What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2023-12-11 compared with 2022-12-09 · 401 added, 197 removed, 882 unchanged (40% of the section changed)

40 unchanged sentences

Cash and cash equivalents $ 258,770 $ 353,457

Marketable securities 286,736 —

Accounts receivable 69,206 3,412

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Total current assets 991,795 605,398

Property and equipment, at cost 48,722 37,177

Accumulated depreciation ( 23,844 ) ( 18,560 )

Property and equipment, net 34,507 24,878

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Total assets $ 1,050,710 $ 631,263

LIABILITIES, REDEEMABLE PREFERRED AND COMMON UNITS AND EQUITY (DEFICIT)

LIABILITIES AND EQUITY

Current liabilities:

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Sales tax payable 28,322 12,953

Deferred revenue, current 394,244 259,418

Deferred revenue 787,227 394,244

Total current liabilities 1,025,459 522,957

Deferred revenue, long-term 31,465 216,538

Deferred revenue — 31,465

Other long-term liabilities 27,967 7,901

1 unchanged sentence

Commitments and contingencies (Note 15) — —

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

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

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

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

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

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

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

Class A Common Stock, 3,000,000,000 shares authorized, 82,112,881 and 57,718,836 shares issued and outstanding at September 30, 2023 and September 24, 2022, respectively

Class V-1 Common Stock, 1,000,000,000 shares authorized, 66,931,097 and 79,237,388 shares issued and outstanding at September 30, 2023 and September 24, 2022, respectively

Class V-3 Common Stock, 450,000,000 shares authorized, 407,528,941 and 416,933,025 shares issued and outstanding at September 30, 2023 and September 24, 2022, respectively

Additional paid-in capital - warrants 58,126 58,126

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Accumulated other comprehensive loss ( 1,687 ) ( 2,294 )

Total stockholders' equity / members’ deficit 7,184 ( 1,113,228 )

Total stockholders' equity 82 7,184

Noncontrolling interest ( 2,798 ) 61,756

Total equity (deficit) 68,940 ( 1,113,228 )

Total liabilities, redeemable preferred and common units, and equity (deficit) $ 631,263 $ 280,535

Total equity ( 2,716 ) 68,940

Total liabilities and equity $ 1,050,710 $ 631,263

The accompanying notes are an integral part of these consolidated financial statements.

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Total cost of revenue 987,152 493,665 241,466

Gross profit (loss) 99,647 10,447 ( 18,930 )

Gross profit 189,739 99,647 10,447

Operating expenses:

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Loss per share of Class A Common Stock:

Basic and Diluted $ ( 0.13 ) N/M N/M

Basic and Diluted $ ( 0.37 ) $ ( 0.13 ) N/M

Weighted-average shares of Class A Common Stock outstanding:

Basic and Diluted 54,086,381 N/M N/M

Basic and Diluted 64,338,580 54,086,381 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.

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Net loss $ ( 207,894 ) $ ( 139,089 ) $ ( 122,314 )

Net loss attributable to Legacy Warehouse unitholders prior to the Business Combination — ( 72,134 ) ( 122,314 )

Net loss attributable to noncontrolling interests ( 184,028 ) ( 60,092 ) —

Net loss attributable to common stockholders $ ( 23,866 ) $ ( 6,863 ) $ —

Other comprehensive income (loss):

Foreign currency translation adjustments ( 265 ) ( 2,338 ) 2,326

Total comprehensive loss ( 141,427 ) ( 119,988 ) ( 111,346 )

Changes in unrealized gain on investments, net of income taxes of $ — for the years ended September 30, 2023, September 24, 2022, and September 25, 2021

Total other comprehensive income (loss) 5,213 ( 2,338 ) 2,326

other comprehensive income (loss) attributable to Legacy Warehouse unitholders prior to the Business Combination — 37 —

other comprehensive income (loss) attributable to noncontrolling interests 4,606 — —

Other comprehensive income attributable to common stockholders $ 607 $ ( 2,375 ) $ 2,326

Comprehensive loss ( 202,681 ) ( 141,427 ) ( 119,988 )

Comprehensive loss attributable to Legacy Warehouse unitholders prior to the Business Combination — ( 72,097 ) ( 119,988 )

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Accretion of Class C Units to redemption value — 142,853 — — — — — — — — — — — — — — — ( 142,853 ) — ( 142,853 )

Member contributions — — — 100,000 — — — — — — — — — — — — — — — —

Preferred return — — — 11,061 — 21,858 — — — — — — — — — — — ( 32,919 ) — ( 32,919 )

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

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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

Net loss — — — — — — — — — — — — — — — — — ( 23,866 ) ( 184,028 ) ( 207,894 )

Issuance of common stock under stock plans, net of shares withheld for employee taxes — — — — — — — — 2,825,576 — — — — — — ( 3,337 ) — — ( 23,161 ) ( 26,498 )

Issuance of common stock under employee stock purchase plan, net of shares withheld for employee taxes — — — — — — — — 225,788 — — — — — — 91 — — 704 795

Exchange of Class V-1 and Class V-3 common stock — — — — — — — — 21,342,681 2 ( 11,938,597 ) ( 1 ) ( 9,404,084 ) ( 1 ) — 956 — — ( 956 ) —

Cancellation of Class V-1 common stock — — — — — — — — — — ( 367,694 ) — — — — — — — — —

Stock-based compensation — — — — — — — — — — — — — — — 18,447 — — 138,281 156,728

Other comprehensive loss — — — — — — — — — — — — — — — — 607 — 4,606 5,213

Balance at September 30, 2023 — $ — — $ — — $ — — $ — 82,112,881 $ 8 66,931,097 $ 7 407,528,941 $ 41 $ 58,126 $ 1,254,022 $ ( 1,687 ) $ ( 1,310,435 ) $ ( 2,798 ) $ ( 2,716 )

(1) As part of the Business Combination (as disclosed in Note 3, Business Combination and Note 17, Equity ), all per share information has been retroactively adjusted using the Exchange Ratio as stipulated by the Merger Agreement

