Innovid Corp. General form of registration statement for all companies including face-amount certificate companies

General form of registration statement for all companies including face-amount certificate companies

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

9 Months Ended

Sep. 30, 2021

Error Corrections and Prior Period Adjustments Restatement [Line Items]

REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTSIn connection with the preparation of the Company’s financial statements as of September 30, 2021, management determined it should restate its previously reported financial statements. The Company determined that it had improperly valued its Class A ordinary shares subject to possible redemption at the closing of the Company’s Initial Public Offering . The Company previously determined the Class A ordinary shares subject to possible redemption to be equal to the redemption value of $10.00 per Class A ordinary share, while also taking into

consideration a redemption cannot result in net tangible assets being less than $5,000,001. Management determined that the Class A ordinary shares issued during the Initial Public Offering can be redeemed or become redeemable subject to the occurrence of future events considered outside the Company’s control. Therefore, management concluded that the redemption value should include all Class A ordinary shares subject to possible redemption, resulting in the Class A ordinary shares subject to possible redemption being equal to their redemption value. In accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” and SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” the Company evaluated the changes and has determined that the related impact was material to previously presented financial statements. As a result, the Company restated its previously filed financial statements to present all redeemable Class A ordinary shares as temporary equity and to recognized accretion from the initial book value to redemption value at the time of its Initial Public Offering. As a result, management has noted an adjustment related to temporary equity and permanent equity. This resulted in an adjustment to the initial carrying value of the Class A ordinary shares subject to possible redemption with the offset recorded to additional paid-in capital (to the extent available), accumulated deficit and Class A ordinary shares.

In connection with the change in presentation for the Class A ordinary shares subject to redemption, the Company also restated its net loss per ordinary share calculation. In order to determine the net income (loss) attributable to both the redeemable Class A ordinary shares and the non-redeemable Class B shares, the Company first considered the total income (loss) allocable to both sets of shares. This is calculated using the total net income (loss) less any dividends paid. For purposes of calculating net income (loss) per share, any remeasurement of the accretion to redemption value of the redeemable ordinary shares subject to possible redemption was considered to be dividends paid to the public shareholders.

There has been no change in the Company’s total assets, liabilities or operating results.

The impact of the restatement on the Company’s financial statements is reflected in the following table.


Balance Sheet as of February 16, 2021 (unaudited)	As Previously Reported		Adjustment		As Restated
Class A ordinary shares subject to possible redemption	$	210,576,766	$	42,423,234	$	253,000,000
Class A ordinary shares	$	424	$	(424)	$	—
Additional paid-in capital	$	5,303,723	$	(5,303,723)	$	—
Accumulated deficit	$	(304,770)	$	(37,119,087)	$	(37,423,857)
Total Shareholders’ Equity (Deficit)	$	5,000,010	$	(42,423,234)	$	(37,423,224)


Balance Sheet as of March 31, 2021 (unaudited)	As Previously Reported		Adjustment		As Restated
Class A ordinary shares subject to possible redemption	$	208,995,955	$	44,004,045	$	253,000,000
Class A ordinary shares	$	440	$	(440)	$	—
Additional paid-in capital	$	6,884,518	$	(6,884,518)	$	—
Accumulated deficit	$	(1,885,581)	$	(37,119,087)	$	(39,004,668)
Total Shareholders’ Equity (Deficit)	$	5,000,010	$	(44,004,045)	$	(39,004,035)


Balance Sheet as of June 30, 2021 (unaudited)	As Previously Reported		Adjustment		As Restated
Class A ordinary shares subject to possible redemption	$	208,257,092	$	44,742,908	$	253,000,000
Class A ordinary shares	$	448	$	(448)	$	—
Additional paid-in capital	$	7,623,373	$	(7,623,373)	$	—
Accumulated deficit	$	(2,624,449)	$	(37,119,087)	$	(39,743,536)
Total Shareholders’ Equity (Deficit)	$	5,000,005	$	(44,742,908)	$	(39,742,903)


Statements of Operations For the Three months ended March 31, 2021 (unaudited)	As Previously Reported		Adjustment		As Restated
Weighted average shares outstanding, Class A ordinary shares (redeemable)			$	12,087,778	$	12,087,778
Basic and diluted net income per Class A ordinary shares (redeemable)			$	2.97	$	2.97
Weighted average shares outstanding, Class B ordinary shares (non redeemable)	$	7,921,054	$	(2,026,887)	$	5,894,167
Basic and diluted net loss per Class B ordinary shares (non redeemable)	$	(0.24)	$	0.14	$	(0.10)


