SEC Filing | Integral Ad Science

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ias-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended March 31, 2022


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

For the transition period from ______________ to ______________

Commission File Number: 001-40557

INTEGRAL AD SCIENCE HOLDING CORP.

(Exact name of registrant as specified in its charter)


Delaware						83-0731995
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

Not Applicable1
(Address of principal executive offices)						(Zip Code)

(646) 278-4871

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
symbol

Name of each exchange
on which registered

Common Stock, $0.001 par value per share

IAS

The NASDAQ Stock Market LLC

(Nasdaq Global Select Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☐

		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

On May 10, 2022, the Registrant had 155,115,262 shares of common stock, $0.001 par value, outstanding.

1Any stockholder or other communication required to be sent to our principal executive offices may be directed to our mailing address: 99 Wall Street, #1950, New York, NY 10005

Table of Contents

Page No.

PART I.

FINANCIAL INFORMATION

Item 1.

Condensed Consolidated Financial Statements (Unaudited)

Condensed Consolidated Balance Sheets as of March 3 1 , 202 2 (Unaudited) and December 31, 2021

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss ) for the Three Months Ended March 3 1 , 202 2 and 202 1 (Unaudited)

Condensed Consolidated Statements of Changes in Members’/ Stockholders’ Equity for the Three Months Ended March 3 1 , 202 2 and 202 1 (Unaudited)

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 3 1 , 202 2 and 202 1 (Unaudited)

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Item 2.

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

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Item 4.

Controls and Procedures

PART II.

OTHER INFORMATION

Item 1.

Legal Proceedings

Item 1A.

Risk Factors

Item 2.

Unregistered Sale of Equity Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities

Item 4.

Mine Safety Disclosures

Item 5.

Other Information

Item 6.

Exhibits

Signatures

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

INTEGRAL AD SCIENCE HOLDING CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


(IN THOUSANDS, EXCEPT SHARE DATA)	March 31, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	82,255	$	73,210
Restricted cash	78		70
Accounts receivable, net	53,956		53,028
Unbilled receivables	35,549		36,210
Prepaid expenses and other current assets	9,768		7,647
Total current assets	181,606		170,165
Property and equipment, net	1,378		1,413
Internal use software, net	18,808		18,100
Intangible assets, net	248,102		258,316
Goodwill	675,632		676,513
Operating lease right-of-use assets	20,150		—
Deferred tax asset, net	876		887
Other long-term assets	4,313		4,143
Total assets	$	1,150,865	$	1,129,537
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	47,684	$	56,257
Due to related party	97		74
Deferred revenue	370		160
Operating lease liabilities, current	5,772		—
Total current liabilities	53,923		56,491
Accrued rent	—		854
Net deferred tax liability	52,470		53,523
Long-term debt	242,914		242,798
Operating lease liabilities, non-current	21,878		—
Other long-term liabilities	1,639		8,681
Total liabilities	372,824		362,347
Commitments and Contingencies (Note 15)
Stockholders’ Equity
Preferred Stock, $0.001 par value, 50,000,000 shares authorized at March 31, 2022; 0 shares issued and outstanding at March 31, 2022 and December 31, 2021.	—		—
Common Stock, $0.001 par value, 500,000,000 shares authorized, 155,016,271 and 154,398,495 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively.	155		154
Additional paid-in-capital	792,616		781,951
Accumulated other comprehensive loss	(1,289)		(315)
Accumulated deficit	(13,441)		(14,600)
Total stockholders’ equity	778,041		767,190
Total liabilities and stockholders’ equity	$	1,150,865	$	1,129,537

See notes to the unaudited condensed consolidated financial statements.

INTEGRAL AD SCIENCE HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)


	Three Months Ended March 31,
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)	2022		2021
Revenue	$	89,242	$	66,952
Operating expenses:
Cost of revenue (excluding depreciation and amortization shown below)	16,561		11,420
Sales and marketing	23,057		16,545
Technology and development	16,987		12,769
General and administrative	16,769		8,547
Depreciation and amortization	12,458		14,395
Total operating expenses	85,832		63,676
Operating income	3,410		3,276
Interest expense, net	(1,426)		(6,960)
Net income (loss) before income taxes	1,984		(3,684)
(Provision) benefit from income taxes	(825)		912
Net income (loss)	$	1,159	$	(2,772)
Net income (loss) per share – basic and diluted (1)	$	0.01	$	(0.02)
Weighted average shares outstanding:
Basic	154,477,403		134,007,742
Diluted	157,159,026		134,007,742
Other comprehensive income (loss):
Foreign currency translation adjustments	(974)		(1,904)
Total comprehensive income (loss)	$	185	$	(4,676)

(1) Amounts for periods prior to the Company’s conversion to a Delaware corporation have been retrospectively adjusted to give effect to the corporate conversion described in Note 1.

See notes to the unaudited condensed consolidated financial statements.

