EX-99.2 3 exhibit_99-2.htm EXHIBIT 99.2
Exhibit 99.2

Otonomo Technologies Ltd.

Interim Unaudited Condensed
Consolidated Financial Statements

As at March 31, 2023
(Unaudited)


Otonomo Technologies Ltd.
Index to Interim Condensed Consolidated Financial Statements as at March 31, 2023 (Unaudited)
 
Contents
Page
   
F-3
F-4
F-5
F-6
F-7
 
F - 2

Otonomo Technologies Ltd.
Interim Unaudited Condensed Consolidated Balance Sheets
(in USD thousands, except share and per share data)
 
 
  
March 31
2023
    
December 31
2022
  
 
  
(Unaudited)
    
(Audited)
  
Assets
            
Current assets
            
Cash and cash equivalents          
    
23,102
      
22,448
  
Short-term restricted cash          
    
302
      
346
  
Short-term deposits          
    
50,101
      
62,262
  
Marketable securities          
    
56,264
      
55,587
  
Trade receivables, net          
    
970
      
1,271
  
Other receivables and prepaid expenses          
    
1,896
      
3,043
  
Total current assets          
    
132,635
      
144,957
  
 
                
Non-current assets
                
Other long-term assets          
    
391
      
606
  
Property and equipment, net          
    
918
      
1,043
  
Operating lease right-of-use assets, net          
    
1,792
      
2,040
  
Total non-current assets          
    
3,101
      
3,689
  
Total assets          
    
135,736
      
148,646
  
 
                
Liabilities and Shareholders’ Equity
                
Current liabilities
                
Account payables          
    
5,310
      
1,020
  
Other payables and accrued expenses          
    
6,548
      
10,958
  
Deferred revenue          
    
186
      
216
  
Current portion of operating lease liabilities          
    
653
      
729
  
Current portion of contingent consideration          
    
2,292
      
165
  
Total current liabilities          
    
14,989
      
13,088
  
 
                
Non-Current liabilities
                
Warrants for ordinary shares          
    
160
      
155
  
Operating lease liabilities, less current portion          
    
1,005
      
1,225
  
Contingent consideration, less current portion          
    
—
      
746
  
Other non-current liabilities          
    
—
      
4
  
Total non-current liabilities          
    
1,165
      
2,130
  
Total liabilities          
    
16,154
      
15,218
  
 
                
Shareholders’ equity:
                
Ordinary shares, no par value; 30,000,000 shares authorized as of March 31, 2023 and December 31, 2022; 9,572,577 and 9,458,682 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively;
    
—
      
—
  
Additional paid-in capital          
    
372,515
      
370,412
  
Accumulated other comprehensive loss          
    
(5,024
)
    
(4,850
)
Accumulated deficit          
    
(247,909
)
    
(232,134
)
Total shareholders’ equity          
    
119,582
      
133,428
  
Total liabilities and Shareholders’ Equity          
    
135,736
      
148,646
  
 
The accompanying notes are an integral part of the interim unaudited condensed consolidated financial statements.

F - 3

Otonomo Technologies Ltd.
Interim Unaudited Condensed Consolidated Statements of Comprehensive Loss
(in USD thousands, except share and per share data)

 
  
Three-month
period ended
March 31
2023
    
Three-month
period ended
March 31
2022
  
Revenues          
    
1,839
      
1,031
  
Costs and operating expenses:
                
Cost of services          
    
1,204
      
380
  
Cloud infrastructure          
    
754
      
1,158
  
Research and development          
    
3,550
      
4,727
  
Sales and marketing          
    
4,642
      
4,410
  
General and administrative          
    
7,344
      
5,022
  
Depreciation and amortization          
    
87
      
455
  
Contingent consideration expense          
    
1,381
      
—
  
Total costs and operating expenses          
    
18,962
      
16,152
  
Operating loss          
    
(17,123
)
    
(15,121
)
Financial income, net          
    
1,374
      
1,027
  
Loss before income tax expense          
    
(15,749
)
    
(14,094
)
Income tax expense          
    
(26
)
    
(8
)
Net loss for the period          
    
(15,775
)
    
