Symbotic Inc. 10-K

Item 8. Financial Statements and Supplementary Data Symbotic Inc. Index to the Consolidated Financial Statements Report of Independent Registered Public Accounting Firm (PCAOB ID No. 248 ) 63 Consolidated Balance Sheets 64 Consolidated Statements of Operations 66 Consolidated Statements of Comprehensive Loss 67 Consolidated Statements of Changes in Redeemable Preferred and Common Units and Equity (Deficit) 68 Consolidated Statements of Cash Flows 70 Notes to the Consolidated Financial Statements 71 62 Table of Contents Report of Independent Registered Public Accounting Firm Board of Directors and Shareholders Symbotic Inc. Opinion on the financial statements We have audited the accompanying consolidated balance sheets of Symbotic Inc. and subsidiaries (the “Company”) as of September 24, 2022 and September 25, 2021, the related consolidated statements of operations, comprehensive loss, changes in redeemable preferred and common units and equity (deficit), and cash flows for each of the three years in the period ended September 24, 2022, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 24, 2022 and September 25, 2021 and the results of its operations and its cash flows for each of the three years in the period ended September 24, 2022, in conformity with accounting principles generally accepted in the United States of America. Basis for opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ GRANT THORNTON LLP We have served as the Company’s auditor since 2021. Boston, Massachusetts December 9, 2022 63 Table of Contents Symbotic Inc. Consolidated Balance Sheets (in thousands) September 24, 2022 September 25, 2021 ASSETS Current assets: Cash and cash equivalents $ 353,457 $ 156,634 Accounts receivable 3,412 63,370 Unbilled accounts receivable 101,816 — Inventories 91,900 33,561 Deferred expenses 29,150 489 Prepaid expenses and other current assets 25,663 6,366 Total current assets 605,398 260,420 Property and equipment, at cost 48,722 37,177 Less: Accumulated depreciation ( 23,844 ) ( 18,560 ) Property and equipment, net 24,878 18,617 Intangible assets, net 650 1,164 Other long-term assets 337 334 Total assets $ 631,263 $ 280,535 LIABILITIES, REDEEMABLE PREFERRED AND COMMON UNITS AND EQUITY (DEFICIT) Current liabilities: Accounts payable $ 68,448 $ 28,018 Accrued expenses 47,312 31,131 Sales tax payable 12,953 18,405 Deferred revenue, current 394,244 259,418 Total current liabilities 522,957 336,972 Deferred revenue, long-term 31,465 216,538 Other long-term liabilities 7,901 3,993 Total liabilities 562,323 557,503 Commitments and contingencies (Note 14) — — Redeemable preferred and common units: Preferred units, Class B-1, 0 units authorized, issued, and outstanding at September 24, 2022 and 2 units authorized, 1 unit issued and outstanding at September 25, 2021 — 232,278 Preferred units, Class B, 0 units authorized, issued, and outstanding at September 24, 2022 and 1 unit authorized, issued, and outstanding at September 25, 2021 — 459,007 Common units, Class C, 0 units authorized, issued, and outstanding at September 24, 2022 and 428,571 units authorized, issued, and outstanding at September 25, 2021 — 144,975 Equity (deficit): Common voting units, Class A, 0 units authorized, issued, and outstanding at September 24, 2022 and 7,071,424 units authorized, 5,997,632 units issued and outstanding at September 25, 2021 — 16,809 64 Table of Contents Class A Common Stock, 3,000,000,000 shares authorized, 57,718,836 shares issued and outstanding at September 24, 2022 and 0 shares authorized, issued, and outstanding at September 25, 2021 6 — Class V-1 Common Stock, 1,000,000,000 shares authorized, 79,237,388 shares issued and outstanding at September 24, 2022 and 0 shares authorized, issued, and outstanding at September 25, 2021 8 — Class V-3 Common Stock, 450,000,000 shares authorized, 416,933,025 shares issued and outstanding at September 24, 2022 and 0 shares authorized, issued, and outstanding at September 25, 2021 42 — Additional paid-in capital - warrants 58,126 26,999 Additional paid-in capital 1,237,865 — Accumulated deficit ( 1,286,569 ) ( 1,154,944 ) Accumulated other comprehensive loss ( 2,294 ) ( 2,092 ) Total stockholders' equity / members’ deficit 7,184 ( 1,113,228 ) Noncontrolling interest 61,756 — Total equity (deficit) 68,940 ( 1,113,228 ) Total liabilities, redeemable preferred and common units, and equity (deficit) $ 631,263 $ 280,535 The accompanying notes are an integral part of these consolidated financial statements. 65 Table of Contents Symbotic Inc. Consolidated Statements of Operations (in thousands, except share and per share information) Year Ended September 24, 2022 September 25, 2021 September 26, 2020 Revenue: Systems $ 567,993 $ 227,563 $ 70,818 Software maintenance and support 3,735 4,009 2,614 Operation services 21,584 20,341 18,654 Total revenue 593,312 251,913 92,086 Cost of revenue: Systems 464,179 216,577 79,252 Software maintenance and support 4,390 2,962 3,681 Operation services 25,096 21,927 28,083 Total cost of revenue 493,665 241,466 111,016 Gross profit (loss) 99,647 10,447 ( 18,930 ) Operating expenses: Research and development expenses 124,141 73,386 55,861 Selling, general, and administrative expenses 115,881 59,442 35,586 Total operating expenses 240,022 132,828 91,447 Operating loss ( 140,375 ) ( 122,381 ) ( 110,377 ) Other income, net 1,286 67 809 Loss before income tax ( 139,089 ) ( 122,314 ) ( 109,568 ) Income tax benefit — — 47 Net loss ( 139,089 ) ( 122,314 ) ( 109,521 ) Net loss attributable to Legacy Warehouse unitholders prior to the Business Combination ( 72,134 ) ( 122,314 ) ( 109,521 ) Net loss attributable to noncontrolling interests ( 60,092 ) — — Net loss attributable to common stockholders $ ( 6,863 ) $ — $ — Loss per share of Class A Common Stock: (1) Basic and Diluted $ ( 0.13 ) N/M N/M Weighted-average shares of Class A Common Stock outstanding: Basic and Diluted 54,086,381 N/M N/M (1) Loss per share information has not been presented for periods prior to the Business Combination (as defined in Note 3, Business Combination ), as it resulted in values that would not be meaningful to the users of these consolidated financial statements. Refer to Note 3, Business Combination for further information. This has been indicated on these statements of operations as “N/M”. The accompanying notes are an integral part of these consolidated financial statements. 66 Table of Contents Symbotic Inc. Consolidated Statements of Comprehensive Loss (in thousands) Year Ended September 24, 2022 September 25, 2021 September 26, 2020 Net loss $ ( 139,089 ) $ ( 122,314 ) $ ( 109,521 ) Foreign currency translation adjustments ( 2,338 ) 2,326 ( 1,825 ) Total comprehensive loss ( 141,427 ) ( 119,988 ) ( 111,346 ) Comprehensive loss attributable to Legacy Warehouse unitholders prior to the Business Combination ( 72,097 ) ( 119,988 ) ( 111,346 ) Comprehensive loss attributable to noncontrolling interests ( 62,228 ) — — Total comprehensive loss attributable to common stockholders $ ( 7,102 ) $ — $ — The accompanying notes are an integral part of these consolidated financial statements 67 Table of Contents Symbotic Inc. Consolidated Statements of Changes in Redeemable Preferred and Common Units and Equity (Deficit) (in thousands, except unit and share information) Redeemable Preferred and Common Units Additional Paid-In Capital - Warrants Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Noncontrolling Interest Total Equity (Deficit) Common Units, Class C Preferred Units, Class B-1 Preferred Units, Class B Common Voting Units, Class A Class A Common Stock Class V-1 Common Stock Class V-3 Common Stock Units Amount Units Amount Units Amount Units Amount Shares Amount Shares Amount Shares Amount Balance at September 28, 2019 428,571 $ 44 1 $ 112,469 1 $ 416,332 5,997,632 $ 16,809 — $ — — $ — — $ — $ — $ — $ ( 2,593 ) $ ( 715,862 ) $ — $ ( 701,646 ) Retroactive application of recapitalization ratio (1) 24,493,538 — 24,041,299 — 47,508,299 — 361,551,314 — — — — — — — — — — — — — Adjusted balance, beginning of period 24,922,109 $ 44 24,041,300 $ 112,469 47,508,300 $ 416,332 367,548,946 $ 16,809 — $ — — $ — — $ — $ — $ — $ ( 2,593 ) $ ( 715,862 ) $ — $ ( 701,646 ) Granted 2,476,504 — — — — — — — — — — — — — — — — — — — Forfeited ( 2,476,504 ) — — — — — — — — — — — — — — — — — — — Unit-based compensation — 71 — — — — — — — — — — — — — — — — — — Accretion of Class C Units to redemption value — 1,910 — — — — — — — — — — — — — — — ( 1,910 ) — ( 1,910 ) Member contributions — — — 100,000 — — — — — — — — — — — — — — — — Preferred return — — — 8,748 — 20,817 — — — — — — — — — — — ( 29,565 ) — ( 29,565 ) Net loss — — — — — — — — — — — — — — — — — ( 109,521 ) — ( 109,521 ) Other comprehensive loss — — — — — — — — — — — — — — — — ( 1,825 ) — — ( 1,825 ) Balance at September 26, 2020 24,922,109 2,025 24,041,300 221,217 47,508,300 437,149 367,548,946 16,809 — — — — — — — — ( 4,418 ) ( 856,858 ) — ( 844,467 ) Granted 2,997,310 — — — — — — — — — — — — — — — — — — — Forfeited ( 2,997,310 ) — — — — — — — — — — — — — — — — — — — Unit-based compensation — 97 — — — — — — — — — — — — — — — — — — Accretion of Class C Units to redemption value — 142,853 — — — — — — — — — — — — — — — ( 142,853 ) — ( 142,853 ) Member contributions — — — — — — — — — — — — — — — — — — — — Preferred return — — — 11,061 — 21,858 — — — — — — — — — — — ( 32,919 ) — ( 32,919 ) Provision for warrants — — — — — — — — — — — — — — 26,999 — — — — 26,999 Net loss — — — — — — — — — — — — — — — — — ( 122,314 ) — ( 122,314 ) Other comprehensive loss — — — — — — — — — — — — — — — — 2,326 — — 2,326 Balance at September 25, 2021 24,922,109 144,975 24,041,300 232,278 47,508,300 459,007 367,548,946 16,809 — — — — — — 26,999 — ( 2,092 ) ( 1,154,944 ) — ( 1,113,228 ) Granted 1,052,952 — — — — — — — — — — — — — — — — — — — Forfeited ( 1,052,952 ) — — — — — — — — — — — — — — — — — — — Unit-based compensation — 52 — — — — — — — — — — — — — — — — — — Accretion of Class C Units to redemption value — 28,433 — — — — — — — — — — — — — — — ( 28,433 ) — ( 28,433 ) Preferred return — — — 8,130 — 16,065 — — — — — — — — — — — ( 24,195 ) — ( 24,195 ) Issuance of common stock under stock plans — — — — — — — — 1,831,505 — — — — — — 219 — — ( 219 ) — 68 Table of Contents Issuance of sponsor shares — — — — — — — — 3,616,000 — — — — — — 431 — — ( 431 ) — Issuance of earnout units upon triggering event — — — — — — — — — — 20,000,000 2 — — — ( 258 ) — — 256 — Exchange of Class V-1 common stock — — — — — — — — 1,607,185 — ( 1,607,185 ) — — — — 212 — — ( 212 ) — Stock-based compensation — — — — — — — — — — — — — — — 2,794 — — 24,013 26,807 Additional paid-in capital adjustment resulting from VAP Unit modification — — — — — — — — — — — — — — — 2,475 — — 21,275 23,750 Provision for warrants — — — — — — — — — — — — — — 74,280 — — — — 74,280 Exercise of warrants — — — — — — 43,756,942 320,929 — — — — — — ( 43,153 ) — — — — 277,776 Net loss pre business combination — — — — — — — — — — — — — — — — — ( 72,134 ) — ( 72,134 ) Other comprehensive loss pre business combination — — — — — — — — — — — — — — — — 37 — — 37 Recapitalization of Preferred Units, Class C Units, Class A Voting Units, and creation of NCI (net of transaction costs of $ 37,104 ) ( 24,922,109 ) ( 173,460 ) ( 24,041,300 ) ( 240,408 ) ( 47,508,300 ) ( 475,072 ) ( 411,305,888 ) ( 337,738 ) — — 60,844,573 6 416,933,025 42 — 1,191,567 — — ( 301,973 ) 551,904 Recapitalization of SVF equity, PIPE, and FPA (net of transaction costs of $ 30,315 ) — — — — — — — — 50,664,146 5 — — — — — 40,425 — — 381,276 421,706 Net loss post business combination — — — — — — — — — — — — — — — — — ( 6,863 ) ( 60,092 ) ( 66,955 ) Other comprehensive loss post business combination — — — — — — — — — — — — — — — — ( 239 ) — ( 2,136 ) ( 2,375 ) Balance at September 24, 2022 — $ — — $ — — $ — — $ — 57,718,836 $ 6 79,237,388 $ 8 416,933,025 $ 42 $ 58,126 $ 1,237,865 $ ( 2,294 ) $ ( 1,286,569 ) $ 61,756 $ 68,940 (1) As part of the Business Combination (as disclosed in Note 3, Business Combination and Note 15, Equity ), all per share information has been retroactively adjusted using the Exchange Ratio as stipulated by the Merger Agreement The accompanying notes are an integral part of these consolidated financial statements. 69 Table of Contents Symbotic Inc. Consolidated Statements of Cash Flows (in thousands) Year Ended September 24, 2022 September 25, 2021 September 26, 2020 Cash flows from operating activities: Net loss $ ( 139,089 ) $ ( 122,314 ) $ ( 109,521 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 5,989 4,491 5,734 Foreign currency losses 25 53 33 Losses on abandonment of assets 4,098 — 51 Unit and Stock-based compensation 26,858 97 71 Deferred taxes, net — — ( 47 ) Changes in operating assets and liabilities: Accounts receivable ( 508 ) ( 1,619 ) 342 Inventories ( 59,572 ) ( 16,817 ) ( 5,653 ) Prepaid expenses and other current assets ( 121,143 ) 3,736 21 Deferred expenses ( 28,665 ) 132,683 31,797 Other long-term assets 49 2,313 ( 1,421 ) Accounts payable 41,528 22,169 ( 4,812 ) Accrued expenses 37,898 16,187 644 Deferred revenue 80,377 67,100 ( 39,123 ) Other long-term liabilities 3,908 1,488 ( 2,423 ) Net cash and cash equivalents provided by (used in) operating activities ( 148,247 ) 109,567 ( 124,307 ) Cash flows from investing activities: Purchases of property and equipment ( 17,950 ) ( 12,168 ) ( 5,071 ) Proceeds from sale of assets — — 12 Net cash and cash equivalents used in investing activities ( 17,950 ) ( 12,168 ) ( 5,059 ) Cash flows from financing activities: Net proceeds from equity infusion from the Business Combination 384,672 — — Purchase of interest from non-controlling interest ( 300,000 ) — — Proceeds from exercise of warrants 277,776 — — Class B-1 Preferred Unit member contributions — — 100,000 Net cash and cash equivalents provided by financing activities 362,448 — 100,000 Effect of exchange rate changes on cash and cash equivalents 572 971 ( 679 ) Net increase (decrease) in cash and cash equivalents 196,823 98,370 ( 30,045 ) Cash and cash equivalents—beginning of year 156,634 58,264 88,309 Cash and cash equivalents—end of year $ 353,457 $ 156,634 $ 58,264 Non-cash financing activities: Preferred Return, Class B-1 8,130 11,061 8,748 Preferred Return, Class B 16,065 21,858 20,817 The accompanying notes are an integral part of these consolidated financial statements. 