INTEGRAL AD SCIENCE HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS’/ STOCKHOLDERS’ EQUITY

(UNAUDITED)

Three Months Ended March 31, 2022


	Common Stock
(IN THOUSANDS, EXCEPT SHARES)	Shares	Amount		Additional paid-in capital		Accumulated other comprehensive income (loss)		Accumulated deficit		Total stockholders’ equity
Balance, December 31, 2021	154,398,495	$	154	$	781,951	$	(315)	$	(14,600)	$	767,190
RSUs vested	12,094	—		—		—		—		—
Option exercises	605,682	1		2,531		—		—		2,532
Stock-based compensation	—	—		8,134		—		—		8,134
Foreign currency translation adjustment	—	—		—		(974)		—		(974)
Net income	—	—		—		—		1,159		1,159
Balance, March 31, 2022	155,016,271	$	155	$	792,616	$	(1,289)	$	(13,441)	$	778,041

Three Months Ended March 31, 2021


	Member’s Interest
(IN THOUSANDS, EXCEPT UNITS AND SHARES)	Units(1)	Amount		Additional paid-in capital		Accumulated other comprehensive income (loss)		Accumulated deficit		Total members’ equity
Balance, December 31, 2020	134,039,494	$	553,717	$	—	$	4,523	$	(126,761)	$	431,479
Repurchase of units	(99,946)	(413)		—		—		(789)		(1,202)
Foreign currency translation adjustment	—	—		—		(1,904)		—		(1,904)
Net loss	—	—		—		—		(2,772)		(2,772)
Balance, March 31, 2021	133,939,548	$	553,304	$	—	$	2,619	$	(130,322)	$	425,601

(1) Amounts for periods prior to the Company’s conversion to a Delaware corporation have been retrospectively adjusted to give effect to the corporate conversion described in Note 1.

See notes to the unaudited condensed consolidated financial statements.

INTEGRAL AD SCIENCE HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Three Months Ended March 31,
(IN THOUSANDS)	2022		2021
Cash flows from operating activities:
Net income (loss)	$	1,159	$	(2,772)
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation and amortization	12,458		14,395
Stock-based compensation	8,139		—
Deferred tax benefit	(719)		—
Amortization of debt issuance costs	116		341
Allowance for (reversal of) doubtful accounts	314		(266)
Non-cash interest expense	—		395
Impairment of assets	49		—
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable	(1,673)		3,556
Decrease in unbilled receivables	649		2,939
Increase in prepaid expenses and other current assets	(2,612)		(3,743)
Operating leases, net	(195)		—
Increase in other long-term assets	(185)		(151)
Decrease in accounts payable and accrued expenses	(6,520)		(6,833)
Increase in accrued rent	—		31
Increase (decrease) in deferred revenue	173		(44)
Increase (decrease) in due to/from related party	34		(151)
Net cash provided by operating activities	11,187		7,697
Cash flows from investing activities:
(Purchase of) proceeds from sale of property and equipment	(328)		5
Acquisition and development of internal use software and other	(2,677)		(6,382)
Net cash used in investing activities	(3,005)		(6,377)
Cash flows from financing activities:
Principal payments on capital lease obligations	—		(136)
Cash paid for unit repurchases	—		(1,202)
Repayment of short-term debt	(1,934)		—
Exercise of stock options	2,532		—
Net cash provided by (used in) financing activities	598		(1,338)
Net increase (decrease) in cash, cash equivalents and restricted cash	8,780		(18)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	278		(846)
Cash, cash equivalents and restricted cash at beginning of period	76,078		54,721
Cash, cash equivalents, and restricted cash, at end of period	$	85,137	$	53,857
Supplemental Disclosures:
Cash paid during the period for:
Interest	$	1,298	$	6,281
Taxes	$	977	$	326
Non-cash investing and financing activities:
Deferred offering costs accrued, not yet paid	$	—	$	1,676
Property and equipment acquired included in accounts payable	$	16	$	93
Internal use software acquired included in accounts payable	$	1,128	$	480
Lease liabilities arising from right of use assets	$	27,650	$	—

See notes to the unaudited condensed consolidated financial statements.

INTEGRAL AD SCIENCE HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

(UNAUDITED)

1. Description of business

Integral Ad Science Holding Corp. and its wholly-owned subsidiaries (together, the “Company”), formerly known as Kavacha Topco, LLC, is a leading global digital advertising verification company by revenue. The Company’s mission is to be the global benchmark for trust and transparency in digital media quality for the world’s leading brands, publishers, and platforms. The Company’s cloud-based technology platform provides actionable insights and deliver independent measurement and verification of digital advertising across all devices, channels, and formats, including desktop, mobile, connected TV (“CTV”), social, display, and video. The Company’s proprietary and Media Rating Council (the “MRC”) accredited Quality Impressions® metric is designed to verify that digital ads are served to a real person rather than a bot, viewable on-screen, and appear in a brand-safe and suitable environment in the correct geography. The Company is an independent, trusted partner for buyers and sellers of digital advertising to increase accountability, transparency, and effectiveness in the market. The Company helps advertisers optimize their ad spend and better measure consumer engagement with campaigns across platforms, while enabling publishers to improve their inventory yield and revenue.

The Company has its operations within the United States ("U.S.") in New York, California, and Illinois. Operations outside the U.S. are within the United Kingdom ("U.K."), Germany, Italy, Spain, Sweden, Singapore, Australia, France, Japan, Canada, Brazil and India.

Corporate conversion

On February 23, 2021, the Company amended the certificate of formation of Kavacha Topco, LLC to change the name of the Company to Integral Ad Science Holding LLC and on June 29, 2021, the Company converted to a Delaware corporation pursuant to a statutory conversion and changed its legal name to Integral Ad Science Holding Corp. in connection with its initial public offering ("IPO"). All of the outstanding member units were converted into 134,203,403 shares of common stock of the Company on a proportion of 1 member unit for 242 shares of common stock with the same voting rights. On June 29, 2021, the Company priced its IPO, which closed on July 2, 2021.

2. Basis of presentation and summary of significant accounting policies

This summary of significant accounting policies is presented to assist in understanding the Company’s condensed consolidated financial statements. These accounting policies have been consistently applied in the preparation of the condensed consolidated financial statements.

