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 March 31, 2022

☐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 May 6, 2022, there were 313,461,320 shares of the registrant’s common stock outstanding.

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TABLE OF CONTENTS


		Page
PART I

Part I. Financial Information		3

Item 1. Financial Statements		3

Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021		3

Condensed Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021		4

Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2022 and 2021		5

Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2022 and 2021		6

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021		7

Notes to Condensed Consolidated Financial Statements		9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		47

Item 3. Quantitative and Qualitative Disclosures About Market Risk		58

Item 4. Controls and Procedures		58

Part II. Other Information		59

Item 1. Legal Proceedings		59

Item 1A. Risk Factors		60

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		88

Item 3. Defaults Upon Senior Securities		88

Item 4. Mine Safety Disclosures		88

Item 5. Other Information		88

Item 6. Exhibits		88

Exhibit Index		89

Signatures		90

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except share and per share amounts)


	March 31,		December 31,
	2022		2021
Assets
Current assets:
Cash and cash equivalents	$	103,590	$	65,017
Current portion of restricted cash		2,166		2,129
Short‑term investments		102,895		204,569
Accounts receivable		36,661		46,687
Inventory		81,876		65,399
Prepaid expenses and other current assets		22,446		18,208
Total current assets		349,634		402,009
Restricted cash, net of current portion		1,112		1,112
Property and equipment, net		58,082		58,710
Goodwill		630,022		639,301
Intangible assets, net		251,000		261,984
Other noncurrent assets		32,143		25,480
Total Assets	$	1,321,993	$	1,388,596
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	30,431	$	31,558
Customer deposits		16,911		14,137
Current portion of lease liability		5,326		5,527
Accrued expenses and other current liabilities		31,615		33,829
Current portion of deferred revenue		19,261		18,189
Current portion of long‑term debt, net of deferred financing costs		731		825
Total current liabilities		104,275		104,065
Long-term debt, net of current portion		523		548
Warrant liability		—		—
Contingent consideration, net of current portion		2,596		4,183
Lease liability, net of current portion		19,856		13,077
Deferred revenue, net of current portion		4,047		4,508
Deferred tax liability		9,506		10,695
Other noncurrent liabilities		3,165		3,170
Total liabilities		143,968		140,246
Commitments and Contingencies (Note 17)
Stockholders’ Equity
Preferred Stock, $0.0001 par value—authorized, 50,000,000 shares; no shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively		—		—
Common Stock, $0.0001 par value—500,000,000 shares authorized; 312,999,991 and 311,737,858 shares issued at March 31, 2022 and December 31, 2021, respectively, 312,825,572 and 311,473,950 shares outstanding at March 31, 2022 and December 31, 2021, respectively		31		31
Additional paid‑in capital		1,833,998		1,823,344
Accumulated deficit		(638,555)		(568,611)
Accumulated other comprehensive loss		(17,449)		(6,414)
Total Stockholders’ Equity		1,178,025		1,248,350
Total Liabilities and Stockholders’ Equity	$	1,321,993	$	1,388,596

See notes to condensed consolidated financial statements

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DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except per share amounts)


	Three Months Ended
	March 31,
	2022		2021
Revenues
Products	$	39,476	$	10,311
Services		4,230		1,002
Total revenues		43,706		11,313
Cost of sales
Products		41,902		10,487
Services		3,132		1,413
Total cost of sales		45,034		11,900
Gross profit/(loss)		(1,328)		(587)
Operating expenses
Research and development		24,605		10,858
Sales and marketing		19,689		5,449
General and administrative		23,857		13,846
Total operating expenses		68,151		30,153
Loss from operations		(69,479)		(30,740)
Change in fair value of warrant liability		—		(56,576)
Interest expense		32		(73)
Interest and other (expense) income, net		(1,753)		361
Loss before income taxes		(71,200)		(87,028)
Income tax benefit		1,256		27,920
Net loss	$	(69,944)	$	(59,108)
Net loss per share—basic and diluted	$	(0.22)	$	(0.25)
Weighted average shares outstanding, basic and diluted		312,016,627		238,243,779

See notes to condensed consolidated financial statements.

