Gores Metropoulos Earnings 2020-06-30

Balance Sheet	Income Statement	Cash Flow

gmhi-10q_20200630.htm

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 June 30, 2020

☐	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: 001-38791

GORES METROPOULOS, INC.

(Exact name of registrant as specified in its Charter)

Delaware		83-1804317
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

9800 Wilshire Blvd.
Beverly Hills, CA		90212
(Address of principal executive offices)		(Zip Code)

(310) 209-3010

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbols	Name of each exchange on which registered
Class A Common Stock	GMHI	Nasdaq Capital Market
Warrants	GMHIW	Nasdaq Capital Market
Units	GMHIU	Nasdaq Capital 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 ☒ NO ☐

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 ☒ NO ☐

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 definition 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 Exchange Act). YES ☒ NO ☐

As of August 6, 2020, there were 40,000,000 shares of the Company’s Class A common stock, par value $0.0001 per share, and 10,000,000 shares of the Company’s Class F common stock, par value $0.0001 per share, issued and outstanding.

TABLE OF CONTENTS

		Page
PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements

Balance Sheets (Unaudited)		3

Statements of Operations (Unaudited)		4

Statements of Changes in Stockholders’ Equity (Unaudited)		5

Statements of Cash Flows (Unaudited)		6

Notes to Unaudited, Interim Financial Statements (Unaudited)		7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	19

Item 4.	Controls and Procedures	19

PART II—OTHER INFORMATION		20

Item 1.	Legal Proceedings	20

Item 1A.	Risk Factors	20

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20

Item 3.	Defaults Upon Senior Securities	21

Item 4.	Mine Safety Disclosures	22

Item 5.	Other Information	22

Item 6.	Exhibits	23

GORES METROPOULOS, INC.

BALANCE SHEETS

	June 30, 2020		December 31, 2019
	(unaudited)		(audited)
CURRENT ASSETS:
Cash and cash equivalents	$	1,011,395	$	1,365,240
Prepaid assets		107,501		136,399
Total current assets		1,118,896		1,501,639
Deferred income tax		15,079		2,353
Investments and cash held in Trust Account		406,397,612		406,434,959
Total assets	$	407,531,587	$	407,938,951

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accrued expenses, formation and offering costs	$	85,889	$	53,203
State franchise tax accrual		20,000		200,000
Current income tax and interest payable		194,654		1,102,662
Total current liabilities		300,543		1,355,865
Deferred underwriting compensation		14,000,000		14,000,000
Total liabilities	$	14,300,543	$	15,355,865

Commitments and Contingencies:
Class A subject to possible redemption, 38,713,476 and 38,713,476 shares at June 30, 2020 and December 31, 2019, respectively (at redemption value of $10 per share)		387,134,760		387,134,760

Stockholders’ equity:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized, none issued or outstanding		—		—
Common stock
Class A common stock, $0.0001 par value; 200,000,000 shares authorized, 1,286,524 and 1,286,524 shares issued and outstanding (excluding 38,713,476 and 38,713,476 shares subject to possible redemption) at June 30, 2020 and December 31, 2019, respectively		129		129
Class F common stock, $0.0001 par value; 20,000,000 shares authorized, 10,000,000 and 10,000,000 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively		1,000		1,000
Additional paid-in capital		24,006		24,006
Retained earnings		6,071,149		5,423,191

Total stockholders’ equity		6,096,284		5,448,326

Total liabilities and stockholders’ equity	$	407,531,587	$	407,938,951

See accompanying notes to the unaudited, interim financial statements.

GORES METROPOULOS, INC.

STATEMENTS OF OPERATIONS

(Unaudited)

		Three Months Ended			Three Months Ended			Six Months Ended			Six Months Ended
		June 30, 2020			June 30, 2019			June 30, 2020			June 30, 2019
Revenues	$		—		$	—		$	—		$	—
Professional fees and other expenses			(160,123	)		(140,925	)		(358,968	)		(309,984	)
State franchise taxes, other than income tax			(50,000	)		(50,000	)		(100,000	)		(100,000	)
Net loss from operations			(210,123	)		(190,925	)		(458,968	)		(409,984	)
Other income - interest income			57,058			2,500,856			1,325,278			3,892,361
Net income before income taxes	$		(153,065	)	$	2,309,931		$	866,310		$	3,482,377
Income tax provision and interest			32,143			(449,295	)		(218,352	)		(727,551	)
Net Income attributable to common shares	$		(120,922	)	$	1,860,636		$	647,958		$	2,754,826

Net income/(loss) per ordinary share:
Class A ordinary shares - basic and diluted	$		(0.00	)	$	0.05		$	0.02		$	0.09
Class F ordinary shares - basic and diluted	$		(0.00	)	$	(0.01	)	$	(0.01	)	$	(0.03	)

See accompanying notes to the unaudited, interim financial statements.

