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Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________
FORM 10-Q
____________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number 001-39790
____________________________
MATTERPORT, INC.
(Exact name of registrant as specified in its charter)
____________________________
Delaware
85-1695048
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer
Identification No.)
352 East Java Drive
Sunnyvale, California 94089
(Address of Principal Executive Offices, including zip code)
(650) 641-2241
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol
Name of each exchange
on which registered
Class A Common Stock, par value of $0.0001 per shareMTTRThe Nasdaq Global Market
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o


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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No
The registrant had 305,660,331 shares of Class A common stock outstanding as of October 31, 2023.


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Item 2.










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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical facts contained in this Report, including statements concerning possible or assumed future actions, business strategies, events or results of operations, and any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “may,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements in this Report are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this document, including our ability to grow market share in our existing markets or any new markets we may enter; our ability to respond to general economic conditions; our ability to manage our growth effectively; our success in retaining or recruiting our officers, key employees or directors, or changes required in the retention or recruitment of our officers, key employees or directors; the impact of the regulatory environment and complexities with compliance related to such environment; our ability to maintain an effective system of internal controls over financial reporting; our ability to achieve and maintain profitability in the future; our ability to access sources of capital; our ability to maintain and enhance our products and brand, and to attract customers; our ability to manage, develop and refine our technology platform; the success of our strategic relationships with third parties; our history of losses and whether we will continue to incur continuing losses for the foreseeable future; our ability to protect and enforce our intellectual property rights; our ability to implement business plans, forecasts, and other expectations and identify and realize additional opportunities; our ability to attract and retain new subscribers; the size of the total addressable market for our products and services; the continued adoption of spatial data; any inability to complete acquisitions and integrate acquired businesses; general economic uncertainty and the effect of general economic conditions in our industry; environmental uncertainties and risks related to adverse weather conditions and natural disasters; factors relating to our business, operations and financial performance, including: any continuing impacts of the COVID-19 pandemic or other infectious diseases, health epidemics and pandemics; the volatility of the market price and liquidity of our Class A common stock, and other securities; the increasingly competitive environment in which we operate; and other factors detailed under the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”) filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2023, and subsequently filed Quarterly Reports on Form 10-Q.
Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur, and actual results could differ materially from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. 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.
You should read this Report completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
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Part I- Financial Information
Item 1. Financial statements
MATTERPORT INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands, except per share data)
September 30,
2023
December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents
$80,142 $117,128 
Short-term investments327,682 355,815 
Accounts receivable, net of allowance of $897 and $1,212, as of September 30, 2023 and December 31, 2022, respectively
17,205 20,844 
Inventories
12,342 11,061 
Prepaid expenses and other current assets
8,929 13,084 
Total current assets
446,300 517,932 
Property and equipment, net
32,821 30,559 
Operating lease right-of-use assets1,547 2,515 
Long-term investments21,881 3,959 
Goodwill69,593 69,593 
Intangible assets, net9,562 10,890 
Other assets
7,502 4,947 
Total assets
$589,206 $640,395 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable
$8,594 $8,331 
Deferred revenue
22,163 16,731 
Accrued expenses and other current liabilities
15,344 23,916 
Total current liabilities
46,101 48,978 
Warrants liability239 803 
Deferred revenue, non-current
2,296 1,201 
Other long-term liabilities
514 5,502 
Total liabilities
49,150 56,484 
Commitments and contingencies (Note 8)
Redeemable convertible preferred stock, $0.0001 par value; 30,000 shares authorized as of September 30, 2023 and December 31, 2022, respectively; nil shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively
  
Stockholders’ equity:
Common stock, $0.0001 par value; 640,000 shares authorized as of September 30, 2023 and December 31, 2022, respectively; and 305,562 shares and 290,541 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively
31 29 
Additional paid-in capital
1,275,153 1,168,313 
Accumulated other comprehensive loss
(599)(5,034)
Accumulated deficit
(734,529)(579,397)
Total stockholders’ equity
540,056 583,911 
Total liabilities and stockholders’ equity
$589,206 $640,395 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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MATTERPORT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Revenue:
Subscription
$22,850 $18,981 $63,565 $54,508 
License
28 21 82 70 
Services
9,936 10,015 29,324 19,001 
Product
7,828 8,976 25,232 21,405 
Total revenue
40,642 37,993 118,203 94,984 
Cost of revenue:
Subscription
7,379 6,592 21,576 17,963 
License
    
Services
6,725 6,553 20,978 12,705 
Product
6,641 8,457 23,377 24,303 
Total cost of revenue
20,745 21,602 65,931 54,971 
Gross profit
19,897 16,391 52,272 40,013 
Operating expenses:
Research and development
15,577 19,084 52,711 66,604 
Selling, general, and administrative
53,719 56,293 164,660 186,527 
Total operating expenses
69,296 75,377 217,371 253,131 
Loss from operations
(49,399)(58,986)(165,099)(213,118)
Other income (expense):
Interest income
1,573 1,691 4,525 4,470 
Change in fair value of warrants liability 513  564 26,147 
Change in fair value of contingent earn-out liability
   136,043 
Other income (expense), net
2,669 (981)5,075 (3,655)
Total other income
4,755 710 10,164 163,005 
Loss before provision for income taxes
(44,644)(58,276)(154,935)(50,113)
Provision for (benefit from) income taxes
110 (17)197 876 
Net loss
$(44,754)$(58,259)$(155,132)$(50,989)
Net loss per share, basic and diluted$(0.15)$(0.20)$(0.52)$(0.18)
Weighted-average shares used in per share calculation, basic and diluted303,432 286,458 298,226 281,729 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


