,439 | ||||||
Liabilities and Shareholders' Equity | ||||||||
Current liabilities | ||||||||
Account payables | 1,020 | 312 | ||||||
Other payables and accrued expenses | 10,958 | 8,405 | ||||||
Deferred revenue | 216 | 35 | ||||||
Current portion of operating lease liabilities | 729 | - | ||||||
Current portion of contingent consideration | 165 | - | ||||||
Total current liabilities | 13,088 | 8,752 | ||||||
Non-Current liabilities | ||||||||
Warrants for ordinary shares | 155 | 1,924 | ||||||
Operating lease liabilities, less current portion | 1,225 | - | ||||||
Contingent consideration, less current portion | 746 | - | ||||||
Other non-current liabilities | 4 | - | ||||||
Total non-current liabilities | 2,130 | 1,924 | ||||||
Total liabilities | 15,218 | 10,676 | ||||||
Commitments and contingencies (Note 10) | - | - | ||||||
Shareholders’ equity: | ||||||||
Ordinary shares, no par value; 450,000,000 shares authorized as of | ||||||||
December 31, 2022, and 2021; 141,880,227 and 132,214,733 shares issued | ||||||||
and outstanding as of December 31, 2022 and 2021, respectively; | - | - | ||||||
Additional paid-in capital | 370,412 | 349,825 | ||||||
Accumulated other comprehensive loss | (4,850 | ) | - | |||||
Accumulated deficit | (232,134 | ) | (101,062 | ) | ||||
Total shareholders’ equity | 133,428 | 248,763 | ||||||
Total liabilities and Shareholders' Equity | 148,646 | 259,439 |
F - 4
Year ended | Year ended | Year ended | ||||||||||
December 31 | December 31 | December 31 | ||||||||||
2022 | 2021 | 2020 | ||||||||||
Revenues | 6,992 | 1,723 | 394 | |||||||||
Costs and operating expenses: | ||||||||||||
Cost of services | (3,367 | ) | (953 | ) | (336 | ) | ||||||
Cloud infrastructure | (4,777 | ) | (2,814 | ) | (1,262 | ) | ||||||
Research and development | (22,573 | ) | (12,077 | ) | (8,194 | ) | ||||||
Sales and marketing | (21,761 | ) | (9,435 | ) | (5,168 | ) | ||||||
General and administrative | (22,059 | ) | (11,904 | ) | (2,515 | ) | ||||||
Depreciation and amortization | (2,749 | ) | (532 | ) | (147 | ) | ||||||
Contingent consideration income | 8,954 | - | - | |||||||||
Impairment of goodwill | (49,686 | ) | - | - | ||||||||
Impairment of intangible assets | (22,355 | ) | - | - | ||||||||
Total costs and operating expenses | (140,373 | ) | (37,715 | ) | (17,622 | ) | ||||||
Operating loss | (133,381 | ) | (35,992 | ) | (17,228 | ) | ||||||
Financial income (expenses), net | 2,455 | 5,280 | (2,737 | ) | ||||||||
Loss before income tax expense | (130,926 | ) | (30,712 | ) | (19,965 | ) | ||||||
Income tax expense | (146 | ) | (222 | ) | (76 | ) | ||||||
Net loss | (131,072 | ) | (30,934 | ) | (20,041 | ) | ||||||
Net loss per share attributable to ordinary shareholders, basic and diluted | (0.95 | ) | (0.45 | ) | (0.65 | ) | ||||||
Weighted-average shares used in computing net loss per share attributable to ordinary shareholders, basic and diluted | 138,362,785 | 69,222,905 | 30,674,263 | |||||||||
Other comprehensive loss, net of tax: | ||||||||||||
Foreign currency translation adjustments | (4,791 | ) | - | - | ||||||||
Unrealized losses on available-for-sale marketable securities, net | (59 | ) | - | - | ||||||||
Other comprehensive loss | (4,850 | ) | - | - | ||||||||
Comprehensive loss | (135,922 | ) | (30,934 | ) | (20,041 | ) |
The accompanying notes are an integral part of the consolidated financial statements.
F - 5
Redeemable Convertible preferred shares | Ordinary shares | Additional paid-in capital | Accumulated deficit | Accumulated Other Comprehensive Loss | Total Equity | |||||||||||||||||||||||||||
Number of | USD | Number of | USD | USD | USD | USD | USD | |||||||||||||||||||||||||
Shares | thousands | Shares | thousands | thousands | thousands | thousands | thousands | |||||||||||||||||||||||||
Balance as of January 1, 2020 | 58,208,597 | 62,195 | 29,955,123 | - | 8,784 | (50,087 | ) | - | (41,303 | ) | ||||||||||||||||||||||
Issuance of redeemable convertible preferred shares, net | 4,717,813 | 15,507 | - | - | - | - | - | - | ||||||||||||||||||||||||
Issuance of shares in connection with stock-based compensation plans | - | - | 1,533,798 | - | 133 | - | - | 133 | ||||||||||||||||||||||||
Share based compensation | - | - | - | - | 1,440 | - | - | 1,440 | ||||||||||||||||||||||||
Comprehensive loss | - | - | - | - | - | (20,041 | ) | - | (20,041 | ) | ||||||||||||||||||||||
Balance as of 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 | - | - | - | - | - | - | ||||||||||||||||||||||||
Conversion of redeemable convertible preferred shares | (64,105,866 | ) | (88,598 | ) | 64,105,866 | - | 88,598 | - | - | 88,598 | ||||||||||||||||||||||
Issuance of ordinary shares in connection with PIPE offering, net | - | - | 14,250,000 | - | 124,560 | - | - | 124,560 | ||||||||||||||||||||||||
Recapitalization, net | - | - | 15,576,479 | - | 88,843 | - | - | 88,843 | ||||||||||||||||||||||||
Shares issued related to the business acquisitions | - | - | 6,559,960 | - | 33,816 | - | - | 33,816 | ||||||||||||||||||||||||
Issuance of shares in connection with stock-based compensation plans | - | - | 233,507 | - | 44 | - | - | 44 | ||||||||||||||||||||||||
Share based compensation | - | - | - | - | 3,607 | - | - | 3,607 | ||||||||||||||||||||||||
Comprehensive loss | - | - | - | - | - | (30,934 | ) | - | (30,934 | ) | ||||||||||||||||||||||
Balance as of 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 | ||||||||||||||||||||||||
Issuance of shares in connection with stock-based compensation plans | - | - | 3,203,408 | - | 140 | - | - | 140 | ||||||||||||||||||||||||
Share based compensation | - | - | - | - | 9,756 | - | - | 9,756 | ||||||||||||||||||||||||
Comprehensive loss | - | - | - | - | - | (131,072 | ) | (4,850 | ) | (135,922 | ) | |||||||||||||||||||||
Balance as of December 31, 2022 | - | - | 141,880,227 | - | 370,412 | (232,134 | ) | (4,850 | ) | 133,428 |
F - 6
Year ended | Year ended | Year ended | ||||||||||
December 31 | December 31 | December 31 | ||||||||||
2022 | 2021 | 2020 | ||||||||||
Cash flows from operating activities | ||||||||||||
Net loss | (131,072 | ) | (30,934 | ) | (20,041 | ) | ||||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
Depreciation and amortization | 2,749 | 532 | 147 | |||||||||
Share based compensation | 9,756 | 3,607 | 1,440 | |||||||||
Revaluation of warrants | (1,769 | ) | (5,259 | ) | 3,271 | |||||||
Impairment of Goodwill | 49,686 | - | - | |||||||||
Impairment of intangible assets | 22,355 | - | - | |||||||||
Contingent consideration income | (8,954 | ) | - | - | ||||||||
Deferred tax expense (benefit) | (31 | ) | (11 | ) | 3 | |||||||
Foreign currency translation loss | 1,321 | - | - | |||||||||
Investments interest receivables, amortization, and accretion | (1,490 | ) | - | - | ||||||||
Other | - | - | 134 | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Trade receivables, net | 639 | (629 | ) | (85 | ) | |||||||
Other receivables and prepaid expenses | 731 | (2,059 | ) | 574 | ||||||||
Other payables and accrued expenses | 140 | 1,886 | 99 | |||||||||
Account payables | 136 | (252 | ) | 63 | ||||||||
Deferred revenue | (167 | ) | (242 | ) | 260 | |||||||
Other assets and liabilities | (403 | ) | - | - | ||||||||
Net cash used in operating activities | (56,373 | ) | (33,361 | ) | (14,135 | ) | ||||||
Cash flows from investing activities | ||||||||||||
Purchases of property and equipment | (241 | ) | (188 | ) | (420 | ) | ||||||
Proceeds from short-term bank deposits, net | (61,549 | ) | 12,800 | (1,393 | ) | |||||||
Investment in marketable securities | (55,000 | ) | - | - | ||||||||
Other long-term assets, net | - | 33 | (19 | ) | ||||||||
Payments for business acquisitions, net of cash acquired | (11,018 | ) | (9,965 | ) | - | |||||||
Net cash provided by (used in) investing activities | (127,808 | ) | 2,680 | (1,832 | ) | |||||||
Cash flows from financing activities | ||||||||||||
Proceeds from issuance of redeemable convertible preferred shares and warrants, net | - | - | 19,967 | |||||||||
Issuance of ordinary shares, net | - | 223,732 | - | |||||||||
Proceeds from exercise of share options | 140 | 44 | 133 | |||||||||
Net cash provided by financing activities | 140 | 223,776 | 20,100 | |||||||||
Foreign currency effect on cash and cash equivalents and short-term restricted cash | (1,244 | ) | - | - | ||||||||
Net increase (decrease) in cash and cash equivalents and short-term restricted cash | (185,285 | ) | 193,095 | 4,133 | ||||||||
Cash and cash equivalents and short-term restricted cash at the beginning of the year | 208,079 | 14,984 | 10,851 | |||||||||
Cash and cash equivalents and short-term restricted cash at the end of the year | 22,794 | 208,079 | 14,984 | |||||||||
Supplemental disclosures of cash flow information | ||||||||||||
Cash paid for income taxes, net of tax refunds | 243 | 104 | 69 | |||||||||
Non-cash investing activities: | ||||||||||||
Contingent consideration | 9,865 | - | - | |||||||||
Shares issued related to the business acquisitions | 10,691 | 33,816 | - | |||||||||
Non-cash financing activities: | ||||||||||||
Conversion of warrants to redeemable convertible preferred shares | - | 10,896 | - |
F - 7
A. | Basis of Presentation The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and include the accounts of Otonomo Technologies Ltd. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
B. | Recapitalization On August 13, 2021, the Company merged with Software Acquisition Group Inc. II (“SWAG”), a special purpose acquisition company, that resulted in SWAG becoming a wholly-owned subsidiary of the Company. The transaction was accounted for as a recapitalization as pre-combination Otonomo was determined to be the accounting acquirer under Financial Accounting Standards Board (FASB)’s Accounting Standards Codification Topic 805, Business Combinations (ASC 805). In connection with the recapitalization, all outstanding capital stock of the pre-combination Otonomo was converted into Company Ordinary Shares, representing a recapitalization, and the net assets of SWAG were acquired at historical cost, with no goodwill or intangible assets recorded. |
F - 8
Note 2 - Summary of Significant Accounting Policies (cont'd)
C. | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and related disclosures at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and such differences may have a material impact on the Company’s financial statements. As applicable to these consolidated financial statements, the most significant estimates relate to purchase price allocation including contingent consideration, recoverability of goodwill and intangible assets and fair value of warrant liability. |
D. | Foreign Currency The functional currency of the Company is the U.S. dollar. Accordingly, monetary accounts maintained in currencies other than the U.S. dollar are re-measured into U.S. dollars in accordance with Accounting Standard Codification ("ASC") Topic 830 "Foreign Currency Matters." All transaction gains and losses of the re-measured monetary balance sheet items are reflected in the consolidated statements of operations as financial income or expenses, as appropriate. The functional currency of the Company's United Kingdom subsidiary is the British Pound. Accordingly, the translation to U.S. dollars takes the balance sheet date exchange rates for assets and liabilities, historical rates of exchange for equity, and average exchange rates in the period for revenues and expenses. The effects of foreign currency translation adjustments are included in shareholders’ equity (deficit) as a component of accumulated other comprehensive loss in the accompanying consolidated balance sheets. |
E. | Concentration of Credit Risk Financial instruments which potentially expose the Company to concentrations of credit risk consist primarily of cash equivalents, restricted cash, short-term deposits, investment in marketable securities and account receivables. Most of the Company’s cash and cash equivalents and bank deposits are invested with banks in the U.S., Israel and Europe. Management believes that the credit risk with respect to the financial institutions that hold the Company’s cash, cash equivalents and bank deposits is low. |
F - 9
Note 2 - Summary of Significant Accounting Policies (cont'd)
F. | Cash, Cash equivalents and restricted cash The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. Restricted cash includes cash that is legally restricted as to withdrawal or usage. |
G. | Short-term deposits Short-term deposits consist of bank deposits with an original maturity of greater than three months at the date of purchase. Short-term bank deposits are presented at their cost, including accrued interest. |
H. | Marketable securities Marketable securities consist of commercial paper, corporate bonds, and U.S. government and agency. The Company considers all of its marketable securities as available for use in current operations, including those with maturity dates beyond one year, and therefore classifies these securities within current assets on the consolidated balance sheets. Securities are classified as available for sale and are carried at fair, with the change in unrealized gains and losses, net of tax, reported as a separate component on the consolidated statements of comprehensive loss until realized. Realized gains and losses on sales of marketable securities, are included in financial income (expenses), net. The amortized cost of marketable securities is adjusted for amortization of premium and accretion of discount to maturity, both of which, together with interest, are included in financial income (expenses), net. The Company's securities are reviewed for impairment in accordance with ASC Topic 320. If such assets are considered to be impaired, the impairment charge is recognized in earnings when a decline in the fair value of its investments below the cost basis is judged to be Other-Than-Temporary Impairment (OTTI). Factors considered in making such a determination include the duration and severity of the impairment, the reason for the decline in value, the potential recovery period and the Company's intent to sell, including whether it is more likely than not that the Company will be required to sell the investment before recovery of cost basis. Based on the above factors, the Company concluded that unrealized losses on its available-for-sale securities for the year ended 2022 were not OTTI. |
I. | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. | |
F - 10
Note 2 - Summary of Significant Accounting Policies (cont'd)
I. | Fair Value Measurements (cont'd) | |
Level 2: Observable inputs that are based on inputs not quoted on active markets but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. |
J. | Accounts Receivables, net Accounts receivables are recorded at the invoiced amount and amounts for which revenue has been recognized but not invoiced, net of allowance for doubtful accounts. The allowance for doubtful accounts is based on the Company’s assessment of the collectability of accounts. As of December 31, 2022, and 2021, unbilled accounts receivables of $193 and $215 thousands, respectively, was included in account receivables, net, on the Company’s consolidated balance sheets. The allowance of doubtful accounts was not material for the periods presented. |
K. | Property and Equipment Property and equipment are stated at cost net of accumulated depreciation. Maintenance and repair expenses are charged to operation as incurred. Depreciation is calculated on the straight-line method based on the estimated useful lives of the assets and commences once the assets are ready for their intended use. Annual rates at depreciation are as follows: |
% | |
Computers and software | 33 |
Office furniture and equipment | 7;15 |
Leasehold improvements | Shorter of remaining lease term or estimated useful life |
The Company evaluates the recoverability of property and equipment for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be fully recoverable. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If such review indicates that the carrying amount of property and equipment is not recoverable, the carrying amount of such assets is reduced to fair value. There were no impairment charges to property and equipment during the years presented. |
L. | Capitalized Software Costs Costs related to software acquired, developed, or modified solely to meet the Company’s internal requirements, with no substantive plans to market such software at the time of development are capitalized. Costs incurred during the preliminary planning and evaluation stage of the project and during the post implementation operational stage are expensed as incurred. Costs incurred during the application development stage of the project are capitalized. Maintenance costs are expensed as incurred. The amount of qualifying costs for capitalization incurred was immaterial for the years presented. |
F - 11
Note 2 - Summary of Significant Accounting Policies (cont'd)
M. | Business Combinations The Company allocates the fair value of consideration transferred in a business combination to the assets acquired and liabilities assumed in the acquired business based on their fair values at the acquisition date. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred. The excess of the fair value of the consideration transferred over the fair value of the assets acquired, liabilities assumed in the acquired business is recorded as goodwill. Key assumptions include, but are not limited to, future expected cash flows, discount rates and profit margin that management believes a market participant would use in pricing the asset or liability. These assumptions are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which may not be later than one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. The fair value of the consideration transferred may include a combination of cash, equity securities and earn out payments. The Company includes the results of operations of the businesses that it has acquired in its consolidated results prospectively from the respective dates of acquisition. The Company records obligations in connection with its business combinations at fair value on the acquisition date. Each reporting period thereafter, the Company revalues earn-out payments which are classified as contingent consideration liabilities and records the changes in their fair value in the consolidated statements of operations and comprehensive loss. Changes in the fair value of the obligations in connection with its business combinations mainly result from the Company’s shares price and sales and profitability targets. These fair value measurements represent Level 3 measurements, as they are based on significant inputs not observable in the market. |
