iacb-20230331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________

FORM 10-Q

____________________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly period ended March 31, 2023


¨			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from to

Commission file number 001-40048

____________________________

Innovid Corp.

(Exact name of registrant as specified in its charter)

____________________________


Delaware						87-3769599
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)
30 Irving Place, 12th Floor New York, New York						10003
(Address of Principal Executive Offices)						(Zip Code)

+1 (212) 966-7555

Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.0001 per share	CTV	New York Stock Exchange
Warrants to purchase one share of Common stock, each at an exercise price of $11.50 per share	CTVWS	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large, accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of “large, accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large, accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨	Smaller reporting company	x
		Emerging growth company	x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x

The registrant had outstanding 137,195,478 shares of common stock as of May 4, 2023.

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TABLE OF CONTENTS


			Page
Part I
Item 1. Financial Statements and Supplementary Data			5
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			26
Item 3. Quantitative and Qualitative Disclosures About Market Risk			40
Item 4. Controls and Procedures			40

Part II
Item 1. Legal Proceedings			42
Item 1A. Risk Factors			42
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			42
Item 3. Defaults Upon Senior Securities			42
Item 4. Mine Safety Disclosures			42
Item 5. Other Information			42
Item 6. Exhibits			42
Signatures			44

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. These forward-looking statements include, without limitation, statements relating to expectations for future financial performance, business strategies or expectations for our business. These statements are based on the beliefs and assumptions of the management of Innovid. Although Innovid believes that its plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, it cannot assure you that it will achieve or realize these plans, intentions or expectations. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this Form 10-Q, words such as “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “strive,” “target,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

Should one or more of a number of known and unknown risks and uncertainties materialize, or should any of our assumptions prove incorrect, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include, but are not limited to:

• our public securities’ potential liquidity and trading;

• our ability to raise financing in the future;

• our success in retaining or recruiting, or changes required in, our officers, key employees or directors;

• changes in applicable laws or regulations;

• our ability to maintain and expand relationships with advertisers;

• decreases and/or changes in CTV audience viewership behavior;

• Innovid’s ability to make the right investment decisions and to innovate and develop new solutions;

• the accuracy of Innovid’s estimates of market opportunity, forecasts of market growth and projections of future financial performance;

• the extent of investment required in Innovid’s sales and marketing efforts;

• Innovid’s ability to effectively manage its growth;

• sustained overall demand for advertising;

• the impact of the COVID-19 pandemic;

• the continued acceptance of digital advertising by consumers and the impact of opt-in, opt-out or ad-blocking technologies;

• Innovid’s ability to scale its platform and infrastructure to support anticipated growth and transaction volume;

• the impact of increasing competition in the digital advertising space, including with competitors who have significantly more resources;

• other risks and uncertainties indicated in this report, including those set forth under the section titled “Risk Factors” and those incorporated by reference to our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which was filed with the Securities and Exchange Commission (“SEC”) on March 3, 2023.

These forward-looking statements are based on information available as of the date of this Quarterly Report on Form 10-Q and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

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As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. You should not place undue reliance on these forward-looking statements.

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Part I

Item 1. Financial Statements

INNOVID, CORP. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except stock and per stock data)


	March 31, 2023		December 31, 2022
	(Unaudited)
ASSETS
Cash and cash equivalents	$	45,015	$	37,541
Short-term bank deposits	—		10,000
Trade receivables, net (allowance for credit losses of $155 and $65 at March 31, 2023 and December 31 2022, respectively)	39,945		43,653
Prepaid expenses and other current assets	5,692		2,640
Total current assets	90,652		93,834
Long-term deposit	265		277
Long-term restricted deposits	401		430
Property and equipment, net	16,968		14,322
Goodwill	116,976		116,976
Intangible assets, net	28,788		29,918
Operating lease right of use asset	2,450		2,910
Other non-current assets	813		938
Total non-current assets	166,661		165,771
TOTAL ASSETS	$	257,313	$	259,605

LIABILITIES AND STOCKHOLDERS’ EQUITY
Trade payables	4,919		3,361
Employees and payroll accruals	9,867		10,165
Lease liabilities - current portion	1,891		2,186
Accrued expenses and other current liabilities	7,166		5,474
Total current liabilities	23,843		21,186
Long-term debt	20,000		20,000
Lease liabilities - non-current portion	1,347		1,636
Other non-current liabilities	8,024		6,554
Warrants liability	1,587		4,301
Total non-current liabilities	30,958		32,491
TOTAL LIABILITIES	54,801		53,677
COMMITMENTS AND CONTINGENT LIABILITIES (Note 7)
Common stock: $0.0001 par value - Authorized: 500,000,000 at March 31, 2023 and December 31, 2022; Issued and outstanding: 136,616,734 and 133,882,414 at March 31, 2023 and December 31, 2022, respectively	13		13
Additional paid-in capital	361,948		356,801
Accumulated deficit	(159,449)		(150,886)
Total stockholders’ equity	202,512		205,928
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	257,313	$	259,605

The accompanying notes are an integral part of the condensed consolidated financial statements.