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Depreciation and amortization 11,311 5,989 4,491

Foreign currency losses 25 53 33

Losses on abandonment of assets 4,098 — 51

Unit and Stock-based compensation 26,858 97 71

Foreign currency (gains) / losses, net ( 3 ) 25 53

Loss on disposal of assets 2,914 4,098 —

Provision for excess and obsolete inventory 22,276 987 —

Deferred taxes, net ( 4,620 ) — —

Stock-based compensation 154,227 26,858 97

Changes in operating assets and liabilities:

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Purchases of property and equipment ( 15,688 ) ( 17,950 ) ( 12,168 )

Capitalization of internal use software development costs ( 5,638 ) — —

Proceeds from sale of assets 71 — —

Proceeds from maturities of marketable securities 130,000 — —

Purchases of marketable securities ( 408,209 ) — —

Net cash and cash equivalents used in investing activities ( 299,464 ) ( 17,950 ) ( 12,168 )

Cash flows from financing activities:

Payment for taxes related to net share settlement of stock-based compensation awards ( 26,674 ) — —

Net proceeds from issuance of common stock under employee stock purchase plan 2,573 — —

Net proceeds from equity infusion from the Business Combination — 384,672 —

1 unchanged sentence

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:

Net cash and cash equivalents provided by (used in) financing activities ( 24,101 ) 362,448 —

Effect of exchange rate changes on cash, cash equivalents, and restricted cash 232 572 971

Net increase (decrease) in cash, cash equivalents, and restricted cash ( 92,539 ) 196,823 98,370

Cash, cash equivalents, and restricted cash —beginning of period 353,457 156,634 58,264

Cash, cash equivalents, and restricted cash —end of period $ 260,918 $ 353,457 $ 156,634

Non-cash activities:

Operating lease right-of-use assets obtained in exchange for operating lease liabilities $ 8,734 $ — $ —

Preferred Return, Class B-1 — 8,130 11,061

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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.

Summary of Significant Accounting Policies

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dollars, in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

The accompanying consolidated financial statements include

the accounts of the Company and its wholly-owned subsidiaries and majority-owned subsidiaries.

The accompanying consolidated financial statements include 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.

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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.

Foreign currency transaction losses were less than $ 0.1 million for the years ended September 30, 2023 and

September 24, 2022, and $ 0.1 million for the year ended September 25, 2021, 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.

The fiscal year ended September 30, 2023 was a 53-week period and the years ended September 24, 2022 and September 25, 2021 were 52-week periods.

Business Combination

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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

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.

Class A Common Stock issued upon exchange of a holder’s noncontrolling 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.

Variable Interest Entities

The Company may enter into strategic investments or other investments or arrangements that are considered variable interest entities (“VIE”).

If the Company is a primary beneficiary of a VIE, it is required to consolidate the entity.

To determine if the Company is the primary beneficiary of a VIE, the Company evaluates whether it has (i) the power to direct the activities that most significantly impact the VIE’s economic performance, and (ii) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The assessment of whether the Company is the primary beneficiary of its VIE investments requires significant assumptions and judgments.

VIEs that are not consolidated are accounted for under the measurement alternative, equity method, amortized cost, or other appropriate methodology based on the nature of the interest held.

Use of Estimates

1 unchanged sentence

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.

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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, Cash Equivalents, and Marketable Securities

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.

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The Company’s cash and cash equivalents are carried at cost, which approximates fair value.

Marketable securities consist of U.S.

Treasury securities.

Securities having remaining maturities of more than three months at the date of purchase and less than one year from the date of the balance sheet are classified as short-term, and those with maturities of more than one year from the date of the balance sheet are classified as long-term in the consolidated balance sheets.

The Company classifies its debt investments with readily determinable market values as available-for-sale.

These investments are classified as investments on the consolidated balance sheets and are carried at fair market value, with unrealized gains and losses considered to be temporary in nature reported as accumulated other comprehensive loss, a separate component of stockholders’ equity.

The Company reviews all investments for reductions in fair value that are other-than-temporary.

When such reductions occur, the cost of the investment is adjusted to fair value through recording a loss on investments in the consolidated statements of operations.

Gains and losses on investments are calculated on the basis of specific identification.

Investments are considered to be impaired when a decline in fair value below cost basis is determined to be other-than-temporary.

The Company periodically evaluates whether a decline in fair value below cost basis is other-than-temporary by considering available evidence regarding these investments including, among other factors:

the duration of the period that, and extent to which, the fair value is less than cost basis;

the financial health of, and business outlook for the issuer, including industry and sector performance and operational and financing cash flow factors;

overall market conditions and trends and the Company’s intent and ability to retain its investment in the security for a period of time sufficient to allow for an anticipated recovery in market value.

Once a decline in fair value is determined to be other-than-temporary, a write-down is recorded and a new cost basis in the security is established.

Presentation of Restricted Cash

Restricted cash consists of collateral required for a credit card processing program.

The short-term or long-term classification is determined in accordance with the required amount of time the cash is to be held as collateral, which is short-

term for less than 12 months, and long-term for greater than 12 months from the balance sheet date.

As the cash is required to be held as collateral for a period which is greater than 12 months from September 30, 2023, it is presented in other long-term assets.

The following table summarizes the end-of-period cash and cash equivalents from the Company’s Consolidated Balance Sheets and the total cash, cash equivalents, and restricted cash as presented on the accompanying Consolidated Statements of Cash Flows (in thousands):

September 30, 2023 September 24, 2022 September 25, 2021

Cash and cash equivalents $ 258,770 $ 353,457 $ 156,634

Restricted cash classified in:

Other long-term assets 2,148 — —

Cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 260,918 $ 353,457 $ 156,634

Accounts Receivable

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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.

For the year ended September 30, 2023, there was one customer that accounted for 10% or more of total revenue, there was one customer that accounted for 10% or more of total revenue for the year ended September 24, 2022, and there were two customers that accounted for 10% or more of total revenue for the year ended September 25, 2021.