N. | Goodwill and Intangible Assets, net Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination and is allocated to reporting units expected to benefit from the business combination. Goodwill is not amortized but rather tested for impairment at least annually in the fourth quarter, or more frequently if events or changes in circumstances indicate that goodwill may not be recoverable. A qualitative assessment is performed to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount. If the reporting unit does not pass the qualitative assessment, the carrying amount of the reporting unit, including goodwill, is compared to fair value and goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value. Any excess of the carrying value of the goodwill above its fair value is recognized as an impairment loss. Intangible assets are amortized over the period of estimated benefit and estimated useful lives ranging from two to eight years. The Company reviews the carrying amounts for potential impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. During 2022, as a result of the decline in the quoted share price of the Company, an impairment loss was recognized for the entire goodwill and intangible assets. For information on key assumptions used in calculation of the recoverable amount, see Note 7. |
F - 12
O. | Employee Benefit Plans |
a) | Section 14 of the Israeli Severance Pay Law Pursuant to Israel’s Severance Pay Law, Israeli employees are entitled to severance pay equal to one month’s salary for each year of employment, or a portion thereof. The Company has elected to include its employees in Israel under Section 14 of the Severance Pay Law, under which these employees are entitled only to monthly deposits made in their name with insurance companies, at a rate of 8.33% of their monthly salary. These payments release the Company from any future obligation under the Israeli Severance Pay Law to make severance payments in respect of those employees; therefore, any liability for severance pay due to these employees, and the deposits under Section 14 are not recorded as an asset in the consolidated balance sheets. |
b) | 401(k) Savings Plan The Company established a defined contribution savings plan under Section 401(k) of the Internal Revenue Code. This plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a portion of the annual compensation on a pre-tax basis. Company contributions to the plan may be made as the discretion of the Board of Directors |
P. | Leases In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, “Leases (Topic 842),” which requires lessees to generally recognize on the balance sheet operating and financing lease liabilities and corresponding right-of-use assets, and to recognize on the statements of operations the expenses in a manner similar to prior practice. The Company adopted Topic 842 using the modified retrospective method as of January 1, 2022 and elected the transition option that allows the Company not to restate the comparative periods in the financial statements in the year of adoption. |
Operating lease right-of-use (“ROU”) assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. Operating lease ROU assets include any prepaid lease payments.
F - 13
P. | Leases (cont'd) | |
The interest rate used to determine the present value of the future lease payments is the Company’s incremental borrowing rate, because the interest rate implicit in the Company’s leases is not readily determinable. The Company’s incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. The Company’s lease terms may include options to extend or terminate the lease. These options are reflected in the ROU asset and lease liability when it is reasonably certain that the Company will exercise the option. Operating lease expense is recognized on a straight-line basis over the lease term. The adoption of the standard resulted in the recognition of right of use ("ROU") assets and lease liabilities of approximately $1.8 million, on January 1, 2022, for the headquarters in Israel. |
Q. | Revenue Recognition Revenues are recognized when control of services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. |
The revenue comprised mainly of subscription fees from customers accessing the Company’s enterprise cloud computing services (“SaaS subscriptions”).
In addition, the Company provides customization, research, and analytical services to its customers, such professional services revenues are recognized as services are delivered.
• | Identification of the contract, or contracts, with a customer; |
• | Identification of the performance obligations in the contract; |
• | Determination of the transaction price; |
• | Allocation of the transaction price to the performance obligations in the contract; and |
• | Recognition of revenue when, or as, the Company satisfies a performance obligation. |
F - 14
Q. | Revenue Recognition (cont'd) | |
The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. The Company evaluates the terms and conditions included within the customer’s contracts to ensure appropriate revenue recognition, including whether products and services are considered distinct performance obligations that should be accounted for separately versus together. For contracts with multiple performance obligations, the transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The Company determine standalone selling price by considering the historical selling price of these performance obligations in similar transactions as the well as other factors, including, but not limited to, competitive pricing of similar products, other software vendor pricing, industry publications and current pricing practices. The Company’s SaaS subscriptions revenues consist primarily of fees to provide the Company’s customers access to its cloud-based platform, which includes routine customer support. Subscription service contracts do not provide customers with the right to take possession of the software, are cancelable, and do not contain general rights of return. The Company recognizes subscription revenues ratably over the contract term beginning on the commencement date of each contract, which is the date the Company makes the services available to the customers. Subscription contracts typically have a term of up to three years and are based on fixed-fee and/or a pay per use basis. Certain pay per use contract includes minimum monthly or annual fees. For fixed-fee basis contracts, invoicing occurring in quarterly or monthly installments at the end of each period. Fixed or substantive minimum fees are recognized ratably over the term of the arrangement beginning on the date that the service is made available to the customer. For pay per use basis contracts, the Company applies the ‘as-invoiced’ practical expedient and recognizes revenue in the amount which is equivalent to the service rendered each month. Invoicing is normally done monthly at the end of each month. Contract assets consist of unbilled accounts receivable, which occur when a right to consideration for the Company’s performance under the customer contract occurs before invoicing to the customer. The amount of unbilled accounts receivable included within accounts receivable, net, on the consolidated balance sheets. Contract liabilities consist of deferred revenue. Revenue is deferred when the Company invoices in advance of performance under a contract. To the extent the Company bill customers in advance of the billing period commencement date, the trade receivable and corresponding deferred revenue amounts are netted to zero on the Company’s consolidated balance sheets, unless such amounts have been paid as of the balance sheet date. The current portion of the deferred revenue balance is recognized as revenue during the 12-month period after the balance sheet date. Contract Balances Of the $216 thousand of deferred revenue recorded as of December 31, 2022, the Company expects to recognize 100% as revenue during the year ended December 31, 2023. | ||
F - 15
Note 2 - Summary of Significant Accounting Policies (cont'd)
Q. | Revenue Recognition (cont'd) | |
Cost to Obtain a Contract The Company capitalizes certain sales commissions as costs of obtaining a contract when they are incremental and if they are expected to be recovered. These costs are subsequently amortized consistently with the pattern of revenue recognition from contracts for which the commissions relate, over an estimated period of benefit. Deferred commission costs capitalized are periodically reviewed for impairment. There were no impairment losses recorded during the periods presented. For costs that the Company would have capitalized and amortized over one year or less, the Company has elected to apply the practical expedient and expense these costs as incurred. Amortization expense of these costs are included in selling and marketing expenses. As of December 31, 2022, the amount of deferred commissions was $273 and is included in other receivables and prepaid expenses and other long-term assets on the consolidated balance sheets. As of December 31, 2021, incremental costs of obtaining a contract that are eligible to capitalization, were immaterial. |
R. | Cost of Services Cost of services consists primarily of expenses related to purchasing of data from data suppliers, amounts paid to data suppliers under revenue sharing or fixed price arrangements, software licenses, and personnel-related costs associated with customer support and professional services, including salaries and benefits. |
S. | Cloud infrastructure Third-party cloud infrastructure expenses incurred in connection with the Company’s customers’ use of the Company’s platform and the maintenance of the Company’s platform on public clouds, such as cloud computing or other hosting and data storage including different regional deployments. In addition, cloud infrastructure also includes the third-party cloud infrastructure expenses incurred with internal research and development use. |
T. | Research and Development Research and development costs include personnel-related expenses associated with the Company’s engineering personnel responsible for the design, development and testing of its products, cost of development environments and tools, and allocated overhead. Research and development costs are expensed as incurred. | |
F - 16
U. | Share Based Compensation Share based compensation expense related to share-based awards is recognized based on the fair value of the awards granted and recognized as an expense on a straight-line basis over the requisite service period for share options and restricted share units (“RSUs”). The Company measures compensation expense for options based on estimated fair values on the date of grant using the Black-Scholes option pricing model. This option pricing model requires estimates as to the option’s expected term and the price volatility of the underlying stock. The fair value of each RSU award is based on the fair value of the underlying ordinary shares on the grant date. The Company records forfeitures for share-based awards and RSUs as they occur. If an employee forfeits an award because he fails to complete the requisite service period, the Company will reverse the compensation cost previously recognized in the period the award is forfeited. |
V. | Income Taxes The Company is subject to income taxes in Israel, the U.S., and other foreign jurisdictions. These foreign jurisdictions may have different statutory tax rates than in Israel. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The financial effect of changes in tax laws or rates is accounted for in the period of enactment. Valuation allowances are provided when necessary to reduce deferred tax assets to the amount more likely than not to be realized. The Company recognizes income tax benefits from tax positions only if it believes that it is more likely than not that the tax position will be sustained upon examination. The tax benefits recognized are measured as the largest amount of tax benefit that is greater than 50 percent likely of being realized upon settlement. |
W. | Net Loss Per Share The Company computes net loss per share using the two-class method required for participating securities. The two-class method requires income available to ordinary shareholders for the period to be allocated between ordinary shares and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. The Company considers its redeemable convertible preferred shares to be participating securities as the holders of the redeemable convertible preferred shares would be entitled to dividends that would be distributed to the holders of ordinary shares, on a pro-rata basis assuming conversion of all redeemable convertible preferred shares into ordinary shares. These participating securities do not contractually require the holders of such shares to participate in the Company’s losses. As such, net loss for the periods presented was not allocated to the Company’s participating securities. | |
F - 17
W. | Net Loss Per Share (cont'd) | |
The Company’s basic net loss per share is calculated by dividing net loss attributable to ordinary shareholders by the weighted-average number of shares of ordinary shares outstanding for the period, without consideration of potentially dilutive securities. The diluted net loss per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury share method or the if-converted method based on the nature of such securities. Diluted net loss per share is the same as basic net loss per share in periods when the effects of potentially dilutive shares of ordinary shares are anti-dilutive. |
X. | Recently Adopted Accounting Pronouncements As an “Emerging growth company,” the Jumpstart Our Business Startups Act (“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 February 2016, the FASB issued ASU No. 2016-02, Leases, which requires lessees to put all leases on their balance sheets, whether operating or financing, while continuing to recognize the expenses on their income statements in a manner similar to current practice. The Company adopted this guidance and the related amendments on January 1, 2022. Refer to Notes 2P and 8. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740). The new guidance simplifies the accounting for income taxes by removing certain exceptions to the general principles and simplification of areas such as franchise taxes, step-up in tax basis goodwill, separate entity financial statements and interim recognition of enactment of tax laws or rate changes. The Company adopted the guidance effective January 1, 2022, with no material impact on its consolidated financial statements. |
Y. | Recently Issued Accounting Pronouncements In June 2016, the FASB issued an ASU 2016-13, Topic 326, that supersedes the existing impairment model for most financial assets to a current expected credit loss model. The new guidance requires an entity to recognize an impairment allowance equal to its current estimate of all contractual cash flows the entity does not expect to collect. The guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted. The Company is in the process of evaluating the effects of this standard on it the consolidated financial statements. |
F - 18
(a) | $13.0 million in cash. |
(b) | $33.8 million in equity for the fair value of 6,658,410 shares of the Company’s ordinary shares issued. |
Fair Value | ||||
USD thousands | ||||
Net tangible assets and liabilities assumed (current and non-current) | (205 | ) | ||
Technology | 10,021 | |||
Goodwill | 37,000 | |||
Net assets acquired | 46,816 |
(a) | $10.8 million in cash |
(b) | $10.7 million in equity for the fair value of 6,363,636 shares of the Company’s ordinary shares issued. |
(c) | Contingent consideration of up to $12 million in cash and up to 6,545,454 of the Company’s ordinary shares, based on performance condition, which was evaluated as of the acquisition date, at a fair value of the amount of $9.9 million. |
F - 19
Note 3 - Business Combinations (cont'd)
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 |
Pro Forma on acquisitions
Year Ended | Year Ended | |||||||
December 31 | December 31 | |||||||
2022 | 2021 | |||||||
USD thousands | USD thousands | |||||||
Revenue | 8,591 | 10,109 | ||||||
Net loss | (121,462 | ) | (40,063 | ) |
F - 20
Note 3 - Business Combinations (cont'd)
Note 4 - Segments and Entity-Wide Disclosure
Otonomo operates its business and reports its financial results in two segments:
(a) | Connected Vehicles – connected vehicle data platform, which provides customers access to vehicle data and other value-added services (“Connected Vehicle”), complemented by Mobility Intelligence platform (“MI services”). | |
(b) | Insurance related Services – connected insurance technology to insurance carriers, comprised of The Floow acquired activity. |
The chief operating decision maker (“CODM”) reviews financial information prepared on a consolidated basis, accompanied by disaggregated information about revenues and contributed profit by the two identified reportable segments, to make decisions about resources to be allocated to the segments and assess their performance.
