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ironSource (IS)

Filed: 24 Aug 21, 4:28pm

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

PROSPECTUS SUPPLEMENT NO. 1

(to Prospectus dated August 10, 2021)

 

LOGO

ironSource Ltd.

133,254,045 CLASS A ORDINARY SHARES

 

 

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

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

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

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

 

 

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

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

 

 

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


IRONSOURCE LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

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

(Unaudited)

 

   June 30,   December 31, 
   2021   2020 

Assets

    

Current assets:

    

Cash and cash equivalents

  $706,797   $200,672 

Short-term deposits

   —      17,627 

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

   186,844    151,503 

Other current assets

   35,654    15,711 
  

 

 

   

 

 

 

Total current assets

   929,295    385,513 

Long-term restricted cash

   2,881    2,415 

Deferred tax assets

   3,412    161 

Operating lease right-of-use asset

   33,571    36,780 

Property, equipment and software, net

   24,646    23,077 

Investment in equity securities

   20,000    —   

Goodwill

   205,842    79,156 

Intangible assets, net

   31,344    8,084 

Other non-current assets

   4,782    650 
  

 

 

   

 

 

 

Total assets

  $1,255,773   $535,836 
  

 

 

   

 

 

 

 

F-1


IRONSOURCE LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS (continued)

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

(Unaudited)

 

   June 30,  December 31, 
   2021  2020 

Liabilities and shareholders’ equity

   

Current liabilities:

   

Accounts payable

  $178,884  $155,476 

Current maturities of long-term loan

   —     9,725 

Operating lease liabilities

   7,334   7,429 

Other current liabilities

   31,771   34,034 
  

 

 

  

 

 

 

Total current liabilities

   217,989   206,664 

Long-term loan, net of current maturities

   —     74,684 

Deferred tax liabilities

   1,037   2,521 

Long-term operating lease liabilities

   29,969   32,241 

Other non-current liabilities

   1,761   280 
  

 

 

  

 

 

 

Total liabilities

   250,756   316,390 
  

 

 

  

 

 

 

Commitments and contingencies

   

Shareholders’ equity:

   

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

   —     —   

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

   —     —   

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

   —     72 

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

   (67,460)  —   

Additional paid-in capital(1)

   985,106   152,251 

Retained earnings

   87,371   67,123 
  

 

 

  

 

 

 

Total shareholders’ equity

   1,005,017   219,446 
  

 

 

  

 

 

 

Total liabilities and shareholders’ equity

  $1,255,773  $535,836 
  

 

 

  

 

 

 

 

(1)

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

 

F-2


IRONSOURCE LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

(Unaudited)

 

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

Revenue

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

Cost of revenue

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

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

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

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

        

Research and development

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

Sales and marketing

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

General and administrative

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

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

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

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

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

Financial expenses, net

   977    1,204    2,006    2,176 
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations before income taxes

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

Income taxes

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

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations, net of income taxes

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

Income from discontinued operations, net of income taxes

   —      12,487    —      24,788 
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

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

 

 

   

 

 

   

 

 

   

 

 

 

Basic net income per ordinary share:(1)

        

Continuing operations

   0.01    0.01    0.02    0.02 

Discontinued operations

   —      0.01    —      0.03 
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic net income per ordinary share

  $0.01   $0.02   $0.02   $0.05 
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average ordinary shares outstanding—basic

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

 

 

   

 

 

   

 

 

   

 

 

 

Diluted net income per ordinary share:(1)

        

Continuing operations

   0.01    0.01    0.02    0.02 

Discontinued operations

   —      0.01    —      0.03 
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted net income per ordinary share

  $0.01   $0.02   $0.02   $0.05 
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average ordinary shares outstanding—diluted

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

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

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

 

F-3


IRONSOURCE LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands)

(Unaudited)

 

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

Cash flows from operating Activities

     

Net income from continuing operations

  $10,004  $10,713  $20,248  $21,603 

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

     

Depreciation and amortization

   5,874   4,138   11,217   8,139 

Share-based compensation expenses

   20,664   2,509   37,474   5,341 

Non-cash lease expense

   615   (369  842   (10

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

   1,107   (723  (139  448 

Interest accrued and other financial expenses

   521   (22  628   108 

Deferred income taxes, net

   99   (413  (728  (695

Changes in operating assets and liabilities:

     

Accounts receivable

   (38,015  (8,411  (38,866  (5,263

Other current assets

   (3,894  3,700   (18,644  1,780 

Other non-current assets

   (4,740  (1,563  (8,037  (1,542

Accounts payable

   27,025   4   20,368   2,935 

Other current liabilities

   (7,404  5,604   (1,553  (416

Other long-term liabilities

   438   34   1,481   42 
  

 

 

  

 

 

  

 

 

  

 

 

 

Net cash provided by continuing operating activities

   12,294   15,201   24,291   32,470 

Net cash provided by (used in) discontinued operating activities

   —     14,487   (5,168  30,974 
  

 

 

  

 

 

  

 

 

  

 

 

 

Net cash provided by operating activities

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

 

 

  

 

 

  

 

 

  

 

 

 

Cash flows from investing activities

     

Purchase of property, plant and equipment

   (287  (291  (760  (831

Capitalized software development costs

   (2,587  (2,836  (5,602  (5,765

Purchase of intangible assets

   —     —     (1,950  —   

Acquisitions, net of cash acquired

   —     —     (90,184  —   

Purchase of equity investment

   (20,000  —     (20,000  —   

Investments in short-term deposits

   —     —     —     (5,000

Maturities of short-term deposits

   —     —     17,590   8,100 
  

 

 

  

 

 

  

 

 

  

 

 

 

Net cash used in continuing investing activities

   (22,874  (3,127  (100,906  (3,496

Net cash used in discontinued investing activities

   —     (1,488  —     (2,940
  

 

 

  

 

 

  

 

 

  

 

 

 

Net cash used in investing activities

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

 

 

  

 

 

  

 

 

  

 

 

 

 

F-4


IRONSOURCE LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(U.S. dollars in thousands)

(Unaudited)

 

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

Cash flows from financing activities

     

Repayment of long-term loan

   (82,500  (1,250  (85,000  (2,500

Proceeds from Recapitalization transaction, net

   673,953    672,893   —   

Exercise of options

   45   272   342   661 
  

 

 

  

 

 

  

 

 

  

 

 

 

Net cash provided (used in) continuing financing activities

   591,498   (978  588,235   (1,839

Net cash provided (used in) discontinued financing activities

   —     —     —     —   
  

 

 

  

 

 

  

 

 

  

 

 

 

Net cash provided (used in) financing activities

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

 

 

  

 

 

  

 

 

  

 

 

 

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

   (1,107  723   139   (448

Net change in cash and cash equivalents and restricted cash

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

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

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

 

 

  

 

 

  

 

 

  

 

 

 

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

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

 

 

  

 

 

  

 

 

  

 

 

 

 

F-5