xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
¨TRANSITION REPORT PURSUANT TO SECTION 13 March 31, 2023
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
| Delaware | 88-1802794 | |||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification | |||||||
| Title of each class | Trading | Name of each exchange on which registered | ||||||||||||
| Redeemable warrants | ||||||||||||||
☐
☐
| Large accelerated filer | Accelerated filer | ☒ | |||||||||
| Smaller reporting company | ☐ | ||||||||||
| Emerging growth company | ☒ | ||||||||||
☐
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ACIES ACQUISITION CORP.
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2020
| Page | |||||
Condensed Consolidated Balance | |||||
Condensed | |||||
Condensed | |||||
Condensed | |||||
Condensed Consolidated Statements of Cash Flows | |||||
i
ACIES ACQUISITION CORP.
CONDENSED BALANCE SHEET
(Unaudited)
| ASSETS | ||||
| Current asset - cash | $ | 143,032 | ||
| Security deposit | 2,875 | |||
| Deferred offering costs | 125,048 | |||
| TOTAL ASSETS | $ | 270,955 | ||
| LIABILITIES AND SHAREHOLDER’S EQUITY | ||||
| Current liabilities | ||||
| Accrued offering costs | $ | 5,000 | ||
| Promissory note – related party | 257,694 | |||
| Total Current Liabilities | 262,694 | |||
| Commitments | ||||
| Shareholder’s Equity | ||||
| Preferred shares, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding | — | |||
| Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; none issued and outstanding | — | |||
| Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 5,750,000 shares issued and outstanding (1) | 575 | |||
| Additional paid-in capital | 24,425 | |||
| Accumulated deficit | (16,739 | ) | ||
| Total Shareholder’s Equity | 8,261 | |||
| TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY | $ | 270,955 | ||
The accompanying notes are an integral part of the unaudited condensed financial statements.
1
ACIES ACQUISITION CORP.
CONDENSED STATEMENT
CONTENTSFOR THE PERIOD FROM AUGUST 14, 2020 (INCEPTION) THROUGH SEPTEMBER 30, 2020
(Unaudited)
| Formation and operating costs | $ | 16,739 | ||
| Net Loss | $ | (16,739 | ) | |
| Weighted average shares outstanding, basic and diluted (1) | 5,000,000 | |||
| Basic and diluted net loss per ordinary share | $ | (0.00 | ) |
The accompanying notes are an integral part of the unaudited condensed financial statements.
2
ACIES ACQUISITION CORP.
CONDENSED STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY
FOR THE PERIOD FROM AUGUST 14, 2020 (INCEPTION) THROUGH SEPTEMBER 30, 2020
(Unaudited)
| Class B Ordinary Shares | Additional Paid-in | Accumulated | Total Shareholder’s | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
| Balance – August 14, 2020 (inception) | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
| Issuance of Class B ordinary shares to Sponsor (1) | 5,750,000 | 575 | 24,425 | — | 25,000 | |||||||||||||||
| Net loss | — | — | — | (16,739 | ) | (16,739 | ) | |||||||||||||
| Balance – September 30, 2020 | 5,750,000 | $ | 575 | $ | 24,425 | $ | (16,739 | ) | $ | 8,261 | ||||||||||
The accompanying notes are an integral part of the unaudited condensed financial statements.
3
ACIES ACQUISITION CORP.
CONDENSED STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM AUGUST 14, 2020 (INCEPTION) THROUGH SEPTEMBER 30, 2020
(Unaudited)
| Cash Flows from Operating Activities: | ||||
| Net loss | $ | (16,739 | ) | |
| Changes in operating assets and liabilities: | ||||
| Security deposit | (2,875 | ) | ||
| Net cash used in operating activities | (19,614 | ) | ||
| Cash Flows from Financing Activities: | ||||
| Proceeds from issuance of Class B ordinary shares to Sponsor | 25,000 | |||
| Proceeds from promissory note - related party | 257,694 | |||
| Payment of offering costs | (120,048 | ) | ||
| Net cash provided by financing activities | 162,646 | |||
| Net Change in Cash | 143,032 | |||
| Cash – Beginning | — | |||
| Cash – Ending | $ | 143,032 | ||
| Non-cash investing and financing activities: | ||||
| Deferred offering costs included in accrued offering costs | $ | 5,000 | ||
The accompanying notes are an integral part of the unaudited condensed financial statements.
4
ACIES ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Acies Acquisition Corp. (the “Company”) is a blank check company incorporated as a Cayman Islands exempted companyThis Quarterly Report on August 14, 2020. The Company was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses (the “Business Combination”).
The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of September 30, 2020, the Company had not yet commenced any operations. All activity for the period August 14, 2020 (inception) through September 30, 2020 relates to the Company’s formation and the initial public offering (the “Initial Public Offering”).
The registration statement for the Company’s Initial Public Offering became effective on October 22, 2020. On October 27, 2020, the Company consummated the Initial Public Offering of 20,000,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $200,000,000 which is described in Note 3.
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 4,333,333 warrants (the “Private Placement Warrants”) at a price of $1.50 per Private Placement Warrant in a private placement to Acies Acquisition, LLC, a Delaware limited liability company (the “Sponsor”), generating gross proceeds of $6,500,000, which is described in Note 4.
Following the closing of the Initial Public Offering on October 27, 2020, an amount of $200,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”) andinvested in U.S. government securities,Form 10-Q contains forward-looking statements within the meaning set forth inof Section 2(a)(16)27A of the Investment CompanySecurities Act of 1940,1933, as amended (the “Investment Company“Securities Act”), with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting certain conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the funds in the Trust Account to the Company’s shareholders, as described below.
On November 9, 2020, the Company consummated the sale of an additional 1,525,000 Units, at $10.00 per Unit, and the sale of an additional 203,334 Private Placement Warrants, at $1.50 per Private Placement Warrant, generating total gross proceeds of $15,555,000. A total of $15,250,000 of the net proceeds was deposited into the Trust Account, bringing the aggregate proceeds held in the Trust Account to $215,250,000.
Transaction costs amounted to $12,363,821, consisting of $4,305,000 of underwriting fees, $7,533,750 of deferred underwriting fees and $525,071 of other offering costs. In addition, at October 27, 2020, cash of $4,179,381 was held outside of the Trust Account (as defined below) and is available for the payment of offering expenses and for working capital purposes.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward completing a Business Combination. The Company must complete its initial Business Combination with one or more target businesses that together have a fair market value equal to at least 80% of the net assets held in the Trust Account (excluding any deferred underwriting commissions held in the Trust Account) at the time of the agreement to enter into a Business Combination. The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to effect a Business Combination successfully.
The Company will provide its holders of the outstanding Public Shares (the “public shareholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.
The Company will proceed with a Business Combination only if the Company has net tangible assets of at least $5,000,001 either prior to or upon such consummation of a Business Combination and, if the Company seeks shareholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a shareholder vote is not required by law and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association (the “Amended and Restated Memorandum and Articles of Association”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, shareholder approval of the transaction is required by law, or the Company decides to obtain shareholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each public shareholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction or don’t vote at all.