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MATTERPORT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands, unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Net loss$(44,754)$(58,259)$(155,132)$(50,989)
Other comprehensive income (loss), net of taxes:
Unrealized gain (loss) on available-for-sale securities, net of tax
514 72 4,435 (6,039)
Other comprehensive income (loss)$514 $72 $4,435 $(6,039)
Comprehensive loss
$(44,240)$(58,187)$(150,697)$(57,028)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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MATTERPORT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands, unaudited)
Common Stock
SharesAmount
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
loss
Accumulated
Deficit
Total
Stockholders’
Equity
Balance as of December 31, 2022290,541 $29 $1,168,313 $(5,034)$(579,397)$583,911 
Net loss
— — — — (53,842)(53,842)
Other comprehensive income
— — — 2,223 — 2,223 
Issuance of common stock in connection with employee equity incentive plans, net of tax withholding
4,910 1 356 — — 357 
Issuance of common stock in connection with acquisitions249 — 3,921 — — 3,921 
Stock-based compensation
— — 33,510 — — 33,510 
Balance as of March 31, 2023
295,700 $30 $1,206,100 $(2,811)$(633,239)$570,080 
Net loss
— — — — (56,536)(56,536)
Other comprehensive income
— — — 1,698 — 1,698 
Issuance of common stock in connection with employee equity incentive plans, net of tax withholding
4,871 — 1,509 — — 1,509 
Stock-based compensation
— — 34,751 — — 34,751 
Balance as of June 30, 2023
300,571 $30 $1,242,360 $(1,113)$(689,775)$551,502 
Net loss
— — — — (44,754)(44,754)
Other comprehensive income
— — — 514 — 514 
Issuance of common stock in connection with employee equity incentive plans, net of tax withholding
4,875 1 1,113 — — 1,114 
Issuance of common stock in connection with acquisitions116 — 1,827 — — 1,827 
Stock-based compensation
— — 29,853 — — 29,853 
Balance as of September 30, 2023305,562 $31 $1,275,153 $(599)$(734,529)$540,056 
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Common Stock
SharesAmount
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Loss
Accumulated
Deficit
Total
Stockholders’
Equity
Balance as of December 31, 2021
250,173 $25 $737,735 $(1,539)$(468,058)$268,163 
Net income
— — — — 71,904 71,904 
Other comprehensive loss
— — — (4,635)— (4,635)
Issuance of common stock in connection with employee equity incentive plans, net of tax withholding6,295 1 (14,498)— — (14,497)
Issuance of common stock upon the reverse recapitalization, net of transaction costs— — 76 — — 76 
Issuance of common stock to a customer100 — 559 — — 559 
Issuance of common stock upon exercise of public warrants1,994 — 34,055 — — 34,055 
Issuance of common stock in connection with acquisitions1,215 — 19,118 — — 19,118 
Issuance of earn-out shares upon triggering events, net of tax withholding21,494 2 (17,738)— — (17,736)
Earn-out liability recognized upon the re-allocation— — (896)— — (896)
Reclassification of remaining contingent earn-out liability upon triggering events— — 242,430 — — 242,430 
Stock-based compensation
— — 61,097 — — 61,097 
Balance as of March 31, 2022
281,271 $28 $1,061,938 $(6,174)$(396,154)$659,638 
Net loss
— — — — (64,634)(64,634)
Other comprehensive loss
— — — (1,476)— (1,476)
Issuance of common stock in connection with employee equity incentive plans, net of tax withholding
2,340 — 2,701 — — 2,701 
Issuance of common stock to a customer32 — 179 179 
Stock-based compensation
— — 34,799 — — 34,799 
Balance as of June 30, 2022
283,643 $28 $1,099,617 $(7,650)$(460,788)$631,207 
Net loss
— — — — (58,259)(58,259)
Other comprehensive income
— — — 72 — 72 
Issuance of common stock in connection with employee equity incentive plans, net of tax withholding
3,757 1 399 — — 400 
Issuance of common stock in connection with acquisitions
8 — 101 — — 101 
Stock-based compensation
— — 32,306 — — 32,306 
Balance as of September 30, 2022
287,408 $29 $1,132,423 $(7,578)$(519,047)$605,827 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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MATTERPORT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022
(In thousands, unaudited)
Nine Months Ended September 30,
20232022
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss
$(155,132)$(50,989)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
14,130 9,237 
Amortization of investment premiums, net of accretion of discounts(5,511)2,517 
Stock-based compensation, net of amounts capitalized
90,674 116,738 
Cease use of certain leased facilities
123  
Change in fair value of warrants liability(564)(26,147)
Change in fair value of contingent earn-out liability
 (136,043)
Deferred income taxes(185)(27)
Allowance for doubtful accounts
150 343 
Loss of excess inventory and purchase obligation1,592 52 
Other
(60)629 
Changes in operating assets and liabilities, net of effects of businesses acquired:
Accounts receivable
3,489 (7,379)
Inventories
(6,833)(6,135)
Prepaid expenses and other assets
2,491 (5,348)
Accounts payable
263 (4,154)
Deferred revenue
6,527 3,167 
Accrued expenses and other liabilities
529 4,181 
Net cash used in operating activities
(48,317)(99,358)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment
(112)(1,417)
Capitalized software and development costs
(7,528)(9,890)
Purchase of investments(368,119)(87,997)
Maturities of investments388,201 194,241 
Business acquisitions, net of cash acquired (4,116)(51,874)
Net cash provided by investing activities
8,326 43,063 
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from sales of shares through employee equity incentive plans
3,309 5,292 
Payments for taxes related to net settlement of equity awards(329)(34,424)
Proceeds from exercise of warrants 27,844 
Other  76 
Net cash provided by (used in) financing activities
2,980 (1,212)
Net change in cash, cash equivalents, and restricted cash
(37,011)(57,507)
Effect of exchange rate changes on cash
25 (628)
Cash, cash equivalents, and restricted cash at beginning of year
117,128 139,987 
Cash, cash equivalents, and restricted cash at end of period
$80,142 $81,852 
Supplemental disclosures of non-cash investing and financing information
Earn-out liability recognized upon the re-allocation $ $896 
Reclassification of remaining contingent Earn-out liability upon triggering events$ $242,430 
Common stock issued in connection with acquisition $5,748 $19,219 
Unpaid cash consideration in connection with acquisition $ $4,348 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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MATTERPORT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. ORGANIZATION AND DESCRIPTION OF BUSINESS
Matterport, Inc., together with its subsidiaries (“Matterport” or the “Company”), is leading the digitization and 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, comprised of 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 in 2011. The Company is headquartered at Sunnyvale, California.
On July 22, 2021 (the “Closing Date”), the Company consummated the merger (collectively with the other transactions described in the Merger Agreement, the “Merger”, “Closing”, or “Transactions”) pursuant to an Agreement and Plan of Merger, dated February 7, 2021 (the “Merger Agreement”), by and among the Company (formerly known as Gores Holdings VI, Inc.), the pre-Merger Matterport, Inc. (now known as Matterport Operating, LLC) (“Legacy Matterport”), Maker Merger Sub, Inc. (“First Merger Sub”), a direct, wholly owned subsidiary of the Company, and Maker Merger Sub II, LLC (“Second Merger Sub”), a direct, wholly owned subsidiary of the Company, pursuant to which 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”. Upon the closing of the Merger, we changed our name to Matterport, Inc.
Unless the context otherwise requires, the “Company” refers to the combined company and its subsidiaries following the Merger, “Gores” refers to the Company prior to the Merger and “Legacy Matterport” refers to Matterport, Inc. prior to the Merger.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Summary of Significant Accounting Policies
The Company’s significant accounting policies are discussed in “Note 2 - Summary of Significant Accounting Policies” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which was filed with the SEC on February 28, 2023. There have been no significant changes to these policies during the three and nine months ended September 30, 2023.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the SEC, regarding interim financial reporting. Certain information and disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes in the Company’s 2022 Form 10-K for the fiscal year ended December 31, 2022, which provides a more complete discussion of the Company’s accounting policies and certain other information.
In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of September 30, 2023, and its results of operations for the three and nine months ended September 30, 2023 and 2022, and cash flows for the nine months ended September 30, 2023 and 2022. The condensed consolidated balance sheet as of December 31, 2022, was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements.