(a) Basis of presentation

The Company’s condensed consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and reflect the financial position, results of operations and cash flows for all periods presented. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP.

The accompanying interim condensed consolidated balance sheet as of March 31, 2022, the condensed consolidated statements of operations and comprehensive income (loss), of cash flows and of members’/stockholders’ equity for the three months ended March 31, 2022 and 2021, and the related footnote disclosures are unaudited. These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in management’s opinion, include all adjustments necessary to state fairly the consolidated financial position of the Company. All adjustments made were of a normal recurring nature. The results for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022, or for any future period.

The Company’s significant accounting policies are discussed in Note 2 to the consolidated financial statements for the years ended December 31, 2021, 2020 and 2019. There have been no significant changes to these policies, except for the adoption of ASC 842, Leases as disclosed in Note 2(g), that have had a material impact on the Company’s condensed consolidated financial statements and related notes for the three months ended March 31, 2022. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission (“SEC”) on March 3, 2022.

(b) Basis of consolidation

The condensed consolidated financial statements include the accounts of Integral Ad Science Holding Corp. and its wholly-owned subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates include fair value of assets acquired in business combinations, including assumptions with respect to future cash inflows and outflows, discount rates, assets useful lives, market multiples, the allocation of purchase price consideration in the business combination valuation of acquired assets and liabilities, the estimated useful lives of intangible assets and internal use software, the allowance for doubtful accounts, goodwill impairment testing; assumptions used to calculate equity-based compensation, and the realization of deferred tax assets. The Company bases its estimates on past experience, market conditions, and other assumptions that the Company believes are reasonable under the circumstances, and the Company evaluates these estimates on an ongoing basis. Actual results may differ from these estimates due to risks and uncertainties, including the continued uncertainty surrounding rapidly changing market and economic conditions due to the COVID-19 pandemic.

(d) Cash, cash equivalents, and restricted cash

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows.


	March 31, 2022		December 31, 2021
Cash and cash equivalents	$	82,255	$	73,210
Short term restricted cash	78		70
Long term restricted cash (held in other long-term assets)	2,804		2,798
Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statements of cash flows	$	85,137	$	76,078

(e) Accounts receivable, net

Accounts receivable are carried at the original invoiced amount less an allowance for doubtful accounts. The allowance is estimated based on management’s knowledge of its customers’ financial condition, credit history, and existing economic conditions. Invoices are typically issued with net 30-days to net 90-days terms. Account balances are considered delinquent if payment is not received by the due date, and the receivables are written off when deemed uncollectible. These costs are recorded in general and administrative expenses within the Consolidated Statements of Operations and Comprehensive Income (Loss).

The activity in our allowance for doubtful accounts consists of the following as of:


	March 31, 2022		March 31, 2021
Balance, beginning of period	$	5,883	4,257
Additional provision (reversal)	314		(266)
Receivables written off	(207)		(574)
Balance, end of period	$	5,990	3,417

(f) Stock-based compensation

Stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which is generally the vesting period. The Company accounts for forfeitures as they occur. The Company used the following assumptions in valuing its time-based service options, which vest over a period of time subject to continued employment ("Time-Based Options") and return target options ("Return-Target Options"), which vest upon a realized cash return of the equity investment of Vista Equity Partners ("Vista"), the Company’s equity sponsor and funds controlled by Vista and registration of the shares held by Vista.

Expected term — For time-based awards, the estimated expected term of options granted is generally calculated as the vesting period plus the midpoint of the remaining contractual term, as the Company does not have sufficient historical information to develop reasonable expectations surrounding future exercise patterns and post-vesting employment termination behavior. For awards subject to market and performance conditions, the expected term represents the period of time that the options granted are expected to be outstanding.

Expected volatility — Since the Company does not have substantive trading history of its common stock, volatility is estimated based upon observed option-implied volatilities for a group of peer companies. The Company believes this is the best estimate of the expected volatility over the weighted-average expected term of its option grants.

Risk-free interest rate — The risk-free interest rate is based on the implied yield currently available on U.S. Treasury instruments with terms approximately equal to the expected term of the option.

Expected dividend — The expected dividend assumption was based on the Company’s history and expectation of dividend payouts. The Company currently has no history or expectation of paying cash dividends on its units.

Fair value —Prior to the IPO, because there was no public market for the Company’s common stock/units, the board of directors determined the best estimate of the fair value of the Company’s option grants, based on reasonable judgment and numerous objective and subjective factors, including independent third-party valuations of the Company’s common stock/units, operating and financial performance, and general and industry-specific economic outlook, amongst other factors. Following the pricing of the IPO, the Company’s shares are traded in the public market, and accordingly the Company uses the applicable closing price of its common stock to determine fair value.

The Company used the following assumptions in valuing its stock-based compensation:


	March 31, 2022			March 31, 2021 (1)
Estimated fair value	$8.16	-	$14.04	$2.29
Expected volatility (%)	65%	-	80%	70%	-	75%
Expected term (in years)	3.00	-	10.00	3.25	-	6.63
Risk-free interest rate (%)	0.46%	-	0.98%	0.26%	-	0.55%
Dividend yield	—			—

(1) For issuances prior to the pricing of the IPO, the fair value of the Company’s option grants was estimated at the grant date using the Monte Carlo simulation model and relate to the Return-Target Options only as the Time-Based Options were not within the scope of ASC 718, Compensation - Stock Compensation for the three months ended March 31, 2021.

