| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
| For the quarterly period ended September 30, 2021 | |||||
For the quarterly period ended March 31, 2021
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
| For the transition period from ____________ to ____________ | |||||
FOR THE TRANSITION PERIOD FROM TO
GORES HOLDINGS VI,
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Delaware | 85-1695048 | ||||||||||||
| (State or other jurisdiction of |
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incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||||
| 352 East Java Drive | ||||||||||||
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(Address of |
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(310) 209-3010
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Class A Common Stock, par value of $0.0001 per share |
| The Nasdaq | ||||||||||||
Warrants, each exercisable for one share of Class A Common Stock for $11.50 per share |
| The Nasdaq | ||||||||||||
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Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes Yesx☒ No NO ☐o
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||||||||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||||||||||
| Emerging growth company | ☒ | |||||||||||||
As of May 27, 2021, there were 34,500,000
TABLE OF CONTENTS
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GORES HOLDINGS VI,
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| March 31, 2021 |
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| December 31, 2020 |
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| (unaudited) |
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| (audited) |
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CURRENT ASSETS: |
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|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| $ |
| 176,595 |
|
| $ |
| 633,266 |
|
Prepaid assets |
|
|
| 835,981 |
|
|
|
| 897,754 |
|
Total current assets |
|
|
| 1,012,576 |
|
|
|
| 1,531,020 |
|
Deferred tax asset |
|
|
| — |
|
|
|
| 26,273 |
|
Investments and cash held in Trust Account |
|
|
| 345,022,332 |
|
|
|
| 345,008,625 |
|
Total assets |
| $ |
| 346,034,908 |
|
| $ |
| 346,565,918 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
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Current liabilities: |
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|
|
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Accrued expenses, formation and offering costs |
| $ |
| 2,659,357 |
|
| $ |
| 475,462 |
|
Related party note |
|
|
| 600,000 |
|
|
|
| — |
|
State franchise tax accrual |
|
|
| 50,000 |
|
|
|
| 55,241 |
|
Public warrants derivative liability |
|
|
| 27,255,000 |
|
|
|
| 11,040,000 |
|
Private warrants derivative liability |
|
|
| 17,577,500 |
|
|
|
| 7,120,000 |
|
Total current liabilities |
|
|
| 48,141,857 |
|
|
|
| 18,690,703 |
|
Deferred underwriting compensation |
|
|
| 12,075,000 |
|
|
|
| 12,075,000 |
|
Total liabilities |
| $ |
| 60,216,857 |
|
| $ |
| 30,765,703 |
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Commitments and Contingencies |
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Class A Common Stock subject to possible redemption, 34,500,000 shares (at redemption value of $10 per share) |
|
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| 345,000,000 |
|
|
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| 345,000,000 |
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Stockholders’ equity (deficit): |
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Preferred stock, $0.0001 par value; 1,000,000 shares authorized, NaN issued or outstanding |
|
|
| — |
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|
|
| — |
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Common stock |
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Class A Common Stock, $0.0001 par value; 400,000,000 shares authorized |
|
|
| — |
|
|
|
| — |
|
Class F Common Stock, $0.0001 par value; 40,000,000 shares authorized, 8,625,000 shares issued and outstanding |
|
|
| 863 |
|
|
|
| 863 |
|
Additional paid-in-capital |
|
|
| — |
|
|
|
| — |
|
Accumulated deficit |
|
|
| (59,182,812 | ) |
|
|
| (29,200,648 | ) |
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|
|
|
|
|
|
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Total stockholders’ equity (deficit) |
|
|
| (59,181,949 | ) |
|
|
| (29,199,785 | ) |
|
|
|
|
|
|
|
|
|
|
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Total liabilities and stockholders’ equity (deficit) |
| $ |
| 346,034,908 |
|
| $ |
| 346,565,918 |
|
See
| September 30, 2021 | December 31, 2020 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 148,853 | $ | 51,850 | |||||||
| Restricted cash | 468 | 400 | |||||||||
| Short-term investments | 174,168 | — | |||||||||
| Accounts receivable, net of allowance of $182 and $799, as of September 30, 2021 and December 31, 2020, respectively | 9,572 | 3,924 | |||||||||
| Inventories | 3,989 | 3,646 | |||||||||
| Prepaid expenses and other current assets | 11,395 | 2,453 | |||||||||
| Total current assets | 348,445 | 62,273 | |||||||||
| Property and equipment, net | 11,377 | 8,210 | |||||||||
| Long-term investments | 290,900 | — | |||||||||
| Other assets | 2,716 | 1,369 | |||||||||
| Total assets | $ | 653,438 | $ | 71,852 | |||||||
| LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable | $ | 6,848 | $ | 3,434 | |||||||
| Current portion of long-term debt | — | 8,215 | |||||||||
| Deferred revenue | 8,903 | 4,606 | |||||||||
| Accrued expenses and other current liabilities | 8,781 | 6,995 | |||||||||
| Total current liabilities | 24,532 | 23,250 | |||||||||
| Public warrants liability | 53,682 | — | |||||||||
| Private warrants liability | 34,621 | — | |||||||||
| Contingent earn-out liability | 334,389 | — | |||||||||
| Long-term debt | — | 4,502 | |||||||||
| Deferred revenue, non-current | 210 | 297 | |||||||||
| Other long-term liabilities | 278 | 335 | |||||||||
| Total liabilities | 447,712 | 28,384 | |||||||||
| Commitments and contingencies (Note 8) | 0 | 0 | |||||||||
| Redeemable convertible preferred stock, $0.0001 par value; 30,000 and 125,405 shares authorized as of September 30, 2021 and December 31, 2020, respectively; nil and 124,979 shares issued and outstanding as of September 30, 2021 and December 31, 2020; and liquidation preference of nil and $166,131 as of September 30, 2021 and December 31, 2020, respectively | — | 164,168 | |||||||||
| Stockholders’ equity (deficit): | |||||||||||
| Common stock, $0.0001 par value; 640,000 shares and 230,680 shares authorized as of September 30, 2021 and December 31, 2020, respectively; and 242,413 shares and 38,981 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively | 24 | 4 | |||||||||
| Additional paid-in capital | 512,808 | 9,159 | |||||||||
| Accumulated other comprehensive income (loss) | (38) | 135 | |||||||||
| Accumulated deficit | (307,068) | (129,998) | |||||||||
| Total stockholders’ equity (deficit) | 205,726 | (120,700) | |||||||||
| Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit) | $ | 653,438 | $ | 71,852 | |||||||
3
GORES HOLDINGS VI,
STATEMENT
(Unaudited)
AND COMPREHENSIVE INCOME (LOSS)
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| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Subscription | $ | 15,677 | $ | 11,517 | $ | 44,758 | $ | 29,032 | |||||||||||||||
| License | 118 | 3,000 | 4,477 | 3,000 | |||||||||||||||||||
| Services | 3,292 | 2,341 | 8,860 | 5,498 | |||||||||||||||||||
| Product | 8,568 | 8,216 | 25,992 | 24,767 | |||||||||||||||||||
| Total revenue | 27,655 | 25,074 | 84,087 | 62,297 | |||||||||||||||||||
| Costs of revenue: | |||||||||||||||||||||||
| Subscription | 3,908 | 2,981 | 10,543 | 8,299 | |||||||||||||||||||
| License | — | 69 | — | 69 | |||||||||||||||||||
| Services | 2,460 | 1,730 | 6,785 | 4,270 | |||||||||||||||||||
| Product | 7,106 | 5,228 | 18,036 | 15,198 | |||||||||||||||||||
| Total costs of revenue | 13,474 | 10,008 | 35,364 | 27,836 | |||||||||||||||||||
| Gross profit | 14,181 | 15,066 | 48,723 | 34,461 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Research and development | 14,484 | 3,861 | 27,599 | 13,003 | |||||||||||||||||||
| Selling, general, and administrative | 44,053 | 9,942 | 73,612 | 30,215 | |||||||||||||||||||
| Total operating expenses | 58,537 | 13,803 | 101,211 | 43,218 | |||||||||||||||||||
| Income (loss) from operations | (44,356) | 1,263 | (52,488) | (8,757) | |||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Interest income | 550 | 3 | 572 | 16 | |||||||||||||||||||
| Interest expense | (91) | (339) | (676) | (1,197) | |||||||||||||||||||
| Transaction costs | (565) | — | (565) | — | |||||||||||||||||||
| Change in fair value of warrants liabilities | (24,176) | — | (24,176) | — | |||||||||||||||||||
| Change in fair value of contingent earn-out liability | (98,478) | — | (98,478) | — | |||||||||||||||||||
| Other expense, net | (839) | (4) | (1,186) | (903) | |||||||||||||||||||
| Total expense | (123,599) | (340) | (124,509) | (2,084) | |||||||||||||||||||
| Income (loss) before provision for income taxes | (167,955) | 923 | (176,997) | (10,841) | |||||||||||||||||||
| Provision for income taxes | 34 | 17 | 73 | 51 | |||||||||||||||||||
| Net income (loss) | $ | (167,989) | $ | 906 | $ | (177,070) | $ | (10,892) | |||||||||||||||
| Less: Income allocated to preferred stockholders | — | (906) | — | — | |||||||||||||||||||
| Net income (loss) attributable to common stockholders | $ | (167,989) | $ | — | $ | (177,070) | $ | (10,892) | |||||||||||||||
| Net income (loss) per share, basic and diluted | $ | (0.86) | $ | — | $ | (1.90) | $ | (0.34) | |||||||||||||||
| Weighted-average shares used in per share calculation, basic and diluted | 196,478 | 32,552 | 93,061 | 32,334 | |||||||||||||||||||
| Other comprehensive income, net of tax: | |||||||||||||||||||||||
| Foreign currency translation gain (loss) | (16) | 99 | (79) | (20) | |||||||||||||||||||
| Unrealized loss on available-for-sale securities, net of tax | (182) | — | (94) | — | |||||||||||||||||||
| Comprehensive income (loss) | $ | (168,187) | $ | 1,005 | $ | (177,243) | $ | (10,912) | |||||||||||||||
GORES HOLDINGS VI,
STATEMENT
For
Redeemable Convertible Preferred Stock | Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares (1) | Amount | Shares (1) | Amount | Additional Paid-In Capital | Accumulated Other Comprehensive Income (loss) | Accumulated Deficit | Total Stockholders’ Equity (Deficit) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2020 | 124,979 | $ | 164,168 | 38,981 | $ | 4 | $ | 9,159 | $ | 135 | $ | (129,998) | $ | (120,700) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | (2,872) | (2,872) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | — | (27) | — | (27) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | — | — | 1,585 | — | 789 | — | — | 789 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | 740 | — | — | 740 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2021 | 124,979 | $ | 164,168 | 40,566 | $ | 4 | $ | 10,688 | $ | 108 | $ | (132,870) | $ | (122,070) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | (6,209) | (6,209) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | 52 | — | 52 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | — | — | 1,184 | — | 553 | — | — | 553 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | 713 | — | — | 713 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2021 | 124,979 | $ | 164,168 | 41,750 | $ | 4 | $ | 11,954 | $ | 160 | $ | (139,079) | $ | (126,961) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | (167,989) | (167,989) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | — | (198) | — | (198) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of redeemable convertible preferred stock | 52 | 293 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Conversion of redeemable convertible preferred stock into common stock in connection with the reverse recapitalization | (125,031) | (164,461) | 126,461 | 13 | 164,448 | — | — | 164,461 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | — | — | 633 | — | 357 | — | — | 357 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of legacy Matterport common stock warrants | — | — | 1,038 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon the reverse recapitalization, net of transaction costs | — | — | 72,531 | 7 | 539,890 | — | — | 539,897 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contingent earn-out liability | — | — | — | — | (235,911) | — | — | (235,911) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | 32,070 | — | — | 32,070 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2021 | — | $ | — | 242,413 | $ | 24 | $ | 512,808 | $ | (38) | $ | (307,068) | $ | 205,726 | ||||||||||||||||||||||||||||||||||||||||||||||||