5
ACIES ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
Notwithstanding the above, if the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Amended and Restated Memorandum and Articles of Association provides that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 1321E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). We have based these forward-looking statements on our current expectations and projections about future events. All statements, other than statements of present or historical fact included in this Quarterly Report, about our future financial performance, strategy, expansion plans, future operations, future operating results, estimated revenues, losses, projected costs, prospects, plans and objectives of management are forward-looking statements. Any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “continue,” “goal,” “project” or the negative of such terms or other similar expressions.
The Sponsor has agreed (a) to waive its redemption rights with respect to its Founder Sharesglobal credit and Public Shares held by it in connection with the completion of a Business Combination, (b) to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination by October 27, 2022 (or by January 27, 2023, if the Company has executed a letter of intent, agreement in principle or definitive agreement for a Business Combination by October 27, 2022) (the “Combination Period”) and (c) not to propose an amendment to the Amended and Restated Certificate of Incorporation (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination or (ii) with respect to any other provisionfinancial markets;
The Company will have until the end of the Combination Period to complete a Business Combination. If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations, except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on depositfinancial performance, and our subsidiaries, including:
The Sponsor has agreed to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor acquires Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within in the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00).
In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00 per Public Share or (2) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s independent auditors), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
ACIES ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
Risks and Uncertainties
Management continues to evaluate •the impact of the COVID-19 pandemic (including existing and has concludedpossible future variants as well as vaccinations) on our business.
| March 31, 2023 | December 31, 2022 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 127,484 | $ | 134,000 | |||||||
| Receivables | 33,353 | 27,016 | |||||||||
| Prepaid expenses and other current assets | 12,238 | 14,963 | |||||||||
| Total current assets | 173,075 | 175,979 | |||||||||
| Property and equipment, net | 17,345 | 17,532 | |||||||||
| Operating lease right-of-use assets | 14,395 | 15,562 | |||||||||
| Intangibles assets and internal-use software, net | 78,818 | 77,231 | |||||||||
| Goodwill | 47,133 | 47,133 | |||||||||
| Deferred income taxes | 16,208 | 13,969 | |||||||||
| Other long-term assets | 4,658 | 4,603 | |||||||||
| Total non-current assets | 178,557 | 176,030 | |||||||||
| Total assets | $ | 351,632 | $ | 352,009 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | 3,412 | 4,425 | |||||||||
| Warrant liabilities | 4,740 | 3,682 | |||||||||
| Operating lease liabilities, current | 4,506 | 4,571 | |||||||||
| Accrued liabilities | 22,941 | 21,473 | |||||||||
| Total current liabilities | 35,599 | 34,151 | |||||||||
| Minimum guarantee liability | 1,500 | 1,500 | |||||||||
| Operating lease liabilities, non-current | 10,574 | 11,660 | |||||||||
| Other long-term liabilities | 2,240 | 2,385 | |||||||||
| Total non-current liabilities | 14,314 | 15,545 | |||||||||
| Total liabilities | $ | 49,913 | $ | 49,696 | |||||||
| Commitments and contingencies | |||||||||||
| Stockholders’ equity: | |||||||||||
| Preferred stock, $0.0001 par value (100,000 shares authorized, no shares issued and outstanding as of March 31, 2023 and December 31, 2022) | — | — | |||||||||
| Class A common stock, $0.0001 par value (2,000,000 shares authorized, 118,867 and 116,756 shares issued, and 116,447 and 115,635 shares outstanding as of March 31, 2023 and December 31, 2022, respectively) | 11 | 11 | |||||||||
| Class B common stock, $0.0001 par value (25,000 shares authorized, 16,457 and 16,457 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively). | 2 | 2 | |||||||||
| Additional paid-in capital | 297,662 | 290,337 | |||||||||
| Retained earnings | 14,186 | 16,756 | |||||||||
| Accumulated other comprehensive loss | (94) | (151) | |||||||||
| Treasury stock, at cost, 2,420 and 1,166 shares at March 31, 2023 and December 31, 2022, respectively | (10,048) | (4,642) | |||||||||
| Total stockholders’ equity | 301,719 | 302,313 | |||||||||
| Total liabilities and stockholders’ equity | $ | 351,632 | $ | 352,009 | |||||||
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2023 | 2022 | ||||||||||||||||||||||
| Net revenue | $ | 80,123 | $ | 70,451 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
Cost of revenue(1) | 19,527 | 21,033 | |||||||||||||||||||||
| Selling and marketing | 18,066 | 20,540 | |||||||||||||||||||||
| Research and development | 17,755 | 16,981 | |||||||||||||||||||||
| General and administrative | 11,901 | 9,691 | |||||||||||||||||||||
| Depreciation and amortization | 11,033 | 8,394 | |||||||||||||||||||||
| Restructuring and related | 4,048 | 8,655 | |||||||||||||||||||||
| Total operating costs and expenses | 82,330 | 85,294 | |||||||||||||||||||||
| Loss from operations | (2,207) | (14,843) | |||||||||||||||||||||
| Other (expense) income, net: | |||||||||||||||||||||||
| Change in fair value of warrant liabilities | (1,058) | (2,716) | |||||||||||||||||||||
| Interest income (expense), net | 895 | (5) | |||||||||||||||||||||
| Other income, net | 60 | 187 | |||||||||||||||||||||
| Total other expense, net | (103) | (2,534) | |||||||||||||||||||||
| Loss before income taxes | (2,310) | (17,377) | |||||||||||||||||||||
| Income tax expense | (260) | (7,835) | |||||||||||||||||||||
| Net loss | $ | (2,570) | $ | (25,212) | |||||||||||||||||||
| Net loss per share attributable to Class A and Class B common stockholders: | |||||||||||||||||||||||
| Basic | $ | (0.02) | $ | (0.20) | |||||||||||||||||||
| Diluted | $ | (0.02) | $ | (0.20) | |||||||||||||||||||
| Weighted average shares of common stock outstanding: | |||||||||||||||||||||||
| Basic | 132,131 | 126,337 | |||||||||||||||||||||
| Diluted | 132,131 | 126,337 | |||||||||||||||||||||
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2023 | 2022 | ||||||||||||||||||||||
| Net loss | $ | (2,570) | $ | (25,212) | |||||||||||||||||||
| Other comprehensive (loss) income: | |||||||||||||||||||||||
Change in foreign currency translation adjustment(1) | 57 | (6) | |||||||||||||||||||||
| Total other comprehensive income (loss) | 57 | (6) | |||||||||||||||||||||
| Comprehensive loss | $ | (2,513) | $ | (25,218) | |||||||||||||||||||
| Class A Common Stock | Class B Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Retained Earnings | |||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2021 | 110,066 | $ | 11 | 16,130 | $ | 2 | $ | 268,522 | $ | 393 | $ | 34,539 | $ | 303,467 | |||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | (25,212) | (25,212) | |||||||||||||||||||||||||||||||||||||||
