june

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, 2024

☐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 (§232.405 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 October 29, 2024, there were 33,341,419 shares of the registrant’s Class A common stock outstanding.

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TABLE OF CONTENTS


		Page
PART I

Part I. Financial Information		3

Item 1. Financial Statements (unaudited)		3

Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023		3

Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023		4

Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2024 and 2023		5

Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2024 and 2023		6

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023		8

Notes to Condensed Consolidated Financial Statements		10

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		32

Item 3. Quantitative and Qualitative Disclosures About Market Risk		48

Item 4. Controls and Procedures		49

Part II. Other Information		49

Item 1. Legal Proceedings		49

Item 1A. Risk Factors		50

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds, and Issuer Purchases of Equity Securities		82

Item 3. Defaults Upon Senior Securities		83

Item 4. Mine Safety Disclosures		83

Item 5. Other Information		83

Item 6. Exhibits		84

Exhibit Index		85

Signatures		86

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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)


	September 30,		December 31,
	2024		2023
Assets
Current assets:
Cash and cash equivalents	$	30,617	$	83,845
Current portion of restricted cash		220		233
Short‑term investments		—		625
Accounts receivable		22,803		37,690
Inventory		80,853		82,639
Prepaid expenses and other current assets		8,946		11,105
Total current assets		143,439		216,137
Restricted cash, net of current portion		—		612
Property and equipment, net		27,184		35,840
Intangible assets, net		75,297		168,259
Other noncurrent assets		27,773		37,153
Total Assets	$	273,693	$	458,001
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	14,317	$	18,190
Customer deposits		4,403		5,356
Current portion of lease liability		7,936		7,404
Accrued expenses and other current liabilities		23,149		27,085
Current portion of deferred revenue		11,206		11,739
Current portion of long‑term debt, net of deferred financing costs		181		330
Total current liabilities		61,192		70,104
Long-term debt, net of current portion		—		89
Convertible notes		113,113		112,565
Lease liability, net of current portion		18,673		23,566
Deferred revenue, net of current portion		2,052		3,696
Deferred tax liability		3,609		3,523
Other noncurrent liabilities		2,706		2,806
Total liabilities		201,345		216,349
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, 2024 and December 31, 2023, respectively		—		—
Common Stock, $0.0001 par value—500,000,000 shares authorized; 33,310,041 and 32,527,742 shares issued at September 30, 2024 and December 31, 2023, respectively, 33,310,040 and 32,527,167 shares outstanding at September 30, 2024 and December 31, 2023, respectively		4		4
Additional paid‑in capital		1,929,669		1,908,533
Accumulated deficit		(1,823,211)		(1,632,225)
Accumulated other comprehensive loss		(34,114)		(34,660)
Total Stockholders’ Equity		72,348		241,652
Total Liabilities and Stockholders’ Equity	$	273,693	$	458,001

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				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Revenues
Products	$	31,939	$	37,502	$	98,981	$	121,597
Services		4,466		5,248		16,956		15,755
Total revenues		36,405		42,750		115,937		137,352
Cost of sales
Products		29,962		37,175		136,190		119,290
Services		3,282		3,651		10,981		11,413
Total cost of sales		33,244		40,826		147,171		130,703
Gross profit (loss)		3,161		1,924		(31,234)		6,649
Operating expenses
Research and development		11,500		20,455		48,456		64,822
Sales and marketing		8,053		8,549		45,008		28,596
General and administrative		17,330		9,528		59,740		50,673
Impairment charges		—		6,062		—		6,062
Goodwill impairment		—		2,450		—		2,450
Total operating expenses		36,883		47,044		153,204		152,603
Loss from operations		(33,722)		(45,120)		(184,438)		(145,954)
Interest expense		(1,690)		(1,045)		(4,871)		(2,965)
Interest and other expense, net		228		(349)		(1,266)		(498)
Loss before income taxes		(35,184)		(46,514)		(190,575)		(149,417)
Income tax benefit (expense)		(264)	$	141	$	(411)	$	675
Net loss	$	(35,448)	$	(46,373)	$	(190,986)	$	(148,742)
Net loss per share—basic and diluted		(1.07)		(1.43)		(5.78)		(4.63)
Weighted average shares outstanding, basic and diluted		33,268,899		32,318,761		33,023,091		32,132,801

