UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 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

Securities registered pursuant to Section 12(b) of the Act:


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

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 ☒

As of August 5, 2022, there were 315,570,246 shares of the registrant’s Class A common stock outstanding.

Table of Contents

TABLE OF CONTENTS


		Page
PART I

Part I. Financial Information		3

Item 1. Financial Statements		3

Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021		3

Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2021		4

Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2022 and 2021		5

Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2022 and 2021		6

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021		8

Notes to Condensed Consolidated Financial Statements		10

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		49

Item 3. Quantitative and Qualitative Disclosures About Market Risk		65

Item 4. Controls and Procedures		65

Part II. Other Information		66

Item 1. Legal Proceedings		66

Item 1A. Risk Factors		67

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		96

Item 3. Defaults Upon Senior Securities		96

Item 4. Mine Safety Disclosures		96

Item 5. Other Information		96

Item 6. Exhibits		96

Exhibit Index		98

Signatures		99

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except share and per share amounts)


	June 30,		December 31,
	2022		2021
Assets
Current assets:
Cash and cash equivalents	$	107,966	$	65,017
Current portion of restricted cash		3,152		2,129
Short‑term investments		147,774		204,569
Accounts receivable		37,291		46,687
Inventory		88,609		65,399
Prepaid expenses and other current assets		21,086		18,208
Total current assets		405,878		402,009
Restricted cash, net of current portion		1,112		1,112
Property and equipment, net		57,667		58,710
Goodwill		377,710		639,301
Intangible assets, net		238,069		261,984
Other noncurrent assets		30,713		25,480
Total Assets	$	1,111,149	$	1,388,596
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	29,309	$	31,558
Customer deposits		12,050		14,137
Current portion of lease liability		5,169		5,527
Accrued expenses and other current liabilities		29,154		33,829
Current portion of deferred revenue		17,746		18,189
Current portion of long‑term debt, net of deferred financing costs		587		825
Total current liabilities		94,015		104,065
Long-term debt, net of current portion		430		548
Convertible notes		111,420		—
Contingent consideration, net of current portion		1,160		4,183
Lease liability, net of current portion		18,040		13,077
Deferred revenue, net of current portion		4,326		4,508
Deferred tax liability		7,961		10,695
Other noncurrent liabilities		2,657		3,170
Total liabilities		240,009		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 June 30, 2022 and December 31, 2021, respectively		—		—
Common Stock, $0.0001 par value—500,000,000 shares authorized; 315,292,925 and 311,737,858 shares issued at June 30, 2022 and December 31, 2021, respectively, 315,147,677 and 311,473,950 shares outstanding at June 30, 2022 and December 31, 2021, respectively		32		31
Additional paid‑in capital		1,851,836		1,823,344
Accumulated deficit		(935,827)		(568,611)
Accumulated other comprehensive loss		(44,901)		(6,414)
Total Stockholders’ Equity		871,140		1,248,350
Total Liabilities and Stockholders’ Equity	$	1,111,149	$	1,388,596

See notes to condensed consolidated financial statements

Table of Contents

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except per share amounts)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Revenues
Products	$	52,672	$	17,560	$	92,148	$	27,871
Services		5,002		1,417		9,232		2,419
Total revenues		57,674		18,977		101,380		30,290
Cost of sales
Products		44,913		15,490		86,815		25,977
Services		4,364		1,115		7,496		2,528
Total cost of sales		49,277		16,605		94,311		28,505
Gross profit		8,397		2,372		7,069		1,785
Operating expenses
Research and development		31,370		15,651		55,975		26,509
Sales and marketing		20,406		10,894		40,070		16,343
General and administrative		19,691		13,142		43,573		26,988
In-process research and development assets acquired		—		10,400		—		10,400
Goodwill impairment		229,500		—		229,500		—
Total operating expenses		300,967		50,087		369,118		80,240
Loss from operations		(292,570)		(47,715)		(362,049)		(78,455)
Change in fair value of warrant liability		—		—		—		(56,576)
Interest expense		(633)		(51)		(601)		(125)
Interest and other (expense) income, net		(5,013)		268		(6,766)		630
Loss before income taxes		(298,216)		(47,498)		(369,416)		(134,526)
Income tax benefit		944		4,318		2,200		32,238
Net loss	$	(297,272)	$	(43,180)	$	(367,216)	$	(102,288)
Net loss per share—basic and diluted	$	(0.95)	$	(0.17)	$	(1.17)	$	(0.41)
Weighted average shares outstanding, basic and diluted		313,556,886		255,097,905		312,798,328		246,717,400

See notes to condensed consolidated financial statements.