(g) Recently adopted accounting pronouncements

In January 2017, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU No. 2019-12”) effective January 1, 2021, which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. Most amendments within ASU No. 2019-12 are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The Company early adopted ASU No. 2019-12, which did not have a material impact on the Company’s condensed consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU No. 2018-15”), which requires customers in a cloud computing arrangement that is a service contract to follow the internal use software guidance in ASC 350-40 to determine which implementation costs to capitalize as assets. The guidance requires certain costs incurred during the application development stage to be capitalized and other costs incurred during the preliminary project and post-implementation stages to be expensed as they are incurred. Capitalized implementation costs related to a hosting arrangement that is a service contract will be amortized over the term of the hosting arrangement, beginning when the module or component of the hosting arrange is ready for its intended use. A customer’s accounting for the hosting component of the arrangement is not affected. The Company adopted this guidance on January 1, 2021 on a prospective basis. The adoption of ASU 2018-15 did not have a material impact on the Company’s condensed consolidated financial statements.

In February 2016, the FASB issued ASU 2016-2, “Leases (Topic 842)” (“ASU No. 2016-2”). Under ASU No. 2016-2, lessees are required to put most leases on their balance sheets but to recognize expenses in the income statement in a manner similar to current accounting. ASU No. 2016-2 also eliminated the current real estate-specific provisions and changes the guidance on sale-leaseback transactions, initial direct costs, and lease executory costs for all entities. The updated guidance is effective for the Company beginning January 1, 2022. Upon adoption, entities will be required to use the modified retrospective approach for leases that exist, or are entered into, after the beginning of the earliest comparative period in the financial statements. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842), Targeted Improvements, which allows entities to not apply the new leases standard, including its disclosure requirements, in the comparative periods they present in their financial statements in the year of adoption.

The Company adopted ASU No. 2016-2 on January 1, 2022 using the modified retrospective transition approach, which resulted in the recognition of right-of-use assets ("ROU assets") of $21,666 and lease liabilities of $29,361. Differences between ROU assets and lease liabilities are attributed to deferred rent, lease incentive obligations and cease-use liability previously recognized under ASC 420 Exit or Disposal Cost Obligations. The Company elected the package of practical expedients not to reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs. In addition, the Company elected the expedient permitting the combination of lease and non-lease components into a single lease component. The Company made a policy election to not recognize right-of-use assets and lease liabilities for short-term leases for all asset classes.

The adoption of ASU No. 2016-2 did not have a material impact on the Consolidated Statements of Operations and Comprehensive Income (Loss) or the Consolidated Statement of Cash Flows. Expanded disclosures around the Company's lease agreements under ASU No. 2016-2 are included in Note 14, Leases.

(h) Accounting pronouncements not yet adopted

In October 2021, the FASB issued ASU 2021-08, "Accounting for Contract Assets and Contract Liabilities from Contracts with Customers," which is intended to improve the accounting for acquired revenue contracts with customers in a business combination and create consistency in practice related to (i) the recognition of an acquired contract liability, and (ii) payment terms and their effect on subsequent revenue recognized by the acquirer. This ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2023. The Company will evaluate the impact of this guidance on future acquisitions as transactions occur.

In March 2020, the FASB issued ASU 2020-4, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” (“ASU No. 2020-4”) which is intended to address accounting consequences that could result from the global markets’ anticipated transition away from the use of the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The amendments in ASU No. 2020-4 provide operational expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions to affected by reference rate reform if certain criteria are met. The amendments in ASU No. 2020-4 apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of the reference rate reform. The optional amendments are effective for all entities as of March 12, 2020, through December 31, 2022. The Company intends to elect to apply certain of the optional expedients when evaluating the impact of reference rate reform on its debt instruments that reference LIBOR. The Company does not expect the adoption of ASU No. 2020-4 to have a material impact on its consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” (“ASU No. 2016-13”) which is intended to provide more decision-useful information about expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. ASU No. 2016-13 revises the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in more timely recognition of losses on financial instruments, including, but not limited to accounts receivable. This guidance will be effective for the Company beginning January 1, 2023, including interim periods within that reporting period. Early adoption is permitted and the update allows for a modified retrospective method of adoption. The Company is currently evaluating the potential effect that adopting this guidance will have on its Condensed Consolidated Financial Statements.

3. Business combinations

Publica LLC

On August 9, 2021, a wholly-owned subsidiary of the Company acquired, directly or indirectly, all the membership units and membership interests of Publica LLC ("Publica"). The purchase price related to this acquisition was $171,366 in cash and 2,888,889 shares of common stock of the Company, valued at $49,631. The acquisition was financed with proceeds received from the Company's IPO.

The acquisition was accounted for in accordance with ASC 805, using the acquisition method of accounting. The assets and liabilities of Publica, including identifiable intangible assets, have been measured at their fair value primarily using Level 3 inputs. Determining the fair value of the assets acquired and liabilities assumed requires judgement and involved the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, assets useful lives, market multiples, and other items. The use of different estimates and judgements could yield materially different results.

The fair values allocated to the assets acquired are based on management's estimates and assumptions and may be subject to change as additional information becomes available. The fair value of the customer relationship intangible asset acquired was determined using the excess earnings method. The fair value of the trademark and developed technology intangible assets acquired were determined using the relief from royalty method.

The excess of the purchase price, over the fair value of net assets acquired, including the amount assigned to the identifiable intangible assets, has been recorded to goodwill. The resulting goodwill has been allocated to the Company's single reporting unit. $57,972 of goodwill will be deductible for tax purposes.

