六月
美国
证券交易委员会
华盛顿特区20549
表格
截至2024年6月30日季度结束
或
委员会文件号码:
(依凭章程所载的完整登记名称)
(其他注册地管辖国或组织状况) | (联邦税号) |
(总部办公地址) | (邮递区号) |
注册人的电话号码,包括区号:(
根据法案第12(b)条规定注册的证券:
每个交易所的名称 | ||
每个班级的标题 | 交易标的(s) | 在哪个注册所? |
请在适用的方框内做标记,表示公司:(1)在过去12个月内,根据1934年证券交易法第13或15(d)条的要求已提交所有要求提交的报告(或该公司为提交该类报告所要求的较短期间);以及(2)自过去90天以来,一直都受到这些提交要求的约束。
根据规则405,在Regulation S-t (§232.405 of this chapter)之前的12个月中(或对于发行人需要提交此类文件的期间较短的情况下),勾选记号表示发行人是否已经电子提交了需要提交的每个交互式数据文件。
请载明检查标记,公司是否为大型加速披露人、加速披露人、非加速披露人、小型报告公司或新兴成长公司。请于「交易所法案」第1202条中查阅「大型加速披露人」、「加速披露人」、「小型报告公司」和「新兴成长公司」的定义。
大型快速申报者☐ | ||
非加速申报者 ☐ | 较小的报告公司 | 新兴成长型公司 |
如果一家新兴成长型企业,请勾选“是”表示注册人选择不使用根据证券交易所法第13(a)条所提供的任何新的或修改后的财务会计准则的延长过渡期来遵守。 ☐
请在核准印章处打勾,表明公司是否为外壳公司(根据《交易所法》第120亿2条所定义)。是
截至2024年10月29日,已发行并流通的登记公司普通股为
财务报表第一部分
项目1.基本报表
DESKTOP METAL, INC.
缩表合并资产负债表
(未经查核)
(以千为单位,股票和每股金额除外)
| 九月三十日 |
| 12月31日 | |||
2024 |
| 2023 | ||||
资产 | ||||||
流动资产: |
|
|
|
| ||
现金及现金等价物 | $ | | $ | | ||
受限现金的当前部分 | | | ||||
短期投资 |
| — |
| | ||
应收帐款 |
| |
| | ||
存货 |
| |
| | ||
预付费用及其他流动资产 |
| |
| | ||
全部流动资产 |
| |
| | ||
限制性现金,除短期外 |
| — |
| | ||
物业及设备,扣除折旧后净值 |
| |
| | ||
无形资产,扣除累计摊销 |
| |
| | ||
其他非流动资产 | | | ||||
总资产 | $ | | $ | | ||
550,714 |
|
|
|
| ||
流动负债: |
|
|
|
| ||
应付账款 | $ | | $ | | ||
客户存款。 |
| |
| | ||
租约负债流动部分 |
| |
| | ||
应计费用及其他流动负债 |
| |
| | ||
已逾期的收益当前部分 |
| |
| | ||
长期负债的当期部分,减去递延融资成本 |
| |
| | ||
流动负债合计 |
| |
| | ||
长期负债,除了当期部分净额 | — | | ||||
可换债券 | | | ||||
租赁负债,当期部分净额 |
| |
| | ||
透过分期收入取得的未来收入,减去当前部分 | | | ||||
递延所得税负债 | | | ||||
其他非流动负债 | | | ||||
总负债 | | | ||||
承诺与条件(附注17) |
|
|
| |||
股东权益 |
|
| ||||
每股面额$ | ||||||
普通股,每股面值$ |
| |
| | ||
资本超额评价 |
| |
| | ||
累积亏损 |
| ( |
| ( | ||
累积其他全面损失 |
| ( |
| ( | ||
股东权益总计 |
| |
| | ||
负债总额和股东权益总额 | $ | | $ | |
参阅总括财务报表的附注
3
DESKTOP METAL, INC.
