Matterport Becomes Publicly Traded Spatial Data Company After Spac Merger; Rj Pittman Quoted

The Company borrowed $3.0 million under the line of credit on September 27, 2019. The principal amount outstanding under the revolving line of credit bears interest at a floating per annum rate equal to the greater of 0.5% above the Prime Rate and 5.25%. The restructuring of the term loan was accounted for as an extinguishment. Level 2—Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

Upon the settlement of all tranches, the Earn-out Shares were issued into a fixed number of shares of common stock that was indexed to the Company’s own stock price other than on an observable market price or index. Our 2021 ESPP permits eligible employees to acquire shares of our common stock at 85% of the lower of the fair market value of our common stock on the first trading day of each offering period or on the purchase date. If the fair market value of our common stock on the purchase date is lower than the first trading day of the offering period, the current offering period will be cancelled after purchase and a new 24-month offering period will begin. Participants may purchase shares of common stock through payroll deductions of up to 15% of their eligible compensation, subject to purchase limits of 3,000 shares per purchase period, 12,000 per offering period, and $25,000 worth of stock for each calendar year. The Company has retroactively adjusted the shares issued and outstanding prior to July 22, 2021 to give effect to the exchange ratio established in the Merger Agreement to determine the number of shares of common stock into which shares of Legacy Matterport common stock were converted. Immediately prior to the Closing, 232.7 million shares were authorized for issuance at $0.001 par value.

The Company is still in the process of preparing the initial accounting for the transaction and expects to establish a preliminary purchase price allocation with respect to this transaction by the end of the third quarter of fiscal year 2022. The estimated fair value of the Earn-out Shares is allocated proportionally to contingent earn-out liability and the grant date fair value of the 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 price of shares of Class A common stock, expected volatility, risk-free rate, expected term and dividend rate.

There are other applications in other areas such as construction, restoration, and facilities management. In fact, there may be so much more real-world applications that can be integrated with virtual models — the use case here seems limitless and that presents growth opportunities for Matterport. However, with virtual tours, real estate agents and potential renters/buyers do not have to meet in person.

Matterport Spac Merger Imminent

The SEC updated its guidance about the accounting treatment of SPAC warrants. Big opportunity here, their data becomes much more valuable the bigger it gets. They have that recurring revenue that Brian loves, all their subscription-based revenue. For example, their Matterport Pro2 3D mapping camera sells for over $3,000. It’s the best 3D mapping camera you could buy pretty much, and integrates perfectly with their platform.

After a decade of digital transformation for the company, combined with a wider acceptance of proptech, the stage has been set for expansion. Last week, the firm went public through a SPAC merger with Gores Holdings VI, where it hopes to continue to expand its reach after a year of rapid growth. With an equity value of $2.9 billion at $10 per share, the current price of $15 as of this writing implies an equity value of about $4.4 billion. This means matterport merger that the company is trading at an enterprise value to 2020 revenue multiple of 43x — very expensive in my opinion. Matterport was founded in 2011 and has established itself as the market leader in the spatial data category by turning physical spaces into an interactive 3D digital twin (a digital copy of a real-world place or object). Based on that analysis, we developed a comprehensive work plan for remediation of the above material weaknesses.

The platform is powered by Cortex AI, the company’s patented deep learning neural network. Cortex accurately creates 3D digital twins by handling complex tasks like 2D to 3D reconstruction, advanced image processing, automatic color correction, object recognition, room labeling, and more. The camera, scanning services, and hosting are Matterport’s key business, but it is pushing into digital twins of all kinds of commercial objects, keeping them accurate, and making them searchable. As a leader in the spatial data and virtual tour industry, Matterport is well-positioned to enhance the digital experience in a rather low-tech real estate sector.

Why Matterport Stock Is An Attractive Bet On Real Estate Digitization

Expansion to non-real estate use cases such as 3D virtual tours of cars and boats. Technology tools like Matterport became the main beneficiaries of the pandemic and real estate owners all over the world took notice as the virtual world becomes increasingly relevant in an industry that is predominantly offline. With real estate being slow to adapt, Matterport attempts to seize this opportunity by offering the built world a virtual world. Real estate is the largest asset class in the world and is on the brink of disruption and massive technological innovation. The virtual reality space is also experiencing secular growth as the pandemic accelerates its importance and relevance.