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				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Net loss	$	(35,448)	$	(46,373)	$	(190,986)	$	(148,742)
Other comprehensive loss, net of taxes:
Unrealized gain (loss) on available-for-sale marketable securities, net		—		(211)		(451)		126
Foreign currency translation adjustment		2,264		(684)		997		(451)
Total comprehensive loss, net of taxes of $0	$	(33,184)	$	(47,268)	$	(190,440)	$	(149,067)

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 September 30, 2024
								Accumulated
								Other
	Common Stock			Additional				Comprehensive		Total
	Voting			Paid‑in		Accumulated		(Loss)		Stockholders’
	Shares	Amount		Capital		Deficit		Income		Equity
BALANCE— July 1, 2024	33,196,705	$	4	$	1,923,978	$	(1,787,763)	$	(36,378)	$	99,841
Vesting of restricted share units	119,423		—		—		—		—		—
Repurchase of shares for employee tax withholdings	(6,088)		—		(29)		—		—		(29)
Stock‑based compensation expense	—		—		5,720		—		—		5,720
Net loss	—		—		—		(35,448)		—		(35,448)
Other comprehensive income (loss)	—		—		—		—		2,264		2,264
BALANCE—September 30, 2024	33,310,040		4	$	1,929,669	$	(1,823,211)	$	(34,114)	$	72,348


	Nine Months Ended September 30, 2024
								Accumulated
								Other
	Common Stock			Additional				Comprehensive		Total
	Voting			Paid‑in		Accumulated		(Loss)		Stockholders’
	Shares	Amount		Capital		Deficit		Income		Equity
BALANCE—January 1, 2024	32,527,167		4		1,908,533		(1,632,225)		(34,660)		241,652
Fractional shares redeemed for cash in lieu of reverse stock split	(1,338)		—		(7)		—		—		(7)
Vesting of restricted Common Stock	574		—		—		—		—		—
Vesting of restricted stock units	849,899		—		—		—		—		—
Repurchase of shares for employee tax withholdings	(66,262)		—		(403)		—		—		(403)
Issuance of common stock related to share-based liability awards	—		—		1,997						1,997
Stock‑based compensation expense	—		—		19,549		—		—		19,549
Net loss	—		—		—		(190,986)		—		(190,986)
Other comprehensive income (loss)	—		—		—		—		546		546
BALANCE—September 30, 2024	33,310,040	$	4	$	1,929,669	$	(1,823,211)	$	(34,114)	$	72,348

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	Three Months Ended September 30, 2023
								Accumulated
								Other
	Common Stock			Additional				Comprehensive		Total
	Voting			Paid‑in		Accumulated		(Loss)		Stockholders’
	Shares	Amount		Capital		Deficit		Income		Equity
BALANCE—July 1, 2023	32,263,019	$	3	$	1,893,548	$	(1,411,323)	$	(37,798)	$	444,459
Exercise of Common Stock options	3,793		—		46		—		—		46
Vesting of restricted Common Stock	978		—		—		—		—		—
Vesting of restricted stock units	98,692		—		—		—		—		—
Repurchase of shares for employee tax withholdings	(2,236)		—		(39)		—		—		(39)
Stock‑based compensation expense	—		—		8,376		—		—		8,376
Net loss	—		—		—		(46,373)		—		(46,373)
Other comprehensive income (loss)	—		—		—		—		(895)		(895)
BALANCE—September 30, 2023	32,364,246	$	3	$	1,901,931	$	(1,457,696)	$	(38,693)	$	405,574