综合营业损益汇缩陈述
(未经查核)
(以千为单位,除每股金额外)
| 三个月结束了 | 截至九个月 | ||||||||||
九月三十日 | 九月三十日 | |||||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | |||||
收益 |
|
|
|
| ||||||||
产品 | $ | | $ | | $ | | $ | | ||||
服务 | | |
| |
| | ||||||
总收益 | |
| |
| |
| | |||||
销货成本 |
|
|
|
|
|
| ||||||
产品 | | |
| |
| | ||||||
服务 | | |
| |
| | ||||||
销售总成本 | |
| |
| |
| | |||||
毛利润(损失) | |
| |
| ( |
| | |||||
营业费用 |
|
|
|
|
|
| ||||||
研发费用 | | |
| |
| | ||||||
销售和市场推广费用 | | |
| |
| | ||||||
总务与行政 | | |
| |
| | ||||||
资产减损损失 | — | | — | | ||||||||
商誉减损 | — | | — | | ||||||||
营业费用总计 | |
| |
| |
| | |||||
营运亏损 | ( | ( |
| ( | ( | |||||||
利息费用 | ( | ( |
| ( | ( | |||||||
利息及其他费用,净额 | |
| ( |
| ( |
| ( | |||||
收入税前亏损 | ( | ( |
| ( |
| ( | ||||||
所得税效益(费用) | ( | $ | | $ | ( | $ | | |||||
净损失 | $ | ( | $ | ( | $ | ( | $ | ( | ||||
每股基本和稀释净亏损 | ( | ( | ( | ( | ||||||||
基本和稀释后的加权平均股份 | | | | |
请参阅基本报表摘要中的注释。
4
5
DESKTOP METAL, INC.
股东权益简明合并财务报表
(未经查核)
(以千为单位,除股份数以外)
2024年9月30日止三个月 | |||||||||||||||||
累计 | |||||||||||||||||
其他 | |||||||||||||||||
普通股 | 额外的 | 综合 | 总计 | ||||||||||||||
投票 | 已付款‑在 | 累计 | (损失) | 股东权益 | |||||||||||||
| 股份 |
| 金额 | 资本 |
| 赤字累计 |
| 收入 |
| 股权 | |||||||
余额— 2024年7月1日 | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
受限股票单元解除限制 | | — | — | — | — | — | |||||||||||
回购股份以支付员工税款扣除 | ( | — | ( | — | — | ( | |||||||||||
以股份为基础的补偿费用 |
| — | — | | — | — | | ||||||||||
净损失 |
| — | — | — | ( | — | ( | ||||||||||
其他全面收益(损失) |
| — | — | — | — | | | ||||||||||
账目余额—2024年9月30日 |
| | | $ | | $ | ( | $ | ( | $ | | ||||||
2024年9月30日结束的九个月 | |||||||||||||||||
累计 | |||||||||||||||||
其他 | |||||||||||||||||
普通股 | 额外的 | 综合 | 总计 | ||||||||||||||
投票 | 已付款‑在 | 累计 | (损失) | 股东权益 | |||||||||||||
| 股份 |
| 金额 | 资本 |
| 赤字累计 |
| 收入 |
| 股权 | |||||||
余额-2024年1月1日 | | | | ( | ( | | |||||||||||
碎股赎回现金以代替股票逆分拆 | ( | — | ( | — | — | ( | |||||||||||
受限普通股的分配 |
| | — | — | — | — | — | ||||||||||
限制性股票单位奖励到期发放 | | — | — | — | — | — | |||||||||||
回购股份以支付员工税款扣缴 | ( | — | ( | — | — | ( | |||||||||||
发行普通股,与基于股份支付负债奖励有关 | — | — | | | |||||||||||||