| Exercise of stock options | 113 | — | — | — | 130 | — | — | 130 | |||||||||||||||||||||||||||||||||||||||
| Issuance of shares upon vesting of restricted stock units | 160 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | 7,969 | — | — | 7,969 | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | — | (6) | — | (6) | |||||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2022 | 110,339 | $ | 11 | 16,130 | $ | 2 | $ | 276,621 | $ | 387 | $ | 9,327 | $ | 286,348 | |||||||||||||||||||||||||||||||||
| Class A Common Stock | Class B Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Retained Earnings | Treasury Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2022 | 115,635 | $ | 11 | 16,457 | $ | 2 | $ | 290,337 | $ | (151) | $ | 16,756 | (4,642) | 302,313 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | (2,570) | — | (2,570) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Exercise of stock options | 1,585 | — | — | — | 1,916 | — | — | — | 1,916 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares upon vesting of restricted stock units | 481 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | 5,409 | — | — | — | 5,409 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | (1,254) | — | — | — | — | — | — | (5,406) | (5,406) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | — | 57 | — | — | 57 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2023 | 116,447 | $ | 11 | 16,457 | $ | 2 | $ | 297,662 | $ | (94) | $ | 14,186 | (10,048) | $ | 301,719 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net loss | $ | (2,570) | $ | (25,212) | |||||||
| Adjustments: | |||||||||||
| Depreciation and amortization | 11,033 | 8,394 | |||||||||
| Amortization of loan costs | 38 | 34 | |||||||||
| Stock-based compensation expense | 4,853 | 6,868 | |||||||||
| Change in fair value of warrant liabilities | 1,058 | 2,716 | |||||||||
| Change in fair value of contingent consideration | 53 | — | |||||||||
| Asset impairments | — | 8,353 | |||||||||
| Deferred income tax expense | (2,228) | 7,945 | |||||||||
| Other | (179) | (203) | |||||||||
| Changes in operating assets and liabilities | |||||||||||
| Receivables | (6,861) | (203) | |||||||||
| Prepaid expenses and other current assets | 201 | 871 | |||||||||
| Income tax receivable | 2,128 | 366 | |||||||||
| Accounts payable & accrued liabilities | (3,492) | 1,926 | |||||||||
| Other | 469 | (270) | |||||||||
| Net cash provided by operating activities | 4,503 | 11,585 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Purchase of property and equipment | (1,849) | (1,936) | |||||||||
| Additions to internal-use software | (5,937) | (5,519) | |||||||||
| Other | 168 | 2,348 | |||||||||
| Net cash used in investing activities | (7,618) | (5,107) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from stock option exercises | 1,916 | 130 | |||||||||
| Repurchases of treasury stock | (5,406) | — | |||||||||
| Net cash (used in) provided by financing activities | (3,490) | 130 | |||||||||
| Foreign currency translation | 89 | (145) | |||||||||
| Net change in cash and cash equivalents | (6,516) | 6,463 | |||||||||
| Cash and cash equivalents at beginning of period | 134,000 | 213,502 | |||||||||
| Cash and cash equivalents at end of period | $ | 127,484 | $ | 219,965 | |||||||
| Supplemental cash flow disclosures: | |||||||||||
| Interest paid | $ | 41 | $ | 35 | |||||||
| Income taxes paid, net of refunds | 414 | 244 | |||||||||
| Non-cash investing and financing activities: | |||||||||||
| Capitalization of stock-based compensation | $ | 556 | $ | 1,101 | |||||||
| Increase in property and equipment included in accounts payable and other long-term liabilities | — | 656 | |||||||||
| Additions to intangible assets related to licensing agreements | 4,617 | — | |||||||||
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Merger, dated as of February 1, 2021 (the “Merger Agreement”), by and among Acies, Catalyst Merger Sub I, Inc., a Delaware corporation and a direct wholly owned subsidiary of Acies, Catalyst Merger Sub II, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Acies, and Old PLAYSTUDIOS.
and Consolidation
three months ended March 31, 2023, and 2022. The accompanying unaudited condensedConsolidated Balance Sheet as of December 31, 2022 was derived from the audited annual financial statements should be readbut does not contain all of the footnote disclosures from the annual financial statements. The Company made certain reclassifications to the comparative balances in conjunctionthe condensed consolidated financial statements to conform with current year presentation.
inherent uncertainties in making these estimates, actual amounts could differ materially.
The
Further,
Use of Estimates
The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
ACIES ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of September 30, 2020.
Deferred Offering Costs
Offering costs consist of legal, accounting and other costs incurred through the balance sheet date that are directly related to the Initial Public Offering. Offering costs amounting to $12,363,821 were charged to shareholders’ equity upon the completion of the Initial Public Offering (see Note 1). As of September 30, 2020, there was $125,048 of deferred offering costs recorded in the accompanying condensed balance sheet.
Income Taxes
The Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, basedlose its emerging growth company status on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
The Company is considered an exempted Cayman Islands Company and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the period presented.
Net Loss per Ordinary Share
Net loss per ordinary share is computed by dividing net loss by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares subject to forfeiture. Weighted average shares were reduced for the effect of an aggregate of 750,000 ordinary shares that were subject to forfeiture if the over-allotment option was not exercised by the underwriter (see Note 5). At September 30, 2020, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company.December 31, 2022. As a result, diluted loss per common share is the same as basic loss per share for the period presented.
Concentration of Credit Risk
Financial instruments that potentially subject the Company does not expect to concentrations of credit risk consist ofadopt any accounting pronouncements currently deferred based on private company standards until a cash account in a financial institution which, at times may exceed the Federal Depository Insurance Coverage of $250,000.year subsequent to 2022. The Company will reevaluate its eligibility to retain emerging growth company status at the end of its second quarter of 2023, and otherwise as required.
Fair Value of Financial Instruments
The fair valueevaluated all of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying condensed balance sheet, primarily due to their short-term nature.
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted, wouldthat have been issued or proposed by the Financial Accounting Standards Board (“FASB”) or other standards-setting bodies through the filing date of these financial statements and does not believe the future adoption of any such pronouncements will have a material effect on the accompanyingCompany’s condensed consolidated financial statements.