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INNOVID, CORP. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except stock and per stock data)


	Three months ended March 31,
	2023		2022
	(Unaudited)		(Unaudited)
Revenues	$	30,485	$	25,862
Cost of revenues (1)	8,265		5,926
Research and development (1)	7,117		7,254
Sales and marketing (1)	11,637		10,351
General and administrative (1)	9,650		11,455
Depreciation and amortization	2,030		673
Operating loss	(8,214)		(9,797)
Finance income, net	(2,475)		(2,311)
Loss before taxes	(5,739)		(7,486)
Taxes on income	2,824		(37)
Net loss	(8,563)		(7,449)

Net loss attributable to common stockholders	$	(8,563)	$	(7,449)
Net loss per stock attributable to common stockholders
Basic and diluted	$	(0.06)	$	(0.06)
Weighted-average number of stock used in computing net loss per stock attributable to common stockholders
Basic and diluted	136,008,998		124,245,358

The accompanying notes are an integral part of the condensed consolidated financial statements.

(1) Exclusive of depreciation and amortization presented separately.

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INNOVID, CORP. AND ITS SUBSIDIARIES CONDENSED STATEMENTS OF CHANGES IN TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY

(In thousands, except stock data)


	Common stock		Additional paid-in capital		Accumulated deficit	Total stockholders’ equity
		Number					Amount


Balance as of December 31, 2021,		119,017,380	$	12			$	293,719	$	(132,476)	$	161,255
Common stock and equity awards issued for acquisition of TVS		11,549,465	1				47,151		—		47,152
Stock-based compensation		—	—				1,496		—		1,496
Stock options exercised		1,521,927	—				462		—		462
Net loss		—	—				—		(7,449)		(7,449)
Balance as of March 31, 2022 (unaudited)		132,088,772	$	13			$	342,828	$	(139,925)	$	202,916












	Common stock		Additional paid-in capital		Accumulated deficit	Total stockholders’ equity
		Number					Amount
Balance as of December 31, 2022		133,882,414	$	13			$	356,801	$	(150,886)	$	205,928

Stock-based compensation		—	—				4,897		—		4,897
Stock options exercised and RSUs vested		2,734,320	—				250		—		250
Net loss		—	—				—		(8,563)		(8,563)
Balance as of March 31, 2023 (unaudited)		136,616,734	$	13			$	361,948	$	(159,449)	$	202,512

The accompanying notes are an integral part of the condensed consolidated financial statements.

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INNOVID, CORP. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, except stock and per stock data)


	Three Months Ended March 31,
	2023		2022
Cash flows from operating activities:	(Unaudited)		(Unaudited)
Net loss	$	(8,563)	$	(7,449)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	2,030		673
Stock-based compensation	4,533		1,496
Change in fair value of warrants	(2,714)		(2,787)
Changes in operating assets and liabilities
Decrease in trade receivables, net	3,708		163
Increase in prepaid expenses and other current assets	(2,922)		(1,950)
(Increase) / decrease in operating lease right of use assets	459		431
Increase/ (decrease) in trade payables	1,558		(191)
Increase / (decrease) in employees and payroll accruals	(299)		1,704
Increase / (decrease) in operating lease liabilities	(584)		(410)
Increase in accrued expenses and other current liabilities	3,162		1,107
Net cash provided by / (used in) operating activities	368		(7,213)
Cash flows from investing activities:
Acquisition of business, net of cash acquired	—		(99,568)
Internal use software capitalization	(3,091)		(1,671)
Purchase of property and equipment	(89)		(97)
Withdrawal of short-term bank deposits	10,000		—
Decrease (increase) in deposits	7		3
Net cash provided by / (used in) investing activities	6,827		(101,333)
Cash flows from financing activities:
Proceeds from loans	5,000		—
Repayment of loans	(5,000)		—
Payment of SPAC merger transaction costs	—		(3,180)
Proceeds from exercise of options	250		462
Net cash provided by / (used in) financing activities	250		(2,718)
Increase (decrease) in cash, cash equivalents and restricted cash	7,445		(111,264)
Cash, cash equivalents and restricted cash at the beginning of the period	37,971		157,158
Cash, cash equivalents and restricted cash at the end of the period	$	45,416	$	45,894
Supplemental disclosure of cash flows activities:
(1) Cash paid during the period for:
Income taxes paid, net of tax refunds	$	203	$	165
Interest	$	362	$	61
(2) Non-cash transactions:
Business combination consideration paid in stock	$

SEC Form 10-Q filed by Innovid Corp.