10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

OR

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: 001-40116

AdTheorent Holding Company, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

85-3978415

( State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

330 Hudson Street, 13th Floor

New York, New York

10013

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (800) 804-1359

 

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

 

ADTH

 

The Nasdaq Stock Market

Warrants to purchase common stock

 

ADTHW

 

The Nasdaq Stock Market

 

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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

 

Non-Accelerated filer

 

 

Smaller reporting company

 

Emerging growth company

 

 

 

 

 

 

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 Exchange Act). Yes ☐ No

As of November 7, 2022, the registrant had 86,902,337 shares of common stock outstanding.

 

 

 

 


 

Table of Contents

 

 

 

Page

 

 

 

PART I.

FINANCIAL INFORMATION

3

 

 

 

Item 1.

Financial Statements (Unaudited)

3

 

Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021

3

 

Condensed Consolidated Statements of Operations for the three and nine month periods ended September 30, 2022 and 2021

4

 

Condensed Consolidated Statements of Equity for the three and nine month periods ended September 30, 2022 and 2021

5

 

Condensed Consolidated Statements of Cash Flows for the nine month periods ended September 30, 2022 and 2021

7

 

Notes to Unaudited Condensed Consolidated Financial Statements

8

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

23

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

35

Item 4.

Controls and Procedures

35

 

 

 

PART II.

OTHER INFORMATION

36

 

 

 

Item 1.

Legal Proceedings

36

Item 1A.

Risk Factors

36

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

37

Item 3.

Defaults Upon Senior Securities

37

Item 4.

Mine Safety Disclosures

37

Item 5.

Other Information

37

Item 6.

Exhibits

37

SIGNATURES

 

 

2


 

PART I. FINANCIAL INFORMATION

 

Item 1. Financial Statements (Unaudited).

 

ADTHEORENT HOLDING COMPANY, INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)

 

 

 

 

September 30, 2022

 

 

December 31, 2021

 

ASSETS

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

67,842

 

 

$

100,093

 

Accounts receivable, net

 

 

42,593

 

 

 

55,936

 

Income tax recoverable

 

 

99

 

 

 

95

 

Prepaid expenses

 

 

4,179

 

 

 

3,801

 

Total current assets

 

 

114,713

 

 

 

159,925

 

Property and equipment, net

 

 

572

 

 

 

409

 

Operating lease right-of-use assets

 

 

5,992

 

 

 

 

Investment in SymetryML Holdings

 

 

812

 

 

 

 

Customer relationships, net

 

 

5,594

 

 

 

8,986

 

Other intangible assets, net

 

 

6,804

 

 

 

7,608

 

Goodwill

 

 

34,842

 

 

 

35,778

 

Deferred income taxes, net

 

 

5,889

 

 

 

434

 

Other assets

 

 

369

 

 

 

402

 

Total assets

 

$

175,587

 

 

$

213,542

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

8,479

 

 

$

12,382

 

Accrued compensation

 

 

4,415

 

 

 

10,530

 

Accrued expenses

 

 

3,361

 

 

 

4,664

 

Operating lease liabilities, current

 

 

1,270

 

 

 

 

Total current liabilities

 

 

17,525

 

 

 

27,576

 

Revolver borrowings

 

 

 

 

 

39,017

 

SAFE Notes

 

 

 

 

 

2,950

 

Warrants

 

 

3,905

 

 

 

12,166

 

Seller's Earn-Out

 

 

2,417

 

 

 

18,081

 

Operating lease liabilities, non-current

 

 

6,518

 

 

 

 

Deferred rent

 

 

 

 

 

1,869

 

Total liabilities

 

 

30,365

 

 

 

101,659

 

Stockholders’ equity

 

 

 

 

 

 

Preferred Stock, $0.0001 per share, 20,000,000 shares authorized, no shares issued and outstanding as of September 30, 2022 and December 31, 2021

 

 

 

 

 

 

Common Stock, $0.0001 par value, 350,000,000 shares authorized; 86,691,430 and 85,743,994 shares issued and outstanding as of September 30, 2022 and December 31, 2021

 

 

9

 

 

 

9

 

Additional paid-in capital

 

 

80,939

 

 

 

70,778

 

Retained earnings

 

 

64,274

 

 

 

42,512

 

Total stockholders’ equity attributable to AdTheorent Holding Company, Inc.

 

 

145,222

 

 

 

113,299

 

Noncontrolling interests in consolidated subsidiaries

 

 

 

 

 

(1,416

)

Total stockholders' equity

 

 

145,222

 

 

 

111,883

 

Total liabilities and stockholders’ equity

 

$

175,587

 

 

$

213,542

 

See accompanying notes to condensed consolidated financial statements.

 

 

 

3


 

ADTHEORENT HOLDING COMPANY, INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

(unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue

 

$

37,584

 

 

$

39,534

 

 

$

114,301

 

 

$

110,368

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Platform operations

 

 

19,581

 

 

 

19,217

 

 

 

58,207

 

 

 

52,368

 

Sales and marketing

 

 

11,127

 

 

 

9,209

 

 

 

32,540

 

 

 

25,689

 

Technology and development

 

 

3,955

 

 

 

2,913

 

 

 

12,393

 

 

 

8,046

 

General and administrative

 

 

4,729

 

 

 

3,073

 

 

 

15,433

 

 

 

13,187

 

Total operating expenses

 

 

39,392

 

 

 

34,412

 

 

 

118,573

 

 

 

99,290

 

(Loss) income from operations

 

 

(1,808

)

 

 

5,122

 

 

 

(4,272

)

 

 

11,078

 

Interest income (expense), net

 

 

97

 

 

 

(598

)

 

 

(59

)

 

 

(1,808

)

Gain on change in fair value of Seller's Earn-Out

 

