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 September 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 November 12, 2021, there were 311,014,335 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 September 30, 2021 and December 31, 2020		3

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

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

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

Condensed Consolidated Statements of Cash Flows for the nine months ended September 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		44

Item 3. Quantitative and Qualitative Disclosures About Market Risk		59

Item 4. Controls and Procedures		60

Part II. Other Information		61

Item 1. Legal Proceedings		61

Item 1A. Risk Factors		61

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		89

Item 3. Defaults Upon Senior Securities		90

Item 4. Mine Safety Disclosures		90

Item 5. Other Information		90

Item 6. Exhibits		90

Exhibit Index		91

Signatures		92

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)


	September 30,		December 31,
	2021		2020
Assets
Current assets:
Cash and cash equivalents	$	131,676	$	483,525
Short‑term investments		292,272		111,867
Accounts receivable		22,878		6,516
Inventory		32,730		9,708
Prepaid expenses and other current assets		7,250		976
Total current assets		486,806		612,592
Restricted cash		676		612
Property and equipment, net		23,782		12,160
Capitalized software, net		179		312
Goodwill		262,343		2,252
Intangible assets, net		180,129		9,102
Other noncurrent assets		17,679		4,879
Total Assets	$	971,594	$	641,909
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	16,985	$	7,591
Customer deposits		2,876		1,480
Current portion of lease liability		2,677		868
Accrued expenses and other current liabilities		20,686		7,565
Deferred revenue		5,530		3,004
Current portion of long‑term debt, net of deferred financing costs		1,030		9,991
Total current liabilities		49,784		30,499
Long-term debt, net of current portion		680		—
Warrant liability		—		93,328
Contingent consideration, net of current portion		4,528		—
Lease liability, net of current portion		7,802		2,157
Deferred tax liability		7,881		—
Other noncurrent liabilities		1,417		—
Total liabilities		72,092		125,984
Commitments and Contingences (Note 16)
Stockholders’ Equity
Preferred Stock, $0.0001 par value—authorized, 50,000,000 shares; no shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively		—		—
Common Stock, $0.0001 par value—500,000,000 shares authorized; 261,914,672 and 226,756,733 shares issued at September 30, 2021 and December 31, 2020, respectively, 261,567,100 and 224,626,597 shares outstanding at September 30, 2021 and December 31, 2020, respectively		26		23
Additional paid‑in capital		1,398,039		844,188
Accumulated deficit		(497,444)		(328,277)
Accumulated other comprehensive income (loss)		(1,119)		(9)
Total Stockholders’ Equity		899,502		515,925
Total Liabilities and Stockholders’ Equity	$	971,594	$	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				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Revenues
Products	$	23,949	$	1,888	$	51,820	$	6,113
Services		1,489		639		3,908		1,988
Total revenues		25,438		2,527		55,728		8,101
Cost of sales
Products		20,450		3,732		46,427		18,145
Services		1,033		1,096		3,561		3,365
Total cost of sales		21,483		4,828		49,988		21,510
Gross profit/(loss)		3,955		(2,301)		5,740		(13,409)
Operating expenses
Research and development		19,311		9,195		45,820		31,362
Sales and marketing		13,224		2,542		29,567		9,994
General and administrative		19,833		5,415		46,821		11,004
In-process research and development assets acquired		15,181		—		25,581		—
Total operating expenses		67,549		17,152		147,789		52,360
Loss from operations		(63,594)		(19,453)		(142,049)		(65,769)
Change in fair value of warrant liability		—		—		(56,576)		—
Interest expense		(12)		(98)		(137)		(253)
Interest and other (expense) income, net		(3,796)		94		(3,166)		995
Loss before income taxes		(67,402)		(19,457)		(201,928)		(65,027)
Income tax benefit		523		—		32,761		—
Net loss	$	(66,879)	$	(19,457)	$	(169,167)	$	(65,027)
Net loss per share—basic and diluted	$	(0.26)	$	(0.12)	$	(0.67)	$	(0.41)
Weighted average shares outstanding, basic and diluted		260,555,655		159,968,300		251,467,644		158,120,826

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				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Net loss		(66,879)		(19,457)	$	(169,167)	$	(65,027)
Other comprehensive (loss) income, net of taxes:
Unrealized gain (loss) on available-for-sale marketable securities, net		(7)		(43)		(11)		(70)
Foreign currency translation adjustment		(1,216)		—		(1,099)		—
Total comprehensive loss, net of taxes of $0		(68,102)		(19,500)	$	(170,277)	$	(65,097)