GORES METROPOULOS, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

	Three Months Ended June 30, 2019
	Class A Ordinary Shares						Class F Ordinary Shares							Additional			Retained			Stockholders'
	Shares			Amount				Shares			Amount			Paid-In Capital			Earnings			Equity
Beginning Balance at April 1, 2019		1,696,791		$	170				10,000,000		$	1,000		$	4,126,635		$	872,205		$	5,000,010
Class A common stock subject to possible redemption; 38,489,273 shares at a redemption price of $10.00		(186,064	)		(19	)			-			-			(1,860,621	)		-			(1,860,640	)
Net income		-			-				-			-			-			1,860,636			1,860,636
Balance at June 30, 2019		1,510,727		$	151				10,000,000		$	1,000		$	2,266,014		$	2,732,841		$	5,000,006

	Six Months Ended June 30, 2019
	Class A Ordinary Shares						Class F Ordinary Shares							Additional			Retained Earnings/			Stockholders'
	Shares			Amount				Shares			Amount			Paid-In Capital			(Acc. Deficit)			Equity
Beginning Balance at January 1, 2019		-		$	-				10,781,250		$	1,078		$	23,922		$	(21,985	)	$	3,015
Forfeited Class F Common stock by Sponsor		-			-				(781,250	)		(78	)		78			-			-
Proceeds from initial public offering of Units on February 5, 2019 at $10.00 per Unit		40,000,000			4,000				-			-			399,996,000			-			400,000,000
Sale of 6,666,666 Private Placement Warrants to Sponsor on February 5, 2019 at $1.50 per Private Placement Warrant		-			-				-			-			10,000,000			-			10,000,000
Underwriters discounts		-			-				-			-			(8,000,000	)		-			(8,000,000	)
Offering costs charged to additional paid-in capital		-			-				-			-			(865,105	)		-			(865,105	)
Deferred underwriting compensation		-			-				-			-			(14,000,000	)		-			(14,000,000	)
Class A common stock subject to possible redemption; 38,489,273 shares at a redemption price of $10.00		(38,489,273	)		(3,849	)			-			-			(384,888,881	)		-			(384,892,730	)
Net income		-			-				-			-			-			2,754,826			2,754,826
Balance at June 30, 2019		1,510,727		$	151				10,000,000		$	1,000		$	2,266,014		$	2,732,841		$	5,000,006

	Three Months Ended June 30, 2020
	Class A Ordinary Shares						Class F Ordinary Shares							Additional			Retained			Stockholders'
	Shares			Amount				Shares			Amount			Paid-In Capital			Earnings			Equity
Beginning Balance at April 1, 2020		1,286,524		$	129				10,000,000		$	1,000		$	24,006		$	6,192,071		$	6,217,206
Class A common stock subject to possible redemption; 38,713,476 shares at a redemption price of $10.00		-			-				-			-			-			-			-
Net loss		-			-				-			-			-			(120,922	)		(120,922	)
Balance at June 30, 2020		1,286,524		$	129				10,000,000		$	1,000		$	24,006		$	6,071,149		$	6,096,284

	Six Months Ended June 30, 2020
	Class A Ordinary Shares						Class F Ordinary Shares							Additional			Retained			Stockholders'
	Shares			Amount				Shares			Amount			Paid-In Capital			Earnings			Equity
Beginning Balance at January 1, 2020		1,286,524		$	129				10,000,000		$	1,000		$	24,006		$	5,423,191		$	5,448,326
Class A common stock subject to possible redemption; 38,713,476 shares at a redemption price of $10.00		-			-				-			-			-			-			-
Net income		-			-				-			-			-			647,958			647,958
Balance at June 30, 2020		1,286,524		$	129				10,000,000		$	1,000		$	24,006		$	6,071,149		$	6,096,284

See accompanying notes to the unaudited, interim financial statements

GORES METROPOULOS, INC.