以股票为基础的酬劳费用 |
| — | — | | — | — | | ||||||||||
净损失 |
| — | — | — | ( | — | ( | ||||||||||
其他全面收益(损失) |
| — | — | — | — | | | ||||||||||
余额-2024年9月30日 |
| | $ | | $ | | $ | ( | $ | ( | $ | |
6
2023年9月30日结束的三个月 | |||||||||||||||||
累计 | |||||||||||||||||
其他 | |||||||||||||||||
普通股 | 额外的 | 综合 | 总计 | ||||||||||||||
投票 | 已付款‑在 | 累计 | (损失) | 股东权益 | |||||||||||||
| 股份 |
| 金额 |
| 资本 |
| 赤字累计 |
| 收入 |
| 股权 | ||||||
资产负债表-2023年7月1日 | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
执行普通股期权 | |
| — |
| |
| — |
| — |
| | ||||||
受限制普通股的限制性股票确定期 |
| |
| — |
| — |
| — |
| — |
| — | |||||
限制性股票单位奖励到期发放 | | — | — | — | — | — | |||||||||||
为员工税款代扣而回购股份 | ( | — | ( | — | — | ( | |||||||||||
股份报酬支出 |
| — |
| — |
| |
| — |
| — |
| | |||||
净损失 |
| — |
| — |
| — |
| ( |
| — |
| ( | |||||
其他全面收益(损失) |
| — |
| — |
| — |
| — |
| ( |
| ( | |||||
账户余额-2023年9月30日 |
| | $ | | $ | | $ | ( | $ | ( | $ | | |||||
2023年9月30日止九个月 | |||||||||||||||||
累计 | |||||||||||||||||
其他 | |||||||||||||||||
普通股 | 额外的 | 综合 | 总计 | ||||||||||||||
投票 | 已付款‑在 | 累计 | (损失) | 股东权益 | |||||||||||||
| 股份 |
| 金额 |
| 资本 |
| 赤字累计 |
| 收入 |
| 股权 | ||||||
账户余额-2023年1月1日 | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
执行普通股票期权 | |
| — |
| |
| — |
| — |
| | ||||||
受限普通股的解冻 |
| |
| — |
| — |
| — |
| — |
| — | |||||
限制性股票单位奖励到期发放 | | — | — | — | — | — | |||||||||||
购回股份以支付员工的税款扣缴 | ( | — | ( | — | — | ( | |||||||||||
发行普通股与解决条件性考虑相关 | | | | ||||||||||||||
股份作为报酬的支出 |
| — |
| — |
| |
| — |
| — |
| | |||||
净损失 |
| — |
| — |
| — |
| ( |
| — |
| ( | |||||
其他全面收益(损失) |
| — |
| — |
| — |
| — |
| ( |
| ( | |||||
资产负债表—2023年9月30日 |
| | $ | | $ | | $ | ( | $ | ( | $ | |
请参阅基本报表摘要中的注释。
7
DESKTOP METAL, INC.
简明财务报表现金流量表
(未经查核)
(以千为单位)
截至九月三十日的九个月 | ||||||
| 2024 |
| 2023 | |||
经营活动现金流量: | ||||||
净损失 |
| $ | ( |
| $ | ( |
调整为使净亏损转化为经营活动所使用现金: |
|
| ||||
折旧与摊提 |
| |
| | ||
股票基础报酬 |
| |
| | ||
商誉减损 | — | | ||||
投资折扣的摊销(折水) | — | ( | ||||
可转换票据推递成本的摊销 | | | ||||
坏账准备 | | | ||||
慢动、淘汰和低成本或净实现价值存货的提存,净额 | ( | — | ||||
处置固定资产的亏损(利益) | ( |
