UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 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 November 7, 2022, there were 317,577,105 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 September 30, 2022 and December 31, 2021		3

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

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

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

Condensed Consolidated Statements of Cash Flows for the nine months ended September 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		66

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		97

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)


	September 30,		December 31,
	2022		2021
Assets
Current assets:
Cash and cash equivalents	$	66,987	$	65,017
Current portion of restricted cash		4,072		2,129
Short‑term investments		150,268		204,569
Accounts receivable		41,390		46,687
Inventory		91,223		65,399
Prepaid expenses and other current assets		18,781		18,208
Total current assets		372,721		402,009
Restricted cash, net of current portion		1,112		1,112
Property and equipment, net		57,755		58,710
Goodwill		365,253		639,301
Intangible assets, net		225,438		261,984
Other noncurrent assets		29,073		25,480
Total Assets	$	1,051,352	$	1,388,596
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	29,211	$	31,558
Customer deposits		15,491		14,137
Current portion of lease liability		5,421		5,527
Accrued expenses and other current liabilities		31,430		33,829
Current portion of deferred revenue		16,309		18,189
Current portion of long‑term debt, net of deferred financing costs		444		825
Total current liabilities		98,306		104,065
Long-term debt, net of current portion		343		548
Convertible notes		111,657		—
Contingent consideration, net of current portion		1,088		4,183
Lease liability, net of current portion		18,788		13,077
Deferred revenue, net of current portion		3,778		4,508
Deferred tax liability		7,994		10,695
Other noncurrent liabilities		2,646		3,170
Total liabilities		244,600		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 September 30, 2022 and December 31, 2021, respectively		—		—
Common Stock, $0.0001 par value—500,000,000 shares authorized; 317,193,388 and 311,737,858 shares issued at September 30, 2022 and December 31, 2021, respectively, 317,069,926 and 311,473,950 shares outstanding at September 30, 2022 and December 31, 2021, respectively		32		31
Additional paid‑in capital		1,864,477		1,823,344
Accumulated deficit		(996,601)		(568,611)
Accumulated other comprehensive loss		(61,156)		(6,414)
Total Stockholders’ Equity		806,752		1,248,350
Total Liabilities and Stockholders’ Equity	$	1,051,352	$	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				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Revenues
Products	$	42,937	$	23,949	$	135,085	$	51,820
Services		4,149		1,489		13,381		3,908
Total revenues		47,086		25,438		148,466		55,728
Cost of sales
Products		43,639		20,450		130,454		46,427
Services		3,756		1,033		11,252		3,561
Total cost of sales		47,395		21,483		141,706		49,988
Gross profit		(309)		3,955		6,760		5,740
Operating expenses
Research and development		22,382		19,311		78,357		45,820
Sales and marketing		16,204		13,224		56,299		29,567
General and administrative		18,924		19,833		62,472		46,821
In-process research and development assets acquired		—		15,181		—		25,581
Goodwill impairment		—		—		229,500		—
Total operating expenses		57,510		67,549		426,628		147,789
Loss from operations		(57,819)		(63,594)		(419,868)		(142,049)
Change in fair value of warrant liability		—		—		—		(56,576)
Interest expense		(680)		(12)		(1,281)		(137)
Interest and other (expense) income, net		(1,677)		(3,796)		(8,443)		(3,166)
Loss before income taxes		(60,176)		(67,402)		(429,592)		(201,928)
Income tax (expense) benefit		(598)		523		1,602		32,761
Net loss	$	(60,774)	$	(66,879)	$	(427,990)	$	(169,167)
Net loss per share—basic and diluted	$	(0.19)	$	(0.26)	$	(1.36)	$	(0.67)
Weighted average shares outstanding, basic and diluted		316,007,716		260,555,655		313,901,704		251,467,644

See notes to condensed consolidated financial statements.

Table of Contents

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

(in thousands)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Net loss	$	(60,774)	$	(66,879)	$	(427,990)	$	(169,167)
Other comprehensive (loss) income, net of taxes:
Unrealized gain (loss) on available-for-sale marketable securities, net		(389)		(7)		(418)		(11)
Foreign currency translation adjustment		(15,866)		(1,216)		(54,324)		(1,099)
Total comprehensive (loss) income, net of taxes of $0	$	(77,029)	$	(68,102)	$	(482,732)	$	(170,277)

See notes to condensed consolidated financial statements.