Pursuant3—BUSINESS COMBINATIONS
| Consideration: | August 2, 2022 | ||||
| Cash consideration | $ | 945 | |||
| Note receivable plus accrued interest conversion | 1,055 | ||||
| Contingent consideration | 1,564 | ||||
| Total consideration transferred | $ | 3,564 | |||
| Identifiable assets acquired and liabilities assumed: | |||||
| Developed technology (weighted-average useful life of 5 years) | 2,403 | ||||
| Liabilities assumed | (15) | ||||
| Total identifiable net assets | $ | 2,388 | |||
| Goodwill | $ | 1,176 | |||
| Consideration: | October 12, 2022 | ||||
| Cash consideration | $ | 73,457 | |||
| Contingent consideration | 1,797 | ||||
| Total consideration transferred | $ | 75,254 | |||
| Identifiable assets acquired and liabilities assumed: | |||||
| Cash and cash equivalents | $ | 3,738 | |||
| Accounts receivable | 3,190 | ||||
| Property and equipment | 4,042 | ||||
| Operating lease assets | 4,195 | ||||
| Trade names (weighted-average useful life of 10 years) | 1,500 | ||||
| Developed technology (weighted-average useful life of 5 years) | 12,600 | ||||
| Customer relationships (weighted-average useful life of 5 years) | 12,000 | ||||
| Other assets | 740 | ||||
| Liabilities assumed | (7,649) | ||||
| Total identifiable net assets | $ | 34,356 | |||
| Goodwill | $ | 40,898 | |||
| March 31, 2023 | December 31, 2022 | Financial Statement Line Item | |||||||||||||||
| Marketing Agreement | $ | 1,000 | $ | 1,000 | Intangibles, net | ||||||||||||
| March 31, 2023 | December 31, 2022 | ||||||||||
| Trade receivables | $ | 31,883 | $ | 25,020 | |||||||
| Other receivables | 1,470 | 1,996 | |||||||||
| Total receivables | $ | 33,353 | $ | 27,016 | |||||||
| March 31, 2023 | December 31, 2022 | ||||||||||
| Prepaid expenses | $ | 4,995 | 5,148 | ||||||||
| Income tax receivable | 612 | 1,372 | |||||||||
| Other current assets | 6,631 | 8,443 | |||||||||
| Total other current assets | $ | 12,238 | $ | 14,963 | |||||||
| March 31, 2023 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Financial liabilities: | |||||||||||||||||||||||
| Public Warrants | $ | 2,772 | — | — | 2,772 | ||||||||||||||||||
| Private Warrants | — | 1,968 | — | 1,968 | |||||||||||||||||||
| Total financial liabilities | $ | 2,772 | $ | 1,968 | $ | — | $ | 4,740 | |||||||||||||||
| December 31, 2022 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Financial liabilities: | |||||||||||||||||||||||
| Public Warrants | $ | 2,153 | — | — | 2,153 | ||||||||||||||||||
| Private Warrants | — | 1,529 | — | 1,529 | |||||||||||||||||||
| Total financial liabilities | $ | 2,153 | $ | 1,529 | $ | — | $ | 3,682 | |||||||||||||||
| March 31, 2023 | December 31, 2022 | ||||||||||
| Land and land improvements | $ | 1,421 | 1,382 | ||||||||
| Building and building improvements | 3,705 | 3,705 | |||||||||
| Computer equipment | 9,007 | 9,423 | |||||||||
| Leasehold improvements | 11,035 | 10,204 | |||||||||
| Purchased software | 3,483 | 4,471 | |||||||||
| Furniture and fixtures | 3,516 | 3,553 | |||||||||
| Construction in progress | 466 | 648 | |||||||||
| Total property and equipment | 32,633 | 33,386 | |||||||||
| Less: accumulated depreciation | (15,288) | (15,854) | |||||||||
| Total property and equipment, net | $ | 17,345 | $ | 17,532 | |||||||
| March 31, 2023 | December 31, 2022 | ||||||||||
| United States | $ | 12,464 | $ | 12,331 | |||||||
EMEA(1) | 3,341 | 3,756 | |||||||||
| All other countries | 1,540 | 1,445 | |||||||||
| Total property and equipment, net | $ | 17,345 | $ | 17,532 | |||||||
| March 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||||||||||||
| Amortizable intangible assets: | |||||||||||||||||||||||||||||||||||
| Licenses | $ | 25,656 | $ | (10,434) | $ | 15,222 | $ | 21,040 | $ | (7,962) | $ | 13,078 | |||||||||||||||||||||||
| Acquired technology | 15,003 | (1,580) | 13,423 | 15,003 | (830) | 14,173 | |||||||||||||||||||||||||||||
| Customer relationships | 12,000 | (1,200) | 10,800 | 12,000 | (600) | 11,400 | |||||||||||||||||||||||||||||
| Trade names | 2,740 | (1,315) | 1,425 | 2,740 | (1,278) | 1,462 | |||||||||||||||||||||||||||||
| Internal-use software | 152,291 | (115,343) | 36,948 | 145,798 | (109,680) | 36,118 | |||||||||||||||||||||||||||||
| 207,690 | (129,872) | 77,818 | 196,581 | (120,350) | 76,231 | ||||||||||||||||||||||||||||||
| Nonamortizable intangible assets: | |||||||||||||||||||||||||||||||||||
| Marketing Agreement with a related party | 1,000 | — | 1,000 | 1,000 | — | 1,000 | |||||||||||||||||||||||||||||
| Total intangible assets | $ | 208,690 | $ | (129,872) | $ | 78,818 | $ | 197,581 | $ | (120,350) | $ | 77,231 | |||||||||||||||||||||||
| Year Ending December 31, | Projected Amortization Expense | |||||||
| Remaining 2023 | $ | 27,263 | ||||||
| 2024 | 27,514 | |||||||
| 2025 | 12,041 | |||||||
| 2026 | 6,167 | |||||||
| 2027 | 4,120 | |||||||
| Thereafter | 713 | |||||||
| Total | $ | 77,818 | ||||||
| Goodwill, Gross | Accumulated Impairment | Goodwill, Net | ||||||||||||||||||
| Balance as of December 31, 2022 | 47,133 | — | 47,133 | |||||||||||||||||
| Additions from acquisitions | — | — | — | |||||||||||||||||
| Measurement period adjustments | — | — | — | |||||||||||||||||
| Balance as of March 31, 2023 | $ | 47,133 | $ | — | $ | 47,133 | ||||||||||||||
ACIES ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 4,333,333 Private Placement Warrants at a price of $1.50 per Private Placement Warrant ($6,500,000 in the aggregate), each exercisable to purchase one Class A ordinary sharecommon stock at a price of $11.50 in cash per share,. On November 9, 2020, in connection with the underwriters’ election subject to partially exercise their over-allotment option, the Company sold an additional 203,334 Private Placement Warrantsadjustment as discussed below, as of October 27, 2021. Pursuant to the Sponsor, atWarrant Agreement, a priceholder of $1.50 per Private Placement Warrant, generating gross proceeds of $305,000. The proceeds from the sale of the Private Placement Warrants were added to the net proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On September 15, 2020, the Sponsor paid $25,000 in consideration for 8,625,000 Class B ordinary shares (the “Founder Shares”). On October 20, 2020, the Sponsor surrendered and the Company canceled 2,875,000 Class B ordinary shares resulting in 5,750,000 Class B ordinary shares outstanding. All share and per-share amounts have been retroactively restated to reflect the share cancellation. The Founder Shares included an aggregate of up to 750,000 shares subject to forfeiture by the Sponsor to the extent that the underwriter’s over-allotment was not exercised in full or in part, so that the Sponsor would collectively own, on an as-converted basis, 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Sponsor did not purchase any Public Shares in the Initial Public Offering). As a result of the underwriters’ election to partially exercise their over-allotment option on November 9, 2020, a total of 381,250 Founder Shares are no longer subject to forfeiture and 368,750 Founder Shares were forfeited, resulting in an aggregate of 5,381,250 Founder Shares issued and outstanding.
The Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination; and (B) subsequent to a Business Combination, (x) if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, amalgamation, share exchange, reorganization or other similar transaction that results in all of the Company’s shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property.
Administrative Support Agreement
The Company entered into an agreement, commencing on October 22, 2020, to pay the Sponsor a total of $10,000 per month for office space, secretarial and administrative support. Upon completion of the Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees.
Due to Sponsor
Subsequent to September 30, 2020, the Sponsor advanced $2,621,369 to the Company in anticipation of the amount to be paid for the purchase of additional Private Placement Warrants in the event the underwriters’ exercised their over-allotment option. The advance was due on demand should the over-allotment option not be exercised by the underwriters. Subsequent to the Initial Public Offering, on October 29, 2020, the Company repaid $2,021,369.