Redeemable Convertible Preferred Stock | Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares (1) | Amount | Shares (1) | Amount | Additional Paid-In Capital | Accumulated Other Comprehensive Income (loss) | Accumulated Deficit | Total Stockholders’ Deficit | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2019 | 98,542 | $ | 110,978 | 32,132 | $ | 3 | $ | 5,871 | $ | 36 | $ | (115,539) | $ | (109,629) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | (8,108) | (8,108) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | — | (98) | — | (98) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | 620 | — | — | 620 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2020 | 98,542 | $ | 110,978 | 32,132 | $ | 3 | $ | 6,491 | $ | (62) | $ | (123,647) | $ | (117,215) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | (3,690) | (3,690) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | — | (21) | — | (21) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Conversion of convertible note to Series D redeemable convertible preferred stock | 4,729 | 9,501 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of Series D redeemable convertible preferred stock net of issuance costs | 21,708 | 43,689 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | — | — | 355 | — | 51 | — | — | 51 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | 625 | — | — | 625 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2020 | 124,979 | $ | 164,168 | 32,487 | $ | 3 | $ | 7,167 | $ | (83) | $ | (127,337) | $ | (120,250) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | 906 | 906 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | 99 | — | 99 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | — | — | 843 | — | 138 | — | — | 138 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Settlement of vested stock options | — | — | — | — | (554) | — | — | (554) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase and Retirement of common stock | — | — | (444) | — | — | — | (438) | (438) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | 664 | — | — | 664 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2020 | 124,979 | $ | 164,168 | 32,886 | $ | 3 | $ | 7,415 | $ | 16 | $ | (126,869) | $ | (119,435) | ||||||||||||||||||||||||||||||||||||||||||||||||
(Unaudited)
|
| Class A Common Stock |
|
| Class F Common Stock |
|
| Additional |
|
| Accumulated |
|
| Stockholders' |
| |||||||||||||||||||
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| Shares |
|
| Amount |
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| Shares |
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| Amount |
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| Paid-In Capital |
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| Deficit |
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| Equity (Deficit) |
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Balance at January 1, 2021 |
|
| - |
|
| $ |
| - |
|
|
|
| 8,625,000 |
|
| $ |
| 863 |
|
| $ |
| - |
|
| $ |
| (29,200,648 | ) |
| $ |
| (29,199,785 | ) |
Subsequent measurement under ASC 480-10-S99 against accumulated deficit |
|
| - |
|
|
|
| - |
|
|
|
| - |
|
|
|
| - |
|
|
|
| - |
|
|
|
| (8,130 | ) |
|
|
| (8,130 | ) |
Net loss |
|
| - |
|
|
|
| - |
|
|
|
| - |
|
|
|
| - |
|
|
|
| - |
|
|
|
| (29,974,034 | ) |
|
|
| (29,974,034 | ) |
Balance at March 31, 2021 |
|
| - |
|
| $ |
| - |
|
|
|
| 8,625,000 |
|
| $ |
| 863 |
|
| $ |
| 0 |
|
| $ |
| (59,182,812 | ) |
| $ |
| (59,181,949 | ) |
SeeThe accompanying notes to theare an integral part of these unaudited interimcondensed consolidated financial statements
GORES HOLDINGS VI,
STATEMENT
(Unaudited)
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See
| Nine Months Ended September 30, | |||||||||||
| 2021 | 2020 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
| Net Loss | $ | (177,070) | $ | (10,892) | |||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
| Depreciation and amortization | 4,121 | 3,538 | |||||||||
| Amortization of debt discount | 135 | 172 | |||||||||
| Amortization of investment premiums, net of accretion of discounts | 413 | — | |||||||||
| Stock-based compensation, net of amounts capitalized | 31,997 | 1,794 | |||||||||
| Change in fair value of warrants liabilities | 24,176 | — | |||||||||
| Change in fair value of contingent earn-out liability | 98,478 | — | |||||||||
| Transaction costs | 565 | — | |||||||||
| Loss on extinguishment of debt and convertible notes | 210 | 954 | |||||||||
| Allowance for doubtful accounts | 460 | 581 | |||||||||
| Other | 193 | 10 | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | (6,100) | (7,097) | |||||||||
| Inventories | (342) | (2,260) | |||||||||
| Prepaid expenses and other assets | (7,699) | (965) | |||||||||
| Accounts payable | 3,427 | 1,692 | |||||||||
| Deferred revenue | 4,503 | 2,817 | |||||||||
| Accrued expenses and other liabilities | 1,442 | 2,516 | |||||||||
| Net cash used in operating activities | (21,091) | (7,140) | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
| Purchases of property and equipment | (536) | (20) | |||||||||
| Capitalized software and development costs | (5,233) | (3,624) | |||||||||
| Purchase of investments | (466,466) | — | |||||||||
| Investment in convertible notes | (1,000) | — | |||||||||
| Net cash used in investing activities | (473,235) | (3,644) | |||||||||
| CASH FLOW FROM FINANCING ACTIVITIES: | |||||||||||
| Proceeds from reverse recapitalization and PIPE financing, net | 612,854 | — | |||||||||
| Payment of transaction costs related to reverse recapitalization | (9,813) | — | |||||||||
| Proceeds from issuance of redeemable convertible preferred stock, net | — | 43,689 | |||||||||
| Proceeds from exercise of stock options | 1,696 | 189 | |||||||||
| Proceeds from debt, net | — | 5,221 | |||||||||
| Proceeds from convertible notes, net of issuance costs | — | 8,457 | |||||||||
| Repayment of debt | (13,067) | (6,974) | |||||||||
| Settlement of vested stock options | — | (554) | |||||||||
| Repurchase of common stock | — | (438) | |||||||||
| Net cash provided by financing activities | 591,670 | 49,590 | |||||||||
| Net change in cash, cash equivalents, and restricted cash | 97,344 | 38,806 | |||||||||
| Effect of exchange rate changes on cash | (273) | (22) | |||||||||
| Cash, cash equivalents, and restricted cash at beginning of year | 52,250 | 10,152 | |||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 149,321 | $ | 48,936 | |||||||
| Supplemental disclosures of cash flow information | |||||||||||
| Cash paid for interest | $ | 753 | $ | 851 | |||||||
| Supplemental disclosures of non-cash investing and financing information | |||||||||||
| Contingent earn-out liability recognized upon the closing of the reverse recapitalization | $ | 231,627 | $ | — | |||||||
| Conversion of redeemable convertible preferred stock into common stock in connection with the reverse recapitalization | $ | 164,461 | $ | — | |||||||
| Unpaid transaction costs | $ | 200 | $ | — | |||||||
6
GORES HOLDINGS VI,
(UNAUDITED)
Organizationits subsidiaries (collectively, “Matterport” or the “Company”) is leading the digitization and General
Gores Holdings VI, Inc. (the “Company”)datafication of the built world. Matterport’s pioneering technology has set the standard for digitizing, accessing and managing buildings, spaces and places online. Matterport’s platform comprising innovative software, spatial data-driven data science, and 3D capture technology has broken down the barriers that have kept the largest asset class in the world, buildings and physical spaces, offline and underutilized for so long. The Company was incorporated in the state of Delaware on June 29, 2020.in 2011. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar Business Combination with one or more businessesis headquartered at Sunnyvale, California.
The Company completed the Public Offering on December 15, 2020 (the “IPO Closing“Closing Date”). The Company will not generate any operating revenues until after the completion of its Business Combination, at the earliest. Subsequent to the Public Offering,, the Company will generate non-operating incomeconsummated the previously announced merger (collectively with the other transactions described in the formMerger Agreement, the “Merger”, “Closing”, or “Transactions”) pursuant to an Agreement and Plan of interest income on cash and cash equivalents from the proceeds derived from the Public Offering and the sale of the Private Placement Warrants (as defined below) held in the Trust Account (as defined below).
Proposed Matterport Business Combination
OnMerger, dated February 7, 2021 the Company entered into a Merger Agreement,(the “Merger Agreement”), by and among the Company (at such time named Gores Holding VI, Inc., (“Gores”, or “GHVI”), First Merger Sub, Second Merger Sub, and the
The Merger Agreement and the transactions contemplated thereby were unanimously approved by the Board of Directorswholly owned subsidiary of the Company, on February 7, 2021 andunder the Matterport Board on February 7, 2021.
The Merger Agreement
Merger Consideration
Pursuantnew name “Matterport Operating, LLC” (the “Mergers”). See Note 3 “
Pursuant to the Merger Agreement, the aggregate merger consideration payable at the closing of the Business Combination to all of the stockholders and holders of equity awards of Matterport will be an aggregate number of shares, or equity awards exercisable for shares, of Company Class A common stock (deemed to have a value of $10.00 per share) equal to $2,188,750,000, divided by $10.00.
In addition to the consideration to be paid at the closing of the Business Combination, stockholders of Matterport will be entitled to receive their pro rata share of an additional number of earn-out shares from the
7
Company, issuable in Company Class A common stock and subject to the terms provided in the Merger Agreement, up to an aggregate of 23,460,000 shares collectively issuable to all Matterport equity holders.
Treatment of Matterport’s Equity Awards
Pursuant to the Merger Agreement, at the closing of the Business Combination, each of Matterport’s stock options, to the extent then outstanding and unexercised, will automatically be converted into (a) an option to acquire a certain number of shares of Company Class A common stock (pursuant to a ratio based on the Per Share Company Common Stock Consideration), at an adjusted exercise price per share and (b) the right to receive a pro rata portion of a number of earn-out shares from the Company, issuable in Company Class A common stock and subject to the terms provided in the Merger Agreement (including that such right to receive earn-out shares is conditional on the holder continuing to provide services to the Company), up to an aggregate of 23,460,000 shares collectively issuable to all Matterport equity holders. Each such converted option will be subject to the same terms and conditions as were applicable immediately prior to such conversion.
Pursuant to the Merger Agreement, at the closing of the Business Combination, each of Matterport’s restricted stock units, to the extent then unvested and outstanding, will automatically be converted into (a) an award of restricted stock units covering a certain number of shares of Company Class A common stock (pursuant to a ratio based on the Per Share Company Common Stock Consideration) and (b) the right to receive a pro rata portion of a number of earn-out shares from the Company, issuable in Company Class A common stock and subject to the terms provided in the Merger Agreement (including that such right to receive earn-out shares is conditional on the holder continuing to provide services to the Company), up to an aggregate of 23,460,000 shares collectively issuable to all Matterport equity holders. Each such converted restricted stock unit will be subject to the same terms and conditions as were applicable immediately prior to such conversion.
