Business context and reporting period
This filing is by SVF Investment Corp. 3, a special purpose acquisition company (SPAC), not by an operating Symbotic Inc. The unaudited quarter ended March 31, 2022 (the filing’s stated period; despite the request metadata indicating 2022 Q2). The SPAC had not commenced operations and reported no operating revenue. It had announced a proposed business combination with Warehouse Technologies LLC and Symbotic Holdings LLC; the transaction was subject to shareholder and other approvals.
Financial results and liquidity
| Metric | Three months ended March 31, 2022 | Prior-year comparable period |
|---|---|---|
| Revenue | None | None |
| General and administrative expenses | $2.30 million | $0.51 million |
| Net loss | $2.30 million | $0.52 million |
| Net loss per share | $0.06 | $0.04 |
| Net cash used in operating activities | $0.53 million | $1.57 million |
Operating expenses were partly offset by trust-account investment income of $26,603, compared with $1,069 a year earlier. Operating margins are not meaningful because the SPAC had no operating revenue.
At March 31, 2022, cash outside the trust was $3.28 million; investments in the trust account were $320.04 million. Total assets were $324.06 million and total liabilities were $19.91 million, including $11.20 million of deferred underwriting commissions payable only if a business combination closes. The company had a working-capital deficit of approximately $4.7 million and a $3.0 million related-party working-capital loan outstanding, up from zero at year-end. Cash increased $2.47 million during the quarter, including $3.0 million of loan proceeds.
Material changes versus the prior comparable period
Net loss increased to $2.30 million from $0.52 million, principally as general and administrative expenses rose to $2.30 million from $0.51 million. Operating cash use decreased to $0.53 million from $1.57 million. The company drew $3.0 million on its sponsor’s working-capital loan during the quarter.
Outlook, transaction, risks and unusual items
- The proposed transaction was announced in December 2021. The SEC declared the registration statement effective on May 9, 2022, and a shareholder meeting was scheduled for June 3, 2022. Management expected a prompt closing after the meeting, subject to approval and customary conditions.
- Transaction financing included $205 million of subscriptions at $10 per share and a forward-purchase commitment of $150 million, with the investor electing an additional $50 million in March 2022. These amounts were conditional on closing and were not quarter-end cash. Advisory fees of approximately $9 million were also payable upon closing.
- Management stated that failure to complete a business combination by March 11, 2023 would require liquidation and raised substantial doubt about the SPAC’s ability to continue as a going concern for one year from issuance of the statements. The financial statements include no related going-concern adjustments.
- Management said COVID-19 could negatively affect the company’s financial position or target search, but the impact was not determinable. No material changes to previously disclosed risk factors were reported; no legal proceedings were reported.
- Disclosure controls were not effective at March 31, 2022 because of a material weakness in accounting for complex financial instruments. The weakness had led to restatements of interim financial information for the 2021 first three quarters; management said it performed additional analysis and continued to consult external professionals.
Important facts for investors to verify
- Confirm the business-combination approval, closing status, final transaction terms, and any shareholder redemptions; this 10-Q predates the scheduled June 2022 vote.
- Review the post-combination capitalization and actual funding, including the subscriptions and forward-purchase shares, rather than treating conditional commitments as available cash.
- Assess the SPAC’s cash outside the trust, related-party loan terms, transaction costs, and ability to meet obligations through the March 11, 2023 deadline.
- Review remediation of the material weakness and any subsequent control or financial-statement updates.