Filed pursuant to Rule 424(b)(3)
Registration Statement No. 333-273394
PROSPECTUS/OFFER TO EXCHANGE
OTONOMO TECHNOLOGIES LTD.
Offer to Exchange Warrants to Acquire Ordinary Shares
of
Otonomo Technologies Ltd.
for
Ordinary Shares
of
Otonomo Technologies Ltd.
and
Consent Solicitation
of
Otonomo Technologies Ltd.
for
Ordinary Shares
of
Otonomo Technologies Ltd.
and
Consent Solicitation
THE OFFER PERIOD (AS DEFINED BELOW) AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59
P.M., EASTERN TIME, ON AUGUST 22, 2023, OR SUCH LATER TIME AND DATE TO WHICH WE
MAY EXTEND.
Terms of the Offer and Consent Solicitation
Until the Expiration Date (as defined below), we are offering to the holders of our outstanding warrants, including the public warrants (as defined below) and the private
placement warrants (as defined below) (collectively, the “warrants”), each to purchase ordinary shares, no par value per share (the “Ordinary Shares”), of Otonomo Technologies Ltd. (the “Company”), the opportunity to receive 0.0167
Ordinary Shares in exchange for each of our outstanding warrants tendered by the holder and exchanged pursuant to the offer (the “Offer”).
The Offer is being made to all holders of our public warrants and all holders of our private placement warrants. The warrants are governed by the Amended & Restated
Warrant Agreement, dated as of August 13, 2021 (the “Warrant Agreement”), by and among the Company, Software Acquisition Group Inc. II (“SWAG”), Continental Stock Transfer & Trust Company and American Stock Transfer & Trust
Company, as warrant agent (the “Warrant Agent”). Our Ordinary Shares and public warrants are listed on The Nasdaq Stock Market LLC (“Nasdaq”) under the symbols “OTMO” and “OTMOW,” respectively. As of August 18, 2023, a total of
13,824,976 warrants were outstanding, consisting of 8,624,976 public warrants and 5,200,000 private placement warrants. Pursuant to the Offer, we are offering up to an aggregate of 230,877 Ordinary Shares in exchange for the warrants.
Each warrant holder whose warrants are exchanged pursuant to the Offer will receive 0.0167 Ordinary Shares for each warrant tendered by such holder and exchanged. No
fractional Ordinary Shares will be issued pursuant to the Offer. In lieu of issuing fractional shares, any holder of warrants who would otherwise have been entitled to receive a fractional share pursuant to the Offer will, after
aggregating all such fractional shares of such holder, receive one additional whole Ordinary Share in lieu of such fractional shares. Our obligation to complete the Offer is not conditioned on the receipt of a minimum number of tendered
warrants.
Concurrently with the Offer, we are also soliciting consents (the “Consent Solicitation”) from holders of the warrants to amend the Warrant Agreement to permit the
Company to require that each warrant that is outstanding upon the closing of the Offer be converted into 0.01503 Ordinary Shares, which is a ratio 10% less than the exchange ratio applicable to the Offer (the “Warrant Amendment”). If the
Company obtains the affirmative vote or written consent of the holders of a majority of the number of then outstanding public warrants, then, pursuant to the terms of the Warrant Agreement, that will be sufficient to adopt the Warrant
Amendment.
You may not consent to the Warrant Amendment without tendering your warrants in the Offer and you may not tender such warrants without consenting to the Warrant Amendment. The consent to the
Warrant Amendment is a part of the letter of transmittal and consent relating to the warrants (as it may be supplemented and amended from time to time, the “Letter of Transmittal and Consent”), and therefore by tendering your warrants for
exchange you will be delivering to us your consent. You may revoke your consent at any time prior to the Expiration Date (as defined below) by withdrawing the warrants you have tendered in the Offer.
The Offer and Consent Solicitation is made solely upon the terms and conditions in this Prospectus/Offer to Exchange and in the related Letter of Transmittal and Consent. The Offer and Consent Solicitation
will be open until 11:59 p.m., Eastern Time, on August 22, 2023, or such later time and date to which we may extend (the period during which the Offer and Consent Solicitation is open, giving effect to any withdrawal or extension, is
referred to as the “Offer Period,” and the date and time at which the Offer Period ends is referred to as the “Expiration Date”). The Offer and Consent Solicitation is not made to those holders who reside in states or other
jurisdictions where an offer, solicitation or sale would be unlawful.
We may withdraw the Offer and Consent Solicitation only if the conditions to the Offer and Consent Solicitation are not satisfied or waived prior to the Expiration Date. Promptly upon any
such withdrawal, we will return the tendered warrants to the holders (and the consent to the Warrant Amendment will be revoked).
You may tender some or all of your warrants into the Offer. If you elect to tender warrants in response to the Offer and Consent Solicitation, please follow the instructions in this Prospectus/Offer to
Exchange and the related documents, including the Letter of Transmittal and Consent. If you tender warrants, you may withdraw your tendered warrants at any time before the Expiration Date and retain them on their current terms or
amended terms if the Warrant Amendment is adopted, by following the instructions in this Prospectus/Offer to Exchange. In addition, tendered warrants that are not accepted by us for exchange by August 22, 2023, may thereafter be
withdrawn by you until such time as the warrants are accepted by us for exchange. If you withdraw the tender of your warrants, your consent to the Warrant Amendment will be withdrawn as a result.
Warrants not exchanged for our Ordinary Shares pursuant to the Offer will remain outstanding subject to their current terms or amended terms if the Warrant Amendment is adopted. We reserve
the right to redeem any of the warrants, as applicable, pursuant to their current terms at any time, including prior to the completion of the Offer and Consent Solicitation, and if the Warrant Amendment is adopted, we intend to require the
conversion of all outstanding warrants to Ordinary Shares as provided in the Warrant Amendment. Our public warrants are currently listed on Nasdaq under the symbol “OTMOW”; however, our public warrants may be delisted if, following the
completion of the Offer and Consent Solicitation, the extent of public distribution or the aggregate market value of outstanding warrants has become so reduced as to make further listing inadvisable or unavailable.
The Offer and Consent Solicitation is conditioned upon the effectiveness of a registration statement on Form F-4 that we filed with the U.S. Securities and Exchange Commission (the “SEC”)
regarding the Ordinary Shares issuable upon exchange of the warrants pursuant to the Offer. This Prospectus/Offer to Exchange forms a part of the registration statement.
Our board of directors has approved the Offer and Consent Solicitation. However, neither we nor any of our management, our board of directors, or the information agent, the exchange agent or
the dealer manager for the Offer and Consent Solicitation is making any recommendation as to whether holders of warrants should tender warrants for exchange in the Offer and, as applicable, consent to the Warrant Amendment in the Consent
Solicitation. Each holder of a warrant must make its own decision as to whether to exchange some or all of its warrants and, as applicable, consent to the Warrant Amendment.
All questions concerning the terms of the Offer and Consent Solicitation should be directed to the dealer manager:
Piper Sandler & Co.
800 Nicollet Mall
Minneapolis, Minnesota 55402
Direct: Jay Hershey
Email: Jay.Hershey@psc.com
(800) 754-1172 or (612) 303-0177
All questions concerning exchange procedures and requests for additional copies of this Prospectus/Offer to Exchange, the Letter of Transmittal and Consent or the Notice of Guaranteed
Delivery should be directed to the information agent:
D.F. King & Co., Inc.
48 Wall Street, 22nd Floor
New York, New York 10005
Bank and Brokers Call Collect: (212) 269-5550
All Others, Please Call Toll-Free: (877) 783-5524
Email: OTMO@dfking.com
We will amend our offering materials, including this Prospectus/Offer to Exchange, to the extent required by applicable securities laws to disclose any material changes to information
previously published, sent or given to warrant holders.
On August 3, 2023, the Company executed a 1-for-15 reverse share split of its 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). As a result of the reverse share split, all Ordinary Shares, 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 throughout this document. The number of Ordinary Shares underlying the warrants were adjusted retroactively for all periods presented throughout this document 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 throughout this document
as a result of the reverse share split. No additional securities are being registered under this Amendment No. 1 to the Registration Statement on Form F-4. All applicable registration fees have been previously paid.
The securities offered by this Prospectus/Offer to Exchange involve risks. Before participating in the Offer and consenting to the Warrant Amendment, you are urged to read
carefully the section entitled “Risk Factors” beginning on page 14 of this Prospectus/Offer to Exchange.
Neither the SEC, the Israel Securities Authority nor any state securities commission or any other regulatory body has approved or disapproved of these securities or
determined if this Prospectus/Offer to Exchange is truthful or complete. Any representation to the contrary is a criminal offense.
Through the Offer, we are soliciting your consent to the Warrant Amendment. By tendering your warrants, you will be delivering your consent to the proposed Warrant
Amendment, which consent will be effective upon our acceptance of such warrants for exchange.
The dealer manager for the Offer and Consent Solicitation is:
Piper Sandler & Co.
This Prospectus/Offer to Exchange is dated August 22, 2023.
TABLE OF CONTENTS
This Prospectus/Offer to Exchange is a part of the registration statement that we filed on Form F-4 with the SEC. You should read this Prospectus/Offer to Exchange, including the detailed
information regarding the Company, Ordinary Shares and warrants, and the financial statements and the notes included herein and any applicable prospectus supplement.
We have not authorized anyone to provide you with information different from that contained in this Prospectus/Offer to Exchange. If anyone makes any recommendation or
representation to you, or gives you any information, you must not rely upon that recommendation, representation or information as having been authorized by us. We and the dealer manager take no responsibility for, and can provide no
assurance as to the reliability of, any other information that others may give you. You should not assume that the information in this Prospectus/Offer to Exchange or any prospectus supplement is accurate as of any date other than the date
on the front of those documents. You should not consider this Prospectus/Offer to Exchange to be an offer or solicitation relating to the securities in any jurisdiction in which such an offer or solicitation relating to the securities is
not authorized. Furthermore, you should not consider this Prospectus/Offer to Exchange to be an offer or solicitation relating to the securities if the person making the offer or solicitation is not qualified to do so, or if it is unlawful
for you to receive such an offer or solicitation.
Unless the context requires otherwise, in this Prospectus/Offer to Exchange, we use the terms “Otonomo,” “the Company,” “our company,” “we,” “us,” “our,” “its,” and similar references to
refer to Otonomo Technologies Ltd. and its subsidiaries.
All references in this Prospectus/Offer to Exchange to the terms “Israeli currency” and “NIS” refer to New Israeli Shekels, the terms “dollar,” “USD” or “$” refer to U.S. dollars and the
terms “€” or “euro” refer to the currency introduced at the start of the third stage of European economic and monetary union pursuant to the treaty establishing the European Community, as amended.
All references in this Prospectus/Offer to Exchange to “Business Combination” refer to the transactions effected under the business combination agreement, dated as of January 31, 2021 (the
“Business Combination Agreement”), by and among Software Acquisition Group Inc. II, a Delaware corporation (“SWAG”), Otonomo and Butterbur Merger Sub Inc., a Delaware corporation and wholly owned subsidiary of Otonomo (“Butterbur Merger
Sub”). Pursuant to the Business Combination Agreement, Butterbur Merger Sub merged with and into SWAG, with SWAG surviving the merger. Upon consummation of the Business Combination and the other transactions contemplated by the Business
Combination Agreement on August 13, 2021, SWAG became a wholly owned subsidiary of Otonomo.
All references in this Prospectus/Offer to Exchange to the “Neura Acquisition” refer to the transactions effected under that certain Agreement and Plan of Merger, dated as of October 4, 2021,
by and among Otonomo, Neura, Inc. (“Neura”) and the other parties thereto, pursuant to which Otonomo acquired Neura. Otonomo acquired 100% of Neura’s outstanding equity interests for transaction consideration of approximately $46.8 million,
including the issuance of Ordinary Shares.
All references in this Prospectus/Offer to Exchange to the “Floow Acquisition” refer to the transactions effected under that certain definitive agreement, dated as of
February 26, 2022 (the “Floow SPA”). On April 14, 2022, pursuant to the terms of the Floow SPA, Otonomo acquired The Floow, a SaaS provider of connected insurance technology for major carriers globally (“The Floow”), in a cash and stock
deal with a fair value of approximately $31.3 million, including a performance-based earnout payable in up to $12.0 million in cash and up to 436,364 Ordinary Shares (depending upon the achievement of certain business performance
objectives), which was evaluated at a fair value of $9.8 million on the acquisition date.
All references in this Prospectus/Offer to Exchange to the “Merger Agreement” refer to that certain Agreement and Plan of Merger, dated as of February 9, 2023, by and among Otonomo, Urgent.ly
Inc. (“Urgently”) and U.O Odyssey Merger Sub Ltd. (“Merger Sub”). Pursuant to the Merger Agreement and subject to the satisfaction or waiver of the terms and conditions specified therein, Merger Sub, a wholly owned subsidiary of Urgently,
will merge with and into Otonomo, with Otonomo continuing as the surviving company and a wholly owned subsidiary of Urgently (the “Merger”). See “Summary — Recent Developments — Entry into Agreement and
Plan of Merger.”
All references in this Prospectus/Offer to Exchange to the “Cost Reduction Initiative” refer to the cost reduction process that the Company commenced during the fourth quarter of 2022,
including a workforce reduction of a significant number of its employees in connection with the Company adjusting its budget for 2023 to focus on managing expenses and preserving operating capital to achieve its growth and profitability
goals. In connection with the Cost Reduction Initiative, the Company sunsetted its artificial intelligence (AI) platform that transforms behavioral data into actionable insights (“MI services”) and its Connected Vehicle Data services, which
includes services relating to multi-layered data, standardized and blurred to remove identifiers, during the first half of 2023.
Except where specifically noted, the information contained in this Prospectus/Offer to Exchange gives effect to (i) the reverse share split of Ordinary Shares at a ratio of 1-for-15, which was
approved by Otonomo's shareholders and effective as of August 3, 2023, and (ii) the 1-for-90 reverse stock split of Urgently common stock, par value $0.001 per share, which was approved by Urgently's stockholders and effective as of July
28, 2023.
ii
This Prospectus/Offer to Exchange contains or may contain “forward-looking statements” within the meaning of the Securities Act and the Exchange Act that involve
substantial risks and uncertainties. “Forward-looking statements” made in connection with the Offer and Consent Solicitation are not within the safe harbors provided by the Private Securities
Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this Prospectus/Offer to Exchange, including statements regarding our future financial position, business strategy and plans and
objectives of management for future operations, are forward-looking statements.
In some cases, you can identify forward-looking statements by terminology such as “believe,” “may,” “will,” “could,” “estimate,” “continue,” “anticipate,” “intend,” “should,”
“would,” “plan,” “expect,” “project,” “target,” “predict” or “potential” and other words, terms and phrases of similar nature or the negative of these terms. Forward-looking statements include, without limitation, our expectations
concerning the outlook for our business, productivity, plans and goals for future operational improvements and capital investments, operational performance, future market conditions or economic performance and developments in the capital
and credit markets and expected future financial performance, as well as any information concerning our possible or assumed future results of operations.
Forward-looking statements involve a number of risks, uncertainties and assumptions, and actual results or events may differ materially from those projected or implied in those statements.
Important factors that could cause such differences include, but are not limited to:
| • |
We have a limited operating history and may be unable to achieve or sustain profitability or accurately predict our future results;
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| • |
Our Cost Reduction Initiative and associated organizational changes may not adequately reduce our operating costs or improve operating margins, may lead to additional workforce
attrition, and may cause operational disruptions;
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| • |
We have a limited operating history with a history of losses and expect to incur significant expenses and continuing losses for the foreseeable future;
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If we do not develop enhancements to our services and introduce new services that achieve market acceptance, our growth, business, results of operations and financial condition could be adversely
affected;
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If we are unsuccessful at investing in growth opportunities, our business could be materially and adversely affected;
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We may need to raise additional funds in the future in order to execute our business plan and these funds may not be available to us when we need them. If we cannot raise
additional funds when we need them, our business, prospects, financial condition and operating results could be negatively affected;
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We rely, in part, on partnerships to grow our business. These partnerships may not produce the expected financial or operating results we expect. In addition, if we are unable to enter into
partnerships or successfully maintain them, our growth may be adversely impacted;
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In 2022, two customers accounted for a material portion of our revenue and, therefore, the loss of those customers could materially and adversely affect our
business, results of operations and financial condition;
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Our business depends on expanding our base of data and insurance services consumers and consumers increasing their use of our services, and our inability to expand our base of
consumers or any loss of consumers or decline in their use of our services could materially and adversely affect our business, results of operations and financial condition;
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| • |
If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards, changing regulations, and changing customer needs, requirements or preferences, our products
may become less competitive;
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iii
| • |
The market for our services and platform is new and unproven and may decline or experience limited growth and is dependent in part on consumers continuing to adopt our platform
and use our services;
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| • |
We rely on the ability to access data from external providers at reasonable terms and prices. Our data providers might restrict our use of, or refuse to license, data, which
could lead to our inability to access certain data or provide certain services and, as a result, materially and adversely affect our operating results and financial condition;
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| • |
If we are unable to expand our relationships with existing vehicle manufacturers (“OEMs”), vehicle fleet operators and other data providers, and add new
OEMs, vehicle fleet operators and other data providers, our business, results of operations and financial condition could be adversely affected;
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| • |
Any failure to offer high quality user support may adversely affect our relationships with our consumers and prospective consumers, and adversely affect our business, results of
operations and financial condition;
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Adverse conditions in the automotive industry or the global economy more generally could have adverse effects on our results of operations;
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The market in which we participate is intensely competitive, and if we do not compete effectively, our business, results of operations and financial condition could be harmed;
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We expect our results of operations to fluctuate on a quarterly and annual basis, which could cause the price of our securities to fluctuate or decline;
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| • |
Changes in tax laws or exposure to additional income tax liabilities could affect our future profitability;
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| • |
Changes in our product mix may impact our financial performance;
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| • |
We are highly dependent on the services of our CEO and founder, Ben Volkow;
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Our business depends on our ability to attract and retain highly skilled personnel and senior management;
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Our sales and operations in international markets expose us to operational, financial and regulatory risks;
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Our business is subject to the risks of earthquakes, fire, floods and other natural catastrophic events, global pandemics, and interruptions by man-made problems, such as
network security breaches, computer viruses or terrorism. Material disruptions of our business or information systems resulting from these events could adversely affect our operating results;
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We are exposed to fluctuations in currency exchange rates that could adversely affect our financial results;
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Breaches of our networks or systems, or those of our data providers or partners, could degrade our ability to conduct our business, compromise the integrity of our products,
platform and data, result in significant data losses and the theft of our intellectual property, damage our reputation, expose us to liability to third parties and require us to incur significant additional costs to maintain the
security of our networks and data;
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Any disruption of service at the Cloud Service Providers that host our platform could harm our business;
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Climate change and related environmental issues may have an adverse effect on our business, financial condition and operating results;
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iv
| • |
If we are unable to maintain The Floow’s existing relationships with insurance companies or establish new relationships with insurance companies, our business, results of
operations, financial condition and growth potential could be adversely affected;
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Changes in the practices of insurance companies in the markets in which we provide our telematics services could adversely affect our business, results of operations, financial
condition and growth potential;
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Failure to effectively combine vehicle and mobile data from Otonomo and The Floow could adversely affect our growth potential;
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Insurance products are highly regulated in the United States and other countries in which we operate;
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There is significant competition in the markets in which we offer our telematics services and products and our business, results of operations, financial condition and growth potential could be
adversely affected if we fail to compete successfully;
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We may not obtain approval of the Warrant Amendment that would allow us to require that all outstanding warrants be exchanged for Ordinary Shares; and
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The other matters described in the section entitled “Risk Factors” of this Prospectus/Offer to Exchange.
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We caution you against placing undue reliance on forward-looking statements, which reflect current beliefs and are based on information currently available as of the date a forward-looking
statement is made. We undertake no obligation to update these forward-looking statements, whether as a result of new information, future developments or otherwise, should circumstances change, except as
otherwise required by securities and other applicable laws. In evaluating our forward-looking statements, you should specifically consider the risks and uncertainties described in the section entitled “Risk Factors” in this Prospectus/Offer to Exchange.
v
Unless the context otherwise requires, references in this Prospectus/Offer to Exchange to:
“Business Combination” are to the Company’s business combination with Software Acquisition Group Inc. II, a special purpose acquisition company, which
was consummated on August 13, 2021;
“Code” are to the Internal Revenue Code of 1986, as amended;
“Companies Law” are to the Israeli Companies Law, 5759-1999;
“Consent Solicitation” are to the solicitation of consent from the holders of the warrants to approve the Warrant Amendment;
“Exchange Act” are to the Securities Exchange Act of 1934, as amended;
“Expiration Date” are to 11:59 p.m., Eastern Time, on August 22, 2023;
“IPO” are to the initial public offering of units of SWAG, which closed on September 17, 2020;
“Letter of Transmittal and Consent” are to the letter of transmittal and consent (as it may be supplemented and amended from time to time) related to
the Offer and Consent Solicitation;
“Offer” are to the opportunity to receive 0.0167 Ordinary Shares in exchange for each of our outstanding warrants;
“Offer Period” are to the period during which the Offer and Consent Solicitation is open, giving effect to any extension;
“Ordinary Shares” are to our Ordinary Shares, no par value per share;
“Otonomo Articles” are to our Amended and Restated Articles of Association, a copy of which is filed with the SEC as an exhibit to the registration
statement of which this Prospectus/Offer to Exchange forms a part;
“private placement warrants” are to the warrants issued to certain parties in a private placement in connection with the closing of the IPO at a
purchase price of $1.00 per warrant that have not become public warrants under the Warrant Agreement as a result of being transferred to any person other than permitted transferees;
“public warrants” are to the warrants (i) sold as part of the units in the IPO (whether they were purchased in the IPO or thereafter in the open
market) or (ii) initially issued to certain parties in connection with the IPO that have been transferred to any person other than permitted transferees;
“SEC” are to the U.S. Securities and Exchange Commission;
“Securities Act” are to the Securities Act of 1933, as amended;
“SWAG” are to Software Acquisition Group Inc. II;
“Urgently” are to Urgent.ly Inc., a Delaware corporation;
“warrants” are to the 8,624,976 public warrants and 5,200,000 private placement warrants governed by the Warrant Agreement;
“Warrant Agreement” are to the Amended & Restated Warrant Agreement, dated as of August 13, 2021, by and among SWAG, Otonomo, Continental Stock
Transfer & Trust Company and American Stock Transfer & Trust Company; and
“Warrant Amendment” are to the amendment to the Warrant
Agreement permitting the Company to require that each outstanding warrant be converted into 0.01503 Ordinary Shares, which is a ratio 10% less than the exchange ratio applicable to the Offer.
vi
The Offer and Consent Solicitation
This summary provides a brief overview of the key aspects of the Offer and Consent Solicitation. Because it is only a summary,
it does not contain all of the detailed information contained elsewhere in this Prospectus/Offer to Exchange or in the documents included as exhibits to the registration statement that contains this Prospectus/Offer to Exchange.
Accordingly, you are urged to carefully review this Prospectus/Offer to Exchange in its entirety (including all documents filed as exhibits to the registration statement that contains this Prospectus/Offer to Exchange, which exhibits
may be obtained by following the procedures set forth herein in the section entitled “Where You Can Find More Information”).
Summary of the Offer and Consent Solicitation
| The Company |
We are a leading one‑stop shop for mobility data. Otonomo fuels a data ecosystem of OEMs, fleets and service providers spanning the transportation, mobility and automotive
industries. Our platform securely processes data globally from vehicles licensed on the platform and mobility demand data from multimodal sources, then reshapes and enriches it to accelerate time to market for new services
that improve the mobility and transportation experience. We provide deeper visibility and actionable insights to empower strategic data‑driven decisions – taking the guesswork out of mobility and transportation planning,
deployment and operations.
|
As part of our proprietary data platform, we have developed a robust suite of SaaS offerings that provide both OEMs and service providers with
additional capabilities, and that incorporate vertically specific applications to meet different privacy, regulation, storage, visualization and data insight needs.
