UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
For the quarterly period ended
OR
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TABLE OF CONTENTS
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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: |
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Cash and cash equivalents | $ | | $ | | ||
Current portion of restricted cash | | | ||||
Short‑term investments |
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Accounts receivable |
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Inventory |
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Prepaid expenses and other current assets |
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Total current assets |
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Restricted cash, net of current portion |
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Property and equipment, net |
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Goodwill |
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Intangible assets, net |
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Other noncurrent assets | | | ||||
Total Assets | $ | | $ | | ||
Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable | $ | | $ | | ||
Customer deposits |
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Current portion of lease liability |
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Accrued expenses and other current liabilities |
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Current portion of deferred revenue |
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Current portion of long‑term debt, net of deferred financing costs |
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Total current liabilities |
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Long-term debt, net of current portion | | | ||||
Warrant liability | — | — | ||||
Contingent consideration, net of current portion | | | ||||
Lease liability, net of current portion |
| |
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Deferred revenue, net of current portion | | | ||||
Deferred tax liability | | | ||||
Other noncurrent liabilities | | | ||||
Total liabilities | | | ||||
Commitments and Contingencies (Note 17) |
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Stockholders’ Equity |
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Preferred Stock, $ | ||||||
Common Stock, $ |
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Additional paid‑in capital |
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Accumulated deficit |
| ( |
| ( | ||
Accumulated other comprehensive loss |
| ( |
| ( | ||
Total Stockholders’ Equity |
| |
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Total Liabilities and Stockholders’ Equity | $ | | $ | |
See notes to condensed consolidated financial statements
3
DESKTOP METAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share amounts)
| Three Months Ended | |||||
March 31, | ||||||
| 2022 |
| 2021 | |||
Revenues |
| |||||
Products | $ | | $ | | ||
Services | | | ||||
Total revenues | |
| | |||
Cost of sales |
| |||||
Products | | | ||||
Services | | | ||||
Total cost of sales | |
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Gross profit/(loss) | ( |
| ( | |||
Operating expenses |
| |||||
Research and development | | | ||||
Sales and marketing | | | ||||
General and administrative | | | ||||
Total operating expenses | |
| | |||
Loss from operations | ( |
| ( | |||
Change in fair value of warrant liability | — | ( | ||||
Interest expense | | ( | ||||
Interest and other (expense) income, net | ( | | ||||
Loss before income taxes | ( |
| ( | |||
Income tax benefit | | | ||||
Net loss | $ | ( | $ | ( | ||
Net loss per share—basic and diluted | ( | ( | ||||
Weighted average shares outstanding, basic and diluted | | |
See notes to condensed consolidated financial statements.
4
DESKTOP METAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)
(in thousands)
| Three Months Ended | |||||
March 31, | ||||||
| 2022 |
| 2021 | |||
Net loss | $ | ( | $ | ( | ||
Other comprehensive (loss) income, net of taxes: | ||||||
Unrealized gain (loss) on available-for-sale marketable securities, net | | | ||||
Foreign currency translation adjustment | ( | ( | ||||
Total comprehensive (loss) income, net of taxes of $ | $ | ( | $ | ( |
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 | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
Exercise of Common Stock options | |
| — |
| |
| — |
| — |
| | ||||||
Vesting of restricted Common Stock |
| |
| — |
| — |
| — |
| — |
| — | |||||
Vesting of restricted stock units | | — | — | — | — | — | |||||||||||
Repurchase of shares for employee tax withholdings | ( | — | ( | — | — | ( | |||||||||||
Issuance of Common Stock for acquisitions | — | — | — | — | — | — | |||||||||||
Stock‑based compensation expense |
| — |
| — |
| |
| — |
| — |
| | |||||
Vesting of Trine Founder shares | — | — | — | — | — | — | |||||||||||
Exercise of warrants |
