UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-38835

DESKTOP METAL, INC.

(Exact name of registrant as specified in its charter)


Delaware	83-2044042
(State of Other Jurisdiction of incorporation or Organization)	(I.R.S. Employer Identification No.)

63 3rd Avenue, Burlington, MA	01803
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code: (978) 224-1244

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically; every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.0405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒	Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒


		Name Of Each Exchange
Title of Each Class	Trading Symbol(s)	On Which Registered
Common Stock, $0.0001 Par Value per Share	DM	New York Stock Exchange

As of August 9, 2021, there were 260,674,860 shares of the registrant’s common stock outstanding.

Table of Contents

TABLE OF CONTENTS


		Page
PART I

Part I. Financial Information		3

Item 1. Financial Statements		3

Condensed Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020		3

Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2021 and 2020		4

Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2021 and 2020		5

Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2021 and 2020		6

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020		8

Notes to Condensed Consolidated Financial Statements		10

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		38

Item 3. Quantitative and Qualitative Disclosures About Market Risk		52

Item 4. Controls and Procedures		53

Part II. Other Information		54

Item 1. Legal Proceedings		54

Item 1A. Risk Factors		54

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		81

Item 3. Defaults Upon Senior Securities		82

Item 4. Mine Safety Disclosures		82

Item 5. Other Information		82

Item 6. Exhibits		82

Exhibit Index		83

Signatures		84

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except share and per share amounts)


	June 30,		December 31,
	2021		2020
Assets
Current assets:
Cash and cash equivalents	$	188,199	$	483,525
Short‑term investments		326,318		111,867
Accounts receivable		13,441		6,516
Inventory		25,407		9,708
Prepaid expenses and other current assets		7,078		976
Total current assets		560,443		612,592
Restricted cash		676		612
Property and equipment, net		13,228		12,160
Capitalized software, net		226		312
Goodwill		251,060		2,252
Intangible assets, net		178,860		9,102
Other noncurrent assets		12,210		4,879
Total Assets	$	1,016,703	$	641,909
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	9,214	$	7,591
Customer deposits		2,829		1,480
Current portion of lease liability		1,983		868
Accrued expenses and other current liabilities		20,968		7,565
Deferred revenue		4,814		3,004
Current portion of contingent consideration		1,429		—
Current portion of long‑term debt, net of deferred financing costs		311		9,991
Total current liabilities		41,548		30,499
Warrant liability		—		93,328
Subscription agreement		474		—
Contingent consideration, net of current portion		4,655		—
Lease liability, net of current portion		3,959		2,157
Deferred tax liability		8,723		—
Total liabilities		59,359		125,984
Commitments and Contingences (Note 15)
Stockholders’ Equity
Preferred Stock, $0.0001 par value—authorized, 50,000,000 shares; no shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively		—		—
Common Stock, $0.0001 par value—500,000,000 shares authorized; 259,712,899 and 226,756,733 shares issued at June 30, 2021 and December 31, 2020, respectively, 259,545,731 and 224,626,597 shares outstanding at June 30, 2021 and December 31, 2020, respectively		26		23
Additional paid‑in capital		1,387,779		844,188
Accumulated deficit		(430,565)		(328,277)
Accumulated other comprehensive income (loss)		104		(9)
Total Stockholders’ Equity		957,344		515,925
Total Liabilities and Stockholders’ Equity	$	1,016,703	$	641,909