70 Table of Contents Symbotic Inc. Notes to the Consolidated Financial Statements 1. Organization and Operations SVF Investment Corp. 3, formerly known as SVF Investment III Corp., (“SVF 3” and, after the Domestication as described below, “Symbotic” or the “Company”) was a blank check company incorporated as a Cayman Islands exempted company on December 11, 2020. SVF 3 was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses. Warehouse Technologies LLC (“Legacy Warehouse”), a New Hampshire limited liability company, was formed in December 2006 to make investments in companies that develop new technologies to improve operating efficiencies in modern warehouses. Symbotic LLC, a technology company that develops and commercializes innovative technologies for use within warehouse operations and Symbotic Group Holdings, ULC (“Symbotic Canada”) were wholly owned subsidiaries of Legacy Warehouse. On December 12, 2021, (i) SVF 3 entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Legacy Warehouse, Symbotic Holdings LLC, a Delaware limited liability company (“Symbotic Holdings”), and Saturn Acquisition (DE) Corp., a Delaware corporation and wholly owned subsidiary of SVF 3 (“Merger Sub”) and (ii) Legacy Warehouse entered into an Agreement and Plan of Merger (the “Company Merger Agreement”) with Symbotic Holdings. On June 7, 2022, as contemplated by the Company Merger Agreement, Legacy Warehouse merged with and into Symbotic Holdings (the “Company Reorganization”), with Symbotic Holdings surviving the merger (“Interim Symbotic”). Immediately following such merger, on June 7, 2022, as contemplated by the Merger Agreement, SVF 3 filed a notice of deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and filed a certificate of incorporation and a certificate of corporate domestication with the Secretary of State of the State of Delaware, under which SVF 3 was transferred by way of continuation from the Cayman Islands and domesticated as a Delaware corporation, changing its name to “Symbotic Inc." (the “Domestication”). Immediately following the Domestication of SVF 3, on June 7, 2022, as contemplated by the Merger Agreement, Merger Sub merged with and into Interim Symbotic (the "Merger” and, together with the Company Reorganization, the “Business Combination”), with Interim Symbotic surviving the merger as a subsidiary of Symbotic (“New Symbotic Holdings”). The Business Combination is further described in Note 3, Business Combination . Symbotic is an automation technology company established to develop technologies to improve operating efficiencies in modern warehouses. The Company's vision is to make the supply chain work better for everyone. The Company does this by developing innovative, end-to-end technology solutions that dramatically improve supply chain operations. The Company currently automates the processing of pallets and cases in large warehouses or distribution centers for some of the largest retail companies in the world. Its systems enhance operations at the front end of the supply chain, and therefore benefit all supply partners further down the chain, irrespective of fulfillment strategy. The Company's headquarters are located in Wilmington, Massachusetts, and its Canadian headquarters are located in Montreal, Quebec. Risks and Uncertainties The Company is subject to risks common to companies in the markets it serves, including, but not limited to, global economic and financial market conditions, fluctuations in customer demand, acceptance of new products, development by its competitors of new technological innovations, risk of disruption in its supply chain, the implementation of tariffs and export controls, dependence on key personnel, and protection of proprietary technology. The Company has an accumulated deficit of $( 1.3 ) billion as of September 24, 2022 and has incurred recurring net losses since its inception. In April 2021, the Company entered into an amendment to a contract with a customer whereby $ 185.0 million of guaranteed, non-refundable payments are due to the Company in accordance with the contract, all of which has been subsequently received through the date of issuance of these consolidated financial statements. Additionally, in June 2022, in connection with the Business Combination, the Company received net proceeds of $ 384.7 million. As of September 24, 2022, the Company had cash and cash equivalents of $ 353.5 million. Based on these factors, the Company believes that its cash and cash equivalents balance will be sufficient to fund its operations for at least the next twelve months from the date of issuance of these consolidated financial statements. 2. Summary of Significant Accounting Policies Basis of Presentation and Foreign Currency Translation The consolidated financial statements have been prepared in U.S. dollars, in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include 71 Table of Contents the accounts of the Company and its wholly-owned subsidiaries and majority-owned subsidiaries. The consolidated financial statements include 100% of the accounts of wholly-owned and majority-owned subsidiaries and the ownership interest of the minority investors are recorded as a non-controlling interest in a subsidiary. All intercompany balances and transactions have been eliminated in consolidation. The functional currency for the Company’s foreign subsidiaries is based on the subsidiaries’ financial and operational environment and is the applicable local currency. For the Company’s subsidiaries that transact in a functional currency other than the U.S. dollar, assets and liabilities are translated into U.S. dollars at period-end foreign exchange rates. Revenue and expenses are translated into U.S. dollars at the average foreign exchange rates for the period. Translation adjustments are excluded from the determination of net income and are recorded in accumulated other comprehensive income (loss), a separate component of members’ deficit. Certain transactions of the Company and its subsidiaries are denominated in currencies other than the functional currency. Foreign currency transaction losses were less than $ 0.1 million for the year ended September 24, 2022, $ 0.1 million for the year ended September 25, 2021, and less than $ 0.1 million for the year ended September 26, 2020, and were recorded within other income, net on the consolidated statements of operations. The Company operates and reports using a 52-53 week fiscal year ending on the last Saturday closest to September 30. Accordingly, the Company’s fiscal quarters end on the last Saturday that falls closest to the last day of the third month of each quarter. The fiscal years ended September 24, 2022, September 25, 2021, and September 26, 2020 were 52-week periods. Business Combination The Business Combination was accounted for as a reverse recapitalization as Legacy Warehouse was determined to be the accounting acquirer under Financial Accounting Standards Board's (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations . This determination was primarily based on Legacy Warehouse comprising the ongoing operations of the combined entity, Legacy Warehouse's senior management comprising the majority of the senior management of the combined company, and the prior shareholders of Legacy Warehouse owning a majority of the voting power of the combined entity. Accordingly, for accounting purposes, the financial statements of the combined entity upon consummation of the Business Combination represented a continuation of the financial statements of Legacy Warehouse with the merger being treated as the equivalent of Legacy Warehouse issuing stock for the net assets of SVF 3, accompanied by a recapitalization. Operations prior to the Business Combination are presented as those of Legacy Warehouse in future reports of the combined entity. The recapitalization had no effect on reported net loss and comprehensive loss, cash flows, total assets, or members' deficit as previously reported. See Note 3, Business Combination, for additional information. The Business Combination resulted in an umbrella partnership corporation (“Up-C”) structure, which is often used by partnerships and limited liability companies (operating as partnerships) undertaking an initial public offering. The Up-C structure allowed Legacy Warehouse equity holders (the “Legacy Warehouse Holders”) to retain their equity ownership in Symbotic Holdings, an entity that is classified as a partnership for U.S. federal income tax purposes, and provides potential future tax benefits for Symbotic when the Legacy Warehouse Holders ultimately redeem their pass-through interests for shares of Class A Common Stock in Symbotic Inc. Under the terms of the Tax Receivable Agreement (“TRA”), 85 % of these potential future tax benefits realized by Symbotic Inc. as a result of such redemptions will be paid to certain Legacy Warehouse Holders (the “TRA Holders”). Noncontrolling Interests Noncontrolling interests represent the portion of Symbotic Inc. that the Company controls and consolidates but does not own. The noncontrolling interest was created as a result of the Business Combination by issuing non-economic shares to the prior investors in Legacy Warehouse. The Company recognizes each noncontrolling holder’s respective share of the estimated fair value of the net assets at the date of formation or acquisition. Noncontrolling interests are subsequently adjusted for the noncontrolling holder’s share of additional contributions, distributions and their share of the net earnings or losses of each respective consolidated entity. The Company allocates net income or loss to noncontrolling interests based on the weighted average ownership interest during the period. The net income or loss attributable to noncontrolling interests is reflected in the Consolidated Statements of Operations. The Company does not recognize a gain or loss on transactions with a consolidated entity in which it does not own 100% of the equity, but the Company reflects the difference in cash received or paid from the noncontrolling interests and carrying amount as additional paid-in capital. Class V-1 and Class V-3 shares are exchangeable, along with common units of Symbotic Holdings, into an equal number of the Company’s Class A Common Stock. Class A Common Stock issued upon exchange of a holder’s noncontrolling 72 Table of Contents interest is accounted for at the carrying value of the surrendered limited partnership interest and the difference between the carrying value and the fair value of the Class A Common Stock issued is recorded to additional paid-in-capital. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses, and the amounts disclosed in the related notes to the consolidated financial statements. Actual results and outcomes may differ materially from management’s estimates, judgments, and assumptions. Significant estimates, judgments, and assumptions used in these financial statements include, but are not limited to, those related to revenue, useful lives and realizability of long-lived assets, accounting for income taxes and related valuation allowances, and unit and stock-based compensation. Estimates are periodically reviewed in light of changes in circumstances, facts, and experience. The COVID-19 pandemic has resulted in a sustained global slowdown of economic activity that has decreased demand for a broad variety of goods and services, including from our customers. While we have not experienced significant disruptions from the COVID-19 pandemic during the year ended September 24, 2022, we are unable to accurately predict the extent to which the COVID-19 pandemic may impact our business, results of operations, and financial condition going forward. Estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require the exercise of judgment. As of the date of issuance of these financial statements, we are not aware of any specific event or circumstance that would require us to update our estimates, assumptions, and judgments or revise the carrying value of our assets or liabilities. These estimates may change as new events occur and additional information is obtained and will be recognized in the consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to our financial statements. Operating Segments The Company operates as one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is regularly evaluated by the chief operating decision maker (“CODM”), which is the Company’s Chief Executive Officer, in deciding how to allocate resources and assess performance. The Company’s CODM evaluates the Company’s financial information and resources and assesses the performance of these resources on a consolidated basis. The Company is not organized by market and is managed and operated as one business. A single management team that reports to the chief executive officer comprehensively manages the entire business. Accordingly, the Company does not accumulate discrete financial information with respect to separate divisions and does not have separate operating or reportable segments. Since the Company operates in one operating segment, all required financial segment information can be found in the consolidated financial statements. Cash and Cash Equivalents Cash and cash equivalents consist of cash and highly liquid investments that are readily convertible into cash and have original maturities of three months or less at the date of purchase. The Company invests its excess cash primarily in money market funds or demand deposit accounts of major financial institutions. Accordingly, the Company’s cash and cash equivalents are subject to minimal credit and market risk. The Company’s cash and cash equivalents are carried at cost, which approximates fair value. Accounts Receivable Accounts receivable consists primarily of trade receivables from customers. The Company estimates the allowance for doubtful accounts for accounts receivable based on the aging of the receivables, customer financial statements, historical collection experience, existing economic conditions, and other available information. The Company had no allowances for doubtful accounts at September 24, 2022, September 25, 2021, and September 26, 2020. Concentrations of Credit Risk and Significant Customers Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company’s cash and cash equivalents are generally held with large financial institutions. Although the Company’s deposits may exceed federally insured limits, the financial institutions that the Company uses have high investment-grade credit ratings and, as a result, the Company believes that, as of September 24, 2022, its risk relating to deposits exceeding federally insured limits was not significant. The Company has no significant off-balance sheet risk such as foreign exchange contracts, options contracts, or other hedging arrangements. 