| — |
| — |
| — |
| — |
| — |
| — | |||||
Net loss |
| — |
| — |
| — |
| ( |
| — |
| ( | |||||
Other comprehensive income (loss) |
| — |
| — |
| — |
| — |
| ( |
| ( | |||||
BALANCE—March 31, 2022 |
| | $ | | $ | | $ | ( | $ | ( | $ | |
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 | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
Exercise of Common Stock options |
| | — | | — | — |
| | |||||||||
Vesting of restricted Common Stock |
| | — | — | — | — |
| — | |||||||||
Vesting of restricted stock units | | — | — | — | — | — | |||||||||||
Repurchase of shares for employee tax withholdings | ( | — | ( | — | — | ( | |||||||||||
Issuance of Common Stock for acquisitions | | — | | — | — | | |||||||||||
Stock‑based compensation expense |
| — | — | | — | — |
| | |||||||||
Vesting of Trine Founder shares |
| | — | — | — | — |
| — | |||||||||
Exercise of warrants | | | | — | — | | |||||||||||
Net loss |
| — | — | — | ( | — |
| ( | |||||||||
Other comprehensive income (loss) |
| — | — | — | — | ( |
| ( | |||||||||
BALANCE—March 31, 2021 |
| | $ | | $ | | $ | ( | $ | ( | $ | |
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 |
| $ | ( |
| $ | ( |
Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation and amortization |
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Stock‑based compensation |
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Change in fair value of warrant liability | — | | ||||
Amortization (accretion) of discount on investments | | | ||||
Amortization of debt financing cost | — | | ||||
Provision for bad debt | | | ||||
Loss on disposal of property and equipment | |
| — | |||
Foreign exchange (gains) losses on intercompany transactions, net | | — | ||||
Net increase (decrease) in accrued interest related to marketable securities | | ( | ||||
Net unrealized (gain) loss on marketable securities | — | ( | ||||
Net unrealized (gain) loss on equity investment | | — | ||||
Deferred tax benefit | ( | ( | ||||
Change in fair value of contingent consideration | ( | — | ||||
Foreign currency transaction (gain) loss | | — | ||||
Changes in operating assets and liabilities: |
| |||||
Accounts receivable |
| |
| ( | ||
Inventory |
| ( |
| ( | ||
Prepaid expenses and other current assets |
| ( |
| ( | ||
Other assets | ( | ( | ||||
Accounts payable |
| ( |
| ( | ||
Accrued expenses and other current liabilities |
| ( |
| ( | ||
Customer deposits |
| |
| ( | ||
Current portion of deferred revenue |
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Change in right of use assets and lease liabilities, net |
| ( |
| ( | ||
Other liabilities | | — | ||||
Net cash used in operating activities |
| ( |
| ( | ||
Cash flows from investing activities: |
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Purchases of property and equipment |
| ( |
| ( | ||
Proceeds from sale of property and equipment | | — | ||||
Purchase of marketable securities | — |
| ( | |||
Proceeds from sales and maturities of marketable securities |
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Cash paid for acquisitions, net of cash acquired |
| ( |
| ( | ||
Net cash provided by (used in) investing activities |
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| ( | ||
Cash flows from financing activities: |
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Proceeds from reverse recapitalization, net of issuance costs | — | ( | ||||
Proceeds from the exercise of stock options | |
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Proceeds from the exercise of stock warrants | — | | ||||
Payment of taxes related to net share settlement upon vesting of restricted stock units | ( | ( | ||||
Repayment of term loan | ( |
| — | |||
Net cash provided by financing activities |
| |
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Effect of exchange rate changes on cash, cash equivalents and restricted cash | ( | | ||||
Net increase (decrease) in cash, cash equivalents, and restricted cash |
| |
| ( | ||
Cash, cash equivalents, and restricted cash at beginning of period | | | ||||
Cash, cash equivalents, and restricted cash at end of period | $ | | $ | | ||
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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 | $ | | | |||
Restricted cash included in other current assets | | | ||||
Restricted cash included in other noncurrent assets | | | ||||
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows | $ | | $ | | ||
Supplemental cash flow information: |
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Interest paid | $ | — | $ | | ||
Non‑cash investing and financing activities: |
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Net unrealized (gain) loss on investments | $ | ( | $ | ( | ||
Exercise of private placement warrants | $ | — | $ | | ||
Common Stock issued for acquisitions | $ | — | $ | | ||
Additions to right of use assets and lease liabilities | $ | | $ | | ||
Purchase of property and equipment included in accounts payable | $ | | $ | | ||
