Desktop Metal Announces Fourth Quarter and Full Year 2022 Financial Results and Initiates 2023 Guidance

DESKTOP METAL, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

December 31,

 

 

2022

 

2021

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

76,291

 

 

$

65,017

 

Current portion of restricted cash

 

 

4,510

 

 

 

2,129

 

Short‑term investments

 

 

108,243

 

 

 

204,569

 

Accounts receivable

 

 

38,481

 

 

 

46,687

 

Inventory

 

 

91,736

 

 

 

65,399

 

Prepaid expenses and other current assets

 

 

17,155

 

 

 

18,208

 

Total current assets

 

 

336,416

 

 

 

402,009

 

Restricted cash, net of current portion

 

 

1,112

 

 

 

1,112

 

Property and equipment, net

 

 

56,271

 

 

 

58,710

 

Goodwill

 

 

112,955

 

 

 

639,301

 

Intangible assets, net

 

 

219,830

 

 

 

261,984

 

Other noncurrent assets

 

 

27,763

 

 

 

25,480

 

Total Assets

 

$

754,347

 

 

$

1,388,596

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

25,105

 

 

$

31,558

 

Customer deposits

 

 

11,526

 

 

 

14,137

 

Current portion of lease liability

 

 

5,730

 

 

 

5,527

 

Accrued expenses and other current liabilities

 

 

26,723

 

 

 

33,829

 

Current portion of deferred revenue

 

 

13,719

 

 

 

18,189

 

Current portion of long‑term debt, net of deferred financing costs

 

 

584

 

 

 

825

 

Total current liabilities

 

 

83,387

 

 

 

104,065

 

Long-term debt, net of current portion

 

 

311

 

 

 

548

 

Convertible notes

 

 

111,834

 

 

 

 

Contingent consideration, net of current portion

 

 

 

 

 

4,183

 

Lease liability, net of current portion

 

 

17,860

 

 

 

13,077

 

Deferred revenue, net of current portion

 

 

3,664

 

 

 

4,508

 

Deferred tax liability

 

 

8,430

 

 

 

10,695

 

Other noncurrent liabilities

 

 

1,359

 

 

 

3,170

 

Total liabilities

 

 

226,845

 

 

 

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 December 31, 2022 and December 31, 2021, respectively

 

 

 

 

 

 

Common Stock, $0.0001 par value—500,000,000 shares authorized; 318,235,106 and 311,737,858 shares issued at December 31, 2022 and December 31, 2021, respectively, 318,133,434 and 311,473,950 shares outstanding at December 31, 2022 and December 31, 2021, respectively

 

 

32

 

 

 

31

 

Additional paid‑in capital

 

 

1,874,792

 

 

 

1,823,344

 

Accumulated deficit

 

 

(1,308,954

)

 

 

(568,611

)

Accumulated other comprehensive loss

 

 

(38,368

)

 

 

(6,414

)

Total Stockholders’ Equity

 

 

527,502

 

 

 

1,248,350

 

Total Liabilities and Stockholders’ Equity

 

$

754,347

 

 

$

1,388,596

 

DESKTOP METAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended December 31,

 

 

2022

 

2021

 

2020

Revenues

 

 

 

 

 

 

 

 

 

Products

 

$

190,248

 

 

$

105,994

 

 

$

13,718

 

Services

 

 

18,775

 

 

 

6,414

 

 

 

2,752

 

Total revenues

 

 

209,023

 

 

 

112,408

 

 

 

16,470

 

Cost of sales

 

 

 

 

 

 

 

 

 

Products

 

 

178,952

 

 

 

87,450

 

 

 

26,945

 

Services

 

 

15,000

 

 

 

6,665

 

 

 

4,574

 

Total cost of sales

 

 

193,952

 

 

 

94,115

 

 

 

31,519

 

Gross profit (loss)

 

 

15,071

 

 

 

18,293

 

 

 

(15,049

)

Operating expenses

 

 

 

 

 

 

 

 

 

Research and development

 