See notes to condensed consolidated financial statements

Table of Contents

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except per share amounts)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Revenues
Products	$	17,560	$	1,531	$	27,871	$	4,225
Services		1,417		658		2,419		1,349
Total revenues		18,977		2,189		30,290		5,574
Cost of sales
Products		15,490		9,372		25,977		14,413
Services		1,115		1,106		2,528		2,269
Total cost of sales		16,605		10,478		28,505		16,682
Gross profit/(loss)		2,372		(8,289)		1,785		(11,108)
Operating expenses
Research and development		15,651		9,827		26,509		22,167
Sales and marketing		10,894		2,958		16,343		7,452
General and administrative		13,142		2,964		26,988		5,589
In-process research and development assets acquired		10,400		—		10,400		—
Total operating expenses		50,087		15,749		80,240		35,208
Loss from operations		(47,715)		(24,038)		(78,455)		(46,316)
Change in fair value of warrant liability		—		—		(56,576)		—
Interest expense		(51)		(51)		(125)		(155)
Interest and other income, net		268		323		630		901
Loss before income taxes		(47,498)		(23,766)		(134,526)		(45,570)
Income tax benefit		4,318		—		32,238		—
Net loss	$	(43,180)	$	(23,766)	$	(102,288)	$	(45,570)
Net loss per share—basic and diluted	$	(0.17)	$	(0.15)	$	(0.41)	$	(0.29)
Weighted average shares outstanding, basic and diluted		255,097,905		158,124,160		246,717,400		157,186,939

See notes to condensed consolidated financial statements.

Table of Contents

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

(in thousands)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Net loss		(43,180)		(23,766)	$	(102,288)	$	(45,570)
Other comprehensive (loss) income, net of taxes:
Unrealized gain (loss) on available-for-sale marketable securities, net		(5)		132		(4)		(27)
Foreign currency translation adjustment		130		—		117		—
Total comprehensive loss, net of taxes of $0		(43,055)		(23,634)	$	(102,175)	$	(45,597)

See notes to condensed consolidated financial statements.

Table of Contents

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

(in thousands, except share amounts)


	Three Months Ended June 30, 2021
								Accumulated
								Other
	Common Stock			Additional				Comprehensive		Total
	Voting			Paid‑in		Accumulated		(Loss)		Stockholders’
	Shares	Amount		Capital		Deficit		Income		Equity
BALANCE—April 1, 2021	252,436,919	$	25	$	1,326,945	$	(387,385)	$	(21)	$	939,564
Exercise of Common Stock options	2,683,506		—		3,485		—		—		3,485
Vesting of restricted Common Stock	56,015		—		—		—		—		—
Vesting of restricted stock units	28,656		—		—		—		—		—
Repurchase of shares for employee tax withholdings	(6,931)		—		(91)		—		—		(91)
Issuance of Common Stock for acquisitions	4,013,196		1		49,141		—		—		49,142
Issuance of common stock for acquired in-process research and development	334,370		—		4,300		—		—		4,300
Stock‑based compensation expense	—		—		3,999		—		—		3,999
Net loss	—		—		—		(43,180)		—		(43,180)
Other comprehensive income (loss)	—		—		—		—		125		125
BALANCE—June 30, 2021	259,545,731	$	26	$	1,387,779	$	(430,565)	$	104	$	957,344


	Six Months Ended June 30, 2021
								Accumulated
								Other
	Common Stock			Additional				Comprehensive		Total
	Voting			Paid‑in		Accumulated		(Loss)		Stockholders’
	Shares	Amount		Capital		Deficit		Income		Equity
BALANCE—January 1, 2021	224,626,597	$	23	$	844,188	$	(328,277)	$	(9)	$	515,925
Exercise of Common Stock options	2,846,734		—		3,665		—		—		3,665
Vesting of restricted Common Stock	112,030		—		—		—		—		—
Vesting of restricted stock units	43,921		—		—		—		—		—
Repurchase of shares for employee tax withholdings	(9,172)		—		(145)		—		—		(145)
Issuance of Common Stock for acquisitions	9,049,338		1		208,988		—		—		208,989
Issuance of common stock for acquired in-process research and development	334,370		—		4,300		—		—		4,300
Stock‑based compensation expense	—		—		6,216		—		—		6,216
Vesting of Trine Founder shares	1,850,938		—		—		—		—		—
Exercise of warrants	20,690,975		2		320,567		—		—		320,569
Net loss	—		—		—		(102,288)		—		(102,288)
Other comprehensive income (loss)	—		—		—		—		113		113
BALANCE—June 30, 2021	259,545,731	$	26	$	1,387,779	$	(430,565)	$	104	$	957,344