	Nine Months Ended September 30, 2023
								Accumulated
								Other
	Common Stock			Additional				Comprehensive		Total
	Voting			Paid‑in		Accumulated		(Loss)		Stockholders’
	Shares	Amount		Capital		Deficit		Income		Equity
BALANCE—January 1, 2023	31,813,343	$	3	$	1,874,792	$	(1,308,954)	$	(38,368)	$	527,502
Exercise of Common Stock options	100,604		—		1,203		—		—		1,203
Vesting of restricted Common Stock	8,537		—		—		—		—		—
Vesting of restricted stock units	406,196		—		—		—		—		—
Repurchase of shares for employee tax withholdings	(8,913)		—		(147)		—		—		(147)
Issuance of Common Stock related to settlement of contingent consideration	44,479				797						797
Stock‑based compensation expense	—		—		25,286		—		—		25,286
Net loss	—		—		—		(148,742)		—		(148,742)
Other comprehensive income (loss)	—		—		—		—		(325)		(325)
BALANCE—September 30, 2023	32,364,246	$	3	$	1,901,931	$	(1,457,696)	$	(38,693)	$	405,574

See notes to condensed consolidated financial statements.

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DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)


	Nine Months Ended September 30,
	2024		2023
Cash flows from operating activities:
Net loss	$	(190,986)	$	(148,742)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		103,786		40,322
Stock‑based compensation		18,058		26,699
Goodwill impairment		—		2,450
Amortization (accretion) of discount on investments		—		(490)
Amortization of deferred costs on convertible notes		548		548
Provision for bad debt		1,756		640
Provision for slow-moving, obsolete, and lower of cost or net realizable value inventories, net		(45)		—
Loss (gain) on disposal of property and equipment		(35)		501
Foreign exchange (gains) losses on intercompany transactions, net		(4)		—
Net decrease in accrued interest related to marketable securities		—		238
Net unrealized loss on equity investment		625		286
Deferred tax benefit		305		(675)
Foreign currency transaction loss		486		392
Impairment charges		—		6,062
Changes in operating assets and liabilities:
Accounts receivable		13,267		(2,446)
Inventory		(694)		(16,052)
Prepaid expenses and other current assets		2,264		(8,716)
Other assets		9,967		2,425
Accounts payable		(4,055)		7,397
Accrued expenses and other current liabilities		(415)		1,009
Customer deposits		(1,000)		(4,542)
Deferred revenue		(2,202)		3,590
Change in right of use assets and lease liabilities, net		(5,033)		(4,456)
Other liabilities		8		1,706
Net cash used in operating activities		(53,399)		(91,854)
Cash flows from investing activities:
Purchases of property and equipment		(810)		(2,709)
Proceeds from sale of property and equipment		1,694		9,942
Purchase of marketable securities		—		(4,973)
Proceeds from sales and maturities of marketable securities		—		112,719
Proceeds from disposal of subsidiaries		—		4,089
Cash paid for acquisitions, net of cash acquired		—		(500)
Net cash provided by investing activities		884		118,568
Cash flows from financing activities:
Proceeds from the exercise of stock options		—		1,203
Payment of taxes related to net share settlement upon vesting of restricted stock units		(403)		(147)
Repayment of loans		(237)		(337)
Net cash (used in) provided by financing activities		(640)		719
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(698)		(461)
Net increase (decrease) in cash, cash equivalents, and restricted cash		(53,853)		26,972
Cash, cash equivalents, and restricted cash at beginning of period		84,690		81,913
Cash, cash equivalents, and restricted cash at end of period		30,837		108,885

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	$	30,617	$	107,432
Restricted cash included in other current assets		220		841
Restricted cash included in other noncurrent assets		—		612
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows	$	30,837	$	108,885

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Supplemental cash flow information:
Interest paid	$	3,488	$	—
Taxes paid	$	—	$	—

Non‑cash investing and financing activities:
Net unrealized gain on investments	$	—	$	(339)
Common Stock issued for settlement of contingent consideration	$	—	$	797
Additions to right of use assets and lease liabilities	$	1,600	$	11,443
Purchase of property and equipment included in accounts payable	$	160	$	326
Purchase of property and equipment included in accrued expense	$	—	$	90
Transfers from inventory to property and equipment	$	2,725	$	1,370
Transfers from property and equipment to inventory	$	—	$	1,647

See notes to condensed consolidated financial statements.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 and services to a variety of end customers.