 

96,878

 

 

 

68,131

 

 

 

43,136

 

Sales and marketing

 

 

68,091

 

 

 

47,995

 

 

 

13,136

 

General and administrative

 

 

83,065

 

 

 

78,041

 

 

 

20,734

 

In-process research and development assets acquired

 

 

 

 

 

25,581

 

 

 

 

Goodwill impairment

 

 

498,800

 

 

 

 

 

 

 

Total operating expenses

 

 

746,834

 

 

 

219,748

 

 

 

77,006

 

Loss from operations

 

 

(731,763

)

 

 

(201,455

)

 

 

(92,055

)

Change in fair value of warrant liability

 

 

 

 

 

(56,576

)

 

 

56,417

 

Interest expense

 

 

(1,743

)

 

 

(149

)

 

 

(328

)

Interest and other (expense) income, net

 

 

(8,335

)

 

 

(11,822

)

 

 

1,011

 

Loss before income taxes

 

 

(741,841

)

 

 

(270,002

)

 

 

(34,955

)

Income tax benefit

 

 

1,498

 

 

 

29,668

 

 

 

940

 

Net loss

 

$

(740,343

)

 

$

(240,334

)

 

$

(34,015

)

Net loss per share—basic and diluted

 

$

(2.35

)

 

$

(0.92

)

 

$

(0.22

)

Weighted average shares outstanding, basic and diluted

 

 

314,817

 

 

 

260,770

 

 

 

157,906

 

DESKTOP METAL, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended December 31,

 

 

2022

 

2021

 

2020

Net loss

 

$

(740,343

)

 

$

(240,334

)

 

$

(34,015

)

Other comprehensive (loss) income, net of taxes:

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on available-for-sale marketable securities, net

 

 

(290

)

 

 

(40

)

 

 

(84

)

Foreign currency translation adjustment

 

 

(31,664

)

 

 

(6,365

)

 

 

 

Total comprehensive (loss) income, net of taxes of $0

 

$

(772,297

)

 

$

(246,739

)

 

$

(34,099

)

DESKTOP METAL, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

Comprehensive

 

Total

 

 

Legacy Convertible Preferred Stock

 

 

Common Stock

 

Paid‑in

 

Accumulated

 

(Loss)

 

Stockholders’

 

 

Shares

 

Amount

 

 

Shares

 

Amount

 

Capital

 

Deficit

 

Income

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE—January 1, 2020

 

100,038,109

 

 

$

436,553

 

 

 

26,813,113

 

 

$

3

 

$

16,722

 

 

$

(294,262

)

 

$

75

 

 

$

(277,462

)

Retroactive application of recapitalization (Note 1)

 

(100,038,109

)

 

 

(436,553

)

 

 

128,100,821

 

 

 

13

 

 

436,520

 

 

 

 

 

 

 

 

 

436,533

 

Adjusted balance, beginning of period

 

 

 

 

 

 

 

154,913,934

 

 

 

16

 

 

453,242

 

 

 

(294,262

)

 

 

75

 

 

 

159,071

 

Exercise of Common Stock options

 

 

 

 

 

 

 

521,925

 

 

 

 

 

325

 

 

 

 

 

 

 

 

 

325

 

Vesting of restricted Common Stock

 

 

 

 

 

 

 

5,307,357

 

 

 

1

 

 

6

 

 

 

 

 

 

 

 

 

7

 

Issuance of Common Stock in connection with acquisitions

 

 

 

 

 

 

 

61,060

 

 

 

 

 

500

 

 

 

 

 

 

 

 

 

500

 

Repurchase of shares for employee tax withholdings

 

 

 

 

 

 

 

(9,308

)

 

 

 

 

(101

)

 

 

 

 

 

 

 

 

(101

)

Stock‑based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

8,006

 

 

 

 

 

 

 

 

 

8,006

 

Common Stock warrants issued and exercised

 

 

 

 

 

 

 

692,366

 

 

 

 

 

1,915

 

 

 

 