(14,102
)
Net loss per share attributable to ordinary shareholders, basic and diluted          
    
(1.66
)
    
(1.59
)
Weighted-average shares used in computing net loss per share attributable to ordinary shareholders, basic and diluted *
    
9,495,046
      
8,850,445
  
Other comprehensive loss, net of taxes:
                
Foreign currency translation adjustments          
    
(220
)
    
—
  
Unrealized gains on available-for-sale marketable securities, net          
    
46
      
—
  
Total comprehensive loss for the period          
    
(15,949
)
    
(14,102
)
 
The accompanying notes are an integral part of the interim unaudited condensed consolidated financial statements.
F - 4
 
Otonomo Technologies Ltd.
Interim Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity
(in USD thousands, except share and per share data)

 
  
Ordinary shares
    
Additional
paid-in
capital
    
Accumulated
deficit
    
Accumulated
other
comprehensive
loss
    
Total
equity
  
 
  
Number of
Shares
    
USD
thousands
    
USD
thousands
    
USD
thousands
    
USD
thousands
    
USD
thousands
  
Balance as of December 31, 2022          
    
9,458,682
      
—
      
370,412
      
(232,134
)
    
(4,850
)
    
133,428
  
Issuance of shares in connection with exercise of share options
    
113,895
      
—
      
62
      
—
      
—
      
62
  
Share based compensation          
    
—
      
—
      
2,041
      
—
      
—
      
2,041
  
Comprehensive loss          
    
—
      
—
      
—
      
(15,775
)
    
(174
)
    
(15,949
)
Balance as of March 31, 2023          
    
9,572,577
      
—
      
372,515
      
(247,909
)
    
(5,024
)
    
119,582
  
Balance as of December 31, 2021          
    
8,814,316
              
349,825
      
(101,062
)
    
—
      
248,763
  
Shares issued related to the business acquisitions
    
6,563
      
—
      
—
      
—
      
—
      
—
  
Issuance of shares in connection with exercise of share options
    
56,281
      
—
      
83
      
—
      
—
      
83
  
Share based compensation          
    
—
      
—
      
2,197
      
—
      
—
      
2,197
  
Comprehensive loss          
    
—
      
—
      
—
      
(14,102
)
    
—
      
(14,102
)
Balance as of March 31, 2022          
    
8,877,160
      
—
      
352,105
      
(115,164
)
    
—
      
236,941
  
 
The accompanying notes are an integral part of the interim unaudited condensed consolidated financial statements.

F - 5
Otonomo Technologies Ltd.
Interim Unaudited Condensed Consolidated Statements of Cash Flows
(in USD thousands, except share and per share data)

 
  
Three-month
period ended
March 31,
2023
    
Three-month
period ended
March 31,
2022
  
Cash flows from operating activities
            
Net loss          
    
(15,775
)
    
(14,102
)
Adjustments to reconcile net loss to net cash used in operating activities:
                
Depreciation and amortization          
    
87
      
455
  
Share based compensation          
    
2,041
      
2,197
  
Revaluation of warrants          
    
5
      
(884
)
Contingent consideration expense          
    
1,381
      
—
  
Foreign currency translation loss          
    
114
      
(147
)
Investments interest receivables, amortization, and accretion          
    
(887
)
    
—
  
Other          
    
13
      
—
  
Changes in operating assets and liabilities:
                
Trade receivables, net          
    
310
      
(7
)
Other receivables and prepaid expenses          
    
934
      
(64
)
Other payables and accrued expenses          
    
(4,439
)
    
936
  
Account payables          
    
4,285
      
280
  
Deferred revenue          
    
(33
)
    
(26
)
Other assets and liabilities          
    
165
      
(84
)
Net cash used in operating activities          
    
(11,799
)
    
(11,446
)
Cash flows from investing activities
                
Proceeds from sale of property and equipment          
    
44
      
—
  
Purchases of property and equipment          
    
(13
)
    
(54
)
Proceeds from short-term bank deposits, net          
    
12,417
      
—
  
Net cash provided by (used in) investing activities          
    
12,448
      
(54
)
Cash flows from financing activities
                
Proceeds from exercise of share options          
    
62
      
83
  
Net cash provided by financing activities          
    
62
      
83
  
Foreign currency effect on cash and cash equivalents and short-term restricted cash
    
(101
)
    
147
  
Net increase (decrease) in cash and cash equivalents and short-term restricted cash
    
610
      
(11,270
)
Cash and cash equivalents and short-term restricted cash at the beginning of the period
    
22,794
      
208,079
  
Cash and cash equivalents and short-term restricted cash at the end of the period
    
23,404
      
196,809
  
 
The accompanying notes are an integral part of the interim unaudited condensed consolidated financial statements.