Promissory Note — Related Party
On September 4, 2020, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the “Note”). The Note was non-interest bearing and payable on the earlier of December 31, 2020 or the completion of the Initial Public Offering. As of September 30, 2020, there was $257,694 outstanding under the Promissory Note. The outstanding balance under the Note of $278,631 was repaid subsequent to the closing of the Initial Public Offering on October 29, 2020.
Related Party Loans
In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s directors and officers may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.50 per warrant. The warrants would be identical to the Private Placement Warrants.
ACIES ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
NOTE 6. COMMITMENTS
Registration Rights
Pursuant to a registration rights agreement entered into on October 22, 2020, the holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of the Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of our initial business combination. However, the registration and shareholder rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lockup period. The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities.The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company granted the underwriter a 45-day option to purchase up to 3,000,000 additional Units to cover over-allotments at the Initial Public Offering price, less the underwriting discounts and commissions. On November 9, 2020, the underwriter’s partially exercised their over-allotment option to purchase an additional 1,525,000 Units, at a price of $10.00 per Unit, and forfeited the remaining option to purchase additional Units.
The underwriter is entitled to a deferred fee of $0.35 per Unit, or $7,533,750 in the aggregate. The deferred fee will become payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
NOTE 7. SHAREHOLDER’S EQUITY
Preferred Shares — The Company is authorized to issue 5,000,000 shares of $0.0001 par value preferred shares. At September 30, 2020, there were no preferred shares issued or outstanding.
Class A Ordinary Shares — The Company is authorized to issue up to 500,000,000 Class A ordinary shares, $0.0001 par value per share. Holders of the Company’s ordinary shares are entitled to one vote for each share. At September 30, 2020, there were no Class A ordinary shares issued or outstanding.
Class B Ordinary Shares — The Company is authorized to issue up to 50,000,000 Class B ordinary shares, $0.0001 par value per share. Holders of the Company’s ordinary shares are entitled to one vote for each share. At September 30, 2020, there were 5,750,000 Class B ordinary shares issued and outstanding.
Holders of Class A ordinary shares and Class B ordinary shares will vote together as a single class on all other matters submitted to a vote of shareholders, except as required by law.
The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of a Business Combination or earlier at the option of the holders thereof at a ratio such that the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of the Initial Public Offering, plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of a Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in a Business Combination and any Private Placement Warrants issued to the Sponsor, its affiliates or any member of management team upon conversion of Working Capital Loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one-to-one.
Warrants — Public Warrants may exercise the Public Warrants only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the consummation of a Business Combination or (b) one year from the closing of the Initial Public Offering.Class A common stock. The Public Warrants will expire five5 years fromafter the consummationcompletion of a Business Combinationthe Acies Merger, or earlier upon redemption or liquidation.
ACIES ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue Class A ordinary shares upon exercise of a warrant unless Class A ordinary shares issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.
The Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of a Business Combination, it will use its commercially reasonable efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the warrants, and it will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of a Business Combination, and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement; provided that if our Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elect, the Company will not be required to file or maintain in effect a registration statement, but the Company will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th day after the closing of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption, but the Company will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
Redemption of Warrants When the Price per Class A Ordinary Share Equals or Exceeds $18.00 — Once the warrants become exercisable, the Company may redeem the outstanding Public Warrants:
If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
Redemption of Warrants When the Price per Class A Ordinary Share Equals or Exceeds $10.00 — Once the warrants become exercisable, the Company may redeem the outstanding warrants:
The exercise price and number of ordinary shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless.
ACIES ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2020
(Unaudited)
In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of its Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
The Private Placement Warrants are identical to the Public Warrants, underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the shares of Class A ordinary sharescommon stock issuable upon the exercise of the Private Placement Warrants willwere not be transferable assignable or salable until 30 days after the completion of a Business Combination,the Acies Merger, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and beare non-redeemable except as described above, so long as they are held by the initial purchasersholder or theirany of its permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasersholder or theirits permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
NOTE 8. SUBSEQUENT EVENTS
The Private Warrants may be exercised on a cashless basis so long as held by the Sponsor or certain permitted transferees.
| March 31, 2023 | December 31, 2022 | ||||||||||
| Accrued payroll and vacation | 9,402 | 9,666 | |||||||||
| Accrued user acquisition | 2,559 | 4,183 | |||||||||
| Income taxes payable | 2,071 | 702 | |||||||||
| Accrued royalties | 29 | 1,484 | |||||||||
| Minimum guarantee liability | 4,320 | 1,500 | |||||||||
| Other accruals | 4,560 | 3,938 | |||||||||
| Total accrued liabilities | $ | 22,941 | $ | 21,473 | |||||||
| March 31, 2023 | December 31, 2022 | |||||||||||||
| Operating lease right-of-use assets, net | $ | 14,395 | $ | 15,562 | ||||||||||
| Operating lease liabilities, current | 4,506 | 4,571 | ||||||||||||
| Operating lease liabilities, noncurrent | 10,574 | 11,660 | ||||||||||||
| Operating lease liabilities, total | $ | 15,080 | $ | 16,231 | ||||||||||
| Weighted average remaining lease term, years | 3.8 | 4.0 | ||||||||||||
| Weighted average discount rate | 3.3 | % | 3.3 | % | ||||||||||
| Year ending December 31, | Operating Leases | |||||||
| Remaining 2023 | $ | 3,818 | ||||||
| 2024 | 4,760 | |||||||
| 2025 | 2,916 | |||||||
| 2026 | 2,542 | |||||||
| 2027 | 1,752 | |||||||
| Thereafter | 382 | |||||||
| Total undiscounted cash flows | $ | 16,170 | ||||||
| Less: imputed interest | $ | (1,090) | ||||||
| Lease liabilities, total | $ | 15,080 | ||||||
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2023 | 2022 | ||||||||||||||||||||||
Virtual currency (over time)(1) | $ | 64,385 | $ | 65,935 | |||||||||||||||||||
| Advertising (point in time) | 13,085 | 4,075 | |||||||||||||||||||||
| Other revenue (point in time or over time) | 2,653 | 441 | |||||||||||||||||||||
| Total net revenue | $ | 80,123 | $ | 70,451 | |||||||||||||||||||
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2023 | 2022 | ||||||||||||||||||||||