In 2021, prior to the The Floow acquisition, Otonomo operated in one operating and reportable segment, the Connected Vehicles segment, therefore corresponding information for earlier periods is not applicable.
Otonomo’s CODM does not regularly review asset information by reportable segment and, therefore, Otonomo does not report asset information by reportable segment.
Segment loss is comprised of operating loss and does not include amortization, depreciation and certain other items.
F - 21
Note 4 - Segments and Entity-Wide Disclosure (cont'd)
A. | Segment information |
Year ended December 31 2022 | ||||||||||||
Connected Vehicles | Insurance related Services | Total | ||||||||||
USD thousands | USD thousands | USD thousands | ||||||||||
Revenues | 3,078 | 3,914 | 6,992 | |||||||||
Segment loss | (51,326 | ) | (6,463 | ) | (57,789 | ) | ||||||
Amounts not allocated to segments: | ||||||||||||
Depreciation and amortization | (2,749 | ) | ||||||||||
Contingent consideration income | 8,954 | |||||||||||
Impairment of goodwill | (49,686 | ) | ||||||||||
Impairment of intangible assets | (22,355 | ) | ||||||||||
Share-based compensation | (9,756 | ) | ||||||||||
Operating loss | (133,381 | ) | ||||||||||
Financial income, net | 2,455 | |||||||||||
Loss before income taxes | (130,926 | ) |
B. | Revenue by geographical region of the Company’s customers |
Year ended | Year ended | Year ended | ||||||||||
December 31 | December 31 | December 31 | ||||||||||
2022 | 2021 | 2020 | ||||||||||
USD thousands | USD thousands | USD thousands | ||||||||||
Americas | 3,283 | 176 | 43 | |||||||||
APAC | 188 | 329 | 164 | |||||||||
EMEA | 3,521 | 1,218 | 187 | |||||||||
Total revenues | 6,992 | 1,723 | 394 |
C. | Property and equipment, net, and operating lease right-of-use assets, by geographic region |
December 31 | December 31 | |||||||
2022 | 2021 | |||||||
USD thousands | USD thousands | |||||||
United States | 30 | 9 | ||||||
Israel | 1,878 | 716 | ||||||
Europe | 1,175 | - | ||||||
Total operating lease right-of-use assets, property and equipment, net | 3,083 | 725 |
F - 22
D. | Number of customers accounted for over 10% of the revenues |
December 31, 2022 | December 31, 2021 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
USD thousands | ||||||||||||||||||||||||
Money Market funds (1) | 447 | - | - | - | - | - | ||||||||||||||||||
U.S. Treasury securities (1) | 4,197 | - | - | - | - | - | ||||||||||||||||||
Corporate bonds (1) | - | 32,516 | - | - | - | - | ||||||||||||||||||
Commercial papers (1) | - | 7,030 | - | - | - | - | ||||||||||||||||||
U.S. government agency securities (1) | - | 9,399 | - | - | - | - | ||||||||||||||||||
Foreign bonds (1) | - | 1,700 | - | - | - | - | ||||||||||||||||||
Contingent consideration (2) | - | - | (911 | ) | - | - | - | |||||||||||||||||
Warrants for ordinary shares (3) | - | - | (155 | ) | - | - | (1,924 | ) | ||||||||||||||||
4,644 | 50,645 | (1,066 | ) | - | - | (1,924 | ) |
(1) | The following tables summarize the composition of marketable securities as of December 31, 2022: |
December 31, 2022 | ||||||||||||
Amortized Cost | Unrealized Gain/Losses | Fair Value | ||||||||||
USD thousands | ||||||||||||
Money market funds | 447 | - | 447 | |||||||||
Available-for-sale debt securities | ||||||||||||
Corporate bonds | 32,562 | (46 | ) | 32,516 | ||||||||
Commercial papers | 7,030 | - | 7,030 | |||||||||
U.S. government agency securities | 9,411 | (12 | ) | 9,399 | ||||||||
U.S. Treasury securities | 4,198 | (1 | ) | 4,197 | ||||||||
Foreign bonds | 1,700 | - | 1,700 | |||||||||
Total | 54,901 | (59 | ) | 54,842 | ||||||||
55,348 | (59 | ) | 55,289 |
F - 23
Note 5 - Fair Value Measurement (cont'd)
December 31, 2022 | ||||||||
Amortized Cost | Fair Value | |||||||
USD thousands | ||||||||
Due within one year | 44,596 | 44,556 | ||||||
Due after one year through two years | 10,305 | 10,286 | ||||||
Total | 54,901 | 54,842 |
(2) | Contingent consideration represents liabilities recorded at fair value in connection with acquisitions, and thus represents a Level 3 measurement within the fair value hierarchy. |
USD thousands | ||||
Fair value as of January 1, 2022 | - | |||
Current year acquisitions, see note 3 | 9,865 | |||
Change in fair value | (8,954 | ) | ||
Fair value as of December 31, 2022 | 911 |
(3) | In connection with the Recapitalization, on August 13, 2021, the Company issued 5,200,000 private warrants. the warrants were classified as a liability measured at fair value, with changes in fair value each period reported in the consolidated statements of operations. Refer to note 11. |
December 31 | December 31 | |||||||
2022 | 2021 | |||||||
USD thousands | USD thousands | |||||||
Computer and software | 839 | 498 | ||||||
Office furniture and equipment | 513 | 376 | ||||||
Leasehold improvements | 426 | 359 | ||||||
1,778 | 1,233 | |||||||
Less - accumulated depreciation | (735 | ) | (508 | ) | ||||
Property and equipment, net | 1,043 | 725 |
F - 24
2022 | 2021 | |||||||
USD thousands | USD thousands | |||||||
Balance on January 1, | 37,000 | - | ||||||
Goodwill acquired | 14,934 | 37,000 | ||||||
Currency translation adjustments | (2,248 | ) | - | |||||
Impairment | (49,686 | ) | - | |||||
Balance on December 31, | - | 37,000 |
2022 | 2021 | |||||||
USD thousands | USD thousands | |||||||
Balance on January 1, | 9,621 | - | ||||||
Assets acquired: | ||||||||
Technology | 7,881 | 10,021 | ||||||
Customer Relationships | 9,454 | - | ||||||
Trademark | 435 | - | ||||||
Amortization | (2,490 | ) | (400 | ) | ||||
Currency translation adjustments | (2,546 | ) | - | |||||
Impairment | (22,355 | ) | - | |||||
Balance on December 31, | - | 9,621 |
F - 25
December 31 | ||||
2022 | ||||
USD thousand | ||||
Operating lease cost: | ||||
Fixed payments and variable payments that depend on an index or rate | 1,000 | |||
1,000 |
December 31 | ||||
2022 | ||||
USD thousand | ||||
Cash paid for amounts included in the measurement of lease liabilities | 904 | |||
Right-of-use assets obtained in exchange for new operating lease liabilities | 2,040 |
December 31 | ||||
2022 | ||||
Weighted-average remaining lease term of operating leases | 3.71 years | |||
Weighted average discount rate of operating leases | 3.10 | % |
USD thousand | ||||
2023 | 742 | |||
2024 | 742 | |||
2025 | 183 | |||
2026 | 183 | |||
Thereafter | 259 | |||
Total undiscounted minimum lease payments | 2,109 | |||
Less: Imputed interest | (155 | ) | ||
1,954 |
December 31 | December 31 | |||||||
2022 | 2021 | |||||||
USD thousands | USD thousands | |||||||
Employees and related institutions | 6,363 | 4,973 | ||||||
Vacation and convalescence | 1,127 | 1,246 | ||||||
Accrued expenses and other | 3,070 | 1,819 | ||||||
Government institutions | 398 | 367 | ||||||
10,958 | 8,405 |
F - 26
The Company may be subject from time to time to various proceedings, lawsuits, disputes, or claims in the ordinary course of business. The Company investigates these claims as they arise. Although claims are inherently unpredictable, the Company is currently not aware of any matters that, if determined adversely to the Company, would individually or taken together, have a material adverse effect on its business, financial position, results of operations, or cash flows.
A. | Recapitalization and Subscription Agreements |
1) | Merger Sub merged with and into SWAG, with SWAG surviving the merger. As a result of the Merger, and simultaneously with the other transactions mentioned above, SWAG became a wholly owned subsidiary of the Company, with the securityholders of SWAG becoming securityholders of the Company. |
2) | Each outstanding Preferred Share of the Company was converted into one Ordinary Share. |
3) | After giving effect to the redemption of approximately $59,863 thousand of SWAG's Class A Stock, the remaining securityholders of SWAG were issued an aggregate of 15,576,479 of the Company's ordinary shares for gross proceeds of $112,646 thousand. |
4) | In accordance with the terms of the Subscription Agreements, the PIPE Investors were issued an aggregate of 14,250,000 the Company's ordinary shares for gross proceeds of $142,500 thousand. |
5) | In accordance with the terms of the Share Purchase Agreement, the Secondary PIPE Investors purchased 3,000,000 of the Company's ordinary shares from the Secondary Selling Shareholders at a purchase price of $10.00 per share, for an aggregate purchase price of $30,000 thousand. |
6) | The Company effected a share split of each ordinary share into such number of ordinary shares, such that each ordinary share has a value of $10.00 per share after giving effect to such share split. As of the Closing Date, the share split calculated ratio was 1:4.6937. As a result, all ordinary share, redeemable convertible preferred shares, options for ordinary shares, exercise price and net loss per share amounts were adjusted retroactively for all periods. |
F - 27
A. Recapitalization and Subscription Agreements (cont'd)
Each warrant entitles the holder to purchase one Company Ordinary Share at a price of $11.50 per share, subject to adjustments. The warrants are exercisable at any time commencing 30 days after the completion of the Recapitalization and expire five years after the Closing Date or earlier upon redemption or liquidation. The Company may redeem the outstanding warrants in whole and not in part at a price of $0.01 per warrant at any time after they become exercisable, provided that the last sale price of the Company Ordinary Shares equals or exceeds $18 per share, subject to adjustments, for any 20-trading days within a 30-trading day period ending three business days prior to the date on which the Company sends the notice of redemption to the warrant holders. The private warrants have similar terms as the public warrants, except that the private warrants may be exercised on a cashless basis at the holder’s option and the private warrants will not be redeemed by the Company as long as they are held by the initial purchasers or their permitted transferees, but once they are transferred, they have the same rights as the public warrants. The public warrants were classified as a component of permanent equity and the private warrants were classified as a liability measured at fair value pursuant to ASC 480 “Distinguishing Liabilities from Equity” and ASC 815 “Derivatives and Hedging”.
B. Ordinary shares
Each ordinary share is entitled to one vote. The holders of ordinary shares are also entitled to receive dividends whenever funds are legally available and when declared by the Board of Directors, subject to the prior rights of holders of all classes of shares outstanding.
