Annual report pursuant to Section 13 and 15(d)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

v3.22.4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
12 Months Ended
Dec. 31, 2022
Accounting Policies [Abstract]  
Condensed Income Statement The effect of the change is as follows:

Year ended December 31, 2022 Year ended December 31, 2021 Year ended December 31, 2020
Under previous classification Effect of change As reported Previously reported Effect of change As adjusted Previously reported Effect of change As adjusted
Cost of revenues $ 33,265  $ (3,078) $ 30,187  $ 17,785  $ (87) $ 17,698  $ 12,365  $ (54) $ 12,311 
Operating expenses:
Research and development 31,932  (814) 31,118  24,619  (320) 24,299  18,283  (269) 18,014 
Sales and marketing 52,226  (1,960) 50,266  33,056  (215) 32,841  28,810  (289) 28,521 
General and administrative 39,435  (291) 39,144  20,680  (39) 20,641  8,221  (118) 8,103 
Depreciation, amortization and impairment $ —  $ 6,143  $ 6,143  $ —  $ 661  $ 661  $ —  $ 730  $ 730 
Schedule of Property, Plant and Equipment Depreciation is calculated by the straight-line method over the estimated useful lives of the assets, at the following annual rates:

Years
Computers and peripheral equipment
3
Office furniture and equipment
5-7
Lease improvements The shorter of the lease term or the useful life of the asset
Internal-use software 3
Property and equipment consist of the following:

December 31,

2022

2021
Cost:


Software development costs $ 13,190  $ 2,594 
Computers and peripheral equipment 2,283  1,779 
Office furniture and equipment 665  661 
Leasehold improvements 2,167  2,164 

18,305  7,198 
Accumulated depreciation (3,983) (2,358)
Depreciated cost $ 14,322  $ 4,840 
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
The following table presents information about the Company’s financial instruments that are measured at fair value on a recurring basis:

December 31, 2022

Level 1
Level 2
Level 3
Assets:
Money market funds $ 18,948  $ —  $ — 
Certificates of deposit —  20,000  — 
Liabilities:
Warrants liability $ 1,265  $ —  $ 3,036 

December 31, 2021

Level 1
Level 2
Level 3
Assets:
Money market funds $ 4,515  $ —  $ — 
Liabilities:
Warrants liability $ 3,510  $ —  $ 15,462 
Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
The change in the fair value of the Level 3 warrant liability is summarized below:

December 31,

2022

2021
Beginning of the year
$ 15,462  $ 499 
Additions* —  18,427 
Change in fair value (12,426) 1,616 
Conversion of Legacy Innovid Warrants on the Closing of the Transaction —  (5,080)
End of the year $ 3,036  $ 15,462 
* Additions during the year ended December 31, 2021 represent Company Warrant liability assumed in the Transaction. See Note 11, Warrants for further detail.
Schedule of Key Inputs for Valuation of Private Placement Warrants
The key inputs into the Black-Scholes model for the Private Warrants were as follows:

December 31, December 31,

2022 2021

Risk-free interest rate
4.07  % 1.24  %
Expected dividends —  % —  %
Expected term (years)
3.9 4.9
Expected volatility 85  % 55  %
Schedules of Concentration of Risk, by Risk Factor
During the years ended December 31, 2022, 2021 and 2020, two of the Company’s customers accounted for more than 10% of the Company’s total revenues as presented below:

Year ended December 31,

2022 2021 2020
Customer A
11  % * *
Customer B
10  % * 10 %
* less than 10%
Assets And Liabilities Lessee
Upon adoption, the Company recognized lease liabilities and corresponding ROU assets, adjusted for the accrued rent and remaining lease incentives received on the adoption date, as follows:
January 1, 2022
ROU assets Lease liabilities
Real Estate $ 3,928  $ 5,482 
Cars 50  50 
Total operating leases $ 3,978  $ 5,532