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ironSource (IS)

Filed: 10 Nov 21, 8:26am

Filed pursuant to Rule 424(b)(3)

SEC File No. 333-258223

PROSPECTUS SUPPLEMENT NO. 2

(to Prospectus dated October 5, 2021)

 

LOGO

ironSource Ltd.

102,869,375 CLASS A ORDINARY SHARES

 

 

This prospectus supplement updates, amends and supplements the prospectus contained in our Post-Effective Amendment No. 1 to our Registration Statement on Form F-1, effective as of October 4, 2021 (as supplemented or amended from time to time, the “Prospectus”) (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 third 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 November 9, 2021, the closing price for our Class A ordinary shares on the New York Stock Exchange was $12.04 per share.

 

 

Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 28 of the 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 November 10, 2021.


IRONSOURCE LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

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

(Unaudited)

 

   September 30,   December 31, 
   2021   2020 

Assets

    

Current assets:

    

Cash and cash equivalents

  $787,961   $200,672 

Short-term deposits

   —      17,627 

Accounts receivable, net of allowances of $761 and $724 as of September 30, 2021 and December 31, 2020, respectively

   188,994    151,503 

Other current assets

   32,920    15,711 
  

 

 

   

 

 

 

Total current assets

   1,009,875    385,513 

Long-term restricted cash

   2,912    2,415 

Deferred tax assets

   3,344    161 

Operating lease right-of-use asset

   32,306    36,780 

Property, equipment and software, net

   24,791    23,077 

Investment in equity securities

   20,000    —   

Goodwill

   205,842    79,156 

Intangible assets, net

   29,677    8,084 

Other non-current assets

   6,774    650 
  

 

 

   

 

 

 

Total assets

  $1,335,521   $ 535,836 
  

 

 

   

 

 

 


IRONSOURCE LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

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

(Unaudited)

 

   September 30  December 31, 
   2021  2020 

Liabilities and shareholders’ equity

   

Current liabilities:

   

Accounts payable

  $213,205  $ 155,476 

Current maturities of long-term loan

   —     9,725 

Operating lease liabilities

   6,002   7,429 

Other current liabilities

   38,991   34,034 
  

 

 

  

 

 

 

Total current liabilities

   258,198   206,664 

Long-term loan, net of current maturities

   —     74,684 

Deferred tax liabilities

   1,163   2,521 

Long-term operating lease liabilities

   28,655   32,241 

Other non-current liabilities

   1,555   280 
  

 

 

  

 

 

 

Total liabilities

   289,571   316,390 
  

 

 

  

 

 

 

Commitments and contingencies

   

Shareholders’ equity:

   

Class A ordinary share, no par value; 10,000,000,000 shares authorized at September 30, 2021 and December 31, 2020; 631,082,097 and 320,133,022 issued and outstanding at September 30, 2021 and December 31, 2020, respectively (1)

   —     —   

Class B ordinary share, no par value; 1,500,000,000 shares authorized at September 30, 2021 and December 31, 2020; 384,150,417 and 320,133,022 issued and outstanding at September 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 September 30, 2021

   (67,460  —   

Additional paid-in capital (1)

   1,007,271   152,251 

Retained earnings

   106,139   67,123 
  

 

 

  

 

 

 

Total shareholders’ equity

   1,045,950   219,446 
  

 

 

  

 

 

 

Total liabilities and shareholders’ equity

  $1,335,521  $ 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.


IRONSOURCE LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

(Unaudited)

 

   Three Months Ended
September 30,
   Nine Months Ended
September 30,
 
   2021   2020   2021   2020 

Revenue

  $140,446   $88,001   $395,195   $223,165 

Cost of revenue

   21,756    15,416    64,661    40,519 
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

   118,690    72,585    330,534    182,646 
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

        

Research and development

   24,073    12,851    67,644    34,451 

Sales and marketing

   51,001    29,805    151,903    77,216 

General and administrative

   20,212    6,353    56,445    19,836 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

   95,286    49,009    275,992    131,503 
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

   23,404    23,576    54,542    51,143 

Financial expenses, net

   55    434    2,061    2,610 
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations before income taxes

   23,349    23,142    52,481    48,533 

Income taxes

   4,581    3,256    13,465    7,044 
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations, net of income taxes

   18,768    19,886    39,016    41,489 

Income from discontinued operations, net of income taxes

   —      6,991    —      31,779 
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