F - 28
D. Warrants for redeemable convertible preferred shares (cont'd)
E. Warrants for ordinary shares
The Black-Scholes assumptions used to value the private warrants are as follows:
December 31 | December 31 | |||||||
2022 | 2021 | |||||||
Volatility | 89.1 | % | 41.0 | % | ||||
Risk-free interest rate | 4.1 | % | 1.2 | % | ||||
Expected dividends | 0.0 | % | 0.0 | % | ||||
Expected life (in years) | 3.62 | 4.6 |
December 31 | December 31 | |||||||
2022 | 2021 | |||||||
Value of warrant per share | $ | 0.03 | $ | 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) | $ | 155 | $ | 1,924 |
In February 2016, the Company adopted the 2016 Share Incentive Plan (the “2016 Plan”) for employees and consultants. Under the 2016 Plan, the Board of Directors (the “Board”) has the authority to grant share options to employees and consultants of the Company under varying Israel tax regimes or any other tax ruling provided by the tax authorities to the Company, as well as with respect to non-Israeli residents pursuant to the applicable law in their respective country of residence. Each option entitles the holder to purchase one ordinary share with no par value. On December 25, 2016, the Company adopted the 2016 U.S. Sub Plan, designated for U.S. persons.
F - 29
Note 11 - Equity (cont'd)
F. Share Based Compensation (cont'd)
In April 2021, the Company adopted the 2021 Share Incentive Plan (the “2021 Plan”). Following the effectiveness of the 2021 Plan, the Company will no longer grant any awards under the 2016 Plan, though previously granted options under the 2016 Plan remain outstanding and governed by the 2016 Plan. The 2021 Plan provides for the grant of share options and restricted share units.
The awards have varying terms, but generally vest over four years. Share options expire 10 years after the date of grant. The Company issues new ordinary shares upon exercise of share options.
Share Options
Weighted | ||||||||
average | ||||||||
Number of Options | exercise price | |||||||
Outstanding - January 1, 2021 | 9,166,946 | |||||||
Granted | 754,988 | $ | 0.40 | |||||
Forfeited | (97,123 | ) | $ | 0.62 | ||||
Exercised | (233,507 | ) | $ | 0.18 | ||||
Outstanding - December 31, 2021 | 9,591,304 | $ | 0.65 | |||||
Forfeited | (638,932 | ) | $ | 1.11 | ||||
Exercised | (916,310 | ) | $ | 0.15 | ||||
Outstanding - December 31, 2022 | 8,036,062 | $ | 0.67 | |||||
Exercisable at end of period | 7,303,499 | $ | 0.26 |
The following table summarizes information about stock options outstanding at December 31, 2022:
Options outstanding | Option exercisable | |||||||||||
Exercise price | Number | Weighted average remaining contractual life (in years) | Number exercisable at December 31, 2022 | |||||||||
$ 9.23 | 434,484 | 8.62 | 86,465 | |||||||||
$ 1.11 | 199,138 | 7.07 | 152,183 | |||||||||
$ 0.93 | 2,835 | 7.36 | 1,770 | |||||||||
$ 0.64 | 882,757 | 7.54 | 555,280 | |||||||||
$ 0.62 | 225,857 | 6.11 | 216,810 | |||||||||
$ 0.47 | 47,937 | 5.09 | 47,937 | |||||||||
$ 0.14 | 1,001,729 | 4.01 | 1,001,729 | |||||||||
$ 0.07 | 502,342 | 5.04 | 502,342 | |||||||||
$ 0.06 | 4,738,983 | 3.64 | 4,738,983 | |||||||||
8,036,062 | 7,303,499 |
F - 30
F. Share Based Compensation (cont'd)
Share Options (cont'd)
The fair value of each option award is estimated on the grant date using the Black-Scholes option pricing model, which requires the input of highly subjective assumptions. No options were granted during 2022.
Year ended | Year ended | |||||||
December 31 | December 31 | |||||||
2021 | 2020 | |||||||
Volatility | 40.6%-45.6 | % | 38.3%-41.1 | % | ||||
Risk-free interest rate | 0.6%-1.4 | % | 0.4%-1.6 | % | ||||
Expected dividends | 0.0 | % | 0.0 | % | ||||
Expected life (in years) | 5.8-6.1 | 5.5-6.1 |
Weighted | ||||||||
Average grant | ||||||||
Number of RSUs | date fair value | |||||||
Balance at January 1, 2021 | - | |||||||
Granted | 4,031,528 | $ | 5.21 | |||||
Vested | (98,406 | ) | $ | 7.67 | ||||
Forfeited | (94,257 | ) | $ | 5.60 | ||||
Balance at December 31, 2021 | 3,838,865 | $ | 5.14 | |||||
Granted | 10,662,754 | $ | 1.12 | |||||
Vested | (2,188,669 | ) | $ | 3.42 | ||||
Forfeited | (1,747,698 | ) | $ | 3.91 | ||||
Balance at December 31, 2022 | 10,565,252 | $ | 1.65 |
Year Ended | Year Ended | Year Ended | ||||||||||
December 31 | December 31 | December 31 | ||||||||||
2022 | 2021 | 2020 | ||||||||||
USD thousands | USD thousands | USD thousands | ||||||||||
Cost of Service | 73 | - | - | |||||||||
Research and development | 2,105 | 1,103 | 771 | |||||||||
Sales and marketing | 3,025 | 737 | 406 | |||||||||
General and administrative | 4,553 | 1,767 | 263 | |||||||||
9,756 | 3,607 | 1,440 |
F - 31
Note 11 - Equity (cont'd)
F. | Share Based Compensation (cont'd) |
G. | Accumulated other comprehensive loss |
Unrealized losses on | ||||||||||||
available- for-sale | Foreign currency | |||||||||||
marketable securities, net | translation adjustments | Total | ||||||||||
USD thousands | ||||||||||||
Balance as of January 1, 2022 | - | - | - | |||||||||
Other comprehensive loss before reclassifications | 59 | 4,791 | 4,850 | |||||||||
Amounts reclassified from accumulated other comprehensive loss | - | - | - | |||||||||
Other comprehensive loss, net of tax | 59 | 4,791 | 4,850 | |||||||||
Balance as of December 31, 2022 | 59 | 4,791 | 4,850 |
• | The corporate tax rate in Israel relevant to the Company is 23%. | |
• | The corporate tax rate in the UK relevant to the Company’s subsidiary is 19%. |
• | The Company’s subsidiaries are separately taxed under the domestic tax laws of the jurisdiction of incorporation of each entity. |
F - 32
Note 12 - Income Taxes (cont'd)
December 31 | December 31 | |||||||
2022 | 2021 | |||||||
USD thousands | USD thousands | |||||||
Deferred tax assets: | ||||||||
Operating loss and tax credit carryforwards | 51,675 | 30,882 | ||||||
Capitalized research and development expenses | 2,098 | 2,061 | ||||||
Share based compensation | 2,070 | 1,125 | ||||||
Accrued expenses and other items | 244 | 596 | ||||||
Deferred tax assets | 56,087 | 34,664 | ||||||
Valuation allowance | (55,929 | ) | (32,408 | ) | ||||
Deferred tax assets, net of valuation allowance | 158 | 2,256 | ||||||
Deferred tax liabilities: | ||||||||
Intangible assets | - | (2,198 | ) | |||||
Other items | (69 | ) | - | |||||
Deferred tax liabilities | (69 | ) | (2,198 | ) | ||||
Net deferred taxes | 89 | 58 |
The Company’s deferred tax assets and liabilities are included within other long-term assets and other non-current liabilities, respectively, on the consolidated balance sheets.
Based on the available evidence, management believes that it is more likely than not that certain of its deferred tax assets relating to net operating loss carryforwards and other temporary differences will not be realized and accordingly, a valuation allowance has been recognized.
F - 33
Note 12 - Income Taxes (cont'd)
Year ended | Year ended | Year ended | ||||||||||
December 31 | December 31 | December 31 | ||||||||||
2022 | 2021 | 2020 | ||||||||||
USD thousands | USD thousands | USD thousands | ||||||||||
Israel | (35,706 | ) | (27,301 | ) | (20,004 | ) | ||||||
Foreign | (95,220 | ) | (3,411 | ) | 39 | |||||||
Total | (130,926 | ) | (30,712 | ) | (19,965 | ) | ||||||
Income tax expense was as follows: | ||||||||||||
Current: | ||||||||||||
Israel | 133 | 87 | - | |||||||||
Foreign | 44 | 146 | 73 | |||||||||
Total current tax expense | 177 | 233 | 73 | |||||||||
Deferred: | ||||||||||||
Foreign | (31 | ) | (11 | ) | 3 | |||||||
Total deferred tax expense (benefit) | (31 | ) | (11 | ) | 3 | |||||||
Total income tax expense | 146 | 222 | 76 |
D. Reconciliation
Year ended | Year ended | Year ended | ||||||||||
December 31 | December 31 | December 31 | ||||||||||
2022 | 2021 | 2020 | ||||||||||
USD thousands | USD thousands | USD thousands | ||||||||||
Loss before income tax expense as reported in the consolidated statements of operations | (130,926 | ) | (30,712 | ) | (19,965 | ) | ||||||
Statutory income tax rate | 23 | % | 23 | % | 23 | % | ||||||
Theoretical income tax benefit | (30,113 | ) | (7,063 | ) | (4,592 | ) | ||||||
Foreign tax rate differentials | 2,599 | 69 | 1 | |||||||||
Non-deductible share-based compensation | 1,939 | 837 | 288 | |||||||||
Revaluation of warrants | (407 | ) | (1,210 | ) | 752 | |||||||
Goodwill impairment | 10,176 | - | - | |||||||||
Contingent consideration income | (2,059 | ) | - | - | ||||||||
Currency transactions gain | - | (1,069 | ) | (1,602 | ) | |||||||
Change in valuation allowance | 18,066 | 8,688 | 5,256 | |||||||||
Other differences, net | (55 | ) | (30 | ) | (27 | ) | ||||||
Reported income tax expense | 146 | 222 | 76 |
F - 34
Note 12 - Income Taxes (cont'd)
Year ended | Year ended | Year ended | ||||||||||
December 31 | December 31 | December 31 | ||||||||||
2022 | 2021 | 2020 | ||||||||||
In USD thousands, except share data | ||||||||||||
Numerator: | ||||||||||||
Net loss | (131,072 | ) | (30,934 | ) | (20,041 | ) | ||||||
Denominator: | ||||||||||||
Weighted-average shares used in computing net | ||||||||||||
loss per share attributable to ordinary | ||||||||||||
shareholders, basic and diluted | 138,362,785 | 69,222,905 | 30,674,263 | |||||||||
Net loss per share attributable to ordinary | ||||||||||||
shareholders, basic and diluted | (0.95 | ) | (0.45 | ) | (0.65 | ) |
F - 35
A. | Merger agreement |
B. | Notification of Noncompliance |
F - 36
Contents | Page |
F-38 | |
F-39 | |
F-40 | |
F-41 | |
F-42 |
March 31 2023 | December 31 2022 | |||||||
(Unaudited) | (Audited) | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | 23,102 | 22,448 | ||||||
Short-term restricted cash | 302 | 346 | ||||||
Short-term deposits | 50,101 | 62,262 | ||||||
Marketable securities | 56,264 | 55,587 | ||||||
Trade receivables, net | 970 | 1,271 | ||||||
Other receivables and prepaid expenses | 1,896 | 3,043 | ||||||
Total current assets | 132,635 | 144,957 | ||||||
Non-current assets | ||||||||
Other long-term assets | 391 | 606 | ||||||
Property and equipment, net | 918 | 1,043 | ||||||
Operating lease right-of-use assets, net | 1,792 | 2,040 | ||||||
Total non-current assets | 3,101 | 3,689 | ||||||
Total assets | 135,736 | 148,646 | ||||||
Liabilities and Shareholders’ Equity | ||||||||
Current liabilities | ||||||||
Account payables | 5,310 | 1,020 | ||||||
Other payables and accrued expenses | 6,548 | 10,958 | ||||||
Deferred revenue | 186 | 216 | ||||||
Current portion of operating lease liabilities | 653 | 729 | ||||||
Current portion of contingent consideration | 2,292 | 165 | ||||||
Total current liabilities | 14,989 | 13,088 | ||||||
Non-Current liabilities | ||||||||
Warrants for ordinary shares | 160 | 155 | ||||||
Operating lease liabilities, less current portion | 1,005 | 1,225 | ||||||
Contingent consideration, less current portion | — | 746 | ||||||
Other non-current liabilities | — | 4 | ||||||
Total non-current liabilities | 1,165 | 2,130 | ||||||
Total liabilities | 16,154 | 15,218 | ||||||
Shareholders’ equity: | ||||||||
Ordinary shares, no par value; 450,000,000 shares authorized as of March 31, 2023 and December 31, 2022; 143,588,652 and 141,880,227 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively; | — | — | ||||||
Additional paid-in capital | 372,515 | 370,412 | ||||||
Accumulated other comprehensive loss | (5,024 | ) | (4,850 | ) | ||||
Accumulated deficit | (247,909 | ) | (232,134 | ) | ||||
Total shareholders’ equity | 119,582 | 133,428 | ||||||
Total liabilities and Shareholders’ Equity | 135,736 | 148,646 |
Three-month period ended March 31 2023 | Three-month period ended March 31 2022 | |||||||
Revenues | 1,839 | 1,031 | ||||||
Costs and operating expenses: | ||||||||
Cost of services | 1,204 | 380 | ||||||
Cloud infrastructure | 754 | 1,158 | ||||||
Research and development | 3,550 | 4,727 | ||||||
Sales and marketing | 4,642 | 4,410 | ||||||
General and administrative | 7,344 | 5,022 | ||||||
Depreciation and amortization | 87 | 455 | ||||||
Contingent consideration expense | 1,381 | — | ||||||
Total costs and operating expenses | 18,962 | 16,152 | ||||||
Operating loss | (17,123 | ) | (15,121 | ) | ||||
Financial income, net | 1,374 | 1,027 | ||||||
Loss before income tax expense | (15,749 | ) | (14,094 | ) | ||||
Income tax expense | (26 | ) | (8 | ) | ||||
Net loss for the period | (15,775 | ) | (14,102 | ) | ||||
Net loss per share attributable to ordinary shareholders, basic and diluted | (0.11 | ) | (0.11 | ) | ||||
Weighted-average shares used in computing net loss per share attributable to ordinary shareholders, basic and diluted * | 142,425,683 | 132,756,680 | ||||||