The following table represents these customers’ aggregate percent of total revenue.

The symbol “n/a” indicates that such customer’s revenue balance at the period indicated within the table did not exceed 10% of the Company’s revenue balance.

September 30, 2023 September 24, 2022 September 25, 2021

Customer A 94.4 % 66.9 % n/a

Customer B n/a 28.1 % 44.8 %

Customer C n/a n/a 42.5 %

Customer A 88.4 % 94.4 % 66.9 %

Customer B n/a n/a 28.1 %

Aggregate Percent of Total Revenue 88.4 % 94.4 % 95.0 %

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.

At September 30, 2023, two customers accounted for over 10% of the Company’s accounts receivable balance, and three customers accounted for over 10% of the Company’s accounts receivable balance at September 24, 2022.

The following table represents these customers’ aggregate percent of total accounts receivable.

The symbol “n/a” indicates that such customer’s accounts receivable balance at the period indicated within the table did not exceed 10% of the Company’s accounts receivable balance.

September 30, 2023 September 24, 2022

Customer A 86.6 % 39.5 %

Customer B 40.7 % n/a

Customer B 10.3 % 40.7 %

Customer C n/a 15.3 %

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Fair Value Measurements

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, and accounts payable.

The Company’s financial instruments consist of cash and cash equivalents, marketable securities, accounts receivable, and accounts payable.

The carrying amounts of these financial instruments approximate their fair value due to their short-term nature.

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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 and Internal Use Software

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 .

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Computer equipment and software, furniture and fixtures, and test equipment 3 - 5 years

Internal use software 5 years

Leasehold improvements Shorter of estimated useful life or remaining term of the lease

3 unchanged sentences

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.

The Company capitalizes certain internal and external costs incurred to acquire or create internal use software.

Capitalized costs include external consulting fees, payroll and payroll-related costs and stock-based compensation for employees who are directly associated with, and who devote time to, the Company’s internal use software projects.

Capitalization begins when the planning stage is complete and the Company commits resources to the software project;

capitalization continues during the application development stage, and ceases when the software has been tested and is ready for its intended use.

Costs incurred during the planning, training, and post-implementation stages of the software development life cycle are expensed as incurred.

Capitalized internal use software is included in property, plant, and equipment and is depreciated over 5 years once development is complete.

Acquired Intangible Assets and Long-Lived Assets

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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.

For the year ended September 30, 2023, $ 0.1 million of impairment losses were recognized.

No impairment losses were recognized in the years ended September 24, 2022 and September 25, 2021.

The Company determines if an arrangement is a lease at its inception.

When the arrangements include lease and non-lease components, the Company separates them and does not account for them as a single lease component.

Leases with an initial term of less than 12 months are not reported on the balance sheet, but rather recognized as lease expense on a straight-line basis over the lease term.

Arrangements may include options to extend or terminate the lease arrangement.

These options are included in the lease term used to establish right-of-use (“ROU”) assets and lease liabilities when it is reasonably certain they will be exercised.

The Company will reassess expected lease terms based on changes in circumstances that indicate options may be more or less likely to be exercised.

The Company has lease arrangements that include variable rental payments.

The future variability of these payments and adjustments are unknown and therefore are not included in minimum rental payments used to determine the ROU assets and lease liabilities.

The Company has lease arrangements where it makes separate payments to the lessor based on the lessor’s common area maintenance expenses, property and casualty insurance costs, property taxes assessed on the property, and other variable expenses.

Variable rental payments are recognized in the period in which their associated obligation is incurred.

As most of the Company’s lease arrangements do not provide an implicit interest rate, an incremental borrowing rate is applied in determining the present value of future payments.

The Company’s incremental borrowing rate is selected based upon information available at the lease commencement date, and represents the Company’s estimate of an interest rate that it would be able to obtain from a lender to borrow, on a collateralized basis, over a similar term to obtain an asset of similar value in a similar economic environment.

The ROU assets are reported as “Other long-term assets” and lease liabilities are reported as “Other current liabilities” and “Other long-term liabilities” on the consolidated balance sheets.

Operating lease expense is recognized on a straight-line basis over the lease term and is included in “Selling, general, and administrative expenses” in the consolidated statements of operations.

Variable lease expense is included in “Selling, general, and administrative expenses” in the consolidated statements of operations.

Revenue Recognition

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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.

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 through 2023, revenue related to systems is accounted for over time as described above.

The transaction price is allocated to the software maintenance and support service performance obligation based on the respective standalone selling price.

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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.

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.

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Warrant Transactions

On July 23, 2023, the Company, New Symbotic Holdings, and Symbotic US (collectively, the “Symbotic Group”), entered into a Framework Agreement (the “Framework Agreement”) with Sunlight Investment Corp., a Delaware corporation (“Sunlight”), SVF II Strategic Investments AIV LLC, a Delaware limited liability company (“SVF” and, together with Sunlight, “SoftBank”), and GreenBox Systems LLC, a Delaware limited liability company (“GreenBox”), related to the formation of GreenBox as a strategic joint venture between the Symbotic Group and SoftBank, the entry into a Limited Liability Company Agreement of GreenBox and Master Services, License and Equipment Agreement and the issuance of a warrant to purchase Class A Common Stock of Symbotic (the “GreenBox Warrant”).

The GreenBox Warrant issues SoftBank warrants to acquire up to an aggregate of 11,434,360 shares of Symbotic Class A common stock, subject to certain vesting conditions as GreenBox makes expenditures of the Company’s warehouse automation system under the Framework Agreement.

Upon vesting, units may be acquired at an exercise price of $ 41.9719 .

The right to purchase units in connection with the GreenBox Warrant expires on July 23, 2032.

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 .

Warrants equivalent to 6.5 % of the Company’s then 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 then outstanding and issuable Common Units, or 267,281 units, were subject to vest in connection with conditions defined by the terms of the Warrant, as Walmart made additional expenditures to the Company in connection with the Subscription Agreement, and vested on May 20, 2022.

