IS Iron Source Ltd

 

Filed pursuant to Rule 424(b)(3)

SEC File No. 333-258223

 

PROSPECTUS SUPPLEMENT NO. 3

(to Prospectus dated October 5, 2021)

 

 

 

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 fourth quarter and year-end 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 February 15, 2022, the closing price for our Class A ordinary shares on the New York Stock Exchange was $6.94 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 February 16, 2022.

 

 

IRONSOURCE LTD.

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

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

 

(Unaudited)

 

		December 31,
		2021				2020
Assets
Current assets:
Cash and cash equivalents		$	778,261			$	200,672
Short-term deposits			—				17,627
Accounts receivable, net of allowances of $437 and $724 as of December 31, 2021 and 2020, respectively			232,049				151,503
Other current assets			42,382				15,711
Total current assets			1,052,692				385,513
Long-term restricted cash			3,495				2,415
Deferred tax assets			2,012				161
Operating lease right-of-use asset			34,116				36,780
Property, equipment and software, net			25,131				23,077
Investment in equity securities			20,000				—
Goodwill			240,299				79,156
Intangible assets, net			54,221				8,084
Other non-current assets			18,857				650
Total assets		$	1,450,823			$	535,836

 

 

IRONSOURCE LTD.

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

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

 

(Unaudited)

 

		December 31,
		2021				2020
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable		$	247,362			$	155,476
Current maturities of long-term loan			—				9,725
Operating lease liabilities			7,525				7,429
Other current liabilities			53,949				34,034
Total current liabilities			308,836				206,664
Long-term loan, net of current maturities			—				74,684
Deferred tax liabilities			6,514				2,521
Long-term operating lease liabilities			30,076				32,241
Other non-current liabilities			2,829				280
Total liabilities			348,255				316,390
Commitments and contingencies
Shareholders’ equity:
Class A and Class B ordinary share, no par value; 11,500,000,000 (Class A 10,000,000,000 and Class B 1,500,000,000) shares authorized; 1,018,468,804 (Class A 652,938,412 and Class B 365,530,392) and 640,266,044 (Class A 320,133,022 and Class B 320,133,022) issued and outstanding at December 31, 2021 and 2020, respectively (*)			—				—
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 December 31, 2021			(67,460	)			—
Additional paid-in capital (*)			1,042,589				152,251
Accumulated other comprehensive income			495				—
Retained earnings			126,944				67,123
Total shareholders’ equity			1,102,568				219,446
Total liabilities and shareholders’ equity		$	1,450,823			$	535,836

 

(*)	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 December 31,								Year Ended December 31,
		2021				2020				2021				2020
Revenue		$	158,271			$	108,354			$	553,466			$	331,519
Cost of revenue			24,562				17,306				89,223				57,825
Gross profit			133,709				91,048				464,243				273,694
Operating expenses:
Research and development			22,887				17,149				90,531				51,600
Sales and marketing			56,804				42,046				208,707				119,262
General and administrative			26,193				8,910				82,638				28,746
Total operating expenses			105,884				68,105				381,876				199,608
Income from operations			27,825				22,943				82,367				74,086
Financial expenses, net			(57	)			1,771				2,004				4,381
Income from continuing operations before income taxes			27,882				21,172				80,363				69,705
Income taxes			7,077				3,852				20,542				10,896
Income from continuing operations, net of income taxes			20,805				17,320				59,821				58,809
Income from discontinued operations, net of income taxes			—				4,701				—				36,480
Net income		$	20,805			$	22,021			$	59,821			$	95,289
Basic net income per ordinary share: (*)
Continuing operations			0.02				0.02				0.07				0.07
Discontinued operations			—				0.01				—				0.04
Basic net income per ordinary share		$	0.02			$	0.03			$	0.07			$	0.11
Weighted-average ordinary shares outstanding – basic			1,014,509,223				639,223,211				832,144,353				636,450,643
Diluted net income per ordinary share: (*)
Continuing operations			0.02				0.02				0.06				0.06
Discontinued operations			—				0.01				—				0.04
Diluted net income per ordinary share		$	0.02			$	0.03			$	0.06			$	0.10
Weighted-average ordinary shares outstanding – diluted			1,094,974,000				689,922,172				911,059,088				681,900,332

 

(*)	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 December 31,								Year Ended December 31,
		2021				2020				2021				2020
Cash flows from operating Activities
Net income from continuing operations		$	20,805			$	17,320			$	59,821			$	58,809
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			6,690				4,628				24,118				16,858
Share-based compensation expenses			20,714				5,005				78,515				12,596
Non-cash lease expense			1,134				2,471				595				2,791
Effect of exchange rate changes on cash and cash equivalents and restricted cash			(1,812	)			(1,407	)			(2,627	)			(1,395	)
Loss (gain) on disposal of property and equipment			1				—				(16	)			—
Interest accrued and other financial expenses			—				110				628				271
Deferred income taxes, net			1,178				665				644				(633	)
Changes in operating assets and liabilities, net of effects of businesses acquired:
Accounts receivable			(41,568	)			(25,435	)			(82,584	)			(39,816	)
Other current assets			(10,261	)			(6,426	)			(27,721	)			(5,771	)
Other non-current assets			(11,388	)			(1,746	)			(21,442	)			(3,913	)
Accounts payable			33,932				23,450				97,701				40,706
Other current liabilities			8,886				6,690				14,553				11,118
Other non-current liabilities			1,274				4				1,705				35
Net cash provided by continuing operating activities			29,585				25,329				143,890				91,656
Net cash provided by (used in) discontinued operating activities			—				6,188				(5,168	)			52,771
Net cash provided by operating activities			29,585				31,517				138,722				144,427
Cash flows from investing activities
Purchase of property and equipment			(391	)			(94	)			(1,419	)			(1,049	)
Capitalized software development costs			(2,662	)			(2,968	)			(10,821	)			(12,024	)
Purchase of intangible assets			—				—				(1,950	)			—
Proceeds from sale of property and equipment			10				—				31				—
Acquisitions, net of cash acquired			(38,209	)			—				(127,549	)			—
Purchase of equity investment			—				—				(20,000	)			—
Investments in short-term deposits			—				(17,590	)			—				(60,180	)
Maturities of short-term deposits			—				37,590				17,590				50,690
Net cash provided by (used in) continuing investing activities			(41,252	)			16,938				(144,118	)			(22,563	)
Net cash provided by (used in) discontinued investing activities			—				(928	)			—				(5,082	)
Net cash provided by (used in) investing activities			(41,252	)			16,010				(144,118	)			(27,645	)
Cash flows from financing activities
Repayment of long-term loan			—				(2,500	)			(85,000	)			(7,500	)
Proceeds from Recapitalization transaction, net			—				—				663,813				—
Exercise of options and restricted share units			738				827				2,625				1,731
Other			—				(540	)			—				(540	)
Net cash provided by (used in) continuing financing activities			738				(2,213	)			581,438				(6,309	)
Net cash provided by (used in) discontinued financing activities			—				—				—				—
Net cash provided by (used in) financing activities			738				(2,213	)			581,438				(6,309	)
Effect of exchange rate changes on cash and cash equivalents and restricted cash			1,812				1,407				2,627				1,395
Net change in cash and cash equivalents and restricted cash			(10,929	)			45,314				576,042				110,473
Cash and cash equivalents and restricted cash at beginning of the period			790,873				156,366				203,087				91,219
Cash and cash equivalents and restricted cash at end of the period		$	781,756			$	203,087			$	781,756			$	203,087