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 September 30, 2021
								Accumulated
								Other
	Common Stock			Additional				Comprehensive		Total
	Voting			Paid‑in		Accumulated		(Loss)		Stockholders’
	Shares	Amount		Capital		Deficit		Income		Equity
BALANCE—July 1, 2021	259,545,731	$	26	$	1,387,779	$	(430,565)	$	104	$	957,344
Exercise of Common Stock options	1,615,484		—		1,576		—		—		1,576
Vesting of restricted Common Stock	295,599		—		—		—		—		—
Vesting of restricted stock units	259,735		—		—		—		—		—
Net share settlement related to employee tax withholdings upon vesting of restricted stock units	(40,299)		—		(309)		—		—		(309)
Issuance of Common Stock for acquisitions	—		—		—		—		—		—
Issuance of common stock for acquired in-process research and development	—		—		—		—		—		—
Net share settlement related to employee tax withholdings upon vesting of restricted stock awards	(109,150)		—		(958)		—		—		(958)
Stock‑based compensation expense	—		—		9,951		—		—		9,951
Net loss	—		—		—		(66,879)		—		(66,879)
Other comprehensive income (loss)	—		—		—		—		(1,223)		(1,223)
BALANCE—September 30, 2021	261,567,100	$	26	$	1,398,039	$	(497,444)	$	(1,119)	$	899,502


	Nine Months Ended September 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	4,462,218		—		5,241		—		—		5,241
Vesting of restricted Common Stock	407,629		—		—		—		—		—
Vesting of restricted stock units	303,656		—		—		—		—		—
Net settlement of shares related to employee tax withholdings upon vesting of restricted stock units	(49,471)		—		(454)		—		—		(454)
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
Net share settlement related to employee tax withholdings upon vesting of restricted stock awards	(109,150)		—		(958)						(958)
Stock‑based compensation expense	—		—		16,167		—		—		16,167
Vesting of Trine Founder shares	1,850,938		—		—		—		—		—
Exercise of warrants	20,690,975		2		320,567		—		—		320,569
Net loss	—		—		—		(169,167)		—		(169,167)
Other comprehensive income (loss)	—		—		—		—		(1,110)		(1,110)
BALANCE—September 30, 2021	261,567,100	$	26	$	1,398,039	$	(497,444)	$	(1,119)	$	899,502

Table of Contents


	Three Months Ended September 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—July 1, 2020	100,038,109	$	436,533	29,937,631	$	3	$	21,254	$	(339,832)	$	48	$	(318,527)
Retroactive application of recapitalization (Note 1)	(100,038,109)		(436,533)	128,792,027		13		434,672		—		—		434,685
Adjusted balance, beginning of period	—		—	158,729,658		16		455,926		(339,832)		48		116,158
Exercise of Common Stock options	—		—	184,447		—		131		—		—		131
Vesting of restricted Common Stock	—		—	1,751,364		—		2		—		—		2
Stock‑based compensation expense	—		—	—		—		1,895		—		—		1,895
Common Stock warrants issued	—		—	—		—		—		—		—		—
Net loss	—		—	—		—		—		(19,457)		—		(19,457)
Other comprehensive income (loss)	—		—	—		—		—		—		(43)		(43)
BALANCE—September 30, 2020	—	$	—	160,665,469	$	16	$	457,954	$	(359,289)	$	5	$	98,686


	Nine Months Ended September 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	—		—	499,256		—		267		—		—		267
Vesting of restricted Common Stock	—		—	5,252,279		—		6		—		—		6
Stock‑based compensation expense	—		—	—		—		4,228		—		—		4,228
Common Stock warrants issued	—		—	—		—		211		—		—		211
Net loss	—		—	—		—		—		(65,027)		—		(65,027)
Other comprehensive income (loss)	—		—	—		—		—		—		(70)		(70)
BALANCE—September 30, 2020	—	$	—	160,665,469	$	16	$	457,954	$	(359,289)	$	5	$	98,686

See notes to condensed consolidated financial statements.

Table of Contents

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)


	Nine Months Ended September 30,
	2021		2020
Cash flows from operating activities:
Net loss	$	(169,167)	$	(65,027)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		15,576		6,525
Stock‑based compensation		16,167		4,228
Change in fair value of warrant liability		56,576		—
Change in fair value of subscription agreement liability		2,920		—
Expense related to Common Stock warrants issued		—		43
Amortization (accretion) of discount on investments		2,189		34
Amortization of debt financing cost		9		14
Provision for bad debt		316		333
Acquired in-process research and development		25,581		—
(Gain) loss on disposal of property and equipment		19		10
Net increase in accrued interest related to marketable securities		(414)		162