Upon vesting, units were acquired at an exercise price of $ 389.03 .

The right to purchase units in connection with the Subscription Agreement expires on April 30, 2031.

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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 .

The warrant units granted to Walmart and the GreenBox Warrant 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”).

1 unchanged sentence

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.

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.

Costs incurred in the research and development of the Company’s products are expensed as incurred, except for certain internal use software development costs eligible for capitalization as discussed above.

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.

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The Company recognizes the effect of pre-vesting forfeitures as they occur.

The Company classifies stock-based

compensation expense in its consolidated statements of operations in the same manner in which the award recipient’s salary and related costs are classified.

The Company classifies stock-based compensation expense in its consolidated statements of operations in the same manner in which the award recipient’s salary and related costs are classified.

As a result of the Business Combination, the Company was appointed as the sole managing member of Symbotic Holdings.

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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.

The Company will be eligible to use this extended transition period under the JOBS Act until the earlier of the date it (i) is no longer an EGC or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act.

As a result, the Company’s financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make comparison of the Company’s financials to those of other public companies more difficult.

The Company will cease to be an EGC on the date that is the earliest of (i) the end of the fiscal year in which total annual gross revenue exceeds $1.235 billion, (ii) the last day of the Company’s fiscal year following March 11, 2026 (the fifth anniversary of the date on which SVF 3 consummated the initial public offering of SVF 3), (iii) the date on which the Company has issued more than $1.0 billion in non-convertible debt during the preceding three-year period;

or (iv) the end of the fiscal year in which the market value of the Company’s common stock held by non-affiliates exceeds $700 million as of the last business day of the most recently completed second fiscal quarter.

As of the last business day of the most recently completed second fiscal quarter ended March 25, 2023, the market value of the Company’s common stock held by non-affiliates was approximately $ 517.0 million (based on the closing sales price of the Class A common stock on March 24, 2023 of $ 21.68 ).

Additionally, the Company’s total annual revenue did not exceed $1.235 billion for the year ended September 30, 2023, and the Company has not issued any non-convertible debt during the preceding three-year period.

Therefore, the Company continues to be an EGC as of the end of the current fiscal year ended September 30, 2023.

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 .

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2016-02, Leases (“ASU 2016-02”).

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.

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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.

The Company adopted ASU 2016-02 and ASU 2018-11 on September 25, 2022, as required by the ASUs, and utilized the cumulative effect adjustment approach, which did not result in an adjustment to the Company’s opening balance of retained earnings.

At adoption, the Company recognized ROU assets and lease liabilities of $ 5.5 million and $ 6.4 million, respectively, on the balance sheet at September 25, 2022.

The new standard did not materially impact the statements of operations, cash flows, or stockholders’ equity (deficit).

In addition, the Company provides expanded disclosures related to its leasing arrangements in accordance with these ASUs.

Refer to Note 6, Leases, for additional information.

In December 2019, the FASB issued ASU No.

2019-12, Income Taxes—Simplifying the Accounting for Income Taxes (“ASU 2019-12”).

ASU 2019-12 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 to the Company 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 adopted ASU 2019-12 on September 25, 2022 and there was not a material impact of the adoption to the Company’s financial statements.

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU No.

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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.

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3 to Symbotic Inc.

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”).

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 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:

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• 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;

• 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.

(“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.

Legacy Warehouse unitholders 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).

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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.

Pursuant to the Merger Agreement, the Legacy Warehouse unitholders were 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 were to be issued if the Class A Common Stock volume weighted average price of shares was 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 were issued upon Triggering Event I, 6,666,667 Earnout Shares were issued upon Triggering Event II, and 6,666,666 Earnout Shares were issued upon Triggering Event III.

All three triggering events were achieved by the end of the preceding fiscal year, September 24, 2022, 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.

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 vested upon the occurrence of Triggering Event I, and (iii) 20 % or 1,808,000 of the Sponsor Shares vested upon the occurrence of Triggering Event II.

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

million Class A Common Stock for $ 10.00 per share, or 20.0 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 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.

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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.

(1) Excludes 20,000,000 Earnout Interests and 3,616,000 Sponsor Shares which were subject to vesting based on achievement of certain share price targets.

(2) Excludes approximately 15,870,411 unvested warrant units at the time of the Closing.

(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).

The Company incurred $ 37.1 million in transaction costs relating to the Business Combination with SVF 3, which was offset against additional paid-in capital in the Consolidated Statements of Changes in Redeemable Preferred and Common Units and Equity (Deficit).

Noncontrolling Interests

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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.

stock for the year ended September 30, 2023.

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

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Exchanges 21,342,681 ( 21,342,681 ) —

Cancellations — ( 367,694 ) ( 367,694 )

End of period 82,112,881 474,460,038 556,572,919 14.8 % 85.2 % 100 %

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Contract liabilities $ 787,227 $ 425,709

The change in the opening and closing balances of the Company’s accounts receivable primarily results from the increase in ongoing customer system implementations in the current fiscal year as well as the timing of when customer payments are due.

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.

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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.

For contracts with a duration of greater than one year, the transaction price allocated to performance obligations that are unsatisfied as of September 30, 2023 was $ 23.3 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, as well as the Commercial Agreement with GreenBox for which Symbotic will implement its warehouse automation system into GreenBox distribution center locations.

The definition of remaining performance obligations excludes 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, approximately 60 % of its remaining performance obligations as revenue within 5 years, and the remaining thereafter, which is dependent 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.

The Company leases certain real estate under noncancellable operating leases.

These leases expire at various dates through June 2026.

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):

In connection with the adoption of ASUs 2016-02 and 2018-11 (see Note 2, Summary of Significant Accounting Policies ), the Company updated its policy for recognizing leases under ASC Topic 842.

A summary of the updated policy is included in Note 2, Summary of Significant Accounting Policies .

Prior to September 25, 2022, the Company accounted for leases under ASC Topic 840, Leases.