Other comprehensive loss, net of taxes: | ||||||||
Foreign currency translation adjustments | (220 | ) | — | |||||
Unrealized gains on available-for-sale marketable securities, net | 46 | — | ||||||
Total comprehensive loss for the period | (15,949 | ) | (14,102 | ) |
Ordinary shares | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive loss | Total equity | ||||||||||||||||||||
Number of Shares | USD thousands | USD thousands | USD thousands | USD thousands | USD thousands | |||||||||||||||||||
Balance as of December 31, 2022 | 141,880,227 | — | 370,412 | (232,134 | ) | (4,850 | ) | 133,428 | ||||||||||||||||
Issuance of shares in connection with exercise of share options | 1,708,425 | — | 62 | — | — | 62 | ||||||||||||||||||
Share based compensation | — | — | 2,041 | — | — | 2,041 | ||||||||||||||||||
Comprehensive loss | — | — | — | (15,775 | ) | (174 | ) | (15,949 | ) | |||||||||||||||
Balance as of March 31, 2023 | 143,588,652 | — | 372,515 | (247,909 | ) | (5,024 | ) | 119,582 | ||||||||||||||||
Balance as of December 31, 2021 | 132,214,733 | 349,825 | (101,062 | ) | — | 248,763 | ||||||||||||||||||
Shares issued related to the business acquisitions | 98,450 | — | — | — | — | — | ||||||||||||||||||
Issuance of shares in connection with exercise of share options | 844,219 | — | 83 | — | — | 83 | ||||||||||||||||||
Share based compensation | — | — | 2,197 | — | — | 2,197 | ||||||||||||||||||
Comprehensive loss | — | — | — | (14,102 | ) | — | (14,102 | ) | ||||||||||||||||
Balance as of March 31, 2022 | 133,157,402 | — | 352,105 | (115,164 | ) | — | 236,941 |
Three-month period ended March 31, 2023 | Three-month period ended March 31, 2022 | |||||||
Cash flows from operating activities | ||||||||
Net loss | (15,775 | ) | (14,102 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 87 | 455 | ||||||
Share based compensation | 2,041 | 2,197 | ||||||
Revaluation of warrants | 5 | (884 | ) | |||||
Contingent consideration expense | 1,381 | — | ||||||
Foreign currency translation loss | 114 | (147 | ) | |||||
Investments interest receivables, amortization, and accretion | (887 | ) | — | |||||
Other | 13 | — | ||||||
Changes in operating assets and liabilities: | ||||||||
Trade receivables, net | 310 | (7 | ) | |||||
Other receivables and prepaid expenses | 934 | (64 | ) | |||||
Other payables and accrued expenses | (4,439 | ) | 936 | |||||
Account payables | 4,285 | 280 | ||||||
Deferred revenue | (33 | ) | (26 | ) | ||||
Other assets and liabilities | 165 | (84 | ) | |||||
Net cash used in operating activities | (11,799 | ) | (11,446 | ) | ||||
Cash flows from investing activities | ||||||||
Proceeds from sale of property and equipment | 44 | — | ||||||
Purchases of property and equipment | (13 | ) | (54 | ) | ||||
Proceeds from short-term bank deposits, net | 12,417 | — | ||||||
Net cash provided by (used in) investing activities | 12,448 | (54 | ) | |||||
Cash flows from financing activities | ||||||||
Proceeds from exercise of share options | 62 | 83 | ||||||
Net cash provided by financing activities | 62 | 83 | ||||||
Foreign currency effect on cash and cash equivalents and short-term restricted cash | (101 | ) | 147 | |||||
Net increase (decrease) in cash and cash equivalents and short-term restricted cash | 610 | (11,270 | ) | |||||
Cash and cash equivalents and short-term restricted cash at the beginning of the period | 22,794 | 208,079 | ||||||
Cash and cash equivalents and short-term restricted cash at the end of the period | 23,404 | 196,809 |
A. | Basis of Preparation |
B. | Use of Estimates |
C. | Significant Accounting Policies |
D. | Foreign currencies |
(a) | Connected Vehicles – connected vehicle data platform, which provides customers access to vehicle data and other value-added services (“Connected Vehicle”), complemented by Mobility Intelligence platform (“MI services”). |
(b) | Insurance related Services – connected insurance technology to insurance carriers, comprised of The Floow acquired activity. |
A. | Segment information |
Three-month period ended March 31, 2023 | ||||||||||||
Connected Vehicles | Insurance related Services | Total | ||||||||||
USD thousands | USD thousands | USD thousands | ||||||||||
Revenues | 282 | 1,557 | 1,839 | |||||||||
Segment loss | (11,756 | ) | (1,858 | ) | (13,614 | ) | ||||||
Amounts not allocated to segments: | ||||||||||||
Depreciation and amortization | (87 | ) | ||||||||||
Contingent consideration expense | (1,381 | ) | ||||||||||
Share-based compensation | (2,041 | ) | ||||||||||
Operating loss | (17,123 | ) | ||||||||||
Financial income, net | 1,374 | |||||||||||
Loss before income tax expense | (15,749 | ) |
B. | Revenue by geographical region of the Company’s customers |
Three-month period ended March 31, 2023 | Three-month period ended March 31, 2022 | |||||||
USD thousands | USD thousands | |||||||
Americas | 830 | 344 | ||||||
APAC | 27 | 11 | ||||||
EMEA | 982 | 676 | ||||||
Total revenues | 1,839 | 1,031 |
C. | Property and equipment, net, and operating lease right-of-use assets, by geographic region |
March 31, 2023 | December 31, 2022 | |||||||
USD thousands | USD thousands | |||||||
United States | 18 | 30 | ||||||
Israel | 1,566 | 1,878 | ||||||
Europe | 1,126 | 1,175 | ||||||
Total operating lease right-of-use assets, property and equipment, net | 2,710 | 3,083 |
D. | Number of customers accounted for over 10% of the revenues |
March 31, 2023 | December 31, 2022 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
USD thousands | ||||||||||||||||||||||||
Money Market funds(1) | 795 | — | — | 447 | — | — | ||||||||||||||||||
U.S. Treasury securities(1) | 3,239 | — | — | 4,197 | — | — | ||||||||||||||||||
Corporate bonds(1) | — | 24,809 | — | — | 32,516 | — | ||||||||||||||||||
Commercial papers(1) | — | 11,403 | — | — | 7,030 | — | ||||||||||||||||||
U.S. government agency securities(1) | — | 15,716 | — | — | 9,399 | — | ||||||||||||||||||
Foreign bonds(1) | — | — | — | — | 1,700 | — | ||||||||||||||||||
Contingent consideration(2) | — | — | (2,292 | ) | — | — | (911 | ) | ||||||||||||||||
Warrants for ordinary shares(3) | — | — | (160 | ) | — | — | (155 | ) | ||||||||||||||||
4,034 | 51,928 | (2,452 | ) | 4,644 | 50,645 | (1,066 | ) |
(1) | The following table summarizes the composition of marketable securities as of March 31, 2023: |
March 31, 2023 | ||||||||||||
Amortized Cost | Unrealized Gain/Losses | Fair Value | ||||||||||
USD thousands | ||||||||||||
Money market funds | 795 | — | 795 | |||||||||
Available-for-sale debt securities | ||||||||||||
Corporate bonds | 24,828 | (19 | ) | 24,809 | ||||||||
Commercial papers | 11,403 | — | 11,403 | |||||||||
U.S. government agency securities | 15,708 | 8 | 15,716 | |||||||||
U.S. Treasury securities | 3,241 | (2 | ) | 3,239 | ||||||||
Total | 55,180 | (13 | ) | 55,167 | ||||||||
55,975 | (13 | ) | 55,962 |
March 31, 2023 | ||||||||
Amortized Cost | Fair Value | |||||||
USD thousands | ||||||||
Due within one year | 41,116 | 41,088 | ||||||
Due after one year through two years | 14,064 | 14,079 | ||||||
Total | 55,180 | 55,167 |
(2) | Contingent consideration represents liabilities recorded at fair value in connection with acquisitions, and thus represents a level 3 measurement within the fair value hierarchy. |
USD thousands | ||||
Fair value as of January 1, 2023 | 911 | |||
Change in fair value | 1,381 | |||
Fair value as of March 31, 2023 | 2,292 |
(3) | In connection with the recapitalization, on August 13, 2021, the Company issued 5,200,000 private warrants. the warrants were classified as a liability measured at fair value, with changes in fair value each period reported in the consolidated statements of operations. Refer to note 6. |
Number of Options | Weighted Average exercise price | |||||||
Outstanding – Balance at January 1, 2023 | 8,036,062 | $ | 0.67 | |||||
Forfeited | (239,818 | ) | $ | 0.64 | ||||
Exercised | (973,846 | ) | $ | 0.06 | ||||
Outstanding – Balance at March 31, 2023 | 6,822,398 | $ | 0.76 |
Number of RSUs | Weighted Average Grant Date Fair Value | |||||||
Unvested Balance at January 1, 2023 | 10,565,252 | $ | 1.65 | |||||
Granted* | 136,363 | $ | 0.44 | |||||
Vested | (1,286,125 | ) | $ | 2.53 | ||||
Forfeited | (4,717,793 | ) | $ | 1.58 | ||||
Unvested Balance at March 31, 2023 | 4,697,697 | $ | 1.44 |
* | The RSU awards generally vest over four years, with no exercise price. |
Three-months period ended March 31 2023 | Three-months period ended March 31 2022 | |||||||
USD thousand | USD thousand | |||||||
Cost of services | 14 | — | ||||||
Research and development | 314 | 519 | ||||||
Sales and marketing | 825 | 665 | ||||||
General and administrative | 888 | 1,013 | ||||||
2,041 | 2,197 |
March 31 2023 | December 31 2022 | |||||||
Value of warrant per share | $ | 0.03 | $ | 0.03 | ||||
Number of ordinary shares issuable upon exercise of warrants | 5,200,000 | 5,200,000 | ||||||
Fair value of warrant liability (in USD thousand) | $ | 160 | $ | 155 |
March 31 2023 | December 31 2022 | |||||||
Volatility | 87.9 | % | 89.1 | % | ||||
Risk-free interest rate | 3.69 | % | 4.1 | % | ||||
Expected dividends | 0.0 | % | 0.0 | % | ||||
Expected life (in years) | 3.37 | 3.62 |
Three-months period ended March 31 2023 | Three-months period ended March 31 2022 | |||||||
In USD thousands, except share data | ||||||||
Numerator: | ||||||||
Net loss | (15,775 | ) | (14,102 | ) | ||||
Denominator: | ||||||||
Weighted-average shares used in computing net loss per share attributable to ordinary shareholders, basic and diluted | 142,425,683 | 132,756,680 | ||||||
Net loss per share attributable to ordinary shareholders, basic and diluted | (0.11 | ) | (0.11 | ) |
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 596) | F-50 | ||
Consolidated Financial Statements: | |||
F-51 | |||
F-52 | |||
F-53 | |||
F-55 | |||
F-56 |
2022 | 2021 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 6,357 | $ | 30,156 | ||||
Restricted cash | 1,050 | 1,050 | ||||||
Accounts receivable, net | 33,966 | 32,753 | ||||||
Prepaid expenses and other current assets | 2,102 | 2,105 | ||||||
Total current assets | 43,475 | 66,064 | ||||||
Right-of-use assets | 2,485 | — | ||||||
Property and equipment, net | 414 | 503 | ||||||
Intangible assets, net | 31 | 31 | ||||||
Other non-current assets | 538 | 1,216 | ||||||
Total assets | $ | 46,943 | $ | 67,814 | ||||
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 7,536 | $ | 4,390 | ||||
Accrued expenses | 19,811 | 10,276 | ||||||
Deferred revenue, current | 349 | 127 | ||||||
Current lease liabilities | 740 | — | ||||||
Current portion of long-term debt | — | 2,561 | ||||||
Total current liabilities | 28,436 | 17,354 | ||||||
Deferred rent | — | 456 | ||||||
Long-term lease liabilities | 2,120 | — | ||||||
Long-term debt, net | 99,443 | 83,606 | ||||||
Derivative liability | 32,765 | — | ||||||
Warrant liability | 13,957 | 7,084 | ||||||
Other long-term liabilities | 5,059 | 29 | ||||||
Total liabilities | 181,780 | 108,529 | ||||||
Redeemable convertible preferred stock: | ||||||||
Series C, par value $0.001; 20,000,000 and 4,074,858 shares authorized, 14,169,524 and 3,823,134 issued and outstanding at December 31, 2022 and 2021, respectively | 46,334 | 19,940 | ||||||
Series C-1, par value $0.001; 4,525,886 shares authorized, 4,475,886 issued and outstanding at December 31, 2021 | — | 18,732 | ||||||
Series B-1, par value $0.001; 7,129,167 shares authorized, 5,645,751 issued and outstanding at December 31, 2021 | — | 19,045 | ||||||
Series B, par value $0.001; 2,780,607 shares authorized, issued and outstanding at December 31, 2021 | — | 10,925 | ||||||
Series A, par value $0.001; 5,462,328 shares authorized, issued and outstanding at December 31, 2021 | — | 10,218 | ||||||
Series Seed, par value $0.001; 1,103,444 shares authorized, issued and outstanding at December 31, 2021 | — | 996 | ||||||
Stockholders’ deficit: | ||||||||
Common stock, par value $0.001; 60,000,000 and 43,000,000 shares authorized, 13,936,512 and 4,797,220 issued and outstanding at December 31, 2022 and 2021, respectively | 14 | 5 | ||||||
Additional paid-in capital | 48,313 | 7,156 | ||||||
Accumulated deficit | (229,498 | ) | (127,732 | ) | ||||
Total stockholders’ deficit | (181,171 | ) | (120,571 | ) | ||||
Total liabilities, redeemable convertible preferred stock and stockholders’ deficit | $ | 46,943 | $ | 67,814 |
2022 | 2021 | |||||||
Revenue | $ | 187,589 | $ | 148,508 | ||||
Cost of revenue | 167,442 | 140,095 | ||||||
Gross profit | 20,147 | 8,413 | ||||||