Private Placement Subscription Agreements
On February 7, 2021, the Company entered into subscription agreements (each, a “Subscription Agreement” and collectively, the “Subscription Agreements”) with certain investors, including certain individuals (each, an “Individual Investor Subscription Agreement”), institutional investors (each, an “Institutional Investor Subscription Agreement”) and Gores Sponsor VI LLC (the “Sponsor”), pursuant to which the investors have agreed to purchase an aggregate of 29,500,000 shares of Class A common stock in a private placement for $10.00 per share (the “Private Placement”). The proceeds from the Private Placement will remain on the Company’s balance sheet following the consummation of the Business Combination.
Each Subscription Agreement will terminate with no further force and effect upon the earliest to occur of: (a) such date and time as the Merger Agreement is terminated in accordance with its terms; (b) upon the mutual written agreement of the parties to such Subscription Agreement; (c) if any of the conditions to closing set forth in such Subscription Agreement are not satisfied or waived on or prior to the closing and, as a result thereof, the transactions contemplated by such Subscription Agreement are not consummated at the closing; and (d) if the closing of the Business Combination shall not have occurred by September 7,August 27, 2021. As of the date hereof, the shares of Class A common stock to be issued pursuant to the Subscription Agreements have not been registered under the Securities Act of 1933, as amended (the “Securities Act”). The Company will, within 30 days after the closing, file with the Securities and Exchange Commission (“SEC”) a registration statement (the “Post-Closing Registration Statement”) registering the resale of such shares of Class A Common Stock and will use its commercially reasonable efforts to have such Post-Closing Registration Statement declared effective as soon as practicable after the filing thereof.
The subscription agreements are accounted for as equity given that the shares are only contingently issuable. There is no impact on basic or diluted net income/(loss) per share.
Financing
Upon the IPO Closing Date and the sale of the Private Placement Warrants, an aggregate of $345,000,000 was placed in a Trust Account with Continental Stock Transfer & Trust Company (the “Trust Account”) acting as Trustee.
The Company intends to finance the Proposed Business Combination with the net proceeds from its $345,000,000 Public Offering and its sale of $8,900,000 of Private Placement Warrants.
8
Trust Account
Funds held in the Trust Account can be invested only in U.S. government treasury bills with a maturity of one hundred and eighty-five (185) days or less or in money market funds meeting certain conditions under Rule 2a‑7 under the Investment Company Act of 1940, as amended, that invest only in direct U.S. government obligations. As of March 31, 2021, the Trust Account consisted of cash and money market funds.
The Company’s amended and restated certificate of incorporation provides that, other than the withdrawal of interest to fund regulatory compliance requirements and other costs related thereto (a “Regulatory Withdrawal”) for a maximum 24 months and/or additional amounts necessary to pay franchise and income taxes, if any, none of the funds held in trust will be released until the earliest of: (i) the completion of the Business Combination; or (ii) the redemption of any public shares of common stock properly tendered in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation to modify the substance or timing of the Company’s obligation to redeem 100% of such public shares of common stock if the Company does not complete the Business Combination within 24 months from the IPO Closing Date; or (iii) the redemption of 100% of the public shares of common stock if the Company is unable to complete a Business Combination within 24 months from the IPO Closing Date, subject to the requirements of law and stock exchange rules.
Business Combination
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Public Offering, although substantially all of the net proceeds of the Public Offering are intended to be generally applied toward consummating a Business Combination. The Business Combination must be with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the Trust Account (less any deferred underwriting commissions and taxes payable on interest income earned) at the time of the Company signing a definitive agreement in connection with the Business Combination. Furthermore, there is no assurance that the Company will be able to successfully effect a Business Combination, including the Proposed Business Combination.
The Company, after signing a definitive agreement for a Business Combination, will either (i) seek stockholder approval of the Business Combination at a meeting called for such purpose in connection with which stockholders may seek to redeem their shares, regardless of whether they vote for or against the Business Combination, for cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest income but less taxes payable, or (ii) provide stockholders with the opportunity to sell their shares to the Company by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount in cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest income but less taxes payable. The decision as to whether the Company will seek stockholder approval of the Business Combination or will allow stockholders to sell their shares in a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require the Company to seek stockholder approval, unless a vote is required by law or under Nasdaq rules. If the Company seeks stockholder approval, it will complete its Business Combination only if a majority of the outstanding shares of common stock voted are voted in favor of the Business Combination. Currently, the Company will not redeem its public shares of common stock in an amount that would cause its net tangible assets to be less than $5,000,001. In such case, the Company would not proceed with the redemption of its public shares of common stock and the related Business Combination, and instead may search for an alternate Business Combination. For business and other reasons, the Company has elected to provide its stockholders with the opportunity to have their public shares redeemed in connection with a stockholder vote to approve the Proposed Business Combination rather than a tender offer.
As a result of the foregoing redemption provisions, the public shares of common stock have been recorded at redemption amount and classified as temporary equity, in accordance with SEC and its staff’s guidance on redeemable equity instruments, which has been codified in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”) in subsequent periods.
9
The Company will have 24 months from the IPO Closing Date to complete its Business Combination. If the Company does not complete a Business Combination within this period of time, it shall (i) cease all operations except for the purposes of winding up; (ii) as promptly as reasonably possible, but not more than ten business days thereafter, redeem the public shares of common stock for a per share pro rata portion of the Trust Account, including interest income, but less taxes payable (less up to $100,000 of such net interest income to pay dissolution expenses) and (iii) as promptly as possible following such redemption, dissolve and liquidate the balance of the Company’s net assets to its remaining stockholders, as part of its plan of dissolution and liquidation. The Sponsor and the Company’s officers and directors have entered into a letter agreement with the Company, pursuant to which they waived their rights to participate in any redemption with respect to their Founder Shares (as defined below); however, if the Sponsor or any of the Company’s officers, directors or affiliates acquire public shares of common stock, they will be entitled to a pro rata share of the Trust Account in the event the Company does not complete a Business Combination within the required time period.
In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per Unit in the Public Offering.
Emerging Growth Company
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out 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, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
2. Significant Accounting Policies
Net Income/(Loss) Per Common Share
Actual results may differ materially from those estimates.
10
11,350,000 shares of Common Stock at $11.50 per share were issued on December 15, 2020. NaN warrants were exercised during the three months ended March 31, 2021. The 11,350,000 potential common sharesNote 4, for outstanding warrants to purchaseinformation regarding the Company’s stock were excluded from diluted earnings per sharerevenue by geography. Substantially all of the Company’s long-lived assets are located in 2021 as the Company had a net loss for the period. As a result, diluted net income/(loss) per common share is the same as basic net income/(loss) per common share for the period.
|
| Three Months Ended March 31, 2021 |
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| Class A |
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| Class F |
| ||||
Basic and diluted net income/(loss) per share: |
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Numerator: |
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Allocation of net income/(loss) |
| $ |
| (23,985,731 | ) |
| $ |
| (5,996,433 | ) |
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Denominator: |
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Weighted-average shares outstanding |
|
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| 34,500,000 |
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| 8,625,000 |
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Basic and diluted net income/(loss) per share |
| $ |
| (0.70 | ) |
| $ |
| (0.70 | ) |
Concentration of Credit Risk
and Other Risks and Uncertainties
Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” (“ASC 820”) approximates the carrying amounts represented in the balance sheet.
Offering Costs
The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A — “Expenses of Offering.” Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to our Public Offering and were charged to equity upon the completion of our Public Offering.
Redeemable Common Stock
As discussed in Note 4, all of the 34,500,000 Class A Common Stock sold as part of the Units in the Public Offering contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s liquidation, if there is a stockholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s second amended and restated certificate of incorporation. In accordance with SEC andmitigates its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require common stock subject to redemption to be classified outside of permanent equity. Therefore, all Class A Common Stock has been classified outside of permanent equity.
The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affectedcredit risks by charges against additional paid in capital and accumulated deficit.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dateperforming ongoing credit evaluations of the financial statementscondition of its customers and the reported amounts of revenues and expenses during the reporting period. One of the more significant accounting estimates includedrequires advance payment from customers in these financial statements is the determination of the fair value of the warrant liability. Such estimates may be
11
subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates.
Income Taxes
certain circumstances. The Company follows the asset and liability methodgenerally does not require collateral from its customers.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Customer: | |||||||||||||||||||||||
| Customer A | * | 12.0 | % | * | * | ||||||||||||||||||
| September 30, 2021 | December 31, 2020 | ||||||||||
| Customer: | |||||||||||
| Customer B | 11.1 | % | * | ||||||||
For those liabilities or benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax liabilities as income tax expense. NaN amounts were accrued for the payment of interest and penalties at March 31, 2021.
The Company may be subject to potential examination by U.S. federal, states or foreign jurisdiction authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income amounts in various tax jurisdictions and compliance with U.S. federal, states or foreign tax laws.
The Company is incorporated in the State of Delaware and is required to pay franchise taxes to the State of Delaware on an annual basis.
Restricted Cash and Cash Equivalents
Investmentsstockholders’ equity. Other income (expense), net, includes interest, amortization of purchase premiums and Cash Held in Trust Account
At March 31, 2021, the Company had $345,022,332discounts, realized gains and losses on sales of securities and other-than-temporary declines in the Trust Account which may be utilizedfair value of securities, if any. The cost of securities sold is based on the specific identification method. We regularly review all of our investments for Business Combinations. At March 31, 2021,other-than-temporary declines in fair value. Our review includes the Trust Account consisted of cash and money market funds.
The Company’s amended and restated certificate of incorporation provides that, other than the withdrawal of interest to pay taxes, if any, noneconsideration of the funds heldcause of the impairment, including the creditworthiness of the security issuers,
Warrant Liability
private warrants (“Private Warrants”) upon the Closing. The Company accounts for warrants for shares of the Company’s
Class A common stock that are not indexed to its own stock as liabilities at fair value on the balance sheet. The warrants are subject to remeasurement at each balance sheet date and any change in fair value is recognized in the Company’s12
component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as a liability at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations.
Recently Issued Accounting Pronouncements Not Yet Adopted
Management does
Going Concern Consideration
Ifon the Company does not complete its Business CombinationCompany’s condensed consolidated financial statements.
| Shares | |||||
Legacy Matterport Stockholders(1) | 169,425 | ||||
| Public Stockholders of Gores | 34,406 | ||||
Initial Stockholders (defined below) of Class F Stock(2) | 8,625 | ||||
PIPE Investors(3) | 29,500 | ||||
| Total | 241,956 | ||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| United States | $ | 16,383 | $ | 16,638 | $ | 51,518 | $ | 40,983 | |||||||||||||||
| International | 11,272 | 8,436 | 32,569 | 21,314 | |||||||||||||||||||
| Total revenue | $ | 27,655 | $ | 25,074 | $ | 84,087 | $ | 62,297 | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Over time revenue | $ | 18,969 | $ | 13,858 | $ | 53,618 | $ | 34,530 | |||||||||||||||
| Point-in-time revenue | 8,686 | 11,216 | 30,469 | 27,767 | |||||||||||||||||||
| Total | $ | 27,655 | $ | 25,074 | $ | 84,087 | $ | 62,297 | |||||||||||||||
In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per unit in the Public Offering. In addition, if the Company fails to complete its Business Combination by December 15, 2022, there will be no redemption rights or liquidating distributions with respect to the warrants, which will expire worthless.