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MATTERPORT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Principles of Consolidation
The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of the accompanying condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts and disclosures in the condensed consolidated financial statements and accompanying notes. Significant estimates include assumptions related to the fair value of common stock before the Merger and other assumptions used to measure stock-based compensation, fair value of assets acquired and liabilities assumed in business combinations, fair value of identified intangibles, goodwill impairment, valuation of deferred tax assets, the estimate of net realizable value of inventory, allowance for doubtful accounts, the fair value of warrants liability, loss contingencies, and the determination of stand-alone selling price of various performance obligations. As a result, many of the Company’s estimates and assumptions required increased judgment and these estimates may change materially in future periods.
Management evaluates its estimates and assumptions on an ongoing basis using historical experience and various other factors, including the current economic environment, which management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The Company adjusts such estimates and assumptions when dictated by facts and circumstances. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the condensed consolidated financial statements in future periods. Actual results may differ materially from those estimates.
Segment Information
The Company has a single operating segment and reportable segment. The Company’s chief operating decision-maker is its Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources. Refer to Note 3 for information regarding the Company’s revenue by geography. Substantially all of the Company’s long-lived assets are located in the United States.
Concentration of Credit Risk and Other Risks and Uncertainties
Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, investments, and accounts receivable. The Company maintains its cash balances in accounts held by major banks and financial institutions located in the United States. Such bank deposits from time to time may be exposed to credit risk in excess of the Federal Deposit Insurance Corporation insurance limit, and the Company considers such risk to be minimal.
We invest only in high-quality credit instruments and maintain our cash and cash equivalents and available-for-sale investments in fixed income securities. Management believes that the financial institutions that hold our investments are financially sound and, accordingly, are subject to minimal credit risk. Deposits held with banks may exceed the amount of insurance provided on such deposits.
The Company’s accounts receivable is derived from customers located both inside and outside the United States. The Company mitigates its credit risks by performing ongoing credit evaluations of the financial condition of its customers and requires advance payment from customers in certain circumstances. The Company generally does not require collateral from its customers.
No customer accounted for more than 10% of the Company’s total accounts receivable at September 30, 2023 and December 31, 2022. No customer accounted for more than 10% of the Company’s total revenue for the three and nine months ended September 30, 2023 and 2022.
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MATTERPORT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Restructuring Costs
The Company’s restructuring costs consist of a one-time payment of termination benefits and the ongoing cost of benefits related to the reduction of its workforce and other costs, and the charges related to the cease use of certain facilities to align with the Company’s anticipated operating needs. The timing of recognition for severance costs depends on whether employees are required to render service until they are terminated in order to receive the termination benefits. If employees are required to render service until they are terminated in order to receive the termination benefits, a liability is recognized ratably over the future service period. Otherwise, a liability is recognized when management has committed to a restructuring plan and has communicated those actions to employees. Employee termination benefit costs covered by existing benefit arrangements are recognized when management has committed to a restructuring plan and has determined the severance costs are probable and estimable. Other costs primarily consist of cease use charges for the related operating lease right-of-use assets for office leases, which are recognized ratably from the decision date to the cease-use date.
Recently Adopted Accounting Standards
In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. ASU 2021-08 requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contract with Customers, as if it had originated the contracts. The Company adopted this standard effective January 1, 2023, which did not have a material impact on the Company’s condensed consolidated financial statements.
3. REVENUE
Disaggregated RevenueThe following table shows the revenue by geography for the three and nine months ended September 30, 2023 and 2022, respectively (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Revenue:
United States
$26,667 $25,310 $76,130 $58,187 
International
13,975 12,683 42,073 36,797 
Total revenue
$40,642 $37,993 $118,203 $94,984 
No country other than the United States accounted for more than 10% of the Company’s revenue for the three and nine months ended September 30, 2023 and 2022, respectively. The geographical revenue information is determined by the ship-to address of the products and the billing address of the customers of the services.
The following table shows over time versus point-in-time revenue for the three and nine months ended September 30, 2023 and 2022, respectively (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Over time revenue
$32,786 $28,996 $92,889 $73,509 
Point-in-time revenue
7,856 8,997 25,314 21,475 
Total
$40,642 $37,993 $118,203 $94,984 