| United States | $ | 69,557 | $ | 62,103 | |||||||||||||||||||
| All other countries | 10,566 | 8,348 | |||||||||||||||||||||
| Total net revenue | $ | 80,123 | $ | 70,451 | |||||||||||||||||||
| March 31, 2023 | December 31, 2022 | ||||||||||
| Minimum guarantee liability-current | $ | 4,320 | $ | 1,500 | |||||||
| Minimum guarantee liability-noncurrent | 1,500 | 1,500 | |||||||||
| Total minimum guarantee obligations | $ | 5,820 | $ | 3,000 | |||||||
| Weighted-average remaining contractual term (in years) | 1.8 | 2.0 | |||||||||
| Year Ending December 31, | Minimum Guarantee Obligations | |||||||
| Remaining 2023 | $ | 4,320 | ||||||
| 2024 | 1,500 | |||||||
| 2025 | — | |||||||
| 2026 | — | |||||||
| 2027 | — | |||||||
| Total | $ | 5,820 | ||||||
| Severance and Related | ||||||||
| Balance as of December 31, 2022 | $ | — | ||||||
| Charges | $ | 2,475 | ||||||
| Payments | $ | (620) | ||||||
| Balance as of March 31, 2023 | $ | 1,854 | ||||||
| Currency Translation Adjustment | Total Accumulated Other Comprehensive Loss | ||||||||||
| Balance as of December 31, 2022 | $ | (151) | $ | (151) | |||||||
| Foreign currency translation | 57 | 57 | |||||||||
| Balance as of March 31, 2023 | $ | (94) | $ | (94) | |||||||
| Currency Translation Adjustment | Total Accumulated Other Comprehensive Income (Loss) | ||||||||||
| Balance as of December 31, 2021 | $ | 393 | $ | 393 | |||||||
| Foreign currency translation | (6) | (6) | |||||||||
| Balance as of March 31, 2022 | $ | 387 | $ | 387 | |||||||
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2023 | 2022 | ||||||||||||||||||||||
| Selling and marketing | $ | 184 | $ | 319 | |||||||||||||||||||
| General and administrative | 2,458 | 3,149 | |||||||||||||||||||||
| Research and development | 2,211 | 3,400 | |||||||||||||||||||||
| Stock-based compensation expense | $ | 4,853 | $ | 6,868 | |||||||||||||||||||
| Capitalized stock-based compensation | $ | 556 | $ | 1,101 | |||||||||||||||||||
| Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | |||||||||||||||||||||||||||||||||||||
| Class A | Class B | Class A | Class B | |||||||||||||||||||||||||||||||||||
| Numerator | ||||||||||||||||||||||||||||||||||||||
| Net loss attributable to common stockholders – basic | $ | (2,250) | $ | (320) | $ | (21,992) | $ | (3,220) | ||||||||||||||||||||||||||||||
| Potential dilutive effect of derivative instruments | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Net loss attributable to common stockholders – diluted | $ | (2,250) | $ | (320) | $ | (21,992) | $ | (3,220) | ||||||||||||||||||||||||||||||
| Denominator | ||||||||||||||||||||||||||||||||||||||
| Weighted average shares of common stock outstanding - basic | 115,673 | 16,458 | 110,207 | 16,130 | ||||||||||||||||||||||||||||||||||
| Potential dilutive effect of derivative instruments | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Weighted average shares of common stock outstanding - diluted | 115,673 | 16,458 | 110,207 | 16,130 | ||||||||||||||||||||||||||||||||||
| Net loss attributable to common stockholders per share | ||||||||||||||||||||||||||||||||||||||
| Basic | $ | (0.02) | $ | (0.02) | $ | (0.20) | $ | (0.20) | ||||||||||||||||||||||||||||||
| Diluted | $ | (0.02) | $ | (0.02) | $ | (0.20) | $ | (0.20) | ||||||||||||||||||||||||||||||
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2023 | 2022 | ||||||||||||||||||||||
| Stock options | 7,617 | 14,486 | |||||||||||||||||||||
| Restricted stock units | 13,357 | 7,690 | |||||||||||||||||||||
| Public Warrants | 5,382 | 7,175 | |||||||||||||||||||||
| Private Warrants | 3,822 | 3,821 | |||||||||||||||||||||
| Earnout Shares | 15,000 | 15,000 | |||||||||||||||||||||
| 45,178 | 48,172 | ||||||||||||||||||||||
ITEMMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSReferences in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Acies Acquisition Corp. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Acies Acquisition, LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report.Special Note Regarding Forward-Looking StatementsThis Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Exchange Act that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’sManagement’s Discussion and Analysis of Financial Condition and Results of Operations” regardingOperationsCompany’sunaudited condensed consolidated financial position, business strategystatements and notes thereto contained in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the plans and objectives“Risk Factors” section of management for future operations, arethis Quarterly Report on Form 10-Q. Actual results may differ materially from those contained in any forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek”Unless the context otherwise requires, references to “we”, “us”, “our”, and variations and similar words and expressions“the Company” are intended to identify such forward-looking statements. Such forward-looking statements relate to futuremean the business and operations of PLAYSTUDIOS, Inc. and its consolidated subsidiaries.or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results tomay differ materiallysignificantly from the events, performance and results discussed in the forward-looking statements. ForFactors that might cause such a discrepancy include, but are not limited to, those discussed elsewhere in this Quarterly Report on Form 10-Q, particularly in the section titled “Risk Factors” set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q. All forward-looking statements in this report are based on information identifying importantavailable to us as of the date hereof, and we assume no obligation to update any such forward-looking statements to reflect future events or circumstances, except as required by law.actual resultsthem to differ materially from those anticipated influctuate on a quarterly basis, such as platform providers’ policies, seasonality, player connectivity, and the forward-looking statements, please referaddition of new content to games. We believe these measures are useful to investors for the Risk Factors section of the Company’s final prospectus for its Initial Public Offering filed with the SEC. The Company’s securities filings cansame reasons. In addition, we also present certain non-GAAP performance measures. These performance measures are presented as supplemental disclosure and should not be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intentionconsidered superior to or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.OverviewWe are a blank check company incorporated in the Cayman Islands on August 14, 2020 formedsubstitute for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or other similar Business Combination with one or more businesses. We intend to effectuate our Business Combination using cash derived from the proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, our shares, debt or a combination of cash, shares and debt.We expect to continue to incur significant costsconsolidated financial statements prepared under U.S. GAAP. The non-GAAP measures presented in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.Results of OperationsWe have neither engaged in any operations nor generated any operating revenues to date. Our only activities from inception through September 30, 2020 were organizational activities and those necessary to prepare for the Initial Public Offering, described below. We do not expect to generate any operating revenues until after the completion of our initial Business Combination. We expect to generate non-operating income in the form of interest income on marketable securities held after the Initial Public Offering. We expect that we will incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection with searching for, and completing, a Business Combination.For the period from August 14, 2020 (inception) through September 30, 2020, we had a net loss of $16,739, which consisted of formation and operating costs.Liquidity and Capital ResourcesAs of September 30, 2020, we had $143,032 in cash. Until the consummation of the Initial Public Offering, our only source of liquidity was an initial purchase of ordinary