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DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

(in thousands)


	Three Months Ended
	March 31,
	2022		2021
Net loss	$	(69,944)	$	(59,108)
Other comprehensive (loss) income, net of taxes:
Unrealized gain (loss) on available-for-sale marketable securities, net		12		1
Foreign currency translation adjustment		(11,047)		(13)
Total comprehensive (loss) income, net of taxes of $0	$	(80,979)	$	(59,120)

See notes to condensed consolidated financial statements.

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DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

(in thousands, except share amounts)


	Three Months Ended March 31, 2022
								Accumulated
								Other
	Common Stock			Additional				Comprehensive		Total
	Voting			Paid‑in		Accumulated		(Loss)		Stockholders’
	Shares	Amount		Capital		Deficit		Income		Equity
BALANCE—January 1, 2022	311,473,950	$	31	$	1,823,344	$	(568,611)	$	(6,414)	$	1,248,350
Exercise of Common Stock options	786,693		—		900		—		—		900
Vesting of restricted Common Stock	84,384		—		—		—		—		—
Vesting of restricted stock units	520,265		—		—		—		—		—
Repurchase of shares for employee tax withholdings	(39,720)		—		(158)		—		—		(158)
Issuance of Common Stock for acquisitions	—		—		—		—		—		—
Stock‑based compensation expense	—		—		9,912		—		—		9,912
Vesting of Trine Founder shares	—		—		—		—		—		—
Exercise of warrants	—		—		—		—		—		—
Net loss	—		—		—		(69,944)		—		(69,944)
Other comprehensive income (loss)	—		—		—		—		(11,035)		(11,035)
BALANCE—March 31, 2022	312,825,572	$	31	$	1,833,998	$	(638,555)	$	(17,449)	$	1,178,025


	Three Months Ended March 31, 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	163,228		—		180		—		—		180
Vesting of restricted Common Stock	56,015		—		—		—		—		—
Vesting of restricted stock units	15,265		—		—		—		—		—
Repurchase of shares for employee tax withholdings	(2,241)		—		(54)		—		—		(54)
Issuance of Common Stock for acquisitions	5,036,142		—		159,847		—		—		159,847
Stock‑based compensation expense	—		—		2,217		—		—		2,217
Vesting of Trine Founder shares	1,850,938		—		—		—		—		—
Exercise of warrants	20,690,975		2		320,567		—		—		320,569
Net loss	—		—		—		(59,108)		—		(59,108)
Other comprehensive income (loss)	—		—		—		—		(12)		(12)
BALANCE—March 31, 2021	252,436,919	$	25	$	1,326,945	$	(387,385)	$	(21)	$	939,564

See notes to condensed consolidated financial statements.

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DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)


	Three Months Ended March 31,
	2022		2021
Cash flows from operating activities:
Net loss	$	(69,944)	$	(59,108)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		12,883		3,892
Stock‑based compensation		9,912		2,217
Change in fair value of warrant liability		—		56,576
Amortization (accretion) of discount on investments		413		406
Amortization of debt financing cost		—		4
Provision for bad debt		419		72
Loss on disposal of property and equipment		2		—
Foreign exchange (gains) losses on intercompany transactions, net		185		—
Net increase (decrease) in accrued interest related to marketable securities		949		(240)
Net unrealized (gain) loss on marketable securities		—		(25)
Net unrealized (gain) loss on equity investment		1,700		—
Deferred tax benefit		(1,256)		(27,921)
Change in fair value of contingent consideration		(114)		—
Foreign currency transaction (gain) loss		10		—
Changes in operating assets and liabilities:
Accounts receivable		9,489		(61)
Inventory		(15,506)		(2,381)
Prepaid expenses and other current assets		(4,087)		(4,276)
Other assets		(210)		(30)
Accounts payable		(1,333)		(3,856)
Accrued expenses and other current liabilities		(3,391)		(5,247)
Customer deposits		2,980		(1,234)
Current portion of deferred revenue		721		105
Change in right of use assets and lease liabilities, net		(108)		(22)
Other liabilities		12		—
Net cash used in operating activities		(56,274)		(41,129)
Cash flows from investing activities:
Purchases of property and equipment		(4,074)		(262)
Proceeds from sale of property and equipment		6		—
Purchase of marketable securities		—		(92,386)
Proceeds from sales and maturities of marketable securities		98,625		48,241
Cash paid for acquisitions, net of cash acquired		(23)		(137,646)
Net cash provided by (used in) investing activities		94,534		(182,053)
Cash flows from financing activities:
Proceeds from reverse recapitalization, net of issuance costs		—		(1,239)
Proceeds from the exercise of stock options		900		180
Proceeds from the exercise of stock warrants		—		158,308
Payment of taxes related to net share settlement upon vesting of restricted stock units		(158)		(54)
Repayment of term loan		(43)		—
Net cash provided by financing activities		699		157,195
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(349)		26
Net increase (decrease) in cash, cash equivalents, and restricted cash		38,610		(65,961)
Cash, cash equivalents, and restricted cash at beginning of period		68,258		484,137
Cash, cash equivalents, and restricted cash at end of period	$	106,868	$	418,176