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MATTERPORT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Contract Asset and Liability Balances—Contract assets consist of unbilled accounts receivable and are recorded when revenue is recognized in advance of scheduled billings. The timing of revenue recognition differs from the timing of invoicing to customers and this timing difference results in contract liabilities (deferred revenue) on the Company’s condensed consolidated balance sheets. The accounts receivable and contract balances as of September 30, 2023 and December 31, 2022 were as follows (in thousands):
September 30,
2023
December 31,
2022
Accounts receivable, net
$15,351 $19,037 
Unbilled accounts receivable
$1,854 $1,807 
Deferred revenue
$24,459 $17,932 
During the nine months ended September 30, 2023 and 2022, the Company recognized revenue of $13.3 million and $8.6 million that was included in the deferred revenue balance at the beginning of the fiscal year, respectively. Contracted but unsatisfied performance obligations were $62.0 million at the end of September 30, 2023 and consisted of deferred revenue and backlog. The contracted but unsatisfied or partially unsatisfied performance obligations expected to be recognized over the next 12 months at the end of September 30, 2023 were $41.7 million, and the remaining obligations are expected to be recognized thereafter.
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MATTERPORT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
4. ACQUISITIONS
VHT, Inc. Acquisition

On June 10, 2022, the Company entered into an Agreement and Plan of Merger (the “Purchase Agreement”) with VHT, Inc. (“VHT”), known as VHT Studios, a U.S.-based real estate marketing company that offers brokerages and agents digital solutions to promote and sell properties. On July 7, 2022 (the “VHT Acquisition Date”), pursuant to the Purchase Agreement, the Company completed the acquisition of VHT (the “VHT Acquisition”), which expands Matterport Capture Services by bringing together Matterport digital twins with professional photography, drone capture and marketing services. With this acquisition, the Company aims to increase adoption of digital twin technology and expand further into the residential real estate industry while adding marketing services for other key markets such as commercial real estate, travel and hospitality, and the retail sector.

Under the terms of the Purchase Agreement, the consideration consisted of an all-cash purchase price of $23.0 million subject to certain adjustments based on a determination of closing net working capital, transaction expenses, cash and investments and closing indebtedness. The total purchase consideration for the VHT Acquisition was $22.7 million.

The Company has accounted for the VHT Acquisition as a business combination and allocated the purchase consideration to assets acquired and liabilities assumed based on the estimated fair values at the VHT Acquisition Date, as presented in the following table (in thousands):

Amount
Goodwill$15,603 
Identified intangible assets6,900 
Net assets acquired215 
Total$22,718 

Goodwill generated from this business combination is primarily attributable to the assembled workforce and expected post-acquisition synergies from leveraging VHT’s customer relationships. The goodwill is not deductible for income tax purposes.