Privacy by design and neutrality are at the core of our platform, which enables compliance with regulations such as the General Data Protection
Regulation 2016/679 (“GDPR”), California Consumer Privacy Act (“CCPA”), and other vehicle specific regulations, such as the European Union (“EU”) requirement/directive that OEMs share connected car data with third parties or the
Massachusetts’ Right to Repair Act allowing access to vehicle data for maintenance and repair purposes.
We generate the majority of our revenue from subscription fees from customers accessing the Company’s enterprise cloud computing services (“SaaS
subscriptions”).
Our customers typically enter into contractual arrangements with terms up to three‑years.
Our go‑to‑market strategy is focused on expanding its access to data through partnering with OEMs, fleets and other data providers, acquiring new
customers and driving continued use of our platform for existing customers.
We pursue strategic partnerships with OEMs, fleets and other data providers through a dedicated team segmented by geographical regions. We focus
our selling efforts on organizations of various sizes, within specific customer segments, and licenses access to our platform through a direct sales force which is geographically separated. Our platform is used globally by
organizations of all sizes across a broad range of industries. In 2022, we had 107 total customers, which was an increase from 55 total customers in 2021.
| Corporate Contact Information | We were incorporated in Israel on December 8, 2015 under the Israeli Companies Law, 5759 1999, and our principal executive office is located at 16 Abba Eban Blvd., Herzliya Pituach 467256, Israel. Our legal and commercial name is Otonomo Technologies Ltd. We are registered with the Israeli Registrar of Companies and our registration number is 51 53528-13. |
Our website address is www.otonomo.io, and our telephone number is +(972) 52 432 9955. Information contained on, or that can be accessed through, our website does not constitute a part
of this Prospectus/Offer to Exchange or the registration statement of which it forms a part, and you should not consider information contained on our website in deciding whether to tender
warrants in exchange for our Ordinary Shares. We have included our website address in this Prospectus/Offer to Exchange solely for informational purposes. The SEC maintains an Internet site
that contains reports, proxy and information statements, and other information regarding issuers, such as we, that file electronically, with the SEC at www.sec.gov. Our agent for service of process in the United States is Cogency
Global Inc., 122 East 42nd Street, 18th Floor, New York, NY 10168.
| Warrants that qualify for the Offer |
As of August 18, 2023, we had outstanding an aggregate of 13,824,976 warrants, including 8,624,976 public warrants and 5,200,000 private placement warrants. The warrants are governed by the
Warrant Agreement, and each warrant is exercisable for
one fifteenth (1/15th) of one Ordinary Share at a price of $172.50 per share, subject to adjustments pursuant to the Warrant
Agreement. Pursuant to the Offer, we are offering up to an aggregate of 230,877 Ordinary Shares in exchange for all of the outstanding warrants.
|
Under the Warrant Agreement, we may call the public warrants for redemption at our option:
| • |
in whole and not in part;
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| • |
at a price of $0.01 per warrant;
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upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and
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if, and only if, the reported last sale price of the Ordinary Shares equals or exceeds $270.00 per share (as adjusted for stock splits, stock dividends,
reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period commencing on August 13, 2021 and ending on the third trading day prior to the date on which we send the notice of
redemption to the warrant holders.
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The private placement warrants will not be redeemable by us so long as they are held by Software Acquisition Holdings II LLC (the “Sponsor”) or its permitted transferees. The Sponsor,
or its permitted transferees, has the option to exercise the private placement warrants on a cashless basis. Except as described below, the private placement warrants have terms and provisions that are identical to those of the public
warrants, including as to exercise price, exercisability and exercise period. If the private placement warrants are held by someone other than the Sponsor or its permitted transferees, the private placement warrants will be redeemable
by us and exercisable by such holders on the same basis as the public warrants. If holders of the private placement warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering their warrants
for that number of Ordinary Shares equal to the quotient obtained by dividing (x) the product of the number of Ordinary Shares underlying the warrants, multiplied by the difference between the exercise price of the warrants and the
“fair market value” (defined below) over the exercise price of the warrants by (y) the fair market value.
2
The “fair market value” means the average reported last sale price of the Ordinary Shares for the 10 trading days ending on the third
trading day prior to the date on which the notice of warrant exercise is sent to the Warrant Agent.
The warrants expire on August 13, 2026, subject to certain terms and conditions.
| Market Price of Our Shares |
Our Ordinary Shares and public warrants are listed on Nasdaq under the symbols “OTMO” and “OTMOW,” respectively. See “Market Information, Dividends and Related Shareholder Matters.” |
| The Offer | Each warrant holder who tenders warrants for exchange pursuant to the Offer will receive 0.0167 Ordinary Shares for each warrant so exchanged. No fractional Ordinary Shares will be issued pursuant to the Offer. In lieu of issuing fractional shares, any holder of warrants who would otherwise have been entitled to receive a fractional share pursuant to the Offer will, after aggregating all such fractional shares of such holder, receive one additional whole Ordinary Share in lieu of such fractional shares. Our obligation to complete the Offer is not conditioned on the receipt of a minimum number of tendered warrants. |
Holders of the warrants tendered for exchange will not have to pay any of the exercise price for the tendered warrants in order to receive
Ordinary Shares in the exchange.
The Ordinary Shares issued in exchange for the tendered warrants will be unrestricted and freely transferable, as long as the holder is
not an affiliate of Otonomo and was not an affiliate of Otonomo within the three months prior to the proposed transfer of such shares.
The Offer is being made to all warrant holders except those holders who reside in states or other jurisdictions where an offer,
solicitation or sale would be unlawful (or would require further action in order to comply with applicable securities laws).
| The Consent Solicitation | In order to tender warrants in the Offer and Consent Solicitation, holders are required to consent (by executing the Letter of Transmittal and Consent or requesting that their broker or nominee consent on their behalf) to an amendment to the Warrant Agreement governing the warrants as set forth in the Warrant Amendment attached as Annex A to this Prospectus/Offer to Exchange. If adopted, the Warrant Amendment would permit the Company to require that all warrants that are outstanding upon the closing of the Offer be converted into Ordinary Shares at a ratio of 0.01503 Ordinary Shares per warrant (a ratio which is 10% less than the exchange ratio applicable to the Offer). Upon such conversion, no warrants will remain outstanding.0 |
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|
Purpose of the Offer and
Consent Solicitation
|
The purpose of the Offer and Consent Solicitation is to attempt to simplify our capital structure and reduce the potentially dilutive impact of the warrants. See “The Offer and Consent Solicitation — Background and Purpose of the Offer and Consent Solicitation.” |
| Offer Period |
The Offer and Consent Solicitation will expire on the Expiration Date, which is 11:59 p.m., Eastern Time, on August 22, 2023, or such later time and date to
which we may extend. All warrants tendered for exchange pursuant to the Offer and Consent Solicitation, and all required related paperwork, must be received by the exchange agent by the Expiration Date, as described in this
Prospectus/Offer to Exchange.
|
If the Offer Period is extended, we will make a public announcement of such extension by no later than 9:00 a.m., Eastern Time, on the next business day following
the Expiration Date as in effect immediately prior to such extension.
We may withdraw the Offer and Consent Solicitation only if the conditions of the Offer and Consent Solicitation are not satisfied or waived prior to the Expiration
Date. Promptly upon any such withdrawal, we will return the tendered warrants (and the related consent to the Warrant Amendment will be revoked). We will announce our decision to withdraw the Offer and Consent Solicitation by
disseminating notice by public announcement or otherwise as permitted by applicable law. See the section entitled “The Offer and Consent Solicitation — General Terms — Offer Period.”
| Amendments to the Offer and Consent Solicitation | We reserve the right at any time or from time to time to amend the Offer and Consent Solicitation, including by increasing or (if the conditions to the Offer are not satisfied) decreasing the exchange ratio of Ordinary Shares issued for every warrant exchanged or by changing the terms of the Warrant Amendment. If we make a material change in the terms of the Offer and Consent Solicitation or the information concerning the Offer and Consent Solicitation, or if we waive a material condition of the Offer and Consent Solicitation, we will extend the Offer and Consent Solicitation to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(3) under the Exchange Act. See the section entitled “The Offer and Consent Solicitation — General Terms — Amendments to the Offer and Consent Solicitation.” |
|
Conditions to the Offer and
Consent Solicitation
|
The Offer is subject to customary conditions, including the effectiveness of the registration statement of which this Prospectus/Offer to Exchange forms a part and the absence of any action or proceeding, statute, rule, regulation or order that would challenge or restrict the making or completion of the Offer. The Offer is not conditioned upon the receipt of a minimum number of tendered warrants. However, the Consent Solicitation is conditioned upon receiving the consent of holders of a majority of the number of the then outstanding public warrants (which is the minimum number required to amend the Warrant Agreement). We may waive some of the conditions to the Offer. See the section entitled “The Offer and Consent Solicitation — General Terms — Conditions to the Offer and Consent Solicitation.” |
We will not complete the Offer and Consent Solicitation unless and until the registration statement described above is effective. If the registration statement is
not effective at the Expiration Date, we may, in our discretion, extend, suspend or cancel the Offer and Consent Solicitation, and will inform warrant holders of such event.
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|
Withdrawal Rights
|
If you tender your warrants for exchange and change your mind, you may withdraw your tendered warrants (and thereby automatically revoke the related consent to the Warrant Amendment) at any time prior to the Expiration Date, as described in greater detail in the section entitled “The Offer and Consent Solicitation — Procedure for Tendering Warrants for Exchange and Consenting to the Warrant Amendment — Withdrawal Rights.” If the Offer Period is extended, you may withdraw your tendered warrants (and thereby automatically revoke the related consent to the Warrant Amendment) at any time until the extended Expiration Date. In addition, tendered warrants that are not accepted by us for exchange by August 22, 2023 may thereafter be withdrawn by you until such time as the warrants are accepted by us for exchange. |
|
Participation by Directors,
Officers and Affiliates
|
An entity affiliated with one of our directors holds warrants and may participate in the Offer. None of our directors, executive officers or affiliates are required to participate in the Offer. See “The Offer and Consent Solicitation — Interests of Directors, Executive Officers and Others.” |
|
Federal and State
Regulatory Approvals
|
Other than compliance with the applicable federal and state securities laws, no federal or state regulatory requirements must be complied with and no federal or state regulatory approvals must be obtained in connection with the Offer and Consent Solicitation. |
|
Absence of Appraisal or
Dissenters’ Rights
|
Holders of warrants do not have any appraisal or dissenters’ rights under applicable law in connection with the Offer and Consent Solicitation. |
|
U.S. Federal Income Tax Consequences of the Offer
to U.S. Holders
|
For a U.S. Holder (as defined in the section entitled “Material U.S. Federal Income Tax Considerations”) of warrants who participates in the Offer, we intend to treat such U.S. Holder’s exchange of warrants for our Ordinary Shares in the Offer as a “recapitalization” within the meaning of Section 368(a)(1)(E) of the Code pursuant to which, subject to the discussion of the PFIC rules below under “Material U.S. Federal Income Tax Considerations — Passive Foreign Investment Company Rules — Effect of PFIC Rules on Offer and Warrant Amendment”) (i) such U.S. Holder should not recognize any gain or loss on the exchange of warrants for Ordinary Shares, (ii) such U.S. Holder’s aggregate tax basis in our Ordinary Shares received in the exchange should equal the U.S. Holder’s aggregate tax basis in such U.S. Holder’s warrants surrendered in the exchange, and (iii) such U.S. Holder’s holding period for our Ordinary Shares received in the exchange should include the U.S. Holder’s holding period for the surrendered warrants. However, because there is a lack of direct legal authority regarding the U.S. federal income tax consequences of the exchange of warrants for our Ordinary Shares, there can be no assurance in this regard and alternative characterizations are possible by the IRS or a court, including ones that would require U.S. Holders to recognize taxable income. |
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Although not free from doubt, if the Warrant Amendment is adopted, we intend to treat all warrants not exchanged for Ordinary Shares in
the Offer as having been exchanged for “new” warrants pursuant to the Warrant Amendment and to treat such deemed exchange as a “recapitalization” within the meaning of Section 368(a)(1)(E) of the Code, pursuant to which, subject to
the discussion of the PFIC rules below under “Material U.S. Federal Income Tax Considerations — Passive Foreign Investment Company Rules — Effect of PFIC
Rules on Offer and Warrant Amendment”) (i) a U.S. Holder of such warrants should not recognize any gain or loss on the deemed exchange of warrants for “new” warrants, (ii) such U.S. Holder’s aggregate tax basis in the “new”
warrants deemed to be received in the exchange should equal the U.S. Holder’s aggregate tax basis in such U.S. Holder’s existing warrants surrendered in the exchange, and (iii) such U.S. Holder’s holding period for the “new” warrants
deemed to be received in the exchange should include the U.S. Holder’s holding period for the surrendered warrants. Because there is a lack of direct legal authority regarding the U.S. federal income tax consequences of the deemed
exchange of warrants for “new” warrants pursuant to the Warrant Amendment, there can be no assurance in this regard and alternative characterizations by the IRS or a court are possible, including ones that would require U.S. Holders
to recognize taxable income.
Neither we, nor any of our advisors or affiliates, make any representation or provide any assurance regarding the tax consequences of the
Offer or the Warrant Amendment, including whether a U.S. Holder’s exchange of warrants for Ordinary Shares in the Offer or deemed exchange of warrants for “new” warrants if the Warrant Amendment is adopted, as applicable, qualifies as
a “recapitalization” under Section 368(a)(1)(E) of the Code or constitutes a value-for-value exchange for U.S. federal income tax purposes. Each U.S. Holder of warrants is urged to consult its tax advisors with respect to the
qualification of an exchange of warrants for Ordinary Shares in the Offer or deemed exchange of warrants for “new” warrants if the Warrant Amendment is adopted, as applicable, as a “recapitalization” under Section 368(a)(1)(E) of the
Code and the tax consequences to them if such exchange or deemed exchange does not so qualify.
See “Material U.S. Federal Income Tax Considerations”
for more detailed information.
|
Israeli Tax Consequences
of the Offer
|
See “Material Israeli Tax Considerations.” |
| No Recommendation | None of our board of directors, our management, our affiliates the dealer manager, the exchange agent, the information agent or any other person makes any recommendation on whether you should tender or refrain from tendering all or any portion of your warrants or consent to the Warrant Amendment, and no one has been authorized by any of them to make such a recommendation. |
| Risk Factors |
You should consider all the information contained in this Prospectus/Offer to Exchange in deciding whether or not to participate in the Offer and Consent Solicitation. In
particular, you should consider the risk factors described in the section entitled “Risk Factors” beginning on page 14 of this Prospectus/Offer to Exchange. Such risks include, but are
not limited to, the following:
|
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Risks Related to Our Warrants and the Offer and Consent Solicitation
| • |
The Warrant Amendment, if adopted, will allow us to require that all outstanding warrants be converted into Ordinary Shares at a ratio 10% lower than the exchange ratio
applicable to the Offer.
|
| • |
The exchange of warrants for Ordinary Shares will increase the number of shares eligible for future resale and result in dilution to our shareholders.
|
| • |
We have not obtained a third-party determination that the Offer or the Consent Solicitation is fair to warrant holders.
|
| • |
There is no guarantee that tendering your warrants in the Offer will put you in a better future economic position.
|
| • |
The number of Ordinary Shares offered in the Offer is fixed and will not be adjusted (subject to any amendment by us of the Offer and Consent Solicitation). The market
price of our Ordinary Shares may fluctuate, and the market price of our Ordinary Shares when we deliver our Ordinary Shares in exchange for your warrants could be less than the market price at the time you tender your
warrants.
|
| • |
We may redeem your unexpired public warrants that are not exchanged prior to their exercise at a time that is disadvantageous to you, thereby making your warrants
worthless.
|
| • |
The warrants that are not exchanged may have reduced liquidity and may be delisted by Nasdaq.
|
| • |
The Israel Tax Authority (the “ITA”) may implement Israeli tax withholding requirements in a different manner than contemplated herein.
|
Risks Related to the Merger
| • |
The pending Merger may not be completed on the currently contemplated timeline or terms, or at all.
|
| • |
The pendency of the Merger could adversely affect our business and operations.
|
| • |
Otonomo will incur significant transaction and transition costs in connection with the Merger.
|
| • |
If the Merger is not completed, the price of our Ordinary Shares may fluctuate significantly.
|
Risks Related to Otonomo’s Operations
| • |
Otonomo’s Cost Reduction Initiative and associated organizational changes may not adequately reduce its operating costs or improve operating margins, may lead to
additional workforce attrition, and may cause operational disruptions.
|
7
| • |
Otonomo has a limited operating history with a history of losses and expects to incur significant expenses and continuing losses for the foreseeable future.
|
| • |
In 2022, two customers accounted for a material portion of Otonomo’s revenues and, therefore, the loss of those customers could materially and adversely affect its
business, results of operations and financial condition.
|
| • |
Otonomo’s business depends on expanding its base of data and insurance services consumers and consumers increasing their use of its services, and its inability to expand
its base of consumers or any loss of consumers or decline in their use of its services could materially and adversely affect its business, results of operations and financial condition.
|
| • |
Otonomo relies on the ability to access data from external providers at reasonable terms and prices. Otonomo’s data providers might restrict its use of, or refuse to
license, data, which could lead to its inability to access certain data or provide certain services and, as a result, materially and adversely affect its operating results and financial condition.
|
| • |
If Otonomo is unable to expand its relationships with existing OEMs and vehicle fleet operators and add new OEMs and vehicle fleet operators and other data providers, its
business, results of operations and financial condition could be adversely affected.
|
| • |
If Otonomo is unable to maintain The Floow’s existing relationships with insurance companies or establish new relationships with insurance companies, its business, results
of operations, financial condition and growth potential could be adversely affected.
|
| • |
Changes in the practices of insurance companies in the markets in which Otonomo provides its telematics services could adversely affect its business, results of
operations, financial condition and growth potential.
|
| • |
There is significant competition in the markets in which Otonomo offers its telematics services and products and its business, results of operations, financial condition
and growth potential could be adversely affected if it fails to compete successfully.
|
Risks Related to Otonomo Being a Public Company
| • |
A market for Otonomo’s securities may not be sustained, which would adversely affect the liquidity and price of its securities.
|
Risks Related to Ownership of Otonomo’s Securities
| • |
If Otonomo fails to comply with the continued listing requirements of Nasdaq, Otonomo would face possible delisting, which would result in a limited public market for its
shares.
|
| • |
The market price and trading volume of the Ordinary Shares may be volatile.
|
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|
Exchange Agent
|
The depositary and exchange agent for the Offer and Consent Solicitation is: |
Equiniti Trust Company, LLC
Operations Center
Operations Center
Attn: Reorganization Department
Brooklyn, New York 11219
E-mail: ReorgVoluntary@equiniti.com
Brooklyn, New York 11219
E-mail: ReorgVoluntary@equiniti.com
|
Dealer Manager
|
The dealer manager for the Offer and Consent Solicitation is: |
Piper Sandler & Co.
800 Nicollet Mall
Minneapolis, Minnesota 55402
Direct: Jay Hershey
Email: Jay.Hershey@psc.com
(800) 754-1172 or (612) 303-0177
|
Additional Information
|
We recommend that our warrant holders review the registration statement on Form F-4, of which this Prospectus/Offer to Exchange forms a part, including the exhibits that we have filed with the SEC in connection with the Offer and Consent Solicitation and our other materials that we have filed with the SEC before making a decision on whether to tender for exchange in the Offer and consent to the Warrant Amendment. All reports and other documents we have filed with the SEC can be accessed electronically on the SEC’s website at www.sec.gov. |
You should direct (1) questions about the terms of the Offer and Consent Solicitation to the dealer manager at its addresses and telephone number listed above and (2) questions about
the exchange procedures and requests for additional copies of this Prospectus/Offer to Exchange, the Letter of Transmittal and Consent or Notice of Guaranteed Delivery to the information agent at the below address and phone number:
D.F. King & Co., Inc.
48 Wall Street, 22nd Floor
New York, New York 10005
Bank and Brokers Call Collect: (212) 269-5550
All Others, Please Call Toll-Free: (877) 783-5524
Email: OTMO@dfking.com
Implications of Being an Emerging Growth Company and a Foreign Private Issuer
Emerging Growth Company
We are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). We are an emerging growth company until the earliest to occur of
(i) the last day of the fiscal year (A) following the fifth anniversary of the first sale of our common equity securities pursuant to an effective registration statement under the Exchange Act or the Securities Act, (B) in which we
have total annual gross revenue of at least $1.235 billion, or (C) in which we are deemed to be a large accelerated filer, which means the market value of our outstanding Ordinary Shares that are held by non-affiliates exceeds
$700 million as of the prior June 30, and (ii) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three year period.
As an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other publicly traded entities that are not
emerging growth companies. These exemptions include: (i) not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002; (ii) not being required to comply with any
requirement that may be adopted by the Public Company Accounting Oversight Board (“PCAOB”), regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the
financial statements (i.e., an auditor discussion and analysis); (iii) not being required to submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay,” “say-on-frequency,” and “say-on-golden
parachutes”; and (iv) not being required to disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to
median employee compensation.
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In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This
allows an emerging growth company to delay the adoption of these accounting standards until they would otherwise apply to private companies.
We have elected not to opt out of, and instead to take advantage of, such extended transition period, which means that when a standard is issued or revised and it has different
application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial
statements with certain other public companies difficult or impossible because of the potential differences in accounting standards used.
Foreign Private Issuer
We report under the Exchange Act as a non-U.S. company with foreign private issuer status. Even after we no longer qualify as an emerging growth company, as long as we qualify as a
foreign private issuer under the Exchange Act, we are exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including: (i) the sections of the Exchange Act regulating the
solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; (ii) the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading
activities and liability for insiders who profit from trades made in a short period of time; and (iii) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial
and other specific information, although we are subject to Israeli laws and regulations with regard to certain of these matters and intend to furnish comparable quarterly information on Form 6-K. In
addition, foreign private issuers are not required to file their annual report on Form 20-F until 120 days after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual
report on Form 10-K within 75 days after the end of each fiscal year and U.S. domestic issuers that are large accelerated filers are required to file their annual report on Form 10-K within 60 days after the end of each fiscal year.
Foreign private issuers are also exempt from Regulation FD, which is intended to prevent issuers from making selective disclosures of material information.
Foreign private issuers are also exempt from certain more stringent executive compensation disclosure rules. Thus, even if we no longer qualify as an emerging growth company, but remain
a foreign private issuer, we continue to be exempt from the more stringent compensation and other disclosures required of companies that are neither an emerging growth company nor a foreign private issuer.
Recent Developments
Workforce Reduction
During the fourth quarter of 2022, Otonomo initiated a workforce reduction of a significant number of its employees as Otonomo adjusted its budget for 2023 to
focus on managing expenses and preserving operating capital to achieve its growth and profitability goals. In connection with the workforce reduction, Otonomo sunsetted its artificial intelligence (AI) platform that transforms
behavioral data into actionable insights (“MI services”) in December 2022 and sunsetted its Connected Vehicle Data services (“Connected Vehicle Data services”), which included services relating to multi-layered data, standardized
and blurred to remove identifiers, in April 2023. The workforce reduction started in the fourth quarter of 2022 and is expected to be completed during the first half of 2023. In connection with the reduction in workforce, the
Company has released its Chief Marketing Officer and Chief Revenue Officer, effective as of March 31, 2023.
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Entry into Agreement and Plan of Merger
On February 9, 2023, Otonomo, Urgently and Merger Sub entered into the Merger Agreement. Pursuant to the Merger Agreement and subject to the satisfaction or waiver
of the terms and conditions specified therein, Merger Sub will merge with and into Otonomo, with Otonomo continuing as the surviving company and a wholly owned subsidiary of Urgently (the “Merger”).
At the effective time of the Merger (the “Effective Time”), each Ordinary Share issued and outstanding immediately prior to the Effective Time (other than certain
excluded or cancelled shares) will be deemed transferred under Israeli law to Urgently in exchange for the right to receive a number of shares of common stock of Urgently (“Urgently common stock”) equal to the Exchange Ratio (as
defined in the Merger Agreement). No fractional shares of Urgently common stock will be issued in the Merger. If a holder of Ordinary Shares was entitled to receive a fraction of a share of Urgently common stock, then the number of
shares of Urgently common stock issuable to such holder will be rounded up or down to the nearest whole share of Urgently common stock as provided for in the Merger Agreement. The merger consideration will not include any cash
consideration, except as set forth in the Merger Agreement. Immediately following closing of the Merger, the parties expect that Otonomo’s equityholders 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 Merger Agreement.