73 Table of Contents The Company believes its credit policies are prudent and reflect normal industry terms and business risk. The Company generally does not require collateral from its customers and generally requires payment 30 days from the invoice date. For the year ended September 24, 2022, there was one customer that accounted for 10% or more of total revenue, and there were two customers that accounted for 10% or more of total revenue for the years ended September 25, 2021 and September 26, 2020. The following table represents these customers’ aggregate percent of total revenue: Year Ended September 24, 2022 September 25, 2021 September 26, 2020 Customer A 94.4 % 66.9 % n/a Customer B n/a 28.1 % 44.8 % Customer C n/a n/a 42.5 % Aggregate Percent of Total Revenue 94.4 % 95.0 % 87.3 % At September 24, 2022, three customers accounted for over 10% of the Company’s accounts receivable balance, and one customer accounted for over 10% of the Company’s accounts receivable balance at September 25, 2021. The following table represents these customers’ aggregate percent of total accounts receivable: September 24, 2022 September 25, 2021 Customer A 39.5 % 96.6 % Customer B 40.7 % n/a Customer C 15.3 % n/a Aggregate Percent of Total Accounts Receivable 95.5 % 96.6 % The concentration in the volume of business transacted with these customers may lead to a material impact on the Company’s results from operations if a total or partial loss of the business relationship were to occur. As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance which would result in a material adverse impact to its results of operations or liquidity and financial condition. Volume of Business The Company has concentrations in the volume of purchases it conducts with its suppliers. For the fiscal year ended September 24, 2022, there was one supplier that accounted for greater than 10% of total purchases, and the aggregate purchases amounted to $ 69.1 million. For the fiscal year ended September 25, 2021, there was one supplier that accounted for greater than 10% of total purchases, and the aggregate purchases amounted to $ 17.8 million. Fair Value Measurements The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, and accounts payable. The carrying amounts of these financial instruments approximate their fair value due to their short-term nature. Inventories Inventories are stated at the lower of cost or net realizable value. Cost approximates actual cost on a first-in, first-out basis. Adjustments to reduce the cost of inventory to its net realizable value are made, if required, for estimated excess, obsolete, or impaired balances. At the point of the loss recognition, a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. Property and Equipment Property and equipment include purchases of items with a per-unit value greater than $ 2,000 and an estimated useful life greater than one year . Property and equipment are recorded at cost upon acquisition. Depreciation is computed using the straight-line method and depreciation expense is allocated between cost of revenue, research and development expenses, and selling, general, and administrative expenses on the statements of operations over the following estimated useful lives: 74 Table of Contents Estimated Useful Life Computer equipment and software, furniture and fixtures, and test equipment 3 - 5 years Leasehold improvements Shorter of estimated useful life or remaining term of the lease Expenditures that improve or extend the life of an asset are capitalized while repairs and maintenance expenditures are expensed as incurred. The Company periodically reviews the estimated useful lives of property and equipment. Changes to the estimated useful lives are recorded prospectively from the date of the change. As assets are retired or sold, the related cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in loss from operations. Acquired Intangible Assets and Long-Lived Assets Acquired intangible assets consist of customer relationships and trademarks. Acquired intangible assets are amortized on a straight-line basis over their estimated useful lives. The Company periodically evaluates the recoverability of its long-lived assets, such as property and equipment and intangible assets, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. If circumstances require a long-lived asset or asset group to be tested for impairment, then assets are required to be grouped and evaluated at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. If the carrying amount of the assets exceeds the expected future undiscounted net cash flows to be generated by the assets, then an impairment charge is recognized to the extent the carrying amount of the asset exceeds its fair value. No impairment losses were recognized in the years ended September 24, 2022, September 25, 2021, and September 26, 2020. Revenue Recognition Revenue is recognized in accordance with the five-step model set forth by Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (“Topic 606”), which involves identification of the contract, identification of performance obligations in the contract, determination of the transaction price, allocation of the transaction price to the previously identified performance obligations, and revenue recognition as the performance obligations are satisfied. The Company generates revenue through its design and installation of modular inventory management systems (the “Systems”) to automate customers’ depalletizing, storage, selection, and palletization warehousing processes. The Systems have both a hardware component and an embedded software component that enables the system to be programmed to operate within specific customer environments. The Company enters into contracts with customers that can include various combinations of services to design and install the Systems. These services are generally distinct and accounted for as separate performance obligations. As a result, each customer contract may contain multiple performance obligations. The Company determines whether performance obligations are distinct based on whether the customer can benefit from the product or service on its own or together with other resources that are readily available and whether the Company’s commitment to provide the services to the customer is separately identifiable from other obligations in the contract. The Company has identified the following distinct performance obligations in its contracts with customers: 1. Systems : The Company designs, assembles, and installs modular hardware systems and performs configuration of embedded software. Systems include the delivery of hardware and an embedded software component, sold as either a perpetual or term-based on-premise license, that automate customers’ depalletizing, storage, selection, and palletization warehousing processes. The modular hardware and embedded software are each not capable of being distinct because a customer cannot benefit from the hardware or software on their own. Accordingly, they are treated as a single performance obligation. Fees for systems are typically fixed or cost-plus fixed fee amounts that are due based on the achievement of a variety of milestones beginning at contract inception through final acceptance. The substantial majority of the Company’s embedded software component is sold as a perpetual on-premise license; however, the Company does sell an immaterial amount of term-based on-premise licenses. 2. Software maintenance and support : Software maintenance and support refer to support services that provide the customer with technical support, updates, and upgrades to the embedded software license. Fees for the software maintenance and support services are typically payable in advance on a quarterly, or annual basis over the term of the software maintenance and support service contract, which term can range from one to 15 years but, for a substantial majority of the Company’s software maintenance and support contracts, is 15 years. 75 Table of Contents 3. Operation services : The Company provides the customer with assistance operating the System and ensuring user experience is optimized for efficiency and effectiveness. Fees for operation services are typically invoiced to customers on a time and materials basis monthly in arrears or using a fixed fee structure. The Company recognizes revenue upon transfer of control of promised goods or services in a contract with a customer, generally as title and risk of loss pass to the customer, in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. Revenue is recognized only to the extent that it is probable that a significant reversal of revenue will not occur and when collection is considered probable. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined its contracts do not include a significant financing component. Taxes collected from customers, which are subsequently remitted to governmental authorities, are excluded from revenue. Shipping and handling costs billed to customers are included in revenue and the related costs are included in cost of revenue when control transfers to the customer. The Company presents amounts collected from customers for sales and other taxes net of the related amounts remitted. For contracts that contain multiple performance obligations, the transaction price is allocated to each performance obligation based on a relative standalone selling price when available. If standalone selling price is not available, the Company estimates the standalone selling price of each performance obligation, which is generally based on an expected cost plus a margin approach. The design, assembly, and installation of a System includes substantive customer-specified acceptance criteria that allow the customer to accept or reject Systems that do not meet the customer’s specifications. When the Company cannot objectively determine that acceptance criteria will be met upon contract inception, revenue relating to Systems is deferred and recognized at a point in time upon final acceptance from the customer. If acceptance can be reasonably certain upon contract inception, revenue is recognized over time based on an input method, using a cost-to-cost measure of progress. During fiscal year 2021, the Company was able to objectively determine that acceptance criteria will be met upon contract inception, and as such, for contracts with customers entered into during fiscal year 2021 and 2022, revenue related to systems is accounted for over time as described above. For all other contracts with customers entered into prior to fiscal year 2021, revenue relating to systems is deferred and recognized at a point in time upon final acceptance, which is when the customer has obtained control of the system. The transaction price is allocated to the software maintenance and support service performance obligation based on the respective standalone selling price. The allocated amount is then recognized ratably over the term of the software maintenance and support service contract. Operation services revenue is recognized over time as the services are performed and costs are incurred. Contract liabilities consist of deferred revenue. Deferred revenue is recorded when the Company has a right to invoice or payments have been received for undelivered products or services, or in situations where revenue recognition criteria have not been met. Deferred revenue that will be recognized during the succeeding 12-month period is recorded as current deferred revenue, and the remaining portion is recorded as long-term deferred revenue. Costs to fulfill a contract are presented as deferred expenses on the consolidated balance sheets and consist of costs incurred by the Company to fulfill its obligations under a contract once it is obtained, but before transferring goods or services to the customer. These costs relate directly to a contract that the Company can specifically identify, are costs to generate or enhance resources of the Company that are used in satisfying performance obligations and are costs which are expected to be recovered. Accordingly, these costs are recognized on the consolidated balance sheets as an asset and are recognized consistent with the pattern of the transfer of the goods or services to which the asset relates. For all contracts, the Company recognizes anticipated contract losses as a charge to cost of revenue as soon as they become evident. As of September 24, 2022, there were no anticipated contract losses recorded in accrued expenses on the consolidated balance sheets. The Company’s warehouse automation system generally provides for a limited warranty that promises customers that delivered products are as specified. The Company’s standard warranty provides for repair or replacement of the associated System parts during the warranty period. The Company records estimated warranty costs in the period the related revenue is recognized based on historical experience or expectations of future costs to repair or replace. Actual results could differ from these estimates, which could cause increases or decreases in warranty reserves in future periods. The Company has not deferred sales commissions and other costs to obtain a contract because such amounts that would qualify for deferral are not material. 76 Table of Contents An allowance for future sales returns is established based on historical trends in product return rates. There was no allowance for future sales returns at September 24, 2022, September 25, 2021, and September 26, 2020. Warrant Transactions On April 30, 2021, the Company and Walmart Inc. (“Walmart”) entered into a Subscription Agreement (the “Subscription Agreement”), in which the Company issued to Walmart warrants to acquire up to an aggregate of 714,022 shares of the Legacy Warehouse Class A Units (the “Warrants” and the Class A Units issuable thereunder, the “Warrant Units”), subject to certain vesting conditions. Warrants equivalent to 6.5 % of the Company’s outstanding and issuable Common Units, or 446,741 units, vested upon the signing of the Subscription Agreement. Warrants equivalent to up to 3.5 % of the Company’s outstanding and issuable Common Units, or 267,281 units, may vest in connection with conditions defined by the terms of the Warrant, as Walmart makes additional expenditures to the Company in connection with the Subscription Agreement. Upon vesting, units may be acquired at an exercise price of $ 389.03 . The right to purchase units in connection with the Subscription Agreement expires on April 30, 2031. On May 20, 2022, the Company and Walmart entered into the 2nd Amended and Restated Master Automation Agreement (“2nd A&R MAA”), in which the Company issued to Walmart a new warrant to acquire up to an aggregate of 258,972 Legacy Warehouse Class A Units (“May 2022 Warrant”), subject to certain vesting conditions. In connection with the closing of the Business Combination, the May 2022 Warrant was converted into a new warrant to acquire up to an aggregate of 15,870,411 common units of Symbotic Holdings (“June 2022 Warrant” and, the common units of Symbotic Holdings issuable thereunder, the “Warrant Units”). Warrant Units equivalent to up to 3.6 % of the Company’s then outstanding and issuable Common Units, or 15,870,411 units, may vest in connection with conditions defined by the terms of the June 2022 Warrant. Upon vesting, units may be acquired at an exercise price of $ 10.00 . The right to purchase units in connection with the June 2022 Warrant expires on June 7, 2027. The warrant units granted to Walmart are accounted for as equity instruments and measured in accordance with ASC 718, Compensation—Stock Compensation . These instruments are classified in the consolidated statements of operations in accordance with ASC 606, Revenue from Contracts with Customers, and ASU 2019-08, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606) (“ASU 2019-08”). For awards granted to a customer which are not in exchange for distinct goods or services, the fair value of the awards earned based on service or performance conditions is recorded as a reduction of the transaction price, in accordance with ASC 606. To determine the fair value of the warrants in accordance with ASC 718, the Company used pricing models based in part on assumptions for which management is required to use judgment. Based on the fair value of the awards, the Company determines the amount of warrant expense based on the customer’s pro-rata achievement of vesting conditions, which is recorded as a reduction to the transaction price. Research and Development Expenses Costs incurred in the research and development of the Company’s products are expensed as incurred. Research and development costs include personnel, contracted services, materials, and indirect costs involved in the design and development of new products and services, as well as depreciation expense. Selling, General, and Administrative Expenses Selling, general, and administrative expenses include all