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Supplemental disclosures of cash flow information
Reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total shown in the condensed consolidated statements of cash flows:
Cash and cash equivalents	$	103,590		416,379
Restricted cash included in other current assets		2,166		1,021
Restricted cash included in other noncurrent assets		1,112		776
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows	$	106,868	$	418,176

Supplemental cash flow information:
Interest paid	$	—	$	73

Non‑cash investing and financing activities:
Net unrealized (gain) loss on investments	$	(12)	$	(1)
Exercise of private placement warrants	$	—	$	149,904
Common Stock issued for acquisitions	$	—	$	159,847
Additions to right of use assets and lease liabilities	$	7,784	$	364
Purchase of property and equipment included in accounts payable	$	313	$	50
Transfers from property and equipment to inventory	$	1,721	$	—
Transfers from inventory to property and equipment	$	605	$	—
Receivable for warrants exercised	$	—	$	12,357

See notes to condensed consolidated financial statements.

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1. ORGANIZATION, NATURE OF BUSINESS, AND RISK AND UNCERTAINTIES

Organization and Nature of Business

Desktop Metal, Inc. is a Delaware corporation headquartered in Burlington, Massachusetts. The company was founded in 2015 and is accelerating the transformation of manufacturing with 3D printing solutions for engineers, designers, and manufacturers. The Company designs, produces and markets 3D printing systems to a variety of end customers.

On December 9, 2020 (the “Closing Date”), Trine Acquisition Corp. (“Trine”) consummated the previously announced merger pursuant to the Agreement and Plan of Merger, dated August 26, 2020, by and among Trine, Desktop Metal, Inc. and Sparrow Merger Sub, Inc., pursuant to which Sparrow Merger Sub, Inc. merged with and into Desktop Metal, Inc., with Desktop Metal, Inc. becoming our wholly owned subsidiary (the “Business Combination”). Upon the closing of the Business Combination, Trine changed its name to Desktop Metal, Inc. and Desktop Metal, Inc. changed its name to Desktop Metal Operating, Inc.

Unless otherwise indicated or the context otherwise requires, references in this Quarterly Report on Form 10-Q to the “Company” and “Desktop Metal” refer to the consolidated operations of Desktop Metal, Inc. and its subsidiaries. References to “Trine” refer to the company prior to the consummation of the Business Combination and references to “Legacy Desktop Metal” refer to Desktop Metal Operating, Inc. prior to the consummation of the Business Combination.