The Exchange Ratio will be calculated based on (i) Urgently’s valuation, (ii) Urgently’s fully-diluted share count, (iii) Otonomo’s net cash and (iv) Otonomo’s
fully-diluted share count.
Urgently’s valuation will be calculated as (a) $271.0 million plus (b) Urgently’s cash as of the business day prior
to closing of the Merger minus (c) Urgently’s transaction expenses minus (d) Urgently’s outstanding indebtedness minus (e) certain taxes of Urgently.
Urgently’s fully-diluted share count will include (a) all shares of Urgently common stock outstanding immediately prior to the Effective Time (including shares of
Urgently common stock underlying convertible notes and warrants that will convert or be exercised prior to or in connection with closing of the Merger), plus (b) shares of Urgently
common stock underlying all outstanding stock options, warrants and other convertible or derivative securities of the Urgently (provided, however, that it will not include shares underlying convertible notes that do not convert prior
to closing of the Merger, the aggregate principal amount of which is included in the calculation of Urgently’s indebtedness).
Otonomo’s net cash will be calculated as (a) Otonomo’s cash as of March 31, 2023 minus (b) Otonomo’s transaction
expenses minus (c) Otonomo’s outstanding indebtedness minus (d) certain taxes of Otonomo minus (e)
Otonomo’s cash burn in excess of $2.55 million per month during the period between April 1, 2023 and closing of the Merger.
Otonomo’s fully-diluted share count will include (a) all outstanding Ordinary Shares immediately prior to the Effective Time plus (b)
shares underlying all Otonomo RSU Awards (as defined below), warrants, promised but ungranted equity awards and other convertible or derivative securities of Otonomo outstanding immediately prior to the Effective Time.
At the Effective Time, each restricted stock unit award relating to Ordinary Shares that is outstanding immediately prior to the Effective Time, other than those
that vest by reason of the consummation of the Merger (an “Otonomo RSU Award”), will be assumed by Urgently. Each Otonomo RSU Award will be automatically converted into a restricted stock unit award relating to shares of Urgently
common stock (an “Adjusted RSU Award”) and will have the same terms and conditions as applied to the Otonomo RSU Award immediately prior to the Effective Time. The Adjusted RSU Awards will settle in the number of shares of Urgently
common stock equal to the product obtained by multiplying (i) the number of Ordinary Shares subject to the Otonomo RSU Award immediately prior to the Effective Time by (ii) the Exchange Ratio.
Additionally, at the Effective Time, each Otonomo Stock Option that has an exercise price per share that is less than the Fair Market Value (as defined in the
applicable Otonomo equity plan) of one Ordinary Share as of the third business day prior the anticipated date of closing of the Merger (such date the “Option Measurement Date” and such options, the “In-the-Money Options”) will be
accelerated, such that all In-the-Money Options will be vested and exercisable as of not later than the Option Measurement Date.
11
Each In-the-Money Option that then remains outstanding and unexercised will be deemed to be exercised in full (on a “net exercise” cashless basis) and cancelled, and the holder of such
In-the-Money Option will receive a number of fully vested Ordinary Shares (rounded down to the next whole share) equal to the quotient obtained by dividing (a) the product of (i) the excess, if any, of the Fair Market Value of one
Ordinary Share as of the Option Measurement Date over the per share exercise price of such In-the-Money Option, multiplied by (ii) the number of Ordinary Shares subject to such In-the-Money Option, by (b) the Fair Market Value of one
Ordinary Share as of the Option Measurement Date. Each Otonomo Stock Option that then remains outstanding and unexercised and that is not an In-the-Money Option will automatically be cancelled without any payment being made in respect
thereof.
Each warrant that is outstanding and unexercised immediately prior to the Effective Time will be assumed by the Urgently and automatically converted into a warrant to acquire shares of
Urgently common stock (an “Assumed Warrant”), which will have the same terms and conditions as applied to the warrant immediately prior to the Effective Time. The number of shares of Urgently common stock subject to each Assumed
Warrant will be equal to the product obtained by multiplying (i) the number of Ordinary Shares subject to the warrant immediately prior to the Effective Time by (ii) the Exchange Ratio, and the exercise price per share of Urgently
common stock will be equal to the quotient of (x) the exercise price per Ordinary Share immediately prior to the Effective Time divided by (y) the Exchange Ratio.
The consummation of the Merger is subject to customary closing conditions, including: (i) the adoption and approval of the Merger Agreement, the Merger and the other transactions
contemplated by the Merger Agreement by the affirmative vote (or action by written consent) of the majority of the votes cast by the holders of Ordinary Shares that are present in person or by proxy at a quorate general meeting (the
“Otonomo Shareholder Approval”) and the obtainment of the approval of Urgently’s amended and restated certificate of incorporation and bylaws by the irrevocable affirmative written consent of the holders of a majority of Urgently’s
outstanding shares (the “Urgently Stockholder Consent”), (ii) the absence of any adverse law or order promulgated, entered, enforced, enacted or issued by any governmental entity that prohibits, the consummation of the Merger or the
other transactions contemplated by the Merger Agreement, (iii) the shares of Urgently common stock and Assumed Warrants to be issued in the Merger being approved for listing on the Nasdaq, subject to official notice of issuance, (iv)
the SEC having declared effective the Registration Statement on Form S-4 of Urgently, which will contain the proxy statement/prospectus of the parties in connection with the Merger, (v) any consents, filings or approvals required
under any foreign direct investment laws for the consummation of the transactions contemplated by the Merger Agreement having been obtained, (vi) the Secretary of State for Business, Energy & Industrial Strategy of the United
Kingdom having either (A) confirmed that no further action will be taken in relation to the Merger, (B) made a final order in relation to the Merger pursuant to section 26(1)(a) of the National Security and Investment Act 2021 (United
Kingdom) (the “NSIA 2021”) allowing the Merger to proceed, or (C) provided a written notice to the Urgently or Otonomo that the NSIA 2021 does not apply to the Merger, (vii) the absence of any pending action by any governmental entity
that challenges or seeks to enjoin the Merger or the other transactions contemplated by the Merger Agreement, (viii) subject to certain materiality exceptions, the accuracy of certain representations and warranties of each of Urgently
and Merger Sub, on the hand, and Otonomo, on the other hand, contained in the Merger Agreement and the compliance by each party with the covenants contained therein, (ix) the absence of a material adverse effect with respect to each
of Urgently and Otonomo, (x) Urgently complying with the provisions of the Merger Agreement relating to the appointment of the Otonomo Representatives (as defined in the Merger Agreement) to the board of directors of Urgently, (xi)
the fulfillment of the required conditions set forth in Section 323 of the Israeli Companies Law – 5759-1999 and at least fifty days having elapsed after the filing of the merger proposal with the Israeli Registrar of Companies and
expiration of the thirty-day waiting period following the Otonomo Shareholder Approval as referenced in (i) above, (xii) the receipt by Urgently of a no-action letter (the “ISA No-Action Letter”) from the Israel Securities Authority
(the “ISA”), (xiii) either a 104H tax ruling or 104H interim tax ruling and a withholding tax ruling from the ITA having been obtained and (xiv) the Exchange Ratio having been finally determined in accordance with the Merger
Agreement. On April 18, 2023, the Secretary of State for Business, Energy & Industrial Strategy of the United Kingdom provided written notice confirming that no further action will be taken in relation to the Merger. The ISA
No-Action Letter was obtained on June 13, 2023.
The consummation of the Merger is not conditioned upon the completion of the Offer or the Consent Solicitation.
A copy of the Merger Agreement is filed as Exhibit 2.2 to this Prospectus/Offer to Exchange. For more information regarding the Merger, we refer you to our Report of Foreign Private
Issuer on Form 6-K filed with the SEC on February 10, 2023.
12
The following selected unaudited pro forma condensed combined financial information was prepared using the acquisition method of accounting with Urgently as the accounting acquirer. The
selected unaudited pro forma condensed combined balance sheet data assumes the Merger of Urgently and Otonomo took place on March 31, 2023. The selected unaudited pro forma condensed combined statements of operations data assumes the Merger
of Urgently and Otonomo took place on January 1, 2022.
The following selected unaudited pro forma condensed combined financial data is for illustrative purposes only and is not necessarily indicative of the combined financial position or results
of operations of future periods or the results that actually would have been realized had the entities been a single entity during these periods. Future results may vary significantly from the results reflected because of various factors,
including those discussed in the section entitled “Risk Factors.” The following selected unaudited pro forma condensed combined financial data should be read in conjunction with the sections entitled
“Summary — Entry into Agreement and Plan of Merger” and “Unaudited Pro Forma Condensed Combined Financial Information” and related notes included in this
Prospectus/Offer to Exchange.
|
Selected Unaudited Pro Forma Condensed Combined Statement of Operations Data (in thousands, except per share amounts)
|
Three months ended
March 31, 2023 |
Year ended
December 31, 2022 |
||||||
|
Revenues
|
$
|
51,417
|
$
|
194,581
|
||||
|
Net loss
|
(32,000
|
)
|
(144,336
|
)
|
||||
|
Net loss per share attributable to common stockholders:
|
||||||||
|
Basic and Diluted
|
(4.80
|
)
|
(23.24
|
)
|
||||
|
Selected Unaudited Pro Forma Condensed Combined Balance Sheet Data (in thousands)
|
As of
March 31, 2023 |
|||
|
Total assets
|
$
|
197,452
|
||
|
Total liabilities
|
124,181
|
|||
|
Total stockholder’s equity
|
73,271
|
|||
13
We operate in a market environment that is difficult to predict and that involves significant risks, many of which are beyond our control. You should
consider and read carefully all of the risks and uncertainties described below, as well as other information included in this Prospectus/Offer to Exchange, including our consolidated financial
statements and related notes included elsewhere in this Prospectus/Offer to Exchange, before exchanging your warrants for our Ordinary Shares. If any of the events, contingencies, circumstances or
conditions described in the following risks actually occur, our business, financial condition or results of operations could be seriously harmed. Additional risks and uncertainties not presently known to us or that we do not currently
believe are important to an investor, if they materialize, also may adversely affect us.
Risks Related to Our Warrants and the Offer and Consent Solicitation
The Warrant Amendment, if adopted, will allow us to require that all outstanding warrants be converted into Ordinary Shares at a ratio 10% lower than
the exchange ratio applicable to the Offer.
If we complete the Offer and Consent Solicitation and obtain the requisite approval of the Warrant Amendment by holders of the warrants, the Company will have the right
to require holders of all warrants that remain outstanding upon the closing of the Offer to exchange each of their warrants for 0.01503 Ordinary Shares. This represents a ratio of Ordinary Shares per warrant that is 10% than the exchange
ratio applicable to the Offer. Although we intend to require an exchange of all remaining outstanding warrants as a result of the approval of the Warrant Amendment, we would not be required to effect such an exchange and may defer doing
so, if ever, until most economically advantageous to us.
Pursuant to the terms of the Warrant Agreement, the consent of holders of a majority of the then outstanding public warrants is required to approve the Warrant Amendment.
Therefore, one of the conditions to the adoption of the Warrant Amendment is the receipt of the consent of holders of greater than 50% of the number of the then outstanding public warrants.
If adopted, we currently intend to require the conversion of all outstanding warrants to Ordinary Shares as provided in the Warrant Amendment, which would result in the
holders of any remaining outstanding warrants receiving approximately 0.00167 fewer Ordinary Shares per warrant than if they had tendered their warrants in the Offer.
The exchange of warrants for Ordinary Shares will increase the number of shares eligible for future resale and result in dilution to our shareholders.
Our warrants may be exchanged for Ordinary Shares pursuant to the Offer, which will increase the number of shares eligible for future resale in the public market and
result in dilution to our shareholders, although there can be no assurance that such warrant exchange will be completed or that all of the holders of the warrants will elect to participate in the Offer. Any warrants remaining outstanding
after the exchange likely will be exercised only if the $172.50 per share exercise price is below the market price of our Ordinary Shares. We also intend to require an exchange of all remaining outstanding warrants assuming the approval
of the Warrant Amendment. To the extent such warrants are exchanged following the approval of the Warrant Amendment or exercised, additional Ordinary Shares will be issued. These issuances of Ordinary Shares will result in dilution to our
shareholders and increase the number of shares eligible for resale in the public market.
We have not obtained a third-party determination that the Offer or the Consent Solicitation is fair to warrant holders.
None of us, our affiliates, the dealer manager, the exchange agent or the information agent makes any recommendation as to whether you should exchange some or all of your
warrants or consent to the Warrant Amendment. We have not retained, and do not intend to retain, any unaffiliated representative to act on behalf of the warrant holders for purposes of negotiating the Offer or Consent Solicitation or
preparing a report concerning the fairness of the Offer or the Consent Solicitation. You must make your own independent decision regarding your participation in the Offer and Consent Solicitation.
14
There is no guarantee that tendering your warrants in the Offer will put you in a better future economic position.
We can give no assurance as to the market price of our Ordinary Shares in the future. If you choose to tender some or all of your warrants in the Offer, future events may
cause an increase in the market price of our Ordinary Shares and warrants, which may result in a lower value realized by participating in the Offer than you might have realized if you did not exchange your warrants. Similarly, if you do not
tender your warrants in the Offer, there can be no assurance that you can sell your warrants (or exercise them for Ordinary Shares) in the future at a higher value than would have been obtained by participating in the Offer. In addition, if
the Warrant Amendment is adopted, and you choose not to tender some or all of your warrants in the Offer, you may receive fewer shares than if you had tendered your warrants in the Offer. You should consult your own individual tax and/or
financial advisor for assistance on how this may affect your individual situation.
The number of Ordinary Shares offered in the Offer is fixed and will not be adjusted (subject to any amendment by us of the Offer and Consent
Solicitation). The market price of our Ordinary Shares may fluctuate, and the market price of our Ordinary Shares when we deliver our Ordinary Shares in exchange for your warrants could be less than the market price at the time you tender
your warrants.
The number of Ordinary Shares for each warrant accepted for exchange is fixed (subject to any amendment by us of the Offer and Consent Solicitation) at the number of
shares specified on the cover of this Prospectus/Offer to Exchange and will fluctuate in value if there is any increase or decrease in the market price of our Ordinary Shares or the warrants after the date of this Prospectus/Offer to
Exchange. Therefore, the market price of our Ordinary Shares when we deliver Ordinary Shares in exchange for your warrants could be less than the market price of the public warrants at the time you tender your warrants. The market price of
our Ordinary Shares could continue to fluctuate and be subject to volatility during the period of time between when we accept warrants for exchange in the Offer and when we deliver Ordinary Shares in exchange for warrants, or during any
extension of the Offer Period.
We may redeem your unexpired public warrants that are not exchanged prior to their exercise at a time that is disadvantageous to you, thereby making
your warrants worthless.
We will have the ability to redeem outstanding warrants (excluding any private placement warrants held by the Sponsor and its affiliates or its permitted transferees) at
any time after they become exercisable and prior to their expiration, at $0.01 per warrant, provided that the last reported sales price (or the closing bid price of our Ordinary Shares in the event Ordinary Shares are not traded on any
specific trading day) of our Ordinary Shares equals or exceeds $270.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-day period ending three
trading days before we send notice of the redemption to the warrant holders, provided that on the date we give notice of redemption and during the entire period thereafter until the time we redeem the warrants, we have an effective
registration statement under the Securities Act covering our Ordinary Shares issuable upon exercise of the warrants and current prospectus relating to them is available. If and when the warrants that are not exchanged become redeemable by
us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding warrants could force a warrant holder: (i)
to exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or
(iii) to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, will be substantially less than the market value of your warrants.
The warrants that are not exchanged may have reduced liquidity and may be delisted by Nasdaq.
If the Warrant Amendment is adopted, it is unlikely that any warrants will remain outstanding following the completion of the Offer and Consent Solicitation. See “— The Warrant Amendment, if adopted, will allow us to require that all outstanding warrants be converted into Ordinary Shares at a ratio 10% lower than the exchange ratio applicable to the Offer.” However,
if any unexchanged warrants remain outstanding, then the ability to sell such warrants may become more limited due to the reduction in the number of warrants outstanding upon completion of the Offer and Consent Solicitation. Additionally,
if we fail to satisfy Nasdaq’s listing requirements as a result of the exchange, such as by having fewer than 300 round lot holders, then Nasdaq may delist our public warrants from trading on its exchange, which could limit public warrant
holders’ ability to make transactions in our public warrants and further impair the market for unexchanged warrants. If Nasdaq delists our public warrants from trading on its exchange and we are not able to list our securities on another
national securities exchange, our public warrants could be quoted on an over-the-counter market. A more limited trading market might adversely affect the liquidity, market price and price volatility of unexchanged warrants. If there
continues to be a market for our unexchanged warrants, these securities may trade at a discount to the price at which the securities would trade if the number outstanding were not reduced, depending on the market for similar securities and
other factors.
15
The ITA may implement Israeli tax withholding requirements in a different manner than contemplated herein.
The identification of warrant holders and determination of their tax status for purposes of implementing Israeli tax withholding
requirements as described under “Material Israeli Tax Considerations — Israeli Tax Withholding” below, shall be done in reliance on
the Residency Declarations and/or Valid Tax Certificates provided by such warrant holders, as applicable. Nevertheless, the ITA may determine that the
Israeli tax withholding obligations of Otonomo are not fully satisfied by the withholding procedures described below. In such case, Otonomo may be exposed to liability in the event of a final
determination that there is any shortfall in withholding amounts, and warrant holders may be exposed to liability as further described under “Material Israeli Tax
Considerations — Israeli Tax Withholding” below.
Risks Related to the Merger
The pending Merger may not be completed on the currently contemplated timeline or terms, or at all.
Either we or Urgently may terminate the Merger Agreement in specified circumstances. If the Merger is not completed, our business, results of operations and financial
condition could be materially and adversely affected and, without realizing any of the benefits of having completed the Merger, we will be subject to a number of risks, including the following:
| • |
the market price of our securities could decline;
|
| • |
we will be required to pay our costs relating to the Merger, such as legal, accounting, financial advisor, filing and integration costs that have already
been incurred or will continue to be incurred until the closing of the Merger, whether or not the Merger is completed;
|
| • |
if the Merger Agreement is terminated and our board of directors seeks another merger, our shareholders cannot be certain that we will be able to find
another party willing to enter into a transaction as attractive to us as the Merger;
|
| • |
we could be subject to litigation related to any failure to complete Merger or related to any enforcement proceeding commenced against us to perform our
obligations under the Merger Agreement;
|
| • |
we will not realize the benefit of the time and resources, financial and otherwise, committed by our management to matters relating to Merger that could
have been devoted to pursuing other beneficial opportunities; and
|
| • |
we may experience reputational harm due to the adverse perception of any failure to successfully complete the Merger or negative reactions from the
financial markets or from our suppliers, customers, employees and other commercial relationships; and
|
| • |
any of these risks could adversely affect our business, results of operations and financial condition. Similarly, delays in the completion of the Merger
could, among other things, result in additional transaction costs, loss of revenue or other negative effects associated with delay and uncertainty about completion of the Merger and could adversely affect our business, results of
operations and financial condition.
|
The pendency of the Merger could adversely affect our business and operations.
In connection with the pending Merger, some parties with commercial relationships with us may delay or defer decisions, which could adversely affect our revenues, earnings,
funds from operations, cash flows and expenses, regardless of whether the Merger is completed. Similarly, our current and prospective employees may experience uncertainty about their future roles with the combined company following the
Merger, which may adversely affect our ability to attract and retain key personnel during the pendency of the Merger.
16
We will not have any right to make damage claims against Urgently or its stockholders for the breach of any representation, warranty
or covenant made by Urgently in the Merger Agreement.
In general, neither Urgently nor Otonomo is obligated to complete the Merger if there is a Material Adverse Effect (as that term is defined in the Merger Agreement)
affecting the other party between February 9, 2023, the date of the Merger Agreement, and the closing of the Merger.
The Merger Agreement provides that all of the representations, warranties and covenants of the parties contained therein shall not survive the closing of the Merger,
except for those covenants that by their terms contemplate performance after the Effective Time.
Accordingly, there are no remedies available to the parties with respect to any breach of the representations, warranties, covenants or agreements of the parties to the
Merger Agreement after the Effective Time, except for covenants that by their terms contemplate performance after the Effective Time.
Otonomo will incur significant transaction and transition costs in connection with the Merger.
Otonomo has incurred and expects to incur significant, non-recurring costs in connection with consummating the Merger. Otonomo may also incur additional costs to retain
key employees. All fees and expenses incurred in connection with the Merger Agreement and the transactions contemplated thereby, including the fees and disbursements of counsel, financial advisors and accountants, shall be paid, whether or
not the Merger is consummated, by the party incurring such fees or expenses.
Otonomo or Urgently may waive one or more of the conditions to the Merger.
Otonomo or Urgently may agree to waive, in whole or in part, some of the conditions to each party’s obligations to complete the Merger, to the extent permitted by
applicable law. For example, it is a condition to Otonomo’s obligations to close the Merger that certain of Urgently’s representations and warranties are true and correct in all respects as of the Closing Date (as defined in the Merger
Agreement), except to the extent the failure of such representations and warranties of Otonomo to be so true and correct, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect with
respect to Urgently. However, if Otonomo’s board determines that it is in the best interest of the shareholders of Otonomo to waive any such breach, then Otonomo’s board may elect to waive that condition and consummate the Merger.
If the Merger is not completed, the price of our Ordinary Shares may fluctuate significantly.
The market price of our Ordinary Shares is subject to significant fluctuations. During the 12-month period ended February 10, 2023, the closing sales price of the
Ordinary Shares on Nasdaq ranged from a high of $31.5 on February 11, 2022 to a low of $3.45 on October 14, 2022. The market price of Ordinary Shares will likely be volatile based on whether shareholders and other investors believe that
Otonomo can complete the Merger and whether the Merger is beneficial to shareholders and investors. The volatility of the market price of our Ordinary Shares is exacerbated by low trading volume.
17
During the pendency of the Merger, Otonomo may not be able to enter into a business combination with another party on more favorable
terms because of restrictions in the Merger Agreement, which could adversely affect its business prospects.
Covenants in the Merger Agreement impede the ability of Urgently and Otonomo to make acquisitions during the pendency of the Merger, subject to specified exceptions. As a
result, if the Merger is not completed, the parties may be at a disadvantage to their competitors during that period. In addition, while the Merger Agreement is in effect, Otonomo is generally prohibited from soliciting, initiating,
knowingly encouraging, or taking any other action designed to, or which would reasonably be expected to facilitate a proposal, offer or indication of interest with respect to certain transactions involving a third party, including a merger,
sale of assets or other business combination (or would reasonably be expected to lead to such a proposal), subject to specified exceptions. Any such transactions could be favorable to such party’s stockholders, but the parties may be unable
to pursue them.
Lawsuits may be filed against Otonomo and Urgently and the members of their respective boards in connection with the Merger in the
future. An adverse ruling in any such lawsuit could result in an injunction preventing the completion of the Merger and/or substantial costs to Otonomo.
Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into acquisition, merger or other business
combination agreements like the Merger Agreement. Even if such a lawsuit is without merit, defending against these claims can result in substantial costs and divert management time and resources. An adverse judgment could result in monetary
damages, which could have a negative impact on Otonomo’s liquidity and financial condition.
One of the conditions to the closing of the Merger is that no injunction by any governmental entity having jurisdiction over Otonomo or Urgently has been entered and
continues to be in effect and no law has been adopted, in either case that restrains, enjoins or otherwise prohibits the closing of the Merger. Consequently, if a plaintiff is successful in obtaining an injunction prohibiting completion of
the merger, that injunction may delay or prevent the Merger from being completed within the expected time frame or at all, which may adversely affect Otonomo’s, business, financial position and results of operations. There can be no
assurance that any of the defendants will be successful in the outcome of any potential future lawsuits. The defense or settlement of any lawsuit or claim that remains unresolved at the time the Merger is completed may adversely affect
Otonomo’s business, financial condition, results of operations and cash flows.