The following table summarizes the preliminary estimated fair values and estimated useful lives of the components of identifiable intangible assets acquired as of the VHT Acquisition Date (in thousands, except years):


Fair Value Estimated Useful Life
Customer Relationships$6,900 10 years

Customer relationships represent the fair value of future projected revenue that will be derived from sales to existing customers of VHT. The economic useful life was determined based on historical customer turnover rates and industry benchmarks.
The fair value of customer relationships was estimated using the multi-period excess earnings method, an income approach (Level 3), which converts projected revenues and costs into cash flows. Significant assumptions used in the discounted cash flow analysis for direct customer relationships were the revenue growth rate, customer attrition rate, earnings before interest, taxes, depreciation, and amortization (“EBITDA”) margins, and discount rate.


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MATTERPORT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Unaudited Pro Forma Financial Information

The following table summarizes the pro forma consolidated information for the Company assuming the acquisition of VHT had occurred as of January 1, 2021. The unaudited pro forma information for all periods presented includes the business combination accounting effects resulting from the acquisition, including amortization for intangible assets acquired and acquisition-related charges. The unaudited pro forma financial information as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of fiscal year 2021.

Three Months Ended September 30,Nine Months Ended September 30,
20222022
(in thousands, except per share data)
Total revenue$38,345 $105,432 
Net loss$(58,118)$(50,103)
Basic earnings per share$(0.20)$(0.18)
Diluted earnings per share $(0.20)$(0.18)

Enview Inc. Acquisition
On January 5, 2022 (the “Enview Acquisition Date”), the Company completed the acquisition (the “Enview Acquisition”) of Enview, Inc. (“Enview”), a privately-held company engaged in the development of artificial intelligence algorithms to identify natural and man-made features in geospatial data using various techniques. The total purchase consideration for the Enview Acquisition was $64.3 million, including an insignificant working capital adjustment finalized during the measurement period that reduced the purchase price for Enview. The total purchase consideration consisted of the following (in thousands):

Amount
Cash (1)
$39,336 
Common stock (1.6 million shares) (2)
24,988 
Total $64,324 
(1) The Company paid $2.4 million and $4.3 million in cash consideration during the three and nine months ended September 30, 2023, respectively and nil and $35.0 million in cash consideration during the three and nine months ended September 30, 2022.
(2) On the Enview Acquisition Date, the Company's closing stock price was $15.73 per share. The Company issued 0.1 million and 0.4 million shares during the three and nine months ended September 30, 2023, respectively, and nil and 1.2 million shares during the three and nine months ended September 30, 2022.
The Company has accounted for the Enview Acquisition as a business combination and allocated the purchase consideration to assets acquired and liabilities assumed based on the fair values at the Enview Acquisition Date. The purchase price allocation includes adjustments for additional information that existed as of the Acquisition Date but at that time was unknown and became known during the measurement period of 12 months from the Acquisition Date. The following table summarizes the allocation of purchase consideration on the Enview Acquisition Date, inclusive of measurement period adjustments (in thousands):

Amount
Goodwill $53,990 
Identified intangible assets5,400 
Net assets acquired 4,934 
Total $64,324 

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MATTERPORT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
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. The goodwill is not deductible for income tax purposes.
The following table summarizes the estimated fair values and estimated useful lives of the components of identifiable intangible assets acquired as of the Enview Acquisition Date (in thousands, except years):

Fair Value Estimated Useful Life
Developed technology $5,400 5 years

Developed technology relates to existing Enview technology of its artificial intelligence algorithms to identify natural and man-made features in geospatial data. The economic useful life was determined based on the technology cycle related to the developed technology of existing services, as well as the cash flows anticipated over the forecasted periods.
The fair value of developed technology was estimated using the multi-period excess earnings method, an income approach (Level 3), which converts projected revenues and costs into cash flows. Significant assumptions used in the discounted cash flow analysis for the developed technology were the revenue growth rates, EBITDA margins, obsolescence technology factor, and discount rate.
Pro forma results of operations have not been presented because the effects of the Enview Acquisition were not material to the Company’s condensed consolidated statements of operations.
Acquisition-related transaction costs are expensed as incurred and are recorded in selling, general, and administrative expenses in the Condensed Consolidated Statements of Operations. The Company incurred $0.2 million and $1.6 million of acquisition-related costs for the three and nine months ended September 30, 2022, respectively. There were no acquisition-related costs incurred for the three and nine months ended September 30, 2023.


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MATTERPORT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
5. GOODWILL AND INTANGIBLE ASSETS
GoodwillAs of September 30, 2023 and December 31, 2022, goodwill was $69.6 million. The Company did not recognize any impairment losses on goodwill during the three and nine months ended September 30, 2023 and 2022, respectively.
Purchased Intangible AssetsThe following table presents details of the Company’s purchased intangible assets as of September 30, 2023 and December 31, 2022 (in thousands).
September 30, 2023December 31, 2022
Gross Carrying AmountAccumulated Amortization Net Carrying Amount Gross Carrying AmountAccumulated AmortizationNet Carrying Amount
Intangible assets subject to amortization:
Developed technology $5,400 $(1,876)$3,524 $5,400 $(1,065)$4,335 
Customer relationships 6,900 (862)6,038 6,900 (345)6,555 
Total $12,300 $(2,738)$9,562 $12,300 $(1,410)$10,890 
The Company recognized amortization expense of $0.4 million and $0.5 million for the three months ended September 30, 2023 and 2022, respectively, and $1.3 million and $1.0 million for the nine months ended September 30, 2023 and 2022, respectively. The Company did not recognize any impairment losses on intangible assets or other long-lived assets during the three and nine months ended September 30, 2023 and 2022, respectively.
The following table summarizes estimated future amortization expense for the Company’s intangible assets as of September 30, 2023 (in thousands):