 

 

 

 

 

1,915

 

Reverse recapitalization, net of transaction costs

 

 

 

 

 

 

 

63,139,263

 

 

 

6

 

 

380,295

 

 

 

 

 

 

 

 

 

380,301

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(34,015

)

 

 

 

 

 

(34,015

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(84

)

 

 

(84

)

BALANCE—December 31, 2020

 

 

 

$

 

 

 

224,626,597

 

 

$

23

 

$

844,188

 

 

$

(328,277

)

 

$

(9

)

 

$

515,925

 

Exercise of Common Stock options

 

 

 

 

 

 

 

5,732,247

 

 

 

1

 

 

6,425

 

 

 

 

 

 

 

 

 

6,426

 

Vesting of restricted Common Stock

 

 

 

 

 

 

 

491,293

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repurchase of shares for employee tax withholdings - RSA

 

 

 

 

 

 

 

(109,150

)

 

 

 

 

(958

)

 

 

 

 

 

 

 

 

(958

)

Vesting of restricted share units

 

 

 

 

 

 

 

650,777

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repurchase of shares for employee tax withholdings - RSU

 

 

 

 

 

 

 

(61,498

)

 

 

 

 

(541

)

 

 

 

 

 

 

 

 

(541

)

Issuance of Common Stock in connection with acquisitions

 

 

 

 

 

 

 

57,267,401

 

 

 

5

 

 

620,585

 

 

 

 

 

 

 

 

 

620,590

 

Issuance of Common Stock in connection with acquired in-process research and development

 

 

 

 

 

 

 

334,370

 

 

 

 

 

4,300

 

 

 

 

 

 

 

 

 

4,300

 

Stock‑based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

28,778

 

 

 

 

 

 

 

 

 

28,778

 

Vesting of Trine Founder Shares

 

 

 

 

 

 

 

1,850,938

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock issued in connection with warrants exercised

 

 

 

 

 

 

 

20,690,975

 

 

 

2

 

 

320,567

 

 

 

 

 

 

 

 

 

320,569

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(240,334

)

 

 

 

 

 

(240,334

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,405

)

 

 

(6,405

)

BALANCE—December 31, 2021

 

 

 

$

 

 

 

311,473,950

 

 

$

31

 

$

1,823,344

 

 

$

(568,611

)

 

$

(6,414

)

 

$

1,248,350

 

Exercise of Common Stock options

 

 

 

 

 

 

 

2,310,931

 

 

 

 

 

3,190

 

 

 

 

 

 

 

 

 

3,190

 

Vesting of restricted Common Stock

 

 

 

 

 

 

 

157,131

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vesting of restricted share units

 

 

 

 

 

 

 

4,153,939

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

1

 

Repurchase of shares for employee tax withholdings - RSU

 

 

 

 

 

 

 

(74,719

)

 

 

 

 

(243

)

 

 

 

 

 

 

 

 

(243

)

Issuance of common stock related to settlement of contingent consideration

 

 

 

 

 

 

 

112,202

 

 

 

 

 

500

 

 

 

 

 

 

 

 

 

500

 

Stock‑based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

48,001

 

 

 

 

 

 

 

 

 

48,001

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(740,343

)

 

 

 

 

 

(740,343

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(31,954

)

 

 

(31,954

)

BALANCE—December 31, 2022

 

 

 

$

 

 

 

318,133,434

 

 

$

32

 

$

1,874,792

 

 

$

(1,308,954

)

 

$

(38,368

)

 

$

527,502

 

DESKTOP METAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended December 31,

 

 

2022

 

2021

 

2020

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Net loss

 

$

(740,343

)

 

$

(240,334

)

 

$

(34,015

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

50,767

 

 

 

24,854

 

 

 

8,589

 

Stock‑based compensation

 

 

48,001

 

 

 

28,778

 

 

 

8,006

 

Goodwill impairment

 

 

498,800

 

 

 

 

 

 

 

Change in fair value of warrant liability

 

 

 

 