Certain provisions of the Merger Agreement may discourage third parties from submitting competing proposals, including proposals that
may be superior to the transactions contemplated by the Merger Agreement.
The terms of the Merger Agreement prohibit Otonomo from soliciting competing proposals or cooperating with persons making unsolicited takeover proposals, except in
limited circumstances. In addition, if the Merger is not completed, Otonomo is subject to the following risks:
| • |
if the Merger Agreement is terminated under certain specified circumstances, Otonomo will be required to pay Urgently a termination fee of up to $3.0 million;
|
| • |
the price of the Ordinary Shares may decline and could fluctuate significantly; and
|
| • |
the incurrence of costs related to the Merger, such as financial advisor, legal and accounting fees, a majority of which must be paid even if the Merger is not completed.
|
18
Risks Related to Otonomo’s Operations
Otonomo has a limited operating history and may be unable to achieve or sustain profitability or accurately predict its future results.
Otonomo has been focused on developing a platform to provide vehicle data services since its formation in 2015. Otonomo’s limited operating history makes it difficult to
evaluate its current business and future prospects and may increase the risk of your investment. Further, because Otonomo has limited historical financial data and operates in a rapidly evolving market, any predictions about its future
revenue and expenses may not be as accurate as they would be if it had a longer operating history or operated in a more predictable market.
Otonomo’s losses in prior periods and accumulated deficit reflect the investments Otonomo has made to date to grow its business. Otonomo expects to have significant
operating expenses in the future to further support and grow its business, including expanding the range of integrations between its platform and third‑party applications and platforms, expanding its direct and indirect sales capabilities,
investing in its infrastructure and R&D and integrating businesses it acquires. As a result, Otonomo may be unable to achieve or sustain profitability or accurately predict its future results. You should not consider Otonomo’s recent
growth in revenue as indicative of its future performance. Otonomo cannot assure you that it will achieve profitability in the future, or that if Otonomo does become profitable, that it will sustain profitability.
If Otonomo fails to address the risks and difficulties that it faces, including those described elsewhere in this “Risk Factors”
section, its business, financial condition and results of operations could be adversely affected. Otonomo has encountered in the past, and will encounter in the future, risks and uncertainties frequently experienced by growing companies
with limited operating histories in rapidly changing industries. If Otonomo’s assumptions regarding these risks and uncertainties, which it uses to plan and operate its business, are incorrect or change, or if Otonomo does not address these
risks successfully, its results of operations could differ materially from its expectations and its business, financial condition and results of operations could be adversely affected.
Otonomo’s Cost Reduction Initiative and associated organizational changes may not adequately reduce its operating costs or improve
operating margins, may lead to additional workforce attrition, and may cause operational disruptions.
During the fourth quarter of 2022, Otonomo commenced the Cost Reduction Initiative, which included a workforce reduction of a significant number of employees in
connection with the Company adjusting its budget for 2023 to focus on managing expenses and preserving operating capital to achieve its growth and profitability goals. In connection with the Cost Reduction Initiative, the Company sunsetted
its MI services in December 2022 and sunsetted its Connected Vehicle Data services in April 2023.
The Cost Reduction Initiative was completed in the second quarter of 2023. As a result of completing the Cost Reduction Initiative, Otonomo anticipates that it will
recognize substantial cost savings. The estimates of the charges and expenditures that Otonomo expects to incur in connection with the workforce reduction, and timing thereof, are subject to a number of assumptions, including local law
requirements in various jurisdictions, and Otonomo may incur costs that are greater than it currently expects in connection with the Cost Reduction Initiative.
The Cost Reduction Initiative may yield unintended consequences and costs (financial or otherwise), such as the loss of institutional knowledge and expertise, employee
attrition beyond Otonomo’s intended reduction in force, a reduction in morale among its remaining employees, greater-than-anticipated costs incurred in connection with implementing the restructuring process, and the risk that Otonomo may
not achieve the benefits from the Cost Reduction Initiative to the extent or as quickly as it anticipates, all of which may have a material adverse effect on its results of operations or financial condition. These restructuring initiatives
could place substantial demands on its management and employees, which could lead to the diversion of its management’s and employees’ attention from other business priorities. In addition, while certain positions have been eliminated in
connection with the Cost Reduction Initiative, certain functions necessary to Otonomo’s reduced operations remain, and Otonomo may be unsuccessful in distributing the duties and obligations of departed employees among its remaining
employees or external service providers, which could result in disruptions to its operations. Otonomo may also discover that the workforce reduction and other restructuring efforts will make it difficult for it to pursue new opportunities
and initiatives and require it to hire qualified replacement personnel, which may require it to incur additional and unanticipated costs and expenses.
19
Otonomo has a limited operating history with a history of losses and expects to incur significant expenses and continuing losses for the foreseeable
future.
Otonomo has incurred net losses on an annual basis since its inception. Otonomo incurred net losses of approximately $131.1 million and $30.9 million for the years ended
December 31, 2022 and 2021, respectively. Otonomo believes that it will continue to incur operating and net losses each quarter for the foreseeable future.
Otonomo expects to continue to invest its efforts and resources into, among other things:
| • |
Otonomo’s engineering team, the development of new products, features and functionality and enhancements in its Connected Fleet platform and the Otonomo Connected Insurance Tech
Business;
|
| • |
research and development; and
|
| • |
general administration costs, including legal costs, accounting costs, and other expenses related to being a public company.
|
These investments may not result in an increased revenue or growth of Otonomo’s business. Otonomo also expects that its revenue growth rate will decline over time.
Accordingly, Otonomo may not be able to generate sufficient revenue to offset its expected cost increases and achieve and sustain profitability. If Otonomo fails to achieve and sustain profitability, then its business, results of operations
and financial condition could be adversely affected.
If Otonomo does not develop enhancements to its services and introduce new services that achieve market acceptance, its growth, business, results of
operations and financial condition could be adversely affected.
Otonomo’s ability to attract new consumers and increase revenue from existing consumers depends in part on its ability to enhance and improve its existing services,
increase adoption and usage of its services, and introduce new services. The success of any enhancements or new services depends on several factors, including timely completion, adequate quality testing, actual performance quality, market
accepted pricing levels and overall market acceptance.
Enhancements, such as additional technology features, and new services, such as software licenses and data services, that Otonomo develops may not be introduced in a
timely or cost effective manner, or at all due to the Cost Reduction Initiative, and thus may not achieve the broad market acceptance necessary to generate significant revenue. Furthermore, Otonomo’s ability to increase the usage of its
services depends, in part, on the development of new uses for its services, which may be delayed or not occur. Otonomo’s ability to generate usage of additional services by its consumers may also require increasingly sophisticated and more
costly sales efforts and result in a longer sales cycle. If Otonomo is unable to successfully enhance its existing services to meet evolving consumer requirements, increase adoption and usage of its services, develop new services, or if its
efforts to increase the usage of its services are more expensive than it expects, then its business, results of operations and financial condition would be adversely affected.
If Otonomo is unsuccessful at investing in growth opportunities, its business could be materially and adversely affected.
Due to the Cost Reduction Initiative, Otonomo reduced its investment in growth opportunities, including the development of new technologies and services to meet its
clients’ needs. If Otonomo is unable to develop new technologies and services, consumers do not use or license its new technologies and services, its new technologies and services do not work as intended or there are delays in the
availability or adoption of its new technologies and services, then Otonomo may not be able to grow its business or growth may occur slower than anticipated. Additionally, although Otonomo expects continued growth in the vehicle data
market, such growth may occur more slowly or not at all, and Otonomo may not benefit from its investments.
Any of the foregoing could have a material and adverse effect on its operating results and financial condition.
20
Otonomo may need to raise additional funds in the future in order to execute its business plan and these funds may not be available to it when it
needs them. If Otonomo cannot raise additional funds when it needs them, its business, prospects, financial condition and operating results could be negatively affected.
Otonomo may require additional capital in the future in order to respond to technological advancements, competitive dynamics or technologies, consumer demands, business
opportunities, challenges, acquisitions or unforeseen circumstances. Otonomo may also determine to raise equity or debt financing for other reasons. For example, in order to further enhance business relationships with current or potential
customers or partners, Otonomo may issue equity or equity‑linked securities to such current or potential customers or partners.
Otonomo may not be able to timely secure additional debt or equity financing on favorable terms, or at all. If Otonomo raises additional funds through the issuance of
equity or convertible debt or other equity‑linked securities, Otonomo’s existing shareholders could experience significant dilution. In addition, any debt financing Otonomo obtains in the future, whether in the form of a credit facility or
otherwise, could involve restrictive covenants relating to its capital raising activities and other financial and operational matters, which may make it more difficult for it to obtain additional capital and to pursue business
opportunities, including potential acquisitions. If Otonomo is unable to obtain adequate financing or financing on terms satisfactory to it when it requires it, its ability to continue to grow or support its business and to respond to
business challenges could be significantly limited. In addition, because Otonomo’s decision to issue debt or equity in the future will depend on market conditions and other factors beyond its control, it cannot predict or estimate the
amount, timing, nature or success of its future capital raising efforts.
Otonomo relies, in part, on partnerships to grow its business. The partnerships may not produce the expected financial or operating results it
expects. In addition, if Otonomo is unable to enter into partnerships or successfully maintain them, its growth may be adversely impacted.
Historically, Otonomo has relied, in part, on a variety of partnerships covering different focus areas and data to grow its business. The majority of the partnerships
allow Otonomo to provide data or data services as part of services provided by the partners, thereby increasing its customer base without the need to address the customers directly.
Any partnerships Otonomo enters into may not be on favorable terms, and the expected benefits and growth from these partnerships may not materialize as planned. Otonomo
may have difficulty assimilating new partnerships and their services, technologies, IT systems and personnel into its operations. IT and data security profiles of partners may not meet its technological standards and may take longer to
integrate and remediate than planned. This may result in significantly greater transaction and integration costs for future partnerships than Otonomo has experienced historically, or it could mean that it will not pursue certain
partnerships where the costs of integration and remediation are too significant. These difficulties could disrupt its ongoing business, increase its expenses and adversely affect its operating results and financial condition.
Despite Otonomo’s past experience, opportunities to grow its business through partnerships may not be available to it in the future.
In 2022, two customers accounted for a material portion of Otonomo’s revenues and, therefore, the loss of those customers could materially and
adversely affect its business, results of operations and financial condition.
The Auto Club Group and DL Insurance Services Limited accounted for approximately 16% and 12%, respectively, of Otonomo’s revenue in 2022. The loss of these customers could
result in a significant reduction of Otonomo’s anticipated revenues, which could materially and adversely affect its business, results of operations and financial condition.
21
Otonomo’s business depends on expanding its base of data and insurance services consumers and consumers increasing their use of its services, and its
inability to expand its base of consumers or any loss of consumers or decline in their use of its services could materially and adversely affect its business, results of operations and financial condition.
Otonomo’s ability to grow and generate revenue growth depends, in part, on its ability to expand its base of consumers and maintain and grow its relationships with
existing consumers and to have them increase their usage of its platform. If Otonomo is not successful in attracting new consumers or its existing consumers do not increase their use of its services, then its revenue growth may decline, and
its results of operations may be harmed. Data consumers are charged based on the usage of its services. Many of Otonomo’s data consumers do not have long‑term contractual financial commitments to it and, therefore, most of its data
consumers may reduce or cease their use of its services at any time without penalty or termination charges. Insurance service consumer arrangements normally include committed fees as well as elements of uncommitted usage-based fees.
Consumers may terminate or reduce their use of Otonomo’s services for any number of reasons, including if they are not satisfied with its services, the value proposition of its services or its ability to meet their needs and expectations.
Otonomo cannot accurately predict consumers’ usage levels and its inability to attract new consumers or the loss of consumers or reductions in their usage levels of its services may each have a negative impact on its business, results of
operations and financial condition and may slow its growth in the future if customers are not satisfied with its products, the value proposition of its products or its ability to meet their needs and expectations. If a significant number of
consumers cease using, or reduce their usage of its services, then Otonomo may be required to spend significantly more on sales and marketing than it currently plans to spend in order to maintain or increase revenue from consumers. Such
additional sales and marketing expenditures could adversely affect its business, results of operations and financial condition.
If Otonomo fails to adapt and respond effectively to rapidly changing technology, evolving industry standards, changing regulations, and changing
customer needs, requirements or preferences, its products may become less competitive.
The market for mobility technology in general, and vehicle data, is subject to rapid changes, evolving industry standards, changing regulations, as well as changing
customer needs, requirements, and preferences. The success of Otonomo’s business will depend, in part, on its ability to adapt and respond effectively to these changes on a timely basis. If Otonomo is unable to develop new services that
satisfy its consumers and provide enhancements and new features for its existing services that keep pace with rapid technological and industry change, its business, results of operations and financial condition could be adversely affected.
If new technologies emerge that are able to deliver competitive services at lower prices, more efficiently, more conveniently or more securely, such technologies could adversely impact Otonomo’s ability to compete effectively.
Otonomo’s platform must integrate with a variety of network, hardware, mobile and software platforms and technologies, and it needs to continuously modify and enhance its
services and platform to adapt to changes and innovation in these technologies. If data providers, partners or consumers adopt new software platforms or infrastructure, Otonomo may be required to develop new or enhanced versions of its
services to work with those new platforms or infrastructure. This development effort may require significant resources, which would adversely affect its business, results of operations and financial condition. Any failure of Otonomo’s
services and platform to operate effectively with evolving or new platforms and technologies could reduce the demand for its services. If Otonomo is unable to respond to these changes in a cost‑effective manner, its services may become less
marketable and less competitive or obsolete, and its business, results of operations and financial condition could be adversely affected.
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The market for Otonomo’s services and platform is new and unproven and may decline or experience limited growth and is dependent in part on consumers
continuing to adopt its platform and use its services.
Otonomo has been developing and providing a cloud based platform, through which it serves as a vehicle data marketplace, which enables car manufacturers, drivers and
service providers to be part of a connected ecosystem. This market is relatively new and unproven and is subject to a number of risks and uncertainties. Otonomo believes that its future success will significantly depend in large part on the
growth, if any, of this market. The utilization of a data marketplace to obtain data on vehicles, drivers and the environment is still relatively new, and consumers may not recognize the need for, or benefits of, its services and platform.
Moreover, if they do not recognize the need for and benefits of its services and platform, they may decide to adopt alternative services to satisfy some portion of their business needs. In order to grow its business and extend its market
position, Otonomo should focus on educating potential customers about the benefits of its services and platform, expanding the range of its services and bringing new technologies to market to increase market acceptance and use of its
platform. Otonomo’s ability to expand the market that its services and platform address depends upon a number of factors, including the cost, performance and perceived value associated with such services and platform. The market for
Otonomo’s services and platform could fail to grow significantly due to the Cost Reduction Initiative or otherwise or there could be a reduction in demand for its services as a result of a lack of acceptance, technological challenges,
competing services, decreases in spending by current and prospective customers, weakening economic conditions and other causes. If Otonomo’s market does not experience significant growth, or demand for its services decreases, then its
business, results of operations, and financial condition could be adversely affected.
Otonomo relies on the ability to access data from external providers at reasonable terms and prices. Otonomo’s data providers might restrict its use
of, or refuse to license, data, which could lead to its inability to access certain data or provide certain services and, as a result, materially and adversely affect its operating results and financial condition.
Otonomo relies extensively upon vehicle data from a variety of external providers to provide its services, including data from OEMs, vehicle fleet operators and mobile
devices. Otonomo’s data providers could increase restrictions on its use of such data, increase the price they charge it for data, or refuse altogether to license the data to it. In addition, during the term of any data supply contract,
providers may fail to adhere to Otonomo’s data quality control standards or fail to deliver data. Further, although no single individual data provider is material to its business, if a number of providers collectively representing a
significant amount of data that it uses for one or more of its services were to impose additional contractual restrictions on its use of or access to data, fail to adhere to its quality‑control standards, repeatedly fail to deliver data or
refuse to provide data, now or in the future, its ability to provide those services to its clients could be materially adversely impacted, which may harm its operating results and financial condition. In addition, if a number of providers
collectively representing a significant amount of data that it uses are no longer able or are unwilling to provide it with certain data, Otonomo may need to find alternative providers.
If Otonomo is unable to identify and contract with suitable alternative data providers and efficiently and effectively integrate these data sources into its service
offerings, it could experience service disruptions, increased costs, and reduced quality and availability of its services. Moreover, some of its data providers compete with it in certain service offerings, which may make it vulnerable to
unpredictable price increases from them and they may elect to stop providing data to it. Significant price increases could have a material adverse effect on its operating margins and its financial position, in particular if Otonomo is
unable to arrange for substitute replacement data suppliers on favorable economic terms. There can be no assurance that Otonomo would be able to obtain data from alternative suppliers if its current suppliers become unavailable. Loss of
such access or the availability of data in the future on commercially reasonable terms, or at all, may reduce the quality and availability of its services, which could have a material adverse effect on its business, financial condition, and
results of operations.
Some of its data suppliers face similar regulatory requirements as Otonomo does and, consequently, they may cease to be able to provide data to it or may substantially
increase the fees they charge it for this data, which may make it financially burdensome or impossible for it to acquire data that is necessary to offer services. Many consumer advocates, privacy advocates, and government regulators believe
that existing laws and regulations do not adequately protect privacy or ensure the accuracy of personal data. As a result, such advocates and regulators are seeking further restrictions on the dissemination or commercial use of personal
information to the public and private sectors, as well as contemplating requirements relative to data accuracy and the ability of consumers to opt to have their personal data removed from databases such as Otonomo’s. Any future laws,
regulations, or other restrictions limiting the dissemination or use of personal information may reduce the quality and availability of the data necessary for its products and services, which could have a material adverse effect on its
business, financial condition, and results of operations.
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If Otonomo is unable to expand its relationships with existing OEMs and vehicle fleet operators and add new OEMs and vehicle fleet operators and other
data providers, its business, results of operations and financial condition could be adversely affected.
Otonomo believes that its business depends in part upon developing and expanding strategic relationships with OEMs and vehicle fleet operators and other data providers.
OEMs and vehicle fleet operators provide much of the data it provides as part of its services. As demand grows for data‑driven products and services and customer groups join the ecosystem and expand their usage of external data, it will
need to be able to provide the data in order to meet increasing market needs.
If Otonomo fails to expand its relationships with existing OEMs and vehicle fleet operators or establish relationships with new OEMs and vehicle fleet operators and other
data providers in a timely and cost effective manner, or at all, it will be unable to grow its business and meet its customers’ needs, which would adversely affect its business, results of operations and financial condition.
Any failure to offer high quality user support may adversely affect Otonomo’s relationships with its consumers and prospective consumers, and
adversely affect its business, results of operations and financial condition.
Many of Otonomo’s customers depend on its customer support team to assist them in deploying its services effectively to help them to resolve post‑deployment issues
quickly, and to provide ongoing support. If Otonomo does not devote sufficient resources or are otherwise unsuccessful in assisting its consumers effectively, it could adversely affect its ability to retain existing consumers and could
prevent prospective consumers from adopting its services. Otonomo may be unable to respond quickly enough to accommodate short‑term increases in demand for customer support. Otonomo also may be unable to modify the nature, scope and
delivery of its customer support to compete with changes in the support services provided by its competitors. Increased demand for customer support, without corresponding revenue, could increase costs and adversely affect its business,
results of operations and financial condition. Otonomo’s revenues are highly dependent on its business reputation. Any failure to maintain high quality customer support, or a market perception that Otonomo does not maintain high quality
customer support, could erode customer trust and adversely affect its reputation, business, results of operations and financial condition.
Adverse conditions in the automotive industry or the global economy more generally could have adverse effects on Otonomo’s results of operations.
Otonomo’s business is directly affected by, and significantly dependent on, business cycles and other factors affecting the global automobile industry and global economy
generally. Automotive production and sales are highly cyclical and depend on general economic conditions and other factors, including consumer spending and preferences, changes in interest rates and credit availability, consumer confidence,
fuel costs, fuel availability, environmental impact, governmental incentives and regulatory requirements and political volatility, especially in energy‑producing countries and growth markets. In addition, automotive production and sales can
be affected by its automotive OEM customers’ ability to continue operating in response to challenging economic conditions and in response to regulatory requirements and other factors. The volume of automotive production in North America,
Europe and the rest of the world has fluctuated, sometimes significantly, from year to year.
Otonomo expects any such fluctuations to give rise to fluctuations in the demand for its products. Reductions in automotive sales could slow the increasing connectivity
of vehicles, as new vehicles have greater connectivity that older ones, and would slow the demand for data‑driven products and services. In addition, a reduction in the number of vehicles would reduce the potential number of data consumers
for its services. Any significant adverse change in automotive production and sales could have a material adverse effect on its business, results of operations and financial condition.
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The market in which Otonomo participates is intensely competitive, and if Otonomo does not compete effectively, its business, results of operations
and financial condition could be harmed.
The market for vehicle data is rapidly evolving and highly competitive, with relatively low barriers to entry in some areas. Otonomo’s future success will depend on its
ability to maintain its lead by continuing to develop and protect from infringement advanced technology in a timely manner and to stay ahead of existing and new competitors. Otonomo currently faces competition from a range of companies
seeking to establish and develop relationships with OEMs and other data providers. Otonomo’s competitors are also working to advance technology, performance and innovation in their development of new and improved solutions.
Otonomo’s direct competitors focus on data provision, services to manage and structure data and consent management. Otonomo’s indirect competitors include service
providers and personal use case companies, which focus on enabling services via APIs and connecting service providers with customers’ personally identifiable information (“PII”), as well as industry‑specific data and service providers for
location‑based services, fleet management and repair and maintenance. Additionally, technology companies, such as Google and Alibaba, and vehicle operating system providers, such as Huawei and Baidu, are potential competitors to its
platform, as are companies providing cloud computing platforms and APIs, such as Amazon Web Services and Microsoft. In addition, Otonomo faces potential competition from its vertically integrated data providers which may elect to directly
provide more data‑related services as part of their business.
The principal competitive factors in its market include completeness of offering, ease of integration and programmability, product features, platform scalability, and
performance and cost.
Some of Otonomo’s competitors and potential competitors are larger and have greater name recognition, longer operating histories, more established customer relationships,
larger budgets and significantly greater resources than it does. In addition, some have the operating flexibility to bundle competing products and services at little or no perceived incremental cost, including offering them at a lower price
as part of a larger sales transaction. As a result, Otonomo’s competitors may be able to respond more quickly and effectively than it can to new or changing opportunities, technologies, standards or customer requirements. These effects may
be magnified if Otonomo is unable to continue to pursue innovative solutions and offerings due to the Cost Reduction Initiative or otherwise.
With the introduction of new services and new market entrants, Otonomo expects competition to intensify in the future. Increased competition may result in pricing
pressure and reduced margins and may impede its ability to increase the sales of its products or cause it to lose market share, any of which will adversely affect its business, results of operations and financial condition.
Otonomo expects its results of operations to fluctuate on a quarterly and annual basis, which could cause the price of its securities to fluctuate or
decline.
Otonomo’s quarterly results of operations have fluctuated in the past and may vary significantly in the future. As such, historical comparisons of its operating results
may not be meaningful. Accordingly, the results of any one quarter should not be relied upon as an indication of future performance. Otonomo’s quarterly financial results may fluctuate as a result of a variety of factors, many of which are
outside of its control and may not fully reflect the underlying performance of its business. These fluctuations could adversely affect its ability to meet its expectations or those of securities analysts or investors. If Otonomo does not
meet these expectations for any period, the value of its business and its securities could decline significantly. Factors that may cause these quarterly fluctuations include, without limitation, those listed below:
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The timing of revenues generated in any quarter;
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Pricing changes Otonomo may adopt to drive market adoption or in response to competitive pressure;
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Otonomo’s ability to retain its existing customers and attract new customers;
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Otonomo’s ability to integrate acquired companies and businesses;
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Otonomo’s ability to develop, introduce and sell services and products in a timely manner that meet customer requirements;
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Disruptions in its sales channels or termination of its relationship with partners;
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Delays in customers’ purchasing cycles or deferments of customers’ purchases in anticipation of new services or updates from it or its competitors;
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Fluctuations in demand pressures for its products;
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The mix of services sold in any quarter;
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The timing and rate of broader market adoption of its data service platform;
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Market acceptance of its services and further technological advancements by its competitors and other market participants;
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Any change in the competitive dynamics of its markets, including consolidation of competitors, regulatory developments and new market entrants;
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Changes in the source, cost, availability of and regulations pertaining to materials it uses;
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Adverse litigation, judgments, settlements or other litigation‑related costs, or claims that may give rise to such costs;
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Foreign currency fluctuations, interest rates, inflation, recession risks and economic recovery timing; and
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General economic, industry and market conditions, including trade disputes.