Lease Portfolio

The Company leases office space in Wilmington, MA and Montreal, QC through operating lease arrangements.

The Company has no finance lease agreements.

The operating lease arrangements expire at various dates through December 2030.

Impact of Adoption

The Company utilized the cumulative effect adjustment method of adoption and, accordingly, recorded ROU assets and lease liabilities of $ 5.5 million and $ 6.4 million, respectively, on the balance sheet at September 25, 2022.

The Company elected the following practical expedients in accordance with ASC Topic 842:

• Reassessment elections - The Company elected the package of practical expedients, and did not reassess whether any existing contracts are or contain a lease, provided a lease analysis was conducted under ASC Topic 840.

extent leases were identified under ASC Topic 840, the Company did not reassess the classification of those leases.

Additionally, to the extent initial direct costs were capitalized under ASC Topic 840 and are not amortized as a result of the implementation of ASC Topic 842, they were not reassessed.

• Short-term lease election - ASC Topic 842 allows lessees an option to not recognize ROU assets and lease liabilities arising from short-term leases.

A short-term lease is defined as a lease with an initial term of 12 months or less.

The Company elected to not recognize short-term leases as ROU assets and lease liabilities on the balance sheet.

All short-term leases which are not included on the Company’s balance sheet will be recognized within lease expense.

Leases that have an initial term of 12 months or less with an option for renewal will need to be assessed in order to determine if the lease qualifies for the short-term lease exception.

If the option is reasonably certain to be exercised, the lease does not qualify as a short-term lease.

The following table presents the balance sheet location of the Company’s operating leases (in thousands):

September 30, 2023

Other long-term assets $ 12,398

Lease Liabilities:

Accrued expenses and other current liabilities $ 1,347

Other long-term liabilities 12,291

Total lease liabilities $ 13,638

The following table presents maturities of the Company’s operating lease liabilities as of September 30, 2023, presented under ASC Topic 842 (in thousands):

September 30, 2023

Fiscal year 2024 $ 2,335

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Total future minimum payments $ 18,175

Implied interest ( 4,537 )

Total lease liabilities $ 13,638

As of September 30, 2023, the weighted-average remaining lease term and the weighted-average incremental borrowing rate of the Company’s operating leases was approximately 6.29 years and 7.9 %, respectively.

Operating cash flows for amounts included in the measurement of the Company’s operating lease liabilities were $ 2.0 million for the year ended September 30, 2023.

Net rental expense under operating leases was $ 3.0 million for the year ended September 30, 2023, $ 2.4 million for the year ended September 24, 2022, and $ 2.3 million for the year ended September 25, 2021.

As previously disclosed in our fiscal year 2022 Annual Report on Form 10-K and under the previous lease accounting standard, the future minimum lease payments under all noncancellable operating lease agreements as of September 24, 2022 are as follows (in thousands):

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

Inventories at September 30, 2023 and September 24, 2022 consist of the following (in thousands):

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Total inventories $ 136,121 $ 91,900

Inventory reserves for the years ended September 30, 2023 and September 24, 2022 were $ 10.3 million and $ 1.0 million, respectively.

During the second quarter and fourth quarter of fiscal year 2023, inventory impairment charges of $ 5.2 million and $ 14.5 million were recorded, respectively, resulting from management’s commitment to actions to restructure certain parts of the Company within the U.S.

and Canada, as further described in Note 9, Severance Charges .

These impairment charges were recorded within Systems Cost of Revenue in the Consolidated Statements of Operations.

Property and Equipment

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Computer equipment and software, furniture and fixtures, and test equipment $ 40,437 $ 45,818

Internal use software 5,638 —

Leasehold improvements 7,194 2,904

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Depreciation expense was $ 9.0 million for the year ended September 30, 2023, $ 5.5 million for the year ended September 24, 2022, and $ 4.0 million for the year ended September 25, 2021.

Severance Charges

During the second quarter of fiscal year 2023, management committed to actions to restructure certain parts of the Company within the U.S.

and Canada to better position the Company to become more agile in delivering its solutions through various outsourcing partnerships.

As a result, certain headcount reductions were necessary, and the Company recognized $ 2.3 million of expense associated with these actions, which is included within selling, general, and administrative expenses on the Consolidated Statements of Operations for the year ended September 30, 2023.

The charges related to these actions have been completed within the fiscal year.

The costs incurred related to employee severance are recorded as a liability when it is probable that employees will be entitled to termination benefits and the amounts can be reasonably estimated.

The liability related to these charges is included in accrued expenses and other current liabilities in the Consolidated Balance Sheets.

The following table presents the activity related to the Company’s severance liability as of September 30, 2023 (in thousands).

The Company did not have material severance activity for the period ended September 24, 2022.

September 30, 2023

Severance liability at September 24, 2022 $ 1,051

Severance charges 6,388

Cash paid and other ( 6,237 )

Severance liability at September 30, 2023 $ 1,202

Intangible Assets

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Fiscal year 2024 $ 217

Fiscal year 2024 217

Fiscal year 2025 —

The components of income/(loss) before provision for income taxes are as follows:

Fiscal year 2025 and thereafter —

The components of income/(loss) before provision for income taxes are as follows (in thousands):

September 30, 2023 September 24, 2022 September 25, 2021

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Total $ ( 212,514 ) $ ( 139,089 ) $ ( 122,314 )

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.

The provision (benefit) for income taxes consists of the following (in thousands):

September 30, 2023

International ( 13 )

Total current taxes $ 294

International ( 4,914 )

Total deferred taxes $ ( 4,914 )

Provision (benefit) for Income Taxes $ ( 4,620 )

There was no provision for income taxes for the years ended September 24, 2022 and September 25, 2021.

The following is a reconciliation of the expected U.S.