Amount
Remaining 2023
$442 
20241,770 
20251,770 
20261,770 
2027705 
2028 and thereafter3,105 
Total future amortization expense$9,562 


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MATTERPORT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
6. BALANCE SHEET COMPONENTS
Allowance for Doubtful AccountsAllowance for doubtful accounts as of September 30, 2023 and 2022 and the rollforward for three and nine months ended September 30, 2023 and 2022 were as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Balance—beginning of period
$(933)$(421)$(1,212)$(291)
Increase in reserves
(101)(148)(150)(343)
Write-offs
137  465 65 
Balance—end of period
$(897)$(569)$(897)$(569)
InventoriesInventories as of September 30, 2023 and December 31, 2022, consisted of the following (in thousands):
September 30,
2023
December 31,
2022
Finished goods
$1,136 $2,112 
Work in process
7,094 3,477 
Purchased parts and raw materials
4,112 5,472 
Total inventories
$12,342 $11,061 
Property and Equipment, NetProperty and equipment as of September 30, 2023 and December 31, 2022, consisted of the following (in thousands):
September 30,
2023
December 31,
2022
Machinery and equipment
$4,060 $3,948 
Furniture and fixtures
355 355 
Leasehold improvements
718 734 
Capitalized software and development costs
70,630 55,662 
Total property and equipment
75,763 60,699 
Accumulated depreciation and amortization
(42,942)(30,140)
Total property and equipment, net
$32,821 $30,559 
Depreciation and amortization expenses of property and equipment were $4.6 million and $3.3 million for the three months ended September 30, 2023 and 2022, respectively, and $12.8 million and $8.3 million for the nine months ended September 30, 2023 and 2022, respectively.
Additions to capitalized software and development costs, inclusive of stock-based compensation in the three months ended September 30, 2023 and 2022 were $4.7 million and $5.7 million, respectively. Additions to capitalized software and development costs, inclusive of stock-based compensation in the nine months ended September 30, 2023 and 2022 were $15.0 million and $21.4 million, respectively. These are recorded as part of property and equipment, net on the condensed consolidated balance sheets.
Amortization expense was $4.4 million and $3.0 million for three months ended September 30, 2023 and 2022, respectively, of which $4.0 million and $2.8 million was recorded to cost of revenue related to subscription and $0.4 million and $0.2 million to selling, general and administrative in the condensed consolidated statements of operations, respectively. Amortization expense was $12.2 million and $7.8 million for the nine months ended September 30, 2023 and 2022, respectively, of which $11.2 million and $7.0 million was recorded to cost of revenue related to subscription and $1.0 million and $0.8 million to selling, general and administrative in the condensed consolidated statements of operations, respectively.
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MATTERPORT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Accrued Expenses and Other Current LiabilitiesAccrued expenses and other current liabilities as of September 30, 2023 and December 31, 2022, consisted of the following (in thousands):
September 30,
2023
December 31,
2022
Accrued compensation
$5,002 $5,609 
Tax payable
1,203 1,669 
ESPP contribution871 341 
Current unpaid acquisition consideration 6,109 
Short-term operating lease liabilities1,293 1,267 
Accrued loss on firm inventory purchase commitments
31 3,991 
Other current liabilities
6,944 4,930 
Total accrued expenses and other current liabilities
$15,344 $23,916 
7. FAIR VALUE MEASUREMENTS
We categorize assets and liabilities recorded or disclosed at fair value on our condensed consolidated balance sheets based upon the level of judgment associated with inputs used to measure their fair value. The categories are as follows:
Level 1—Inputs are unadjusted quoted prices for identical assets or liabilities in active markets.
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.
Level 3—Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The inputs require significant management judgment or estimation.
The Company’s financial assets and liabilities that were measured at fair value on a recurring basis were as follows (in thousands):

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MATTERPORT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 2023
Level 1Level 2Level 3Total
Financial Assets:
Cash equivalents:
Money market funds$60,730 $ $ $60,730 
Total cash equivalents$60,730 $ $ $60,730 
Short-term investments:
U.S. government and agency securities$238,503 $ $ $238,503 
Non-U.S. government and agency securities 19,681  19,681 
Corporate debt securities 41,757  41,757 
Commercial paper 27,741  27,741 
Total short-term investments$238,503 $89,179 $ $327,682 
Long-term investments:
U.S. government and agency securities$21,881 $ $ $21,881 
Total long-term investments$21,881 $ $ $21,881 
Total assets measured at fair value$321,114 $89,179 $ $410,293 
Financial Liabilities:
Private warrants liability$ $ $239 $239 
Total liabilities measured at fair value$ $ $239 $239 
December 31, 2022
Level 1Level 2Level 3Total
Financial Assets:
Cash equivalents:
Money market funds$51,557 $ $ $51,557 
Total cash equivalents$51,557 $ $ $51,557 
Short-term investments:
U.S. government and agency securities$181,714 $ $ $181,714 
Non-U.S. government and agency securities 24,946  24,946 
Corporate debt securities 114,113  114,113 
Commercial paper 35,042  35,042 
Total short-term investments$181,714 $174,101 $ $355,815 
Long-term investments:
Corporate debt securities$ $3,959 $ $3,959 
Total long-term investments$ $3,959 $ $3,959 
Total assets measured at fair value$233,271 $178,060 $ $411,331 
Financial Liabilities:
Private warrants liability$ $ $803 $803 
Total liabilities measured at fair value$ $ $803 $803 