Table of Contents

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

(in thousands, except share amounts)


	Three Months Ended September 30, 2022
								Accumulated
								Other
	Common Stock			Additional				Comprehensive		Total
	Voting			Paid‑in		Accumulated		(Loss)		Stockholders’
	Shares	Amount		Capital		Deficit		Income		Equity
BALANCE—July 1, 2022	315,147,677	$	32	$	1,851,836	$	(935,827)	$	(44,901)	$	871,140
Exercise of Common Stock options	1,147,289		—		1,771		—		—		1,771
Vesting of restricted Common Stock	21,786		—		—		—		—		—
Vesting of restricted stock units	765,093		—		—		—		—		—
Net settlement of shares for employee tax withholdings upon vesting of restricted stock units	(11,919)		—		(39)		—		—		(39)
Issuance of Common Stock related to settlement of contingent consideration	—		—		—		—		—		—
Stock‑based compensation expense	—		—		10,909		—		—		10,909
Net loss	—		—		—		(60,774)		—		(60,774)
Other comprehensive income (loss)	—		—		—		—		(16,255)		(16,255)
BALANCE—September 30, 2022	317,069,926	$	32	$	1,864,477	$	(996,601)	$	(61,156)	$	806,752


	Nine Months Ended September 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	2,168,289		—		3,035		—		—		3,035
Vesting of restricted Common Stock	135,341		—		—		—		—		—
Vesting of restricted stock units	3,248,204		1		—		—		—		1
Repurchase of shares for employee tax withholdings	(68,060)		—		(228)		—		—		(228)
Issuance of Common Stock related to settlement of contingent consideration	112,202		—		500		—		—		500
Stock‑based compensation expense	—		—		37,826		—		—		37,826
Net loss	—		—		—		(427,990)		—		(427,990)
Other comprehensive income (loss)	—		—		—		—		(54,742)		(54,742)
BALANCE—September 30, 2022	317,069,926	$	32	$	1,864,477	$	(996,601)	$	(61,156)	$	806,752

Table of Contents


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


	Nine Months Ended September 30, 2021
								Accumulated
								Other
	Common Stock			Additional				Comprehensive		Total
	Voting			Paid‑in		Accumulated		(Loss)		Stockholders’
	Shares	Amount		Capital		Deficit		Income		Equity
BALANCE—January 1, 2021	224,626,597	$	23	$	844,188	$	(328,277)	$	(9)	$	515,925
Exercise of Common Stock options	4,462,218		—		5,241		—		—		5,241
Vesting of restricted Common Stock	407,629		—		—		—		—		—
Vesting of restricted stock units	303,656		—		—		—		—		—
Net settlement of shares related to employee tax withholdings upon vesting of restricted stock units	(49,471)		—		(454)		—		—		(454)
Issuance of Common Stock for acquisitions	9,049,338		1		208,988		—		—		208,989
Issuance of common stock for acquired in-process research and development	334,370		—		4,300		—		—		4,300
Net share settlement related to employee tax withholdings upon vesting of restricted stock awards	(109,150)		—		(958)						(958)
Stock‑based compensation expense	—		—		16,167		—		—		16,167
Vesting of Trine Founder shares	1,850,938		—		—		—		—		—
Exercise of warrants	20,690,975		2		320,567		—		—		320,569
Net loss	—		—		—		(169,167)		—		(169,167)
Other comprehensive income (loss)	—		—		—		—		(1,110)		(1,110)
BALANCE—September 30, 2021	261,567,100	$	26	$	1,398,039	$	(497,444)	$	(1,119)	$	899,502

See notes to condensed consolidated financial statements.

Table of Contents

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)


	Nine Months Ended September 30,
	2022		2021
Cash flows from operating activities:
Net loss	$	(427,990)	$	(169,167)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		38,294		15,576
Stock‑based compensation		37,826		16,167
Goodwill impairment		229,500		—
Change in fair value of warrant liability		—		56,576
Change in fair value of subscription agreement		—		2,920
Amortization (accretion) of discount on investments		(305)		2,189
Amortization of debt financing cost		—		9
Amortization of deferred costs on convertible notes		276		—
Provision for bad debt		1,038		316
Acquired in-process research and development		—		25,581
Loss on disposal of property and equipment		209		19
Foreign exchange (gains) losses on intercompany transactions, net		1,261		—
Net increase (decrease) in accrued interest related to marketable securities		771		(414)
Net unrealized (gain) loss on equity investment		6,172		1,880
Net unrealized (gain) loss on other investments		745		(639)
Deferred tax benefit		(1,602)		(32,761)
Change in fair value of contingent consideration		(254)		(166)
Foreign currency transaction (gain) loss		(59)		—
Changes in operating assets and liabilities:
Accounts receivable		3,166		(8,476)
Inventory		(31,195)		(11,067)
Prepaid expenses and other current assets		(969)		(3,096)
Other assets		1,196		(118)
Accounts payable		(2,959)		4,243
Accrued expenses and other current liabilities		(