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Changes in tax laws or exposure to additional income tax liabilities could affect Otonomo’s future profitability.
Factors that could materially affect its future, effective tax rates, include but are not limited to:
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Changes in tax laws or the regulatory environment;
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Changes in accounting and tax standards or practices;
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Changes in the composition of operating income by tax jurisdiction; and
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Otonomo’s operating results before taxes.
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Otonomo’s effective tax rates could be affected by operating losses in jurisdictions where no tax benefit can be recorded under U.S. GAAP, changes in the composition of
earnings in countries with differing tax rates, changes in deferred tax assets and liabilities, or changes in tax laws.
Changes in Otonomo’s product mix may impact its financial performance.
Otonomo’s financial performance can be affected by the mix of services it sells during a given period. If Otonomo’s sales include more of the lower gross margin services
than higher gross margin products, its results of operations and financial condition may be adversely affected. There can be no guarantees that it will be able to successfully alter its service mix so that Otonomo is selling more of its
high gross margin products.
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Otonomo is highly dependent on the services of its CEO and founder, Ben Volkow.
Otonomo is highly dependent on its CEO and founder, Ben Volkow. Mr. Volkow has acted as its Chief Executive Officer since its inception, and as such, is deeply involved
in all aspects of its business, including product development. The loss of Mr. Volkow would adversely affect its business because this could make it more difficult to, among other things, compete with other market participants, manage its
R&D activities and retain existing customers or cultivate new ones. Negative public perception of, or negative news related to, Mr. Volkow may adversely affect its brand, relationship with customers or standing in the industry.
Otonomo’s business depends on its ability to attract and retain highly skilled personnel and senior management.
Competition for highly‑skilled personnel is often intense, especially in Israel, where Otonomo’s principal office is located, and Otonomo may incur significant costs to
attract them. Otonomo may face challenges in attracting or retaining qualified personnel to fulfill its current or future needs. Otonomo has, from time to time, experienced, and Otonomo expects to continue to experience, difficulty in
hiring and retaining highly skilled employees with appropriate qualifications. As a result of the intense competition for qualified human resources, the technology market has also experienced, and may continue to experience, significant
wage inflation. Accordingly, Otonomo’s efforts to attract, retain and develop personnel may also result in significant additional expenses, which could adversely affect its profitability. Furthermore, job candidates and existing employees
often consider the value of the equity awards they receive in connection with their employment. If the perceived value of its equity or equity awards declines, it may adversely affect Otonomo’s ability to retain highly skilled employees.
During the fourth quarter of 2022, Otonomo authorized a workforce reduction (as part of its Cost Reduction Initiative) which resulted in a reduced headcount of approximately 135 employees worldwide. The workforce reduction may make it more
difficult to preserve Otonomo’s company culture and may negatively impact employee morale. Otonomo’s success depends in part on the attraction, retention and motivation of executive personnel critical to the business and its operations. If
Otonomo fails to attract new personnel or fails to retain and motivate its current personnel, it could face disruptions in its operations, strategic relationships, key information, expertise or know‑how and unanticipated recruitment and
onboarding costs, and its business and future growth prospects could be adversely affected.
Otonomo’s sales and operations in international markets expose it to operational, financial and regulatory risks.
A core component of Otonomo’s growth strategy is international expansion. While Otonomo has committed resources to expanding its international operations and sales
channels, these efforts may not be successful. International operations are subject to a number of other risks, including:
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Foreign currency exchange rate fluctuations; political and economic instability, international terrorism and anti‑American sentiment, particularly in emerging markets;
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Rising inflation in the economies in which Otonomo operates and its ability to control costs, including operating expenses;
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Potential for violations of anti‑corruption laws and regulations, such as those related to bribery and fraud;
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Preference for locally branded products, and laws and business practices favoring local competition;
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Potential consequences of, and uncertainty related to, the “Brexit” process in the United Kingdom, which could lead to additional expense and complexity in doing business there;
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Delayed revenue recognition;
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Less effective protection of intellectual property;
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Stringent regulation of the autonomous or other systems, or products using its products and rigorous consumer protection and product compliance regulations, including but not
limited to General Data Protection Regulation in the European Union, European competition law, the Restriction of Hazardous Substances directive, the Waste Electrical and Electronic Equipment directive and the European Ecodesign
directive that are costly to comply with, and may vary from country to country;
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Difficulties and costs of staffing and managing foreign operations;
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Import and export laws and the impact of tariffs; and
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Changes in local tax and customs duty laws or changes in the enforcement, application or interpretation of such laws.
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As a result of these and other factors, international expansion may be more difficult, take longer and not generate the results Otonomo anticipates, which could
negatively impact its growth and business.
Otonomo’s business is subject to the risks of earthquakes, fire, floods and other natural catastrophic events, global pandemics, and interruptions by
man‑made problems, such as network security breaches, computer viruses or terrorism. Material disruptions of its business or information systems resulting from these events could adversely affect its operating results.
A significant natural disaster, such as an earthquake, fire, flood or significant power outage or other similar events, such as infectious disease outbreaks or pandemic
events (such as the COVID-19 pandemic), could have an adverse effect on its business and operating results. In addition, natural disasters, acts of terrorism or war, including the ongoing invasion of Ukraine by Russia, could cause
disruptions in its remaining business operations, its or its customers’ or partners’ businesses, its data providers or the economy as a whole. Otonomo also relies on information technology systems to communicate among its workforce and with
third parties. Any disruption to its communications, whether caused by a natural disaster or by man‑made problems, such as power disruptions, could adversely affect its business. Otonomo does not have a formal disaster recovery plan or
policy in place and does not currently require that its suppliers’ partners have such plans or policies in place. To the extent that any such disruptions result in delays or cancellations of orders or impede its suppliers’ ability to timely
deliver product components, or the deployment of its products, its business, operating results and financial condition would be adversely affected.
Otonomo is exposed to fluctuations in currency exchange rates that could adversely affect its financial results.
Otonomo faces exposure to movements in currency exchange rates, which may cause its revenue and operating results to differ
materially from expectations. Fluctuations in the value of the U.S. dollar versus foreign currencies may impact its operating results when translated into U.S. dollars. Thus, its results of operations and cash flows are subject to
fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign currency exchange rates. As exchange rates vary, revenue, cost of revenue, operating expenses and other
operating results, when re-measured, may differ materially from expectations. In addition, its operating results are subject to fluctuation if its mix of U.S. and foreign currency denominated transactions and expenses change in the
future. Although Otonomo may apply certain strategies to mitigate foreign currency risk, these strategies might not eliminate its exposure to foreign exchange rate fluctuations and would involve costs and risks of their own, such as
ongoing management time and expertise, external costs to implement the strategies and potential accounting implications.
Breaches of Otonomo’s networks or systems, or those of its data providers or partners, could degrade its ability to conduct its business, compromise
the integrity of its products, platform and data, result in significant data losses and the theft of its intellectual property, damage its reputation, expose it to liability to third parties and require it to incur significant additional
costs to maintain the security of its networks and data.
Otonomo depends upon its IT systems to conduct virtually all of its business operations, ranging from its internal operations and research and development activities to
its marketing and sales efforts and communications with its customers and business partners. Individuals or entities may attempt to penetrate its network security, or that of its platform, and to cause harm to its business operations,
including by misappropriating proprietary information or that of its data suppliers, data consumers, partners and employees or to cause interruptions of its products and platform. In general, cyberattacks and other malicious internet‑based
activity continue to increase in frequency and magnitude, and cloud‑based companies have been targeted in the past and are likely to continue to be targeted in the future. In addition to threats from traditional computer hackers, malicious
code (such as malware, viruses, worms, and ransomware), employee theft or misuse, password spraying, phishing, credential stuffing, and denial‑of‑service attacks, Otonomo also faces threats from sophisticated organized crime, nation‑state,
and nation‑state supported actors who engage in attacks (including advanced persistent threat intrusions) that add to the risk to its systems (including those hosted on AWS or other cloud services), internal networks, its customers’ systems
and the information that they store and process.
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While Otonomo devotes significant financial and personnel resources to implement and maintain security measures, because the techniques used by such individuals or
entities to access, disrupt or sabotage devices, systems and networks change frequently and may not be recognized until launched against a target, Otonomo may be required to make further investments over time to protect data and
infrastructure as cybersecurity threats develop, evolve and grow more complex over time. Otonomo may also be unable to anticipate these techniques, and Otonomo may not become aware in a timely manner of security breaches, which could
exacerbate any damage it experiences. Additionally, Otonomo depends upon its employees and contractors to appropriately handle confidential and sensitive data, including customer data, and to deploy its IT resources in a safe and secure
manner that does not expose its network systems to security breaches or the loss of data. Any data security incidents, including internal malfeasance or inadvertent disclosures by its employees or a third party’s fraudulent inducement of
its employees to disclose information, unauthorized access or usage, introduction of a virus or similar breach or disruption of it or its service providers, such as AWS, could result in loss of confidential information, damage to its
reputation, erosion of customer trust, loss of customers, litigation, regulatory investigations, fines, penalties and other liabilities. Accordingly, if its cybersecurity measures or its service providers fail to protect against
unauthorized access, attacks (which may include sophisticated cyberattacks), or the mishandling of data by its employees and contractors, then its reputation, business, results of operations and financial condition could be adversely
affected. While Otonomo maintains errors, omissions, and cyber liability insurance policies covering certain security and privacy damages, it cannot be certain that its existing insurance coverage will continue to be available on acceptable
terms or will be available in sufficient amounts to cover the potentially significant losses that may result from a security incident or breach or that the insurer will not deny coverage as to any future claim.
Any disruption of service at the Cloud Service Providers that host Otonomo’s platform could harm its business.
Otonomo currently hosts its platform primarily using AWS, and, to a lesser extent, Microsoft Azure and Google Cloud, referred to as its Cloud Service Providers. Otonomo’s
continued growth depends on the ability of its customers to access its platform at any time and within an acceptable amount of time.
Although Otonomo has disaster recovery plans, including the use of multiple Cloud Service Provider locations, any incident affecting its Cloud Service Provider
infrastructure that may be caused by fire, flood, severe storm, earthquake or other natural disasters, cyber‑attacks, terrorist or other attacks, and other similar events beyond its control could negatively affect its platform and its
ability to deliver its services to its customers. A prolonged Cloud Service Provider disruption affecting its platform for any of the foregoing reasons would negatively impact its ability to serve its customers and could damage its
reputation with current and potential customers, expose it to liability, cause it to lose customers or otherwise harm its business. Otonomo may also incur significant costs for using alternative equipment or taking other actions in
preparation for, or in reaction to, events that damage the Cloud Service Providers it uses.
In the event that its Cloud Service Provider service agreements are terminated, or there is a lapse of service, Otonomo would experience interruptions in access to its
platform as well as significant delays and additional expense in arranging new facilities and services and/or re‑architecting its solutions for deployment on a different cloud infrastructure, which would adversely affect its business,
operating results and financial condition.
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Climate change and related environmental issues may have an adverse effect on Otonomo’s business, financial condition and operating results.
Climate change related events, such as increasing temperatures, rising sea levels and changes to patterns and intensity of wildfires, hurricanes, floods, other storms and
severe weather‑related events and natural disasters, may have an adverse effect on its business, financial condition and operating results. Otonomo recognizes that there are inherent climate related risks regardless of how and where it
conducts its operations. For example, a catastrophic natural disaster could negatively impact the locations of its customers and suppliers. Access to clean water and reliable energy in the communities where Otonomo conducts its operations
is critical to it. Accordingly, a natural disaster has the potential to disrupt its and its customers’ businesses and may cause it to experience work stoppages, project delays, financial losses and additional costs to resume operations,
including increased insurance costs or loss of cover, legal liability and reputational losses.
If Otonomo is unable to maintain The Floow’s existing relationships with insurance companies or establish new relationships with
insurance companies, its business, results of operations, financial condition and growth potential could be adversely affected.
Otonomo believes that the success of its business depends in part upon developing and expanding relationships with insurance companies. The Floow’s
revenue depends, in large part, on revenue associated with its data refinery platform and telematics services, each of which primarily comes from insurance company customers. Otonomo’s inability to maintain these existing relationships
with the Floow’s insurance company customers or establish new relationships with insurance companies could adversely affect its business, results of operations, financial condition and growth potential.
Changes in the practices of insurance companies in the markets in which Otonomo provides its telematics services could adversely
affect its business, results of operations, financial condition and growth potential.
The Floow’s business depends, in part, on the existing practices of insurance companies in the markets in which Otonomo provides The Floow’s data refinery platform and sell its telematics services. Among other items, Otonomo relies on insurance companies’ continued practice of:
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accepting vehicle location as a preferred security product;
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requiring or providing a premium discount for using location and recovery services and products; and
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mandating or encouraging the use of its telematics services, or similar services and products, for drivers.
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If any or all of these policies or practices change, revenues from The Floow’s data refinery platform and sales of its telematics services could
decline, which could adversely affect its business, results of operations, financial condition and growth potential.
Failure to effectively combine vehicle and mobile data from Otonomo and The Floow could adversely affect its growth potential.
Otonomo believes the combination of vehicle and mobile data from Otonomo and The Floow will be crucial to enabling innovative, usage-based
and behavioral-based insurance products and to move from “detect and repair” to “predict and prevent” models to create safer, greener and smarter driving experiences for policy holders; however, Otonomo may experience technical and
operational challenges in performing this data combination and/or the ultimate results may not be as predictive of risk as anticipated. In the event that Otonomo experiences these challenges or
the results are not as predictive as anticipated, Otonomo may not realize the full benefits Otonomo anticipates from the combination of vehicle and mobile data from Otonomo and The Floow and
its business and results of operations could be adversely affected.
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Insurance products are highly regulated in the United States and other countries in which Otonomo operates.
The markets for insurance products are highly affected by governmental regulation in the United States and in other countries in which Otonomo operates
and these regulations are subject to change. Failure to comply with applicable regulations and quality assurance guidelines, or increases in the costs associated with efforts to comply with such regulations and guidelines, could lead to
changes in its products and services, which could have a material adverse effect on its business, financial condition and results of operations.
There is significant competition in the markets in which Otonomo offers its
telematics services and products and its business, results of operations, financial condition and growth potential could be adversely affected if it fails to compete successfully.
The markets for its telematics services and products are highly competitive. Otonomo competes
primarily on the basis of the technological innovation, quality and price of its services and products. The telematics services market and the related telematics products market are extremely competitive due to the existence of a wide
variety of competing services and products and alternative technologies that offer various levels of personalized product and driver coaching capabilities, including global positioning systems, or GPS, satellite- or network-based
cellular systems and direction-finding homing technologies. Providers of competing services or products may extend their offerings to the locations in which Otonomo operates, or new competitors may enter the telematics services market.
Some of these competing products have greater brand recognition than its telematics products. Increased competition in the telematics services and products space could adversely affect its business, results of operations, financial
condition and growth potential.
Risks Related to Otonomo’s Intellectual Property
Otonomo may not be able to adequately protect or enforce its intellectual property rights or prevent unauthorized parties from copying or reverse
engineering its solutions. Otonomo’s efforts to protect and enforce its intellectual property rights and prevent third parties from violating its rights may be costly.
The success of Otonomo’s services and its business depends in part on its ability to obtain patents and other intellectual property rights and maintain adequate legal
protection for its products in the United States and other international jurisdictions. Otonomo relies on a combination of patent, copyright, service mark, and trade secret laws, as well as confidentiality procedures and contractual
restrictions, to establish and protect its proprietary rights, all of which provide only limited protection. Otonomo cannot assure you that any patents will be issued with respect to its currently pending patent applications, including in a
manner that gives it adequate defensive protection or competitive advantages, if at all, or that any of its patents will not be challenged, invalidated or circumvented. Otonomo has filed for patents in the United States and in certain
international jurisdictions, but such protections may not be available in all countries in which Otonomo operates or in which Otonomo seeks to enforce its intellectual property rights or may be difficult to enforce in practice. Otonomo
cannot be certain that the steps it has taken will prevent unauthorized use of its technology or the reverse engineering of its technology. Moreover, others may independently develop technologies that are competitive to it or infringe its
intellectual property.
Protecting against the unauthorized use of its intellectual property, products and other proprietary rights is expensive and can be difficult, particularly with respect
to international jurisdictions. Unauthorized parties may attempt to copy or reverse engineer its solutions or certain aspects of its solutions that are considered proprietary. Litigation may be necessary in the future to enforce or defend
its intellectual property rights, to prevent unauthorized parties from copying or reverse engineering its solutions, to determine the validity and scope of the proprietary rights of others or to block the importation of infringing products
into the U.S. Any such litigation, regardless of merit, could be costly, divert the attention of management and may not ultimately be resolved in its favor.
Effective patent, trademark, service mark, copyright and trade secret protection may not be available in every country in which its products are available and competitors
based in other countries may sell infringing products in one or more markets. An inability to adequately protect and enforce its intellectual property and other proprietary rights or an inability to prevent authorized parties from copying
or reverse engineering its smart vision solutions or certain aspects of its solutions that Otonomo considers proprietary could adversely affect its business, operating results, financial condition and prospects.
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In addition to patented technology, Otonomo relies on its unpatented proprietary technology, trade secrets, processes and know‑how.
Otonomo relies on proprietary information (such as trade secrets, know‑how and confidential information) to protect intellectual property that may not be patentable or
subject to copyright, trademark, trade dress or service mark protection, or that it believes is best protected by means that do not require public disclosure.
Otonomo generally seeks to protect this proprietary information by entering into confidentiality agreements, or consulting, services or employment agreements that contain
non‑disclosure and non‑use provisions with its employees, consultants, contractors and third parties. However, Otonomo may fail to enter into the necessary agreements, and even if entered into, these agreements may be breached or may
otherwise fail to prevent disclosure, third‑party infringement or misappropriation of its proprietary information, may be limited as to their term and may not provide an adequate remedy in the event of unauthorized disclosure or use of
proprietary information. Otonomo has limited control over the protection of trade secrets used by its current or future manufacturing partners and suppliers and could lose future trade secret protection if any unauthorized disclosure of
such information occurs. In addition, its proprietary information may otherwise become known or be independently developed by its competitors or other third parties. To the extent that Otonomo’s employees, consultants, contractors, advisors
and other third parties use intellectual property owned by others in their work for it, disputes may arise as to the rights in related or resulting know‑how and inventions. Costly and time‑consuming litigation could be necessary to enforce
and determine the scope of its proprietary rights, and failure to obtain or maintain protection for its proprietary information could adversely affect its competitive business position. Furthermore, laws regarding trade secret rights in
certain markets where Otonomo operates may afford limited or no protection to its trade secrets.
Otonomo also relies on physical and electronic security measures to protect its proprietary information, but it cannot provide assurance that these security measures will
not be breached or that these measures will provide adequate protection. There is a risk that third parties may obtain and improperly utilize its proprietary information to its competitive disadvantage. Otonomo may not be able to detect or
prevent the unauthorized use of such information or take appropriate and timely steps to enforce its intellectual property rights.
Third‑party claims that Otonomo is infringing intellectual property, whether successful or not, could subject it to costly and time‑consuming
litigation or expensive licenses, and its business could be adversely affected.
Although Otonomo has pending patents related to its products, a number of companies, both within and outside of the vehicle data service industry, hold other patents
covering systems and methods for processing vehicle requests. In addition to these patents, participants in this industry typically also protect their technology, especially embedded software, through copyrights and trade secrets. As a
result, there is frequent litigation based on allegations of infringement, misappropriation or other violations of intellectual property rights. Otonomo may receive, in the future, inquiries from other intellectual property holders and may
become subject to claims that it infringes their intellectual property rights, particularly as it expands its presence in the market. In addition, third parties may claim that the names and branding of its products infringe their trademark
rights in certain countries or territories. If such a claim were to prevail, Otonomo may be liable for damages, be forced to change the branding of its products in the affected territories, or may be required to pay royalties for a license
(if a license is available at all).
Otonomo currently has a number of agreements in effect pursuant to which it has agreed to defend, indemnify and hold harmless its customers, suppliers, and partners from
damages and costs which may arise from the infringement by its products of third‑party patents or other intellectual property rights. The scope of these indemnity obligations varies, but may, in some instances, include indemnification for
damages and expenses, including attorneys’ fees. Otonomo’s insurance may not cover all intellectual property infringement claims. A claim that its products infringe a third party’s intellectual property rights, even if without merit, could
adversely affect its relationships with its customers, may deter future customers from purchasing its products and could expose it to costly litigation and settlement expenses. Even if Otonomo is not a party to any litigation between a
customer and a third party relating to infringement by its products, an adverse outcome in any such litigation could make it more difficult for it to defend its products against intellectual property infringement claims in any subsequent
litigation in which Otonomo is a named party. Any of these results could adversely affect its brand and operating results.
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Otonomo’s defense of intellectual property rights claims brought against it or its customers, suppliers and channel partners, with or without merit, could be
time‑consuming, expensive to litigate or settle, divert management resources and attention and force it to acquire intellectual property rights or licenses, which may involve substantial royalty or other payments and may not be available on
acceptable terms or at all. Further, a party making such a claim, if successful, could secure a judgment that requires it to pay substantial damages or obtain an injunction. An adverse determination also could invalidate its intellectual
property rights and adversely affect its ability to offer its products to its customers and may require that it procures or develops substitute products that do not infringe, which could require significant effort and expense. Any of these
events could adversely affect its business, operating results, financial condition and prospects.
Weakened global economic conditions may harm Otonomo’s industry, business and results of operations.
Otonomo’s overall performance depends in part on worldwide economic conditions. Global financial developments and downturns seemingly unrelated to it or
the software industry may harm it. The United States and other key international economies have been affected from time to time by falling demand for a variety of goods and services, restricted credit, poor liquidity, reduced corporate
profitability, volatility in credit, equity and foreign exchange markets, bankruptcies, inflation and overall uncertainty with respect to the economy, including tariff and trade issues. Weak economic conditions or significant uncertainty
regarding the stability of financial markets related to stock market volatility, inflation, recession, changes in tariffs, trade agreements or governmental fiscal, monetary and tax policies, among others, could adversely impact its
business, financial condition and operating results. Further, weak market conditions have, and could in the future result in, the impairment of its investments and long-lived assets.
Further, the economies of countries in Europe have been experiencing weakness associated with high sovereign debt levels, weakness in the banking
sector, uncertainty over the future of the Euro zone and volatility in the value of the pound sterling and the Euro and instability resulting from the ongoing conflict between Russia and Ukraine. The effect of the conflict between Russia
and Ukraine, including any resulting sanctions, export controls or other restrictive actions that may be imposed against governmental or other entities in, for example, Russia, have in the past contributed and may in the future contribute
to disruption, instability and volatility in the global markets. Otonomo has operations, as well as current and potential new customers, throughout Europe. If economic conditions in Europe and other key markets for its platform continue
to remain uncertain or deteriorate further, it could adversely affect its customers’ ability or willingness to subscribe to its platform, delay prospective customers’ purchasing decisions, reduce the value or duration of their
subscriptions or affect renewal rates, all of which could harm its operating results.