Operating expenses: | ||||||||
Research and development | 16,733 | 12,252 | ||||||
Sales and marketing | 5,647 | 4,122 | ||||||
Operations and support | 36,893 | 28,680 | ||||||
General and administrative | 14,129 | 12,875 | ||||||
Depreciation and amortization | 297 | 242 | ||||||
Total operating expenses | 73,699 | 58,171 | ||||||
Operating loss | (53,552 | ) | (49,758 | ) | ||||
Other income (expense), net: | ||||||||
Interest expense | (31,454 | ) | (3,712 | ) | ||||
Interest income | 7 | 5 | ||||||
Change in fair value of derivative liabilities | (4,077 | ) | — | |||||
Change in fair value of warrant liabilities | (5,809 | ) | (2,232 | ) | ||||
Warrant expense | (1,009 | ) | (705 | ) | ||||
Foreign exchange gain (loss) | (88 | ) | 63 | |||||
Total other expense, net | (42,430 | ) | (6,581 | ) | ||||
Loss before income taxes | (95,982 | ) | (56,339 | ) | ||||
Provision for income taxes | — | — | ||||||
Net loss | $ | (95,982 | ) | $ | (56,339 | ) | ||
Loss per share, basic and diluted | $ | (10.54 | ) | $ | (11.80 | ) | ||
Weighted average shares outstanding, basic and diluted | 9,104,116 | 4,776,214 |
Redeemable Convertible Preferred Stock Series B-1 | Redeemable Convertible Preferred Stock Series B | Redeemable Convertible Preferred Stock Series A | Redeemable Convertible Preferred Stock Series Seed | |||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance, December 31, 2020 | 4,997,768 | $ | 16,917 | 2,780,607 | $ | 10,900 | 5,462,328 | $ | 10,218 | 1,103,444 | $ | 996 | ||||||||||||||||||||
Issuance of preferred stock | 647,983 | 1,802 | — | — | — | — | — | — | ||||||||||||||||||||||||
Issuance of common stock | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Accretion of preferred stock to redemption value | — | 326 | — | 25 | — | — | — | — | ||||||||||||||||||||||||
Issuance of warrants on common stock | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Balance, December 31, 2021 | 5,645,751 | $ | 19,045 | 2,780,607 | $ | 10,925 | 5,462,328 | $ | 10,218 | 1,103,444 | $ | 996 | ||||||||||||||||||||
Accretion of preferred stock to redemption value | — | 143 | — | 12 | — | — | — | — | ||||||||||||||||||||||||
Conversion of preferred stock in connection with recapitalization (see Note 1) | (5,645,751 | ) | (19,188 | ) | (2,780,607 | ) | (10,937 | ) | (5,462,328 | ) | (10,218 | ) | (1,103,444 | ) | (996 | ) | ||||||||||||||||
Issuance of common stock | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Issuance of common stock warrants for services | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Balance, December 31, 2022 | — | $ | — | — | $ | — | — | $ | — | — | $ | — |
Redeemable Convertible Preferred Stock Series C | Redeemable Convertible Preferred Stock Series C-1 | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders’ Deficit | |||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||
Balance, December 31, 2020 | 3,823,134 | $ | 19,924 | 4,475,886 | $ | 18,732 | 4,726,791 | $ | 5 | $ | 73 | $ | (71,393 | ) | $ | (71,315 | ) | |||||||||||||||||||
Issuance of preferred stock | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Issuance of common stock | — | — | — | — | 70,429 | — | 68 | — | 68 | |||||||||||||||||||||||||||
Accretion of preferred stock to redemption value | — | 16 | — | — | — | — | (367 | ) | — | (367 | ) | |||||||||||||||||||||||||
Issuance of warrants on common stock | — | — | — | — | — | — | 6,684 | — | 6,684 | |||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | 698 | — | 698 | |||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | (56,339 | ) | (56,339 | ) | |||||||||||||||||||||||||
Balance, December 31, 2021 | 3,823,134 | $ | 19,940 | 4,475,886 | $ | 18,732 | 4,797,220 | $ | 5 | $ | 7,156 | $ | (127,732 | ) | $ | (120,571 | ) | |||||||||||||||||||
Accretion of preferred stock to redemption value | — | 8 | — | — | — | — | (163 | ) | — | (163 | ) | |||||||||||||||||||||||||
Conversion of preferred stock in connection with the recapitalization (see Note 1) | 10,346,390 | 26,386 | (4,475,886 | ) | (18,732 | ) | 9,121,626 | 9 | 40,717 | (5,784 | ) | 34,942 | ||||||||||||||||||||||||
Issuance of common stock | — | — | — | — | 17,666 | — | 17 | — | 17 | |||||||||||||||||||||||||||
Issuance of common stock warrants for services | — | — | — | — | — | — | 92 | — | 92 | |||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | 494 | — | 494 | |||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | (95,982 | ) | (95,982 | ) | |||||||||||||||||||||||||
Balance, December 31, 2022 | 14,169,524 | $ | 46,334 | — | $ | — | 13,936,512 | $ | 14 | $ | 48,313 | $ | (229,498 | ) | $ | (181,171 | ) |
2022 | 2021 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (95,982 | ) | $ | (56,339 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 297 | 242 | ||||||
Amortization of right-of-use assets | 675 | — | ||||||
Amortization of contract costs to obtain | 697 | 443 | ||||||
Amortization of contract costs to fulfill | 116 | 187 | ||||||
Amortization of deferred financing fees | 1,388 | 755 | ||||||
Stock-based compensation | 494 | 698 | ||||||
Bad debt expense (recoveries) | (269 | ) | 341 | |||||
Change in fair value of derivative and warrant liabilities | 9,886 | 2,232 | ||||||
Warrant expense | 1,009 | 705 | ||||||
Noncash interest expense | 22,002 | 329 | ||||||
Issuance of common stock warrants for services | 92 | — | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (944 | ) | (8,488 | ) | ||||
Prepaid expenses and other current assets | 3 | (1,348 | ) | |||||
Other assets | (135 | ) | (705 | ) | ||||
Accounts payable | 3,146 | 1,649 | ||||||
Accrued expenses | 3,812 | 2,225 | ||||||
Deferred rent | — | (16 | ) | |||||
Deferred revenue | 222 | 113 | ||||||
Lease liabilities | (756 | ) | — | |||||
Long-term liabilities | 10 | (237 | ) | |||||
Net cash used in operating activities | (54,237 | ) | (57,214 | ) | ||||
Cash flows from investing activities: | ||||||||
Purchases of property, equipment and software | (208 | ) | (340 | ) | ||||
Acquisition of intangible asset | — | (16 | ) | |||||
Net cash used in investing activities | (208 | ) | (356 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of long-term debt, net of discount | — | 56,700 | ||||||
Proceeds from revolving line of credit | — | 41,075 | ||||||
Repayment of revolving line of credit and term loan | — | (55,325 | ) | |||||
Refunds (payments) of deferred financing fees | 629 | (4,424 | ) | |||||
Proceeds from issuance of convertible notes payable | 30,000 | 39,957 | ||||||
Proceeds from exercise of warrants | — | 51 | ||||||
Proceeds from exercise of stock options | 17 | 18 | ||||||
Net cash provided by financing activities | 30,646 | 78,052 | ||||||
Net increase (decrease) in cash and cash equivalents | (23,799 | ) | 20,482 | |||||
Cash, cash equivalents and restricted cash at beginning of year | 31,206 | 10,724 | ||||||
Cash, cash equivalents and restricted cash at end of year | $ | 7,407 | $ | 31,206 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for interest | $ | 6,863 | $ | 985 | ||||
Supplemental noncash investing and financing activities: | ||||||||
Right-of-use assets obtained in exchange for lease obligations | $ | 3,160 | $ | — | ||||
Derivative liability resulting from issuance of convertible notes | $ | 28,688 | $ | — | ||||
Warrants issued in connection with issuance of convertible notes | $ | 7,041 | $ | — | ||||
Issuance of common stock warrants for services | $ | 92 | $ | — | ||||
Warrants issued in connection with issuance of long-term debt | $ | — | $ | 7,004 | ||||
Exercise of warrants into Series B-1 preferred stock | $ | — | $ | 1,801 |
1. | Organization |
2. | Summary of significant accounting policies |
• | Identification of the contract, or contracts with a Customer Partner |
• | Identification of the performance obligations in the contract |
• | Determination of the transaction price |
• | Allocation of the transaction price to the performance obligations in the contract |
• | Recognition of revenue when, or as, performance obligations are satisfied |
2022 | 2021 | |||||||
Balance as of January 1 | $ | 1,048 | $ | 885 | ||||
Additional contract costs to obtain | 135 | 799 | ||||||
Amortization of contract costs to obtain | (697 | ) | (449 | ) | ||||
Amortization of contract costs to fulfill | (116 | ) | (187 | ) | ||||
Balance as of December 31 | $ | 370 | $ | 1,048 |
3. | Fair value measurements |
Level 1— | Quoted prices in active markets for identical assets or liabilities. | |
Level 2— | Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |
Level 3— | Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. |
Fair value as of December 31, 2022 | ||||||||||||||||
Recurring fair value measurements | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Liabilities: | ||||||||||||||||
Derivative liability | $ | — | $ | — | $ | 32,765 | $ | 32,765 | ||||||||
Warrant liability | — | — | 13,957 | 13,957 | ||||||||||||
Total liabilities in fair value hierarchy | $ | — | $ | — | $ | 46,722 | $ | 46,722 |
Fair value as of December 31, 2021 | ||||||||||||||||
Recurring fair value measurements | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Liabilities: | ||||||||||||||||
Warrant liability | $ | — | $ | — | $ | 7,084 | $ | 7,084 |
Derivative Liability | Warrant Liability | Total | ||||||||||
Balance at December 31, 2020 | $ | $ | 5,628 | $ | 5,628 | |||||||
Issuances | — | 1,025 | 1,025 | |||||||||
Exercises | — | (1,801 | ) | (1,801 | ) | |||||||
Change in fair value | — | 2,232 | 2,232 | |||||||||
Balance at December 31, 2021 | $ | — | $ | 7,084 | $ | 7,084 | ||||||
Issuances | 28,688 | 1,009 | 29,697 | |||||||||
Adjustments due to recapitalization | — | 55 | 55 | |||||||||
Change in fair value | 4,077 | 5,809 | 9,886 | |||||||||
Balance at December 31, 2022 | $ | 32,765 | $ | 13,957 | $ | 46,722 |
4. | Property and equipment |
2022 | 2021 | |||||||
Furniture, fixtures and computer equipment | $ | 1,364 | $ | 1,159 | ||||
Software for internal use | 887 | 887 | ||||||
Vehicles | 6 | 6 | ||||||
2,257 | 2,052 | |||||||
Less accumulated depreciation and amortization | (1,843 | ) | (1,549 | ) | ||||
$ | 414 | $ | 503 |
5. | Intangible assets |
2022 | 2021 | |||||||
Acquired technology | $ | 194 | $ | 194 | ||||
Domain name | 31 | 31 | ||||||
225 | 225 | |||||||
Less accumulated amortization | (194 | ) | (194 | ) | ||||
$ | 31 | $ | 31 |
6. | Accrued expenses |
2022 | 2021 | |||||||
Accrued service provider costs | $ | 5,461 | $ | 3,232 | ||||
Accrued compensation | 1,054 | 2,023 | ||||||
Accrued contract labor | 2,400 | 1,509 | ||||||
Accrued interest | 6,689 | 1,125 | ||||||
Credit card liabilities | 100 | 263 | ||||||
Other accrued liabilities | 4,107 | 2,124 | ||||||
$ | 19,811 | $ | 10,276 |
7. | Debt arrangements |
2022 | 2021 | |||||||
2021 Convertible promissory notes with an interest rate of 10.0% per annum maturing June 30, 2024 | $ | 39,957 | $ | 39,957 | ||||
Structural Capital term loan with an interest rate at the greater of 10.75% or the prime rate plus 7.5% per annum maturing November 1, 2023 (see Note 16) | 17,500 | 17,500 | ||||||
Highbridge Capital term loan with an interest rate ranging from 10%-13% per annum maturing December 15, 2023 (see Note 16) | 40,000 | 40,000 | ||||||
2022 Convertible promissory notes with an interest rate of 15.0% per annum maturing June 30, 2024 | 30,000 | — | ||||||
127,457 | 97,457 | |||||||
Less: current portion | — | (2,561 | ) | |||||
Less: deferred financing fees and discounts | (28,014 | ) | (11,290 | ) | ||||
Total debt, less current portion | $ | 99,443 | $ | 83,606 |
(i) | Automatic conversion into common stock upon a qualified transaction. Upon the consummation of a qualified business combination, an initial public offering with gross proceeds of at least $50.0 million or a direct listing of the Company’s common stock, the 2021 Convertible Notes will convert to common stock at the lesser of (i) $380,000 divided by the fully-diluted capitalization of the Company immediately prior to the transaction (“Cap Price”), and (ii) 0.75 multiplied by the per share price paid in the transaction. |
(ii) | Optional conversion into convertible preferred stock in an Equity Financing. If the Company sells shares of preferred stock in an equity financing transaction while the notes are outstanding (“Equity Financing”), then the holders have the option to convert the outstanding principal amount and any unpaid accrued interest into shares of the series of convertible preferred stock issued in the Equity Financing at a price per share equal to the lesser of (i) 0.75 multiplied by the per share price paid by the cash investors in the Equity Financing, or (ii) the Cap Price. |