The allocation of purchase consideration to the assets acquired and liabilities assumed is as follows:


	Fair Value		Useful Life
Assets acquired:
Cash and cash equivalents	$	4,482
Accounts receivable	2,391
Property, plant and equipment	46
Prepaid expenses	188
Security deposits	12
Intangible assets:
Developed technology	15,200		5 years
Trademarks	2,200		5 years
Customer relationships	42,800		6 years
Total intangible assets	60,200
Total identifiable assets acquired	$	67,319
Liabilities assumed:
Accounts payable	$	560
Other current liabilities	2
Deferred tax liability	36,161
Total liabilities assumed	36,723
Goodwill	190,401		Indefinite
Total purchase consideration	$	220,997

Context

On December 31, 2021, a wholly-owned subsidiary of the Company acquired, directly or indirectly, all the common equity of Nobora SAS ("Context"). The Context acquisition builds on the Company's current, market-leading media classification and contextual targeting capabilities. The integration of Context's technology will enable marketing partners to identify brand suitable content beyond standard frameworks and contextually target with granularity. The purchase price related to this acquisition was $22,575 in cash, of which $1,354 is payable on May 15, 2022 and $966 is payable on December 31, 2023, and 457,959 shares of common stock of the Company, valued at $10,391.

The Context acquisition was accounted for in accordance with ASC 805, using the acquisition method of accounting. The assets and liabilities of Context, including identifiable intangible assets, have been measured at their fair value primarily using Level 3 inputs. Determining the fair value of the assets acquired and liabilities assumed requires judgement and involved the use of significant estimates and assumptions, including assumptions with respect to discount rates, opportunity costs, and assets useful lives. The use of different estimates and judgements could yield materially different results.

The excess of the purchase price, over the fair value of net assets acquired, including the amount assigned to the identifiable intangible assets, has been recorded to goodwill. The resulting goodwill has been allocated to the Company's single reporting unit, none of which will be deductible for tax purposes.

The allocation of purchase consideration to the assets acquired and liabilities assumed is as follows:


	Fair Value		Useful Life
Assets acquired:
Accounts receivable	$	122
Other assets	112
Developed technology	7,670		5 years
Total identifiable assets acquired	$	7,904
Liabilities assumed:
Accounts payable	$	318
Short-term debt	2,354
Deferred tax liability	142
Total liabilities assumed	2,814
Goodwill	27,876		Indefinite
Total purchase consideration	$	32,966

The Company recognized a deferred tax liability of $142 on its purchase of Context.

4. Property and equipment, net

Property and equipment consisted of the following:


	Estimated useful life (in years)			March 31, 2022		December 31, 2021
Computer and office equipment	1	-	3 years	$	3,324	$	3,100
Computer software	3	-	5 years	218		218
Leasehold improvements	Various			405		412
Furniture	5 years			78		66
Total property and equipment				4,025		3,796
Less: accumulated depreciation				(2,647)		(2,383)
Total property and equipment, net				$	1,378	$	1,413

Depreciation expense of property and equipment for the three months ended March 31, 2022 and 2021 was $218 and $510, respectively.

5. Internal use software, net

Internal use software consisted of the following:


	Estimated useful life (in years)			March 31, 2022		December 31, 2021
Internal use software	3	-	5 years	$	35,489	$	32,591
Less: Accumulated amortization				(16,681)		(14,491)
Total internal use software, net				$	18,808	$	18,100

Amortization expense for the three months ended March 31, 2022 and 2021 was $2,227 and $1,686, respectively. For the three months ended March 31, 2022, the Company impaired $49 of costs related to projects that were no longer being implemented, recorded in general and administrative expenses within the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

6. Intangible assets, net

The gross book value, accumulated amortization, net book value and amortization periods of the intangible assets were as follows:


	March 31, 2022
	Estimated useful life			Gross book value		Accumulated amortization		Net book value		Weighted average remaining useful life
Customer relationships	5	-	15 years	$	302,005	$	(89,727)	$	212,278	10.2 years
Developed technology	4	-	5 years	138,098		(114,006)		24,092		4.2 years
Trademarks	5	-	9 years	19,700		(8,043)		11,657		5.1 years
Favorable leases	6 years			198		(123)		75		2.3 years
Total				$	460,001	$	(211,899)	$	248,102

	December 31, 2021
	Estimated useful life			Gross book value		Accumulated amortization		Net book value		Weighted average remaining useful life
Customer relationships	5	-	15 years	$	302,026	$	(82,105)	$	219,921	10.4 years
Developed technology	4	-	5 years	138,342		(112,347)		25,995		4.5 years
Trademarks	5	-	9 years	19,700		(7,384)		12,316		5.4 years
Favorable leases	6 years			198		(114)		84		2.5 years
Total				$	460,266	$	(201,950)	$	258,316

Amortization expense related to intangibles for the three months ended March 31, 2022 and 2021 was $10,013 and $12,067, respectively.