Legacy Desktop Metal was deemed the accounting acquirer in the Business Combination based on an analysis of the criteria outlined in Accounting Standards Codification (“ASC”) 805. This determination was primarily based on Legacy Desktop Metal’s stockholders prior to the Business Combination having a majority of the voting power in the combined company, Legacy Desktop Metal having the ability to appoint a majority of the Board of Directors of the combined company, Legacy Desktop Metal’s existing management comprising the senior management of the combined company, Legacy Desktop Metal comprising the ongoing operations of the combined company, Legacy Desktop Metal being the larger entity based on historical revenues and business operations, and the combined company assuming Legacy Desktop Metal’s name. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Legacy Desktop Metal issuing stock for the net assets of Trine, accompanied by a recapitalization. The net assets of Trine are stated at historical cost, with no goodwill or other intangible assets recorded.

While Trine was the legal acquirer in the Business Combination, because Legacy Desktop Metal was deemed the accounting acquirer, the historical financial statements of Legacy Desktop Metal became the historical financial statements of the combined company upon the consummation of the Business Combination. As a result, the financial statements included in this report reflect (i) the historical operating results of Legacy Desktop Metal prior to the Business Combination; (ii) the combined results of Trine and Legacy Desktop Metal following the close of the Business Combination; (iii) the assets and liabilities of Legacy Desktop Metal at their historical cost; and (iv) the Company’s equity structure for all periods presented.

In accordance with guidance applicable to these circumstances, the equity structure has been restated in all comparative periods up to the Closing Date to reflect the number of shares of the Company’s common stock, $0.0001 par value per share, issued to Legacy Desktop Metal’s stockholders in connection with the Business Combination. As such, the shares and corresponding capital amounts and earnings per share related to Legacy Desktop Metal convertible preferred stock and Legacy Desktop Metal common stock prior to the Business Combination have been retroactively restated as shares reflecting the exchange ratio of 1.22122 established in the Business Combination. Legacy Desktop Metal’s convertible preferred stock previously classified as mezzanine was retroactively adjusted, converted into Common Stock, and reclassified to permanent as a result of the reverse recapitalization.

Risks and Uncertainties

The Company is subject to a number of risks similar to those of other companies of similar size in its industry, including, but not limited to, the need for successful development of products, the need for additional funding, competition from substitute products and services from larger companies, protection of proprietary technology, patent litigation, dependence on key individuals, and risks associated with changes in information technology. The Company has financed its operations to date primarily with proceeds from the sale of preferred stock and the Business Combination. The Company’s long-term success is dependent upon its ability to successfully market its products and services; generate revenue; maintain or reduce its operating costs and expenses; meet its obligations; obtain additional capital when needed; and, ultimately, achieve profitable operations. Management believes that existing cash and

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investments as of March 31, 2022 will be sufficient to fund operating and capital expenditure requirements through at least twelve months from the date of issuance of these consolidated financial statements.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company are prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the regulations of the U.S Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. The condensed consolidated financial statements include the Company’s accounts and those of its subsidiaries. In the opinion of the Company’s management, the financial information for the interim periods presented reflects all adjustments, which are of a normal and recurring nature, necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows. The results reported in these condensed consolidated financial statements are not necessarily indicative of results that may be expected for the entire year.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The functional currency of all wholly owned subsidiaries is U.S. Dollars. All intercompany transactions and balances have been eliminated in consolidation.

COVID-19 Pandemic

In March 2020, the World Health Organization declared the outbreak of a disease caused by a novel strain of the coronavirus (“COVID-19”) to be a pandemic. As of March 31, 2022, the impact of the COVID-19 pandemic continues to unfold and there has been uncertainty and disruption in the global economy and financial markets. The Company has considered the COVID-19 pandemic related impacts on its estimates, as appropriate, within its consolidated financial statements and there may be changes to those estimates in future periods.

The COVID-19 pandemic, as well as the response to mitigate the spread and effects of COVID-19, may impact the Company and its customers, as well as the demand for its products and services. The impact of COVID-19 on the Company’s operational results in subsequent periods will largely depend on future developments, and cannot be accurately predicted. These developments may include, but are not limited to, new information concerning the severity of COVID-19, the degree of success of actions take to contain or treat COVID-19 and the reactions by consumers, companies, governmental entities, and capital markets to such actions.