(iii) | Maturity. Upon or after maturity of the 2021 Convertible Notes, the notes can be settled in cash at the outstanding accrued interest and principal amount or converted to common stock at a price per share equal to the lesser of (i) 0.75 multiplied by the per share price paid by the cash investors in the Equity Financing, or (ii) the Cap Price. |
(i) | Optional conversion into Series C preferred stock. At any time upon the election of the noteholders, the outstanding principal of the 2022 Convertible Notes and any unpaid accrued interest shall convert into shares of the Company’s Series C convertible preferred stock at a conversion price per share equal to the lesser of $3.66191, or the Cap Price. |
(ii) | Optional conversion in an Equity Financing. If the Company sells shares of preferred stock in an equity financing (as such term is defined in the 2022 Convertible Notes agreement), then the holders have the option to convert the outstanding principal amount and any unpaid accrued interest into shares of the series of convertible preferred stock issued in the Equity Financing at a price per share equal to the lesser of (i) 0.70 multiplied by the per share price paid by the cash investors in the Equity Financing, or (ii) the Cap Price. |
(iii) | Company Sale. If the Company consummates a sale of the company while the 2022 Convertible Notes are outstanding, it is to repay the holders in cash in an amount equal to 300% of the outstanding principal amount of the notes plus any unpaid accrued interest. A Company Sale includes (i) the sale of all or substantially all of the Company’s assets, (ii) a merger or consolidation of the Company with or into another entity, (iii) a liquidation, dissolution or winding up of the Company, (iv) other change of control type transaction as defined in the 2022 Convertible Notes agreement. |
(iv) | Maturity. Upon or after maturity of the 2022 Convertible Notes, the notes can be settled in cash at the outstanding accrued interest and principal amount. |
8. | Redeemable convertible preferred stock |
9. | Warrants to purchase preferred and common stock |
December 31, 2022 | ||||||||||||||||||||||||
Issuance Date | Contractual Term | Class of Stock | Balance Sheet Classification | Shares Issuable Upon Exercise | Exercise Price | Fair Value | ||||||||||||||||||
May 2018 | 10 years | Common | 1 | Liability | 2,782,361 | 2 | $ | 0.01 | 1 | $ | 9,037 | |||||||||||||
May 2019 | 10 years | Common | 1 | Liability | 46,345 | 3 | $ | 0.01 | 1 | $ | 287 | |||||||||||||
December 2021 (Structural Debt) | 10 years | Common | 1 | Liability | 41,816 | 4 | $ | 0.01 | 1 | $ | 198 | |||||||||||||
December 2021 (Highbridge Debt) | 10 years | Common | 1 | Liability | 5 | 6,399,430 | 5 | $ | 0.01 | $ | 4,435 | |||||||||||||
9,269,952 | $ | 13,957 |
December 31, 2021 | ||||||||||||||||||||||||
Issuance Date | Contractual Term | Class of Stock | Balance Sheet Classification | Shares Issuable Upon Exercise | Exercise Price | Fair Value | ||||||||||||||||||
May 2018 | 10 years | Series B-1 | 6 | Liability | 863,154 | 2 | $ | 4.185 | $ | 4,153 | ||||||||||||||
September 2018 | 10 years | Series B-1 | Liability | 9 | 518,387 | $ | 0.001 | $ | 2,392 | |||||||||||||||
May 2019 | 10 years | Series B-1 | 6 | Liability | 47,789 | 7 | $ | 4.185 | $ | 219 | ||||||||||||||
December 2021 (Structural Debt) | 10 years | Series C-1 | 6 | Liability | 41,816 | 8 | $ | 4.185 | $ | 320 | ||||||||||||||
1,471,146 | $ | 7,084 |
1 | If at least $1,000 of the 2022 Convertible Notes convert to Series C, the warrants will become exercisable into Series C preferred stock at the lower of $3.66191 per share or the lowest price per share Series C is issued; upon a future qualified financing of preferred stock in which at least $1,000 of gross proceeds are received, the warrants will become exercisable for such shares of preferred stock at the lowest issue price. If such future round is in connection with a qualifying merger event or company sale event, the exercise price will be 40% of the effective price per share of such event. | |
2 | Exercisable into shares representing 2.0% of the fully diluted capitalization table at exercise; the table currently represents the shares exercisable into as of the respective balance sheet date. | |
3 | If exercisable into a future round of preferred stock or qualifying event, the number of shares the warrants will be exercisable into will be 200,000 divided by the exercise price. | |
4 | If exercisable into a future round of preferred stock or qualifying event, the number of shares the warrants will be exercisable into will be 175,000 divided by the exercise price. | |
5 | As part of the Recapitalization, these warrants were amended to add anti-dilutive features and their classification changed from equity to liability as a result. The number of shares the warrants are exercisable into is based upon 4.6% of the fully diluted capitalization table. | |
6 | Upon qualified financing with gross proceeds of at least $1,000, warrants would have become exercisable for shares of that future round at the lowest issue price. | |
7 | Exercisable into a number of shares based upon 200,000 divided by the exercise price. | |
8 | Exercisable into a number of shares based upon 175,000 divided by the exercise price. | |
9 | The September 2018 was reclassified from liability to equity upon the Recapitalization during the year ended December 31, 2022 as it was no longer exercisable for preferred stock and became exercisable for a fixed number of shares of common stock at a fixed price. |
December 31, 2022 | ||||||||||||||||||||
Issuance Date | Contractual Term | Class of Stock | Balance Sheet Classification | Shares Issuable Upon Exercise | Exercise Price | |||||||||||||||
September 2018 | 10 years | Common | Equity | 1 | 518,387 | $ | 0.001 | |||||||||||||
November-December 2019 | 10 years | Common | Equity | 881,643 | $ | 0.94 | ||||||||||||||
May 2020 | 10 years | Common | Equity | 51,614 | $ | 0.99 | ||||||||||||||
September 20222 | 10 years | Common | Equity | 92,937,302 | $ | 0.001 | ||||||||||||||
September 20223 | 10 years | Common | Equity | 918,676 | $ | 0.001 | ||||||||||||||
95,307,622 |
December 31, 2021 | ||||||||||||||||||||
Issuance Date | Contractual Term | Class of Stock | Balance Sheet Classification | Shares Issuable Upon Exercise | Exercise Price | |||||||||||||||
November-December 2019 | 10 years | Common | Equity | 881,643 | $ | 0.94 | ||||||||||||||
May 2020 | 10 years | Common | Equity | 51,614 | $ | 0.99 | ||||||||||||||
December 2021 (Highbridge Debt)4 | 10 years | Common | Equity | 2,031,883 | $ | 0.01 | ||||||||||||||
2,965,140 |
1 | The September 2018 warrant was reclassified from liability to equity upon the Recapitalization during the year ended December 31, 2022 as it was no longer exercisable for preferred stock and became exercisable for a fixed number of shares of common stock at a fixed price. | ||
2 | Issued in connection with the 2022 Convertible Notes (Note 7). | ||
3 | Issued in connection with certain company advisor agreements resulting in $92 of expense recorded in general and administrative costs. | ||
4 | Issued in connection with the Highbridge Term Loan (Note 7). |
10. | Stock-based compensation |
Options | Weighted average exercise price | |||||||
Outstanding at December 31, 2020 | 4,828,334 | $ | 0.95 | |||||
Granted | 1,665,750 | 1.38 | ||||||
Exercised | (17,238 | ) | 1.04 | |||||
Forfeited or expired | (204,214 | ) | 1.11 | |||||
Outstanding at December 31, 2021 | 6,272,632 | 1.07 | ||||||
Granted | — | — | ||||||
Exercised | (17,666 | ) | 0.96 | |||||
Forfeited or expired | (1,994,373 | ) | 1.11 | |||||
Outstanding at December 31, 2022 | 4,260,593 | 1.05 |
Options | Weighted average exercise price | |||||||
Non-vested as of December 31, 2020 | 2,773,362 | $ | 1.10 | |||||
Granted | 1,665,750 | 1.38 | ||||||
Vested | (1,284,346 | ) | 1.11 | |||||
Forfeited or expired | (156,637 | ) | 1.17 | |||||
Non-vested as of December 31, 2021 | 2,998,129 | 1.25 | ||||||
Granted | — | — | ||||||
Vested | (1,038,806 | ) | 1.22 | |||||
Forfeited or expired | (930,103 | ) | 1.23 | |||||
Non-vested as of December 31, 2022 | 1,029,220 | 1.30 |
Risk-free interest rate | 0.70-1.29 | % | ||
Dividend yield | 0 | % | ||
Volatility | 65 | % | ||
Expected term of options | 5-6.44 years |
11. | Employee benefit plans |
12. | Income taxes |
2022 | 2021 | |||||||
United States | $ | (92,479 | ) | $ | (51,062 | ) | ||
Foreign | (3,503 | ) | (5,277 | ) | ||||
$ | (95,982 | ) | $ | (56,339 | ) |
2022 | 2021 | |||||||
Federal tax at statutory rate | 21.00 | % | 21.00 | % | ||||
State taxes | 2.50 | % | 1.26 | % | ||||
Permanent differences | (6.52 | )% | (1.71 | )% | ||||
Other | 0.40 | % | 0.10 | % | ||||
Change in tax rate | 0.06 | % | (0.19 | )% | ||||
Foreign rate differential | 0.99 | % | 2.53 | % | ||||
Valuation allowances | (18.43 | )% | (22.99 | )% | ||||
Tax provision rate | 0.00 | % | 0.00 | % |
Deferred Tax Asset/(Liability) | 2022 | 2021 | ||||||
Deferred tax assets: | ||||||||
Depreciation and amortization | $ | 17 | $ | 73 | ||||
Stock compensation | 43 | 18 | ||||||
Deferred revenue | — | 3 | ||||||
Deferred rent | — | 107 | ||||||
Accrued expenses | 68 | 600 | ||||||
Charitable contributions | 24 | 22 | ||||||
Capitalized R&D expenditures | 938 | — | ||||||
Right of use / lease liability | 90 | — | ||||||
Interest expense | 3,783 | 913 | ||||||
Federal and state net operating loss carryforward | 42,663 | 27,792 | ||||||
Total deferred tax assets | 47,626 | 29,528 | ||||||
Less: valuation allowance | (47,626 | ) | (29,528 | ) | ||||
Net deferred tax assets | $ | — | $ | — |
13. | Related-party transactions |
14. | Commitments and contingencies |
15. | Leases |
Lease cost | $ | 1,200 | ||
Sublease income | (255 | ) | ||
Total lease cost | $ | 945 |
2023 | $ | 954 | ||
2024 | 757 | |||
2025 | 618 | |||
2026 | 635 | |||
2027 | 459 | |||
Total lease payments | 3,423 | |||
Less imputed interest | (563 | ) | ||
Present value of lease liabilities | 2,860 | |||
Less current lease liabilities | (740 | ) | ||
Long-term lease liabilities | $ | 2,120 |
Weighted average remaining lease term | 4.2 years | |||
Weighted average discount rate | 8.6 | % |
16. | Subsequent events |
Urgent.ly Inc. Index to Consolidated Financial Statements Unaudited Condensed Consolidated Financial Statements: | ||||
F-86 | ||||
F-87 | ||||
F-88 | ||||
F-90 | ||||
F-91 |
March 31, 2023 | December 31, 2022 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 7,730 | $ | 6,357 | ||||
Restricted cash | 1,050 | 1,050 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $338 in 2023 and 2022 | 30,452 | 33,966 | ||||||
Prepaid expenses and other current assets | 1,233 | 2,102 | ||||||
Total current assets | 40,465 | 43,475 | ||||||
Right-of-use assets | 2,316 | 2,485 | ||||||
Property and equipment, net of accumulated depreciation of $1,916 and $1,844 in 2023 and 2022, respectively | 403 | 414 | ||||||
Intangible assets, net | 31 | 31 | ||||||
Other non-current assets | 501 | 538 | ||||||
Total assets | $ | 43,716 | $ | 46,943 | ||||
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 12,023 | $ | 7,536 | ||||
Accrued expenses | 22,254 | 13,122 | ||||||
Accrued interest | 8,784 | 6,689 | ||||||
Deferred revenue, current | 62 | 349 | ||||||
Current lease liabilities | 714 | 740 | ||||||
Current portion of long-term debt | 53,786 | — | ||||||
Total current liabilities | 97,623 | 28,436 | ||||||
Long-term lease liabilities | 1,964 | 2,120 | ||||||
Long-term debt, net | 50,206 | 99,443 | ||||||
Derivative liability | 33,368 | 32,765 | ||||||
Warrant liability | 10,324 | 13,957 | ||||||
Other long-term liabilities | 2,739 | 5,059 | ||||||
Total liabilities | 196,224 | 181,780 | ||||||
Redeemable convertible preferred stock: | ||||||||
Series C, par value $0.001; 20,000,000 shares authorized, 14,169,524 issued and outstanding in 2023 and 2022 | 46,334 | 46,334 | ||||||
Stockholders’ deficit: | ||||||||
Common stock, par value $0.001; 600,000,000 shares authorized, 13,936,512 issued and outstanding in 2023 and 2022 | 14 | 14 | ||||||
Additional paid-in capital | 48,390 | 48,313 | ||||||
Accumulated deficit | (247,246 | ) | (229,498 | ) | ||||
Total stockholders’ deficit | (198,842 | ) | (181,171 | ) | ||||
Total liabilities, redeemable convertible preferred stock and stockholders’ deficit | $ | 43,716 | $ | 46,943 |
Three Months Ended March 31, | ||||||||
2023 | 2022 | |||||||