7. Goodwill

The following table provides a roll forward of the changes in the goodwill balance:



Goodwill as of December 31, 2021	$	676,513
Measurement period adjustments	(252)
Impact of exchange rates	(629)
Goodwill as of March 31, 2022	$	675,632

8. Accounts payable and accrued expenses

Accounts payable and accrued expenses consisted of the following:


	March 31, 2022		December 31, 2021
Accounts payable	$	17,383	$	8,307
Accrued payroll	5,908		5,047
Accrued professional fees	1,496		2,334
Accrued interest	48		33
Accrued bonuses and commissions	6,210		16,454
Accrued revenue sharing	3,428		8,497
Taxes payable	6,230		6,076
Short term debt	—		1,976
Accrued hosting fees	3,089		2,465
Cease use liability (short-term)	—		1,298
Other accrued expenses	3,892		3,770
Total accounts payable and accrued expenses	$	47,684	$	56,257

Other long-term liabilities consisted of the following:


	March 31, 2022		December 31, 2021
Purchase price payable for the acquisition of Context	$	967	$	2,320
Cease use liability (long-term)	—		5,689
Security deposit received	672		672
Total Other long-term liabilities	$	1,639	$	8,681

9. Long-term debt

New Credit Agreement

On September 29, 2021, the Company entered into a new credit agreement with various lenders (the “New Credit Agreement” or the “New Revolver”), that provides for an initial $300,000 in commitments for revolving credit loans, which amount may be increased or decreased under specific circumstances, with a $30,000 letter of credit sublimit and a $100,000 alternative currency sublimit. In addition, the New Credit Agreement provides for the ability to request incremental term loan facilities, in a minimum amount of $5,000 for each facility. Borrowings pursuant to the New Credit Agreement may be used for working capital and other general corporate purposes, including for acquisitions permitted under the New Credit Agreement. The Company drew down $235,000 on the New Revolver on September 29, 2021 and an additional $10,000 on December 23, 2021.

Borrowings under the New Credit Agreement are scheduled to mature on September 29, 2026. The New Credit Agreement contains certain customary events of default including failure to make payments when due thereunder, and failure to observe or perform certain covenants.

The proceeds of the New Revolver, together with cash on hand, were used to repay the outstanding balance of the Term Loan and Revolving Loan. In connection with the New Revolver, the Company incurred costs of $2,318 that are included in Long-term debt, net, in the Condensed Consolidated Balance Sheets. In connection with the extinguishment of the Term Loan and Revolving Loan, the Company wrote off deferred financing costs of $3,721 as a loss on extinguishment.

The interest rates for the New Revolver under the New Credit Agreement for U.S. dollar loans are equal to (i) the applicable rate for base rate loans range from 0.75% to 1.50% per annum, (ii) for LIBO Rate (as defined in the New Credit Agreement) loans range from 1.75% to 2.50% per annum, (iii) for RFR Loans (as defined in the New Credit Agreement) denominated in sterling range from 1.7826% to 2.5326%, and (iv) for RFR Loans denominated in euro range from 1.7965% to 2.5456%, in each case, based on the Senior Secured Net Leverage Ratio (as defined in the New Credit Agreement). Base rate borrowings may only be made in dollars. The Company will pay a commitment fee during the term of the New Credit Agreement ranging from 0.20% to 0.35% per annum of the average daily undrawn portion of the revolving commitments based on the Senior Secured Net Leverage Ratio. The interest rate on March 31, 2022 was 2.5%.

Any borrowings under the New Credit Agreement may be repaid, in whole or in part, at any time and from time to time without premium or penalty other than customary breakage costs, and any amounts repaid may be reborrowed. No mandatory prepayments will be required other than when borrowings and letter of credit usage exceed the aggregate commitment of all lenders.

The New Credit Agreement contains covenants requiring certain financial information to be submitted quarterly and annually. In addition, the Company is also required to comply with certain financial covenants such as maintaining a Net Leverage Ratio (as defined in the New Credit Agreement) of 3.50:1.00 or lower and maintaining a minimum Interest Coverage Ratio (as defined in the New Credit Agreement) of 2.50 to 1.00. As of March 31, 2022, the Company was in compliance with all covenants contained in the New Credit Agreement.


	March 31, 2022		December 31, 2021
New Revolver	$	245,000	$	245,000
Less: Unamortized debt issuance costs	(2,086)		(2,202)
Total carrying amount	$	242,914	$	242,798

Amortization of debt issuance costs for the three months ended March 31, 2022 and 2021 was $116 and $341, respectively. Amortization of debt issuance costs is recorded to interest expense, net on the Company's Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

The Company recognized interest expense of $1,312 and $6,222 during the three months ended March 31, 2022 and 2021, respectively. Future principal payments of long-term debt as of March 31, 2022 are as follows:


Year Ending
2022 (remaining nine months)	$	—
2023	—
2024	—
2025	—
2026	245,000
	$	245,000

10. Income taxes

At the end of each interim period, the Company estimates the annual expected effective income tax rate and applies that rate to its ordinary year-to-date earnings or loss. The income tax provision or benefit related to significant, unusual, or extraordinary items, if applicable, that will be separately reported or reported net of their related tax effects are individually computed and recognized in the interim period in which they occur. In addition, the effect of changes in enacted tax laws or rates, tax status, judgment on the realizability of a beginning-of-the-year deferred tax asset in future years or unrecognized tax benefits is recognized in the interim period in which the change occurs.

The computation of the annual expected effective income tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected pre-tax income (or loss) for the year, projections of the proportion of income (and/or loss) earned and taxed in foreign jurisdictions, permanent and temporary differences, and the likelihood of the realization of deferred tax assets generated in the current year. The accounting estimates used to compute the provision or benefit for income taxes may change as new events occur, more experience is acquired, additional information is obtained or the Company’s tax environment changes. To the extent that the expected annual effective income tax rate changes during a quarter, the effect of the change on prior quarters is included in income tax provision in the quarter in which the change occurs.

