Liquidation, Dissolution and Winding Up
Subject to the rights, if any, of the holders of any outstanding series of the Preferred Stock, in the event of any voluntary or involuntary liquidation, dissolution or
winding-up,
after payment or provision for payment of the debts and other liabilities of Matterport, the holders of Common Stock will be entitled to receive all the remaining assets of Matterport available for distribution to its stockholders, ratably in proportion to the number of shares of the Common Stock held by them.
Under the Merger Agreement, we are required to issue up to an aggregate of 23,460,000
Earn-Out
Shares to the Matterport Stockholders and holders of Matterport Stock Options and Matterport RSUs if either (i) the daily volume weighted average price (based on such trading day) of one share of Common Stock exceeds certain thresholds for a period of at least 10 days out of 30 consecutive trading days, as adjusted, at any time during the
five-year
period beginning on the 180th day following the closing of the Mergers (the “Common Share Price”) or (ii) there is a change in control (as described in the Merger Agreement) in which the holders of Common Stock receive a per share price in respect of their Common Stock that is equal to or greater than any such Common Share Price threshold, in each case, at any time during the
five-year
period beginning on the date that is 180 days after the closing of the Merger.
We are required to issue the
Earn-Out
Shares as follows: (i) a
one-time
issuance of 3,910,000 shares if the Common Share Price is greater than $13.00; (ii) a
one-time
issuance of 3,910,000 shares if the Common Share Price is greater than $15.50; (iii) a
one-time
issuance of 3,910,000 shares if the Common Share Price is greater than $18.00; (iv) a
one-time
issuance of 3,910,000 shares if the Common Share Price is greater than $20.50; (v) a
one-time
issuance of 3,910,000 shares if the Common Share Price is greater than $23.00; and (vi) a
one-time
issuance of 3,910,000 shares if the Common Share Price is greater than $25.50.
On January 18, 2022, all six
Earn-Out
Triggering Events for issuing up to 23,460,000
Earn-out
Shares occurred. A total of 21,493,509
Earn-out
Shares were issued on February 1, 2022 after withholding some of these
Earn-out
Shares to cover tax withholding obligations. We will recognize the unamortized stock-based compensation related to the
Earn-out
Shares amounted to $28.0 million as of December 31, 2021 in the quarter ended March 31, 2022, as both Triggering event condition satisfied and the service condition was met. No further
Earn-out
Shares remained contingently issuable thereafter.
Our board is authorized, subject to limitations prescribed by law, to issue Preferred Stock in one or more series and to establish such series from time to time. Our board is authorized to fix the voting rights, if any, designations, powers, preferences and relative, participating, optional, special and other rights, if any, and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. Our board is able, without stockholder approval, to issue Preferred Stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the Common Stock and could have
anti-takeover
effects. The ability our board to issue Preferred Stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control of Matterport or the removal of existing management. There are no current plans to issue any shares of Preferred Stock.
As part of the GHVI IPO on December 10, 2020, GHVI issued to third-party investors 30.0 million units, consisting of one share of Class A common stock of GHVI and
one-fifth
of one warrant, at a price of $10.00 per unit. Each whole warrant entitled the holder to purchase one share of GHVI’s Class A common stock at an exercise price of $11.50 per share (the “Public Warrants”). Simultaneously with the closing of the IPO, GHVI completed the private sale of 4,450,000 warrants to the Sponsor at a purchase price of $1.50 per warrant (the