In addition, at March 31,September 30, 2021 and December 31, 2020 were as follows (in thousands):
| September 30, 2021 | December 31, 2020 | ||||||||||
| Accounts receivable, net | $ | 7,793 | $ | 2,700 | |||||||
| Unbilled accounts receivable | $ | 1,779 | $ | 1,224 | |||||||
| Deferred revenue | $ | 9,113 | $ | 4,903 | |||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Balance—beginning of period | $ | (32) | $ | (566) | $ | (799) | $ | (337) | |||||||||||||||
| Increase in reserves | (309) | (340) | (460) | (581) | |||||||||||||||||||
| Write-offs | 159 | — | 1,077 | 12 | |||||||||||||||||||
| Balance—end of period | $ | (182) | $ | (906) | $ | (182) | $ | (906) | |||||||||||||||
| September 30, 2021 | December 31, 2020 | ||||||||||
| Finished Goods | $ | 1,026 | $ | 538 | |||||||
| Work in process | 1,480 | 2,219 | |||||||||
| Purchased parts and raw materials | 1,483 | 889 | |||||||||
| Total inventories | $ | 3,989 | $ | 3,646 | |||||||
| September 30, 2021 | December 31, 2020 | ||||||||||
| Machinery and equipment | $ | 1,945 | $ | 1,435 | |||||||
| Furniture and fixtures | 354 | 359 | |||||||||
| Leasehold improvements | 728 | 733 | |||||||||
| Capitalized software and development costs | 24,902 | 18,126 | |||||||||
| Total property and equipment | 27,929 | 20,653 | |||||||||
| Accumulated depreciation and amortization | (16,552) | (12,443) | |||||||||
| Total property and equipment, net | $ | 11,377 | $ | 8,210 | |||||||
| September 30, 2021 | December 31, 2020 | ||||||||||
| Accrued compensation | $ | 2,503 | $ | 3,208 | |||||||
| Tax payable | 945 | 1,164 | |||||||||
| Transaction cost payable | 200 | 135 | |||||||||
| Other current liabilities | 5,133 | 2,488 | |||||||||
| Total accrued expenses and other current liabilities | $ | 8,781 | $ | 6,995 | |||||||
| September 30, 2021 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Financial Assets: | |||||||||||||||||||||||
| Cash equivalents: | |||||||||||||||||||||||
| Money market funds | $ | 138,730 | $ | — | $ | — | $ | 138,730 | |||||||||||||||
| Total cash equivalents | $ | 138,730 | $ | — | $ | — | $ | 138,730 | |||||||||||||||
| Short-term investments: | |||||||||||||||||||||||
| Corporate debt securities | — | 44,274 | — | 44,274 | |||||||||||||||||||
| Commercial paper | — | 129,894 | — | 129,894 | |||||||||||||||||||
| Total short-term investments | $ | — | $ | 174,168 | $ | — | $ | 174,168 | |||||||||||||||
| Long-term investments: | |||||||||||||||||||||||
| U.S. government and agency securities | $ | 180,988 | $ | — | $ | — | $ | 180,988 | |||||||||||||||
| Non-U.S. government and agency securities | — | 24,483 | — | 24,483 | |||||||||||||||||||
| Corporate debt securities | — | 85,429 | — | 85,429 | |||||||||||||||||||
| Total long-term investments | $ | 180,988 | $ | 109,912 | $ | — | $ | 290,900 | |||||||||||||||
| Other assets: | |||||||||||||||||||||||
| Convertible notes receivable | $ | — | $ | — | $ | 1,095 | $ | 1,095 | |||||||||||||||
| Total other assets: | $ | — | $ | — | $ | 1,095 | $ | 1,095 | |||||||||||||||
| Total assets measured at fair value | $ | 319,718 | $ | 284,080 | $ | 1,095 | $ | 604,893 | |||||||||||||||
| Financial Liabilities: | |||||||||||||||||||||||
| Public warrants liability | $ | 53,682 | $ | — | $ | — | $ | 53,682 | |||||||||||||||
| Private warrants liability | — | 34,621 | — | 34,621 | |||||||||||||||||||
| Contingent earn-out liability | — | 0 | 334,389 | 334,389 | |||||||||||||||||||
| Total liabilities measured at fair value | $ | 53,682 | $ | 34,621 | $ | 334,389 | $ | 422,692 | |||||||||||||||
| December 31, 2020 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Financial Assets: | |||||||||||||||||||||||
| Cash equivalents: | |||||||||||||||||||||||
| Money market funds | $ | 43,116 | $ | — | $ | — | $ | 43,116 | |||||||||||||||
| Total cash equivalents | $ | 43,116 | $ | — | $ | — | $ | 43,116 | |||||||||||||||
| Total assets measured at fair value | $ | 43,116 | $ | — | $ | — | $ | 43,116 | |||||||||||||||
| September 30, 2021 | |||||||||||||||||||||||
| Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||||||||||
| Investments: | |||||||||||||||||||||||
| U.S. government and agency securities | $ | 181,104 | $ | — | $ | (116) | $ | 180,988 | |||||||||||||||
| Non-U.S. government and agency securities | 24,490 | — | (6) | 24,484 | |||||||||||||||||||
| Corporate debt securities | 129,775 | — | (72) | 129,703 | |||||||||||||||||||
| Commercial paper | 129,888 | 5 | — | 129,893 | |||||||||||||||||||
| Convertible notes receivable | 1,000 | 95 | — | 1,095 | |||||||||||||||||||
| Total available-for-sale investments | $ | 466,257 | $ | 100 | $ | (194) | $ | 466,163 | |||||||||||||||
| Amortized Cost | Fair Value | ||||||||||
| Due within one year | $ | 174,176 | $ | 174,167 | |||||||
| Due between one and three years | 292,081 | 291,996 | |||||||||
| Total | $ | 466,257 | $ | 466,163 | |||||||
3. Public Offering
Public Units
Onextended the line of credit maturity date from December 15, 2020, through December 14, 2021. The interest rates for the term loan and the revolving line of credit were 5.25%. In July 2021, the Company sold 34,500,000 unitsrepaid in full the Line of Credit of $3.0 million.
| December 31, 2020 | |||||||||||
| Line of credit | $ | 3,000 | |||||||||
| 2019 term loan | 2,417 | ||||||||||
| 2018 term loan | 5,650 | ||||||||||
| 2020 term loan | 2,000 | ||||||||||
| Total debt | $ | 13,067 | |||||||||
| Less: unamortized debt discount | (350) | ||||||||||
| Total debt, net of debt discount | 12,717 | ||||||||||
| Less: Current portion of long-term debt | (8,215) | ||||||||||
| Long-term debt | $ | 4,502 | |||||||||
| Operating Leases | Purchase Obligations | Total Lease and Purchase Obligations | |||||||||||||||
| Remainder of 2021 | $ | 318 | $ | 8,313 | $ | 8,631 | |||||||||||
| 2022 | 1,301 | 5,221 | 6,522 | ||||||||||||||
| 2023 | 1,339 | 165 | 1,504 | ||||||||||||||
| 2024 | 1,306 | 153 | 1,459 | ||||||||||||||
| 2025 | 207 | — | 207 | ||||||||||||||
| Total | $ | 4,471 | $ | 13,852 | $ | 18,323 | |||||||||||
| December 31, 2020 | |||||||||||||||||||||||||||||||||||||||||
| Convertible preferred stock: | Original Issuance Price | Shares Authorized | Shares Issued and Outstanding | Shares of Common Stock if converted | Carrying Value | Aggregate Liquidation Preference | Dividend Rate | ||||||||||||||||||||||||||||||||||
| Series Seed redeemable | $ | 0.3507 | 24,861 | 24,861 | 24,861 | $ | 7,350 | $ | 8,720 | 8.0 | % | ||||||||||||||||||||||||||||||
| Series A-1 redeemable | $ | 0.4261 | 7,570 | 7,570 | 7,570 | 3,165 | 3,226 | 8.0 | % | ||||||||||||||||||||||||||||||||
| Series B redeemable | $ | 0.8194 | 19,527 | 19,527 | 20,957 | 15,905 | 16,000 | 8.0 | % | ||||||||||||||||||||||||||||||||
| Series C redeemable | $ | 1.7194 | 30,730 | 30,727 | 30,727 | 52,696 | 52,832 | 8.0 | % | ||||||||||||||||||||||||||||||||
| Series D redeemable | $ | 2.0181 | 42,717 | 42,294 | 42,294 | 85,052 | $ | 85,353 | 8.0 | % | |||||||||||||||||||||||||||||||
| 125,405 | 124,979 | 126,409 | $ | 164,168 | $ | 166,131 | |||||||||||||||||||||||||||||||||||
| September 30, 2021 | |||||||||||
| Common stock reserved for Earn-out | 23,460 | ||||||||||
| Public and private warrants to purchase common stock | 11,350 | ||||||||||
| Common stock options outstanding and unvested RSUs under the Amended and Restated 2011 Stock Incentive Plan | 46,861 | ||||||||||
| Shares available for future grant under 2021 Employee Stock Purchase Plan | 7,259 | ||||||||||
| Shares available for future grant under 2021 Incentive Award Plan | 24,196 | ||||||||||
| Total shares of common stock reserved | 113,126 | ||||||||||
| Foreign Currency Translation, Net of Tax | Unrealized Losses on Available-for-Sale Debt Securities, Net of Tax | Total | |||||||||||||||
| Balance at December 31, 2020 | $ | 135 | $ | — | $ | 135 | |||||||||||
| Net unrealized loss | (79) | (94) | (173) | ||||||||||||||
| Balance at September 30, 2021 | $ | 56 | $ | (94) | $ | (38) | |||||||||||
| Foreign Currency Translation, Net of Tax | Unrealized Gains on Available-for-Sale Debt Securities, Net of Tax | Total | |||||||||||||||
| Balance at December 31, 2019 | $ | 36 | $ | — | $ | 36 | |||||||||||
| Net unrealized loss | (20) | — | (20) | ||||||||||||||
| Balance at September 30, 2020 | $ | 16 | $ | — | $— | $ | 16 | ||||||||||
13
terms ofredemption to the warrant agreement, the Company has agreed to use its best efforts to file a registration statement under the Securities Act following the completion of the Business Combination covering the shares of common stock issuable upon exercise of the Warrants. The Company paid an upfront underwriting discount of 2.00% ($6,900,000) of the per Unit offering price to the underwriters at the IPO Closing Date, with an additional fee (the “Deferred Discount”) of 3.50% ($12,075,000) of the per Unit offering price payable upon the Company’s completion of a Business Combination. The Deferred Discount will become payable to the underwriters from the amounts held in the Trust Account solely in the event the Company completes its Business Combination.holders.
The public warrants issued as part of the Units are accounted for as liabilities as there are terms and features do not qualify for equity classification in ASC Topic 815-40 “Derivatives and Hedging – Contracts in Entity’s Own Equity.” The fair value of the public warrants at December 31, 2020 was a liability of $11,040,000. At March 31, 2021, the fair value has increased to $27,255,000. The change in fair value of $16,215,000 is reflected as an expense in the statement of operations.