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.

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, the Business Combination, and the sale of convertible senior notes due in 2027 (the “2027 Notes”) in May 2022. 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.

Recent Developments

Proposed Merger with Nano Dimension Ltd.

On July 2, 2024, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, Nano Dimension Ltd., an Israeli company (“Nano”), and Nano US I, Inc., a Delaware corporation and an indirect wholly owned subsidiary of Nano (“Merger Sub”), pursuant to which Merger Sub will merge with and into the Company, with the Company surviving the merger as an indirect wholly owned subsidiary of Nano (the “Merger”). Following the closing of the Merger, the Company’s Common Stock (as defined below), will be delisted from the New York Stock Exchange and will be deregistered under the Exchange Act of 1934, as amended.

Subject to the terms and conditions set forth in the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each outstanding share of Class A common stock, par value $0.0001 per share, of the Company (“Common Stock”) (other than (i) shares of preferred stock, par value $0.0001 per share (“Preferred Stock”), (ii) shares held by the Company as treasury stock or held directly by a subsidiary of the Company, Nano or Merger Sub and (iii) shares of Common Stock held by stockholders that are entitled to, and have properly demanded appraisal for such shares, in accordance with, and have complied in all respects with, Section 262 of the Delaware General Corporation Law (such shares, “Dissenting Shares”)) will be converted automatically into the right to receive an amount in cash equal to $5.50 (the “Per Share Merger Consideration”), without interest, subject to downward adjustment, by an amount (the “Consideration Adjustment Amount”) equal to the sum of (x) the product of (A) the aggregate principal amount outstanding under the Bridge Loan Facility (as defined below) together with accrued and unpaid interest, as of the closing of the Merger divided by $2.5 million, and (B) $0.10 (provided that in no event will the adjustment pursuant to (x) hereunder be greater than $0.80), plus (y) the product of (A) all unpaid Company Transaction Expenses (as defined in the Merger Agreement) as of the closing of the Merger divided by $2.5 million, and (B) $0.10 (provided that in no event will the adjustment pursuant to (y) hereunder be greater than $0.60), plus (z) $0.0325 if certain executives of the Company do not execute severance letter agreements prior to the closing, in each of the following cases (x), (y) and (z), subject further to any tax withholding. Subject to the terms and conditions set forth in the Merger Agreement, at the Effective Time, each share of Preferred Stock, each Dissenting Share and, when converted into the right to receive the Per Share Merger Consideration, each share of Common Stock, will be cancelled and shall cease to exist, and each certificate formerly representing such shares of Common Stock will thereafter represent only the right to receive the Per Share

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Merger Consideration.

The Company’s stockholders approved the Merger at a special meeting of stockholders held on October 2, 2024. The Merger is subject to the receipt of required regulatory approvals and other customary closing conditions.

For further information about the Merger Agreement, refer to the Merger Agreement, a copy of which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 3, 2024.

Reverse Stock Split

On June 10, 2024 after obtaining stockholder approval, the Company effected a 1-for-10 reverse stock split, and the Company’s Class A common stock began trading on the post-split adjusted basis on June 11, 2024. All shares of the Company’s common stock, stock-based instruments and per-share data included in these condensed consolidated financial statements have been retroactively adjusted as though the stock split has been effected prior to all periods presented.

Termination of Merger with Stratasys Ltd.

On May 25, 2023, the Company entered into an Agreement and Plan of Merger (the “Stratasys Merger Agreement”), by and among Stratasys Ltd. (“Stratasys”), Tetris Sub Inc., a Delaware corporation and a direct wholly owned subsidiary of Stratasys (“Stratasys Merger Sub”), and the Company, pursuant to which Stratasys Merger Sub was to merge with and into the Company, with the Company surviving the merger as a direct wholly owned subsidiary of Stratasys (the “Stratasys Merger”).