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Valuation allowance 3,187 ( 1 ) % 1,168 ( 1 ) % ( 993 ) 1 %

Impact on foreign activity 575 — % — — — —

Return to provision 88 — % — — — —

Other 9 — % — — ( 129 ) — %

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Total deferred tax assets after valuation allowance 6,497 711

Deferred tax liabilities:

Foregone FTC ( 575 ) —

ROU asset ( 286 ) —

Foreign R&D credit recapture ( 718 ) ( 711 )

Total deferred tax liabilities ( 1,579 ) ( 711 )

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The Company's foreign subsidiaries are subject to income tax in its local jurisdictions.

consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax base.

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 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.

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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.

Due to a change in circumstances during the year ended September 30, 2023, the Company now believes it will have sufficient future operating income to realize a portion of the

beginning of the year’s foreign deferred tax assets.

Therefore the Company has released $ 6.1 million of its valuation allowance.

The remaining valuation allowance at September 30, 2023 of $ 486.9 million consists of $ 480.3 million in the United States and $ 6.6 million in foreign jurisdictions.

The change in the valuation allowance in fiscal year 2023 of $ 318.6 million primarily relates to the Company’s investment in Symbotic Holdings LLC, tax receivable agreement, and tax carryforward attributes.

Net Operating Losses

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As of September 30, 2023, the Company had Canadian net operating loss (“NOL”) carryforwards of approximately $ 27.7 million federal and $ 26.1 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.

The Canadian NOL carryforwards expire in various years through 2039, and are subject to review and possible adjustment by the applicable taxing authorities.

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.

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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.

As of September 30, 2023, United States income taxes have not been provided on accumulated but undistributed earnings of foreign subsidiaries as the Company intends to permanently reinvest.

Uncertain Tax Positions

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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.

As of September 30, 2023, 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 U.S.

deferred tax asset.

Employee Benefit Plans

Symbotic sponsors a defined-contribution benefit plan under the provisions of Section 401(k) of the Internal Revenue Code.

Symbotic sponsors a defined-contribution benefit plan under the provisions of Section 401(k) of the U.S.

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.

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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.

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.

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Money market funds $ 219,945 $ — $ — $ 219,945 $ 333,388 $ — $ — $ 333,388

Treasury Securities — 286,736 — 286,736 — — — —

Total assets $ 219,945 $ 286,736 $ — $ 506,681 $ 333,388 $ — $ — $ 333,388

The Company had no liabilities measured and recorded at fair value on a recurring basis as of September 30, 2023 and September 24, 2022.

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

The fair value of the Company’s investments in certain money market funds is their face value and such instruments are classified as Level 1 and are included in cash and cash equivalents on the consolidated balance sheets.

At September 30, 2023, Level 2 securities were priced by pricing vendors.

These pricing vendors utilize the most recent observable market information in pricing these securities or, if specific prices are not available for these securities, use other observable inputs like market transactions involving identical or comparable securities.

At September 30, 2023, the amortized cost of the Company’s U.S.

Treasury securities is $ 281.3 million, with unrealized gains of $ 5.5 million and no unrealized losses, resulting in a fair value of $ 286.7 million.

As applicable, when making the determination as to whether unrealized losses are other-than-temporary, the Company considers the length of time and extent to which each investment has been in an unrealized loss position, the financial condition and near-term prospects of the issuers, the issuers’ credit rating, and the time to maturity.

For the year ended September 30, 2023, there is no cash and cash equivalents related to U.S.

Treasury securities with an original maturity of three months or less which are included in the amortized cost balance of $ 281.3 million.

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.

Prior to the first quarter of fiscal year 2023, the Company was 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 managed 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 Company paid $ 2.3 million, and $ 1.8 million to C&S related to this insurance coverage during the years ended September 24, 2022, and September 25, 2021, 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.

In December 2021 and May 2022, the Company entered into 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 the 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 $ 0.9 million and $ 0.7 million related to usage of the aircrafts for the years ended September 30, 2023 and September 24, 2022, respectively.

Usage of Facility and Employee Services

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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.

The Company incurred $ 2.9 million and $ 0.2 million of expense related to this arrangement for the years ended September 30, 2023 and September 24, 2022, respectively.

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.

The Company has customer contracts with C&S relating to systems implementation, software maintenance services and the operations of a warehouse automation system.

Revenue of $ 15.8 million, $ 3.5 million, and $ 2.9 million was recognized for the years ended September 30, 2023, September 24, 2022, and September 25, 2021, respectively, relating to these customer contracts.

There was $ 0.9 million accounts receivable due from C&S at September 30, 2023 and no accounts receivable due from C&S at September 24, 2022.

There was $ 9.3 million and $ 0.5 million of deferred revenue relating to contracts with C&S at September 30, 2023 and September 24, 2022, respectively.

Commitments and Contingencies

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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.

The majority of the purchase commitments covered by these arrangements are for periods of less than one year and aggregate to approximately $ 1.2 billion as of September 30, 2023.

Lease Commitments

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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.

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 30, 2023 and September 24, 2022.

Variable Interest Entities

VIEs are entities with any of the following characteristics:

(i) the entity does not have enough equity to finance its activities without additional financial support;

(ii) the equity holders, as a group, lack the characteristics of a controlling financial interest;

or (iii) the entity is structured with non-substantive voting rights.

Consolidation of a VIE is required for the party deemed to be the primary beneficiary, if any.

The primary beneficiary is the party who has both (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (b) an obligation to absorb losses of the entity or a right to receive benefits from the entity that could potentially be significant to the entity.

On July 23, 2023, the Company, New Symbotic Holdings, and Symbotic US (collectively, the “Symbotic Group”), entered into a Framework Agreement (the “Framework Agreement”) with Sunlight Investment Corp., a Delaware corporation (“Sunlight”), SVF II Strategic Investments AIV LLC, a Delaware limited liability company (“SVF” and, together with Sunlight, “SoftBank”), and GreenBox Systems LLC, a Delaware limited liability company (“GreenBox”), related to the formation of GreenBox as a venture between the Symbotic Group and SoftBank, the entry into a Limited Liability Company Agreement of GreenBox and Master Services, License and Equipment Agreement (the “Commercial Agreement”) and issuance of a warrant to purchase Class A Common Stock of Symbotic (the “GreenBox Warrant”).

