References in this Item 2 to "we," "us," "our," or the "Company" are toGores Holdings VI, Inc. prior to the Business Combination (as defined below), except where the context requires otherwise. The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with our unaudited condensed interim financial statements and the notes related thereto which are included in "Item 1. Financial Statements" of this Quarterly Report on Form 10-Q. 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 Discussion and Analysis of Financial Condition and Results of Operations" regarding 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. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company's management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our filings with theSEC . All subsequent written or oral forward-looking statements attributable to us or persons acting on the Company's behalf are qualified in their entirety by this paragraph. Overview As ofJune 30, 2021 , we were a blank check company incorporated onJune 29, 2020 as aDelaware corporation and formed for the purpose of effecting a business combination with one or more target businesses. We completed our Public Offering onDecember 15, 2020 . Recent Developments Business Combination OnJuly 22, 2021 (the "Closing Date"), the Company consummated the previously announced business combination (the "Business Combination") pursuant to that certain Agreement and Plan of Merger, datedFebruary 7, 2021 (the "Merger Agreement"), by and among the Company,Maker Merger Sub, Inc. ("First Merger Sub"), a direct, wholly owned subsidiary of the Company,Maker Merger Sub II, LLC ("Second Merger Sub"), a direct, wholly owned subsidiary of the Company, andMatterport, Inc. ("Legacy Matterport"). In connection with the consummation of the Business Combination (the "Closing"), the Company changed its name fromGores Holdings VI, Inc. toMatterport, Inc. As a result of the Business Combination and the other transactions contemplated by the Merger Agreement, First Merger Sub merged with and into Legacy Matterport, with Legacy Matterport continuing as the surviving corporation (the "First Merger"), and immediately following the First Merger and as part of the same overall transaction as the First Merger, Legacy Matterport merged with and into Second Merger Sub, with Second Merger Sub continuing as the surviving entity as a wholly owned subsidiary of the Company, under the new name "Matterport Operating, LLC " (the "Mergers"). As a result of the First Merger, each share of outstanding capital stock of Legacy Matterport was cancelled and converted into the right to receive the merger consideration in accordance with the terms of the Merger Agreement, with the Company owning 100% of the outstanding capital stock of Legacy Matterport as the surviving corporation of the First Merger (the "Surviving Corporation"). As a result of the Second Merger, the Company owns 100% of the outstanding interests in the surviving entity of the Second Merger (the "Surviving Entity"). Following the closing of the Business Combination, the Company owns, directly or indirectly, all of the issued and outstanding equity interests in the Surviving Entity and its subsidiaries, and the stockholders of Legacy Matterport as of immediately prior to the effective time of the First Merger (the "Matterport Stockholders") hold a portion of our Class A Common Stock. 19 -------------------------------------------------------------------------------- Table of Contents The aggregate merger consideration paid in connection with the Business Combination was 218,875,000 shares of Class A Common Stock (the "Aggregate Company Stock Consideration"). Holders of shares of Legacy Matterport's common stock, par value$0.001 per share ("Matterport Stock"), are entitled to receive a number of newly issued shares of Class A Common Stock equal to the Aggregate Company Stock Consideration, divided by the sum of, without duplication, (a) the aggregate number of shares of Matterport Stock issued and outstanding and issuable upon conversion ofMatterport's Preferred Stock, each series with a par value of$0.001 per share (the "Matterport Preferred Stock"), plus (b) the aggregate number of shares of Matterport Stock issuable upon the exercise or settlement of all (i) options to purchase Matterport Stock granted pursuant toMatterport's Amended and Restated 2011 Stock Incentive Plan (the "Stock Incentive Plan"), whether vested or unvested (the "Matterport Stock Options"), but excluding any Matterport Stock Options that have an exercise price equal to or greater than the cash equivalent of the Per Share Matterport Stock Consideration (as defined below), and (ii) restricted stock units covering shares of Matterport Stock granted pursuant to the Stock Incentive Plan, whether vested or unvested (the "Matterport RSUs"), in each case of clauses "(i)" and "(ii)," outstanding as of immediately prior to the effective time of the First Merger (the "Matterport Stock Adjusted Fully Diluted Shares" and, such quotient, the "Per Share Matterport Stock Consideration"). Holders of shares ofMatterport's Preferred Stock are entitled to receive a number of shares of newly issued Class A Stock equal to the Per Share Matterport Stock Consideration multiplied by the number of shares of Matterport Stock issuable upon conversion of such share of Matterport Preferred Stock as of immediately prior to the effective time of the First Merger (the "Per Share Matterport Preferred Stock Consideration"). No