Table of Contents


	Three Months Ended June 30, 2020
											Accumulated
											Other
	Legacy Convertible			Common Stock			Additional				Comprehensive		Total
	Preferred Stock			Voting			Paid‑in		Accumulated		(Loss)		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Deficit		Income		Equity
BALANCE—April 1, 2020	100,038,109	$	436,533	26,813,113	$	3	$	16,722	$	(316,066)	$	(84)	$	(299,425)
Retroactive application of recapitalization (Note 1)	(100,038,109)		(436,533)	130,138,012		13		438,037		—		—		438,050
Adjusted balance, beginning of period	—		—	156,951,125		16		454,759		(316,066)		(84)		138,625
Exercise of Common Stock options	—		—	28,173		—		4		—		—		4
Vesting of restricted Common Stock	—		—	1,750,360		—		2		—		—		2
Stock‑based compensation expense	—		—	—		—		1,074		—		—		1,074
Common Stock warrants issued	—		—	—		—		87		—		—		87
Net loss	—		—	—		—		—		(23,766)		—		(23,766)
Other comprehensive income (loss)	—		—	—		—		—		—		132		132
BALANCE—June 30, 2020	—	$	—	158,729,658	$	16	$	455,926	$	(339,832)	$	48	$	116,158


	Six Months Ended June 30, 2020
											Accumulated
											Other
	Legacy Convertible			Common Stock			Additional				Comprehensive		Total
	Preferred Stock			Voting			Paid‑in		Accumulated		(Loss)		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Deficit		Income		Equity
BALANCE—January 1, 2020	100,038,109	$	436,533	26,813,113	$	3	$	16,722	$	(294,262)	$	75	$	(277,462)
Retroactive application of recapitalization (Note 1)	(100,038,109)		(436,533)	128,100,821		13		436,520		—		—		436,533
Adjusted balance, beginning of period	—		—	154,913,934		16		453,242		(294,262)		75		159,071
Exercise of Common Stock options	—		—	314,809		—		136		—		—		136
Vesting of restricted Common Stock	—		—	3,500,915		—		4		—		—		4
Stock‑based compensation expense	—		—	—		—		2,333		—		—		2,333
Common Stock warrants issued	—		—	—		—		211		—		—		211
Net loss	—		—	—		—		—		(45,570)		—		(45,570)
Other comprehensive income (loss)	—		—	—		—		—		—		(27)		(27)
BALANCE—June 30, 2020	—	$	—	158,729,658	$	16	$	455,926	$	(339,832)	$	48	$	116,158

See notes to condensed consolidated financial statements.

Table of Contents

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)


	Six Months Ended June 30,
	2021		2020
Cash flows from operating activities:
Net loss	$	(102,288)	$	(45,570)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		9,524		4,475
Stock‑based compensation		6,216		2,333
Change in fair value of warrant liability		56,576		—
Change in fair value of subscription agreement		474		—
Expense related to Common Stock warrants issued		—		43
Amortization (accretion) of discount on investments		1,304		—
Amortization of debt financing cost		9		10
Provision for bad debt		164		285
Acquired in-process research and development		10,400		—
(Gain) loss on disposal of property and equipment		(7)		10
Gain on investment, related to Make Composites, Inc.		—		120
Net increase in accrued interest related to marketable securities		(1,062)		—
Net unrealized (gain) loss on other investments		(517)		—
Deferred tax benefit		(32,535)		—
Changes in operating assets and liabilities:
Accounts receivable		(3,584)		1,562
Inventory		(6,635)		(1,378)
Prepaid expenses and other current assets		(3,732)		1,033
Other assets		(170)		—
Accounts payable		(155)		(1,178)
Accrued expenses and other current liabilities		(5,119)		(1,074)
Customer deposits		(1,372)		(57)
Deferred revenue		693		(756)
Change in right of use assets and lease liabilities, net		(92)