All of the 34,500,000 Class A Common Stock sold as part of the Units in the Public Offering contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s liquidation, if there is a stockholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s second amended and restated certificate of incorporation. In accordance with SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require common stock subject to redemption to be classified outside of permanent equity. Given that the Class A Common Stock was issued with other freestanding instruments (i.e., public warrants), the initial carrying value of Class A Common Stock classified as temporary equity is the allocated proceeds based on the guidance in ASC 470-20.
Our Class A Common Stock are subject to SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99. If it is probable that the equity instrument will become redeemable, the Company has the option to either accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or to recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize the changes immediately. The accretion or remeasurement is treated as a deemed dividend (i.e., a reduction to retained earnings, or in absence of retained earnings, additional paid-in capital).
As of March 31, 2021, the Class A Common Stock reflected on the balance sheet are reconciled in the following table. The accretion of carrying value to redemption value was recognized on December 31, 2020, and there has been $8,130 of additional accretion for the three months ended March 31, 2021:
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4. Related Party Transactions
Founder Shares
On July 24, 2020, the Sponsor purchased 17,250,000 shares of Class F Common Stock for $25,000, or approximately $0.001 per share. On October 1, 2020, the Sponsor surrendered 8,625,000 Founder Shares to us for 0 consideration, on October 23, 2020, the Company effected a stock dividend with respect to its Class F Common Stock of 6,468,750 shares thereof and on November 13, 2020 the Sponsor surrendered 6,468,750 Founder Shares to us for 0 consideration, resulting in an aggregate of 8,625,000 outstanding shares of Class F Common Stock. As a result of such surrender, the per-share purchase price increased to approximately $0.003 per share. The number of Founder Shares issued was determined based on the expectation that such Founder Shares would represent 20% of the outstanding shares upon completion of the Public Offering. On September 11, 2020, the Sponsor transferred 25,000 Founder Shares to each of the independent directors at their original purchase price. The Founder Shares are identical to the common stock included in the Units sold in the Public Offering except that the Founder Shares will automatically convert into shares of Class A common stock at the time of the Business Combination on a 1-for-one basis, subject to adjustment as described in the Company’s amended and restated certificate of incorporation.
The sale of the Founders Shares is in the scope of ASC 718, “Compensation-Stock Compensation.” Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date. The Founders Shares were granted subject to a performance condition (i.e., the occurrence of a Business Combination). Compensation expense related to the Founders Shares is recognized only when the performance condition is probable of occurrenceunder the applicable accounting literature in this circumstance. As of December 31, 2020, the Company determined that a Business Combination is not considered probable, and, therefore, 0 stock-based compensation expense has been recognized. Stock-based compensation would be recognized at the date a Business Combination is considered probable (i.e., upon consummation of a Business Combination) in an amount equal to the number of Founders Shares that ultimately vest multiplied times the grant date fair value per share (unless subsequently modified) less the amount initially received for the purchase of the Founders Shares.
Private Placement Warrants
The Sponsor purchased from the Company an aggregate of 4,450,000 warrants at a price of $2.00 per warrant (a purchase price of $8,900,000) in a private placement that occurred simultaneously with the Public Offering (the “Private Placement Warrants”). Each Private Placement Warrant entitles the holder to purchase 1 share of Class A common stock at $11.50 per share. A portion of the purchase price of the Private Placement Warrants was added to the proceeds from the Public Offering to be held in the Trust Account pending completion of the Business Combination.
The Private Placement Warrants have terms and provisions that are identical to those of the public warrantsWarrants sold as part of the unitsUnits in the Public Offering, except that the Sponsor has agreed not to transfer, assign or sell any of the Private Placement Warrants may be physical (cash) or net share (cashless) settled(except to certain permitted transferees) until 30 days after the completion of the Merger. Additionally, the Private Warrants are exercisable on a cashless basis and are not redeemablenon-redeemable so long as they are held by the Sponsorinitial purchasers or itstheir permitted transferees.
If the Company does not complete a Business Combination,Private Warrants are held by someone other than the initial purchasers or their permitted transferees then the Private Placement Warrants proceedssuch warrants will be part of the liquidation distribution to the public stockholders and the Private Placement Warrants will expire worthless.Consistent with the public warrants, the private warrants are accounted for as liabilities under ASC Topic 814-40, due to their terms.
Registration Rights
The holders of Founder Shares, Private Placement Warrants and warrants issued upon conversion of working capital loans, if any, have registration rights (in the case of the Founder Shares, only after conversion of such shares to common shares) pursuant to a registration rights agreement entered intoredeemable by the Company and exercisable by the Sponsor andwarrant holders on the other security holders named therein on December 15, 2020. These holders will also have certain demand
15
same basis as the Public Warrants.
Sponsor Loan
On July 24, 2020, Company borrowed $300,000 byfiled a Registration Statement on Form S-1 on August 19, 2021 related to the issuance of an unsecured promissory note from the Sponsor for $300,000 to cover expenses related to the Public Offering. This Note was non-interest bearing and payable on the earlier of June 30, 2021 or the completion of the Public Offering. This Note was repaid in full upon the completion of the Public Offering.
On March 19, 2021, the Sponsor made available to the Company a loanaggregate of up to $2,000,000 pursuant to a promissory note issued11,350,000 shares of Class A common stock issuable upon the exercise of the Warrants, which was declared effective by the Company toSEC on August 26, 2021.
Administrative Services Agreement
The Company entered into an administrative services agreement on December 10, 2020, pursuant to which it agreed to pay to an affiliate of the Sponsor $20,000 a month for office space, utilities and secretarial support. Services commenced on the date the securities were first listed on the Nasdaq Capital Market and will terminate upon the earlier of the consummation by the Company of a Business Combination or the liquidation of the Company.
ForPrivate Warrants activities during the three and nine months period ended March 31,September 30, 2021 the Company has paid the affiliate $60,000.
5. Deferred Underwriting Compensation
(in thousands):
| Public Warrants | Private Warrants | Total Warrants | |||||||||||||||
| Warrants assumed upon the Closing of the Merger | 6,900 | 4,450 | 11,350 | ||||||||||||||
| Warrants Exercised | — | — | — | ||||||||||||||
| Outstanding as of September 30, 2021 | 6,900 | 4,450 | 11,350 | ||||||||||||||
6. Income Taxes
Income tax expense during interim periods is based on applying an estimated annual effective income tax rate to year-to-date income, plus any significant unusual or infrequently occurring items which are recorded in the interim period. The Company’s effective tax rates differ from the federal statutory rate primarily due to the fair value on instruments treated as debt for GAAP and equity for tax purposes, which is not deductible for income tax purposes, for 2021.
The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in various jurisdictions, permanent and temporary differences, and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is obtained, additional information becomes known or as the tax environment changes.
16
The Company has evaluated tax positions taken or expected to be taken in the course of preparing the financial statements to determine if the tax positions are “more likely than not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the “more likely than not” threshold would be recorded as a tax benefit or expense in the current year. The Company has concluded that there was no impact related to uncertain tax positions on the results of its operations for the period ended March 31, 2021. As of March 31, 2021, the Company has 0 accrued interest or penalties related to uncertain tax positions. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company’s conclusions regarding tax positions will be subject to review and may be adjusted at a later date based on factors including, but not limited to, ongoing analyses of tax laws, regulations, and interpretations thereof.
7. Investments and Cash Held in Trust
As of March 31, 2021, investment securities in the Company’s Trust Account consist of $345,022,332 in cash and money market funds.
8. Fair Value Measurement
The Company complies with ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. ASC 820 determines fair value to be the price that would be received to sell an asset or would be paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date.
Warrants
The Company has determined that warrants issued in connection with its initial public offering in December 2020 are subject to treatment as a liability. The Company utilizes a Monte Carlo simulation methodology to value the warrants at each reporting period, with changes in fair value recognized in the statement of operations. The estimated fair value of the warrant liability is determined using Level 1 and Level 2 inputs. The key assumptions in the option pricing model utilized are assumptions related to expected share-price volatility, expected term, risk-free interest rate and dividend yield. The expected volatility as of the IPO Closing Date was derived from observable public warrant pricing on comparable ‘blank-check’ companies that recently went public in 2020 and 2021. At March 31, 2021, there were observable transactions in the Company’s public warrants and correspondingly an implied volatility. The risk-free interest rate is based on the interpolated U.S. Constant Maturity Treasury yield. The expected term of the warrants is assumed to be six months until the close of a Business Combination, and the contractual five year term subsequently. The dividend rate is based on the historical rate, which the Company anticipates to remain at 0.
ThePrivate Warrants were classified as Level 2 atsince the respective measurement dates.
The key inputs intoClosing Date. Both the option model forPublic Warrants and the Private Placement Warrants andwere valued at $7.78 as of
| As of |
| |||||
| December 31, 2020 |
|
| March 31, 2021 |
| ||
Volatility |
| 21.0 | % |
|
| 13.0 | % |
Risk-free interest rate |
| 0.43 | % |
|
| 1.00 | % |
Warrant exercise price | $ | 11.50 |
|
| $ | 11.50 |
|
Expected term | 5.5 |
|
| 5.35 |
| ||
Subsequent Measurement
As of March 31, 2021, the aggregate values of the Private Placement Warrants and Public Warrants were $17.6 million and $27.3 million, respectively, based on the closing price of GHVIW on that date of $3.95.
As of December 31, 2020, the aggregate values of the Private Placement Warrants and Public Warrants were $7.1 million and $11.0 million, respectively, based on the closing price of GHVIU on that date of $10.60.
The following table presents the changes in the fair value of warrant liabilities:
| Private placement warrants |
|
| Public warrants |
|
| Total warrant liabilities |
| |||
Fair value at December 31, 2020 | $ | 7,120,000 |
|
| $ | 11,040,000 |
|
| $ | 18,160,000 |
|
Change in fair value |
| 10,457,500 |
|
|
| 16,215,000 |
|
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| 26,672,500 |
|
Fair value at March 31, 2021 | $ | 17,577,500 |
|
| $ | 27,255,000 |
|
| $ | 44,832,500 |
|
| Public Warrants | Private Warrants | Total Warrant Liabilities | |||||||||||||||
| Fair value at Closing date on July 22, 2021 | $ | 38,984 | $ | 25,143 | $ | 64,127 | |||||||||||
| Change in fair value | 14,698 | 9,478 | 24,176 | ||||||||||||||
| Fair value at September 30, 2021 | $ | 53,682 | $ | 34,621 | $ | 88,303 | |||||||||||
| As of | |||||||||||
| September 30, 2021 | July 22, 2021 | ||||||||||
| Current stock price | $ | 18.91 | $ | 14.47 | |||||||
| Expected term (in years) | 5.3 | 5.5 | |||||||||
| Expected volatility | 55.0 | % | 51.5 | % | |||||||
| Risk-free interest rate | 1.1 | % | 0.8 | % | |||||||
| Expected dividend yield | 0 | % | 0 | % | |||||||
| Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | |||||
| Balance at December 31, 2020 | $ | — | |||
| Contingent earn-out liability recognized upon the closing of the Reverse Recapitalization | 231,627 | ||||
| Reallocation of Earn-out Shares to earn-out liability upon forfeitures | 4,284 | ||||
| Change in fair value of earn-out liability | 98,478 | ||||
| Balance at September 30, 2021 | $ | 334,389 | |||
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| Significant |
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| Significant |
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| Other |
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| Other |
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| Quoted Prices in |
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| Observable |
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| Unobservable |
| ||||||
|
| March 31, |
|
| Active Markets |
|
| Inputs |
|
| Inputs |
| ||||||||
Description |
| 2021 |
|
| (Level 1) |
|
| (Level 2) |
|
| (Level 3) |
| ||||||||
Investments and cash held in Trust Account |
|
|
| 345,022,332 |
|
|
|
| 345,022,332 |
|
|
|
| — |
|
|
|
| — |
|
Public warrants |
|
|
| 27,255,000 |
|
|
|
| — |
|
|
|
| 27,255,000 |
|
|
|
| — |
|
Private placement warrants |
|
|
| 17,577,500 |
|
|
|
| — |
|
|
|
| 17,577,500 |
|
|
|
| — |
|
Total |
| $ |
| 389,854,832 |
|
| $ |
| 345,022,332 |
|
| $ |
| 44,832,500 |
|
| $ |
| — |
|
9. Stockholders’ Equity
Common Stock
The Company is authorized to issue 440,000,000 shares of common stock, consistingavailable for issuance pursuant to awards thereunder shall be the sum of 400,000,000(a) 10% of the outstanding shares of common stock as of the Closing, which is equivalent to 24.2 million shares of Class A common stock par value $0.0001 per share and 40,000,000 shares of Class F Common Stock, par value $0.0001 per share. Holders of the Company’s common stock are entitled to 1 vote for each share of common stock and vote together as a single class. At March 31, 2021, there were 34,500,000(the “Initial Plan Reserve”), (b) any shares of Class A common stock subject to outstanding equity awards under the amended and 8,625,000restated 2011 Stock Plan which, following the effective date of the 2021 Plan, become available for issuance under the 2021 Plan and (c) an annual increase on the first day of each calendar year beginning on January 1, 2022 and ending on and including January 1, 2031 equal to a number of shares equal to 5% of the aggregate number of shares of Class F Common Stock issued andA common stock outstanding respectively.