shares by the Sponsor and loans from our Sponsor.Subsequent to the end of the quarterly period covered by this Quarterly Report on October 27, 2020, we consummated the Initial Public Offering of 20,000,000 Units, at a price of $10.00 per Unit, generating gross proceeds of $200,000,000. SimultaneouslyForm 10-Q should be read together with the closingunaudited condensed consolidated financial statements and the respective related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. The key performance indicators and non-GAAP measures presented in this Quarterly Report on Form 10-Q may differ from similarly titled measures presented by other companies and are not a substitute for financial statements prepared in accordance with U.S. GAAP.Initial Public Offering,DAU, determined as described above, for each day during the period presented. We use DAU and Average DAU as measures of audience engagement to help us understand the size of the active player base engaged with our games on a daily basis.consummatedtrack DPU based on account activity. As such, an individual who makes a purchase in two different games in a particular day is counted as two DPU while an individual who makes purchases in the salesame game on two different devices is counted as one DPU. The term "Average DPU" is defined as the average of 4,333,333 Private Placement Warrantsthe DPU, determined as described above, for each day during the period presented. We use DPU and Average DPU to help us understand the size of our active player base that makes in-game purchases. This focus directs our strategic goals in setting player acquisition and pricing strategy.Three Months Ended March 31, 2023 2022 $ Change % Change Net revenue $ 80,123 $ 70,451 $ 9,672 13.7 % Operating expenses 82,330 85,294 (2,964) (3.5) % Operating loss (2,207) (14,843) 12,636 (85.1) % Net loss (2,570) (25,212) 22,642 (89.8) % Net loss margin (3.2) % (35.8) % 32.6 (91.1) % Three Months Ended March 31, 2023 2022 Change % Change Virtual currency $ 64,385 $ 65,935 $ (1,550) (2.4) % Advertising 13,085 4,075 9,010 221.1 % Other revenue 2,653 441 2,212 501.6 % Net revenue $ 80,123 $ 70,451 $ 9,672 13.7 % Average DAU 3,565 1,555 2,010 129.3 % Average MAU 13,082 6,913 6,169 89.2 % Average DPU 28 31 (3) (9.7) % Average Daily Payer Conversion 0.8 % 2.0 % (1.2) pp (60.0) % ARPDAU (in dollars) $ 0.24 $ 0.50 $ (0.26) (52.0) % pp = percentage points Three Months Ended March 31, 2023 2022 Change % Change United States $ 69,557 $ 62,103 $ 7,454 12.0 % North America (excluding United States) 10,566 3,691 6,875 186.3 % Other — 4,657 (4,657) (100.0) % Net revenue $ 80,123 $ 70,451 $ 9,672 13.7 % Sponsor ataddition of Tetris® and the Brainium portfolio of games, which primarily operate with an advertising revenue model, as described above.Three Months Ended March 31, % of Revenue 2023 2022 $ Change % Change 2023 2022 Operating expenses: Cost of revenue $ 19,527 $ 21,033 $ (1,506) (7.2) % 24.4 % 29.9 % Selling and marketing 18,066 20,540 (2,474) (12.0) % 22.5 % 29.2 % Research and development 17,755 16,981 774 4.6 % 22.2 % 24.1 % General and administrative 11,901 9,691 2,210 22.8 % 14.9 % 13.8 % Depreciation and amortization 11,033 8,394 2,639 31.4 % 13.8 % 11.9 % Restructuring expenses 4,048 8,655 (4,607) (53.2) % 5.1 % 12.3 % Total operating expenses $ 82,330 $ 85,294 $ (2,964) (3.5) % 102.8 % 121.1 % pricepercentage of $1.50 per Private Placement revenue, cost of revenue decreased from 29.9% for the three months ended March 31, 2022 to 24.4% for the three months ended March 31, 2023. The decrease was primarily related to an increase in advertising revenue which does not incur platform fees, and a reduction in royalty expenses associated with our revenue.Three Months Ended March 31, 2023 2022 $ Change % Change Change in fair value of warrant liabilities $ (1,058) $ (2,716) $ 1,658 61.0 % Interest expense 895 (5) 900 18000.0 % Other (expense) income 60 187 (127) (67.9) % Total other expense, net $ (103) $ (2,534) $ 2,431 (95.9) % generating gross proceeds of $6,500,000.On November 9, 2020, we issued an additional 1,525,000 Units for total gross proceeds of $15,250,000 in connectionLiabilitiesunderwriters’ partial exerciseCredit Agreement and the Private Venture Growth Capital Loan, respectively, as discussed in Note 14—Long-Term Debt to our consolidated financial statements herein. Other (expense) income primary relates to gains or (losses) from equity investments and gains or (losses) from foreign currency transactions with our foreign subsidiaries.their over-allotment option. Simultaneously$0.3 million for the three months ended March 31, 2023, compared to a tax expense of $7.8 million for the three months ended March 31, 2022. Our effective tax rate was (11.3)% for the three months ended March 31, 2023 compared to our statutory tax rate of 21%. Our effective tax rate was increased for non-deductible stock options, the deduction of foreign taxes, and for the recognition of estimated state taxes. Our effective tax rate was decreased by additional foreign taxes paid related to a settlement with the partial closingIsrael Tax Authority, the recognition of additional state tax liabilities due to an updated nexus study, and the fair value adjustment of the over-allotment option,warrant liability.also consummatedcalculate as the salepercentage of an additional 203,334 Private Placement Warrants at $1.50 per Private Placement Warrant, generating total proceedsAEBITDA to revenue.$305,000.our business operations, facilitate internal comparisons of our operating performance, and to analyze and evaluate decisions regarding future budgets and initiatives. We believe that both measures are useful because they provide investors with information regarding our operating performance that is used by our management in its reporting and planning processes. AEBITDA and AEBITDA Margin as calculated herein may not be comparable to similarly titled measures and disclosures reported by other companies.
FollowingThe following table sets forth the Initial Public Offering,reconciliation of AEBITDA and AEBITDA Margin to net loss and net loss margin, the exercisemost directly comparable GAAP measure (in thousands, except percentages).
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2023 | 2022 | ||||||||||||||||||||||
| Net loss | $ | (2,570) | $ | (25,212) | |||||||||||||||||||
| Depreciation & amortization | 11,033 | 8,394 | |||||||||||||||||||||
| Income tax expense | 260 | 7,835 | |||||||||||||||||||||
| Stock-based compensation expense | 4,853 | 6,868 | |||||||||||||||||||||
| Change in fair value of warrant liability | 1,058 | 2,716 | |||||||||||||||||||||
| Change in fair value of contingent consideration | (53) | — | |||||||||||||||||||||
Restructuring and related(1) | 4,048 | 8,655 | |||||||||||||||||||||
Other, net(2) | (864) | (182) | |||||||||||||||||||||
| AEBITDA | 17,765 | 9,074 | |||||||||||||||||||||
| GAAP Revenue | 80,123 | 70,451 | |||||||||||||||||||||
| Margin as a % of revenue | |||||||||||||||||||||||
| Net loss margin | (3.2) | % | (35.8) | % | |||||||||||||||||||
| AEBITDA Margin | 22.2 | % | 12.9 | % | |||||||||||||||||||
Wenext twelve (12) months. However, we intend to use substantially all ofcontinue to make significant investments to support our business growth and may require additional funds to respond to business challenges, including the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account, which interest shall be net of taxes payable and excluding deferred underwriting commissions, to complete our Business Combination. We may withdraw interest from the Trust Account to pay taxes, if any. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete a Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a Business Combination.
In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we may repay such loaned amounts out of the proceeds of the Trust Account released to us. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts, but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants, at a price of $1.50 per warrant, at the option of the lender. The warrants would be identical to the Private Placement Warrants.