On February 12, 2021, the Company amended and restated the 2011 Stock Plan to allow the Company to grant restricted stock units (“RSUs”) and extended the terms of the plan until February 12, 2022, unless terminated earlier. No shares are available for future grant under the 2011 Plan due to the termination of the 2011 Plan in connection with the Closing. There were 67.8 million shares authorized under the 2011 Stock Plan prior to its termination, and 2.1 million shares were assumed under the 2021 Incentive Award Plan upon the termination of the 2011 Plan. In February 2021, the holders of all of the Company’s outstanding warrants entered into an agreement with the Company to exercise their warrants contingent upon, and effective immediately prior to, the consummation of the First Merger. The Company issued 1.0 million shares of the Class A common stock to the holders of the common stock warrants upon the Closing.

Our future capital requirements will depend on many factors, including increase in our customer base, the timing and extent of spend to support the expansion of sales, marketing and development activities, and the impact of the COVID-19 pandemic. As a result, we may require additional capital resources to grow our business. We believe that current cash, cash equivalents and investments will be sufficient to fund our operations for at least the next 12 months. We believe our existing cash resources are sufficient to support planned operations for the next 12 months. On January 14, 2022, the Public Warrants ceased trading on the Nasdaq Global Market. As a result, management believes that its current financial resources are sufficient to continue operating activities for at least one year past the issuance date of the financial statements.

This work plan includes detailed process by process workflows with completion dates and responsible parties. We are now regularly tracking our progress on completion of the work plan and provide periodic updates to the Audit Committee on our progress. We continue to further expedite and streamline our reporting process and develop our process, including establishing a comprehensive policy and procedure manual, to allow detection, prevention and resolution of potential control deficiencies. We have also conducted training on policies and procedures, standardizing business practices, effective communication, strategic thinking, leadership, and process improvement within various financial functional areas. Section 102 of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards.

Matterport And Gores Holdings Vi Announce Closing Of Business Combination

The Company’s incremental borrowing rate is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. Because the Company does not generally borrow in a collateralized basis, it uses its understanding of what its collateralized credit rating would be as an input to deriving an appropriate incremental borrowing rate. The operating lease right-of-use asset includes any lease payments made and excludes lease incentives. In connection with the execution of the 2018 Agreement, an additional final payment of $0.5 million is due at the earlier of the maturity date and prepayment of the team loan. The Company accreted the final payment liability up to the redemption amount as part of the 2018 Agreement term loan balance and recognized interest expense over the term of the loan. The Company recognized an interest expense of less than $0.1 million and $0.1 million related to the final payment for the 2018 Agreement for the three and six months ended June 30, 2021, respectively.

We expect our license revenue to fluctuate from quarter to quarter based on the number of new licenses purchased by our customers as we obtain new customers for our license solutions and the delivery of our licensed content is accepted by our customers during each quarter. As of June 30, 2022, unrecognized compensation costs related to unvested RSUs and PRSUs were $410.4 million and $8.9 million, respectively. The remaining unrecognized compensation costs for RSUs and PRSUs are expected to be recognized over a weighted-average period of 3.2 years and 1.7 years, respectively, excluding additional stock-based compensation expense related to any future grants of share-based awards. Common Stock Warrants— The Company issued warrants to purchase common stock in connection with loan agreements entered from three lenders as disclosed below and in Note 9 “Debt”.

• In June 2022, the Company entered into a definitive agreement to acquire VHT, Inc., a privately-held real estate marketing company that offers brokerages and agents digital solutions to promote and sell properties, for total consideration of approximately $23.0 million in cash.
• Gores Holdings VI Sponsor, LLC, a Delaware limited liability company, Mr. Randall Bort, Ms. Elizabeth Marcellino and Ms. Nancy Tellem, Gores’ independent directors, are collectively noted as “Initial Stockholders”.
• Goodwill generated from this business combination is primarily attributable to the assembled workforce and expected post-acquisition synergies from integrating Enview technology with Matterport’s products and services.
• Our effective tax rate for the three months ended June 30, 2022, differs from the U.S. federal statutory tax rate of 21% primarily due to losses that cannot be benefited from due to the valuation allowance on the U.S entity, foreign earnings being taxed at different tax rates and the tax benefit from stock-based compensation activities during the period.
• The match contributions for the three and six months ended June 30, 2021 were approximately $0.1 million.
• The Company contributes to a defined-contribution pension plan for eligible employees in the U.K.
• In the medium to long term, the stock should trade on Matterport’s fundamentals, which seem to be bright.