Statements of Operations For the Three months ending June 30, 2021 (unaudited)	As Previously Reported		Adjustment		As Restated
Weighted average shares outstanding, Class A ordinary shares (redeemable)			$	25,300,000	$	25,300,000
Basic and diluted net loss per Class A ordinary shares (redeemable)			$	(0.02)	$	(0.02)
Weighted average shares outstanding, Class B ordinary shares (non redeemable)	$	10,726,807	$	(4,401,807)	$	6,325,000
Basic and diluted net loss per Class B ordinary shares (non redeemable)	$	(0.07)	$	0.05	$	(0.02)


Statement of Operations For the Six months ended June 30, 2021 (unaudited)	As Previously Reported		Adjustment		As Restated
Weighted average shares outstanding, Class A ordinary shares (redeemable)			$	18,730,387	$	18,730,387
Basic and diluted net income per Class A ordinary shares (redeemable)			$	1.88	$	1.88
Weighted average shares outstanding, Class B ordinary shares (non redeemable)	$	9,386,872	$	(3,276,099)	$	6,110,773
Basic and diluted net loss per Class B ordinary shares (non redeemable)	(0.28)		0.17		(0.11)

*The “as previously reported” weighted average shares outstanding and basic and diluted net loss per share included Class B shares and Class A shares that were classified to equity.


Statement of Changes in Shareholders’ (Deficit) Equity for the Three Months ended March 31, 2021 (unaudited)	As Previously Reported		Adjustment		As Restated
Sale of 25,300,000 Class A shares, $0.0001 par value; 500,000,000 shares authorized; 25,300,000 shares subject to redemption, net of underwriting discounts and offering costs	$	208,796,106	$	(208,796,106)	$	—
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized, 6,325,000 shares issued and outstanding	$	633	$	—	$	633
Sale of 7,060,000 Private Placement Warrants	$	7,060,000	$	(7,060,000)	$	—
Class A ordinary shares subject to possible redemption	$	(208,995,515)	$	208,995,515	$	—
Accretion for Class A ordinary shares subject to redemption amount	$	—	$	(37,143,454)	$	(37,143,454)
Additional paid-in capital	$	6,884,518	$	(6,884,518)	$	—
Accumulated deficit	$	(1,885,581)	$	(37,119,087)	$	(39,004,668)
Total Shareholders’ Equity (Deficit)	$	5,000,010	$	(44,004,045)	$	(39,004,035)

Statement of Changes in Shareholders’ (Deficit) Equity for the Three Months ended June 30, 2021 (unaudited)
Class A ordinary shares subject to possible redemption	$	738,863	$	(738,863)	$	—
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized, 6,325,000 shares issued and outstanding	$	633	$	—	$	633
Additional paid-in capital	$	7,623,373	$	(7,623,373)	$	—
Accumulated deficit	$	(2,624,449)	$	(37,119,087)	$	(39,743,536)
Total Shareholders’ Equity (Deficit)	$	5,000,005	$	(44,742,908)	$	(39,742,903)

Statement of Cash Flows for the Period from January 1, 2021 through March 31, 2021, Non-Cash Investing and Financing Activities (unaudited)
Initial classification of Class A ordinary shares subject to possible redemption	$	—	$	253,000,000	$	253,000,000

Statement of Cash Flows for the Six Months Ended June 30, 2021, Non-Cash Investing and Financing Activities (unaudited)
Initial classification of Class A ordinary shares subject to possible redemption	$	240,641,840	$	12,358,160	$	253,000,000
Change in value of Class A ordinary shares subject to redemption	$	(32,384,748)	$	32,384,748	$	—

Restatement of Previously Issued Financial Statement

On April 12, 2021, the Staff of the U.S. Securities and Exchange Commission (“SEC”) released the Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”) (the “Statement”). The SEC Staff Statement addresses certain accounting and reporting considerations related to warrants of a kind similar to those issued by the Company at the time of its initial public offering in February 2021.