| | |||
汇率期货(利得)因跨公司交易损失,净额 | ( | — | ||||
与可交易证券相关应计利息净减少 | — | | ||||
股权投资的未实现损失 | | | ||||
递延税益 | | ( | ||||
外币交易损失 | | | ||||
资产减损损失 | — | | ||||
营运资产和负债的变化: |
| |||||
应收帐款 |
| |
| ( | ||
存货 |
| ( |
| ( | ||
预付费用及其他流动资产 |
| |
| ( | ||
其他资产 | | | ||||
应付账款 |
| ( |
| | ||
应计费用及其他流动负债 |
| ( |
| | ||
客户存款。 |
| ( |
| ( | ||
逐步认列的收入 | ( | | ||||
权利使用资产和租赁负债的变动,净额 |
| ( |
| ( | ||
其他负债 | | | ||||
经营活动所使用之净现金流量 |
| ( |
| ( | ||
投资活动之现金流量: |
|
| ||||
购买不动产和设备 |
| ( |
| ( | ||
产销土地及设备款项 | | | ||||
可转换证券的购买 | — |
| ( | |||
出售和到期日收到的具市场价值的证券的收益 |
| — |
| | ||
处分附属公司所得款项 | — | | ||||
收购支付的现金,扣除取得的现金净额 |
| — |
| ( | ||
投资活动产生的净现金流量 |
| |
| | ||
来自筹资活动的现金流量: |
|
|
| |||
股票期权行使所得 | — |
| | |||
支付与限制性股票单位累积解禁时的净股份结算相关的税款 | ( | ( | ||||
偿还贷款 | ( | ( | ||||
筹资活动提供的净现金流量 |
| ( |
| | ||
汇率变动对现金、现金等价物及限制性现金的影响 | ( | ( | ||||
现金、现金等价物及限制性现金的净增加(减少) | ( | | ||||
期初现金、现金等价物及限制性现金余额 | | | ||||
期末现金、现金等价物及限制性现金余额 | | | ||||
现金流量补充披露 | ||||||
将在简明综合账户财务状况表中报告的现金、现金等价物和受限现金进行调和,以汇总在简明综合现金流量报表中显示的总额: | ||||||
现金及现金等价物 | $ | | $ | | ||
其他当前资产中包含的限制性现金 | | | ||||
列在其他非流动资产中的限制性现金 | — | | ||||
现金及现金等价物总额以及受限现金,在简明综合现金流量表中呈现。 | $ | | $ | | ||
8
9
简明综合财务报表附注
1.组织、业务性质、风险与不确定性
企业组织及性质
桌上型金属公司是一家特拉华州公司,总部位于马萨诸塞州伯灵顿。该公司成立于 2015 年,并通过为工程师,设计师和制造商的 3D 打印解决方案加速制造的转型。公司为各种最终客户设计、生产和销售 3D 打印系统和服务。
除非另有指明或情况另有规定,否则本表格 10-Q 的季度报告中指「公司」和「桌上型金属」的参考是指 Desktop Metal, Inc. 及其附属公司的合并营运。「Trine」的参考指在业务合并完成之前的公司,而「旧式桌上型金属」的参考指在业务合并完成之前的桌上型金属营运股份有限公司。
风险与不确定性
本公司承受与其他相似规模的公司相似的风险,包括但不限于成功开发产品的需求、需要额外资金、大型公司替代产品和服务的竞争、保护专有技术、专利诉讼、依赖关键人士以及资讯科技变化相关的风险。至今,本公司主要用于 2022 年 5 月出售优先股、业务合并及出售 2027 年到期的可换股优先票据(「2027 债券」)的收益,为其业务提供资金。公司的长期成功取决于其成功推广其产品和服务;产生收入;维持或降低其营运成本和开支;履行其义务;在需要时获得额外资本;最终实现有利润的营运。
近期发展
建议与纳米维度有限公司合并
2024 年 7 月 2 日,该公司与以色列公司 Nano Dimension Ltd.(以下简称「纳诺」)和一家特拉华州公司和纳诺的间接全资附属公司 Nano US I, Inc.(下称「合并子公司」)签订合约和合并计划(「合并协议」),根据该协议将与公司合并并进入该公司,而该公司在合并后仍以间接全资拥有纳诺的子公司(「合并」)。合并完成后,该公司的普通股(如下所定义)将从纽约证券交易所取消上市,并根据修订的 1934 年交易法取消注册。
根据合并协议所订明的条款及细则,在合并生效时(「有效时间」),每股 A 类普通股未偿还股份,面值 $
10
合并代价。
公司的股东在2024年10月2日举行的特别股东会上批准了这项合并。该合并须经过所需的监管批准和其他惯例的结束条件。