 

56,576

 

 

 

(56,417

)

Change in fair value of subscription agreement

 

 

 

 

 

2,920

 

 

 

 

Expense related to Common Stock warrants issued

 

 

 

 

 

 

 

 

1,915

 

Amortization (accretion) of discount on investments

 

 

(888

)

 

 

3,021

 

 

 

75

 

Amortization of debt financing cost

 

 

 

 

 

9

 

 

 

19

 

Amortization of deferred costs on convertible notes

 

 

453

 

 

 

 

 

 

 

Provision for bad debt

 

 

975

 

 

 

447

 

 

 

377

 

Provision for slow-moving, obsolete, and lower of cost or net realizable value inventories, net

 

 

(45

)

 

 

 

 

 

 

Acquired in-process research and development

 

 

 

 

 

25,581

 

 

 

 

Loss on disposal of property and equipment

 

 

224

 

 

 

74

 

 

 

18

 

Foreign exchange (gains) losses on intercompany transactions, net

 

 

259

 

 

 

182

 

 

 

 

Net increase (decrease) in accrued interest related to marketable securities

 

 

847

 

 

 

(819

)

 

 

(3

)

Net unrealized (gain) loss on equity investment

 

 

6,332

 

 

 

9,660

 

 

 

 

Net unrealized (gain) loss on other investments

 

 

1,595

 

 

 

(130

)

 

 

 

Deferred tax benefit

 

 

(1,498

)

 

 

(29,668

)

 

 

(940

)

Change in fair value of contingent consideration

 

 

(1,567

)

 

 

(429

)

 

 

 

Foreign currency transaction (gain) loss

 

 

44

 

 

 

7

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

6,737

 

 

 

(18,299

)

 

 

(2,370

)

Inventory

 

 

(28,183

)

 

 

(16,962

)

 

 

(1,303

)

Prepaid expenses and other current assets

 

 

1,787

 

 

 

(8,937

)

 

 

901

 

Other assets

 

 

2,505

 

 

 

(3

)

 

 

 

Accounts payable

 

 

(6,595

)

 

 

12,797

 

 

 

(2,637

)

Accrued expenses and other current liabilities

 

 

(10,613

)

 

 

(8,761

)

 

 

(2,391

)

Customer deposits

 

 

(2,037

)

 

 

(2,569

)

 

 

(845

)

Current portion of deferred revenue

 

 

(4,749

)

 

 

5,989

 

 

 

774

 

Change in right of use assets and lease liabilities, net

 

 

(4,298

)

 

 

(641

)

 

 

(328

)

Other liabilities

 

 

(41

)

 

 

1,609

 

 

 

 

Net cash used in operating activities

 

 

(181,531

)

 

 

(155,048

)

 

 

(80,575

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(11,517

)

 

 

(7,683

)

 

 

(1,429

)

Purchase of other investments

 

 

 

 

 

(3,620

)

 

 

(3,000

)

Proceeds from other investments

 

 

3,155

 

 

 

 

 

 

 

Purchase of equity investment

 

 

 

 

 

(20,000

)

 

 

 

Proceeds from sale of property and equipment

 

 

6

 

 

 

44

 

 

 

 

Proceeds from policy buyout

 

 

 

 

 

333

 

 

 

 

Purchase of marketable securities

 

 

(158,404

)

 

 

(330,873

)

 

 

(136,286

)

Proceeds from sales and maturities of marketable securities

 

 

248,150

 

 

 

243,349

 

 

 

109,016

 

Proceeds from capital grant

 

 

200

 

 

 

 

 

 

 

Cash paid to acquire in-process research and development

 

 

 

 

 

(21,220

)

 

 

 

Cash paid for acquisitions, net of cash acquired

 

 

(23

)

 

 

(287,624

)

 

 

(5,284

)

Net cash provided by (used in) investing activities

 

 

81,567

 

 

 

(427,294

)

 

 

(36,983

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

Proceeds from reverse recapitalization, net of issuance costs

 

 