F - 6
Otonomo Technologies Ltd.
Notes to the Interim Unaudited Condensed Consolidated Financial Statements

Note 1 – General
 
A.  Otonomo Technologies Ltd. (together with its subsidiaries, “Otonomo”, or the “Company”) was incorporated as an Israeli corporation in December 2015. The Company provides an automotive data service platform enabling car manufacturers, drivers, insurance carriers and service providers to be part of a connected ecosystem as well as mobility intelligence which transforms vast amounts of anonymized data and activity signals into actionable, impactful, and valuable insights.
 
On February 9, 2023, the Company and Urgent.ly Inc. (“Urgently”), a provider of digital roadside and mobility assistance technology and services, entered into a definitive agreement to merge pursuant to which the Company will become a wholly owned subsidiary of Urgently. Upon closing of the transaction, holders of the Company’s ordinary shares will receive common stock of Urgently. The Company’s shareholders and other equity holders will own, in the aggregate, approximately 33% of the combined company on a fully diluted basis, subject to the determination of the final exchange ratio pursuant to the terms set forth in the definitive agreement. The transaction is expected to close in the third quarter of 2023, subject to the approval of the Company’s shareholders and the satisfaction of other customary closing conditions.
 
B.  During March 2023, the Company started the process of sunsetting part of its connected vehicle data services (“CVD services”), which include services relating to aggregate multi-layered data, standardized data and data blurred to remove identifiers. The sunsetting of CVD services resulted in a further workforce reduction. The process is expected to be finalized in the second quarter of 2023. The Company concluded that the services were not considered as a component according to ASC 205 and therefore were not considered as a discontinued operation.

C.  On August 3, 2023, the Company executed a 1-for-15 reverse share split of its ordinary shares, no par value per share (the “Ordinary Shares”). As a result of the reverse share split, every 15 issued and outstanding Ordinary Shares were automatically converted into one Ordinary Share. The reverse share split is intended to increase the per share trading price of the Ordinary Shares to enable the Company to regain compliance with the minimum bid price requirement in Nasdaq Listing Rule 5450(a)(1). The reverse share split will also affect the Company’s outstanding options, warrants and restricted share units. As a result, all ordinary share, convertible preferred shares and options for ordinary shares, exercise price per share and net loss per share amounts were adjusted retroactively for all periods presented in these financial statements. The number of Ordinary Shares underlying the warrants were adjusted retroactively for all periods presented in these financial statements as a result of the reverse share split. The number of options and restricted share units outstanding and the number of Ordinary Shares underlying the options and restricted share units were adjusted retroactively for all periods presented in these financial statements as a result of the reverse share split.
 
Note 2 – Summary of Significant Accounting Policies
 

 A.
Basis of Preparation
 
The accompanying interim unaudited condensed consolidated financial statements included herein have been prepared by the Company in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements due to the permitted exclusion of certain disclosures for interim reporting. In management’s opinion, the interim financial data presented includes all adjustments necessary for a fair presentation. All intercompany accounts and transactions have been eliminated. Operating results for the three months ended March 31, 2023, are not necessarily indicative of the results that may be expected for any future period or for the year ending December 31, 2023.
 
These interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2022.
 

 B.
Use of Estimates
 
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and related disclosures at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and such differences may have a material impact on the Company’s financial statements.

F - 7

Otonomo Technologies Ltd.
Notes to the Interim Unaudited Condensed Consolidated Financial Statements

Note 2 – Summary of Significant Accounting Policies (cont’d)
 
As applicable to these consolidated financial statements, the most significant estimate relates to the fair value of contingent consideration.
 