Significant Accounting Policies

The Company’s significant accounting policies are described in Note 2 to the financial statements in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. There have been no material changes to the significant accounting policies from the Annual Report on Form 10-K for the year ended December 31, 2021.

Recently Issued Accounting Standards

Recently Adopted Accounting Guidance

In October 2021, the FASB issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805) —Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, to require that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. This standard is effective for calendar-year public business entities in 2023 and interim periods within that year, and early adoption is permitted. The Company has adopted this ASU as of January 1, 2021 and has retrospectively adjusted purchase accounting for the acquisition of EnvisionTEC, which is described in Note 4 to these condensed

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consolidated financial statements, where deferred revenue was fair valued. As a practical expedient, the Company elected to estimate the standalone selling price for allocation purposes at the acquisition date. Upon the application of this practical expedient, the Company recognized deferred revenue as part of purchase accounting in the amount of $0.2 million and $12.5 million for the acquisitions of EnvisionTEC and ExOne, which is described in Note 4 to the financial statements, respectively.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by eliminating some exceptions to the general approach in Accounting Standards Codification 740, Income Taxes. It also clarifies certain aspects of the existing guidance to promote more consistent application. This standard is effective for calendar-year public business entities in 2021 and interim periods within that year, and early adoption is permitted. The Company adopted the ASU as of January 1, 2021, which did not have a material effect on the Company’s condensed consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which eliminates the performance of Step 2 from the goodwill impairment test. In performing its annual or interim impairment testing, an entity will instead compare the fair value of the reporting unit with its carrying amount and recognize any impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Additionally, an entity should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss. The Company adopted the ASU as of January 1, 2021, which did not have a material effect on the Company’s condensed consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses. This ASU added a new impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses. The CECL model applies to most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and other loan commitments. The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected credit losses on assets that have a low risk of loss. The company adopted the ASU as of January 1, 2022, which did not have a material effect on the Company’s condensed consolidated financial statements.

3. REVENUE RECOGNITION

Contract Balances

The Company’s deferred revenue balance was $23.3 million and $22.7 million as of March 31, 2022 and December 31, 2021, respectively. During the three months ended March 31, 2022, the Company recognized $6.9 million of existing deferred revenue from 2021. The deferred revenue consists of billed post-installation customer support and maintenance, cloud-based software licenses that are recognized ratably over the term of the agreement, and contracts that have outstanding performance obligations or contracts that have acceptance terms that have not yet been fulfilled.

Contract assets were not significant during the three months ended March 31, 2022 and 2021.

Remaining Performance Obligations

At March 31, 2022, the Company had $23.3 million of remaining performance obligations, also referred to as backlog, of which approximately $19.3 million is expected to be fulfilled over the next 12 months, notwithstanding uncertainty related to the impact of COVID-19, including, but not limited to, international shipping and travel restrictions brought about by COVID-19, which could have an adverse effect on the timing of delivery and installation of products and/or services to customers. In addition, the Company also had customer deposits of $16.9 million at March 31, 2022.

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4. ACQUISITIONS

2021 Acquisitions

Acquisition of EnvisionTEC

On February 16, 2021, the Company acquired EnvisionTEC, Inc. and its subsidiaries (“EnvisionTEC”) pursuant to a Purchase Agreement and Plan of Merger dated January 15, 2021. This acquisition added a comprehensive portfolio in additive manufacturing across metals, polymers and composites and grew distribution channels both in quantity and through the addition of a vertically-focused channel. The total purchase price was $303.6 million, consisting of $143.8 million paid in cash and 5,036,142 shares of the Company’s Common Stock with a fair value of $159.8 million as of the close of business on the transaction date.

The acquisition is accounted for as a business combination using the acquisition method of accounting. The total purchase price was allocated to the identifiable assets acquired and liabilities assumed based on the Company’s estimates of their fair values on the acquisition date.