fractional shares of Class A Stock were issued in connection with the Business Combination. In lieu of the issuance of any fractional shares, Matterport Stockholder who otherwise would have been entitled to receive such fractional share received an amount in cash, without interest, rounded down to the nearest cent, equal to the product of (i) the amount of the fractional share interest in a share of Class A Common Stock to which such Matterport Stockholder otherwise would have been entitled multiplied by (ii)$10.00 . In addition to the consideration to be paid at the closing of the Business Combination, Matterport Stockholders (to the extent entitled to consideration) are entitled to receive their pro rata share of an additional number of earn-out shares, issuable in shares of Class A Common Stock and subject to the terms provided in the Merger Agreement (the "Earn-Out Shares"), up to an aggregate of 23,460,000 shares of Class A Common Stock collectively issuable to all Matterport Stockholders; provided, that Earn-Out Shares shall be issued to holders of Matterport RSUs and holders ofMatterport Stock Options only if such holder continues to provide services (whether as an employee, director or individual independent contractor) to the Company or one of its subsidiaries through the date of the occurrence of the triggering event that causes such Earn-Out Shares to become issuable. In connection with the Closing, the Founder Shares automatically converted into shares of Class A Common Stock on a one-for-one basis and continue to be subject to the transfer restrictions applicable to the Founder Shares. Pursuant to subscription agreements entered into in connection with the Merger Agreement (collectively, the "Subscription Agreements"), certain investors agreed to subscribe for an aggregate of 29,500,000 newly issued shares of Class A Stock at a purchase price of$10.00 per share for an aggregate purchase price of$295,000,000 (the "PIPE Investment "). At the Closing, the Company consummated thePIPE Investment . In connection with the Business Combination, holders of 93,917 shares of Class A Common Stock exercised their rights to redeem those shares for cash at an approximate price of$10.0009 per share, for an aggregate of approximately$939,258 , which was paid to such holders on the Closing Date. Immediately after giving effect to the Mergers, the redemptions described above, thePIPE Investment and the conversion of all 8,625,000 outstanding Founder Shares into shares of Class A Common Stock on a one-for-one basis, there were 291,406,633 shares of Common Stock, consisting of 241,956,549 of Class A Common Stock issued and outstanding, options to purchase an aggregate of 45,399,537 shares of Class A Common Stock and restricted stock units covering an aggregate of 4,049,547 shares of Class A Common Stock. Upon the Closing, the Company's Class A Common Stock and the Company's Public Warrants began trading on the Nasdaq Global Market ("Nasdaq") under the symbols "MTTR" and "MTTRW," respectively, and the Company's public units automatically separated into their component securities and, as a result, no longer trade as a separate security and were delisted from Nasdaq. 20 -------------------------------------------------------------------------------- Table of Contents Recent Stockholder Action The Company and the members of its Board of Directors have been named as defendants in a putative stockholder action filed in theSupreme Court of the State of New York , County ofNew York , captionedJamin Quimby v.Gores Holdings VI, Inc. , et al., Index No. 652761/2021, in connection with Business Combination. 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 theSEC onApril 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 six months endedJune 30, 2021 , we had a net loss of ($54,555,009 ), of which ($49,826,500 ) are non-cash losses related to the change in fair value of the warrant liability. Our business activities during the quarter mainly consisted of pursuing the Business Combination. As indicated in the accompanying unaudited financial statements, atJune 30, 2021 , we had$381,644 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. Liquidity and Capital Resources OnJuly 24, 2020 , the Sponsor purchased 17,250,000 shares of ClassF Common Stock for$25,000 , or approximately$0.001 per share. OnOctober 1, 2020 , the Sponsor surrendered 8,625,000 Founder Shares to us for no consideration, onOctober 23, 2020 , the Company effected a stock dividend with respect to its Class F Common Stock of 6,468,750 shares thereof and onNovember 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 ClassF Common Stock. As a result of such surrenders and stock dividend, 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. OnSeptember 11, 2020 , the Sponsor transferred 25,000 Founder Shares to each of the independent directors at their original purchase price. OnDecember 15, 2020 , the Company consummated its Public Offering of 34,500,000 Units at a price of$10.00 per Unit, including 4,500,000 Units as a result of the underwriters' full exercise of their over-allotment option, generating gross proceeds of$345,000,000 . On the IPO Closing Date, we completed the private sale of an aggregate of 4,450,000 Private Placement Warrants, each exercisable to purchase one share of Common Stock at$11.50 per share, to our Sponsor, at a price of$2.00 per Private Placement Warrant, generating gross proceeds, before expenses, of$8,900,000 . After deducting the underwriting discounts and commissions (excluding the Deferred Discount, which amount will be payable upon consummation of the Business Combination, if consummated) and the estimated offering expenses, the total net proceeds from our Public Offering and the sale of the Private Placement Warrants were$346,055,000 , of which$345,000,000 (or$10.00 per share sold in the Public Offering) was placed in the Trust Account. The amount of proceeds not deposited in the Trust Account was$1,055,000 at the closing of our Public Offering. 