STATEMENTS OF CASH FLOWS

(Unaudited)

		Six Months Ended				Six Months Ended
		June 30, 2020				June 30, 2019
Cash flows from operating activities:
Net Income	$		647,958		$		2,754,826
Changes in state franchise tax accrual			(180,000	)			98,569
Changes in prepaid assets and deferred costs			28,899				(250,891	)
Changes in deferred offering costs			—				437,375
Changes in accrued expenses, formation and offering costs			32,685				(306,365	)
Changes in current income tax and interest payable			(908,008	)			27,050
Changes in deferred income tax			(12,726	)			359,203
Net cash provided by/(used in) operating activities			(391,192	)			3,119,767
Cash flows from investing activities:
Cash deposited in Trust Account			—				(400,000,000	)
Interest reinvested in Trust Account			37,347				(3,886,144	)
Net cash provided by/(used in) investing activities			37,347				(403,886,144	)
Cash flows from financing activities:
Proceeds from sale of Units in initial public offering			—				400,000,000
Proceeds from sale of Private Placement Warrants to Sponsor			—				10,000,000
Repayment of notes and advances payable – related party			—				(150,000	)
Payment of underwriters’ discounts and commissions			—				(8,000,000	)
Payment of accrued offering costs			—				(865,105	)
Net cash provided by financing activities			—				400,984,895
Increase/(decrease) in cash			(353,845	)			218,518
Cash at beginning of period			1,365,240				52,489
Cash at end of period	$		1,011,395		$		271,007
Supplemental disclosure of cash and non-cash financing activities:
Deferred underwriting compensation	$		—		$		14,000,000
Accrued expenses, formation, and offering costs			—				20,053
Cash paid for income and state franchise taxes			1,419,136				342,729

See accompanying notes to the unaudited, interim financial statements.

GORES METROPOULOS, INC.

NOTES TO THE UNAUDITED, INTERIM FINANCIAL STATEMENTS

1. Organization and Business Operations

Organization and General

Gores Metropoulos, Inc. (the “Company”) was incorporated in Delaware on August 28, 2018. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar Business Combination with one or more businesses (the “Business Combination”). The Company has neither engaged in any operations nor generated any revenue to date. The Company’s management has broad discretion with respect to the Business Combination, but intends to focus its search for a target business in the consumer products and services industries. The Company’s Sponsor is Gores Metropoulos Sponsor, LLC, a Delaware limited liability company (the “Sponsor”). The Company has selected December 31^st as its fiscal year-end.

At June 30, 2020, the Company had not commenced any operations. All activity for the period from August 28, 2018 (inception) through June 30, 2020 relates to the Company’s formation and initial public offering (“Public Offering”) described below. The Company completed the Public Offering on February 5, 2019 (the “IPO Closing Date”). The Company will not generate any operating revenues until after the completion of its Business Combination, at the earliest. Subsequent to the Public Offering, the Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Public Offering and the sale of the Private Placement Warrants (as defined below) held in the Trust Account (as defined below).

Financing

Upon the IPO Closing Date and the sale of the Private Placement Warrants, an aggregate of $400,000,000 was placed in a Trust Account with Continental Stock Transfer & Trust Company acting as trustee (the “Trust Account”).

The Company intends to finance a Business Combination with the net proceeds from its $400,000,000 Public Offering and its sale of $10,000,000 of Private Placement Warrants.

Trust Account

Funds held in the Trust Account can be invested only in U.S. government treasury bills with a maturity of one hundred and eighty (180) days or less or in money market funds meeting certain conditions under Rule 2a‑7 under the Investment Company Act of 1940, as amended, that invest only in direct U.S. government obligations. As of June 30, 2020, the Trust Account consisted of cash and treasury bills.

The Company’s amended and restated certificate of incorporation provides that, other than the withdrawal of interest to fund regulatory compliance requirements and other costs related thereto (a “Regulatory Withdrawal”), subject to an annual limit of $750,000, for a maximum 24 months and/or additional amounts necessary to pay franchise and income taxes, if any, none of the funds held in trust will be released until the earliest of: (i) the completion of the Business Combination; or (ii) the redemption of any public shares of common stock properly tendered in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation to modify the substance or timing of the Company’s obligation to redeem 100% of such public shares of common stock if the Company does not complete the Business Combination within 24 months from the IPO Closing Date; or (iii) the redemption of 100% of the public shares of common stock if the Company is unable to complete a Business Combination within 24 months from the IPO Closing Date, subject to the requirements of law and stock exchange rules.