The acquisition date fair value of the consideration transferred is as follows (in thousands):


	Total Acquisition Date Fair Value
Cash consideration	$	143,795
Equity consideration		159,847
Total consideration transferred	$	303,642

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The following table summarizes the allocation of the purchase price to the estimated fair values of assets acquired and liabilities assumed (in thousands):


	At February 16, 2021
Assets acquired:
Cash and cash equivalents	$	859
Restricted cash		5,004
Accounts receivable		2,982
Inventory		7,668
Prepaid expenses and other current assets		1,081
Restricted cash - noncurrent		285
Property and equipment		1,540
Intangible assets		137,300
Other noncurrent assets		1,801
Total assets acquired	$	158,520
Liabilities assumed:
Accounts payable	$	1,442
Customer deposits		2,460
Current portion of lease liability		605
Accrued expenses and other current liabilities		13,706
Liability for income taxes		480
Deferred revenue		492
Current portion of long-term debt		898
Long-term debt		285
Deferred tax liability		29,009
Lease liability, net of current portion		1,189
Total liabilities assumed	$	50,566
Net assets acquired	$	107,954

Goodwill	$	195,688
Total net assets acquired	$	303,642

Subsequent to the ,acquisition date, the Company made certain measurement period adjustments to the preliminary purchase price allocation, which resulted in decrease to goodwill of $3.4 million. The decrease was primarily due to an decrease in deferred income tax liabilities of $4.1 million and a decrease in deferred revenue of $0.2 million related to the adoption of ASU 2021-08 and a decrease in inventory of $1.0 million related to obsolete inventory. Additionally, the Company recorded a measurement period adjustment of $0.3 million related to certain assets acquired and liabilities assumed due to clarification of information utilized to determine fair value during the measurement period. As of December 31, 2021, the measurement period is completed.

The estimated useful lives of the identifiable intangible assets acquired is as follows:


	Gross Value		Estimated Life
Acquired technology	$	77,800	7 – 14 years
Trade name		8,600	14 years
Customer relationships		50,900	12 years
Total intangible assets	$	137,300

The goodwill resulting from the purchase price allocation is attributable to the workforce of the acquired business (which is not eligible for separate recognition as an identifiable intangible asset) and the expected synergistic benefits of expanding the combined companies’ target markets both geographically and across industries. $16.4 million of the goodwill recognized is deductible for income tax purposes. During 2021, the Company incurred $4.8 million of acquisition-related and other transactional charges related to this acquisition, which are included in general and administrative expenses in the condensed consolidated statements of operations.

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EnvisionTEC’s results are included in the Company’s consolidated results for the period from February 16, 2021 to December 31, 2021. During that period, EnvisionTEC’s net revenues were approximately $33.3 million and net loss was approximately $11.1 million.

Acquisition of Adaptive 3D

On May 7, 2021, the Company acquired Adaptive 3D Holdings, Inc. and its affiliates (“Adaptive 3D”) pursuant to a Purchase Agreement and Plan of Merger dated as of May 7, 2021. This acquisition expanded the Company’s materials library to include photopolymer elastomers for use in the production of end use parts. The total purchase price was $61.8 million, consisting of $24.1 million paid in cash and 3,133,276 shares of the Company’s Common Stock with a fair value of $37.7 million as of the close of business on the transaction date.

The total purchase price was allocated to the identifiable assets acquired and liabilities assumed based on the Company’s preliminary estimates of their fair values on the acquisition date. The fair values assigned to Adaptive 3D’s tangible and intangible assets and liabilities assumed, and the related deferred tax assets and liabilities, are considered preliminary and are based on the information available at the date of the acquisition. The Company is in the process of finalizing its purchase price allocation, and the tax basis of the assets and liabilities acquired. This may result in potential adjustments to the carrying value of the respective recorded assets and liabilities, establishment of certain intangible assets, revisions of useful lives of intangible assets, establishment of potential acquisition contingencies, and the determination of any residual amount that will be allocated to goodwill. Adjustments that impact the deferred tax liability recorded in the business combination could result in an increase or decrease in the Company’s recorded valuation allowance that will be recognized in the accompanying statement of operations.