A number of estimates have been and will continue to be affected by global events and other longer-term macroeconomic conditions, including rising inflation and increasing interest rates. As a result, the accounting estimates and assumptions may change over time. These consolidated financial statements reflect the financial statement effects based upon management’s estimates and assumptions utilizing the most currently available information.
 

 C.
Significant Accounting Policies
 
The Company’s significant accounting policies are discussed in Note 2, Summary of Significant Accounting Policies, in the Company’s Annual Report for the year ended December 31, 2022.
 

 D.
Foreign currencies
 
The functional currency of the Company is the U.S. dollar. Accordingly, monetary accounts maintained in currencies other than the U.S. dollar are re-measured into U.S. dollars in accordance with Accounting Standard Codification (“ASC”) Topic 830 “Foreign Currency Matters.” All transaction gains and losses of the re-measured monetary balance sheet items are reflected in the consolidated statements of operations as financial income or expenses, as appropriate.
 
The functional currency of the Company’s United Kingdom subsidiary is the British Pound. Accordingly, the translation to U.S. dollars takes the balance sheet date exchange rates for assets and liabilities, historical rates of exchange for equity, and average exchange rates in the period for revenues and expenses. The effects of foreign currency translation adjustments are included in shareholders’ equity (deficit) as a component of accumulated other comprehensive loss in the accompanying consolidated balance sheets.
 
Note 3 – Segments
 
Otonomo operates its business and reports its financial results in two segments:
 

 (a)
Connected Vehicles – connected vehicle data platform, which provides customers access to vehicle data and other value-added services (“Connected Vehicle”), complemented by Mobility Intelligence platform (“MI services”).
 

 (b)
Insurance related Services – connected insurance technology to insurance carriers, comprised of The Floow acquired activity.
 
The chief operating decision maker (“CODM”) reviews financial information prepared on a consolidated basis, accompanied by disaggregated information about revenues and contributed profit by the two identified reportable segments, to make decisions about resources to be allocated to the segments and assess their performance.
 
In Q1 2022, prior to the The Floow acquisition, Otonomo operated in one operating and reportable segment, the Connected Vehicles segment, therefore corresponding information for earlier periods is not applicable.
 
Otonomo’s CODM does not regularly review asset information by reportable segment and, therefore, Otonomo does not report asset information by reportable segment.

F - 8
Otonomo Technologies Ltd.
Notes to the Interim Unaudited Condensed Consolidated Financial Statements

Note 3 – Segments (cont’d)
 
 
Segment loss is comprised of operating loss and does not include amortization, depreciation and certain other items.
 

 A.
Segment information
 
 
  
Three-month period ended March 31, 2023
  
 
  
Connected
Vehicles
    
Insurance
related Services
    
Total
  
 
  
USD thousands
    
USD thousands
    
USD thousands
  
Revenues          
    
282
      
1,557
      
1,839
  
Segment loss          
    
(11,756
)
    
(1,858
)
    
(13,614
)
Amounts not allocated to segments:
                        
Depreciation and amortization          
                    
(87
)
Contingent consideration expense          
                    
(1,381
)
Share-based compensation          
                    
(2,041
)
Operating loss          
                    
(17,123
)
Financial income, net          
                    
1,374
  
Loss before income tax expense          
                    
(15,749
)
 

 B.
Revenue by geographical region of the Company’s customers
 
 
  
Three-month
period ended
March 31, 2023
    
Three-month
period ended
March 31, 2022
  
 
  
USD thousands
    
USD thousands
  
Americas          
    
830
      
344
  
APAC          
    
27
      
11
  
EMEA          
    
982
      
676
  
Total revenues          
    
1,839
      
1,031
  
 

 C.
Property and equipment, net, and operating lease right-of-use assets, by geographic region
 
 
  
March 31, 2023
    
December 31, 2022
  
 
  
USD thousands
    
USD thousands
  
United States          
    
18
      
30
  
Israel          
    
1,566
      
1,878
  
Europe          
    
1,126
      
1,175
  
Total operating lease right-of-use assets, property and equipment, net
    
2,710
      
3,083
  
 