For the three months ended March 31, 2022 and 2021, the Company recorded an income tax provision of $825 and an income tax benefit of $912, respectively. The Company’s effective tax rate for the three months ended March 31, 2022 and 2021 was 41.6% and 24.8%, respectively. The Company's effective tax rate for the three months ended March 31, 2022 is higher than for the respective three months ended March 31, 2021 primarily due to non-deductible stock-based compensation as the Company became subject to the provisions of Section 162(m) of the Internal Revenue Code as a result of becoming a public company.

The Company recognizes interest and, if applicable, penalties related to unrecognized tax benefits in the income tax provision. The Company is not currently under audit in any taxing jurisdiction.

11. Segment data

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), in deciding how to allocate resources and in assessing performance. The Company’s Chief Executive Officer is the CODM.

The Company manages its operations as a single segment for the purpose of assessing and making operating decisions. The Company’s CODM allocates resources and assesses performance based upon financial information at the consolidated level. Since the Company operates in one operating segment, all required financial segment information can be found in the condensed consolidated financial statements.

The following table summarizes revenue by geographic area:


	Three Months Ended March 31,
	2022		2021
North and South America (“Americas”)	$	60,559	$	41,190
Europe, Middle East and Africa (“EMEA”)	21,658		18,917
Asia and Pacific Rim (“APAC”)	7,025		6,845
Total	$	89,242	$	66,952

For the three months ended March 31, 2022 and 2021, revenue in the U.S. was $57,432 and $38,901, respectively.

The following table summarizes long lived assets by geographic area:


	March 31, 2022		December 31, 2021
Long lived assets
Americas	$	16,748	$	876
EMEA	887		181
APAC	3,893		356
Total	$	21,528	$	1,413

12. Stock-based compensation

Integral Ad Science Holding Corp. Amended and Restated 2018 Stock Option Plan

On August 1, 2018, the Company adopted the 2018 Non-Qualified Stock Option Plan (“2018 Plan”). Under the 2018 Plan, the Company had issued (i) Time-Based Options that vest over four years with 25% vesting after twelve months and an additional 6.25% vesting at the end of each successive quarter thereafter; and (ii) Return-Target Options that vest upon the first to occur of sale of the Company, or, sale or transfer to any third party of shares, as a result of which, any person or group other than Vista, obtains possession of voting power to elect a majority of the Company’s board of directors or any other governing body and the achievement of a total equity return multiple of 3.0 or greater.

The 2018 Plan contained a provision wherein, the Time-Based Options can be repurchased by the Company at cost upon resignation of the employee. Due to this repurchase feature, the Time-Based Options did not provide the employee with the potential benefits associated with a stock award holder, and therefore, these awards were not accounted for as a stock-based award under ASC 718, Compensation - Stock Compensation but instead, compensation cost was recognized when the benefit to the employee was determined to be probable.

The Return-Target Options were considered to contain both market (total stockholder return threshold) and performance (exit event) conditions. As such, the award was measured on the date of grant. Since the conditions for vesting related to the Return-Target Options were not met prior to the IPO, no stock-based compensation was recognized in the pre-IPO financial statements of the Company.

In connection with the Company’s IPO, the 2018 Plan was amended and restated (“Amended and Restated 2018 Plan”) with the following modifications: (i) the provision to repurchase the Time-Based Options at cost upon resignation of the employee was removed and (ii) the Return-Target Options were modified to include vesting upon a sale of shares by Vista following the IPO resulting in Vista realizing a cash return on its investment in the Company equaling or exceeding $1.17 billion.

As a result of the modification to the Time-Based Options, the awards became subject to the guidance in ASC 718, Compensation - Stock Compensation. During the three months ended March 31, 2022, the Company recognized stock compensation expense of $3,876 related to the Time-Based Options.

As the return multiple and vesting conditions associated with the Return-Target Options were also modified, the Company fair valued the Return-Target Options using a Monte Carlo simulation model. The Return-Target Options become exercisable following both (i) a registration of shares of common stock held by Vista and (ii) Vista realizing a cash return on its investment in the Company equaling or exceeding $1.17 billion. As of March 31, 2022, the condition relating to Vista's cash return was not deemed probable and therefore, no stock-based compensation expense was recognized relating to the Return-Target Options.

Vesting of the Time-Based Options accelerate when the Return-Target Options vest and therefore, recognition of the remaining unamortized stock compensation expense related to the Time-Based Options will accelerate when it becomes probable that the Return-Target Options would vest.

The total number of Time-Based Options and Return Target Options outstanding under the Amended and Restated 2018 Plan as of March 31, 2022 were 4,586,408 and 2,270,455, respectively. The Company does not expect to issue any additional awards under the Amended and Restated 2018 Plan.

2021 Omnibus Incentive Plan (“2021 Plan”)

On June 29, 2021, the Company adopted the 2021 Plan to incentivize executive officers, management, employees, consultants and directors of the Company and to align the interests of the participants with those of the Company’s shareholders. As of March 31, 2022, there were 27,421,802 shares reserved for issuance under the 2021 Plan and the total number of shares reserved for issuance under the 2021 Plan will be increased on January 1 of each of the first 10 calendar years during the term of the 2021 Plan, by the lesser of (i) 5% of the total number of shares of common stock outstanding on each December 31 immediately prior to the date of increase or (ii) such number of shares of common stock determined by our Board or compensation committee.

During the three months ended March 31, 2022, the Company recognized stock compensation expense of $868 related to the stock options. As of March 31, 2022, there are 1,883,690 total options outstanding under the 2021 Plan, consisting of two-thirds or 1,255,471 Time-Based Options and one-third or 628,219 Return-Target Options. The vesting conditions for the options issued under the 2021 Plan are identical to the those described under the Amended and Restated 2018 Plan.