The acquisition date fair value of the consideration transferred is as follows (in thousands):


	Total Acquisition Date Fair Value
Cash consideration	$	24,083
Equity consideration		37,693
Total consideration transferred	$	61,776

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The following table summarizes the preliminary allocation of the purchase price to the estimated fair values of assets acquired and liabilities assumed (in thousands):


	At May 7, 2021
Assets acquired:
Cash and cash equivalents	$	2,852
Accounts receivable		504
Inventory		305
Prepaid expenses and other current assets		462
Property and equipment		558
Intangible assets		27,300
Other noncurrent assets		654
Total assets acquired	$	32,635
Liabilities assumed:
Accounts payable	$	280
Current portion of lease liability		151
Accrued expenses and other current liabilities		100
PPP loan payable		311
Deferred revenue		12
Lease liability, net of current portion		502
Deferred tax liability		4,616
Total liabilities assumed	$	5,972
Net assets acquired	$	26,663

Goodwill	$	35,113
Total net assets acquired	$	61,776

Subsequent to the acquisition date, the Company made a measurement period adjustment to the preliminary purchase price allocation, which resulted in a decrease to goodwill of $0.2 million. The decrease was due to a decrease in deferred income tax liabilities of $0.2 million.

The estimated useful lives of the identifiable intangible assets acquired is as follows:


	Gross Value		Estimated Life
Acquired technology	$	27,000	14 years
Trade name		300	5 years
Total intangible assets	$	27,300

The goodwill resulting from the purchase price allocation is attributable to the workforce of the acquired business (which is not eligible for separate recognition as an identifiable intangible asset) and the expected synergistic benefits of expanding the combined companies’ target markets both geographically and across industries. The goodwill recognized is not deductible for income tax purposes. During 2021, the Company incurred $0.3 million of acquisition-related and other transactional charges related to this acquisition, which are included in general and administrative expenses in the consolidated statements of operations.

Adaptive 3D’s results are included in the Company’s consolidated results for the period from May 7, 2021 to December 31, 2021. During that period, Adaptive 3D’s revenues were approximately $1.1 million, and its net loss was approximately $4.9 million.

Acquisition of Aerosint

On June 24, 2021, the Company acquired all outstanding securities of Aerosint SA and its affiliates (“Aerosint”), which expanded the Company’s portfolio of technologies with the addition of multi-material printing capabilities. The total purchase price was $23.8 million, consisting of $6.2 million paid in cash, 879,922 shares of the Company’s Common Stock with a fair value of $11.5 million as of the close of business on the transaction date, and contingent consideration with a fair value of $6.1 million as of the acquisition

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date. The Company may be required to pay this contingent consideration based on the achievement of revenue metrics and technical milestones over the three-year period following the transaction date.

The total purchase price was allocated to the identifiable assets acquired and liabilities assumed based on the Company’s preliminary estimates of their fair values on the acquisition date. The fair values assigned to Aerosint’s tangible and intangible assets and liabilities assumed, and the related deferred tax assets and liabilities, are considered preliminary and are based on the information available at the date of the acquisition. The Company is in the process of finalizing its purchase price allocation, and the tax basis of the assets and liabilities acquired. This may result in potential adjustments to the carrying value of the respective recorded assets and liabilities, establishment of certain intangible assets, revisions of useful lives of intangible assets, establishment of potential acquisition contingencies, and the determination of any residual amount that will be allocated to goodwill. Adjustments that impact the deferred tax liability recorded in the business combination could result in an increase or decrease in the Company’s recorded valuation allowance that will be recognized in the accompanying statement of operations.

The acquisition included contingent consideration related to revenue metrics and technical milestones, with a fair value of $6.1 million as of the date of acquisition and a fair value of $5.5 million as of March 31, 2022. The Company will pay up to $5.5 million of contingent consideration based on stated revenue metrics, which had a fair value of $4.6 million as of the date of acquisition, and a fair value of $4.0 million as of March 31, 2022. If Aerosint reaches certain product mass production technical milestones, the Company will pay out a maximum of $2.0 million in contingent consideration, which had a fair value of $1.5 million as of the date of acquisition, and a fair value of $1.5 million as of March 31, 2022. As of the date of acquisition, the fair value of the short-term liability was $1.4 million, and the long-term liability was $4.7 million, which the Company recorded in accrued expenses and other current liabilities and contingent consideration, net of current portion, on the condensed consolidated balance sheets. As of March 31, 2022, $2.9 million of contingent consideration is recorded in accrued expenses and other current liabilities and $2.6 million is recorded in contingent consideration, net of current portion, in the condensed consolidated balance sheets.