 D.
Number of customers accounted for over 10% of the revenues
 
For the three-month period ended March 31, 2023, the Company had two customers that accounted for 17% and 23% respectively, of its revenues. For the three-month period ended March 31, 2022, the Company had two customers that accounted for 18% and 49% respectively, of its revenues.
F - 9
Otonomo Technologies Ltd.
Notes to the Interim Unaudited Condensed Consolidated Financial Statements

 
Note 4 – Fair Value Measurement
 
The Company’s financial assets and liabilities measured at fair value on a recurring basis, consisted of the following types of instruments:
 
 
  
March 31, 2023
    
December 31, 2022
  
 
  
Level 1
    
Level 2
    
Level 3
    
Level 1
    
Level 2
    
Level 3
  
 
  
USD thousands
  
Money Market funds(1)          
    
795
      
—
      
—
      
447
      
—
      
—
  
U.S. Treasury securities(1)          
    
3,239
      
—
      
—
      
4,197
      
—
      
—
  
Corporate bonds(1)          
    
—
      
24,809
      
—
      
—
      
32,516
      
—
  
Commercial papers(1)          
    
—
      
11,403
      
—
      
—
      
7,030
      
—
  
U.S. government agency securities(1)
    
—
      
15,716
      
—
      
—
      
9,399
      
—
  
Foreign bonds(1)          
    
—
      
—
      
—
      
—
      
1,700
      
—
  
Contingent consideration(2)          
    
—
      
—
      
(2,292
)
    
—
      
—
      
(911
)
Warrants for ordinary shares(3)          
    
—
      
—
      
(160
)
    
—
      
—
      
(155
)
 
    
4,034
      
51,928
      
(2,452
)
    
4,644
      
50,645
      
(1,066
)
 

 (1)
The following table summarizes the composition of marketable securities as of March 31, 2023:
 
 
  
March 31, 2023
  
 
  
Amortized
Cost
    
Unrealized
Gain/Losses
    
Fair
Value
  
 
  
USD thousands
  
Money market funds          
    
795
      
—
      
795
  
Available-for-sale debt securities
                        
Corporate bonds          
    
24,828
      
(19
)
    
24,809
  
Commercial papers          
    
11,403
      
—
      
11,403
  
U.S. government agency securities          
    
15,708
      
8
      
15,716
  
U.S. Treasury securities          
    
3,241
      
(2
)
    
3,239
  
Total          
    
55,180
      
(13
)
    
55,167
  
 
    
55,975
      
(13
)
    
55,962
  
 
Accrued interest in an amount of $302 thousand is included in marketable securities on the consolidated balance sheets as of March 31, 2023.
 
The following table summarizes the fair value and amortized cost of the available-for-sale debt securities by contractual maturity as of March 31, 2023:
 
 
  
March 31, 2023
  
 
  
Amortized Cost
    
Fair Value
  
 
  
USD thousands
  
Due within one year          
    
41,116
      
41,088
  
Due after one year through two years          
    
14,064
      
14,079
  
Total          
    
55,180
      
55,167
  

F - 10
Otonomo Technologies Ltd.
Notes to the Interim Unaudited Condensed Consolidated Financial Statements

Note 4 – Fair Value Measurement (cont’d)
 

 (2)
Contingent consideration represents liabilities recorded at fair value in connection with acquisitions, and thus represents a level 3 measurement within the fair value hierarchy.
 
The following table sets forth a summary of the changes in the fair value of the contingent consideration:
 
 
  
USD thousands
  
Fair value as of January 1, 2023          
    
911
  
Change in fair value          
    
1,381
  
Fair value as of March 31, 2023          
    
2,292
  
 
As of March 31, 2023, the Company evaluated the contingent consideration based on updated revenue growth assumptions, the Company’s ordinary shares fair value, and the probability of the merger with Urgently Inc., resulting with an increase in the liability for contingent consideration of $1,381 thousands during the three-month period ended March 31, 2023.
 

 (3)
In connection with the recapitalization, on August 13, 2021, the Company issued 5,200,000 private warrants. Each warrant is exercisable for one fifteenth (1/15th) of one Ordinary Share. The warrants were classified as a liability measured at fair value, with changes in fair value each period reported in the consolidated statements of operations. Refer to note 6.
 