  $18,768   $26,877   $39,016   $73,268 
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic net income per ordinary share: (1)

        

Continuing operations

   0.02    0.02    0.04    0.05 

Discontinued operations

   —      0.01    —      0.03 
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic net income per ordinary share

  $0.02   $0.03   $0.04   $0.08 
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average ordinary shares outstanding – basic

   1,014,267,611    636,578,068    772,837,797    635,526,458 
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted net income per ordinary share: (1)

        

Continuing operations

   0.02    0.02    0.04    0.04 

Discontinued operations

   —      0.01    —      0.04 
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted net income per ordinary share

  $0.02   $0.03   $0.04   $0.08 
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average ordinary shares outstanding – diluted

   1,095,048,098    688,072,259    851,235,852    679,226,389 
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(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.


IRONSOURCE LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands)

(Unaudited)

 

   Three months Ended
September 30,
  Nine months Ended
September 30,
 
   2021  2020  2021  2020 
   (Unaudited)  (Unaudited) 

Cash flows from operating Activities

     

Net income from continuing operations

  $18,768  $19,886  $39,016  $41,489 

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

     

Depreciation and amortization

   6,211   4,091   17,428   12,230 

Share-based compensation expenses

   20,327   2,250   57,801   7,591 

Non-cash lease expense

   (1,381  330   (539  320 

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

   (676  (436  (815  12 

Gain on disposal of fixed assets

   (17  —     (17  —   

Interest accrued and other financial expenses

   —     53   628   161 

Deferred income taxes, net

   194   (603  (534  (1,298

Changes in operating assets and liabilities:

     

Accounts receivable

   (2,150  (9,118  (41,016  (14,381

Other current assets

   1,184   (1,125  (17,460  655 

Other non-current assets

   (2,017  (625  (10,054  (2,167

Accounts payable

   43,401   14,321   63,769   17,256 

Other current liabilities

   7,220   4,844   5,667   4,428 

Other long-term liabilities

   (206  (11  1,275   31 
  

 

 

  

 

 

  

 

 

  

 

 

 

Net cash provided by continuing operating activities

   90,858   33,857   115,149   66,327 

Net cash provided by (used in) discontinued operating activities

   —     15,609   (5,168  46,583 
  

 

 

  

 

 

  

 

 

  

 

 

 

Net cash provided by operating activities

   90,858   49,466   109,981   112,910 
  

 

 

  

 

 

  

 

 

  

 

 

 

Cash flows from investing activities

     

Purchase of property, plant and equipment

   (268  (124  (1,028  (955

Capitalized software development costs

   (2,557  (3,291  (8,159  (9,056

Purchase of intangible assets

   —     —     (1,950  —   

Consideration received from sale of fixed assets

   21   —     21   —   

Acquisitions, net of cash acquired

   —     —     (90,184  —   

Purchase of equity investment

   —     —     (20,000  —   

Investments in short-term deposits

   —     (37,590  —     (42,590

Maturities of short-term deposits

   —     5,000   17,590   13,100 
  

 

 

  

 

 

  

 

 

  

 

 

 

Net cash used in continuing investing activities

   (2,804  (36,005  (103,710  (39,501

Net cash used in discontinued investing activities

   —     (1,214  —     (4,154
  

 

 

  

 

 

  

 

 

  

 

 

 

Net cash used in investing activities

   (2,804  (37,219  (103,710  (43,655
  

 

 

  

 

 

  

 

 

  

 

 

 

Cash flows from financing activities

     

Repayment of long-term loan

   —     (2,500  (85,000  (5,000

Proceeds from Recapitalization transaction, net

   (9,080  —     663,813   —   

Exercise of options

   1,545   243   1,887   904 
  

 

 

  

 

 

  

 

 

  

 

 

 

Net cash provided (used in) continuing financing activities

   (7,535  (2,257  580,700   (4,096

Net cash provided (used in) discontinued financing activities

   —     —     —     —   
  

 

 

  

 

 

  

 

 

  

 

 

 

Net cash provided (used in) financing activities

   (7,535  (2,257  580,700   (4,096
  

 

 

  

 

 

  

 

 

  

 

 

 

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

   676   436   815   (12

Net change in cash and cash equivalents and restricted cash

   80,519   9,990   586,971   65,159 

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

   709,678   145,940   203,087   91,219 
  

 

 

  

 

 

  

 

 

  

 

 

 

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

  $790,873  $156,366  $790,873  $156,366