GreenBox was established on July 21, 2023, to build and automate supply chain networks globally by operating and financing the Company’s advanced A.I.

and automation technology for the warehouse.

Symbotic Holdings and Sunlight own 35 % and 65 % of GreenBox, respectively.

On July 23, 2023, GreenBox entered into a Commercial Agreement with Symbotic US with respect to the purchase of Symbotic’s automated case handling systems, as noted in Note 5, Revenue .

The Company evaluated for VIEs upon the formation of GreenBox in accordance with ASC 810, Consolidation.

The Company holds a variable interest in GreenBox through its equity interest in GreenBox.

GreenBox is a VIE resulting from GreenBox’s lack of sufficient equity to finance its operations without additional subordinated financial support from both the Company and SoftBank.

The consolidation of GreenBox is not required as the Company is not the primary beneficiary of this VIE as it does not have the power to direct the activities that most significantly impact GreenBox’s economic performance.

Such power is conveyed through GreenBox’s board of directors and the Company does not have control over GreenBox’s board of directors.

The Company calculated its maximum exposure to loss while considering its equity investment in the VIE, any amounts owed to the Company for services which may have been provided, net of any unearned revenue commitments from the VIE under the Commercial Agreement, and future funding commitments.

As of September 30, 2023, there is no carrying value of the VIE as no significant activity had occurred in the period related to the VIE.

As of September 30, 2023 the Company does not have a maximum exposure to loss as the Company’s future funding commitment is less than the revenue commitment from the VIE under the Commercial Agreement .

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.

As the Business Combination was accounted for as a reverse recapitalization, all periods prior to the Business Combination were 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.

of 58.15 per share.

This is presented within the consolidated statements of changes in redeemable preferred and common units and equity (deficit).

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As of September 30, 2023 there were 66,931,097 shares of Class V-1 and 407,528,941 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.

For the year ended September 30, 2023, the Legacy Warehouse unitholders exchanged 11,938,597 and 9,404,084 shares of Class V-1 and Class V-3 Common Stock, respectively, 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.

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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.

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.

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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.

The holders of shares of Class V-1 Common Stock and Class V-3 Common Stock will not be entitled to receive any of the Company’s assets in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company.

The holders of Class V-1 Common Stock and Class V-3 Common Stock have no preemptive or other subscription rights.

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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.

As discussed above, these outstanding units were converted into Common Stock as part of the Business Combination during fiscal year 2022.

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-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.

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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.

The Company classified 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.

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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 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 19, Stock-Based Compensation and Warrant Units ).

The Class A Units do not have any redemption rights.

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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.

Since the Company incurred net losses for each of the periods presented, diluted net loss per share is the same as basic net loss per share.

Prior to the Business Combination, the membership structure of Legacy Warehouse included units which shared in the profits and losses of Legacy Warehouse.

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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):

September 24, 2022

September 30, 2023 September 24, 2022

Numerator - basic and diluted

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Loss per share of Class A Common Stock - basic and diluted $ ( 0.37 ) $ ( 0.13 )

The Company’s Class V-1 Common Stock and Class V-3 Common Stock do not participate in the earnings or losses of the Company and are therefore not participating securities.

As such, separate presentation of basic and diluted earnings per share of Class V-1 Common Stock and Class V-3 Common Stock under the two-class method has not been presented.

The Company uses the treasury stock method and the average market price per share during the period for calculating any potential dilutive effect of the RSUs, ESPP and Warrant Units.

The average stock price for the year ended September 30, 2023 was $ 25.30 .

For the year ended September 30, 2023, there were 7,635,238 and 9,598,620 potentially dilutive common stock equivalents related to the RSUs and Warrant Units, respectively.

The ESPP shares were not included as they created an anti-dilutive effect.

Stock-Based Compensation and Warrant Units

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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

The following two tables show stock-based compensation expense by award type and where the stock-based compensation expense is recorded in the Company’s consolidated statements of operations (in thousands):

September 30, 2023 September 24, 2022

RSUs (service-based and performance-based) $ 152,791 $ 26,858

Employee stock purchase plan 1,436 —

Total stock-based compensation expense $ 154,227 $ 26,858

Effect of stock-based compensation expense on income by line item (in thousands):

September 30, 2023 September 24, 2022

Cost of revenue, Systems $ 36 $ —

Cost of revenue, Software maintenance and support 1,767 —

Cost of revenue, Operation services 4,344 —

Research and development 68,364 9,671

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Total stock-based compensation expense $ 154,227 $ 26,858

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

For the year ended September 30, 2023, the Company capitalized $ 2.0 million of stock-based compensation expense to property and equipment related to internal use software projects and $ 0.5 million of stock-based compensation expense to prepaid expenses and other current assets and other-long term assets related to its ERP implementation project.

There were no stock-based compensation costs capitalized for the years ended September 24, 2022 and September 25, 2021.

RSUs represent the right to receive one share of the Company’s common stock upon vesting.

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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.

For RSUs with service-based vesting conditions, the fair value is calculated based on the Company’s closing stock price on the grant date, 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.

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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:

The following table summarizes the RSU activity for the periods presented:

Shares Weighted Average Grant Date Fair Value

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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.

Granted 7,625,784 15.72

Vested ( 4,187,313 ) 15.78

Forfeited ( 2,920,043 ) 15.62

Outstanding at September 30, 2023 12,884,015 $ 15.81

The total fair value of RSUs that vested during the years ended September 30, 2023 and September 24, 2022 was $ 90.7 million and $ 29.0 million, respectively.

For the years ended September 30, 2023 and September 24, 2022 the weighted-average fair value of RSU awards granted was $ 15.72 per share and $ 15.81 per share, respectively.

As of September 30, 2023, 12.9 million RSUs were outstanding and unvested, with an aggregate value of $ 430.7 million and a weighted average remaining vesting period of approximately 0.94 years.

These RSUs are expected to vest on various dates through 2027.