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MATTERPORT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Available-for-sale Debt Securities
The following tables summarize the amortized cost, unrealized gains and losses, and fair value of our available-for-sale debt securities as of September 30, 2023 and December 31, 2022 (in thousands):
September 30, 2023
Amortized CostUnrealized GainsUnrealized LossesFair Value
Investments:
U.S. government and agency securities$260,661 $ $(277)$260,384 
Non-U.S. government and agency securities19,741  (60)19,681 
Corporate debt securities41,934  (177)41,757 
Commercial paper27,774  (33)27,741 
Total available-for-sale investments$350,110 $ $(547)$349,563 
December 31, 2022
Amortized CostUnrealized GainsUnrealized LossesFair Value
Investments:
U.S. government and agency securities$185,371 $ $(3,657)$181,714 
Non-U.S. government and agency securities24,989  (44)24,945 
Corporate debt securities119,396  (1,324)118,072 
Commercial paper35,052  (9)35,043 
Total available-for-sale investments$364,808 $ $(5,034)$359,774 
As of September 30, 2023, the gross unrealized losses of $0.5 million are substantially all in a continuous unrealized loss position for less than 12 months, which were related to $341.6 million of available-for-sale debt securities. As of December 31, 2022, the gross unrealized losses that have been in a continuous unrealized loss position for less than 12 months were $0.2 million, which were related to $49.4 million of available-for-sale debt securities, and the gross unrealized losses that have been in a continuous unrealized loss position for more than 12 months were $4.8 million, which were related to $291.0 million of available-for-sale debt securities.
Unrealized losses related to these securities are due to interest rate fluctuations as opposed to credit quality. In addition, we do not intend to sell and it is not likely that we would be required to sell these securities before recovery of their amortized cost basis, which may be at maturity. We did not recognize any credit losses related to our available-for sale debt securities during the three and nine months ended September 30, 2023 and 2022.
The following table summarizes the amortized cost and fair value of our available-for-sale debt securities as of September 30, 2023, by contractual years-to-maturity (in thousands):
September 30, 2023
 Amortized CostFair Value
Due within one year
$328,208 $327,682 
Due between one and three years
21,902 21,881 
Total
$350,110 $349,563 

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MATTERPORT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
8. COMMITMENTS AND CONTINGENCIES

Purchase Obligation—The Company has purchase obligations, which include agreements and issued purchase orders containing non-cancelable payment terms to purchase goods and services.
As of September 30, 2023, future minimum purchase obligations are as follows (in thousands):
Purchase
Obligations
Remainder of 2023
 