The Stratasys Merger was subject to approval by shareholders of Stratasys and Desktop Metal. At an extraordinary general meeting of shareholders of Stratasys held on September 28, 2023, Stratasys shareholders did not approve the proposal related to the Stratasys Merger Agreement. Accordingly, on September 28, 2023, Stratasys sent Desktop Metal a notice of termination of the Stratasys Merger Agreement. As a result, and under the terms of the Stratasys Merger Agreement, Stratasys paid $10.0 million to Desktop Metal for reimbursement of expenses, which is included in general and administrative expenses in the condensed consolidated statements of operations. The termination fee was paid on October 6, 2023.

Going concern

Pursuant to the Financial Accounting Standards Board (the “FASB”) codification Accounting Standards Codification (“ASC”) 205, Presentation of Financial Statements, the Company is required to assess its ability to continue as a going concern for a period of one year from the date of the issuance of the condensed consolidated financial statements.

Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year from the date the condensed consolidated financial statements are available to be issued.

These condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities in the normal course of business. The Company has incurred net losses since inception and has an accumulated deficit of $1.8 billion as of September 30, 2024. The Company expects to continue to incur additional losses and negative cash flows from operations in the near term. The Company will require additional capital investment to fund operating and capital expenditure requirements. The Company may seek additional capital through arrangements with Nano or from other sources, including, but not limited to, equity and debt financings.

Additional equity financing may not be available, and if it is available, it may not be on terms favorable to the Company and could be dilutive to current stockholders. Debt financing, if available, may involve restrictive covenants and dilutive financing instruments. Similarly, arrangements with Nano or from other sources may not be on terms favorable to the Company, and could be dilutive to current stockholders.

The Company’s ability to access capital when needed is not assured. If the merger is not completed and if capital is not available to the Company when, and in the amounts needed, the Company could be required to delay, scale back or abandon some or all its

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operations, which could materially harm the Company’s business, financial condition, and results of operations. Because of this uncertainty, there is substantial doubt about the Company’s ability to continue as a going concern for at least one year from the date that these condensed consolidated financial statements are available to be issued. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty, nor do they include adjustments to reflect the future effects of the recoverability or classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

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. In the unaudited condensed consolidated financial statements, certain balances have been reclassified to conform to the current year presentation. Certain prior year amounts have been reclassified to conform to the current year presentation related to the reverse stock split.

Principles of Consolidation

The accompanying condensed 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.

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, 2023. There have been no other changes to the Company’s significant accounting policies during the first nine months of fiscal year 2024.

3. REVENUE RECOGNITION

Contract Balances

The Company’s deferred revenue balance was $13.3 million and $15.4 million as of September 30, 2024 and December 31, 2023, respectively. During the three and nine months ended September 30, 2024, the Company recognized $2.0 million and $8.0 million of existing deferred revenue from 2023. During the three and nine months ended September 30, 2023, the Company recognized $3.6 million and $14.0 million of existing deferred revenue from 2022. 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 material as of September 30, 2024 and December 31, 2023.

Remaining Performance Obligations

At September 30, 2024, the Company had $13.3 million of remaining performance obligations, of which approximately $11.2 million is expected to be fulfilled over the next 12 months, notwithstanding uncertainty related to customer site readiness and unanticipated economic events, which could have an adverse effect on the timing of delivery and installation of products and/or

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services to customers. In addition, the Company also had customer deposits of $4.4 million and $6.9 million at September 30, 2024 and 2023, respectively.

4. CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

The Company’s cash equivalents and short-term investments are invested in the following (in thousands):


	September 30, 2024
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Money market funds	$	9,043	$	—	$	—	$	9,043
Total cash equivalents		9,043		—		—		9,043
Total cash equivalents and short-term investments	$	9,043	$	—	$	—	$	9,043


	December 31, 2023
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Money market funds	$	40,799	$	—	$	—	$	40,799
Total cash equivalents		40,799		—