Revenue | $ | 49,578 | $ | 40,155 | ||||
Cost of revenue | 40,319 | 37,713 | ||||||
Gross margin | 9,259 | 2,442 | ||||||
Operating expenses: | ||||||||
Research and development | 3,742 | 3,972 | ||||||
Sales and marketing | 1,072 | 1,418 | ||||||
Operations and support | 7,201 | 9,276 | ||||||
General and administrative | 7,480 | 3,906 | ||||||
Depreciation and amortization | 72 | 69 | ||||||
Total operating expenses | 19,567 | 18,641 | ||||||
Operating loss | (10,308 | ) | (16,199 | ) | ||||
Other income (expense), net: | ||||||||
Interest expense | (10,951 | ) | (4,514 | ) | ||||
Interest income | — | 2 | ||||||
Change in fair value of derivative liability | (111 | ) | — | |||||
Change in fair value of warrant liability | 3,633 | (414 | ) | |||||
Warrant expense | — | (8 | ) | |||||
Foreign exchange loss | (11 | ) | (62 | ) | ||||
Total other expense, net | (7,440 | ) | (4,996 | ) | ||||
Loss before income taxes | (17,748 | ) | (21,195 | ) | ||||
Provision for income taxes | — | — | ||||||
Net loss | $ | (17,748 | ) | $ | (21,195 | ) | ||
Loss per share, basic and diluted | $ | (1.27 | ) | $ | (4.42 | ) | ||
Weighted average shares outstanding, basic and diluted | 13,936,512 | 4,799,762 |
Redeemable Convertible Preferred Stock Series B-1 | Redeemable Convertible Preferred Stock Series B | Redeemable Convertible Preferred Stock Series A | Redeemable Convertible Preferred Stock Series Seed | |||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance, December 31, 2021 | 5,645,751 | $ | 19,045 | 2,780,607 | $ | 10,925 | 5,462,328 | $ | 10,218 | 1,103,444 | $ | 996 | ||||||||||||||||||||
Issuance of common stock | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Accretion of preferred stock to redemption value | — | 71 | — | 6 | — | — | — | — | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Balance, March 31, 2022 | 5,645,751 | $ | 19,116 | 2,780,607 | $ | 10,931 | 5,462,328 | $ | 10,218 | 1,103,444 | $ | 996 | ||||||||||||||||||||
Balance, December 31, 2022 | — | $ | — | — | $ | — | — | $ | — | — | $ | — | ||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Balance, March 31, 2023 | — | $ | — | — | $ | — | — | $ | — | — | $ | — |
Redeemable Convertible Preferred Stock Series C | Redeemable Convertible Preferred Stock Series C-1 | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders’ Deficit | |||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||
Balance, December 31, 2021 | 3,823,134 | $ | 19,940 | 4,475,886 | $ | 18,732 | 4,797,220 | $ | 5 | $ | 7,156 | $ | (127,732 | ) | $ | (120,571 | ) | |||||||||||||||||||
Issuance of common stock | — | — | — | — | 6,833 | — | 7 | — | 7 | |||||||||||||||||||||||||||
Accretion of preferred stock to redemption value | — | 4 | — | — | — | — | (81 | ) | — | (81 | ) | |||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | 155 | — | 155 | |||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | (21,195 | ) | (21,195 | ) | |||||||||||||||||||||||||
Balance, March 31, 2022 | 3,823,134 | $ | 19,927 | 4,475,886 | $ | 18,732 | 4,779,982 | $ | 5 | $ | 7,237 | $ | (148,927 | ) | $ | (141,685 | ) | |||||||||||||||||||
Balance, December 31, 2022 | 14,169,524 | $ | 46,334 | — | $ | — | 13,936,512 | $ | 14 | $ | 48,313 | $ | (229,498 | ) | $ | (181,171 | ) | |||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | 77 | — | 77 | |||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | (17,748 | ) | (17,748 | ) | |||||||||||||||||||||||||
Balance, March 31, 2023 | 14,169,524 | $ | 46,334 | — | $ | — | 13,936,512 | $ | 14 | $ | 48,390 | $ | (247,246 | ) | $ | (198,842 | ) |
Three Months Ended March 31, | ||||||||
2023 | 2022 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (17,748 | ) | $ | (21,195 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 72 | 69 | ||||||
Amortization of right-of-use assets | 169 | 161 | ||||||
Amortization of contract costs to obtain | 25 | 141 | ||||||
Amortization of contract costs to fulfill | 12 | 48 | ||||||
Amortization of deferred financing fees | 342 | 430 | ||||||
Stock-based compensation | 77 | 155 | ||||||
Change in fair value of derivative and warrant liabilities | (3,522 | ) | 414 | |||||
Warrant expense | — | 8 | ||||||
Noncash interest expense | 8,722 | 2,626 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 3,514 | (1,962 | ) | |||||
Prepaid expenses and other current assets | 869 | 737 | ||||||
Other assets | — | 9 | ||||||
Accounts payable | 4,487 | 3,792 | ||||||
Accrued expenses | 7,204 | (274 | ) | |||||
Deferred revenue | (287 | ) | — | |||||
Lease liabilities | (182 | ) | (190 | ) | ||||
Long-term liabilities | (4,770 | ) | — | |||||
Net cash used in operating activities | (1,016 | ) | (15,031 | ) | ||||
Cash flows from investing activities: | ||||||||
Purchases of property, equipment and software | (61 | ) | (91 | ) | ||||
Net cash used in investing activities | (61 | ) | (91 | ) | ||||
Cash flows from financing activities: | ||||||||
Payments of deferred financing fees | — | (11 | ) | |||||
Advances on April 2023 convertibles notes payable | 2,450 | — | ||||||
Proceeds from exercise of stock options | — | 7 | ||||||
Net cash provided by (used in) financing activities | 2,450 | (4 | ) | |||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 1,373 | (15,126 | ) | |||||
Cash, cash equivalents and restricted cash, beginning of period | 7,407 | 31,206 | ||||||
Cash, cash equivalents and restricted cash, end of period | $ | 8,780 | $ | 16,080 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for interest | $ | 1,885 | $ | 1,624 | ||||
Supplemental noncash investing and financing activities: | ||||||||
Right-of-use assets obtained in exchange for lease obligations | $ | — | $ | 3,160 | ||||
Derivative liability resulting from term loan amendment | $ | 492 | $ | — |
Three Months Ended March 31, | ||||||||
2023 | 2022 | |||||||
Full-service outsourcing—flat rate | $ | 48,688 | $ | 39,297 | ||||
Full-service outsourcing—claim cost pass-through | 3 | 8 | ||||||
Membership | 772 | 833 | ||||||
Software licensing arrangements | 101 | — | ||||||
Professional services | 14 | 17 | ||||||
Total revenue | $ | 49,578 | $ | 40,155 |
2023 | 2022 | |||||||
Balance as of January 1 | $ | 370 | $ | 1,049 | ||||
Amortization of contract costs to obtain | (25 | ) | (141 | ) | ||||
Amortization of contract costs to fulfill | (12 | ) | (48 | ) | ||||
Balance as of March 31 | $ | 333 | $ | 860 |
Level 1 — | Quoted prices in active markets for identical assets or liabilities. |
Level 2 — | Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
Level 3 — | Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. |
Fair Value as of March 31, 2023 | ||||||||||||||||
Recurring fair value measurements | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Liabilities: | ||||||||||||||||
Derivative liability | $ | — | $ | — | $ | 33,368 | $ | 33,368 | ||||||||
Warrant liability | — | — | 10,324 | 10,324 | ||||||||||||
Total liabilities in fair value hierarchy | $ | — | $ | — | $ | 43,692 | $ | 43,692 | ||||||||
Fair Value as of December 31, 2022 | ||||||||||||||||
Recurring fair value measurements | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Liabilities: | ||||||||||||||||
Derivative liability | $ | — | $ | — | $ | 32,765 | $ | 32,765 | ||||||||
Warrant liability | — | — | 13,957 | 13,957 | ||||||||||||
Total liabilities in fair value hierarchy | $ | — | $ | — | $ | 46,722 | $ | 46,722 |
Derivative Liability | Warrant Liability | Total | ||||||||||
Balance at December 31, 2021 | $ | — | $ | 7,084 | $ | 7,084 | ||||||
Issuances | — | 8 | 8 | |||||||||
Change in fair value | — | 414 | 414 | |||||||||
Balance at March 31, 2022 | $ | — | $ | 7,506 | $ | 7,506 | ||||||
Balance at December 31, 2022 | $ | 32,765 | $ | 13,957 | $ | 46,722 | ||||||
Issuances | 492 | — | 492 | |||||||||
Change in fair value | 111 | (3,633 | ) | (3,522 | ) | |||||||
Balance at March 31, 2023 | $ | 33,368 | $ | 10,324 | $ | 43,692 |
March 31, 2023 | December 31, 2022 | |||||||
Accrued service provider costs | $ | 6,464 | $ | 5,461 | ||||
Accrued compensation | 516 | 1,054 | ||||||
Accrued contract labor | 983 | 2,400 | ||||||
Credit card liabilities | 75 | 100 | ||||||
Accrued lender fees | 6,949 | — | ||||||
Other accrued liabilities | 7,267 | 4,107 | ||||||
$ | 22,254 | $ | 13,122 |
Urgent.ly Inc.
March 31, 2023 | December 31, 2022 | |||||||
2021 convertible promissory notes with an interest rate of 10.0% per annum maturing June 30, 2024 | $ | 39,957 | $ | 39,957 | ||||
Structural Capital term loan with an interest rate at the greater of 14.0% or the prime rate plus 7.5% per annum for the first $14,000 and 13.75% or the prime rate plus 7.0% for the remaining $3,500; maturing on January 1, 2024 or November 1, 2024 based on the occurrence of certain events | 17,500 | 17,500 | ||||||
Highbridge Capital term loan with an interest rate ranging from 12%-13% per annum maturing on March 31, 2024 or January 31, 2025 based on the occurrence of certain events | 40,000 | 40,000 | ||||||
2022 convertible promissory notes with an interest rate of 15.0% per annum maturing June 30, 2024 | 30,000 | 30,000 | ||||||
127,457 | 127,457 | |||||||
Less: current portion | (57,500 | ) | — | |||||
Less: debt issuance costs and discounts, long-term | (19,751 | ) | (28,014 | ) | ||||
Total long-term debt, net | $ | 50,206 | $ | 99,443 |
Lease cost | $ | 296 | ||
Sublease income | (69 | ) | ||
Total lease cost | $ | 227 |
2023 | $ | 713 | ||
2024 | 758 | |||
2025 | 618 | |||
2026 | 635 | |||
2027 | 458 | |||
Thereafter | — | |||
Total lease payments | 3,182 | |||
Less imputed interest | (504 | ) | ||
Present value of lease liabilities | $ | 2,678 |
Weighted average remaining lease term (years) | 4.0 | |||
Weighted average discount rate | 8.7 | % |
OTONOMO TECHNOLOGIES LTD. | ||||
By: | ||||
Name: | ||||
Title: | ||||
AMERICAN STOCK TRANSFER & TRUST COMPANY as Warrant Agent | ||||
By: | ||||
Name: | ||||
Title: |

of
Otonomo Technologies Ltd.
for
Ordinary Shares
of
Otonomo Technologies Ltd.
and
Consent Solicitation
If delivering by hand, express mail, courier, or other expedited service: Equiniti Trust Company, LLC Operations Center Attn: Reorganization Department 6201 15th Avenue Brooklyn, New York 11219 | By mail: Equiniti Trust Company, LLC Operations Center Attn: Reorganization Department 6201 15th Avenue Brooklyn, New York 11219 |
INFORMATION NOT REQUIRED IN PROSPECTUS
* | Filed herewith. |
^ | Previously filed. |
** | Furnished herewith. |
# | Management contract or compensatory plan. |
† | Certain confidential portions (indicated by brackets and asterisks) have been omitted from this exhibit. |
(1) | To file, during any period during which offers or sales are being made, a post-effective amendment to this registration statement: |
(i) | to include any prospectus required by section 10(a)(3) of the Securities Act of 1933; |
(ii) | to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) (§230.424(b) of this chapter) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
(iii) | to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
(2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
(4) | To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished, provided that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (1)(d) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. |
(5) | That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
(6) | That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
(i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
(ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
(iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
(iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
Otonomo Technologies Ltd. | |||
By: | /s/ Ben Volkow | ||
Name: | Ben Volkow | ||
Title: | Chief Executive Officer |
Signature | Title | Date | ||||
/s/ Ben Volkow | Chief Executive Officer and Director | July 24, 2023 | ||||
Ben Volkow | (Principal Executive Officer) | |||||
/s/ Bonnie Moav | Chief Financial Officer | July 24, 2023 | ||||
Bonnie Moav | (Principal Financial and Accounting Officer) | |||||
/s/ Benny Schnaider | Director | July 24, 2023 | ||||
Benny Schnaider | ||||||
/s/ Andy Geisse | Director | July 24, 2023 | ||||
Andy Geisse | ||||||
/s/ Meir Moshe | Director | July 24, 2023 | ||||
Meir Moshe | ||||||
/s/ Jonathan Huberman | Director | July 24, 2023 | ||||
Jonathan Huberman | ||||||
/s/ Vered Raviv Schwarz | Director | July 24, 2023 | ||||
Vered Raviv Schwarz |
By: | /s/ Colleen A. De Vries | ||
Name: | Colleen A. De Vries | ||
Title: | Senior Vice President on behalf of Cogency Global Inc. |