More recently, global inflation rates have increased to levels not seen in several decades, which may result in decreased demand for its products and
services, increases in its operating costs, including its labor costs, constrained credit and liquidity, reduced government spending and volatility in financial markets. The Federal Reserve and other international government agencies have
raised, and may again raise, interest rates in response to concerns over inflation risk. Increases in interest rates on credit and debt that would increase the cost of any borrowing that Otonomo may engage in from time to time and could
impact its ability to access the capital markets. Increases in interest rates, especially if coupled with reduced government spending and volatility in financial markets, may have the effect of further increasing economic uncertainty and
heightening these risks. In an inflationary environment, Otonomo may be unable to raise the sales prices of its products and services at or above the rate at which its costs increase, which could/would reduce its profit margins and have a
material adverse effect on its financial results and net income. Otonomo also may experience lower than expected sales and potential adverse impacts on its competitive position if there is a decrease in consumer spending or a negative
reaction to its pricing. A reduction in its revenue would be detrimental to its profitability and financial condition and could also have an adverse impact on its future growth.
There continues to be uncertainty in the changing market and economic conditions, including the possibility of additional measures that could be taken
by the Federal Reserve and other domestic and international government agencies, related to concerns over inflation risk. A sharp rise in interest rates could have an adverse impact on the fair market value of certain securities in its
portfolio and investments in some financial instruments could pose risks arising from market liquidity and credit concerns, which could adversely affect its financial results.
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The current economic downturn may lead to decreased demand for Otonomo’s products and services and otherwise harm its business and
results of operations.
Otonomo’s overall performance depends, in part, on worldwide economic conditions. In recent months, Otonomo has observed increased economic uncertainty
in the United States and abroad. Impacts of such economic weakness include:
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lower overall demand for goods and services, leading to reduced profitability;
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reduced credit availability;
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higher borrowing costs;
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reduced liquidity;
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volatility in credit, equity and foreign exchange markets; and
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bankruptcies.
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These developments could lead to inflation, higher interest rates, and uncertainty about business continuity, which may adversely affect its business
and its results of operations. As its customers react to global economic conditions and the potential for a global recession, Otonomo may see them reduce spending on its products and take additional precautionary measures to limit or
delay expenditures and preserve capital and liquidity. Reductions in spending, delays in purchasing decisions, lack of renewals, inability to attract new customers, as well as pressure for extended billing terms or pricing discounts,
would limit its ability to grow its business and could negatively affect its operating results and financial condition.
Legal and Regulatory Risks Related to Otonomo’s Business
Otonomo’s operations and platform are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, data
protection and information security, and its data consumers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidential information. Any failure of its platform and operations to comply
with or enable data consumers to comply with applicable laws and regulations would harm its business, results of operations and financial condition.
Privacy is at the core of Otonomo’s technology. As a result, the platform and marketplace were designed to take into consideration the requirements of the GDPR and CCPA.
Otonomo has and continue to invest time and resources, including the review of its technology and systems to ensure its taking into consideration the requirements of applicable data privacy laws.
Otonomo and its data providers and data consumers may be subject to privacy and data protection‑related laws and regulations that impose obligations in connection with
the collection, processing and use of personal data. The U.S. federal and various state and foreign governments have adopted or proposed limitations on, or requirements regarding, the collection, distribution, use, security and storage of
personal data of individuals. The U.S. Federal Trade Commission and numerous state attorneys general are applying federal and state consumer protection laws to impose standards on the online collection, use and dissemination of data, and to
the security measures applied to such data.
Similarly, many foreign countries and governmental bodies, including the EU member states, have laws and regulations concerning the collection and use of personal data
obtained from EU residents or by businesses operating within their jurisdiction. For example, from January 1, 2021, Otonomo is subject to the GDPR and also the UK GDPR, which, together with the amended UK Data Protection Act 2018, retains
the GDPR in UK national law. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security of personal data that identifies or may be used to identify an individual, such as names,
telephone numbers, email addresses, vehicle identification number, GPS location and, in some jurisdictions, IP addresses and other online identifiers.
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For example, the GDPR, and national implementing legislation in the European Economic Area (“EEA”) member states and the United Kingdom, impose a strict data protection
compliance regime including: providing detailed disclosures about how personal data is collected and processed (in a concise, intelligible and easily accessible form); demonstrating that an appropriate legal basis is in place or otherwise
exists to justify data processing activities; granting new rights for data subjects in regard to their personal data (including the right to be “forgotten” and the right to data portability), as well as enhancing current rights (e.g., data
subject access requests); introducing the obligation to notify data protection regulators or supervisory authorities (and in certain cases, affected individuals) of significant data breaches; defining for the first time pseudonymized (i.e.,
key‑coded) data; imposing limitations on retention of personal data; maintaining a record of data processing; and complying with the principal of accountability and the obligation to demonstrate compliance through policies, procedures,
training and audit.
Noncompliance with GDPR and the UK GDPR can respectively trigger fines equal to or greater of €20 million or 4% of global annual revenues. In addition to the foregoing, a
breach of the GDPR or UK GDPR could result in regulatory investigations, reputational damage, orders to cease/ change its processing of its data, enforcement notices, and/ or assessment notices (for a compulsory audit). Otonomo may also
face civil claims including representative actions and other class action type litigation (where individuals have suffered harm), potentially amounting to significant compensation or damages liabilities, as well as associated costs,
diversion of internal resources, and reputational harm. Although Otonomo believes that its Otonomo Vehicle Data Platform currently meets the material requirements of GDPR, to the extent the requirements of GDPR change or are expanded,
Otonomo may need to invest significant time and resources, including a review of its technology and systems currently in use against such changed or expanded requirements of GDPR. There are also additional EU laws and regulations (and
member states implementations thereof) which govern the protection of consumers and of electronic communications. If Otonomo’s efforts to comply with GDPR or other applicable EU laws and regulations are not successful, Otonomo may be
subject to penalties and fines, as well as the other action as noted above, that would adversely impact its business and results of operations, and its ability to conduct business in the EU could be significantly impaired.
Otonomo is also subject to European Union rules with respect to cross‑border transfers of personal data out of the EEA and the United Kingdom. Recent legal developments
in Europe have created complexity and compliance uncertainty regarding certain transfers of information from the EU to the United States. On July 16, 2020, the Court of Justice of the European Union (the “CJEU”) invalidated the EU‑US
Privacy Shield Framework. The CJEU also imposed substantial requirements upon the continued use of standard contractual clauses for data transfers from the EU to the United States, which may make the use of standard contractual clauses
difficult or impossible to use under some circumstances. These recent developments may require it to review and amend the legal mechanisms by which it makes and/ or receives personal data transfers to/ in the United States. As supervisory
authorities issue further guidance on personal data export mechanisms, including circumstances where the standard contractual clauses cannot be used, and/or start taking enforcement action, it could suffer additional costs, complaints
and/or regulatory investigations or fines, and/or if Otonomo is otherwise unable to transfer personal data between and among countries and regions in which Otonomo operates, it could affect the manner in which it provides its services, the
geographical location or segregation of its relevant systems and operations, and could adversely affect its financial results. Otonomo and its customers are at risk of enforcement actions taken by European regulators until such point in
time that Otonomo is able to ensure that all data transfers to the United States (and other countries deemed to be “third countries”) from the EU are legitimized.
In addition, Otonomo also may encounter additional complexity with respect to data privacy and data transfers in relation to the U.K. Following the U.K.’s withdrawal from
the EU, the U.K. will become a “third country” for the purposes of data transfers from the EU to the United Kingdom following the expiration of the four to six‑month personal data transfer grace period (from January 1, 2021) set out in the
EU and UK Trade and Cooperation Agreement, unless a relevant adequacy decision is adopted in favor of the U.K. (which would allow data transfers without additional measures). If Otonomo is unable to transfer personal data between and among
countries and regions in which Otonomo operates or may operate in the future, it could affect the manner in which Otonomo provides its services or could adversely affect its financial results.
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Otonomo is also subject to evolving EU and U.K. privacy laws on cookies and e‑marketing. In the EU and the U.K., regulators are increasingly focusing on compliance with
requirements in the online behavioral advertising ecosystem, and current national laws that implement the European Directive 2002/58/EC, (the “ePrivacy Directive”) are highly likely to be replaced by an EU regulation known as the ePrivacy
Regulation which will significantly increase fines for non‑compliance. In the EU and the UK, informed consent is required for the placement of a cookie or similar technologies on a user’s device and for direct electronic marketing. The GDPR
also imposes conditions on obtaining valid consent, such as a prohibition on pre‑checked consents and a requirement to ensure separate consents are sought for each type of cookie or similar technology. While the text of the ePrivacy
Regulation is still under development, a recent European court decision and regulators’ recent guidance are driving increased attention to cookies and tracking technologies. If regulators start to enforce the strict approach in recent
guidance, this could lead to substantial costs, require significant systems changes, limit the effectiveness of its marketing activities, divert the attention of its technology personnel, adversely affect its margins, increase costs and
subject it to additional liabilities. Regulation of cookies and similar technologies, and any decline of cookies or similar online tracking technologies as a means to identify and potentially target users, may lead to broader restrictions
and impairments on its marketing and personalization activities and may negatively impact its efforts to understand users.
Furthermore, outside of the EU, Otonomo continues to see increased regulation of data privacy and security, including the adoption of more stringent subject matter
specific state laws in the United States. For example, on July 8, 2019, Brazil enacted the General Data Protection Law (Lei Geral de Proteção de Dados Pessoais) (Law No. 13,709/2018) (“LGPD”) regulating the processing of personal data,
which was enacted in August 2020. Also, on June 28, 2018, California enacted the CCPA, which took effect on January 1, 2020. The CCPA gives California residents expanded rights to access and delete their personal information, opt out of
certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is
expected to increase data breach litigation. Although Otonomo believes that its Otonomo Vehicle Data Platform currently meets the requirements of the CCPA, to the extent the requirements of CCPA change or are expanded may increase its
compliance costs and potential liability. Some observers have noted that the CCPA could mark the beginning of a trend toward more stringent state privacy legislation in the U.S., which could increase its potential liability and adversely
affect its business. Furthermore, California voters approved the California Privacy Rights Act (“CPRA”) on November 3, 2020, which will amend and expand the CCPA, including by providing consumers with additional rights with respect to their
personal data. The CPRA will come into effect on January 1, 2023, applying to information collected by businesses on or after January 1, 2022. Otonomo continues to invest time and resources in reviewing its technology and systems to meet
the evolving data privacy regulations, be they GDPR, CCPA or others. Restrictions on the collection, use, sharing or disclosure of personal data or additional requirements and liability for security and data integrity may require it to
modify its business practices, limit its ability to develop new products and features and subject it to increased compliance obligations and regulatory scrutiny.
In addition, additional jurisdictions may impose data localization laws, which require personal information, or certain subcategories of personal information to be stored
in the jurisdiction of origin. These regulations may inhibit Otonomo’s ability to expand into those markets or prohibit it from continuing to offer its marketplace in those markets without significant additional costs.
The uncertainty and changes in the requirements of multiple jurisdictions may increase the cost of compliance, delay or reduce demand for Otonomo’s platform, restrict its
ability to offer its marketplace in certain locations, limit its ability to transfer data between jurisdictions or subject it to sanctions, by national data protection regulators, all of which could harm its business, financial condition
and results of operations. Any such regulations may also restrict OEMs or other data providers from collecting, processing and sharing vehicle data which may adversely impact its business. Additionally, although Otonomo endeavors to have
its platform and operations comply with applicable laws and regulations, Otonomo expects that there will continue to be new proposed laws, rules of self‑regulatory bodies, regulations and industry standards concerning privacy, data
protection and information security in the United States, the European Union and other jurisdictions, and it cannot yet determine the impact such future laws, rules, regulations and standards may have on its business or that of its data
providers and data consumers, which may indirectly impact it. Furthermore, these and other obligations may be modified, they may be interpreted and applied in an inconsistent manner from one jurisdiction to another, and they may conflict
with one another, other regulatory requirements, contractual commitments or its internal practices. As a result, it is possible that Otonomo or its platform or operations or the businesses of its data providers and data consumers, may not
be, or may not have been, compliant with each such applicable law, regulation and industry standard and compliance with such new laws or to changes to existing laws may impact its business and practices, require it to expend significant
resources to adapt to these changes and modify its platform and business, or to stop offering its platform in certain countries. These developments could adversely affect its business, results of operations and financial condition.
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Otonomo also may be bound by contractual obligations relating to its collection, use and disclosure of personal and other data or may find it necessary or desirable to
join industry or other self‑regulatory bodies or other privacy or data protection‑related organizations that require compliance with their rules pertaining to privacy and data protection.
Any failure or perceived failure by it, its platform or operations, or its data providers and data consumers, to comply with new or existing U.S., EU or other applicable
privacy or data security laws, regulations, policies, industry standards or legal obligations, or any security incident that results in the unauthorized access to, or acquisition, share or transfer of, personal data or other customer data
may result in governmental investigations, inquiries, enforcement actions and prosecutions, private litigation, fines and penalties, adverse publicity or potential loss of business.
Risks Related to Otonomo Being a Public Company
Otonomo incurs increased costs as a result of operating as a public company, and its management devotes substantial time to new compliance
initiatives.
Otonomo is a new public company subject to reporting requirements in the United States, and it incurs significant legal, accounting and other expenses that it did not
incur as a private company, and these expenses may increase even more after Otonomo is no longer an emerging growth company, as defined in Section 2(a) of the Securities Act. As a public company, Otonomo is subject to the reporting
requirements of the Exchange Act, the Sarbanes‑Oxley Act, the Dodd‑Frank Wall Street Reform and Consumer Protection Act, as well as rules adopted, and to be adopted, by the SEC and The Nasdaq Stock Market LLC (“Nasdaq”). Otonomo’s
management and other personnel devote a substantial amount of time to these compliance initiatives. Moreover, Otonomo expects these rules and regulations to substantially increase its legal and financial compliance costs and to make some
activities more time‑consuming and costly. The increased costs will increase its net loss. For example, Otonomo expects these rules and regulations to make it more difficult and more expensive for it to obtain director and officer liability
insurance and Otonomo may be forced to accept reduced policy limits or incur substantially higher costs to maintain the same or similar coverage. Otonomo cannot predict or estimate the amount or timing of additional costs Otonomo may incur
to respond to these requirements. The impact of these requirements could also make it more difficult for it to attract and retain qualified persons to serve on its board of directors, its board committees or as executive officers.
A market for Otonomo’s securities may not be sustained, which would adversely affect the liquidity and price of its securities.
The price of Otonomo’s securities may fluctuate significantly due to, among other things, general market and economic conditions. An active trading market for its
securities may not be sustained. In addition, the price of its securities can vary due to general economic conditions and forecasts, its general business condition and the release of its financial reports. Additionally, if its securities
become delisted from Nasdaq and are quoted on the OTC Bulletin Board (an inter‑dealer automated quotation system for equity securities that is not a national securities exchange), the liquidity and price of its securities may be more
limited than if it were quoted or listed on the NYSE, Nasdaq or another national securities exchange. You may be unable to sell your securities unless a market can be established or sustained.
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Otonomo identified material weaknesses in connection with its internal control over financial reporting. Otonomo’s efforts to remediate these material
weaknesses may not be successful in a timely manner, or at all, and Otonomo may identify other material weaknesses.
Effective internal controls over financial reporting are necessary for it to provide reliable financial reports and, together with adequate disclosure controls and
procedures are designed to prevent fraud. Otonomo’s management are required to assess the effectiveness of its internal controls and procedures and disclose changes in these controls on an annual basis. However, for as long as Otonomo is an
“emerging growth company” under the JOBS Act, its independent registered public accounting firm will not be required to attest to the effectiveness of its internal controls over financial reporting pursuant to Section 404.
This assessment needs to include disclosure of any material weaknesses identified by its management in its internal control over financial reporting. A material weakness
is a deficiency, or combination of deficiencies, in internal control that results in more than a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely
basis.
As of December 31, 2022, Otonomo’s management has identified the following material weaknesses in its internal controls over financial reporting:
(a) For a substantial portion of the year, management was unable to design and maintain effective controls over information technology general controls (ITGCs) for
information systems and applications that are relevant to the preparation of the consolidated financial statements. Specifically, management did not design and maintain: sufficient user access controls to ensure appropriate segregation of
duties and adequately restrict user and privileged access to financial applications, programs and data to appropriate Company personnel; and program change management controls to ensure that information technology (IT) program and data
changes affecting financial information technology applications and underlying accounting records were authorized, tested, and implemented appropriately. As a result, business process controls (automated and IT-dependent manual controls)
that were dependent on the ineffective ITGCs, or that used data produced from systems impacted by the ineffective ITGCs were deemed ineffective at December 31, 2022; and
(b) Management did not have an adequate process and the resources in place to monitor and oversee the completion of its testing and assessment of the design and operating
effectiveness of internal control over financial reporting in a timely manner.
These deficiencies, together with other business process level control deficiencies, could result in material misstatements in the Company’s financial statements and
therefore constitute material weaknesses in internal controls. Based on these material weaknesses, the Company’s management concluded that as of December 31, 2022, the Company’s internal control over financial reporting was not effective.
As of the date of this Prospectus/Offer to Exchange, management is continuing to re-assess its internal controls in light of the Merger, and is in the process of
modifying processes designed to improve its internal control over financial reporting and remediate the control deficiencies that led to the material weaknesses, including but not limited to, (a) developing an execution plan and resourcing
to test controls and providing timely feedback of any deficiencies noted to complete remediation, (b) establishing a training program for the entire organization to support ongoing execution of internal controls and adherence to control
activities and (c) actively monitoring corrective actions and providing status reporting to leadership on the progress.
Failure to remediate the material weaknesses described above at all or within its expected timeframe, or the identification of any newly identified material weaknesses,
could limit its ability to prevent or detect a misstatement of its financial results, lead to a loss of investor confidence and have a negative impact on the trading price of its common stock and could subject it to sanctions or
investigations by Nasdaq, the SEC or other regulatory authorities. A failure to implement and maintain effective control systems could also restrict its future access to the capital markets.
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Otonomo’s internal controls over financial reporting may not be effective and its independent registered public accounting firm may not be able to
certify as to their effectiveness, which could have a significant and adverse effect on its business and reputation.
Otonomo is subject to the reporting requirements of the Securities Act, the Exchange Act, the Sarbanes‑Oxley Act and the rules and regulations of Nasdaq. Otonomo expects
that the requirements of these rules and regulations will continue to increase its legal, accounting and financial compliance costs, make some activities more difficult, time‑consuming and costly, and place significant strain on its
personnel, systems and resources.
The Sarbanes‑Oxley Act requires, among other things, that Otonomo maintain effective disclosure controls and procedures and internal control over financial reporting.
Otonomo is continuing to develop and refine its disclosure controls, internal control over financial reporting and other procedures that are designed to ensure that information required to be disclosed by it in the reports that it files
with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to its
principal executive and financial officers.
Otonomo’s current controls and any new controls that it develops may become inadequate because of changes in conditions in its business. Further, weaknesses in its
internal controls may be discovered in the future. Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could adversely affect its operating results or cause it to
fail to meet its reporting obligations and may result in a restatement of its financial statements for prior periods. Any failure to implement and maintain effective internal controls also could adversely affect the results of periodic
management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of its internal control over financial reporting that Otonomo is required to include in the reports it files
with the SEC under Section 404 of the Sarbanes‑Oxley Act. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in its reported financial and other
information.
In order to maintain and improve the effectiveness of its disclosure controls and procedures and internal control over financial reporting, Otonomo has expended and
anticipate that it will continue to expend significant resources, including accounting‑related costs, and provide significant management oversight. Any failure to maintain the adequacy of its internal controls, or consequent inability to
produce accurate financial statements on a timely basis, could increase its operating costs and could materially and adversely affect its ability to operate its business. In the event that its internal controls are perceived as inadequate
or that Otonomo is unable to produce timely or accurate financial statements, investors may lose confidence in its operating results and the price of its securities could decline.
In addition, if Otonomo is unable to continue to meet these requirements, it may not be able to obtain or maintain listing on Nasdaq.
Otonomo’s independent registered public accounting firm is not required to formally attest to the effectiveness of its internal control over financial reporting until
after Otonomo is no longer an emerging growth company and become an accelerated filer. At such time, its independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at
which its controls are documented, designed or operating. Any failure to maintain effective disclosure controls and internal control over financial reporting could have a material and adverse effect on Otonomo’s business and operating
results.
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Risks Related to Ownership of Otonomo’s Securities
If Otonomo fails to comply with the continued listing requirements of Nasdaq, Otonomo would face possible delisting, which would result in a limited public market for its
shares.
On August 23, 2022, Otonomo received written notification from the Listing Qualifications Department of Nasdaq indicating that the Company no longer satisfies Nasdaq
Listing Rule 5450(a)(1) based upon a closing bid price of less than $1.00 per share for the Company’s Ordinary Shares for the prior 30 consecutive business day period. Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company was provided
with a grace period of 180 days, or until February 20, 2023, to meet the minimum bid price requirement under the Nasdaq Listing Rules.
Effective as of January 9, 2023, Otonomo moved the listing of its Ordinary Shares from the Nasdaq Global Market to the Nasdaq Capital Market and requested from Nasdaq an
additional 180-day compliance period to meet the minimum bid price. On February 21, 2023, Nasdaq notified Otonomo that it had determined Otonomo was eligible for an additional 180-calendar day period, or until August 21, 2023, to regain
compliance.
On August 3, 2023, Otonomo effected a 1-for-15 reverse share split in order to regain compliance with Nasdaq’s minimum bid price requirement. As a result of the reverse
share split, every 15 issued and outstanding Ordinary Shares were automatically converted into one Ordinary Share. No fractional shares were issued as a result of the reverse share split. Instead, in accordance with the Otonomo Articles,
all fractional shares were rounded to the nearest whole share (half shares were rounded up). 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 also affected Otonomo’s options, warrants and restricted share units (collectively, the “Outstanding Equity Rights”). Generally, the plans and
other documents pertaining to the Outstanding Equity Rights included provisions providing for adjustments in the event of a reverse share split in order to maintain the same economic effect. Specifically, the exercise price and the number
of Ordinary Shares issuable pursuant to Outstanding Equity Rights were adjusted pursuant to the terms of such instruments in connection with the reverse share split. The Ordinary Shares began trading on a split-adjusted basis on Nasdaq at
the open of business on August 4, 2023. On August 18, 2023, the Listing Qualifications Department of Nasdaq notified Otonomo that it had regained compliance with Nasdaq Listing Rule 5450(a)(1).
A delisting would likely have a negative effect on the price of the securities and would impair your ability to sell or purchase the securities when you wish to do so. In
the event of a delisting, Otonomo can provide no assurance that any action taken by it to restore compliance with listing requirements would allow its securities to become listed again, stabilize the market price or improve the liquidity of
its securities, prevent its securities from dropping below the Nasdaq minimum bid price requirement or prevent future non- compliance with Nasdaq’s listing requirements. Additionally, if Otonomo’s securities become delisted from Nasdaq for
any reason, and are quoted on the OTC Bulletin Board, an inter- dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of Otonomo’s securities may be more limited than if
it were quoted or listed on Nasdaq or another national securities exchange. You may be unable to sell your securities unless a market can be established or sustained.
The Otonomo Articles and Israeli law could prevent a takeover that shareholders consider favorable and could also reduce the market price of its
securities.
Certain provisions of Israeli law and the Otonomo Articles could have the effect of delaying or preventing a change in control and may make it more difficult for a third
party to acquire it or for its shareholders to elect different individuals to its board of directors, even if doing so would be beneficial to its shareholders, and may limit the price that investors may be willing to pay in the future for
its Ordinary Shares. For example, Israeli corporate law regulates mergers and requires that a tender offer be effected when certain thresholds of percentage ownership of voting power in a company are exceeded (subject to certain
conditions). Further, Israeli tax considerations may make potential transactions undesirable to it or to some of its shareholders whose country of residence does not have a tax treaty with Israel granting tax relief to such shareholders
from Israeli tax.
Otonomo does not intend to pay dividends for the foreseeable future. Accordingly, you may not receive any return on investment unless you sell your Ordinary Shares for a
price greater than the price you paid for your Ordinary Shares.
Otonomo has never declared or paid any cash dividends on its shares. Otonomo currently intends to retain all available funds and any future earnings for use in the
operation of its business and does not anticipate paying any dividends on the Ordinary Shares in the foreseeable future. Consequently, you may be unable to realize a gain on your investment except by selling sell such shares after price
appreciation, which may never occur.