Transfers from property and equipment to inventory | $ | | $ | — | ||
Transfers from inventory to property and equipment | $ | | $ | — | ||
Receivable for warrants exercised | $ | — | $ | |
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, $
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
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 $
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 $
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 $
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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 $
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 | $ | | |
Equity consideration | | ||
Total consideration transferred | $ | |
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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 | $ | | |
Restricted cash | | ||
Accounts receivable | | ||
Inventory | | ||
Prepaid expenses and other current assets | | ||
Restricted cash - noncurrent | | ||
Property and equipment | | ||
Intangible assets | | ||
Other noncurrent assets | | ||
Total assets acquired | $ | | |
Liabilities assumed: | |||
Accounts payable | $ | | |
Customer deposits | | ||
Current portion of lease liability | | ||
Accrued expenses and other current liabilities | | ||
Liability for income taxes | | ||
Deferred revenue | | ||
Current portion of long-term debt | | ||
Long-term debt | | ||
Deferred tax liability | | ||
Lease liability, net of current portion | | ||
Total liabilities assumed | $ | | |
Net assets acquired | $ | | |
Goodwill | $ | | |
Total net assets acquired | $ | |
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 $
The estimated useful lives of the identifiable intangible assets acquired is as follows:
Gross Value | Estimated Life | ||||
Acquired technology | $ | | |||
Trade name | | ||||
Customer relationships | | ||||
Total intangible assets | $ | |
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. $
13
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 $
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 $
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 | $ | | |
Equity consideration | | ||
Total consideration transferred | $ | |
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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 | $ | | |
Accounts receivable | | ||
Inventory | | ||
Prepaid expenses and other current assets | | ||
Property and equipment | | ||
Intangible assets | | ||
Other noncurrent assets | | ||
Total assets acquired | $ | | |
Liabilities assumed: | |||
Accounts payable | $ | | |
Current portion of lease liability | | ||
Accrued expenses and other current liabilities | | ||
PPP loan payable | | ||
Deferred revenue | | ||
Lease liability, net of current portion | | ||
Deferred tax liability | | ||
Total liabilities assumed | $ | | |
Net assets acquired | $ | | |
Goodwill | $ | | |
Total net assets acquired | $ | |
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 $
The estimated useful lives of the identifiable intangible assets acquired is as follows:
Gross Value | Estimated Life | ||||
Acquired technology | $ | | |||
Trade name | | ||||
Total intangible assets | $ | |
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 $
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 $
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 $
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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
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 $
The acquisition date fair value of the consideration transferred is as follows (in thousands):
Total Acquisition Date Fair Value | |||
Cash consideration | $ | | |
Equity consideration | | ||
Contingent consideration | | ||
Total consideration transferred | $ | |
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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 | $ | | |
Accounts receivable | | ||
Inventory | | ||
Prepaid expenses and other current assets | | ||
Property and equipment | | ||
Intangible assets | | ||
Other noncurrent assets | | ||
Total assets acquired | $ | | |
Liabilities assumed: | |||
Accounts payable | $ | | |
Customer deposits | | ||
Current portion of lease liability | | ||
Accrued expenses and other current liabilities | | ||
Deferred revenue | | ||
Lease liability, net of current portion | | ||
Deferred tax liability | | ||
Total liabilities assumed | $ | | |
Net assets acquired | $ | | |
Goodwill | $ | | |
Total net assets acquired | $ | |
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 $
The estimated useful lives of the identifiable intangible assets acquired is as follows:
Gross Value | Estimated Life | ||||
Acquired technology | $ | | |||
Trade name | | ||||
Total intangible assets | $ | |
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 $
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 $
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 $
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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):