Other financial instruments consist mainly of cash and cash equivalents, deposits, receivables, and accounts payable. The fair value of these financial instruments approximates their carrying values.
 
Note 5 – Share-Based Compensation
 
Share Options
 
A summary of the stock option activity is as follows:
 
 
  
Number of
Options
    
Weighted Average
exercise price
  
Outstanding – Balance at January 1, 2023          
    
535,737
    
$
10.05
  
Forfeited          
    
(15,987
)
  
$
9.60
  
Exercised          
    
(64,923
)
  
$
 0.90  
Outstanding – Balance at March 31, 2023          
    
454,827
    
$
 11.40  


F - 11
Otonomo Technologies Ltd.
Notes to the Interim Unaudited Condensed Consolidated Financial Statements

Note 5 – Share-Based Compensation (cont’d)
 
 
Restricted Share Units (“RSU”)
 
A summary of RSU activity and related information under the Company’s equity incentive plan and the RSU award is as follows:
 
 
  
Number of
RSUs
    
Weighted Average
Grant Date
Fair Value
  
Unvested Balance at January 1, 2023          
    
704,350
    
$
24.75
  
Granted*          
    
9,091
    
$
6.60
  
Vested          
    
(85,742
)
  
$
37.95
  
Forfeited          
    
(314,519
)
  
$
23.70
  
Unvested Balance at March 31, 2023          
    
313,180
    
$
21.60
  
 

 *
The RSU awards generally vest over four years, with no exercise price.
 
The share-based compensation expenses by line item in the accompanying condensed consolidated statements of comprehensive loss is summarized as follows:
 
 
  
Three-months
period ended
March 31
2023
    
Three-months
period ended
March 31
2022
  
 
  
USD thousand
    
USD thousand
  
Cost of services          
    
14
      
—
  
Research and development          
    
314
      
519
  
Sales and marketing          
    
825
      
665
  
General and administrative          
    
888
      
1,013
  
 
    
2,041
      
2,197
  
 
Note 6 – Warrants for Ordinary Shares
 
The Fair value of the Warrants:
 
 
  
March 31
2023
    
December 31
2022
  
Value of warrant per share          
  
$
0.46
    
$
0.45
  
Number of ordinary shares issuable upon exercise of warrants          
    
346,667
      
346,667
  
Fair value of warrant liability (in USD thousand)          
  
$
160
    
$
155
  
 
For the period ended March 31, 2023, the Company recorded a financial expense of $5 thousand to the condensed consolidated statements of comprehensive loss as part of the financial income, net, relating to the warrant’s fair value increased in the period.

F - 12
Otonomo Technologies Ltd.
Notes to the Interim Unaudited Condensed Consolidated Financial Statements

Note 6 – Warrants for Ordinary Shares (cont’d)
 
 
The Black-Scholes assumptions used to value the private warrants are as follows:
 
 
  
March 31
2023
    
December 31
2022
  
Volatility          
    
87.9
%
    
89.1
%
Risk-free interest rate          
    
3.69
%
    
4.1
%
Expected dividends          
    
0.0
%
    
0.0
%
Expected life (in years)          
    
3.37
      
3.62
  
 
Note 7 – Net Loss Per Share Attributable to Ordinary Shareholders
 
The following table sets forth the computation of basic and diluted net loss per share attributable to ordinary shareholders for the periods presented:
 
 
  
Three-months
period ended
March 31
2023
    
Three-months
period ended
March 31
2022
  
 
  
In USD thousands, except share data
  
Numerator:
            
Net loss          
    
(15,775
)
    
(14,102
)
Denominator:
                
Weighted-average shares used in computing net loss per share attributable to ordinary shareholders, basic and diluted
    
9,495,046
      
8,850,445
  
Net loss per share attributable to ordinary shareholders, basic and diluted
    
(1.66
)
    
(1.59
)
 
Since the Company incurred net losses for each of the periods presented, diluted net loss per share is the same as basic net loss per share. All of the Company’s outstanding stock options and RSUs, as well as the warrants were excluded in the calculation of diluted net loss per share as the effect would be anti-dilutive.
 

F - 13