Otonomo’s board of directors has sole discretion whether to pay dividends. If Otonomo’s board of directors decides to pay dividends, the form, frequency, and amount will
depend upon its future, operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that its directors may deem relevant. The Israeli Companies Law, 1999 (the “Companies
Law”) imposes restrictions on its ability to declare and pay dividends. Payment of dividends may also be subject to Israeli withholding taxes.
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The market price and trading volume of the Ordinary Shares may be volatile.
The stock markets, including Nasdaq on which Otonomo lists the Ordinary Shares and warrants under the symbols “OTMO,” and “OTMOW,” respectively, have from time to time
experienced significant price and volume fluctuations. Even if an active, liquid and orderly trading market is sustained for the Ordinary Shares and warrants, the market price of the Ordinary Shares and warrants may be volatile and could
decline significantly. In addition, the trading volume in the Ordinary Shares and warrants may fluctuate and cause significant price variations to occur. If the market price of the Ordinary Shares and warrants declines significantly, you
may be unable to resell your shares or warrants at or above the market price of the Ordinary Shares and warrants. Otonomo cannot assure you that the market price of the Ordinary Shares and warrants will not fluctuate widely or decline
significantly in the future in response to a number of factors, including, among others, the following:
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the realization of any of the risk factors presented in this Prospectus/Offer to Exchange;
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actual or anticipated differences in its estimates, or in the estimates of analysts, for its revenues, Adjusted EBITDA, results of operations, level of indebtedness, liquidity or financial condition;
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additions and departures of key personnel;
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failure to comply with the requirements of Nasdaq;
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failure to comply with the Sarbanes‑Oxley Act or other laws or regulations;
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future issuances, sales, resales or repurchases or anticipated issuances, sales, resales or repurchases, of its securities including due to the expiration of contractual lock‑up agreements;
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publication of research reports about Otonomo;
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the performance and market valuations of other similar companies;
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failure of securities analysts to initiate or maintain coverage of it, changes in financial estimates by any securities analysts who follow it or its failure to meet these estimates or the expectations of investors;
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new laws, regulations, subsidies, or credits or new interpretations of existing laws applicable to Otonomo;
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commencement of, or involvement in, litigation involving Otonomo;
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broad disruptions in the financial markets, including sudden disruptions in the credit markets;
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speculation in the press or investment community;
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actual, potential or perceived control, accounting or reporting problems;
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changes in accounting principles, policies and guidelines; and
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other events or factors, including those resulting from infectious diseases, health epidemics and pandemics (such as the COVID-19 pandemic), natural disasters, war, acts of terrorism or responses to these events.
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In the past, securities class‑action litigation has often been instituted against companies following periods of volatility in the market price of their shares. This type
of litigation could result in substantial costs and divert its management’s attention and resources, which could have a material adverse effect on it.
Otonomo’s quarterly operating results may fluctuate significantly and could fall below the expectations of securities analysts and investors due to seasonality and other
factors, some of which are beyond its control, resulting in a decline in its stock price.
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Otonomo’s quarterly operating results may fluctuate significantly because of several factors, including:
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labor availability and costs for hourly and management personnel;
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profitability of its products, especially in new markets and due to seasonal fluctuations;
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changes in interest rates;
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impairment of long‑lived assets;
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macroeconomic conditions, both internationally and locally;
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changes in consumer preferences and competitive conditions;
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expansion to new markets; and
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fluctuations in commodity prices.
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If securities or industry analysts do not publish or cease publishing research or reports about Otonomo, its business, or its market, or if they
change their recommendations regarding the Ordinary Shares adversely, then the price and trading volume of Otonomo’s securities could decline.
The trading market for Otonomo’s securities is and will be influenced by the research and reports that industry or financial analysts publish about its business. Otonomo
does not control these analysts, or the content and opinions included in their reports. As a new public company, Otonomo may be slow to attract research coverage and the analysts who publish information about its securities will have had
relatively little experience with it, which could affect their ability to accurately forecast its results and make it more likely that Otonomo fails to meet their estimates. In the event Otonomo obtains industry or financial analyst
coverage, if any of the analysts who cover it issues an inaccurate or unfavorable opinion regarding it, the price of its securities would likely decline. In addition, the share prices of many companies in the technology industry have
declined significantly after those companies have failed to meet, or significantly exceed, the financial guidance publicly announced by the companies or the expectations of analysts. If Otonomo’s financial results fail to meet, or
significantly exceed, its announced guidance or the expectations of analysts or public investors, analysts could downgrade its securities or publish unfavorable research about it. If one or more of these analysts cease coverage of it or
fail to publish reports on it regularly, its visibility in the financial markets could decrease, which in turn could cause the price of its securities or trading volume to decline.
Sales of a substantial number of Otonomo’s securities in the public market by selling securityholders and/or by its existing securityholders could
cause the price of the Ordinary Shares and warrants to fall.
Otonomo has registered for resale by certain selling shareholders (a) 3,645,471 Ordinary Shares and (b) 5,200,000 warrants. Sales of a substantial number of Ordinary Shares and/or warrants in the public
market by such selling securityholders and/or by its other existing securityholders, or the perception that those sales might occur, could depress the market price of its Ordinary Shares and warrants and could impair its ability to
raise capital through the sale of additional equity securities. Otonomo is unable to predict the effect that such sales may have on the prevailing market price of its Ordinary Shares and warrants.
Otonomo qualifies as an emerging growth company within the meaning of the Securities Act, and it takes advantage of certain exemptions from disclosure
requirements available to emerging growth companies, which make its securities less attractive to investors and make it more difficult to compare its performance with other public companies.
Otonomo is eligible to be treated as an emerging growth company, as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. Under the JOBS Act,
emerging growth companies can delay adopting new or revised financial accounting standards until such time as those standards apply to private companies. Otonomo intends to take advantage of this extended transition period under the JOBS
Act for adopting new or revised financial accounting standards.
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For as long as Otonomo continues to be an emerging growth company, Otonomo may also take advantage of certain exemptions from various reporting requirements that are
applicable to other public companies that are not emerging growth companies, including presenting only limited selected financial data and not being required to comply with the auditor attestation requirements of Section 404 of the
Sarbanes‑Oxley Act. As a result, its shareholders may not have access to certain information that they may deem important. Otonomo could be an emerging growth company for up to five years, although circumstances could cause it to lose that
status earlier, including if its total annual gross revenue exceeds $1.235 billion, if Otonomo issues more than $1.0 billion in non‑convertible debt securities during any three‑year period, or if before that time Otonomo is a “large
accelerated filer” under U.S. securities laws.
Otonomo cannot predict if investors find its securities less attractive because Otonomo relies on these exemptions. If some investors find its securities less attractive
as a result, there may be a less active trading market for its securities and the price of its securities may be more volatile. Further, there is no guarantee that the exemptions available to it under the JOBS Act will result in significant
savings. To the extent that Otonomo chooses not to use exemptions from various reporting requirements under the JOBS Act, it will incur additional compliance costs, which may impact its financial condition.
Otonomo is a foreign private issuer and, as a result, Otonomo is not subject to U.S. proxy rules and is subject to Exchange Act reporting obligations
that, to some extent, are more lenient and less frequent than those of a U.S. domestic public company.
Otonomo reports under the Exchange Act as a non‑U.S. company with foreign private issuer status. Because Otonomo qualifies as a foreign private issuer under the Exchange
Act, Otonomo is exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including (1) the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in
respect of a security registered under the Exchange Act, (2) the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made
in a short period of time and (3) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10‑Q containing unaudited financial and other specified information, although Otonomo is subject to Israeli
laws and regulations with regard to certain of these matters and intend to furnish comparable quarterly information on Form 6‑K. In addition, foreign private issuers are not required to file their annual report on Form 20‑F until 120 days
after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual report on Form 10‑K within 75 days after the end of each fiscal year and U.S. domestic issuers that are large
accelerated filers are required to file their annual report on Form 10‑K within 60 days after the end of each fiscal year. Foreign private issuers are also exempt from Regulation FD, which is intended to prevent issuers from making
selective disclosures of material information. As a result of all of the above, you may not have the same protections afforded to shareholders of a company that is not a foreign private issuer.
Otonomo may lose its foreign private issuer status in the future, which could result in significant additional costs and expenses.
As discussed above, Otonomo is a foreign private issuer, and therefore are not required to comply with all of the periodic disclosure and current reporting requirements
of the Exchange Act. The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter, and, accordingly, the next determination will be made with
respect to it on June 30, 2023. In the future, Otonomo would lose its foreign private issuer status if (1) more than 50% of its outstanding voting securities are owned by U.S. residents and (2) a majority of its directors or executive
officers are U.S. citizens or residents, or it fails to meet additional requirements necessary to avoid loss of foreign private issuer status. If Otonomo loses its foreign private issuer status, it will be required to file with the SEC
periodic reports and registration statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. Otonomo would also have to mandatorily comply with U.S. federal proxy
requirements, and its officers, directors and principal shareholders will become subject to the short‑swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. In addition, Otonomo would lose its ability to rely
upon exemptions from certain corporate governance requirements under the listing rules of Nasdaq. As a U.S. listed public company that is not a foreign private issuer, Otonomo would incur significant additional legal, accounting and other
expenses that it will not incur as a foreign private issuer.
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As Otonomo is a “foreign private issuer” and intends to follow certain home country corporate governance practices, its shareholders may not have the
same protections afforded to shareholders of companies that are subject to all Nasdaq corporate governance requirements.
As a foreign private issuer, Otonomo has the option to follow certain home country corporate governance practices rather than those of Nasdaq, provided that Otonomo
discloses the requirements it is not following and describe the home country practices Otonomo is following. Otonomo intends to rely on this “foreign private issuer exemption” with respect to the Nasdaq rules for shareholder meeting quorums
and Nasdaq rules requiring shareholder approval. Otonomo may in the future elect to follow home country practices with regard to other matters. As a result, its shareholders may not have the same protections afforded to shareholders of
companies that are subject to all Nasdaq corporate governance requirements.
Otonomo may issue additional Ordinary Shares or other equity securities without seeking approval of its shareholders, which would dilute your
ownership interests and may depress the market price of the Ordinary Shares.
Otonomo has warrants outstanding to purchase up to an aggregate of 13,824,976 Ordinary Shares. Further, Otonomo may choose to seek third party financing to provide additional working capital for its
business, in which event Otonomo may issue additional equity securities. Otonomo may also issue additional Ordinary Shares or other equity securities of equal or senior rank in the future for any reason or in connection with, among
other things, future acquisitions, the redemption of outstanding warrants or repayment of outstanding indebtedness, without shareholder approval, in a number of circumstances.
The issuance of additional Ordinary Shares or other equity securities of equal or senior rank would have the following effects:
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its shareholders’ proportionate ownership interest in it will decrease;
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the amount of cash available per share, including for payment of dividends in the future, may decrease;
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the relative voting strength of each previously outstanding Ordinary Share may be diminished; and
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the market price of the Ordinary Shares may decline.
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The IRS may not agree that Otonomo should be treated as a non‑U.S. corporation for U.S. federal income tax purposes.
Under current U.S. federal income tax law, a corporation generally will be considered to be a U.S. corporation for U.S. federal income tax purposes if it is created or
organized in the United States or under the law of the United States or of any State. Accordingly, under generally applicable U.S. federal income tax rules, we, who are incorporated and tax resident in Israel, would generally be classified
as a non U.S. corporation for U.S. federal income tax purposes. Section 7874 of the Code and the Treasury regulations promulgated thereunder, however, contain specific rules that may cause a non U.S. corporation to be treated as a U.S.
corporation for U.S. federal income tax purposes. If it were determined that we are treated as a U.S. corporation for U.S. federal income tax purposes under Section 7874 of the Code and the Treasury regulations promulgated thereunder, we
would be liable for U.S. federal income tax on our income in the same manner as any other U.S. corporation and certain distributions made by us to persons that are not U.S. Holders (as defined below under “Material
U.S. Federal Income Tax Considerations”) may be subject to U.S. withholding tax.
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Based on the terms of the Business Combination and certain factual assumptions, we do not believe we should be treated as a U.S. corporation for U.S. federal income tax
purposes under Section 7874 of the Code as a result of the Business Combination. However, the application of Section 7874 of the Code is complex, subject to detailed U.S. Treasury regulations (the application of which is uncertain in
various respects and would be impacted by changes in such U.S. Treasury regulations with possible retroactive effect) and subject to certain factual uncertainties. Accordingly, there can be no assurance that the IRS will not challenge the
status of us as a non U.S. corporation for U.S. federal income tax purposes under Section 7874 of the Code or that such challenge would not be sustained by a court.
If the IRS were to successfully challenge under Section 7874 of the Code our status as a non U.S. corporation for U.S. federal income tax purposes, we and certain of our
shareholders may be subject to significant adverse tax consequences, including a higher effective corporate income tax rate on us and future withholding taxes on certain of our shareholders, depending on the application of any applicable
income tax treaty that may apply to reduce such withholding taxes.
If we or any of our subsidiaries are characterized as a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes, U.S. Holders
may suffer adverse tax consequences.
A non‑U.S. corporation generally will be treated as a PFIC for U.S. federal income tax purposes, in any taxable year if either (1) at least 75% of its gross income for
such year is passive income or (2) at least 50% of the value of its assets (generally based on an average of the quarterly values of the assets) during such year is attributable to assets that produce or are held for the production of
passive income. We believe we were a PFIC for our taxable year ending December 31, 2022, and based on the current and anticipated composition of the income, assets and operations of us and our subsidiaries, we believe we are likely to be a
PFIC for our taxable year in which the Offer occurs. However, there can be no assurances in this regard or any assurances with respect to our status as a PFIC in any future taxable year. Moreover, the application of the PFIC rules is
subject to uncertainty in several respects, and we cannot assure you that the IRS will not take a contrary position or that a court will not sustain such a challenge by the IRS.
Whether we are or any of our subsidiaries is or are a PFIC for any taxable year is a factual determination that depends on, among other things, the composition of our
income and assets, and the market value of our and our subsidiaries’ shares and assets. Changes in the composition of our income or composition of our or any of our subsidiaries’ assets may cause us to be or become a PFIC for the current or
subsequent taxable years. Moreover, the value of our assets (including unbooked goodwill) for purposes of the PFIC determination may be determined by reference to the trading value of our Ordinary Shares, which could fluctuate
significantly. Whether we are treated as a PFIC for U.S. federal income tax purposes is a factual determination that must be made annually at the close of each taxable year and, thus, is subject to significant uncertainty.
If we are a PFIC for any taxable year, a U.S. Holder (as defined below under “Material U.S. Federal Income Tax Considerations”)
of Ordinary Shares may be subject to adverse tax consequences and may incur certain information reporting obligations. For a further discussion, see “Material U.S. Federal Income Tax Considerations.”
In addition, even if the exchange of warrants for Ordinary Shares pursuant to the Offer and/or the deemed exchange of warrants for “new” warrants pursuant to the Warrant Amendment qualifies as a tax-free “recapitalization” under Section
368(a)(1)(E) of the Code, any gain realized upon the exchange or deemed exchange, as applicable, may be required to be recognized unless Ordinary Shares or “new” warrants, as applicable, are treated as shares or warrants in a PFIC or, in
the case of Ordinary Shares received in exchange for warrants pursuant to the Offer, the U.S. Holder filed a certain election under the PFIC rules.
U.S. Holders of warrants are strongly urged to consult their own advisors regarding the potential application of the PFIC rules to the Offer and the ownership of Ordinary
Shares and/or “new” warrants.
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If a U.S. Holder is treated as owning at least 10% of the Ordinary Shares, such U.S. Holder may be subject to adverse U.S. federal income tax
consequences.
For U.S. federal income tax purposes, if a U.S. Holder (as defined below under “Material U.S. Federal Income Tax Considerations”)
is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of our equity interests, such person may be treated as a “United States shareholder” with respect to us, or any of our applicable
subsidiaries, if we are, or any such subsidiary is, a “controlled foreign corporation.” If we have one or more U.S. subsidiaries, certain of our non-U.S. subsidiaries could be treated as a controlled foreign corporation regardless of
whether we are treated as a controlled foreign corporation.
Certain United States shareholders of a controlled foreign corporation may be required to report annually and include in their U.S. federal taxable income their pro rata
share of the controlled foreign corporation’s “Subpart F income” and, in computing their “global intangible low-taxed income,” “tested income” and a pro rata share of the amount of certain U.S. property (including certain stock in U.S.
corporations and certain tangible assets located in the United States) held by the controlled foreign corporation regardless of whether such controlled foreign corporation makes any distributions. The amount includable by a United States
shareholder under these rules is based on a number of factors, including potentially, but not limited to, the controlled foreign corporation’s current earnings and profits (if any), tax basis in the controlled foreign corporation’s assets,
and foreign taxes paid by the controlled foreign corporation on its underlying income. Failure to comply with these reporting obligations (or related tax payment obligations) may subject such United States shareholder to significant
monetary penalties and may extend the statute of limitations with respect to such United States shareholder’s U.S. federal income tax return for the year for which reporting (or payment of tax) was due. We cannot provide any assurances that
we will assist U.S. Holders in determining whether we or any of our subsidiaries are treated as a controlled foreign corporation for U.S. federal income tax purposes or whether any U.S. Holder is treated as a United States shareholder with
respect to any of such controlled foreign corporations or furnish to any holder information that may be necessary to comply with reporting and tax paying obligations if we, or any of our subsidiaries, is treated as a controlled foreign
corporation for U.S. federal income tax purposes.
Risks Related to Otonomo’s Incorporation and Location in Israel
Conditions in Israel could materially and adversely affect Otonomo’s business.
Many of Otonomo’s employees, including certain management members operate from its offices that are located in Herzliya Pituach, Israel. In addition, a number of its
officers and directors are residents of Israel. Accordingly, political, economic, and military conditions in Israel and the surrounding region may directly affect its business and operations. In recent years, Israel has been engaged in
sporadic armed conflicts with Hamas, an Islamist terrorist group that controls the Gaza Strip, with Hezbollah, an Islamist terrorist group that controls large portions of southern Lebanon, and with Iranian‑backed military forces in Syria.
In addition, Iran has threatened to attack Israel and may be developing nuclear weapons. Some of these hostilities were accompanied by missiles being fired from the Gaza Strip against civilian targets in various parts of Israel, including
areas in which its employees are located, and negatively affected business conditions in Israel. Any hostilities involving Israel or the interruption or curtailment of trade between Israel and its trading partners could adversely affect its
operations and results of operations.
Otonomo’s commercial insurance does not cover losses that may occur as a result of events associated with war and terrorism. Although the Israeli government currently
covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, Otonomo cannot assure you that this government coverage will be maintained or that it will sufficiently cover its potential damages. Any
losses or damages incurred by it could have a material adverse effect on its business. Any armed conflicts or political instability in the region would likely negatively affect business conditions and could harm its results of operations.
Further, in the past, the State of Israel and Israeli companies have been subjected to economic boycotts. Several countries still restrict business with the State of
Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on its results of operations, financial condition or the expansion of its business. A campaign of boycotts, divestment, and sanctions has been
undertaken against Israel, which could also adversely affect its business. Actual or perceived political instability in Israel or any negative changes in the political environment, may individually or in the aggregate adversely affect the
Israeli economy and, in turn, its business, financial condition, results of operations, and prospects.
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In addition, many Israeli citizens are obligated to perform several weeks of annual military reserve duty each year until they reach the age of 40 (or older, for
reservists who are military officers or who have certain occupations) and, in the event of a military conflict, may be called to active duty. In response to increases in terrorist activity, there have been periods of significant call‑ups of
military reservists. It is possible that there will be military reserve duty call‑ups in the future. Otonomo’s operations could be disrupted by such call‑ups, which may include the call‑up of members of its management. Such disruption could
materially adversely affect its business, prospects, financial condition, and results of operations.
Furthermore, the Israeli government is currently pursuing extensive changes to Israel’s judicial system. This has sparked extensive political debate. In response to the
foregoing developments, many individuals, organizations and institutions, both within and outside of Israel, have voiced concerns that the proposed changes may negatively impact the business environment in Israel, including due to
reluctance of foreign investors to invest or transact business in Israel, increased currency fluctuations, downgrades in credit rating, increased interest rates, increased volatility in security markets, and other changes in macroeconomic
conditions. To the extent that any of these negative developments do occur, they may have an adverse effect on its business, its results of operations and its ability to raise additional funds, if deemed necessary by its management and
board of directors.
Otonomo may become subject to claims for remuneration or royalties for assigned service invention rights by its employees, which could result in
litigation and adversely affect its business.
A significant portion of Otonomo’s intellectual property has been developed by its employees in the course of their employment by it. Under the Israeli Patents Law,
5727‑1967 (the “Patents Law”), inventions conceived by an employee during and as a result of his or her employment with a company are regarded as “service inventions,” which belong to the employer, absent an agreement between the employee
and employer providing otherwise. The Patents Law also provides that if there is no agreement between an employer and an employee determining whether the employee is entitled to receive consideration for service inventions and on what
terms, this will be determined by the Israeli Compensation and Royalties Committee (the “Committee”), a body constituted under the Patents Law. Case law clarifies that the right to receive consideration for “service inventions” can be
waived by the employee and that in certain circumstances, such waiver does not necessarily have to be explicit. The Committee will examine, on a case‑by‑case basis, the general contractual framework between the parties, using interpretation
rules of the general Israeli contract laws. Further, the Committee has not yet determined one specific formula for calculating this remuneration, but rather uses the criteria specified in the Patents Law. Although Otonomo generally enters
into agreements with its employees pursuant to which such individuals assign to it all rights to any inventions created during and as a result of their employment with it, Otonomo may face claims demanding remuneration in consideration for
assigned inventions. As a consequence of such claims, Otonomo could be required to pay additional remuneration or royalties to its current and/or former employees, or be forced to litigate such monetary claims (which will not affect its
proprietary rights), which could negatively affect its business.
Certain tax benefits that may be available to Otonomo, if obtained by it, would require it to continue to meet various conditions and may be
terminated or reduced in the future, which could increase its costs and taxes.
Otonomo may be eligible for certain tax benefits provided to “Preferred Technological Enterprises” under the Israeli Law for the Encouragement of Capital Investments,
5719‑1959, referred to as the Investment Law. If Otonomo obtains tax benefits under the “Preferred Technological Enterprises” regime then, in order to remain eligible for such tax benefits, it will need to continue to meet certain
conditions stipulated in the Investment Law and its regulations, as amended. If these tax benefits are reduced, cancelled or discontinued, its Israeli taxable income may be subject to the Israeli corporate tax rate of 23% in 2018 and
thereafter. Additionally, if Otonomo increase its activities outside of Israel through acquisitions, for example, its activities might not be eligible for inclusion in future Israeli tax benefit programs.
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It may be difficult to enforce a U.S. judgment against Otonomo, its officers and directors and the Israeli experts named in this Prospectus/Offer to
Exchange in Israel or the United States, or to assert U.S. securities laws claims in Israel or serve process on its officers and directors and these experts.
Most of Otonomo’s directors or officers are not residents of the United States and most of their and its assets are located outside the United States. Service of process
upon it or its non‑U.S. resident directors and officers and enforcement of judgments obtained in the United States against it or its non‑U.S. directors and executive officers may be difficult to obtain within the United States. Otonomo has
been informed by its legal counsel in Israel that it may be difficult to assert claims under U.S. securities laws in original actions instituted in Israel or obtain a judgment based on the civil liability provisions of U.S. federal
securities laws. Israeli courts may refuse to hear a claim based on a violation of U.S. securities laws against it or its non‑U.S. officers and directors because Israel may not be the most appropriate forum to bring such a claim. In
addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law is applicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact,
which can be a time‑consuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel addressing the matters described above. Israeli courts might not enforce
judgments rendered outside Israel, which may make it difficult to collect on judgments rendered against it or its non‑U.S. officers and directors.
Moreover, among other reasons, including but not limited to, fraud or absence of due process, or the existence of a judgment which is at variance with another judgment
that was given in the same matter if a suit in the same matter between the same parties was pending before a court or tribunal in Israel, an Israeli court will not enforce a non‑Israeli judgment if it was given in a state whose laws do not
provide for the enforcement of judgments of Israeli courts (subject to exceptional cases) or if its enforcement is likely to prejudice the sovereignty or security of the State of Israel.