Employee Stock Purchase Plan

On June 3, 2022, the Company’s stockholders approved, and on June 7, 2022, the Company’s board of directors adopted the 2022 Employee Stock Purchase Plan (the “ESPP”).

The ESPP authorizes the issuance of up to a total of 1,266,604 shares

of common stock to participating employees, and allows eligible employees to purchase shares of Class A Common Stock at a 15 % discount from the fair market value of the stock as determined on specific dates, which are typically at six-month intervals.

The offering periods for the ESPP generally start on the first trading day on or after January 1st and July 1st of each year.

However, the first offering period for the ESPP commenced on the first trading day after October 1, 2022 and ended on December 31, 2022, the second offering period commenced on the first trading day after January 1, 2023 and ended on June 30, 2023, and the third offering period commenced on the first trading day after July 1, 2023 and ends on February 28, 2024.

The fair value of employee options is estimated using the Black-Scholes option-pricing model with the following assumptions:

September 30, 2023

Risk-free interest rate (%) 0.03 - 0.05

Expected term (years) 0.25 - 0.66

Volatility (%) 63.67 - 76.21

Expected dividends —

The interest rate is based on the U.S.

Treasury bond rate at the date of grant with a maturity approximately equal to the expected term.

The expected term was based on terms of the offering period.

The expected volatility for the Company’s common stock is based on an average of the historical volatility of a peer group of similar public companies.

The assumed dividend yield is based upon the Company’s expectation of not paying dividends in the foreseeable future.

The fair value of the Company’s common stock is the closing price of the stock on the date the offering period starts.

For the year ended September 30, 2023, 225,788 shares of common stock were issued to employees who participated in the plan with a weighted average purchase price of $ 10.20 per share for total cash proceeds of $ 2.6 million, net of taxes.

Class C Units

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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

Units are redeemed or forfeited).

As further described in Note 17, Equity , the Class C Units were converted into Common Stock upon consummation of the Business Combination.

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Forfeited ( 18,107 )

Balance at September 25, 2021 428,571

Granted 18,107

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.

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 year ended September 25, 2021.

Valuation of Class C Units

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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:

June 7, 2022 September 25, 2021 September 26, 2020

June 7, 2022 September 25, 2021

Dividend yield 0 % 0 %

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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.

No VAP Units were granted during the years ended September 24, 2022 and September 25, 2021.

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.

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Balance at September 25, 2021 4,039,620

Forfeited ( 349,637 )

Balance at September 25, 2021 4,039,620

Exercised ( 255,845 )

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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.

The Company recognized $ 13.2 million and $ 11.6 million as compensation expense associated with the VAP Units for the years ended September 24, 2022 and September 25, 2021, respectively.

Warrant Units

GreenBox Warrant

On July 23, 2023, in connection with it entry into the Commercial Agreement with GreenBox, the Company issued Sunlight the GreenBox Warrant to acquire up to an aggregate of 11,434,360 shares of the Company’s Class A Common Stock, subject to certain vesting conditions.

The GreenBox Warrant had a grant date fair value of $ 19.90 per unit.

The GreenBox Warrant may vest in connection with conditions defined by the terms of the Warrant, as GreenBox makes additional expenditures to the Company in connection with the Framework Agreement.

There are up to eight tranches based

on increments of expenditures where approximately 1,429,295 additional warrant units may vest per tranche, subject to certain conditions defined by the terms of the Warrant.

Upon vesting, warrant units may be acquired at an exercise price of $ 41.9719 .

The warrant units contain customary anti-dilution, down-round, and change-in-control provisions.

The right to purchase units in connection with the GreenBox Warrant expires 36 months following the end of the initial term of the Framework Agreement which is July 23, 2027, or if applicable, the extension term of the Framework Agreement, which is July 23, 2029.

As of September 30, 2023, none of the GreenBox Warrant units had vested.

Non-cash share-based payment expense associated with the GreenBox Warrant is recognized as vesting conditions are achieved, based on the grant date fair value of the warrants.

The fair value of the GreenBox Warrant was determined as of the grant date in accordance with ASC Topic 718, Compensation – Stock Compensation , using the Monte Carlo simulation model.

The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the vesting conditions stipulated in the warrant agreement in a large number of simulated scenarios.

Additionally, the Black-Scholes pricing model was applied to determine the fair value of the GreenBox warrant after vesting.

Key assumptions for the Monte Carlo simulation and Black-Scholes models include risk-free interest rate and historical stock price volatility of peer company shares.

The Black-Scholes assumptions utilized in determining the grant date fair value of the GreenBox Warrant after vesting are included in the following table:

Selected Assumption

Strike price $ 41.972

Volatility (a) 48.0 %

Risk-free interest rate (b) 4.44 %

Expected term (years) (c) 3.00

(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 GreenBox 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 GreenBox Warrant.

Walmart Warrants

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.

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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

(“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.

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 (“June 2022 Warrant” and, the common units of Symbotic Holdings issuable thereunder, the “Warrant Units”).

As of September 30, 2023, the June 2022 Warrant had vested and is exercisable, as the installation commencement date for certain Systems which the Company is installing in Walmart's 42 regional distribution centers had occurred.

Upon vesting, units may be acquired at an exercise price of $ 10.00 .

1 unchanged sentence

The right to purchase units in connection with the June 2022 Warrant expires on June 7, 2027.

On December 7, 2023, the Company received a notice of exercise from Walmart whereby Walmart noted their irrevocable election to exercise the outstanding 15,870,411 warrant units.

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.

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The following table summarizes stock warrant activity for the year ended September 24, 2022:

The following table summarizes the Company’s stock warrant activity for the year ended September 30, 2023:

Warrant Units

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The amount of provision for warrants recorded as a reduction of the transaction price for the Warrants during the twelve months ended September 30, 2023 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.

As of September 30, 2023, total warrant balance related to the Walmart Warrants is $ 58.1 million and the remaining term of the agreement is 3.6 years.

Segment and Geographic Information

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data