The acquisition date fair value of the consideration transferred is as follows (in thousands):


	Total Acquisition Date Fair Value
Cash consideration	$	6,220
Equity consideration		11,448
Contingent consideration		6,083
Total consideration transferred	$	23,751

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The following table summarizes the preliminary allocation of the purchase price to the estimated fair values of assets acquired and liabilities assumed (in thousands):


	At June 24, 2021
Assets acquired:
Cash and cash equivalents	$	419
Accounts receivable		34
Inventory		166
Prepaid expenses and other current assets		697
Property and equipment		369
Intangible assets		11,726
Other noncurrent assets		336
Total assets acquired	$	13,747
Liabilities assumed:
Accounts payable	$	58
Customer deposits		283
Current portion of lease liability		100
Accrued expenses and other current liabilities		169
Deferred revenue		810
Lease liability, net of current portion		226
Deferred tax liability		2,931
Total liabilities assumed	$	4,577
Net assets acquired	$	9,170

Goodwill	$	14,581
Total net assets acquired	$	23,751

Subsequent to the acquisition date, the Company made a measurement period adjustment to the preliminary purchase price allocation, which resulted in a decrease to goodwill of $0.6 million. The decrease was due to a decrease in deferred income tax liabilities.

The estimated useful lives of the identifiable intangible assets acquired is as follows:


	Gross Value		Estimated Life
Acquired technology	$	11,547	11.5 years
Trade name		179	4.5 years
Total intangible assets	$	11,726

The goodwill resulting from the purchase price allocation is attributable to the workforce of the acquired business (which is not eligible for separate recognition as an identifiable intangible asset) and the expected synergistic benefits of expanding the combined companies’ target markets both geographically and across industries. The goodwill recognized is not deductible for income tax purposes. During 2021, the Company incurred $0.9 million of acquisition-related and other transactional charges related to this acquisition, which are included in general and administrative expenses in the consolidated statements of operations.

Aerosint’s results are included in the Company’s consolidated results for the period from June 24, 2021 to December 31, 2021. During that period, Aerosint’s revenues were $0.6 million and net loss was $0.4 million.

Acquisition of Dental Arts Labs

On July 30, 2021, the Company acquired Dental Arts Laboratories, Inc., (“Dental Arts Labs”), which expanded the Company’s portfolio in additive manufacturing within the healthcare industry. The purchase price was $26.0 million paid in cash. The Company also issued 1,190,468 restricted stock units with a grant date fair value of $11.0 million, which are subject to a four-year vesting period

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and continuing employment. The Company will recognize compensation expense for these restricted stock units over the vesting period.

The total purchase price was allocated to the identifiable assets acquired and liabilities assumed based on the Company’s preliminary estimates of their fair values on the acquisition date. The fair values assigned to Dental Arts Labs’ tangible and intangible assets and liabilities assumed, and the related deferred tax assets and liabilities, are considered preliminary and are based on the information available at the date of the acquisition. The Company is in the process of finalizing its purchase price allocation, and the tax basis of the assets and liabilities acquired. This may result in potential adjustments to the carrying value of the respective recorded assets and liabilities, establishment of certain intangible assets, revisions of useful lives of intangible assets, establishment of potential acquisition contingencies, and the determination of any residual amount that will be allocated to goodwill. Adjustments that impact the deferred tax liability recorded in the business combination could result in an increase or decrease in the Company’s recorded valuation allowance that will be recognized in the accompanying statement of operations.

The acquisition date fair value of the consideration transferred is as follows (in thousands):