18
Preferred Stock
on the final day of the immediately preceding calendar year. The Company is authorized to issue 1,000,000maximum aggregate number of shares of preferredcommon stock par value $0.0001 per share, withthat may be issued under the 2021 Plan upon the exercise of ISOs, shall equal 181.5 million shares of Class A common stock.
10. Risk and Contingencies
Management is currently evaluatingor transferred pursuant to the impactrights granted under the 2021 ESPP shall not exceed 15.25% of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, resultsoutstanding shares of its operations, and/or search for a target company, the specific impact is not readily determinableClass A common stock as of the Closing, which is equivalent to 36.9 million shares.
| Options Outstanding | |||||||||||||||||||||||
| Number of Shares | Weighted- Average Exercise Price Per Share | Weighted- Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | ||||||||||||||||||||
| Balance—December 31, 2020 | 49,206 | $ | 0.62 | 8.1 | $ | 245,565 | |||||||||||||||||
| Expired or canceled | (2,673) | 0.70 | |||||||||||||||||||||
| Exercised | (3,402) | 0.50 | $ | 33,210 | |||||||||||||||||||
| Balance—September 30, 2021 | 43,131 | $ | 0.63 | 7.1 | $ | 788,467 | |||||||||||||||||
| Options vested and exercisable—September 30, 2021 | 27,493 | $ | 0.56 | 6.6 | $ | 504,540 | |||||||||||||||||
| RSUs and PRSUs | |||||||||||
| Number of Shares | Weighted- Average Grant-Date Fair Value Price Per Share | ||||||||||
| Balance-December 31, 2020 | — | $ | — | ||||||||
| Granted | 4,070 | 9.55 | |||||||||
| Vested | (28) | 9.29 | |||||||||
| Canceled or forfeited | (312) | 9.20 | |||||||||
| Balance-September 30, 2021 | 3,730 | $ | 9.58 | ||||||||
| Earn-out Award Outstanding | |||||||||||
| Number of Shares | Weighted-Average Grant-Date Fair Value Price Per Share | ||||||||||
| Balance - December 31, 2020 | — | $ | — | ||||||||
| Granted | 5,097 | 12.61 | |||||||||
| Forfeited | (337) | 12.57 | |||||||||
| Balance - September 30, 2021 | 4,760 | $ | 12.62 | ||||||||
| Nine Months Ended September 30, | |||||
| 2020 | |||||
| Expected term | 5.5 – 6.1 years | ||||
| Expected volatility | 38.5 – 44.9% | ||||
| Risk-free interest rate | 0.3 – 1.5% | ||||
| Expected dividend yield | 0% | ||||
| Inception to September 30, | |||||
| 2021 | |||||
| Current stock price | $13.93 – $19.11 | ||||
| Expected term | 5.3 – 5.5 years | ||||
| Expected volatility | 40.0% – 55.0% | ||||
| Risk-free interest rate | 0.8% – 1.1% | ||||
| Expected dividend yield | 0% | ||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Costs of revenue | $ | 978 | $ | 28 | $ | 1,040 | $ | 78 | |||||||||||||||
| Research and development | 6,695 | 164 | 6,929 | 485 | |||||||||||||||||||
| Selling, general, and administrative | 23,065 | 438 | 24,028 | 1,231 | |||||||||||||||||||
| Stock-based compensation, net of amounts capitalized | 30,738 | 630 | 31,997 | 1,794 | |||||||||||||||||||
| Capitalized stock-based compensation | 1,332 | 34 | 1,526 | 115 | |||||||||||||||||||
| Total stock-based compensation | $ | 32,070 | $ | 664 | $ | 33,523 | $ | 1,909 | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Numerator : | |||||||||||||||||||||||
| Net income (loss) attributable to common stockholders | $ | (167,989) | $ | 906 | $ | (177,070) | $ | (10,892) | |||||||||||||||
| Less: undistributed earnings attributable to participating securities | — | (906) | — | — | |||||||||||||||||||
| Net income (loss) attributable to common stockholders, basic and diluted | $ | (167,989) | $ | — | $ | (177,070) | $ | (10,892) | |||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted average shares used in computing net income (loss) per share attributable to common stockholders, basic and diluted | 196,478 | 32,552 | 93,061 | 32,334 | |||||||||||||||||||
| Net income (loss) per share attributable to common stockholders, basic and diluted | $ | (0.86) | $ | — | $ | (1.90) | $ | (0.34) | |||||||||||||||
11. Subsequent Events
Management has performed an evaluationdiluted net loss per share attributable to common stockholders, basic and diluted, because their effect would have been anti-dilutive or issuance of subsequent events through May 27, 2021such shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the financial statements, noting no items which require adjustment or disclosure other than those set forthperiod (shares in thousands):
| As of September 30, | |||||||||||
| 2021 | 2020 | ||||||||||
| Public warrants | 6,900 | — | |||||||||
| Private warrants | 4,450 | — | |||||||||
| Earn-out shares | 23,460 | — | |||||||||
| Redeemable convertible preferred stock, all series | — | 126,409 | |||||||||
| Warrants to purchase common stock | — | 1,081 | |||||||||
| Common stock options outstanding | 43,131 | 52,859 | |||||||||
| Unvested RSUs | 3,730 | — | |||||||||
| Total potentially dilutive common stock equivalents | 81,671 | 180,349 | |||||||||
19
Cautionary Note Regarding Forward-Looking Statements
All statements other than statements of historical fact included in this Quarterly Report on Form 10‑Q including, without limitation, statements under this “Management’s Discussionthe final prospectus and Analysis of Financial Conditiondefinitive proxy statement, dated August 27, 2021 (the “Proxy Statement/Prospectus”) and Results of Operations” regardingfiled with the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. When used in this Quarterly Report on Form 10‑Q, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or the Company’s management, identify forward-looking statements. SuchSEC. This discussion may contain forward-looking statements are based on the beliefs of management, as well as assumptions made by,upon Matterport’s current expectations, estimates and information currently available to, the Company’s management.projections that involve risks and uncertainties. Actual results could differ materially from those contemplated by theanticipated in these forward-looking statements as a result of certainvarious factors, detailedincluding those discussed under “Risk Factors”, “Forward-Looking Statements” and other disclosures included in our filings withthis Report. Unless the SEC. All subsequent writtencontext otherwise requires, all references in this section to “we,” “our,” “us,” “the Company” or oral forward-looking statements attributableMatterport refer to us or persons acting on the Company’s behalf are qualified in their entirety by this paragraph.
Overview
We are a blank check company incorporated on June 29, 2020 asbusiness of Matterport, Inc., a Delaware corporation, and formedits subsidiaries both prior to the consummation of and following the Merger (as defined below).
We intenddemand from anywhere.