costs that are not directly related to satisfaction of customer contracts or research and development. Selling, general, and administrative expenses include items for the Company’s selling and administrative functions, such as sales, finance, legal, human resources, and information technology support. These functions include costs for items such as salaries and benefits and other personnel-related costs, maintenance and supplies, professional fees for external legal, accounting, and other consulting services, intangible asset amortization, and depreciation expense. Stock-based Compensation The Company recognizes compensation costs for all stock-based payment awards based upon the awards’ grant-date fair value. The stock-based payment awards include restricted stock units. For stock awards that contain only a service-based vesting feature, the Company recognizes compensation cost on a graded vesting basis over the award’s vesting period. For performance-based restricted stock awards that vest and become exercisable only upon achievement of specified performance conditions, the Company makes judgments and estimates each quarter about the probability that such performance conditions will be met or achieved. Any changes to those estimates that the Company makes from time to time may have a significant impact on the stock-based compensation expense recorded and could materially impact the Company’s results of operations. The Company recognizes the effect of pre-vesting forfeitures as they occur. The Company classifies stock-based 77 Table of Contents compensation expense in its consolidated statements of operations in the same manner in which the award recipient’s salary and related costs are classified. Income Taxes As a result of the Business Combination, the Company was appointed as the sole managing member of Symbotic Holdings. Symbotic Holdings is a limited liability company that is treated as a partnership for U.S. federal income tax purposes and for most applicable state and local income taxes. Any taxable income or loss generated by Symbotic Holdings is passed through to and included in the taxable income or loss of its members, including the Company, on a pro rata basis, subject to applicable tax regulations. The Company is subject to U.S. federal income taxes, in addition to state and local income taxes, with respect to its allocable share of any taxable income or loss of Symbotic Holdings. Additionally, there are foreign subsidiaries of Symbotic Holdings that are subject to income tax in their local jurisdictions. Refer to Note 10, Income Taxes , for further details. The Company accounts for income taxes in accordance with ASC Topic 740, Accounting for Income Taxes (“ASC Topic 740”), which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax bases of its assets and liabilities by applying the enacted tax rates in effect for the year in which the differences are expected to reverse. Such net tax effects on temporary differences are reflected on the Company’s consolidated balance sheets as deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when the Company believes that it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. ASC Topic 740 prescribes a two-step approach for the recognition and measurement of tax benefits associated with the positions taken or expected to be taken in a tax return that affect amounts reported in the financial statements. The Company has reviewed and will continue to review the conclusions reached regarding uncertain tax positions, which may be subject to review and adjustment at a later date based on ongoing analyses of tax laws, regulations and interpretations thereof. To the extent that the Company’s assessment of the conclusions reached regarding uncertain tax positions changes as a result of the evaluation of new information, such change in estimate will be recorded in the period in which such determination is made. The Company reports income tax-related interest and penalties relating to uncertain tax positions, if applicable, as a component of income tax expense. Tax Receivable Agreement In connection with the Business Combination, the Company entered into a Tax Receivable Agreement, which generally provides for the payment by the Company to the TRA Holders of their proportionate share of 85 % of the tax savings, if any, in U.S. federal and state income tax that is realized by the Company (or are deemed to realize in certain circumstances) as a result of (i) the existing tax basis in certain assets of New Symbotic Holdings that is allocable to the relevant New Symbotic Holdings Common Units, (ii) any step-up in tax basis in New Symbotic Holdings’ assets resulting from the relevant Exchanges and certain distributions (if any) by New Symbotic Holdings and payments under the Tax Receivable Agreement, and (iii) tax benefits related to imputed interest deemed to be paid by the Company as a result of payments under the Tax Receivable Agreement. The Company records liabilities for amounts payable under the Tax Receivable Agreement in the period in which the payment is deemed to be probable. Further, payments under the Tax Receivable Agreement are only expected to be made in periods following the filing of a tax return in which the Company is able to utilize tax benefits described above to reduce its cash taxes paid to a taxing authority. Emerging Growth Company The Company is an emerging growth company (“EGC”), as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has not elected to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an EGC, can adopt the new or revised standard at the time private companies adopt the new or revised standard. 78 Table of Contents Recently Adopted Accounting Pronouncements In November 2019, the FASB issued ASU 2019-08. ASU 2019-08 requires entities to measure and classify share-based payments that are granted to a customer in conjunction with a revenue arrangement and are not in exchange for a distinct good or service in accordance with FASB ASC 718, Compensation – Stock Compensation . The Company adopted ASU 2019-08 on September 27, 2020. Accordingly, warrants to purchase Legacy Warehouse Class A Units issued to Walmart Inc. in April 2021 and May 2022 have been accounted for under ASU 2019-08. Refer to the warrant transactions policy above and Note 15 for additional information. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases . The ASU requires lessees to recognize the assets and liabilities on their balance sheet for the rights and obligations created by most leases and continue to recognize expenses on their income statements over the lease term. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements , which provides entities with a new transition method where comparative periods presented in the financial statements in the period of adoption will not need to be restated. Under this new transition method, an entity initially applies the provisions of the standard at the adoption date, versus at the beginning of the earliest period presented, and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As the Company qualifies as an EGC, the guidance is effective for annual reporting periods beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is in the process of implementing its lease accounting and related business processes, as well as its internal controls. The Company will adopt this standard as of September 25, 2022. The guidance is required to be adopted using a modified retrospective approach. Upon adoption, the Company expects to elect the transition relief package, permitted within the new standard, in which the Company will not reassess the classification of existing leases, whether any expired or existing contracts contain a lease, and if existing leases have any initial direct costs. The Company will also elect to not recognize leases with an initial term of twelve months or less on its balance sheet. The standard will not have a material impact on the Company’s consolidated balance sheet, consolidated statement of operations, consolidated statement of comprehensive loss, or consolidated statement of cash flows based on the nature and limited number of lease agreements. The most significant impact will be the recognition of right-of-use assets and lease liabilities for operating leases as the Company expects the obligations under existing operating leases, as disclosed in Note 6, Leases to the consolidated financial statements, will be reported in the consolidated balance sheet upon adoption. The Company is currently evaluating the potential changes from this guidance to future financial reporting and disclosures and designing and implementing related processes and controls. In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments , which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments. This may result in the earlier recognition of allowances for losses. The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. The Company does not expect the new standard to have a material impact on its consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes—Simplifying the Accounting for Income Taxes . The ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles as well as clarifying and amending existing guidance to improve consistent application. The guidance is effective for fiscal years beginning after December 15, 2021, and for interim periods within fiscal years beginning after December 15, 2022, with early adoption permitted. The Company does not expect the new standard to have a material impact on its consolidated financial statements. Other recent accounting pronouncements that are or will be applicable to the Company did not, or are not expected to, have a material impact on the Company’s present or future financial statements. 3. Business Combination On June 7, 2022 (the “Closing”), SVF 3 consummated the Business Combination pursuant to the Merger Agreement and Company Merger Agreement. In connection with the consummation of the Business Combination, the registrant changed its name from SVF Investment Corp. 3 to Symbotic Inc. As a result of and upon the effective time of the Domestication, among other things, each of the then-issued and outstanding Class A ordinary shares, par value $ 0.0001 per share, of SVF 3 (“SVF Class A Ordinary Shares”) automatically converted, on a one-for-one basis, into a share of Class A Common Stock, par value $ 0.0001 per share, of Symbotic (“Class 79 Table of Contents A Common Stock”), and each of the then-issued and outstanding Class B ordinary shares, par value $ 0.0001 per share, of SVF 3 (“SVF Class B Ordinary Shares”) automatically converted, on a one-for-one basis, into a share of Class B Common Stock, par value $ 0.0001 per share, of Symbotic (“Class B Common Stock”). In connection with the Closing, as contemplated by the Merger Agreement and Company Merger Agreement: • Legacy Warehouse merged with and into Symbotic Holdings, with Interim Symbotic surviving the merger; • Merger Sub merged with and into Interim Symbotic, with Interim Symbotic surviving the merger as a subsidiary of Symbotic; • at the effective time of the Merger (the “Effective Time”), New Symbotic Holdings entered into the Second Amended and Restated Limited Liability Company Agreement of Symbotic Holdings LLC (the “New Symbotic Holdings LLC Agreement”), which, among other things, provided that Symbotic will be the managing member of New Symbotic Holdings; and • at the Effective Time, each common unit of Interim Symbotic that was issued and outstanding immediately prior to the Effective Time was converted into the right to receive a number of common units in New Symbotic Holdings (“New Symbotic Holdings Common Units”), which New Symbotic Holdings Common Units entitle the holder to the distributions, allocations and other rights under the New Symbotic Holdings LLC Agreement, and an equal number of either shares of Class V-1 common stock, par value $ 0.0001 , of Symbotic (“Class V-1 Common Stock”) or shares of Class V-3 common stock, par value $ 0.0001 , of Symbotic (“Class V-3 Common Stock”), as well as the contingent right to receive certain earnout interests, in each case, as set forth in the Merger Agreement. Following the Business Combination, consistent with the Up-C structure, Legacy Warehouse unitholders hold their economic interests directly in New Symbotic Holdings. All other investors, including SVF 3 shareholders, hold their economic interests through Symbotic Inc. Legacy Warehouse unitholders will also hold voting interests in Symbotic Inc. in the form of voting stock with no economic rights (including rights to dividends and distributions upon liquidation). The Company issued an aggregate of 60,844,573 shares of Class V-1 Common Stock and 416,933,025 shares of Class V-3 Common Stock, each of which is exchangeable, together with a New Symbotic Holdings Common Unit, into an equal number of Class A Common Stock. Each of the then-issued and outstanding shares of Class B Common Stock were converted into a share of Class A Common Stock at the Effective Time. Pursuant to the Merger Agreement, the Legacy Warehouse unitholders are entitled to receive an aggregate of up to 20.0 million New Symbotic Holdings Common Units and an equal number of shares of the Company's Class V-1 Common Stock (“Earnout Shares”). The Earnout Shares are issued if the Class A Common Stock volume weighted average price of shares is greater than or equal to $ 12.00 (“Triggering Event I”), $ 14.00 (“Triggering Event II”), and $ 16.00 (“Triggering Event III”) per share for a certain period of time. A total of 6,666,667 Earnout Shares are issued upon Triggering Event I, 6,666,667 Earnout Shares are issued upon Triggering Event II, and 6,666,666 Earnout Shares are issued upon Triggering Event III. As of September 24, 2022, all three triggering events were achieved, which resulted in a one-time issuance of 20.0 million of New Symbotic Common Units and an equal number of shares of the Company’s Class V-1 Common Stock to certain existing stockholders of Symbotic Inc. In connection with the Domestication, the 9,040,000 shares held by SVF 3 insiders (“Sponsor Shares”) converted to the Company's Class A Common Stock. Pursuant to a letter agreement entered into in connection with the Merger Agreement (i) 60 % or 5,424,000 Sponsor Shares vested at the Closing, (ii) 20 % or 1,808,000 Sponsor Shares will vest at such time as Triggering Event I occurs on or before the seventh anniversary of the Closing, and (iii) 20 % or 1,808,000 of the Sponsor Shares will vest at such time as Triggering Event II occurs on or before the seventh anniversary of the Closing. Any Sponsor Shares that remain unvested after the seventh anniversary of the Closing will be forfeited. As a result of Triggering Event I and Triggering Event II being achieved, the remaining 40 %, or 3,616,000 Sponsor Shares vested, which resulted in an issuance of 3,616,000 Class A Common Stock. Concurrently with the execution of the Merger Agreement, the Company entered into subscription agreements with certain investors (the “PIPE”), pursuant to which the PIPE investors purchased, immediately prior to the closing, an aggregate of $ 205.0 million of the Company's Class A Common Stock at a purchase price of $ 10.00 per share, or 20.5 million Class A Common Stock. In connection with SVF 3's initial public offering (“IPO”), SVF 3 entered into a forward purchase agreement (the “FPA”) with SVF II SPAC Investment 3 (DE) LLC (the “Forward Purchase Investor"), an affiliate of the sponsor of SVF 3, SVF Sponsor III (DE) LLC, pursuant to which the Forward Purchase Investor elected to purchase an aggregate of $ 200.0 80 Table of Contents million Class A Common Stock for $ 10.00 per share, or 20.0 million Class A Common Stock. The Forward Purchase was consummated immediately prior to the consummation of the Merger. Following the Closing, the Company purchased from an affiliated entity of the Symbotic Founder Common Units in New Symbotic Holdings for $ 300.0 million. Upon the Closing, the Company received net cash proceeds of $ 84.7 million. The following table reconciles the elements of the Business Combination to the consolidated statements of cash flows and the consolidated statements of stockholders' equity for the year ended September 24, 2022 (in thousands): Amount Cash proceeds from SVF 3, net of redemptions $ 47,021 Cash proceeds from PIPE Financing 205,000 Cash proceeds from forward purchase agreement 200,000 Less: cash payment of transaction expenses and underwriting fees - SVF 3 ( 30,315 ) Net cash proceeds from the Business Combination and PIPE Financing 421,706 Less: repurchase by Symbotic Inc. of New Symbotic Holdings Common Units ( 300,000 ) Cash received for Class V-1 and Class V-3 Common Stock 70 Less: transaction expenses - Symbotic ( 37,104 ) Net contributions from the Business Combination $ 84,672 The total number of shares of the Company's common stock outstanding immediately following the Closing of the Business Combination was 528,441,744 , comprised as follows: Shares Class A - Public Stockholders 4,540,146 Class A - Sponsor Shares (1) (4) 5,624,000 Class A - Subscription Agreements 20,500,000 Class A - Forward Purchase Agreement 20,000,000 Class V-1 Legacy Warehouse Holders (1) (2) (3) 60,844,573 Class V-3 Legacy Warehouse Holders (1) (3) 416,933,025 Total Shares at Closing 528,441,744 (1) Excludes 20,000,000 Earnout Interests and 3,616,000 Sponsor Shares subject to vesting based on achievement of certain share price targets. (2) Excludes approximately 15,870,411 unvested warrant units. (3) Class V-1 and V-3 common stock are non-economic and carry one and three votes per share, respectively, whereas Class A Common Stock are economic shares and have one vote per share. (4) Includes 200,000 shares issued as part of a working capital loan settlement. The Company incurred $ 37.1 million in transaction costs relating to the Business Combination with SVF 3, which has been offset against additional paid-in capital in the Consolidated Statements of Changes in Redeemable Preferred and Common Units and Equity (Deficit). 4. Noncontrolling Interests Upon completion of the Business Combination, Symbotic Inc. issued an aggregate of 60,844,573 shares of Symbotic Class V-1 Common Stock and 416,933,025 shares of Symbotic Class V-3 Common Stock, excluding earnouts, each of which is exchangeable, together with a New Symbotic Holdings Common Unit, into an equal number of Class A Common Stock. Class V-1 and Class V-3 Common Stock are non-economic voting shares in Symbotic Inc. where Class V-1 Common Stock have one vote per share and Class V-3 Common Stock have three votes per share. Class V-3 Common Stock can convert into Class V-1 Common Stock in certain situations, including automatically, seven years following the Business Combination. The financial results of Legacy Warehouse were consolidated into Symbotic Inc. and the share of the consolidated net loss for the period June 7, 2022 through September 24, 2022 were allocated to noncontrolling interests. 81 Table of Contents The following table summarizes the ownership of Symbotic Inc. stock for the period beginning June 7, 2022, the closing of the Business Combination, and ending September 24, 2022. Class A Common Stock Class V-1 and Class V-3 Common Stock Total Class A Common Stock Class V-1 and Class V-3 Common Stock Total Beginning of period — — — Issuances 56,111,651 497,777,598 553,889,249 Exchanges 1,607,185 ( 1,607,185 ) — End of period 57,718,836 496,170,413 553,889,249 10.4 % 89.6 % 100 % 5. Revenue Disaggregation of Revenue The Company provides disaggregation of revenue based on product and service type on the consolidated statements of operations as it believes these categories best depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Contract Balances The following table provides information about accounts receivable, unbilled accounts receivable, and contract liabilities from contracts with customers (in thousands): September 24, 2022 September 25, 2021 Accounts receivable $ 3,412 $ 63,370 Unbilled accounts receivable $ 101,816 $ — Contract liabilities $ 425,709 $ 475,956 The change in the opening and closing balances of the Company’s contract liabilities primarily results from the timing difference between the Company’s performance and the customer’s payment. The Company’s performance obligations are typically satisfied over time as work is performed. Payment from customers can vary, and is often received in advance of satisfaction of the performance obligations, resulting in a contract liability balance. During the years ended September 24, 2022 and September 25, 2021, the Company recognized $ 359.5 million and $ 120.3 million, respectively, of the contract liability balance as revenue upon transfer of the products or services to customers. Remaining Performance Obligations Remaining performance obligations represent the aggregate amount of the transaction price allocated to performance obligations not delivered, or partially undelivered, at the end of the reporting period. Remaining performance obligations include deferred revenue plus unbilled amounts not yet recorded in deferred revenue. Remaining performance obligation estimates are subject to change and are affected by several factors, including terminations, changes in scope of contracts, periodic revalidation, adjustments for revenue that have not materialized, adjustments for inflation, and adjustments for currency. For contracts with a duration of greater than one year, the transaction price allocated to performance obligations that are unsatisfied as of September 24, 2022 was $ 11.1 billion, which is primarily comprised of undelivered or partially undelivered Systems under contract, and which a substantial majority relates to undelivered or partially undelivered Systems in connection with the Master Automation Agreement with Walmart to implement systems in all of Walmart’s 42 regional distribution centers. The definition of remaining performance obligations excludes: (i) any variable consideration, and (ii) those contracts that provide the customer with the right to cancel or terminate the contract without incurring a substantial penalty. The Company expects to recognize approximately 8 % of its remaining performance obligations as revenue in the next 12 months, and the remaining thereafter, depending on the timing of System installation timelines. The Company does not disclose the value of remaining performance obligations for contracts with an original expected duration of one year or less. 6. Leases The Company leases certain real estate under noncancellable operating leases. These leases expire at various dates through June 2026. 82 Table of Contents Net rental expense under operating leases amounted to $ 2.4 million, $ 2.3 million, and $ 2.0 million for the years ended September 24, 2022, September 25, 2021, and September 26, 2020, respectively. Future minimum lease payments under the noncancellable operating leases as of September 24, 2022 are as follows (in thousands): Total Fiscal year 2023 $ 2,301 Fiscal year 2024 2,335 Fiscal year 2025 2,037 Fiscal year 2026 557 Fiscal year 2027 and thereafter — Total future minimum payments $ 7,230 7. Inventories Inventories at September 24, 2022 and September 25, 2021 consist of the following (in thousands): Year Ended September 24, 2022 September 25, 2021 Raw materials and components $ 88,999 $ 33,065 Finished goods 2,901 496 Total inventories $ 91,900 $ 33,561 8. Property and Equipment Property and equipment at September 24, 2022 and September 25, 2021 consists of the following (in thousands): Year Ended September 24, 2022 September 25, 2021 Computer equipment and software, furniture and fixtures, and test equipment $ 45,818 $ 34,268 Leasehold improvements 2,904 2,909 Total property and equipment 48,722 37,177 Less accumulated depreciation ( 23,844 ) ( 18,560 ) Property and equipment, net $ 24,878 $ 18,617 Depreciation expense was $ 5.5 million for the year ended September 24, 2022, $ 4.0 million for the year ended September 25, 2021, and $ 5.3 million for the year ended September 26, 2020. 9. Intangible Assets Intangible assets acquired in connection with a 2014 business acquisition are being amortized on a straight-line basis over their estimated useful lives. The estimated weighted average useful life of the identified intangible assets are as follows: Estimated Weighted Average Useful Life Customer relationships 10 years Trademarks 3 years 83 Table of Contents Amortization expense was $ 0.5 million for the year ended September 24, 2022, $ 0.5 million for the year ended September 25, 2021, and $ 0.4 million for the year ended September 26, 2020. The following table presents the Company’s intangible assets as of the dates indicated (in thousands): Year Ended September 24, 2022 September 25, 2021 Intangibles, gross Accumulated amortization Intangibles, net Intangibles, gross Accumulated amortization Intangibles, net Customer relationships $ 4,335 $ ( 3,685 ) $ 650 $ 4,656 $ ( 3,492 ) $ 1,164 Trademarks 729 ( 729 ) — 782 ( 782 ) — Intangible assets $ 5,064 $ ( 4,414 ) $ 650 $ 5,438 $ ( 4,274 ) $ 1,164 The following table presents the estimated future annual pre-tax amortization expense of definite-lived intangible assets as of the date indicated (in thousands): Total Fiscal year 2023 $ 433 Fiscal year 2024 217 Fiscal year 2025 — Total $ 650 10. Income Taxes The components of income/(loss) before provision for income taxes are as follows: Year Ended September 24, 2022 September 25, 2021 September 26, 2020 Income/(Loss) before income tax expense: U.S. $ ( 144,119 ) $ ( 126,549 ) $ ( 111,676 ) Foreign 5,030 4,235 2,108 Total $ ( 139,089 ) $ ( 122,314 ) $ ( 109,568 ) There is no provision for income taxes for the years ended September 24, 2022 and September 25, 2021. For the year ended September 26, 2020, there was a provision for income taxes of less than $ 0.1 million for the Company’s current provision for its foreign jurisdiction. 84 Table of Contents The following is a reconciliation of the expected U.S. Federal income tax rate to the effective tax rate for the years ended September 24, 2022, September 25, 2021, and September 26, 2020 (dollars in thousands): September 24, 2022 September 25, 2021 September 26, 2020 Loss before income tax $ ( 139,089 ) $ ( 122,314 ) $ ( 109,568 ) Tax on pre-tax loss ( 29,209 ) ( 25,686 ) ( 23,009 ) Loss not subject to tax 27,767 25,686 23,009 State income tax rate ( 744 ) — — Permanent differences 46 889 443 Adjustment for foreign income tax rate differential 1,346 233 116 Credits ( 374 ) — — Valuation allowance 1,168 ( 993 ) ( 611 ) Other — ( 129 ) 5 Total income tax $ — $ — $ ( 47 ) The following is a summary of the significant components of the Company’s net deferred tax assets as of September 24, 2022 and September 25, 2021 (in thousands): Year Ended September 24, 2022 September 25, 2021 Deferred tax assets: Net operating losses $ 11,361 $ 11,265 Investment in Symbotic Holdings, LLC 146,894 — Tax Receivable Agreement 5,209 — Other 68 38 Credits 5,487 1,993 Total deferred tax assets before valuation allowance 169,019 13,296 Valuation allowance ( 168,308 ) ( 12,608 ) Total deferred tax assets after valuation allowance 711 688 Total deferred tax liabilities ( 711 ) ( 688 ) Net deferred tax asset $ — $ — As a result of the Business Combination, the Company was appointed as the sole managing member of Symbotic Holdings. Prior to the close of the Business Combination, the Company's financial reporting predecessor, Legacy Warehouse, was treated as a pass-through entity for tax purposes and no provision, except for certain foreign subsidiaries, was made in the consolidated financial statements for income taxes. Any income tax items for the periods prior to the close of the Business Combination are related to the applicable subsidiary companies that are subject to foreign income tax. Symbotic Holdings is a limited liability company that is treated as a partnership for U.S. federal income tax purposes and for most applicable state and local income tax purposes. As a partnership, Symbotic Holdings is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Symbotic Holdings is passed through to and included in the taxable income or loss of its members, including the Company, on a pro rata basis, subject to applicable tax regulations. The Company is subject to U.S. federal income taxes, in addition to state and local income taxes, with respect to its allocable share of any taxable income or loss of Symbotic Holdings. The Company's foreign subsidiaries are subject to income tax in its local jurisdictions. The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the estimated future tax consequences attributable to temporary differences between the 85 Table of Contents consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax base. Deferred tax assets and liabilities are determined on the basis of the differences between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the temporary differences are expected to be settled or recovered. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future income, and tax planning strategies in making this assessment. Valuation Allowance The Company has established a valuation allowance related to domestic and foreign deferred tax assets on deductible temporary differences, tax losses, and tax credit carryforwards. The valuation allowance at September 24, 2022 of $ 168.3 million consists of $ 155.5 million in the United States and $ 12.8 million in foreign jurisdictions. The increase in the valuation allowance in fiscal year 2022 of $ 155.7 million primarily relates to the Company’s investment in Symbotic Holdings LLC, tax receivable agreement, and tax carryforward attributes. Net Operating Losses As of September 24, 2022, the Company had a U.S. federal net operating loss carryforwards of $ 10.3 million and gross state net operating loss carryforwards of $ 8.9 million. U.S. federal and certain state net operating losses generated in 2018 and beyond have no expiration. The remaining state net operating losses expire at various dates through 2042. As of September 24, 2022, the Company had Canadian net operating loss (“NOL”) carryforwards of approximately $ 32.7 million federal and $ 31.1 million provincial. The Canadian NOL carryforwards expire in various years through 2039, and are subject to review and possible adjustment by the applicable taxing authority. Utilization of the domestic federal or Canadian NOL carryforwards may be subject to annual limitations due to ownership changes that have occurred previously or that could occur in the future. The Company has not completed any studies to determine if any of these events have occurred that would result in such limitations. Accordingly, further limitations could arise upon the completion of such studies. The Company’s undistributed earnings are not permanently reinvested, however, these earnings are not material. Uncertain Tax Positions The Company accounts for uncertain tax positions using a more likely than not threshold for recognizing and resolving uncertain tax positions. The Company evaluates uncertain tax positions on an annual basis and adjusts the level of the liability to reflect any subsequent changes in the relevant facts surrounding the uncertain positions. For the years ended September 24, 2022 and September 25, 2021, the Company had no unrecognized tax benefits. Tax Receivable Agreement As of September 24, 2022, future payments under the TRA with respect to the purchase of Symbotic Holdings Units which occurred as part of the Business Combination and through September 24, 2022 are expected to be $ 112.1 million. Payments made under the TRA represent payments that otherwise would have been made to taxing authorities in the absence of attributes obtained by the Company as a result of exchanges by its pre-IPO members. Such amounts will be paid only when a cash tax savings is realized as a result of attributes subject to the TRA. That is, payments under the TRA are only expected to be made in periods following the filing of a tax return in which the Company is able to utilize certain tax benefits to reduce its cash taxes paid to a taxing authority. The impact of any changes in the projected obligations under the TRA as a result of changes in the geographic mix of the Company’s earnings, changes in tax legislation and tax rates or other factors that may impact the Company’s tax savings will be reflected in income before taxes on the consolidated statement of operations in the period in which the change occurs. As of September 24, 2022, no TRA liability was recorded based on current projections of future taxable income taking into consideration the Company’s full valuation allowance against its net deferred tax asset. 11. Employee Benefit Plans Symbotic sponsors a defined-contribution benefit plan under the provisions of Section 401(k) of the Internal Revenue Code. This plan covers substantially all of the Company’s employees meeting eligibility criteria and contributions to the plan are determined by the plan provisions or at the discretion of the Board of Managers. Symbotic contributions to the plan were $ 2.4 million, $ 1.9 million, and $ 1.6 million for the years ended September 24, 2022, September 25, 2021, and September 26, 2020, respectively. 86 Table of Contents Symbotic Canada sponsors a Registered Retirement Savings Plan that qualifies as a defined-contribution benefit plan, which covers a portion of Symbotic Canada’s management. Symbotic Canada contributions to the plan were $ 0.3 million, $ 0.2 million, and $ 0.3 million for the years ended September 24, 2022, September 25, 2021, and September 26, 2020, respectively. 12. Fair Value Measures The fair value measurement accounting standards establish a framework for measuring fair value and expand disclosures about fair value measurements. The standard does not require any new fair value measurements; rather, it applies to other accounting pronouncements that require or permit fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. This pronouncement also establishes a three-level hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels are defined as follows: Level 1—inputs to the valuation methodology are quoted prices (unadjusted) for an identical asset or liability in an active market Level 2—inputs to the valuation methodology include quoted prices for a similar asset or liability in an active market or model-derived valuations in which all significant inputs are observable for substantially the full term of the asset or liability Level 3—inputs to the valuation methodology are unobservable and significant to the fair value measurement of the asset or liability The following table presents the Company’s financial assets measured and recorded at fair value on a recurring basis using the above input categories as of September 24, 2022 and September 25, 2021 (in thousands): Year Ended September 24, 2022 September 25, 2021 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Money market funds $ 333,388 $ — $ — $ 333,388 $ 152,204 $ — $ — $ 152,204 Total assets $ 333,388 $ — $ — $ 333,388 $ 152,204 $ — $ — $ 152,204 The Company had no liabilities measured and recorded at fair value on a recurring basis as of September 24, 2022 and September 25, 2021. 13. Related Party Transactions Insurance Coverage The Company is covered under the C&S Wholesale Grocers, Inc. (“C&S”) workers’ compensation, general liability, auto liability risk, and technology errors and omissions insurance which C&S manages through the utilization of high deductible insurance policies. C&S is an affiliate of the Company as the same individual, certain of his family members and certain affiliated entities and trusts of the individual and his family members, in the aggregate, control both entities. The Company paid $ 2.3 million, $ 1.8 million, and $ 1.6 million to C&S related to this insurance coverage during the years ended September 24, 2022, September 25, 2021, and September 26, 2020, respectively. The amounts were expensed to operations as incurred. Aircraft Time Sharing Agreement Effective during fiscal year 2022, the Company has two separate agreements with C&S whereby the Company's officials, employees, and guests are permitted to use the two C&S aircrafts on an as-needed and as-available basis, with no minimum usage being required (the “Agreements”). As there is no defined period of time stated within these Agreements, the Company does not consider these to meet the definition of a lease, and as such, records payments in the period in which the obligation for the payment is incurred. The Company incurred expense of $ 0.7 million related to usage of the aircrafts for the year ended September 24, 2022. 87 Table of Contents Usage of Facility and Employee Services In the fourth quarter of fiscal year 2022, the Company entered into a license arrangement with C&S whereby C&S is providing receiving and logistics services for the Company within C&S distribution facilities. The arrangement also provides for C&S employees assisting with certain of the Company’s operations. The Company incurred $ 0.2 million of expense related to this arrangement for the year ended September 24, 2022. Customer Contracts The Company has customer contracts with C&S relating to software maintenance services and the operations of a warehouse automation system. Revenue of $ 3.5 million, $ 2.9 million, and $ 2.4 million and cost of revenue of $ 2.3 million, $ 2.2 million, $ 2.1 million was recognized for the years ended September 24, 2022, September 25, 2021, and September 26, 2020, respectively, relating to these customer contracts. There were no accounts receivable due from C&S at September 24, 2022 and September 25, 2021. There was $ 0.5 million of deferred revenue relating to contracts with C&S at September 24, 2022 and September 25, 2021. 14. Commitments and Contingencies Purchase Obligations The Company has contractual obligations to purchase goods or services, which specify significant terms, including fixed or minimum quantities to be purchased and fixed minimum, or variable price provisions. The majority of the purchase commitments covered by these arrangements are for periods of less than one year and aggregate to approximately $ 757.0 million as of September 24, 2022. Lease Commitments The Company leases certain of its facilities under operating leases expiring in various years through 2026. Refer to Note 6, Leases for a schedule of future lease payments under non-cancellable leases as of September 24, 2022. Warranty The Company provides a limited warranty on its warehouse automation system and has established a reserve for warranty obligations based on estimated warranty costs. The reserve is included as part of accrued expenses and other long-term liabilities in the accompanying consolidated balance sheets. Activity related to the warranty accrual was as follows (in thousands): Year Ended September 24, 2022 September 25, 2021 September 26, 2020 Balance at beginning of period $ 3,735 $ — $ 450 Provision 7,329 4,652 — Warranty usage ( 2,060 ) ( 917 ) ( 450 ) Balance at end of period $ 9,004 $ 3,735 $ — Contingencies Liabilities for any loss contingencies arising from claims, assessments, litigation, fines, penalties, and other matters are recorded when it is probable that the liability has been incurred and the amount of the liability can be reasonably estimated. As of September 24, 2022, the Company had made appropriate provisions related to such matters and does not believe that such matters will have a material adverse effect on the Company’s consolidated operations, financial position, or liquidity. Indemnifications In the ordinary course of business, the Company enters into various contracts under which it may agree to indemnify other parties for losses incurred from certain events as defined in the relevant contract, such as litigation, regulatory penalties, or claims relating to past performance. Such indemnification obligations may not be subject to maximum loss clauses. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification obligations. As a result, the Company believes the estimated fair value of these obligations is not material. Accordingly, the Company has no liabilities recorded for these obligations as of September 24, 2022 and September 25, 2021. 88 Table of Contents 15. Equity Prior to the Business Combination, the Company had authorized five classes of membership interests, consisting of a class of common units of the Company known as the Class A Common Units (the “Class A Units”), a class of preferred units of the Company known as the Class B Preferred Units (the “Class B Units”), a class of preferred units of the Company known as the Class B-1 Preferred Units (the “Class B-1 Units”), a class of preferred units of the Company known as the Class B-2 Preferred Units (the “Class B-2 Units”, and together with the Class B Units and the Class B-1 Units, the “Preferred Units”) and an additional class of common units of the Company to be granted to employees, officers, and directors pursuant to an incentive plan, known as the Class C Common Units (the “Class C Units” and, together with the Class A Units, the “Common Units,” and the Common Units together with the Preferred Units, the “Units”). Following the Business Combination, the Company has three classes of common stock, Class A Common Stock, Class V-1 Common Stock, and Class V-3 Common Stock (and together, the “Common Stock”). As the Business Combination is accounted for as a reverse recapitalization, all periods prior to the Business Combination have been retroactively adjusted using the Exchange Ratio as stipulated by the Merger Agreement for the equivalent number of shares outstanding immediately after the Merger to effect the reverse recapitalization. The Class A Units were converted into Common Stock using an exchange ratio of 61.28 per share, the Class B Units were converted into Common Stock using an exchange ratio of 47,508,300.00 per share, the Class B-1 Units were converted into Common Stock using an exchange ratio of 24,031,400.00 per share, and the Class C Units were converted into Common Stock using an exchange ratio of 58.15 per share. This is presented within the consolidated statements of changes in redeemable preferred and common units and equity (deficit). Class A Common Stock The Company is authorized to issue 3,000,000,000 shares of Class A Common Stock, par value $ 0.0001 per share, of which 57,718,836 shares were issued and outstanding on September 24, 2022. Voting Rights Each holder of Class A Common Stock is entitled to one vote for each share of Class A Common Stock held of record by such holder on all matters submitted to a vote of the stockholders. Holders of Class A Common Stock will vote together with other holders of common stock as a single class on all matters (or, if any holders of any series of preferred stock are entitled to vote together with the holders of common stock, as a single class with the holders of such series of preferred stock). Notwithstanding the foregoing, the holders of shares of any series of common stock will be entitled to vote as a separate class upon any amendment to the Company’s certificate of incorporation (“Charter”) (including by merger, consolidation, reorganization or similar event) that would adversely alter or change the powers, preferences or special rights of such series of common stock. Except as expressly required by law, holders of common stock, as such, will not be entitled to vote on any amendment to the Charter (including any certificate of designation) that relates solely to the rights, powers, preferences (or the qualifications, limitations or restrictions thereof) or other terms of one or more outstanding series of preferred stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to the Charter (including any certificate of designation) or pursuant to the Delaware General Corporation Law (“DGCL”). Dividend Rights Subject to the rights and preferences of any holders of any outstanding series of preferred stock, the holders of Class A Common Stock will be entitled to the payment of dividends and other distributions of cash, stock or property on the Class A Common Stock when, as and if declared by the board of directors in accordance with law. Liquidation Rights Subject to the rights and preferences of any holders of any shares of any outstanding series of preferred stock, in the event of any liquidation, dissolution or winding up, whether voluntary or involuntary, the Company’s funds and assets that may be legally distributed to its stockholders will be distributed among the holders of the then-outstanding Class A Common Stock pro rata in accordance with the number of shares of Class A Common Stock held by each such holder. Other Rights The holders of Class A Common Stock have no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the Class A Common Stock. The rights, preferences, and privileges of holders of the Class A Common Stock will be subject to those of the holders of any shares of the preferred stock the Company may issue in the future. 