$6,337 
20249,125 
2025185 
Thereafter
 
Total
$15,647 
Litigation—The Company is named from time to time as a party to lawsuits and other types of legal proceedings and claims in the normal course of business. The Company accrues for contingencies when it believes that a loss is probable and that it can reasonably estimate the amount of any such loss.
On July 23, 2021, plaintiff William J. Brown, a former employee and a shareholder of Matterport, Inc. (now known as Matterport Operating, LLC) (“Legacy Matterport”), sued Legacy Matterport, Gores Holdings VI, Inc. (now known as Matterport, Inc.), Maker Merger Sub Inc., Maker Merger Sub II, LLC, and Legacy Matterport directors R.J. Pittman, David Gausebeck, Matt Bell, Peter Hebert, Jason Krikorian, Carlos Kokron and Michael Gustafson (collectively, the “Defendants”) in the Court of Chancery of the State of Delaware. The plaintiff’s initial complaint claimed that Defendants imposed invalid transfer restrictions on his shares of Matterport stock in connection with the merger transactions between Matterport, Inc. and Legacy Matterport (the “Transfer Restrictions”), and that Legacy Matterport’s board of directors violated their fiduciary duties in connection with a purportedly misleading letter of transmittal. The initial complaint sought damages and costs, as well as a declaration from the court that he may freely transfer his shares of Class A common stock of Matterport received in connection with the merger transactions. An expedited trial regarding the facial validity of the Transfer Restrictions took place in December 2021. On January 11, 2022, the court issued a ruling that the Transfer Restrictions did not apply to the plaintiff. The opinion did not address the validity of the Transfer Restrictions more broadly. Matterport filed a notice of appeal of the court’s ruling on February 8, 2022, and a hearing was held in front of the Delaware Supreme Court on July 13, 2022, after which the appellate court affirmed the lower court’s ruling. Separate proceedings regarding the plaintiff’s remaining claims are pending. The plaintiff filed a Third Amended Complaint on September 16, 2022, which asserts the causes of action described above but omits as defendants Maker Merger Sub Inc., Maker Merger Sub II, LLC, and Legacy Matterport directors David Gausebeck, Matt Bell, and Carlos Kokron, and adds an additional cause of action alleging that Matterport, Inc. violated the Delaware Uniform Commercial Code by failing to timely register Brown’s requested transfer of Matterport, Inc. shares. The remaining defendants’ answer to the Third Amended Complaint was filed on November 9, 2022, and the parties have completed discovery. Trial is scheduled to begin November 13, 2023.
On July 20, 2021, the Company, then operating under the name Gores Holdings VI, Inc., held a special meeting of stockholders (the “2021 Special Meeting”) in lieu of the 2021 annual meeting of the Company’s stockholders to approve certain matters relating to its proposed business combination with Matterport, Inc., Maker Merger Sub, Inc. and Maker Merger Sub II, LLC. One of these matters was a proposal to adopt the Second Amended and Restated Certificate of Incorporation of the Company (the “New Certificate of Incorporation”), which, among other things, increased the total number of authorized shares of the Company’s Class A common stock, par value $0.0001 per share (the “Class A common stock”), from 400,000,000 shares to 600,000,000 shares. The New Certificate of Incorporation was approved by a majority of the shares of Class A common stock and the Company’s Class F common stock, par value $0.0001 per share (the “Class F common stock”), voting together as a single class, that were outstanding as of the record date for the 2021 Special Meeting. After the 2021 Special Meeting, the business combination was consummated and the New Certificate of Incorporation became effective. A December 2022 decision of the Delaware Court of Chancery (the “Court of Chancery”) has created uncertainty as to whether Section 242(b)(2) of the Delaware General Corporation Law (“DGCL”) would have required the New Certificate of Incorporation to be approved by a separate vote of the majority of the Company’s then-outstanding shares of Class A common stock, in addition to a majority of the shares of Class A common stock and Class F common stock voting together. The Company continues to believe that a separate vote of Class A common stock was not
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MATTERPORT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
required to approve the New Certificate of Incorporation. However, in light of the recent Court of Chancery decision, on February 16, 2023 the Company filed a petition (the “Petition”) in the Court of Chancery pursuant to Section 205 of the DGCL seeking validation of the New Certificate of Incorporation, and the shares issued in reliance on the effectiveness of the New Certificate of Incorporation to resolve any uncertainty with respect to those matters. Section 205 of the DGCL permits the Court of Chancery, in its discretion, to ratify and validate potentially defective corporate acts and stock after considering a variety of factors. On March 14, 2023, the Court of Chancery granted the Petition validating the New Certificate of Incorporation and all shares of capital stock issued in reliance on the effectiveness of the New Certificate of Incorporation.
On May 11, 2020, Redfin Corporation (“Redfin”) was served with a complaint by Appliance Computing, Inc. III, d/b/a Surefield (“Surefield”), filed in the United States District Court for the Western District of Texas, Waco Division. In the complaint, Surefield asserted that Redfin’s use of Matterport’s 3D-Walkthrough technology infringes four of Surefield’s patents. Redfin has asserted defenses in the litigation that the patents in question are invalid and have not been infringed upon. We have agreed to indemnify Redfin for this matter pursuant to our existing agreements with Redfin. The parties have vigorously defended against this litigation. The matter went to jury trial in May 2022 and resulted in a jury verdict finding that Redfin had not infringed upon any of the asserted patent claims and that all asserted patent claims were invalid. Final judgment was entered on August 15, 2022. On September 12, 2022, Surefield filed post trial motions seeking to reverse the jury verdict. Redfin has filed oppositions to the motions. In addition, on May 16, 2022, the Company filed a declaratory judgment action against Appliance Computing III, Inc., d/b/a Surefield, seeking a declaratory judgment that the Company had not infringed upon the four patents asserted against Redfin and one additional, related patent. The matter is pending in the Western District of Washington and captioned Matterport, Inc. v. Appliance Computing III, Inc. d/b/a Surefield, Case No. 2:22-cv-00669 (W.D. Wash.). Surefield has filed a motion to dismiss or in the alternative transfer the case to the United States District Court for the Western District of Texas. The Company filed an opposition to the motion. On August 28, 2023, the Court denied Surefield’s motion to dismiss but stayed the action pending the resolution of the Texas case.
On January 29, 2021, Legacy Matterport received a voluntary request for information from the Division of Enforcement of the SEC relating to certain sales and repurchases of its securities in the secondary market. We believe we have complied fully with the request. We have not received any updates from the SEC as to the scope, duration or ultimate resolution of the investigation.
The Company monitors developments in these legal matters that could affect the estimate if the Company had previously accrued. As of September 30, 2023 and December 31, 2022, there were no amounts accrued that the Company believes would be material to its financial position.
Indemnification—In the ordinary course of business, the Company enters into certain agreements that provide for indemnification by the Company of varying scope and terms to customers, vendors, directors, officers, employees and other parties with respect to certain matters. Indemnification includes losses from breach of such agreements, services provided by the Company, or third-party intellectual property infringement claims. These indemnities may survive termination of the underlying agreement and the maximum potential amount of future indemnification payments, in some circumstances, are not subject to a cap. As of September 30, 2023, there were no known events or circumstances that have resulted in a material indemnification liability.

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MATTERPORT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
9. STOCKHOLDERS’ EQUITY
The Company had reserved shares of common stock for future issuance as of September 30, 2023 as follows (in thousands):
 September 30,
2023
Private warrants to purchase common stock 1,708 
Common stock options outstanding and unvested RSUs under the Amended and Restated 2011 Stock Incentive Plan
59,325 
Shares available for future grant under 2021 Employee Stock Purchase Plan
11,378