Business Combination

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Public Offering, although substantially all of the net proceeds of the Public Offering are intended to be generally applied toward consummating a Business Combination. The Business Combination must be with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the Trust Account (less any deferred underwriting commissions and taxes payable on interest income earned) at the time of the Company signing a definitive agreement in connection with the Business Combination. Furthermore, there is no assurance that the Company will be able to successfully effect a Business Combination.

The Company, after signing a definitive agreement for a Business Combination, will either (i) seek stockholder approval of the Business Combination at a meeting called for such purpose in connection with which stockholders may seek to redeem their shares, regardless of whether they vote for or against the Business Combination, for cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest income but less taxes payable, or (ii) provide stockholders with the opportunity to sell their shares to the Company by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount in cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest income but less taxes payable. The decision as to whether the Company will seek stockholder approval of the Business Combination or will allow stockholders to sell their shares in a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require the Company to seek stockholder approval, unless a vote is required by law or under NASDAQ rules. If the Company seeks stockholder approval, it will complete its Business Combination only if a majority of the outstanding shares of common stock voted are voted in favor of the Business Combination. Currently, the Company will not redeem its public shares of common stock in an amount that would cause its net tangible assets to be less than $5,000,001. In such case, the Company would not proceed with the redemption of its public shares of common stock and the related Business Combination, and instead may search for an alternate Business Combination.

As a result of the foregoing redemption provisions, the public shares of common stock will be recorded at the redemption amount and classified as temporary equity, in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 480, “Distinguishing Liabilities from Equity” (“ASC Topic 480”) in subsequent periods.

The Company will have 24 months from the IPO Closing Date to complete its Business Combination. If the Company does not complete a Business Combination within this period of time, it shall (i) cease all operations except for the purposes of winding up; (ii) as promptly as reasonably possible, but not more than ten business days thereafter, redeem the public shares of common stock for a per share pro rata portion of the Trust Account, including interest income, but less taxes payable (less up to $100,000 of such net interest income to pay dissolution expenses) and (iii) as promptly as possible following such redemption, dissolve and liquidate the balance of the Company’s net assets to its remaining stockholders, as part of its plan of dissolution and liquidation. The Sponsor and the Company’s officers and directors have entered into a letter agreement with the Company, pursuant to which they waived their rights to participate in any redemption with respect to their Founder Sha

Price	1.00	EPS	-4,239,658
Shares	-0	P/E	-0
MCap	-0	P/FCF	-0
Net Debt	-1	EBIT	5
TEV	-1	TEV/EBIT	-0
TTM 2019-09-30, in MM, except price, ratios

S-1	2020-12-23	Public Filing
10-Q	2020-09-30	Filed 2020-11-06
10-Q	2020-06-30	Filed 2020-08-06
10-Q	2020-03-31	Filed 2020-05-08
10-K	2019-12-31	Filed 2020-03-13
10-Q	2019-09-30	Filed 2019-11-08
10-Q	2019-06-30	Filed 2019-08-09
10-Q	2019-03-31	Filed 2019-05-06
10-K	2018-12-31	Filed 2019-03-29

8-K	2021-02-08	Officers, Regulation FD, Exhibits
8-K	2021-02-03	Other Events, Exhibits
8-K	2020-12-16	Regulation FD, Exhibits
8-K	2020-12-02	Enter Agreement, M&A, Sale of Shares, Shareholder Rights, Accountant, Control, Officers, Shell Status, Exhibits
8-K	2020-12-01	Shareholder Vote, Other Events
8-K	2020-11-24
8-K	2020-11-20
8-K	2020-11-10
8-K	2020-11-06
8-K	2020-10-30
8-K	2020-10-07
8-K	2020-08-24
8-K	2019-03-22
8-K	2019-02-05
8-K	2019-01-31

EX-31.1	gmhi-ex311_7.htm
EX-31.2	gmhi-ex312_6.htm
EX-32.1	gmhi-ex321_8.htm
EX-32.2	gmhi-ex322_9.htm

GMHI 10Q Quarterly Report

Gores Metropoulos Earnings 2020-06-30