01—Abstract
Summary
Summary of the 10-K filed March 23, 2022. Cited figures are marked; the original filing is the authoritative source.
SVF Investment Corp. 3, a Cayman Islands blank check company (now Symbotic Inc.), filed this annual report for the year ended December 31, 2021.
The company has no operations and no revenue. Its March 11, 2021 IPO raised $320.0 milliona gross from 32,000,000 Class A ordinary shares, and $320,016,430 was held in the Trust Account at year-end. The company had approximately $813,000 outside the trust and a working capital deficit of approximately $2.5 million.
For 2021 it reported a net loss of $6,475,753,b driven mainly by $6.4 million of general and administrative expenses. The auditor, Marcum LLP, included a going concern explanatory paragraph because the company must complete a business combination by March 11, 2023 or liquidate. On December 12, 2021, the company agreed to merge with Symbotic Holdings LLC and Warehouse Technologies LLC, with Symbotic to become the post-combination company Symbotic Inc. The filing describes Symbotic's business as warehouse automation.
It names Walmart, Inc. as its largest customer, at approximately 67% of total revenue for the fiscal year ended September 25, 2021, and C&S Wholesale Grocers, an affiliate, among other customers. The filing also says the transaction includes a $205 millionc PIPE subscription for 20,500,000 shares, a $150 million forward purchase commitment with an additional $50 million election, and a Tax Receivable Agreement. The filing discloses a material weakness in internal control over accounting for complex financial instruments, which led to restatement of prior interim periods.
02—Key points
Key Highlights
- Blank check company with no operations or revenue; $320,016,430 held in the Trust Account at December 31, 2021, and about $813,000 held outside the trust.
- Net loss of $6,475,753 for 2021, mainly from $6.4 million in general and administrative expenses; trust income was $16,430.
- Going concern doubt: the company must complete a business combination by March 11, 2023, or cease operations and liquidate.
- Pending merger agreement dated December 12, 2021 with Warehouse Technologies LLC and Symbotic Holdings LLC; the combined company will be renamed Symbotic Inc. and listed on NASDAQ as SYM.
- Symbotic's largest customer is Walmart, approximately 67% of total revenue for the fiscal year ended September 25, 2021; C&S Wholesale Grocers, an affiliate, is another key customer.
- Financing for the transaction includes a $205,000,000 PIPE (20,500,000 shares at $10.00) and a $150 million forward purchase commitment, with an option for an additional $50 million.
- Material weakness in internal control over accounting for complex financial instruments; disclosure controls were not effective as of December 31, 2021.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2021, Symbotic lost $0.49.
- Revenue$251.9M100.0%
- Cost of revenue−$241.5M95.9%
- Gross profit$10.4M4.1%
- Operating costs−$132.8M52.7%
- Operating income−$122.4M48.6%
- Interest, other & tax$67,0000.0%
- Net income−$122.3M48.6%
04—Financials
Financial Highlights
Figures from 10-KFY2021filed March 23, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $251.91M$92.09M | +173.6% |
| Cost of Revenue | $241.47M$111.02M | +117.5% |
| Gross Profit | $10.45M-$18.93M | +155.2% |
| R&D Expenses | $73.39M$55.86M | +31.4% |
| SG&A Expenses | $59.44M$35.59M | +67.0% |
| Operating Expenses | $132.83M$91.45M | +45.3% |
| Operating Income | -$122.38M-$110.38M | −10.9% |
| Net Income | -$122.31M-$109.52M | −11.7% |
05—Questions
Frequently Asked Questions
How much money is available to investors in the trust account?
The Trust Account held $320,016,430 at December 31, 2021, from the $320.0 million gross IPO proceeds and the $10.4 million private placement. Public shareholders would receive approximately $10.00 per share on redemption, plus pro rata interest, subject to creditor claims.
What happens if the business combination is not completed?
The company must complete a business combination by March 11, 2023. If it does not, it will cease operations, redeem all public shares for cash at the trust amount per share, and liquidate. The Sponsor's founder shares and private placement shares would be worthless.
Who is Symbotic and why is the merger significant?
The filing describes Symbotic as a warehouse automation business. Its largest customer is Walmart, which accounted for approximately 67% of total revenue in the fiscal year ended September 25, 2021. The filing also reports that Symbotic had an accumulated deficit of $1,154.9 million and a net loss of $122.3 million for fiscal 2021.
What dilution or ownership changes could result from the transaction?
Current SVF 3 shareholders would be diluted. The filing says Symbotic Inc. is expected to own about 14% of New Symbotic Holdings Common Units with no redemptions, and about 9% with maximum redemptions. The Sponsor and directors control 22.3% of voting power, and the Class V-3 structure gives founder Richard B. Cohen about 91% of voting power after the combination, assuming no redemptions.
06—Continue