Recent Developments
Proposed Matterport Business Combination
financial position as well as those of our customers. For more information on our operations and risks related to the COVID-19 pandemic, please see the section titled “
Risk Factors” in this Report.| Nine Months Ended September 30, | Year ended December 31 | ||||||||||||||||||||||
| 2021 | 2020 | 2020 | 2019 | ||||||||||||||||||||
| Spaces under management | 6.2 | 3.8 | 4.3 | 2.3 | |||||||||||||||||||
| Nine Months Ended September 30, | Year ended December 31 | ||||||||||||||||||||||
| 2021 | 2020 | 2020 | 2019 | ||||||||||||||||||||
| Free subscribers | 385.2 | 163.2 | 210.3 | 19.1 | |||||||||||||||||||
| Paid subscribers | 53.8 | 39.9 | 43.9 | 20.5 | |||||||||||||||||||
| Total subscribers | 439.0 | 203.1 | 254.2 | 39.6 | |||||||||||||||||||
| Three Months Ended September 30, | |||||||||||
| 2021 | 2020 | ||||||||||
| Net dollar expansion rate | 114 | % | 119 | % | |||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||||||
| GAAP income (loss) from operations | $ | (44,356) | $ | 1,263 | $ | (52,488) | $ | (8,757) | |||||||||||||||||||||||||||
| Add back: stock based compensation expense, net | 30,738 | 630 | 31,997 | 1,794 | |||||||||||||||||||||||||||||||
| Non-GAAP income (loss) from operations | $ | (13,618) | $ | 1,893 | $ | (20,491) | $ | (6,963) | |||||||||||||||||||||||||||
| Nine Months Ended September 30, | |||||||||||
| 2021 | 2020 | ||||||||||
| Net cash used in operating activities | $ | (21,091) | $ | (7,140) | |||||||
| Less: purchases of property and equipment | 536 | 20 | |||||||||
| Less: capitalized software and development costs | 5,233 | 3,624 | |||||||||
| Free cash flow | $ | (26,860) | $ | (10,784) | |||||||
The Merger Agreementthe solutions that we have developed for diverse markets over the past decade.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||||||||
| Subscription | 15,677 | 11,517 | 44,758 | 29,032 | |||||||||||||||||||||||||||||||
| License | 118 | 3,000 | 4,477 | 3,000 | |||||||||||||||||||||||||||||||
| Services | 3,292 | 2,341 | 8,860 | 5,498 | |||||||||||||||||||||||||||||||
| Product | 8,568 | 8,216 | 25,992 | 24,767 | |||||||||||||||||||||||||||||||
| Total revenue | 27,655 | 25,074 | 84,087 | 62,297 | |||||||||||||||||||||||||||||||
| Costs of revenue: | |||||||||||||||||||||||||||||||||||
| Subscription | 3,908 | 2,981 | 10,543 | 8,299 | |||||||||||||||||||||||||||||||
| License | — | 69 | — | 69 | |||||||||||||||||||||||||||||||
| Services | 2,460 | 1,730 | 6,785 | 4,270 | |||||||||||||||||||||||||||||||
| Product | 7,106 | 5,228 | 18,036 | 15,198 | |||||||||||||||||||||||||||||||
| Total costs of revenue | 13,474 | 10,008 | 35,364 | 27,836 | |||||||||||||||||||||||||||||||
| Gross profit | 14,181 | 15,066 | 48,723 | 34,461 | |||||||||||||||||||||||||||||||
| Gross margin | 51% | 60% | 58% | 55% | |||||||||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||||
| Research and development | 14,484 | 3,861 | 27,599 | 13,003 | |||||||||||||||||||||||||||||||
| Selling, general, and administrative | 44,053 | 9,942 | 73,612 | 30,215 | |||||||||||||||||||||||||||||||
| Total operating expenses | 58,537 | 13,803 | 101,211 | 43,218 | |||||||||||||||||||||||||||||||
| Income (loss) from operations | (44,356) | 1,263 | (52,488) | (8,757) | |||||||||||||||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||||||||||||||
| Interest income | 550 | 3 | 572 | 16 | |||||||||||||||||||||||||||||||
| Interest expense | (91) | (339) | (676) | (1,197) | |||||||||||||||||||||||||||||||
| Transaction costs | (565) | — | (565) | — | |||||||||||||||||||||||||||||||
| Change in fair value of warrants liabilities | (24,176) | — | (24,176) | — | |||||||||||||||||||||||||||||||
| Change in fair value of contingent earn-out liability | (98,478) | — | (98,478) | — | |||||||||||||||||||||||||||||||
| Other expense, net | (839) | (4) | (1,186) | (903) | |||||||||||||||||||||||||||||||
| Total expense | (123,599) | (340) | (124,509) | (2,084) | |||||||||||||||||||||||||||||||
| Income (loss) before provision for income taxes | (167,955) | 923 | (176,997) | (10,841) | |||||||||||||||||||||||||||||||
| Provision for income taxes | 34 | 17 | 73 | 51 | |||||||||||||||||||||||||||||||
| Net income (loss) | $ | (167,989) | $ | 906 | $ | (177,070) | $ | (10,892) | |||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | Change | 2021 | 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||
| Amount | Amount | Amount | % | Amount | Amount | Amount | % | ||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Subscription | $ | 15,677 | $ | 11,517 | $ | 4,160 | 36 | % | $ | 44,758 | $ | 29,032 | $ | 15,726 | 54 | % | |||||||||||||||||||||||||||||||
| License | 118 | 3,000 | (2,882) | (96) | % | 4,477 | 3,000 | 1,477 | 49 | % | |||||||||||||||||||||||||||||||||||||
| Services | 3,292 | 2,341 | 951 | 41 | % | 8,860 | 5,498 | 3,362 | 61 | % | |||||||||||||||||||||||||||||||||||||
| Product | 8,568 | 8,216 | 352 | 4 | % | 25,992 | 24,767 | 1,225 | 5 | % | |||||||||||||||||||||||||||||||||||||
| Total revenue | $ | 27,655 | $ | 25,074 | $ | 2,581 | 10 | % | $ | 84,087 | $ | 62,297 | $ | 21,790 | 35 | % | |||||||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | Change | 2021 | 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||
| Amount | Amount | Amount | % | Amount | Amount | Amount | % | ||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Cost of subscription revenue | $ | 3,908 | $ | 2,981 | $ | 927 | 31 | % | $ | 10,543 | $ | 8,299 | 2,244 | 27 | % | ||||||||||||||||||||||||||||||||
| Cost of license revenue | — | 69 | (69) | (100) | % | — | 69 | (69) | (100) | % | |||||||||||||||||||||||||||||||||||||
| Cost of services revenue | 2,460 | 1,730 | 730 | 42 | % | 6,785 | 4,270 | 2,515 | 59 | % | |||||||||||||||||||||||||||||||||||||
| Cost of products revenue | 7,106 | 5,228 | 1,878 | 36 | % | 18,036 | 15,198 | 2,838 | 19 | % | |||||||||||||||||||||||||||||||||||||
| Total cost of revenue | $ | 13,474 | $ | 10,008 | $ | 3,466 | 35 | % | $ | 35,364 | $ | 27,836 | $ | 7,528 | 27 | % | |||||||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||
| Gross profit | $ | 14,181 | $ | 15,066 | $ | 48,723 | $ | 34,461 | |||||||||||||||||||||||||||
| Gross margin | 51% | 60% | 58% | 55% | |||||||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | Change | 2021 | 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||
| Amount | Amount | Amount | % | Amount | Amount | Amount | % | ||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Research and development expenses | $ | 14,484 | $ | 3,861 | $ | 10,623 | 275 | % | $ | 27,599 | $ | 13,003 | $ | 14,596 | 112 | % | |||||||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | Change | 2021 | 2020 | Change | ||||||||||||||||||||||||||||||||||||||||||
| Amount | Amount | Amount | % | Amount | Amount | Amount | % | ||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | $ | 44,053 | $ | 9,942 | $ | 34,111 | 343 | % | $ | 73,612 | $ | 30,215 | $ | 43,397 | 144 | % | |||||||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| Interest income | $ | 550 | $ | 3 | $ | 572 | $ | 16 | ||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| Interest expense | $ | (91) | $ | (339) | $ | (676) | $ | (1,197) | ||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| Transaction costs | $ | (565) | $ | — | $ | (565) | $ | — | ||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| Change in fair value of warrants liabilities | $ | (24,176) | $ | — | $ | (24,176) | $ | — | ||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| Change in fair value of contingent earn-out liability | $ | (98,478) | $ | — | $ | (98,478) | $ | — | ||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| Other expense, net | $ | (839) | $ | (4) | $ | (1,186) | $ | (903) | ||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| Provision for income taxes | $ | 34 | $ | 17 | $ | 73 | $ | 51 | ||||||||||||
| September 30, 2021 | December 31, 2020 | ||||||||||
| (dollars in thousands) | |||||||||||
| Cash, cash equivalents, and investments: | |||||||||||
| Cash and cash equivalents | $ | 148,853 | $ | 51,850 | |||||||
| Restricted cash | 468 | 400 | |||||||||
| Investments | 465,068 | — | |||||||||
| Total cash, cash equivalents, and investments | $ | 614,389 | $ | 52,250 | |||||||
The Merger Agreement
Merger Consideration
Pursuantbears interest at a floating per annum rate of equal to the termsgreater of (a) the Prime Rate + 0.5% and (b) 5.25%. The Line of Credit was fully repaid in July 2021.
| Nine Months Ended September 30, | |||||||||||
| 2021 | 2020 | ||||||||||
| Cash provided by (used in): | |||||||||||
| Operating activities | (21,091) | (7,140) | |||||||||
| Investing activities | (473,235) | (3,644) | |||||||||
| Financing activities | 591,670 | 49,590 | |||||||||
20
PursuantReverse Recapitalization and pursuant to the Merger Agreement, the aggregate merger consideration payable at the closing of the Business Combination to all of theeligible Legacy Matterport stockholders and Legacy Matterport stock options and restricted share units (RSUs) holders of equity awards of Matterport will be an aggregate number of shares, or equity awards exercisable for shares, of Company Class A common stock (deemed to have a value of $10.00 per share) equal to $2,188,750,000, divided by $10.00.
In addition to the consideration to be paid at the closing of the Business Combination, stockholders of Matterport will beare entitled to receive their pro rata share of an additional number of earn-out shares from the Company, issuable in Company Class A common stock and subject to the terms provided in the Merger Agreement, up to an aggregate of 23,460,000 shares collectively issuable to all Matterport equity holders.
Treatment of Matterport’s Equity Awards
Pursuant to the Merger Agreement, at the closing of the Business Combination, each of Matterport’s stock options, to the extent then outstanding and unexercised, will automatically be converted into (a) an option to acquire a certain number of shares of CompanyCompany’s Class A common shares (“Earn-out Shares”) upon the Company achieving certain Earn-out Triggering Events during the Earn-out Period (as described in Note 11).
Pursuant to the Merger Agreement, at the closing of the Business Combination, each of Matterport’s restricted stock units, to the extent then unvested and outstanding, will automatically be converted into (a) an award of restricted stock units covering a certain number of shares of Company Class A common stock (pursuant to a ratio based on the Per Share Company Common Stock Consideration) and (b) the right to receive a pro rata portion of a number of earn-out shares from the Company, issuable in Company Class A common stock and subject to the terms provided in the Merger Agreement (including that such right to receive earn-out shares is conditional on the holder continuing to provide services to the Company), up to an aggregate of 23,460,000 shares collectively issuable to all Matterport equity holders. Each such converted restricted stock unit will be subject to the same terms and conditions as were applicable immediately prior to such conversion.
Private Placement Subscription Agreements
On February 7, 2021, the Company entered into subscription agreements (each, a “Subscription Agreement” and collectively, the “Subscription Agreements”) with certain investors, including certain individuals (each, an “Individual Investor Subscription Agreement”), institutional investors (each, an “Institutional Investor Subscription Agreement”) and Gores Sponsor VI LLC (the “Sponsor”), pursuant to which the investors have agreed to purchase an aggregate of 29,500,000 shares of Class A common stock in a private placement for $10.00 per share (the “Private Placement”). The proceeds from the Private Placement will remain on the Company’s balance sheet following the consummation of the Business Combination.
Each Subscription Agreement will terminate with no further force and effect upon the earliest to occur of: (a) such date and time as the Merger Agreement is terminated in accordance with its terms; (b) upon the mutual written agreement of the parties to such Subscription Agreement; (c) if any of the conditions to closing set forth in such Subscription Agreement are not satisfied or waived on or prior to the closing and, as a result thereof, the transactions contemplated by such Subscription Agreement are not consummated at the closing; and (d) if the closing of the Business Combination shall not have occurred by September 7, 2021. As of the date hereof, the shares of Class A common stock to be issued pursuant to the Subscription Agreements have not been registered under the Securities Act. The Company will, within 30 days after the closing, file with the SEC a registration statement (the “Post-Closing Registration Statement”) registering the resale of such shares of Class A Common Stock and will use its commercially reasonable efforts to have such Post-Closing Registration Statement declared effective as soon as practicable after the filing thereof.
Recent Stockholder Action
21
The Company and the members of its Board of Directors have been named as defendants in a putative stockholder action filed in the Supreme Court of the State of New York, County of New York, captioned Jamin Quimby v. Gores Holdings VI, Inc., et al., Index No. 652761/2021, in connection with the proposed business combination of the Company with Matterport, Inc. (the “Proposed Transaction”). The complaint generally alleges breach of fiduciary duty and aiding and abetting claims relating to, among other things, alleged misstatements and omissions in the Form S-4 registration statement filed by the Company with the SEC on April 6, 2021 in connection with the Proposed Transaction (the “Registration Statement”). The complaint seeks, among other things, injunctive relief and an award of attorneys’ fees. The Company believes the claims asserted in the Quimby matter are without merit, and intends to vigorously defend against them.
