Annual report pursuant to Section 13 and 15(d)

Schedule I - Condensed Financial Information of Registrant

v3.22.0.1
Schedule I - Condensed Financial Information of Registrant
12 Months Ended
Dec. 31, 2021
Parent Company | Reportable Legal Entities  
Schedule I - Condensed Financial Information of Registrant

SCHEDULE I—CONDENSED FINANCIAL INFORMATION OF REGISTRANT

DoubleVerify Holdings, Inc.

(Parent Company Only)

Condensed Statements of Balance Sheets

(In thousands)

As of December 31, 

(in thousands, except per share data)

    

2021

    

2020

Assets:

Current assets

  

  

Cash and cash equivalents

$

187,105

$

6,418

Trade receivables

 

 

2

Total current assets

 

187,105

 

6,420

Investment in subsidiary

 

428,006

 

360,230

Due from subsidiaries

 

285,906

 

83,151

Total assets

$

901,017

$

449,801

Liabilities and Stockholder’s Equity:

 

  

 

  

Due to subsidiaries

$

101,896

$

32,956

Accrued expense

 

55

 

150

Total liabilities

$

101,951

$

33,106

Stockholders’ equity

 

  

 

  

Common stock, $0.001 par value, 1,000,000 shares authorized, 162,347 shares issued and 162,297 outstanding as of December 31, 2021; 700,000 shares authorized, 140,222 shares issued and 125,074 shares outstanding as of December 31, 2020

 

162

 

140

Preferred stock, $0.01 par value, 100,000 shares authorized, zero shares issued and outstanding as of December 31, 2021; 61,006 shares authorized, issued, and outstanding as of December 31, 2020. Liquidation preference: $350,000 as of December 31, 2020

 

 

610

Additional paid‑in capital

 

717,228

 

620,679

Treasury stock, at cost, 50 shares and 15,146 shares as of December 31, 2021 and December 31, 2020, respectively

 

(1,802)

 

(260,686)

Retained earnings

 

84,249

 

54,941

Accumulated other comprehensive (loss) income, net of income taxes

 

(771)

 

1,011

Total stockholders’ equity

 

799,066

 

416,695

Total liabilities and stockholders’ equity

$

901,017

$

449,801

See accompanying notes to condensed financial statements.

SCHEDULE I—CONDENSED FINANCIAL INFORMATION OF REGISTRANT

DoubleVerify Holdings, Inc.

(Parent Company Only)

Condensed Statements of Operations and Comprehensive (Loss) Income

(In thousands)

Year Ended December 31, 

(in thousands)

    

2021

    

2020

    

2019

Revenue

$

$

$

Cost of revenue

 

 

 

8

Product development

 

4,369

 

673

 

305

Sales, marketing and customer support

 

6,374

 

6,151

 

450

General and administrative

 

28,513

 

14,020

 

1,233

Loss from operations

 

(39,256)

 

(20,844)

 

(1,996)

Other expense, net

 

996

 

 

9

Equity in pre‑tax earnings of consolidated subsidiaries

 

66,073

 

38,153

 

37,365

Income before income taxes

 

25,821

 

17,309

 

35,360

Income tax (benefit) expense

 

(3,487)

 

(3,144)

 

12,053

Net income

 

29,308

 

20,453

 

23,307

Foreign currency cumulative translation adjustment

 

(1,782)

 

1,078

 

(67)

Total comprehensive income

$

27,526

$

21,531

$

23,240

See accompanying notes to condensed financial statements.

SCHEDULE I—CONDENSED FINANCIAL INFORMATION OF REGISTRANT

DoubleVerify Holdings, Inc.

(Parent Company Only)

Condensed Statements of Cash Flows

(In thousands)

Year Ended December 31, 

(in thousands)

    

2021

    

2020

    

2019

Operating activities:

$

67,294

$

18,214

$

(94)

Investing activities:

Transfer of funds to subsidiary

 

(179,825)

 

(83,000)

 

(1,787)

Net cash used in investing activities

 

(179,825)

 

(83,000)

 

(1,787)

Financing activities:

 

  

 

  

 

  

Repurchase of vested options

 

 

(15,506)

 

Proceeds from Series A preferred stock issuance, net of issuance costs

 

 

346,150

 

Payments to shareholders for preferred stock Series A

 

 

(260,686)

 

Proceeds from common stock issued upon exercise of stock options

 

12,440

 

780

 

177

Proceeds from common stock issued under employee purchase plan

 

404

 

424

 

Proceeds from issuance of common stock upon initial public offering

269,390

Proceeds from issuance of common stock in connection to concurrent private placement

30,000

Payments for offering costs

(17,214)

Shares repurchased for settlement of employee tax withholdings

(1,802)

Net cash provided by financing activities

 

293,218

 

71,162

 

177

Effect of exchange rate changes on cash and cash equivalents

 

 

 

(67)

Net increase (decrease) in cash and cash equivalents

 

180,687

 

6,376

 

(1,771)

Cash and cash equivalents—Beginning of period

 

6,418

 

42

 

1,813

Cash and cash equivalents—End of period

$

187,105

$

6,418

$

42

Noncash investing and financing transactions:

 

  

 

  

 

  

Common stock issued in connection with acquisition

22,526

Exchange of common stock for preferred stock

260,686

Treasury stock reissued upon the conversion of Series A preferred stock for common stock

260,686

Due to consolidated subsidiaries

68,940

See accompanying notes to condensed financial statements

SCHEDULE I—CONDENSED FINANCIAL INFORMATION OF REGISTRANT

DoubleVerify Holdings, Inc.