Stock option activity for the three months ended March 31, 2022 is as follows:

Time-Based Options


	Stock options	Weighted average exercise price		Weighted average remaining contractual life (years)	Aggregate intrinsic value
Outstanding at January 1, 2022	6,648,975	$	7.46	7.76	$	98,055
Granted	—	—		—	—
Canceled or forfeited	(201,414)	4.13		—	—
Exercised	(605,682)	4.18		—	—
Outstanding at March 31, 2022	5,841,879	$	7.92	7.61	$	39,635
Vested and expected to vest at March 31, 2022	5,841,879	$	7.92	7.61	—
Exercisable as of March 31, 2022	2,883,956	$	4.64	6.83	$	26,425

Return-Target Options


	Stock options	Weighted average exercise price		Weighted average remaining contractual life (years)	Aggregate intrinsic value
Outstanding at January 1, 2022	3,265,126	$	7.53	7.27	47,947
Granted	—	—		—	—
Canceled or forfeited	(366,452)	4.13		—	—
Exercised	—	—		—	—
Outstanding at March 31, 2022	2,898,674	$	7.95	7.75	$	19,582
Vested and expected to vest at March 31, 2022	2,898,674	$	7.95	7.75	—
Exercisable as of March 31, 2022	—	—		—	—

As of March 31, 2022, unamortized stock-based compensation expense related to the Time-Based Options was $31,102, which will be recognized over the weighted average vesting term of 2.3 years. In addition, unamortized stock-based compensation expense related to the Return-Target Options of $35,236 will be recognized when events that trigger vesting are deemed probable.

2021 Employee Stock Purchase Plan (“ESPP”)

The Company adopted the ESPP for the primary purpose of incentivizing employees in future periods. As of March 31, 2022, 3,033,556 shares of common stock are reserved for issuance under the ESPP, and the number of shares available for issuance will be increased on January 1 of each calendar year, ending in and including 2031, by an amount equal to the lesser of (i) 1% of the shares outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares as is determined by our Board, subject to a maximum of 16,000,000 shares of our common stock for the portion of the ESPP intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code. All Company employees and employees of designated subsidiaries are eligible to participate in the ESPP and can purchase shares through payroll deductions of up to 15% of their eligible compensation, subject to a maximum of $25,000 in any annual period for the portion of the ESPP intended to qualify as an employee purchase plan under Section 423 of the Internal Revenue Code. There are no shares issued under the ESPP plan as of March 31, 2022.

Integral Ad Science Holding Corp. Long-Term Incentive Plan

In 2018, the Company adopted the Long-Term Incentive Plan (“LTIP”). Under the LTIP, certain employees were granted long-term target incentive cash awards which would be payable subject to continued employment, upon the sale of the Company, or, sale to a third party of at least 50% of the Vista’s equity interest, provided if such sale of equity interests is through a public offering (whether initial or secondary), it would require the transfer of an aggregate of at least 75% of Vista’s equity interest and the achievement of a total equity return multiple of 3.0 or greater. Since the liquidity events described above were contingent and generally not considered probable until the event occurred, no stock-based compensation expense was recognized in the three months ended March 31, 2022.

In July 2021, the Company offered employees with LTIP grants the opportunity to convert their cash award into Restricted Stock Units (“RSUs”). The conversion was at a 10% premium to the cash value of the award. The RSUs issued in exchange for LTIP grants vest 50% each year and become fully vested after two years of service. Certain employees did not convert their cash award to RSUs and to cover those cash awards, the Company adopted the Amended and Restated Long-Term Incentive Plan (“Amended and Restated LTIP”) to modify the vesting conditions to include vesting upon the occurrence of a sell down event by Vista following the IPO resulting in Vista realizing a cash return on its investment in the Company equaling or exceeding $1.17 billion. The fair value of the cash awards held by employees under the Amended and Restated LTIP as of March 31, 2022 was $159. As of March 31, 2022, since the sell down event was not deemed probable, no stock-based compensation expense was recognized relating to these LTIP cash awards.

Restricted Stock Units

The majority of RSUs under the 2021 Plan vest 25% each year and become fully vested after 4 years of service.

The RSU activity for the three months ended March 31, 2022 is as follows:


	RSUs
	Number of Shares	Weighted Average Grant Date Fair Value
Outstanding as of January 1, 2022	2,426,147	$	19.43
Granted	524,411	18.14
Canceled or forfeited	(152,088)	18.64
Vested	(12,094)	12.40
Outstanding as of March 31, 2022	2,786,376	$	19.27
Expected to vest as of March 31, 2022	2,786,376

During the three months ended March 31, 2022, the Company recognized $3,395 of stock-based compensation expense related to these RSU awards. Unamortized stock-based compensation expense related to RSUs was $44,257, which will be recognized over the weighted average vesting term of 3.2 years.

Performance Stock Units

The Company granted Performance Stock Units under the 2021 Plan, which are contingent upon achieving specified revenue performance goals by December 31, 2023. As of March 31, 2022, no stock-based compensation expense has been recognized as performance vesting conditions were not deemed probable to occur. The unrecognized compensation expense is $12,000 assuming performance at the highest tier.

Total stock-based compensation expense for all equity arrangements for the three months ended March 31, 2022 and 2021 were as follows:


	Three Months Ended March 31,
	2022		2021
Cost of revenue	$	56	$	—
Sales and marketing	2,531		—
Technology and development	1,536		—
General and administrative	4,016		—
Total	$	8,139	$	—