We do not believe we will need to raise additional funds in order to meet the expenditures required fordevelop new games and features or enhance our existing games, improve our operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligenceinfrastructure, or acquire complementary businesses, personnel and negotiating a Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial Business Combination. Moreover,technologies. Accordingly, we may need to obtainengage in equity or debt financings to secure additional financing either to complete our Business Combinationfunds or because we become obligated to redeem a significant number of our public shares upon completion of our Business Combination, in which case we may issue additional securities or incur debt decide to do so opportunistically.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of September 30, 2020. We do not participateour Condensed Consolidated Financial Statements
Contractual Obligations
WeMarch 31, 2023, we do not have any long-term debt, capital lease obligations,outstanding amounts under the Credit Agreement.
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2023 | 2022 | ||||||||||||||||||||||
| Net cash provided by operating activities | $ | 4,503 | $ | 11,585 | |||||||||||||||||||
| Net cash used in investing activities | (7,618) | (5,107) | |||||||||||||||||||||
| Net cash (used in) provided by financing activities | (3,490) | 130 | |||||||||||||||||||||
| Effect of exchange rate on cash and cash equivalents | 89 | (145) | |||||||||||||||||||||
| (Decrease) increase in cash and cash equivalents | (6,516) | 6,463 | |||||||||||||||||||||
The underwriter is entitled to a deferred fee of $0.35 per Unit, or $7,533,750 in the aggregate. The deferred fee will become payable to the underwriterspayments for share repurchases partially offset by proceeds from the amounts heldexercise of stock options.
year ended December 31, 2022.
and Estimates
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective,policies and estimates as compared to the critical accounting standards, if currently adopted, would have a material effectpolicies and estimates disclosed in our 2022 Annual Report on our condensed financial statements.
ITEMQUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKNot requiredQuantitative and Qualitative Disclosures About Market Risksmaller reporting company.twelve-month period by an immaterial amount.
Procedures effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including the Company's CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.ITEMCONTROLS AND PROCEDURESDisclosure controlsControls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.As required by Rules 13a-15f15d-15 underwith the Exchange Act,participation of our Chief Executive Officermanagement, including our principal executive officer and Chief Financial Officer carried outprincipal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as of September 30, 2020. Based upon their evaluation, our Chief Executive Officerdefined in Rules 13a-15(e) and Chief Financial Officer concluded that our15d-15(e) under the Exchange Act. In designing and evaluating the disclosure controls and procedures, (as definedmanagement recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives and management is required to apply its judgment in Rules 13a-15 (e)evaluating the cost-benefit relationship of possible controls and 15d-15 (e)procedures. Based on such evaluation, the Company's CEO and CFO have concluded that, as of the period covered by this report, the Company's disclosure controls and procedures were effective, at the reasonable assurance level, in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act)Act and were effective.Overover Financial Reporting(as definedidentified in connection with the evaluation required by Rules 13a-15(f)13a-15(d) and 15d-15(f) under15d-15(d) of the Exchange Act)Act that occurred during the period covered by this reportthree months ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.II -II. OTHER INFORMATION
ITEMLEGAL PROCEEDINGS.None.
Risk FactorsITEMRISK FACTORS.could causemay affect our actualfuture results to differ materially from those in this Quarterly Report include theand risk factors describedis set forth in our final prospectus filed withAnnual Report on Form 10-K for the SEC on October 26, 2020. As of the date of this Quarterly Report thereyear ended December 31, 2022. There have been no material changes to the riskthose factors previously disclosed in our final prospectus filed with the SEC.2022 Annual Report on Form 10-K.
ITEMUNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.On October 27, 2020, we consummatedUnregistered Sales of Equity Securities and Use of ProceedsInitial Public Offering of 20,000,000 Units.Class A common stock during the quarter ended March 31, 2023:Period Total Number of Shares Purchased as Part of a Publicly Announced Program January 1, 2023 - January 31, 2023 987,895 $ 4.24 987,895 $ 41,189 February 1, 2023 - February 28, 2023 265,834 $ 4.47 265,834 $ 40,000 March 1, 2023 - March 31, 2023 — $ — — $ 40,000 9, 2020,10, 2021, the Company’s Board of Directors approved a stock repurchase program authorizing the Company to repurchase, within a 12 month period, up to $50.0 million of the Company’s Class A common stock at such times and in connectionsuch amounts as the Company’s Board of Directors deems appropriate, based on factors such as market conditions, legal requirements, and other business considerations. The Company publicly announced the approval of such stock repurchase program on November 12, 2021. On November 2, 2022, the Company’s Board of Directors approved an extension of the time period for repurchases under the stock repurchase program for an additional 12 months from November 10, 2022 to November 10, 2023. The Company publicly announced the extension of such time period on November 8, 2022. See Note 18—Stockholders' Equity for additional information relating to share repurchases.underwriters’ election to partially exercise their over-allotment option, we soldrepurchases.1,525,000 Units. The Units sold in the Initial Public Offering and the partial exercise1.3 million shares of over-allotment option soldClass A common stock under this program at an offeringaggregate purchase price of $10.00$5.7 million and an average purchase price of $4.24 per Unit, generating total gross proceedsshare. As of $215,250,000. Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC and Oppenheimer & Co. Inc acted asMay 8, 2023, the book-running managers. The securities sold inCompany has remaining authorization to repurchase up to $34.3 million of the offering were registeredCompany's Class A common stock under the Securities Act on registration statements on Form S-1 (No. 333-249297). The registration statements became effective on October 22, 2020.Simultaneously with the consummation of the Initial Public Offering and the partial exercise of the over-allotment option, we consummated a private placement of 4,536,667 Private Placement Warrants to our Sponsor at a price of $1.50 per Private Placement Warrant, generating total proceeds of $6,805,000. Such securities were issued pursuant to the exemption from registration containedstock repurchase program described in Section 4(a)(2) of the Securities Act.The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants are not transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions.Of the gross proceeds received from the Initial Public Offering including the over-allotment option, and the sale of the Private Placement Warrants, $215,250,000 was placed in the Trust Account.We paid a total of $4,305,000 in underwriting discounts and commissions and $525,071 for other costs and expenses related to the Initial Public Offering. In addition, the underwriter agreed to defer $7,533,750 in underwriting discounts and commissions.For a description of the use of the proceeds generated in our Initial Public Offering, see Part I, Item 2 of this Form 10-Q.
ITEMDEFAULTS UPON SENIOR SECURITIES.None.
Mine Safety DisclosuresITEMMINE SAFETY DISCLOSURES.applicable.applicable
ITEMOTHER INFORMATION.None.
None
ExhibitsITEMEXHIBITS.*Filed herewith.**101.LAB*Furnished.Inline XBRL Taxonomy Extension Label Linkbase Document (1)104Previously filed as an exhibit to our Current Report on Form 8-K filed on October 27, 2020Cover Page Interactive Data File formatted in Inline XBRL and incorporated by reference herein.contained in Exhibit 101.* Filed herewith ** The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
| PLAYSTUDIOS, Inc. | |||||||||||
| Date: | /s/ Andrew Pascal | ||||||||||
| Andrew Pascal | |||||||||||
| Title: | Chairman and Chief Executive Officer | ||||||||||
| (Principal Executive Officer) | |||||||||||
| Date: | May 9, 2023 | By: | /s/ | ||||||||
| Scott Peterson | |||||||||||
| Chief Financial Officer | |||||||||||
| (Principal Financial and Accounting Officer) | |||||||||||