(Parent Company Only)

Notes to the Condensed Financial Statements

(In thousands)

1. Organization

DoubleVerify Holdings, Inc. (the “Company”) is a leading software platform for digital media measurement and analytics. Our mission is to create stronger, safer, more secure digital transactions that drive optimal outcomes for global advertisers. Through our software platform and the metrics it provides, we help preserve the fair value exchange between buyers and sellers of digital media. The Company’s solutions provide advertisers unbiased data analytics that enable advertisers to increase the effectiveness, quality and return on their digital advertising investments. The DV Authentic Ad is our proprietary metric of digital media quality, which measures whether a digital ad was delivered in a brand suitable environment, fully viewable, by a real person and in the intended geography. The Company’s software interface, DV Pinnacle, delivers these metrics to our customers in real time, allowing them to access critical performance data on their digital transactions. The Company’s software solutions are integrated across the entire digital advertising ecosystem, including programmatic platforms, social media channels and digital publishers. The Company’s solutions are accredited by the Media Rating Council, which allows the Company’s data to be used as a single source standard in the evaluation and measurement of digital ads.

The Company was incorporated on August 16, 2017, is registered in the state of Delaware and is the parent company of DoubleVerify Midco, Inc. (“MidCo”), which is in turn the parent company of DoubleVerify Inc. On August 18, 2017, DoubleVerify Inc. entered into an agreement and plan of merger (the “Agreement”), whereby the Company (the “Ultimate Parent”) and Pixel Merger Sub, Inc. (“Merger Sub”), a wholly owned subsidiary of the Company, agreed to provide for the merger of the Merger Sub with DoubleVerify Inc. pursuant to the terms and conditions of the Agreement.

On the effective date, Merger Sub was merged with and into DoubleVerify Inc. whereupon the separate corporate existence of Merger Sub ceased and DoubleVerify Inc. continued as the surviving corporation.

Through the merger, the Company acquired 100% of the outstanding equity instruments of DoubleVerify Inc. (the “Acquisition”) resulting in a change of control at the parent level. The merger resulted in the application of acquisition accounting under the provisions of Financial Accounting Standards Board (“FASB”) Topic Accounting Standards Codification (“ASC”) 805, “Business Combinations.”

The Company is a holding company that does not conduct any business operations of its own and therefore its assets consist primarily of investments in subsidiaries and cash proceeds from stock option exercises, in accordance with the Company’s stock plan discussed further in Footnote 2, Basis of Presentation and Significant Accounting Policies, to the Company’s Consolidated Financial Statements. The amounts available to the Company to fulfill cash commitments or to pay cash dividends are also subject to the covenants and distribution restrictions in its subsidiaries’ loan agreements.

2. Basis of Preparation

The accompanying condensed parent company-only financial statements are required in accordance with Rule 5-04 of Regulation S-X. These condensed financial statements have been presented on a standalone basis for the Company and have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Company’s financial statements should be read in conjunction with the Company’s annual Consolidated Financial Statements.

On March 29, 2021, the Company effected a 1 for 3 reverse stock split (“reverse stock split”) of its outstanding common stock and a proportional adjustment to the existing conversion ratio for the preferred stock described in Footnote 13, Stockholders’ Equity to the Company’s annual Consolidated Financial Statements. Accordingly, all share and per share amounts for all periods presented in these consolidated financial statements and notes thereto, have been adjusted retrospectively, where applicable, to reflect this reverse stock split.

3. Income Taxes

The income tax benefit of $3.5 million, tax benefit of $3.1 million, and tax expense of $12.1 million for years ended December 31, 2021, 2020 and 2019, respectively, represent the Company’s consolidated income tax expense (benefit) as it relates to the Company’s subsidiaries, which have not been consolidated for this presentation.

4. Distributions

There were no distributions made to DoubleVerify Holdings, Inc. by its subsidiaries, for the years ended December 31, 2021, 2020 and 2019.

5. Long-term debt and credit facilities

As of December 31, 2021 and 2020, DoubleVerify Holdings, Inc. held no debt. Certain subsidiaries of the Company are subject to debt agreements.

For further discussion on the nature and terms of these agreements, refer to Footnote 8, “Long-term Debt”, to the Company’s Consolidated Financial Statements.

6. Commitments and Contingencies

For a discussion of commitments and contingencies, refer to Footnote 14, “Commitments and Contingencies”, to the Company’s Consolidated Financial Statements.