89 Table of Contents Class V-1 Common Stock and Class V-3 Common Stock The Company is authorized to issue 1,000,000,000 shares of Class V-1 Common Stock and 450,000,000 shares of Class V-3 Common Stock, both which have a par value of $ 0.0001 and all of which were issued to the Legacy Warehouse unitholders in connection with the Closing of the Business Combination, as described in Note 3, Business Combination . As of September 24, 2022 there were 79,237,388 shares of Class V-1 and 416,933,025 shares of Class V-3 Common Stock outstanding. In the fourth quarter of fiscal year 2022, the Legacy Warehouse unitholders exchanged 1,607,185 shares of Class V-1 Common Stock, together with a corresponding number of New Symbotic Holdings Common Units, into an equal number of Class A Common Stock. The Company did not receive any proceeds as a result of this exchange. Voting Rights Each holder of Class V-1 Common Stock is entitled to one vote for each share of Class V-1 Common Stock held of record by such holder on all matters submitted to a vote of the stockholders, and each holder of Class V-3 Common Stock is entitled to three votes for each share of Class V-3 Common Stock held of record by such holder on all matters submitted to a vote of the stockholders. Holders of Class V-1 Common Stock and Class V-3 Common Stock will vote together with other holders of common stock as a single class on all matters (or, if any holders of any series of preferred stock are entitled to vote together with the holders of common stock, as a single class with the holders of such series of preferred stock). Notwithstanding the foregoing, the holders of shares of any series of common stock will be entitled to vote as a separate class upon any amendment to the Charter (including by merger, consolidation, reorganization or similar event) that would adversely alter or change the powers, preferences or special rights of such series of common stock. Except as expressly required by law, holders of common stock, as such, will not be entitled to vote on any amendment to the Charter (including any certificate of designation) that relates solely to the rights, powers, preferences (or the qualifications, limitations or restrictions thereof) or other terms of one or more outstanding series of preferred stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to the Charter (including any certificate of designation) or pursuant to the DGCL. Dividend Rights Except as provided in the Charter with respect to certain stock adjustments, dividends of cash or property may not be declared or paid on shares of Class V-1 Common Stock or Class V-3 Common Stock. Liquidation Rights The holders of shares of Class V-1 Common Stock and Class V-3 Common Stock will not be entitled to receive any the Company’s assets in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company. Other Rights The holders of Class V-1 Common Stock and Class V-3 Common Stock have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the Class V-1 Common Stock or Class V-3 Common Stock. The rights, preferences and privileges of holders of the Class V-1 Common Stock and Class V-3 Common Stock will be subject to those of the holders of any shares of the preferred stock the Company may issue in the future. Subject to the terms of the New Symbotic Holdings LLC Agreement, holders of New Symbotic Holdings Common Units may cause the Company to redeem all or any portion of such holder’s New Symbotic Holdings Common Units, and in connection with such redemption, the Company may be required to deliver Class A common units to such holder. Conversion of Class V-3 Common Stock Class V-3 Common Stock may convert into Class V-1 Common Stock in certain situations, including automatically seven years following the Business Combination. Transfer of Class V-1 Common Stock and Class V-3 Common Stock No holder of Class V-1 Common Stock or Class V-3 Common Stock may transfer such shares to any person unless such holder also simultaneously transfers an equal number of such holder’s New Symbotic Holdings Common Units to the same person in accordance with the terms of the New Symbotic Holdings LLC Agreement. Upon a transfer of New Symbotic Holdings Common Units in accordance with the New Symbotic Holdings LLC Agreement, an equal number of shares of Class V-1 Common Stock and/or Class V-3 Common Stock that correspond to such New Symbotic Holdings Common Units will automatically and simultaneously be transferred to the same transferee of such New Symbotic Holdings Common Units. Any attempted or purported transfer of shares of Class V-1 Common Stock and Class V-3 Common Stock in violation of the foregoing restrictions will be null and void. 90 Table of Contents Cancellation of Class V-1 Common Stock and Class V-3 Common Stock In the event that any outstanding share of Class V-1 Common Stock or Class V-3 Common Stock ceases to be held directly or indirectly by a holder of a New Symbotic Holdings Common Units, such share will automatically be transferred to Symbotic and cancelled for no consideration. Preferred Stock The Company is authorized to issue 50,000,000 shares of undesignated preferred stock, par value $ 0.0001 per share, of which no shares were issued and outstanding on September 24, 2022. Legacy Warehouse Membership Interests For the year ended September 25, 2021, the Company was authorized to issue up to 6,426,208 Units in the aggregate, of which 5,997,632 are designated as Class A Units, one Unit is designated as a Class B Unit, two Units are designated as Class B-1 Units, two Units are designated as Class B-2 Units and 428,571 Units are designated as Class C Units. As of September 25, 2021, there were 5,997,632 Class A Units, one Class B Unit, one Class B-1 Unit and 428,571 Class C Units outstanding. During the periods ended September 24, 2022 and September 25, 2021, the Company received no member contributions from the holder of the Class B-1 Unit. The Company recorded a cumulative preferred return with respect to the holder of the Class B-1 Unit of $ 8.1 million and $ 11.1 million for the years ended September 24, 2022 and September 25, 2021, respectively. The Company recorded a cumulative preferred return with respect to the holder of the Class B Unit of $ 16.1 million and $ 21.9 million for the years ended September 24, 2022 and September 25, 2021, respectively. The following conditions applied to the classes of membership interests authorized prior to the Business Combination: Voting Rights Each holder of Class A Units and Class C Units shall have the right to one vote per the Class A Unit or Class C Unit, respectively. Except as required by law, the Preferred Units do not have any voting rights. Preferred Return The holder of the Preferred Units shall be entitled to receive, in preference to the holders of the Class A Units and the Class C Units, a cumulative preferred return at a rate per annum of 5 %, compounded annually, on the unreturned preferred capital of the holder’s Preferred Units (the “Preferred Return”). The Class A Units and Class C Units have no stated returns or dividends. Liquidation Rights In the event of liquidation, dissolution, or winding up of the Company, the five classes of membership interests rank in the following order of priority: the Class B-2 Units are the most senior, followed by Class B-1 Unit, then the Class B Unit, and then both the Class A Units and Class C Units treated as a single class. The holders of the Preferred Units are entitled to a liquidation preference equal to the sum of the Unreturned Preferred Capital (defined as the initial investment and subsequent contributions, less distributions, if any) and the applicable unpaid Preferred Return (collectively, the “Liquidation Preference”) in the order described in the preceding sentence, prior to any distribution to holders of the Class A Units and Class C Units. Upon the payment in full of the Liquidation Preference, any remaining assets available for distribution shall be distributed ratably to the holders of the Class A Units and Class C Units, however, for the Class C Units only to the extent that the value exceeds the applicable Hurdle Value (see Note 17). Any remaining value that does not exceed the Hurdle Value for any particular Class C Unit shall be distributed to the holders of Class A Units (and any other Class C Units entitled to share in the distribution) based on their respective pro rata holdings of all such Class A (and Class C) Units. The Company classifies its redeemable Preferred Units (Class B, B-1, and B-2 Units) as mezzanine equity, or outside of members’ deficit, because the units contain liquidation features that are not solely within the Company’s control. As of September 25, 2021, the aggregate Liquidation Preference for the Class B and B-1 Units was $ 691.3 million. Redemption Rights Upon written notice by the holders of a majority of a class of Preferred Units, the Company shall redeem all of the outstanding Preferred Units of such class. The redemption price payable to each holder of the class of Preferred Units shall equal the Liquidation Preference of the Preferred Units being redeemed. The Class C Units are subject to a put feature that allow holders to redeem vested Class C Units, subject to certain terms and conditions (see Note 17). The Class A Units do not have any redemption rights. Accordingly, the Preferred Units and the Class C Units are classified outside of permanent members’ deficit because they are redeemable by the holders. 91 Table of Contents 16. Net Loss per Share Basic earnings per share of Class A Common Stock is computed by dividing net loss attributable to common shareholders by the weighted-average number of shares of Class A Common Stock outstanding during the period. Diluted earnings per share of Class A Common Stock is computed by dividing net loss attributable to common shareholders adjusted for the assumed exchange of all potentially dilutive securities, by the weighted-average number of shares of Class A Common Stock outstanding adjusted to give effect to potentially dilutive elements. Diluted loss per share for all periods presented is the same as basic loss per share as the inclusion of the potentially issuable shares would be anti-dilutive. Prior to the Business Combination, the membership structure of Legacy Warehouse included units which shared in the profits and losses of Legacy Warehouse. The Company analyzed the calculation of earnings per unit for periods prior to the Business Combination and determined that it resulted in values that would not be meaningful to the users of these consolidated financial statements. Therefore, earnings per share information has not been presented for periods prior to the Business Combination on June 7, 2022. The basic and diluted earnings per share for the period ended September 24, 2022 represent only the period of June 8, 2022 to September 24, 2022. The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A Common Stock (in thousands, except per share information): Year Ended September 24, 2022 Numerator - basic and diluted Net loss $ ( 139,089 ) Less: Net loss attributable to Warehouse Technologies LLC unitholders prior to the Business Combination ( 72,134 ) Less: Net loss attributable to the noncontrolling interest post Business Combination ( 60,092 ) Net loss attributable to common shareholders $ ( 6,863 ) Denominator - basic and diluted Weighted-average shares of Class A Common Stock outstanding 54,086,381 Loss per share of Class A Common Stock - basic and diluted $ ( 0.13 ) 17. Stock-Based Compensation and Warrant Units In June 2022, the Company’s stockholders approved the Symbotic Inc. 2022 Omnibus Incentive Compensation Plan (“2022 Plan”). The 2022 Plan allows for the issuance of stock options, stock appreciation rights, restricted shares, restricted stock units, dividend equivalent rights, and other equity-based or equity-like awards that the Compensation Committee of the Board of Directors determines to be consistent with the purposes of the 2022 Plan and the interests of the Company for up to 59,800,928 shares of common stock to employees, directors, and consultants of the Company. Additionally, up to 8,500,000 shares may be issued in connection with the exchange of awards under the 2012 Value Appreciation Plan (described below) or the Amended and Restated 2018 Long Term Incentive Plan (“Legacy Plans”). The Company will no longer issue new awards under the Legacy Plans as all future grants will be issued under the 2022 Plan, or another equity plan that is approved by the Compensation Committee of the Board of Directors. Awards issued under the 2022 Plan have a maximum term of 10 years. The following table summarizes the components of total stock-based compensation included in the Company’s consolidated statements of operations for the year ended September 24, 2022 (in thousands): September 24, 2022 Research and development 9,671 Selling, general, and administrative 17,187 Total stock-based compensation expense $ 26,858 92 Table of Contents The following table summarizes the different types of RSUs granted by the Company during the year ended September 24, 2022: September 24, 2022 RSUs (service-based vesting conditions) 13,784,743 RSUs (performance-based vesting conditions) 578,453 Total 14,363,196 RSUs represent the right to receive one share of the Company’s common stock upon vesting. RSUs are granted at the discretion of the Board of Directors, a committee thereof or, subject to defined limitations, the Chief Executive Officer of the Company, acting as a committee of one director, to whom such authority has been delegated. The Company has issued RSUs that vest based on the passage of time assuming continued service with the Company, and RSUs that vest only upon the achievement of defined performance metrics tied primarily to revenue and earnings targets. For RSUs with service-based vesting conditions, the fair value is calculated based on the Company’s closing stock price on the date preceding the date of grant, and the stock-based compensation expense is being recognized over the vesting period. Most RSUs with service-based vesting provisions vest in installments over a three-year period following the grant date. For RSUs with performance-based vesting conditions, management measures compensation expense based upon a review of the Company’s expected achievement against specified financial performance targets. Such compensation cost is being recorded to the extent management has deemed that such awards are probable of vesting based upon the expected achievement against the specified targets. On a periodic basis, management reviews the Company’s expected performance and adjusts the compensation cost, if needed, at such time. The following table summarizes the RSU activity for the year ended September 24, 2022: Shares Weighted Average Grant Date Fair Value Outstanding at September 26, 2021 — $ — Granted 14,363,196 15.81 Vested ( 1,831,505 ) 15.81 Forfeited ( 166,104 ) 15.81 Outstanding at September 24, 2022 12,365,587 $ 15.81 The total fair value of RSUs that vested during the year ended September 24, 2022 was $ 29.0 million including $ 24.4 million for vested RSUs issued in exchange for vested value appreciation plan units (“VAP Units”). The grant-date fair value of each RSU is calculated based upon the Company’s closing stock price on the date preceding the date of grant. For the year ended September 24, 2022 the weighted-average fair value of RSU awards granted was $ 15.81 per share. As of September 24, 2022, 12.4 million RSUs were outstanding and unvested, with an aggregate value of $ 130.3 million and a weighted average remaining vesting period of approximately 2.26 years. These RSUs are expected to vest on various dates through 2027. Class C Units Prior to the Business Combination, the Company periodically granted Class C Units to employees, officers, and directors which vest over a period of up to five years , as determined by the Board of Managers. Each issuance of Class C Units entitles its holder to share in the appreciation in the fair market value (“FMV”) of the Company from the date of issuance, subject to any preferences or priorities payable to the Preferred Units. The Board shall establish a “Hurdle Value”, which shall not be less than the FMV on the date of such issuance of such Class C Unit and such units shall share only in appreciation of the FMV in excess of the Hurdle Value. Any distributions made with respect to Class C Units that have not yet become vested are