As described in note 1 above, in connection with the Company’s Initial Public Offering (“IPO”) on February 16, 2021, the Company issued to investors 25,300,000 units, consisting of one Class A ordinary share and one-eighth of one redeemable warrant (“Public Warrant”). Simultaneously with the closing of the IPO, the Company’s Sponsor purchased an aggregate of 7,060,000 private placement warrants (“Private Placement Warrants”). Each whole Public Warrant and Private Placement Warrant entitles the holder to purchase one Class A ordinary share at an exercise price of $11.50 per whole share, subject to adjustment. Both the Public Warrants and Private Placement Warrants (together the “Warrants”) were classified as equity in the Company’s previously issued audited balance sheet as of February 16, 2021.

In light of the Statement and guidance in Accounting Standards Codification (“ASC”) 815-40, “Derivatives and Hedging — Contracts in Entity’s Own Equity”, in particular as applicable to certain provisions in the Warrants related to tender or exchange offer provisions as well as provisions that provided for potential changes to the settlement amounts dependent upon the characteristics of the holder of the warrant, the Company evaluated the terms of the Warrants agreement entered into in connection with the Company’s IPO and concluded that the Company’s Warrants include provisions that, based on ASC 815-40, preclude the Warrants from being classified as components of equity. The Warrants are not eligible for an exception from derivative accounting, and therefore should be classified as a liability measured at fair value, with changes in fair value reported each period in earnings.

The Company’s management and the audit committee of the Company’s Board of Directors concluded that it is appropriate to restate the Company's audited balance sheet as of February 16, 2021 to reflect these Warrants as liability, with subsequent changes in their fair value recorded as income or expense in the statements of operations for all periods since issuance.

In connection with the preparation of the Company’s financial statement as of September 30, 2021, management determined that it should restate its previously reported financial statements. The Company determined that it had improperly valued its Class A ordinary shares subject to redemption at the closing of the Company’s Initial Public Offering. The Company previously determined the Class A ordinary shares subject to possible redemption to be equal to the redemption value of $10.00 per Class A ordinary share, while also taking into consideration a redemption cannot result in net tangible assets being less than $5,000,001. Management determined that the Class A ordinary shares issued during the Initial Public Offering can be redeemed or become redeemable subject to the occurrence of future events considered outside the Company’s control. Therefore, management concluded that the redemption value should include all Class A ordinary shares subject to possible redemption, resulting in the Class A ordinary shares subject to possible redemption being equal to their redemption value. As a result, the Company restated its previously issued financial statements to present all redeemable Class A ordinary shares as temporary equity and to recognize accretion from the initial book value to redemption value at the time of its Initial Public Offering. As a result, management has noted as adjustment related to temporary equity and permanent equity. This resulted in an adjustment to the initial carrying value of the Class ordinary shares subject to possible redemption with the offset recorded to additional paid-in capital (to the extent available), accumulated deficit and Class A ordinary shares.

In accordance with SEC Staff Accounting Bulletin No. 99 “Materiality,” and SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” the Company evaluated the changes and has determined that the related impact was material to the previously issued audited balance sheet included in the Company’s Current Report on Form 8-K as of February 16, 2021, filed with the SEC on February 22, 2021 (the “Affected Financial Statement”) and such the Affected Financial Statement should no longer be relied upon. Therefore, the Company, in consultation with its Audit Committee of the Board of Directors of the Company, concluded that the Affected Financial Statement should be restated to classify the warrants as derivative liabilities and report all Class A ordinary shares as temporary equity. As such the Company is reporting this restatement to the Affected Financial Statement in this Current Report on Form 8-K/A.

The impact of the restatement on the Company’s balance sheet is reflected in the following table:


Balance Sheet as of February 16, 2021	As Previously Reported		Adjustment		As Restated
Warrant liabilities	$	—	$	30,065,074	$	30,065,074
Total liabilities	$	9,361,700	$	30,065,074	$	39,426,774
Class A ordinary shares subject to possible redemption	$	240,641,840	$	12,358,160	$	253,000,000
Class A ordinary shares	$	124	$	(124)	$	—
Additional paid-in capital	$	5,004,253	$	(5,004,253)	$	—
Accumulated deficit	$	(5,000)	$	(37,418,857)	$	(37,423,857)
Total Shareholders’ (Deficit) Equity	$	5,000,010	$	(42,423,234)	$	(37,423,224)
Class A ordinary shares subject to possible redemption	24,064,184		1,235,816		25,300,000