 

2,901

 

 

 

 

 

 

15,664

 

 

 

 

Gain on change in fair value of warrants

 

 

5,674

 

 

 

 

 

 

8,261

 

 

 

 

Gain on deconsolidation of SymetryML

 

 

 

 

 

 

 

 

1,939

 

 

 

 

Loss on change in fair value of SAFE Notes

 

 

 

 

 

 

 

 

(788

)

 

 

 

Loss on fair value of investment in SymetryML Holdings

 

 

(39

)

 

 

 

 

 

(49

)

 

 

 

Other (expense) income, net

 

 

(5

)

 

 

 

 

 

(24

)

 

 

20

 

Total other income (expense), net

 

 

8,628

 

 

 

(598

)

 

 

24,944

 

 

 

(1,788

)

Net income before (provision) benefit for income taxes

 

 

6,820

 

 

 

4,524

 

 

 

20,672

 

 

 

9,290

 

(Provision) benefit for income taxes

 

 

(1,095

)

 

 

(1,569

)

 

 

540

 

 

 

(3,141

)

Net income

 

$

5,725

 

 

$

2,955

 

 

$

21,212

 

 

$

6,149

 

Less: Net loss attributable to noncontrolling interest

 

 

 

 

 

198

 

 

 

550

 

 

 

539

 

Net income attributable to AdTheorent Holding Company, Inc.

 

$

5,725

 

 

$

3,153

 

 

$

21,762

 

 

$

6,688

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

     Basic

 

$

0.07

 

 

$

0.05

 

 

$

0.25

 

 

$

0.11

 

     Diluted

 

$

0.06

 

 

$

0.05

 

 

$

0.23

 

 

$

0.10

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

     Basic

 

 

86,492,025

 

 

 

59,882,523

 

 

 

86,003,514

 

 

 

59,882,523

 

     Diluted

 

 

92,122,421

 

 

 

66,971,147

 

 

 

92,885,851

 

 

 

64,795,030

 

 

See accompanying notes to condensed consolidated financial statements.

 

 

 

4


 

ADTHEORENT HOLDING COMPANY, INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(in thousands, except for number of shares)

(unaudited)

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Additional
Paid-in
Capital

 

 

Retained
Earnings

 

 

Noncontrolling
Interests

 

 

Total
Stockholders'
Equity

 

December 31, 2021

 

 

85,743,994

 

 

$

9

 

 

$

70,778

 

 

$

42,512

 

 

$

(1,416

)

 

 

111,883

 

Equity-based compensation

 

 

 

 

 

 

 

 

1,988

 

 

 

 

 

 

 

 

 

1,988

 

Seller's Earn-Out equity-based compensation

 

 

 

 

 

 

 

 

492

 

 

 

 

 

 

 

 

 

492

 

Conversion of SAFE Notes into SymetryML preferred stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,938

 

 

 

3,938

 

SymetryML preferred stock issuance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

400

 

 

 

400

 

Deconsolidation of SymetryML Holdings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,372

)

 

 

(2,372

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(41,740

)

 

 

(550

)

 

 

(42,290

)

March 31, 2022

 

 

85,743,994

 

 

$

9

 

 

$

73,258

 

 

$

772

 

 

$

 

 

$

74,039

 

Equity-based compensation

 

 

 

 

 

 

 

 

3,856

 

 

 

 

 

 

 

 

 

3,856

 

Seller's Earn-Out equity-based compensation

 

 

 

 

 

 

 

 

499

 

 

 

 

 

 

 

 

 

499

 

Exercises of options

 

 

355,629

 

 

 

 

 

 

183

 

 

 

 

 

 

 

 

 

183

 

Exercises of warrants

 

 

10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transaction cost adjustment

 

 

 

 

 

 

 

 

55

 

 

 

 

 

 

 

 

 

55

 

Net income

 

 

 

 

 

 

 

 

 

 

 

57,777

 

 

 

 

 

 

57,777

 

June 30, 2022

 

 

86,099,633

 

 

$

9

 

 

$

77,851

 

 

$

58,549

 

 

$

 

 

$

136,409

 

Equity-based compensation

 

 

 

 

 

 

 

 

2,783

 

 

 

 

 

 

 

 

 

2,783

 

Seller's Earn-Out equity-based compensation

 

 

 

 

 

 

 

 

373

 

 

 

 

 

 

 

 

 

373

 

Exercises of options

 

 

244,922

 

 

 

 

 

 

163

 

 

 

 

 

 

 

 

 

163

 

Vesting of restricted stock, net of shares withheld for taxes

 

 

346,875

 

 

 

 

 

 

(231

)

 

 

 

 

 

 

 

 

(231

)

Net income

 

 

 

 

 

 

 

 

 

 

 

5,725

 

 

 

 

 

 

5,725

 

September 30, 2022

 

 

86,691,430

 

 

$

9

 

 

$

80,939

 

 

$

64,274

 

 

$

 

 

$

145,222

 

 

5


 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Additional
Paid-in
Capital

 

 

Retained
Earnings

 

 

Noncontrolling
Interests

 

 

Total
Stockholders'
Equity

 

December 31, 2020

 

 

59,853,276

 

 

$

6

 

 

$

45,584

 

 

$

16,309

 

 

$

(632

)

 

 

61,267

 

Equity-based compensation

 

 

 

 

 

 

 

 

164

 

 

 

 

 

 

 

 

 

164

 

Exercises of options

 

 

20,645

 

 

 

 

 

 

10

 

 

 

 

 

 

 

 

 

10

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

2,003

 

 

 

(170

)

 

 

1,833

 

March 31, 2021

 

 

59,873,921

 

 

$

6

 

 

$

45,758

 

 

$

18,312

 

 

$