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. 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 ofJune 30, 2021 or the completion of the Public Offering. This Note was repaid in full upon the completion of the Public Offering. OnMarch 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 ofJune 30, 2021 , the amount advanced by Sponsor to the Company was$1,100,000 . 21 -------------------------------------------------------------------------------- Table of Contents AtJune 30, 2021 andDecember 31, 2020 , we had cash held outside of the Trust Account of approximately$381,644 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. AtJune 30, 2021 andDecember 31, 2020 , the Company had current liabilities of$72,796,936 and$18,690,703 , respectively, and working capital of ($71,718,858 ) 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 used 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 during the quarter endedSeptember 30, 2021 . Contractual Obligations As ofJune 30, 2021 andDecember 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 toThe 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, accounting pronouncements, if currently adopted, would have a material effect on the Company's financial statements based on current operations of the Company. The impact 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. Item 3. Quantitative and Qualitative Disclosures About Market Risk Market risk is a broad term for the risk of economic loss due to adverse changes in the fair value of a financial instrument. These changes may be the result of various factors, including interest rates, foreign exchange rates, commodity prices and/or equity prices. Our business activities for the six months endedJune 30, 2021 consisted solely of organizational activities and activities relating to our Public Offering and the identification of a target company for our Business Combination. As ofJune 30, 2021 ,$345,030,934 (including accrued interest and dividends and subject to reduction by the Deferred Discount due at the consummation of the Business Combination) was held in the Trust Account for the purposes of consummating our Business Combination. As ofJune 30, 2021 , investment securities in the Company's Trust Account consists of$345,030,934 in money market funds. As ofJune 30, 2021 , the effective annualized rate of return generated by our investments was approximately 0.0012%. 22 -------------------------------------------------------------------------------- Table of Contents We have not engaged in any hedging activities during the six months endedJune 30, 2021 . We do not expect to engage in any hedging activities with respect to the market risk to which we are exposed. Item 4. Controls and Procedures Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in theSEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as ofJune 30, 2021 . Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective as ofJune 30, 2021 due to a material weakness in internal control over financial reporting for the year endedDecember 31, 2020 , which was disclosed in our Form 10-K/A. We have committed significant effort and resources to the remediation and improvement of our internal control over financial reporting. While we have processes to properly identify and evaluate the appropriate accounting technical pronouncements and other literature for all significant or unusual transactions, we are improving these processes to ensure that the nuances of such transactions are effectively evaluated in the context of the increasingly complex accounting standards. Specifically, we plan to provide enhanced access to accounting literature and research materials and consult with third party professionals regarding complex accounting matters. The elements of our remediation plan can only be accomplished over time and will be continually reviewed to determine that it is achieving its objectives. We cannot guarantee that these initiatives will ultimately have the intended effects. Internal Control over Financial Reporting This Quarterly Report on Form 10-Q does not include a report of management's assessment regarding internal control over financial reporting or an attestation report of our registered public accounting firm due to a transition period established by rules of theSEC for newly public companies; however, in light of management's conclusion, following a review of the Company Warrants in connection with theSEC Staff Statement, to reclassify the Company Warrants, our internal control over financial reporting did not result in sufficient risk assessment of the underlying accounting for certain financial instruments which we determined to be a material weakness. During the most recently completed fiscal quarter, there has been no change that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. The Business Combination was consummated in the quarter endingSeptember 30, 2021 . 23
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