 

 

 

 

 

 

534,597

 

Proceeds from the exercise of stock options

 

 

3,190

 

 

 

6,426

 

 

 

325

 

Proceeds from the exercise of stock warrants

 

 

 

 

 

170,665

 

 

 

 

Payment of taxes related to net share settlement upon vesting of restricted stock units

 

 

(243

)

 

 

(541

)

 

 

 

Repayment of loans

 

 

(542

)

 

 

 

 

 

 

Proceeds from issuance of convertible notes

 

 

115,000

 

 

 

 

 

 

 

Costs incurred in connection with the issuance of convertible notes

 

 

(3,619

)

 

 

 

 

 

 

Proceeds from PPP loan

 

 

 

 

 

 

 

 

5,379

 

Repayment of PPP loan

 

 

 

 

 

 

 

 

(5,379

)

Repayment of term loan

 

 

 

 

 

(10,000

)

 

 

 

Net cash provided by financing activities

 

 

113,786

 

 

 

166,550

 

 

 

534,922

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

 

(167

)

 

 

(87

)

 

 

 

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

 

13,655

 

 

 

(415,879

)

 

 

417,364

 

Cash, cash equivalents, and restricted cash at beginning of period

 

 

68,258

 

 

 

484,137

 

 

 

66,773

 

Cash, cash equivalents, and restricted cash at end of period

 

$

81,913

 

 

$

68,258

 

 

$

484,137

 

 

 

 

 

 

 

 

 

 

 

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

 

$

76,291

 

 

$

65,017

 

 

$

483,525

 

Restricted cash included in other current assets

 

 

4,510

 

 

 

2,129

 

 

 

 

Restricted cash included in other noncurrent assets

 

 

1,112

 

 

 

1,112

 

 

 

612

 

Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows

 

$

81,913

 

 

$

68,258

 

 

$

484,137

 

 

 

 

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

 

 

 

Interest paid

 

$

3,488

 

 

$

148

 

 

$

322

 

Taxes paid

 

$

 

 

$

150

 

 

$

 

 

 

 

 

 

 

 

 

 

 

Non‑cash investing and financing activities:

 

 

 

 

 

 

 

 

 

Net liabilities assumed from Trine Business Combination

 

$

 

 

$

 

 

$

152,395

 

Accrued reverse recapitalization transaction costs

 

$

 

 

$

 

 

$

1,901

 

Net unrealized (gain) loss on investments

 

$

290

 

 

$

40

 

 

$

 

Exercise of private placement warrants

 

$

 

 

$

149,904

 

 

$

 

Common Stock issued for acquisitions

 

$

 

 

$

620,590

 

 

$

500

 

Common Stock issued for acquisition of in-process research and development

 

$

 

 

$

4,300

 

 

$

 

Common Stock issued for settlement of contingent consideration

 

$

500

 

 

$

 

 

$

 

Accrued purchase price related to acquisitions

 

$

 

 

$

1,800

 

 

$

200

 

Additions to right of use assets and lease liabilities

 

$

10,812

 

 

$

5,582

 

 

$

 

Purchase of property and equipment included in accounts payable

 

$

516

 

 

$

90

 

 

$

 

Purchase of property and equipment included in accrued expense

 

$

 

 

$

38

 

 

$

 

Transfers from property and equipment to inventory

 

$

4,993

 

 

$

1,068

 

 

$

 

Transfers from inventory to property and equipment

 

$

4,513

 

 

$

1,435

 

 

$

 

Accrued contingent consideration in connection with acquisitions

 

$

 

 

$

6,083

 

 

$

 

Taxes related to net share settlement upon vesting of restricted stock awards in accrued expense

 

$

 

 

$

958

 

 

$

 

Tax liabilities related to withholdings on Common Stock issued in connection with acquisitions

 

$

 

 

$

 

 

$

102

 

Deferred contract costs

 

$

1,341

 

 

$

 

 

$

 

Equipment financing

 

$

175

 

 

$

 

 

$

 


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