Results of Operations
For the three months ended March 31, 2021, we had a net loss of ($29,974,034), of which ($26,672,500) are non-cash losses related to the change in fair value of the warrant liability. Our business activities duringEarn-out Awards over the quarter mainly consistedderived service period for each tranche. Forfeitures are accounted for as they occur.
As indicated in the accompanying unaudited financial statements, at March 31, 2021, we had $176,595 in cash and deferred offering costs of $12,075,000. Further, we expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete our Business Combination will be successful.
Liquidity and Capital Resources
On July 24, 2020, the Sponsor purchased 17,250,000 shares of Class F Common Stock for $25,000, or approximately $0.001 per share. On October 1, 2020, the Sponsor surrendered 8,625,000 Founder Shares to us for no consideration, on October 23, 2020, the Company effected a stock dividend with respect to its Class F Common Stock of 6,468,750 shares thereof and on November 13, 2020 the Sponsor surrendered 6,468,750 Founder Shares to us for no consideration, resulting in an aggregate of 8,625,000 outstanding shares of Class F Common Stock. As a result of such surrendersremaining eligible Legacy Matterport stockholders and stock dividend,options and RSUs holders. The reallocated issuable shares to Legacy Matterport common stockholders are recognized as contingent earn-out liability, and the per-share purchase price increasedreallocated issuable shares to approximately $0.003 per share. The number of Founder Shares issued was determinedLegacy Matterport stock options and RSUs holders are recognized as share-based compensation over the remaining derived service period based on the expectation that such Founder Shares would represent 20%fair value on the date of the outstanding shares upon completionreallocation.
On December 15, 2020,Earn-out Awards. The estimated fair value of the Earn-out Shares is determined using a Monte Carlo simulation prioritizing the most reliable information available. The assumptions utilized in the calculation are based on the achievement of certain stock price milestones, including the current Company common stock price, expected volatility, risk-free rate, expected term and dividend rate. The contingent earn-out liability is categorized as a Level 3 fair value measurement because the Company consummated its Public Offeringestimates projections during the Earn-out Period utilizing unobservable inputs. See Note 6 “Fair Value Measurement” and Note 13 “Contingent Earn-Out Liability” for additional information.
On July 24, 2020, Company borrowed $300,000 by the issuance of an unsecured promissory note from the Sponsor for $300,000 to cover expenses related to the Public Offering. This Note was non-interest bearing and payable on the earlier of June 30, 2021 or the completion of the Public Offering. This Note was repaid in full upon the completion of the Public Offering.
22
On March 19, 2021, the Sponsor made available to the Company a loan of up to $2,000,000 pursuant to a promissory note issued by the Company to the Sponsor. The proceeds from the note will be used for on-going operational expenses and certain other expenses in connection with the Proposed Business Combination. The note is unsecured, non-interest bearing and matures on the earlier of: (i) January 31, 2022 or (ii) the date on which the Company consummates the Proposed Business Combination. As of March 31, 2021, the amount advanced by Sponsor to the Company was $600,000.
At March 31, 2021 and December 31, 2020, we had cash held outside of the Trust Account of approximately $176,595 and $633,266, respectively, which is available to fund our working capital requirements.Additionally, interest earned on the funds held in the Trust Account may be released to us to fund our Regulatory Withdrawals, for a maximum of 24 months and/or additional amounts necessary to pay our franchise and income taxes.
At March 31, 2021 and December 31, 2020, the Company had current liabilities of $48,141,857 and $18,690,703, respectively, and working capital of ($47,129,281) and ($17,159,683), respectively, the balances of which are primarily related to warrants we have recorded as liabilities. Other amounts related to accrued expenses owed to professionals, consultants, advisors and others who are working on seeking a Business Combination.
We intend to use substantially all of the funds held in the Trust Account, including interest (which interest shall be net of Regulatory Withdrawals and taxes payable) to consummate our Business Combination. Moreover, we may need to obtain additional financing either to complete a Business Combination or because we become obligated to redeem a significant number of shares of our Common Stock upon completion of a Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our Business Combination. If we are unable to complete our Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following our Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations. To the extent that our capital stock or debt is used, in whole or in part, as consideration to consummate our Business Combination, the remaining proceeds held in our Trust Account, if any, will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategy.
Contractual Obligations
As of March 31, 2021 and December 31, 2020, we did not have any long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations or long-term liabilities. In connection with the Public Offering, we entered into an administrative services agreement to pay monthly recurring expenses of $20,000 to The Gores Group for office space, utilities and secretarial support. The administrative services agreement terminates upon the earlier of the completion of a Business Combination or the liquidation of the Company.
The underwriters are entitled to underwriting discounts and commissions of 5.5% ($18,975,000), of which 2.0% ($6,900,000) was paid at the IPO Closing Date, and 3.5% ($12,075,000) was deferred. The Deferred Discount will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement. The underwriters are not entitled to any interest accrued on the Deferred Discount.
Recently Issued Accounting Pronouncements Not Yet Adopted
Management does not believe that any recently issued, but not yet effective,recent accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements based on current operationsrefer to “Accounting Pronouncements” in Note 2. Summary of the Company. The impactSignificant Accounting Policies in Part I, Item 1 of any recently issued accounting standards will be re-evaluated on a regular basis or if a business combination is completed where the impact could be material.
this Report.
Market risk
23
rates, commodity prices and/or equity prices. Our business activities for the three months ended March 31, 2021 consisted solely of organizational activities and activities relating to our Public Offering and the identification of a targetsmaller reporting company for our Business Combination. As of March 31, 2021, $345,022,332 (including accrued interest and dividends and subject to reductionas defined by the Deferred Discount due at the consummationRule 12b-2 of the Business Combination) was held inExchange Act and is not required to provide the Trust Account for the purposes of consummating our Business Combination. As of March 31, 2021, investment securities in the Company’s Trust Account consists of $345,022,332 in money market funds. As of March 31, 2021, the effective annualized rate of return generated by our investments was approximately 0.0015%.
We have not engaged in any hedging activities during the three months ended March 31, 2021. We do not expect to engage in any hedging activities with respect to the market risk to which we are exposed.
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried outwe conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2021. Based upon their evaluation at that earlier time, our Chief Executive Officer and Chief Financial Officer had concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective. Subsequently, our management re-evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of March 31,the end of the quarter ended September 30, 2021. Based upon that evaluation, and in light of the SEC Staff Statement on April 12, 2021, our Chief Executive Officer and Chief Financial Officer concluded that due to the industry-wide issues and related insufficient risk assessment of the underlying accounting for certain instruments resulting in the Company’s restatement of its financial statements, our disclosure controls and procedures were not effective as of MarchSeptember 30, 2021 because of material weaknesses in our internal control over financial reporting described below. In light of the material weaknesses described below, the Company performed additional analysis and other post-closing procedures to determine its consolidated financial statements are prepared in accordance with generally accepted accounting principles. Accordingly, management concluded that the financial statements included in this report fairly present in all material respects the Company’s financial condition, results of operations and cash flows for the periods presented.
While we have implemented a variety of steps to remediate these weaknesses, the material weaknesses will not be considered remediated until our remediation plan has been fully implemented, the applicable controls operate for a sufficient period of time, and we have concluded, through testing, that the newly implemented and enhanced controls are operating effectively.
This Quarterly Report on Form 10-Q does not include a report of management’s assessment regarding
During the most recently completed fiscal quarter there has been no change ended September 30 ,2021
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PART II—OTHER INFORMATION
None.
Factors that could cause our actual results to differ materially from those in this report are any
As of the date of this Quarterly Report on Form 10-Q, thereThere have been no material changes to the risk factors disclosed therein.
Item 2. Unregistered Salesclosing of Equity Securities and Use of Proceeds
Unregistered Sales
On July 24, 2020, the Sponsor purchased 17,250,000 shares of Class F Common Stock for $25,000, or approximately $0.001 per share. On October 1, 2020, the Sponsor surrendered 8,625,000 Founder Shares to us for no consideration, on October 23, 2020, the Company effected a stock dividend with respect to its Class F Common Stock of 6,468,750 shares thereof and on November 13, 2020 the Sponsor surrendered 6,468,750 Founder Shares to us for no consideration, resulting in an aggregate of 8,625,000 outstanding shares of Class F Common Stock. As a result of such surrender, the per-share purchase price increased to approximately $0.003 per share. The number of Founder Shares issued was determined based on the expectation that such Founder Shares would represent 20% of the outstanding shares upon completion of the Public Offering. On September 11, 2020, the Sponsor transferred 25,000 Founder Shares to each of the independent directors at their original purchase price.Our Public Offering was consummated on December 15, 2020.
Prior to the IPO Closing Date, we completed the private sale of an aggregate of 4,450,000 Private Placement Warrantsunits of private placement warrants to ourGores Holdings VI Sponsor, LLC (our “Sponsor”) at a price of $2.00 per Private Placement Warrant,private placement warrants, generating total proceeds, before expenses, of $8,900,000. The Private Placement Warrants have terms and provisions that are identical to those$8.9 million.
The sales of the above securities by the Company were exempt from registration in reliance on Section 4(a)(2) of the Securities Act as transactions by an issuer not involving a public offering.
Use of Proceeds
On December 10, 2020, our registration statement on Form S‑1 (File No. 333-249312) was declared effective by the SEC for the Public Offering pursuant to which we sold an aggregate of 34,500,000 Units at an offering price to the public of $10.00 per Unit, including 4,500,000 Units as a result of the underwriters’ full exercise of its over-allotment option, generating gross proceeds of $345,000,000.
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offering expenses, the total net proceeds from our Public OfferingIPO and the sale of the Private Placement Warrantsprivate placement warrants were $346,055,000,$346.1 million, of which $345,000,000$345.0 million (or $10.00 per share sold in the Public Offering)IPO) was placed in the Trust Accounta trust account in the United States maintained by the trustee.
Our Sponsor, executive officers and directors have agreed, and our second amended and restated certificateMerger, the outstanding balance of incorporation provides, that we will have only 24 months from the IPO Closing Datetrust account was distributed to complete our Business Combination. If we are unable to complete our Business Combination within such 24‑month period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in our Trust Account, including interest (which interest shall be net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our Board, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
us.
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and Financial Statement Schedules.
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Number | Description | |||||||
| 2.1 | ||||||||
3.1 | ||||||||
3.2 | ||||||||
4.1 | ||||||||
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| Amendment to Warrant Agreement, dated as of July 22, 2021, by and among Matterport, Inc.,Continental Stock Transfer & Trust Company and American Stock Transfer & Trust Company, aswarrant agent (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form8-K, filed with the Securities and Exchange Commission on July 28, 2021). | |||||||
| 10.1 | ||||||||
| 10.2† | ||||||||
| 10.3† | ||||||||
| 10.4† | ||||||||
| 10.5† | ||||||||
| 10.6† | ||||||||
| 10.7† | ||||||||
| 10.8† | ||||||||
| 31.1* | ||||||||
31.2* | ||||||||
32.1* | ||||||||
32.2* | ||||||||
Exhibit 101 | The following financial statements from the Quarterly Report on Form 10-Q of | |||||||
Exhibit 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) | |||||||
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| MATTERPORT, INC. | ||||||||||||
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| Date: November 10, 2021 | By: |
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R.J. Pittman | ||||||||||||
| Chief Executive Officer | ||||||||||||
(Duly Authorized Officer and Principal Executive Officer) | ||||||||||||
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