Fair Value Measurements

12 Months Ended

Dec. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

We categorize assets and liabilities recorded or disclosed at fair value on the consolidated balance sheets based upon the level of judgment associated with inputs used to measure their fair value. The categories are as follows:

Level 1—Inputs are unadjusted quoted prices for identical assets or liabilities in active markets.

Level 2—Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

Level 3—Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The inputs require significant management judgment or estimation.

The Company’s financial assets and liabilities that were measured at fair value on a recurring basis were as follows (in thousands):

	December 31, 2021
	Level 1		Level 2		Level 3		Total
Financial Assets:
Cash equivalents:
Money market funds	$	44,142	$	—	$	—	$	44,142
Total cash equivalents	$	44,142	$	—	$	—	$	44,142
Short-term investments:
Non-U.S. government and agency securities	—		24,317		—		24,317
Corporate debt securities	—		92,737		—		92,737
Commercial paper	—		147,877		—		147,877
Total short-term investments	$	—	$	264,931	$	—	$	264,931
Long-term investments:
U.S. government and agency securities	$	185,075	$	—	$	—	$	185,075
Corporate debt securities	—		78,584		—		78,584
Total long-term investments	$	185,075	$	78,584	$	—	$	263,659
Other assets:
Convertible notes receivable	$	—	$	—	$	1,107	$	1,107
Total other assets:	$	—	$	—	$	1,107	$	1,107
Total assets measured at fair value	$	229,217	$	343,515	$	1,107	$	573,839
Financial Liabilities:
Public warrants liability	$	15,645	$	—	$	—	$	15,645
Private warrants liability	—		23,329		—		23,329
Contingent earn-out liability	—				377,576		377,576
Total liabilities measured at fair value	$	15,645	$	23,329	$	377,576	$	416,550

	December 31, 2020
	Level 1		Level 2		Level 3		Total
Financial Assets:
Cash equivalents:
Money market funds	$	43,116	$	—	$	—	$	43,116
Total cash equivalents	$	43,116	$	—	$	—	$	43,116
Total assets measured at fair value	$	43,116	$	—	$	—	$	43,116

Available-for-sale Debt Securities

The following table summarizes the amortized cost, unrealized gains and losses, and fair value of our available-for-sale debt securities as of December 31, 2021 (in thousands). There were no investments as of December 31, 2020.

	December 31, 2021
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Investments:
U.S. government and agency securities	$	186,113	$	—	$	(1,038)	$	185,075
Non-U.S. government and agency securities	24,385		—		(68)		24,317
Corporate debt securities	171,772		—		(451)		171,321
Commercial paper	147,914		—		(37)		147,877
Convertible notes receivable	1,000		107		—		1,107
Total available-for-sale investments	$	531,184	$	107	$	(1,594)	$	529,697

Unrealized losses related to these securities are due to interest rate fluctuations as opposed to credit quality. In addition, we do not intend to sell and it is not likely that we would be required to sell these securities before recovery of their amortized cost basis, which may be at maturity. As a result, there were no other-than-temporary impairments recorded for these securities at December 31, 2021.

In January 2021, Legacy Matterport entered a convertible note agreement with a privately held company as a strategic investment for a principal of $1.0 million. The note bears an interest rate of 5.0% per annum and matures in January 2023. The convertible note receivable is accounted for as available-for-sale debt securities in other assets based on “Level 3” inputs, which consist of unobservable inputs and reflect management’s estimates of assumptions that market participants would use in pricing the asset, with unrealized holding gains and losses excluded from earnings and reported in other comprehensive income (loss). The fair value of the convertible note receivable was determined using a probability-weighted assessment of redemption and conversion scenarios upon the investee closing additional financing. The key inputs to determining fair values under that approach included probability of repayment and conversion scenarios, and discount rates. As of December 31, 2021, the Company applied a probability of 70% and 30% to the conversion and repayment scenario, respectively and an average discount rate of 16.2% in the valuation.

The following table summarizes the amortized cost and fair value of our available-for-sale debt securities as of December 31, 2021, by contractual years-to-maturity (in thousands):

	Amortized Cost		Fair Value
Due within one year	$	265,216	$	264,931
Due between one and three years	265,968		264,766
Total	$	531,184	$	529,697