IRONSOURCE LTD. References to the "Company," "
Cautionary Note Regarding Forward-Looking Statements
This Annual Report on Form 10-K 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 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. These forward-looking statements are subject to known and
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unknown risks, uncertainties and assumptions about us that may cause our actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by such forward-looking statements. In some
cases, you can identify forward-looking statements by terminology such as "may,"
"should," "could," "would," "expect," "plan," "anticipate," "believe,"
"estimate," "continue," or the negative of such terms or other similar
expressions. Such statements include, but are not limited to, possible business
combinations and the financing thereof, and related matters, as well as all
other statements other than statements of historical fact included in this
Form 10-K. Factors that might cause or contribute to such a discrepancy include,
but are not limited to, those described in our other
Overview
We are a blank check company incorporated in the
Our sponsor is
Our registration statements for the Initial Public Offering became effective on
Simultaneously with the closing of the Initial Public Offering, we consummated
the Private Placement of 2,400,000 Private Placement Shares at a price of
Upon the closing of the Initial Public Offering and the Private Placement,
Our management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of Private Placement Shares, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination.
If we are unable to complete a Business Combination within the Completion
Window, we 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 deposit in the Trust Account, including
interest earned on the funds held in the Trust Account and not previously
released to us to pay its income taxes, if any (less up to
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to the approval of the remaining shareholders and the board of directors,
liquidate and dissolve, subject in each case to our obligations under
Proposed Business Combination
On
At the Effective Time, assuming none of the Company's public shareholders
exercise redemption rights ("TBA Redemptions") pursuant to the Company's amended
and restated memorandum and articles of association, (i) the existing
shareholders of ironSource, including ironSource Management, will own
approximately 77% of the ironSource Class A Ordinary Shares, which includes
Class A ordinary shares issuable upon conversion of Class B ordinary shares of
ironSource on a one-for-one basis (" ironSource Class B Ordinary Shares" and,
together with the ironSource Class A Ordinary Shares, the "ironSource Ordinary
Shares), (ii) the Company's shareholders, including the Sponsor, will own
approximately 11% of the outstanding ironSource Class A Ordinary Shares, and
(iii) the
On the Closing Date and immediately prior to the consummation of the Mergers and
the sale of shares to the
Following such recapitalization (but before the Mergers), if ironSource
determines, after consulting with the Company, that the amount of freely usable
cash proceeds to be released to us from the trust account is greater than
ironSource's capital needs (such amount of freely usable cash to be no less than
Following the recapitalization, (a) immediately prior to the First Merger, each Class B ordinary share of the Company will be cancelled automatically and converted into one Class A ordinary share of the Company and (b) after giving effect to the foregoing and in connection with the First Merger, each Class A ordinary share of the Company issued and outstanding will be converted automatically into one ironSource Class A Ordinary Share.
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ironSource Ordinary Shares to be received by the Sponsor and certain of the Company's directors and officers will be subject to the transfer restrictions.
The consummation of the Transactions is subject to customary closing conditions for special purpose acquisition companies, including the following conditions to each party's obligations, among others:
• the expiration or termination of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;
• no law or governmental order enjoining, prohibiting or making illegal the
Transactions;
• the Company having at least $5,000,001 of net tangible assets as of the
Effective Time;
• the approval of the Transactions by our shareholders and ironSource's
shareholders;
• the approval of the listing of ironSource Class A Ordinary Shares to be
issued in connection with the closing of the Transactions on the New York
Stock Exchange ; and
• the effectiveness of the Registration Statement.
Concurrently with the execution of the Merger Agreement, the Sponsor and certain
of its directors entered into a letter agreement (the "Sponsor Support
Agreement") in favor of ironSource and the Company. Additionally, on
The foregoing description of the Merger Agreement, the transactions, the Sponsor
Support Agreement and the Investment Agreement does not purport to be complete.
For further information and access to the full agreements refer to the Company's
Current Report on Form 8-K filed with the
Results of Operations
Our entire activity from
For the period from
Liquidity and Capital Resources
As of
Our liquidity needs up to
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Based on the foregoing, management believes that it will have sufficient working capital and borrowing capacity to meet its needs through the earlier of the consummation of a Business Combination or one year from this filing. Over this time period, we will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.
Management continues to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on our financial position, results of our operations and/or our search for a target company, the specific impact is not readily determinable as of the date of the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Related Party Transactions Founder Shares
On
The Initial Shareholders have agreed, subject to limited exceptions, not to
transfer, assign or sell any of their Founder Shares until the earlier to occur
of: (A) one year after the completion of the initial Business Combination and
(B) subsequent to the initial Business Combination, (x) if the last reported
sale price of Class A ordinary shares equals or exceeds
Private Placement Shares
Simultaneously with the closing of the Initial Public Offering, we consummated
the Private Placement of 2,400,000 Private Placement Shares at a price of
Our sponsor agreed, subject to limited exceptions, not to transfer, assign or sell any of its Private Placement Shares until 30 days after the completion of the initial Business Combination.
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Sponsor Loan
On
Working Capital Loans
In addition, in order to 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 ("Working Capital Loans"). If we complete a Business Combination, we
would repay the Working Capital Loans. In the event that a Business Combination
does not close, we 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. The Working Capital Loans
would either be repaid upon consummation of a Business Combination, without
interest, or, at the lender's discretion, up to
Termination of Administrative Support Agreement
At the time of our initial public offering, we agreed to pay our sponsor
In addition, our sponsor, executive officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, executive officers or directors, or their affiliates. Any such payments prior to an initial Business Combination will be made using funds held outside the Trust Account.
Other Contractual Obligations
Registration and Shareholder Rights
The holders of Founder Shares, Private Placement Shares, and Class A ordinary shares that may be issued upon conversion of Working Capital Loans, if any, are entitled to registration rights pursuant to a registration rights agreement signed upon consummation of the Initial Public Offering. These holders will be entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, these holders will have certain "piggy-back" registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination. We will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
We granted the underwriters a 45-day option from the date of the final
prospectus relating to the Initial Public Offering to purchase up to 10,000,000
additional Class A ordinary shares, if any, at the Initial Public Offering price
less the underwriting discounts and commissions. On
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The underwriters were entitled to an underwriting discount of
Off-Balance Sheet Arrangements; Commitments and Contractual Obligations
As of
JOBS Act
On
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an "emerging growth company," we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor's attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO's compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our Initial Public Offering or until we are no longer an "emerging growth company," whichever is earlier.
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