Your rights and responsibilities as a shareholder of Otonomo will be governed by Israeli law, which may differ in some respects from the rights and
responsibilities of shareholders of U.S. corporations.
Otonomo is incorporated under Israeli law. The rights and responsibilities of holders of the Ordinary Shares are governed by the Otonomo Articles and the Companies Law.
These rights and responsibilities differ in some respects from the rights and responsibilities of shareholders in typical U.S. corporations. In particular, pursuant to the Companies Law each shareholder of an Israeli company has to act in
good faith in exercising his or her rights and fulfilling his or her obligations toward the company and other shareholders and to refrain from abusing his or her power in the company, including, among other things, in voting at the general
meeting of shareholders and class meetings, on amendments to a company’s articles of association, increases in a company’s authorized share capital, mergers, and transactions requiring shareholders’ approval under the Companies Law. In
addition, a controlling shareholder of an Israeli company or a shareholder who knows that it possesses the power to determine the outcome of a shareholder vote or who has the power to appoint or prevent the appointment of a director or
officer in the Company, or has other powers toward the Company has a duty of fairness toward the Company. However, Israeli law does not define the substance of this duty of fairness. There is limited case law available to assist in
understanding the implications of these provisions that govern shareholder behavior.
The Otonomo Articles provide that, unless it consents otherwise, the District Court (Economic Division), located in Tel Aviv, Israel shall be the sole
and exclusive forum for substantially all disputes between it and its shareholders under the Companies Law and the Israeli Securities Law, which could limit its shareholders’ ability to bring claims and proceedings against, as well as
obtain favorable judicial forum for disputes with, it, its directors, officers and other employees.
The District Court (Economic Division), located in Tel Aviv, Israel shall be the exclusive forum for (i) any derivative action or proceeding brought on behalf of it, (ii)
any action asserting a claim of breach of fiduciary duty owed by any director, officer or other employee of it to it or its shareholders, or (iii) any action asserting a claim arising pursuant to any provision of the Companies Law or the
Israeli Securities Law. This exclusive forum provision is intended to apply to claims arising under Israeli Law and would not apply to claims brought pursuant to the Securities Act or the Exchange Act or any other claim for which
U.S. federal courts would have exclusive jurisdiction. Such exclusive forum provision in its Articles will not relieve it of its duties to comply with federal securities laws and the rules and regulations thereunder, and its shareholders
will not be deemed to have waived its compliance with these laws, rules and regulations. This exclusive forum provision may limit a shareholders’ ability to bring a claim in a judicial forum of its choosing for disputes with it or its
directors, officers or other employees, which may discourage lawsuits against it, its directors, officers and other employees.
48
The following unaudited pro forma condensed combined balance sheet data gives effect to the proposed Merger as if it had occurred on March 31, 2023, while the unaudited
pro forma condensed combined statement of operations for the three months ended March 31, 2023 and year ended December 31, 2022 are presented as if the Merger had occurred on January 1, 2022. The following summary unaudited pro forma
condensed combined financial information has been prepared for illustrative purposes only, to reflect merger-related pro forma adjustments, is based on available information and certain assumptions that Urgently believes are reasonable and
is not necessarily indicative of what the combined company’s financial position or results of operations would have been had the Merger occurred as of the dates indicated. In addition, the unaudited pro forma condensed combined financial
information does not purport to project the future financial position or operating results of the combined company following the Merger. Future results may vary significantly from the results reflected because of various factors, including
those discussed in the section entitled “Risk Factors” beginning on page 14 of this Prospectus/Offer to Exchange.
Introduction
On February 9, 2023, Urgently, Otonomo and Merger Sub entered into the Merger Agreement. Pursuant to the Merger Agreement, and subject to the satisfaction or waiver of
the conditions set forth therein, Merger Sub will be merged with and into Otonomo, and Otonomo will continue as the surviving company of the Merger and as a wholly owned subsidiary of Urgently. Urgently and Otonomo expect the transaction to
close during the third quarter of 2023 subject to the approval of Otonomo’s shareholders and the satisfaction or waiver of certain conditions to the closing of the Merger set forth in the Merger Agreement, as further described in the
section entitled “Summary — Entry into Agreement and Plan of Merger.” The merger consideration is estimated to be approximately $91.4 million payable in shares of Urgently common stock. See Note 2
for additional information on the estimated merger consideration.
The unaudited pro forma condensed combined balance sheet as of March 31, 2023 gives effect to the Merger as if this transaction had been completed on March 31, 2023 and
combines figures derived from the unaudited condensed consolidated balance sheet of Urgently as of March 31, 2023 with figures derived from Otonomo’s unaudited condensed consolidated balance sheet as of March 31, 2023.
The unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2023 and year ended December 31, 2022 gives effect to the Merger
as if it had occurred on January 1, 2022, the beginning of the earliest period presented, and combines the historical results of Urgently and Otonomo. The unaudited pro forma condensed combined statement of operations for the three months
ended March 31, 2023 combines figures derived from the unaudited condensed consolidated statement of operations of Urgently for the three months ended March 31, 2023, with figures derived from Otonomo’s unaudited condensed consolidated
statement of operations for the three months ended March 31, 2023. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2022 combines figures derived from the audited consolidated statement of
operations of Urgently for the year ended December 31, 2022 with figures derived from Otonomo’s audited consolidated statement of operations for the year ended December 31, 2022. The unaudited pro forma condensed combined financial
information has been prepared pursuant to Article 11 of Regulation S-X.
The consolidated financial statements of Urgently and the consolidated financial statements of Otonomo have been adjusted in the accompanying unaudited pro forma
condensed combined financial information to give effect to pro forma events described in the introduction paragraph above through transaction accounting adjustments, which would be necessary to (1) account for the Merger, in accordance
with US GAAP and (2) reflect other material recapitalization and other transactions that are expected to be initiated immediately preceding and in conjunction with the Merger in accordance with Rule 11-01(a)(8) of Regulation S-X. The
accompanying unaudited pro forma condensed combined financial information gives effect to (i) the 1-for-90 reverse stock split of Urgently common stock conducted on July 28, 2023, and (ii) the reverse share split of the Ordinary Shares at
a ratio of 1-for-15, which was conducted on August 3, 2023. The unaudited pro forma adjustments are based upon available information and certain assumptions that Urgently’s management believes are reasonable.
49
The unaudited pro forma condensed combined financial information should be read in conjunction with:
| • |
The accompanying notes to the unaudited pro forma condensed combined financial information;
|
| • |
The separate unaudited condensed consolidated financial statements of Urgently as of and for the three months ended March 31, 2023 and the related notes, included elsewhere in this Prospectus/Offer to
Exchange;
|
| • |
The separate audited consolidated financial statements of Urgently as of and for the year ended December 31, 2022 and the related notes, included in this Prospectus/Offer to Exchange;
|
| • |
The separate unaudited condensed consolidated financial statements of Otonomo as of and for the three months ended March 31, 2023 and the related notes, included elsewhere in this Prospectus/Offer to
Exchange;
|
| • |
The separate audited consolidated financial statements of Otonomo as of and for the year ended December 31, 2022 and the related notes, included in this Prospectus/Offer to Exchange; and
|
| • |
The section of this Prospectus/Offer to Exchange entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
|
Description of the Merger
Pursuant to the Merger Agreement, Merger Sub, a company organized under the laws of the State of Israel and a direct wholly owned subsidiary of Urgently, will be merged
with and into Otonomo with Otonomo continuing as the surviving company and a wholly owned subsidiary of Urgently. As a result, each issued and outstanding Ordinary Share will be automatically transferred to Urgently, and the rights of the
holders of Ordinary Shares immediately prior to the Effective Time will automatically convert into and represent the right to receive a number of shares of Urgently common stock equal to the Exchange Ratio (as defined in the Merger
Agreement). Based on Otonomo’s and Urgently’s respective pro forma capitalization, and based on assumptions as of March 31, 2023 as to the anticipated valuations of Otonomo and Urgently, respectively, on the business day prior to the
anticipated date of the closing of the Merger, the Exchange Ratio is estimated to be 0.236. This estimate is subject to adjustment prior to the closing of the Merger for Otonomo’s and Urgently’s capitalization at the Effective Time and
the definitive amounts of Otonomo’s and Urgently’s respective valuations on the business day prior to the anticipated date of the closing of the Merger.
Accounting for the Merger
The Merger is being accounted for as a business combination using the acquisition method with Urgently as the accounting acquirer in accordance with Accounting Standards
Codification (“ASC”) Topic 805, Business Combinations. Under this method of accounting, the aggregate merger consideration will be allocated to Otonomo’s separately identifiable assets acquired and liabilities assumed based upon their
estimated fair values or other measurement explicitly permissible by US GAAP at the date of completion of the Merger. The process of valuing the net assets of Otonomo immediately prior to the Merger, as well as evaluating accounting
policies for conformity, is preliminary. Any shortfall between the estimated fair value of the consideration transferred and the estimated fair value of the Otonomo assets acquired and liabilities assumed will be recorded as a bargain
purchase gain. Accordingly, the aggregate merger consideration allocation and related adjustments reflected in this unaudited pro forma condensed combined financial information are preliminary and subject to revision based on a final
determination of the fair value of Otonomo’s net assets, Ordinary Shares and the value of Urgently common stock immediately prior to the Effective Time, after the date of this Prospectus/Offer to Exchange. See Note 1 Basis of Presentation below for more information.
The unaudited pro forma condensed combined financial information has been prepared for illustrative purposes only and is not necessarily indicative of what the combined
company’s financial position or results of operations actually would have been had the Merger occurred as of the dates indicated. The unaudited pro forma condensed combined financial information also should not be considered indicative of
the future results of operations or financial position of Urgently.
The Merger is subject to reclassification and transaction accounting adjustments that have not yet been finalized. Accordingly, the pro forma adjustments are preliminary
and have been made solely for the purpose of providing unaudited pro forma condensed combined financial information as required by SEC rules. Differences between these preliminary estimates and the final reclassification and transaction
accounting adjustments may be material.
50
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF MARCH 31, 2023
(In thousands)
|
|
Historical
|
Pro Forma
Combined |
||||||||||||||||||
|
|
Urgently
|
Otonomo
|
Transaction
Accounting Adjustments Note 3 |
Notes
|
||||||||||||||||
|
Assets
|
||||||||||||||||||||
|
Current assets:
|
||||||||||||||||||||
|
Cash and cash equivalents
|
$
|
7,730
|
$
|
23,102
|
—
|
$
|
30,832
|
|||||||||||||
|
Restricted cash
|
1,050
|
302
|
—
|
1,352
|
||||||||||||||||
|
Short-term deposits
|
—
|
50,101
|
—
|
50,101
|
||||||||||||||||
|
Marketable securities
|
—
|
56,264
|
—
|
56,264
|
||||||||||||||||
|
Accounts receivable, net
|
30,452
|
970
|
—
|
31,422
|
||||||||||||||||
|
Prepaid expenses and other current assets
|
1,233
|
1,896
|
—
|
3,129
|
||||||||||||||||
|
|
||||||||||||||||||||
|
Total current assets
|
40,465
|
132,635
|
—
|
173,100
|
||||||||||||||||
|
Right-of-use assets
|
2,316
|
1,792
|
—
|
4,108
|
||||||||||||||||
|
Property and equipment, net
|
403
|
918
|
—
|
1,321
|
||||||||||||||||
|
Intangible assets, net
|
31
|
—
|
18,000
|
3A
|
18,031
|
|||||||||||||||
|
Other non-current assets
|
501
|
391
|
—
|
892
|
||||||||||||||||
|
|
||||||||||||||||||||
|
Total assets
|
$
|
43,716
|
$
|
135,736
|
$
|
18,000
|
$
|
197,452
|
||||||||||||
|
|
||||||||||||||||||||
|
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Deficit
|
||||||||||||||||||||
|
Current liabilities:
|
||||||||||||||||||||
|
Accounts payable
|
$
|
12,023
|
$
|
5,310
|
$
|
—
|
$
|
17,333
|
||||||||||||
|
Accrued expenses
|
22,254
|
6,548
|
13,993
|
3B
|
42,795
|
|||||||||||||||
|
Accrued interest
|
8,784
|
—
|
(8,784
|
)
|
3C
|
—
|
||||||||||||||
|
Deferred revenue, current
|
62
|
186
|
—
|
248
|
||||||||||||||||
|
Current lease liabilities
|
714
|
653
|
—
|
1,367
|
||||||||||||||||
|
Current portion of contingent consideration
|
—
|
2,292
|
—
|
2,292
|
||||||||||||||||
|
Current portion of long-term debt
|
53,786
|
—
|
—
|
53,786
|
||||||||||||||||
|
|
||||||||||||||||||||
|
Total current liabilities
|
97,623
|
14,989
|
5,209
|
117,821
|
||||||||||||||||
|
Long-term lease liabilities
|
1,964
|
1,005
|
—
|
2,969
|
||||||||||||||||
|
Long-term debt, net
|
50,206
|
—
|
(50,206
|
)
|
3D
|
—
|
||||||||||||||
|
Derivative liability
|
33,368
|
—
|
(32,876
|
)
|
3D
|
492
|
||||||||||||||
|
Warrant liability
|
10,324
|
160
|
(10,324
|
)
|
3D
|
160
|
||||||||||||||
|
Other long-term liabilities
|
2,739
|
—
|
—
|
2,739
|
||||||||||||||||
|
|
||||||||||||||||||||
|
Total liabilities
|
196,224
|
16,154
|
(88,197
|
)
|
124,181
|
|||||||||||||||
|
|
||||||||||||||||||||
|
Redeemable convertible preferred stock
|
46,334
|
—
|
(46,334
|
)
|
3D
|
—
|
||||||||||||||
|
Stockholders’ deficit:
|
||||||||||||||||||||
|
Common stock
|
—
|
—
|
6 |
3E
|
6 |
|||||||||||||||
|
Additional paid-in capital
|
48,404
|
372,515
|
(123,748
|
)
|
3E
|
297,171
|
||||||||||||||
|
Accumulated other comprehensive loss
|
—
|
(5,024
|
)
|
5,024
|
3E
|
—
|
||||||||||||||
|
Accumulated deficit
|
(247,246
|
)
|
(247,909
|
)
|
271,249
|
3E
|
(223,906
|
)
|
||||||||||||
|
|
||||||||||||||||||||
|
Total stockholders’ equity (deficit)
|
(198,842
|
)
|
119,582
|
152,531
|
73,271
|
|||||||||||||||
|
|
||||||||||||||||||||
|
Total liabilities, redeemable convertible preferred stock and stockholders’ deficit
|
$
|
43,716
|
$
|
135,736
|
$
|
18,000
|
$
|
197,452
|
||||||||||||
51
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2023
(In thousands, except per share amounts)
|
|
Historical
|
|||||||||||||||||||
|
|
Urgently
|
Otonomo
|
Transaction
Accounting Adjustments Note 4 |
Notes
|
Pro Forma
Combined |
|||||||||||||||
|
Revenues
|
$
|
49,578
|
$
|
1,839
|
$
|
—
|
$
|
51,417
|
||||||||||||
|
Cost of revenues
|
40,319
|
1,204
|
—
|
41,523
|
||||||||||||||||
|
Cloud infrastructure
|
—
|
754
|
—
|
754
|
||||||||||||||||
|
|
||||||||||||||||||||
|
Gross margin
|
9,259
|
(119
|
)
|
—
|
9,140
|
|||||||||||||||
|
|
||||||||||||||||||||
|
Operating expenses:
|
||||||||||||||||||||
|
Research and development
|
3,742
|
3,550
|
—
|
7,292
|
||||||||||||||||
|
Sales and marketing
|
1,072
|
4,642
|
—
|
5,714
|
||||||||||||||||
|
Operations and support
|
7,201
|
—
|
—
|
7,201
|
||||||||||||||||
|
General and administrative
|
7,480
|
7,344
|
—
|
14,824
|
||||||||||||||||
|
Depreciation and amortization
|
72
|
87
|
1,000
|
4B
|
1,159
|
|||||||||||||||
|
Contingent consideration expense
|
—
|
1,381
|
—
|
1,381
|
||||||||||||||||
|
|
||||||||||||||||||||
|
Total operating expenses
|
19,567
|
17,004
|
1,000
|
37,571
|
||||||||||||||||
|
|
||||||||||||||||||||
|
Operating loss
|
(10,308
|
)
|
(17,123
|
)
|
(1,000
|
)
|
(28,431
|
)
|
||||||||||||
|
Other income (expense), net:
|
||||||||||||||||||||
|
Interest expense, net
|
(10,951
|
)
|
1,239
|
6,045
|
4C
|
(3,667
|
)
|
|||||||||||||
|
Change in fair value of derivative liability
|
(111
|
)
|
—
|
111
|
4C
|
—
|
||||||||||||||
|
Change in fair value of warrant liability
|
3,633
|
(5
|
)
|
(3,633
|
)
|
4D
|
(5
|
)
|
||||||||||||
|
Foreign exchange loss
|
(11
|
)
|
140
|
—
|
129
|
|||||||||||||||
|
|
||||||||||||||||||||
|
Loss before provision for income taxes
|
(17,748
|
)
|
(15,749
|
)
|
1,523
|
(31,974
|
)
|
|||||||||||||
|
Provision for income taxes
|
—
|
26
|
—
|
26
|
||||||||||||||||
|
|
||||||||||||||||||||
|
Net loss
|
$
|
(17,748
|
)
|
$
|
(15,775
|
)
|
$
|
1,523
|
$
|
(32,000
|
)
|
|||||||||
|
|
||||||||||||||||||||
|
Loss per share:
|
||||||||||||||||||||
|
Basic and diluted
|
$
|
(114.66
|
)
|
$
|
(1.66
|
)
|
$
|
(4.80
|
)
|
|||||||||||
|
|
||||||||||||||||||||
|
Weighted average shares outstanding:
|
||||||||||||||||||||
|
Basic and diluted
|
155
|
9,495
|
6,665
|
|||||||||||||||||
52
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2022
(In thousands, except per share amounts)
|
|
Historical
|
|||||||||||||||||||
|
|
Urgently
|
Otonomo
|
Transaction
Accounting Adjustments Note 4 |
Notes
|
Pro Forma
Combined |
|||||||||||||||
|
Revenues
|
$
|
187,589
|
$
|
6,992
|
$
|
—
|
$
|
194,581
|
||||||||||||
|
Cost of revenues
|
167,442
|
3,367
|
—
|
170,809
|
||||||||||||||||
|
Cloud infrastructure
|
—
|
4,777
|
—
|
4,777
|
||||||||||||||||
|
|
||||||||||||||||||||
|
Gross margin
|
20,147
|
(1,152
|
)
|
—
|
18,995
|
|||||||||||||||
|
|
||||||||||||||||||||
|
Operating expenses:
|
||||||||||||||||||||
|
Research and development
|
16,733
|
22,573
|
—
|
39,306
|
||||||||||||||||
|
Sales and marketing
|
5,647
|
21,761
|
—
|
27,408
|
||||||||||||||||
|
Operations and support
|
36,893
|
—
|
—
|
36,893
|
||||||||||||||||
|
General and administrative
|
14,129
|
22,059
|
13,993
|
4A
|
50,181
|
|||||||||||||||
|
Depreciation and amortization
|
297
|
2,749
|
1,510
|
4B
|
4,556
|
|||||||||||||||
|
Impairment of goodwill/intangibles
|
—
|
72,041
|
(72,041
|
)
|
4E
|
—
|
||||||||||||||
|
Contingent consideration income
|
—
|
(8,954
|
)
|
—
|
(8,954
|
)
|
||||||||||||||
|
|
||||||||||||||||||||
|
Total operating expenses
|
73,699
|
132,229
|
(56,538
|
)
|
149,390
|
|||||||||||||||
|
|
||||||||||||||||||||
|
Operating loss
|
(53,552
|
)
|
(133,381
|
)
|
56,538
|
(130,395
|
)
|
|||||||||||||
|
Other income (expense), net:
|
||||||||||||||||||||
|
Interest expense, net
|
(31,447
|
)
|
1,857
|
15,285
|
4C
|
(14,305
|
)
|
|||||||||||||
|
Change in fair value of derivative liability
|
(4,077
|
)
|
—
|
4,077
|
4C
|
—
|
||||||||||||||
|
Change in fair value of warrant liability
|
(5,809
|
)
|
1,769
|
5,809
|
4D
|
1,769
|
||||||||||||||
|
Warrant expense
|
(1,009
|
)
|
—
|
1,009
|
4D
|
—
|
||||||||||||||
|
Foreign exchange loss
|
(88
|
)
|
(1,171
|
)
|
—
|
(1,259
|
)
|
|||||||||||||
|
|
||||||||||||||||||||
|
Loss before provision for income taxes
|
(95,982
|
)
|
(130,926
|
)
|
82,718
|
(144,190
|
)
|
|||||||||||||
|
Provision for income taxes
|
—
|
146
|
—
|
146
|
||||||||||||||||
|
|
||||||||||||||||||||
|
Net loss
|
$
|
(95,982
|
)
|
$
|
(131,072
|
)
|
$
|
82,718
|
$
|
(144,336
|
)
|
|||||||||
|
|
||||||||||||||||||||
|
Loss per share:
|
||||||||||||||||||||
|
Basic and diluted
|
$
|
(949.35
|
)
|
$
|
(14.21
|
)
|
$
|
(23.24
|
)
|
|||||||||||
|
|
||||||||||||||||||||
|
Weighted average shares outstanding:
|
||||||||||||||||||||
|
Basic and diluted
|
101
|
9,224
|
6,212
|
|||||||||||||||||
53
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL INFORMATION
Note 1: Basis of Presentation
The pro forma condensed combined financial information has been prepared by Urgently in accordance with Article 11 of Regulation S-X. The pro forma condensed combined
financial information reflects transaction accounting adjustments management believes are necessary to present fairly Urgently’s pro forma financial position and results of operations for (1) the closing of the Merger and (2) other
material recapitalization transactions expected to occur immediately preceding or contemporaneous with the Merger. The unaudited pro forma condensed combined financial information does not reflect any cost savings, operating synergies, or
revenue enhancements that the combined company may achieve as a result of the Merger, nor does it reflect the costs to integrate the operations of Urgently and Otonomo or the costs necessary to achieve any cost savings, operating
synergies, and revenue enhancements. The accompanying unaudited pro forma condensed combined financial information gives effect to (i) a 1-for-90 reverse stock split of Urgently common stock, and (ii) a 1-for-15 reverse share split of the
Ordinary Shares.
The unaudited pro forma condensed combined financial information was prepared using the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations, with Urgently as the accounting acquirer, using the fair value concepts defined in ASC Topic 820, Fair Value Measurement, and based on the
historical condensed consolidated financial statements of Urgently and the historical condensed consolidated financial statements of Otonomo. Under ASC Topic 805, all assets acquired and liabilities assumed in a business combination are
generally recognized and measured at their assumed acquisition date fair value, while transaction costs and restructuring costs associated with the business combination are expensed as incurred. The excess of the fair value of assets
acquired and liabilities assumed over the merger consideration is recorded as a transaction gain.
The transaction accounting adjustments represent Urgently management’s best estimates and are based upon currently available information and certain assumptions that Urgently believes are
reasonable under the circumstances. All significant intercompany balances and transactions between Urgently and Otonomo have been eliminated in combination
Urgently management has not identified any reclassification adjustments given all currently available information about Otonomo, which would be necessary to conform the presentation of
Otonomo’s financial statements or accounting policies to those of Urgently.
Note 2: Calculation of Estimated Merger Consideration and Preliminary Purchase Price Allocation
The estimated merger consideration for the purpose of this unaudited pro forma condensed combined financial information as of March 31, 2023 is estimated to be approximately
$91.4 million. The actual consideration will change based on fluctuations in the share price of Urgently common stock and the number of Ordinary Shares outstanding on the closing date of the Merger. The following table summarizes the
preliminary estimate of the merger consideration to be transferred as a result of the Merger:
|
(in thousands, except exchange ratio and share price)
|
||||
|
Otonomo shares outstanding as of March 31, 2023
|
9,573
|
|||