New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. As a result of these factors, we cannot assure you that the forward-looking statements in this Report will prove to be accurate. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise. Gores SPAC will provide up to $640 million in gross proceeds, comprising $345 M cash from Gores Holdings VI and $295 million in fully committed common stock purchase at $10.00 per share. When the transaction is completed, MTTR will join the growing ranks of pure-play spatial computing companies, which include booming companies like PTC, which just joined the S&P 500, and Autodesk.

The Company recognized $231.6 million of contingent earn-out liability attributable to the Earn-out Shares to Matterport legacy Stockholders upon the Closing on July 22, 2021. Commencing 90 days after the Public Warrants become exercisable, we may redeem the outstanding Public Warrants, in whole and not in part, for a price equal to a number of shares of the Company’s Class A common stock to be determined based on a predefined rate based on the redemption date and the “fair market value” of the Company’s Class A common stock. If the Company calls the Public Warrants for redemption, the Company will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis”, as described in the warrant agreement.

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Significant increases in the expected volatility in isolation would result in a significantly higher fair value measurement. For the three and six months ended June 30, 2022, cash paid for amounts included in the measurement of operating lease liabilities was $0.3 million and $0.5 million, respectively. There were no right-of-use assets obtained in exchange for new operating lease liabilities for the three and six months ended June 30, 2022, respectively, as there were no new leases.

The merger’s completion comes after Matterport unveiled initiatives to help drive the creation of digital representations of physical spaces. These include the launch of the Matterport Capture app on the Google Play Store and a partnership with Facebook’s AI group to help train robots using 3D indoor scans. For Matterport, the goal is to https://xcritical.com/ digitize as many buildings as possible while making the digitization process accessible. According to Pittman, there are four billion buildings and 20 billion spaces worldwide, of which less than a percent is digitized. In all, that amounts to $230 trillion of global real estate, a massive asset class that Matterport believes it can tap.

GHVI SPAC shareholders and sponsors will own about 15 percent of Matterport stock. Gores Group, the SPAC’s sponsor, is the same one that took lidar sensor company Luminar Technologies public. The group also sponsored Verra Mobility and Hostess Brands to the public market. ”) and other documents filed by Matterport from time to time with the SEC. Net cash used in financing activities was $1.6 million for the six months ended June 30, 2022.

Matterport’s growth is pinned by the digitization trend in real estate, which accelerated during the COVID-19 pandemic. The company is positioning itself to become the digital platform for the built world similar to the way Zoom, Netflix, and PayPal have changed the way we communicate, interact with content, and pay. While a definitive date hasn’t been set, the transaction is expected to close sometime in the second quarter of 2021. However, some SPAC mergers have got delayed lately, including the IPOE and SoFi merger.

To capitalize on this extraordinary market opportunity, we plan to increase our investment in our customers’ success, scale innovation and R&D, and accelerate growth through our spatial data platform for the 20 billion spaces around the world,” Pittman added. In recent years, diplomatic and trade relationships between the U.S. government and China have become increasingly frayed and the threat of a takeover of Taiwan by China has increased. Our business, operations, and supply chain could be materially and adversely impacted by political, economic or other actions from China or Taiwan, or changes in China-Taiwan relations that impact their economies. In addition, we continue to monitor any adverse impact that the outbreak of war in Ukraine and the subsequent institution of sanctions against Russia by the United States and several European and Asian countries may have on the global economy in general, on our business and operations and on the businesses and operations of our suppliers and customers. For example, a prolonged conflict may result in ongoing increased inflation, escalating energy prices and constrained availability, and thus increasing costs, of raw materials.