Table of Contents

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

(in thousands)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Net loss	$	(297,272)	$	(43,180)	$	(367,216)	$	(102,288)
Other comprehensive (loss) income, net of taxes:
Unrealized gain (loss) on available-for-sale marketable securities, net		(41)		(5)		(29)		(4)
Foreign currency translation adjustment		(27,411)		130		(38,458)		117
Total comprehensive (loss) income, net of taxes of $0	$	(324,724)	$	(43,055)	$	(405,703)	$	(102,175)

See notes to condensed consolidated financial statements.

Table of Contents

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

(in thousands, except share amounts)


	Three Months Ended June 30, 2022
								Accumulated
								Other
	Common Stock			Additional				Comprehensive		Total
	Voting			Paid‑in		Accumulated		(Loss)		Stockholders’
	Shares	Amount		Capital		Deficit		Income		Equity
BALANCE—April 1, 2022	312,825,572	$	31	$	1,833,998	$	(638,555)	$	(17,449)	$	1,178,025
Exercise of Common Stock options	234,307		—		364		—		—		364
Vesting of restricted Common Stock	29,171		—		—		—		—		—
Vesting of restricted stock units	1,962,846		1		—		—		—		1
Net settlement of shares for employee tax withholdings upon vesting of restricted stock units	(16,421)		—		(31)		—		—		(31)
Issuance of Common Stock related to settlement of contingent consideration	112,202		—		500		—		—		500
Stock‑based compensation expense	—		—		17,005		—		—		17,005
Net loss	—		—		—		(297,272)		—		(297,272)
Other comprehensive income (loss)	—		—		—		—		(27,452)		(27,452)
BALANCE—June 30, 2022	315,147,677	$	32	$	1,851,836	$	(935,827)	$	(44,901)	$	871,140


	Six Months Ended June 30, 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	1,021,000		—		1,264		—		—		1,264
Vesting of restricted Common Stock	113,555		—		—		—		—		—
Vesting of restricted stock units	2,483,111		1		—		—		—		1
Repurchase of shares for employee tax withholdings	(56,141)		—		(189)		—		—		(189)
Issuance of Common Stock related to settlement of contingent consideration	112,202		—		500		—		—		500
Stock‑based compensation expense	—		—		26,917		—		—		26,917
Net loss	—		—		—		(367,216)		—		(367,216)
Other comprehensive income (loss)	—		—		—		—		(38,487)		(38,487)
BALANCE—June 30, 2022	315,147,677	$	32	$	1,851,836	$	(935,827)	$	(44,901)	$	871,140

Table of Contents


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


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

See notes to condensed consolidated financial statements.

Table of Contents

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)


	Six Months Ended June 30,
	2022		2021
Cash flows from operating activities:
Net loss	$	(367,216)	$	(102,288)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		25,602		9,524
Stock‑based compensation		26,917		6,216
Goodwill impairment		229,500		—
Change in fair value of warrant liability		—		56,576
Change in fair value of subscription agreement		—		474
Amortization (accretion) of discount on investments		390		1,304
Amortization of debt financing cost		—		9
Amortization of deferred costs on convertible notes		39		—
Provision for bad debt		554		164
Acquired in-process research and development		—		10,400
Loss (gain) on disposal of property and equipment		156		(7)
Foreign exchange (gains) losses on intercompany transactions, net		443		—
Net increase (decrease) in accrued interest related to marketable securities		917		(1,062)
Net unrealized (gain) loss on equity investment		5,080		—
Net unrealized (gain) loss on other investments		800		(517)
Deferred tax benefit		(2,188)		(32,535)
Change in fair value of contingent consideration		4		—
Foreign currency transaction (gain) loss		(13)		—
Changes in operating assets and liabilities:
Accounts receivable		8,250		(3,584)
Inventory		(25,384)		(6,635)
Prepaid expenses and other current assets		(2,994)		(3,732)
Other assets		1,117		(170)
Accounts payable		(2,767)		(155)
Accrued expenses and other current liabilities		(7,337)		(5,119)
Customer deposits		(1,412)		(1,372)
Current portion of deferred revenue		(70)		693
Change in right of use assets and lease liabilities, net		(1,467)		(92)
Other liabilities