held in a separate account for the benefit of the holder of the unvested units until such time as the units vest. The Class C Units are subject to a put feature that allow holders to redeem vested Class C Units. The put feature requires the holder to hold the units for at least six months from the date the Class C Units vest to the earliest date the put feature can be exercised. Accordingly, since the holder is exposed to the economic risks and rewards of unit ownership, the Class C Units are treated as equity classified awards. However, because redemption of the Class C Units is outside of the control of the Company: (i) the Class C Units are classified outside of permanent members’ deficit, and (ii) the carrying value of Class C Units is adjusted to redemption value at each reporting period through a charge to members’ deficit (until such time as the Class C 93 Table of Contents Units are redeemed or forfeited). As further described in Note 15, Equity , the Class C Units were converted into Common Stock upon consummation of the Business Combination. The following is a summary of Class C Units outstanding and vested immediately prior to the consummation of the Business Combination: Class C Units Balance at September 28, 2019 428,571 Granted 42,587 Redeemed — Forfeited ( 42,587 ) Balance at September 26, 2020 428,571 Granted 51,543 Redeemed — Forfeited ( 51,543 ) Balance at September 25, 2021 428,571 Granted 18,107 Redeemed — Forfeited ( 18,107 ) Balance at June 7, 2022 428,571 Vested at June 7, 2022 375,930 The Company recognized less than $ 0.1 million as compensation expense associated with the Class C Units for the year ended September 24, 2022, and $ 0.1 million as compensation expense for the years ended September 25, 2021, and September 26, 2020. Valuation of Class C Units The fair value of Class C Units was determined by the Company’s Board of Managers based on enterprise valuations performed by management with the assistance of a third-party valuation firm. For fiscal year 2022 leading up to the Business Combination and for the year ended September 25, 2021, the Company’s total equity value was determined using a combination of the income approach and market approach under the Hybrid Method. Under this approach, a probability-weighted expected return method was applied where two types of future event scenarios were considered: an IPO scenario and a non-IPO scenario for all other potential future exits. The relative probabilities between the future exit scenarios were based on an analysis of performance and market conditions at the time, including then-current IPO valuations of similarly situated companies and expectations as to the timing and likely prospects of future event scenarios. For the year ended September 26, 2020, the Company’s total equity value was determined using the income approach. Under this approach, total equity value is estimated based on the present value of the Company’s future estimated cash flows. These future cash flows, including cash flows beyond the forecast period for the residual value, are discounted to their present values using an appropriate discount rate, to reflect the risks inherent in the Company achieving these estimated cash flows. The resulting equity value was then allocated to outstanding equity instruments using an option pricing model. The fair value of each Class C Unit grant was estimated on the date of the award using a Black-Scholes option pricing model with the following assumptions: Year Ended June 7, 2022 September 25, 2021 September 26, 2020 Dividend yield 0 % 0 % 0 % Volatility(a) 45.0 % 40.0 % 50.0 % Risk-free interest rate(b) 2.30 % 0.29 % 0.12 % Expected term (years)(c) 2.00 2.00 1.25 94 Table of Contents (a) The expected volatility is estimated based on the historical volatility of a select peer group of similar publicly traded companies for a term that is consistent with the expected term of the Class C Units. (b) The risk-free interest rate is based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected term of the Class C Units. (c) The expected term is based on estimated liquidity event timing as further described above. The fair value per unit for the Class C Units granted was determined to be the following for each of the periods presented: • $ 451.81 for the period December 26, 2021 through June 7, 2022 • $ 415.75 for the period September 26, 2021 through December 25, 2021 • $ 407.19 for the period June 27, 2021 through September 25, 2021 • $ 160.03 for the period March 28, 2021 through June 26, 2021 • $ 5.56 for the period September 29, 2019 through March 27, 2021 Value Appreciation Units The Company historically granted VAP Units to employees, officers, and directors that vested over a period of up to five years , as determined by the Board of Managers. No VAP Units were granted during the years ended September 24, 2022, September 25, 2021, and September 26, 2020. Following the Business Combination and in the fourth quarter of fiscal year 2022, all outstanding VAP Units for 20 employees were converted into the Company’s restricted stock units. The Company issued 2,350,795 RSUs to the legacy VAP Unit holders. The conversion of the VAP Units into RSUs was treated as a modification in accordance with ASC 718, and resulted in a charge of $ 24.4 million to additional paid-in capital on the date of the modification. This included a step-up in grant date fair value charge of $ 0.7 million, which was principally due to the difference between the VAP Units grant date hurdle rates and the Company’s stock price as of the modification date. Prior to the Business Combination, to the extent vested and exercisable, each VAP Unit could be exercised for a cash payment equal to the appreciation in the FMV of 1/100th of a Class C Unit. The following exercisability triggers must be met before any vested award may be exercised, with the achievement of each trigger allowing one third of the vested award to be exercised: (i) the end of the first fiscal year in which the Company meets or exceeds annual revenue (on a cash accounting basis) of $ 100 million, (ii) the end of the first fiscal year in which the Company becomes cash flow positive, and (iii) the end of the first fiscal year in which the Company generates positive earnings before interest, taxes, depreciation, and amortization (“EBITDA”). The following is a summary of VAP Units outstanding which were converted to restricted stock units in the fourth quarter of fiscal year 2022: VAP Units Balance at September 28, 2019 5,053,182 Granted — Exercised — Forfeited ( 663,925 ) Balance at September 26, 2020 4,389,257 Granted — Exercised — Forfeited ( 349,637 ) Balance at September 25, 2021 4,039,620 Granted — Exercised ( 255,845 ) Forfeited ( 92,664 ) Balance at August 16, 2022 3,691,111 Converted to restricted stock units ( 3,691,111 ) Balance at September 24, 2022 — 95 Table of Contents Because the VAP Units were settleable in cash, they were treated as liability classified awards. Accordingly, the carrying value of the liability was adjusted to fair value at each reporting period through a charge to earnings (until such time as the VAP Units are settled or forfeited). Further, the exercisability triggers noted above represent performance conditions that impact the vesting of the awards. Accordingly, compensation expense is not recognized until such time as the performance conditions are considered probable of achievement. During the year ended September 26, 2020, the performance conditions relating to annual revenue and cash flows were considered probable of achievement. The performance condition relating to EBITDA was not considered probable of achievement for any of the periods presented and up to the date of conversion of the VAP Units to restricted stock units. The Company recognized $ 13.2 million, $ 11.6 million, and $ 0.1 million as compensation expense associated with the VAP Units for the years ended September 24, 2022, September 25, 2021, and September 26, 2020, respectively. Warrant Units On April 30, 2021, in connection with its entry into a Subscription Agreement with Walmart, the Company issued Walmart warrants to acquire up to an aggregate of 714,022 shares of the Company’s Class A Units (the “Warrants”), subject to certain vesting conditions. Warrants equivalent to 6.5 % of the Company’s outstanding and issuable Common Units, or 446,741 units, vested upon the signing of the Subscription Agreement, and had a grant date fair value of $ 60.44 per unit. Warrants equivalent to up to 3.5 % of the Company’s outstanding and issuable Common Units, or 267,281 units, may vest in connection with conditions defined by the terms of the Warrant, as Walmart makes additional expenditures to the Company in connection with the Subscription Agreement, There are up to six tranches based on increments of additional expenditures where approximately 44,000 additional Warrants may vest per tranche. The Warrants had a grant date fair value of $ 60.44 per unit. Upon vesting, units may be acquired at an exercise price of $ 389.03 . The warrant units contain customary anti-dilution, down-round, and change-in-control provisions. The right to purchase units in connection with the Warrant expires on April 30, 2031. Non-cash share-based payment expense associated with the warrant units is recognized as vesting conditions are achieved, based on the grant date fair value of the warrants. The fair value of the warrant units was determined as of the grant date in accordance with ASC 718 using the Black-Scholes pricing model. The Black-Scholes pricing model is based, in part, upon assumptions for which management is required to use judgment. The assumptions made for purposes of estimating fair value under the Black-Scholes pricing model for the Warrants were as follows: Selected Assumption Dividend yield 0 % Volatility(a) 43.0 % Risk-free interest rate(b) 1.65 % Expected term (years)(c) 10.00 (a) The expected volatility is estimated based on the historical volatility of a select peer group of similar publicly traded companies for a term that is consistent with the expected term of the Warrants. (b) The risk-free interest rate is based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected term of the Warrants. (c) The expected term is based on the contractual term of the Warrants. In December 2021, Walmart elected to gross exercise the 446,741 vested Warrant Units for $ 173.8 million. As a result of this gross exercise, 446,741 Class A Common Units of Legacy Warehouse were issued to Walmart, which represented a 6.5 % ownership in the Company’s outstanding and issuable Common Units. On May 20, 2022, in connection with its entry into the 2nd A&R MAA, Walmart's remaining 267,281 Warrant Units vested in accordance with the terms referenced above. Upon vesting, Walmart elected to gross exercise the 267,281 vested Warrant Units for $ 104.0 million. As a result of this gross exercise, 267,281 Class A Common Units of Legacy Warehouse were issued to Walmart, which represented, together with the December 2021 gross exercise, a combined total of 10.0 % ownership in the Company's then outstanding and issuable Common Units. Also in connection with its entry into the 2nd A&R MAA with Walmart, the Company issued Walmart a new warrant to acquire up to an aggregate of 258,972 Legacy Warehouse Class A Units (“May 2022 Warrant”), subject to certain vesting conditions. The May 2022 Warrants had a grant date fair value of $ 224.45 . In connection with the Closing, the May 2022 Warrant was converted into a new warrant to acquire up to an aggregate of 15,870,411 common units of Symbotic Holdings 96 Table of Contents (“June 2022 Warrant” and, the common units of Symbotic Holdings issuable thereunder, the “Warrant Units”). As of September 24, 2022, the June 2022 Warrant had not vested, as vesting is tied to the installation commencement date for certain Systems which the Company is installing in Walmart's 42 regional distribution centers. Warrant Units equivalent to up to 3.6 % of the Company's then outstanding and issuable Common Units, or 15,870,411 units, may vest in connection with conditions defined by the terms of the June 2022 Warrant. Upon vesting, units may be acquired at an exercise price of $ 10.00 . The Warrant Units contain customary anti-dilution, down-round, and change-in-control provisions. The right to purchase units in connection with the June 2022 Warrant expires on June 7, 2027. Non-cash share-based payment expense associated with the June 2022 Warrant is recognized as vesting conditions are achieved, based on the grant date fair value of the warrants. The fair value of the June 2022 Warrant was determined as of the grant date in accordance with ASC Topic 718, Compensation – Stock Compensation , using the Black-Scholes pricing model. The Black-Scholes pricing model is based, in part, upon assumptions for which management is required to use judgment. The assumptions made for purposes of estimating fair value under the Black-Scholes pricing model for the June 2022 Warrant were as follows: Selected Assumption Dividend yield 0 % Volatility (a) 40.0 % Risk-free interest rate (b) 2.80 % Expected term (years) (c) 5.00 (a) The expected volatility is estimated based on the historical volatility of a select peer group of similar publicly traded companies for a term that is consistent with the expected term of the June 2022 Warrant. (b) The risk-free interest rate is based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected term of the June 2022 Warrant. (c) The expected term is based on the contractual term of the June 2022 Warrant. The following table summarizes stock warrant activity for the year ended September 24, 2022: Warrant Units Outstanding and nonvested at September 26, 2020 — Granted 714,022 Vested ( 446,741 ) Outstanding and nonvested at September 25, 2021 267,281 Granted 258,972 Vested ( 267,281 ) Outstanding and nonvested at September 24, 2022 258,972 The amount of provision for warrants recorded as a reduction of the transaction price for the Warrants during the twelve months ended September 24, 2022 was $ 101.3 million. As of September 24, 2022, total unrecognized cost related to unvested warrants was $ 58.1 million, which may be expensed as vesting conditions are satisfied over the remaining term of the agreement, or 4.7 years. At September 24, 2022, there are no warrant units which are vested and exercisable. 18. Segment and Geographic Information As more fully described in the Company’s Summary of Significant Accounting Policies, the Company operates in one operating segment. Revenue and property and equipment, net by geographic region, based on physical location of the operations recording the sale or the assets are as follows: 97 Table of Contents Revenue by geographical region (in thousands): Year Ended September 24, 2022 September 25, 2021 September 26, 2020 United States $ 589,944 $ 248,209 $ 54,349 Canada 3,368 3,704 37,737 Total revenue $ 593,312 $ 251,913 $ 92,086 Percentage of revenue generated outside of the United States 1 % 1 % 41 % Total property and equipment, net by geographical region (in thousands): Year Ended September 24, 2022 September 25, 2021 United States $ 23,640 $ 17,355 Canada 1,238 1,262 Total property and equipment, net $ 24,878 $ 18,617 Percentage of property and equipment, net held outside of the United States 5 % 7 % Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None.