有关合并协议的进一步信息,请参阅合并协议,该协议的副本已于2024年7月3日提交给SEC的公司当前报告8-k表格中作为2.1号展览文件。
股票合并倒数
获得股东批准后,于2024年6月10日,公司实施了1对- 逆向拆股,公司的A类普通股开始于2024年6月11日以拆股后调整的基础交易。所有包含在这些简明合并财务报表中的公司普通股、以股票为基础的工具和每股数据均已作为拆股已在所呈现的所有时期之前生效的调整而进行调整。
与stratasys ltd.终止合并。
于2023年5月25日,公司与Stratasys Ltd.(“stratasys”),Tetris Sub Inc.(一家特拉华州公司,为Stratasys的直接全资子公司)及公司订立了一份并购协议计划(“Stratasys并购协议”),根据该协议,Stratasys并购子公司应与公司合并,公司作为Stratasys的直接全资子公司幸存(“Stratasys Merger”)。
Stratasys Merger需要获得Stratasys和desktop metal股东的批准。在2023年9月28日举行的Stratasys股东特别股东大会上,Stratasys股东未批准与Stratasys Merger协议相关的提议。因此,于2023年9月28日,Stratasys向Desktop Metal发送了一份终止Stratasys Merger协议的通知。因此,根据Stratasys Merger协议的条款,Stratasys支付了$
持续经营
根据财务会计准则委员会(“FASB”)编码会计准则编码(“ASC”)205,财务报表的编制,公司在简明综合财务报表发行日起一年的期间内须评估其作为持续经营实体的能力。
当相关条件和事件综合考虑,指出实体很可能无法在简明综合财务报表发行后一年内按期支付其到期的债务时,对实体能够持续作为持续经营实体存在重大怀疑。
这些简明综合财务报表是根据持续经营基础编制的,预期在业务正常进行的情况下实现资产并清偿负债。公司自成立以来一直亏损,累积亏损额为$
可能无法获得额外的股权融资,即使能够获得,条件可能不对公司有利,并可能对现有股东造成稀释效应。债务融资,即使可用,可能涉及限制性契约和稀释性融资工具。同样,与Nano或其他来源的安排可能不对公司有利,并可能对现有股东造成稀释效应。
该公司未能保证在需要时获得资本。如果合并未能完成,并且当需要资本时,且需要的金额未能得到,该公司可能需延迟、缩减或放弃部分或全部其业务。
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业务可能对公司的业务、财务状况和营业收入产生重大损害。由于这种不确定性,公司在至少从这些简明的合并财务报表可以发行的日期起继续作为持续经营的能力存在重大疑虑。附带的简明合并财务报表不包括可能由这种不确定性结果而导致的任何调整,也不包括调整以反映已记录资产金额的回收性或分类和应公司无法继续作为持续经营时可能需要的负债分类。
2. 重要会计政策摘要
报告基础
公司附属的未经审核的简明合并财务报表是按照美国普遍公认的会计原则(“美国通用会计原则”)和根据美国证券交易委员会(“SEC”)的规定准备的。根据SEC的规则和法规,根据美国通用会计准则准备的财务报表通常包含的特定信息和脚注披露已经被压缩或省略。简明合并财务报表包括公司及其附属公司的账目。在公司管理层的意见中,呈现的暂时期间的财务信息反映了需要对公司的财务状况、营业收入和现金流进行公平呈现的一切调整,这些调整属于正常且重复出现的性质。在这些未经审核的简明合并财务报表中,为符合当年度的呈现,某些余额已重新分类。与反向股票分割相关的某些前年金额已重新分类以符合当年度的呈现。
合并原则
附属简明合并财务报表包括公司及其全资子公司的账户。所有全资子公司的功能货币为美元。在合并时已消除所有公司内交易和余额。
重要之会计政策
公司重要的会计政策在年底截至于2023年12月31日的公司10-k表格第II部分,第8项基本财务报表的注解2中有所描述。在2024年度首九个月期间,公司的重要会计政策没有其他更改。
3. 营业收入认列
合约余额
公司的递延收入余额为$
Contract assets were not material as of September 30, 2024 and December 31, 2023.
待履行绩效义务
截至2024年9月30日,公司剩余绩效义务$
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向客户提供服务。此外,该公司在2024年和2023年9月30日分别拥有其他客户存款$资产。
4. 现金及短期投资
公司的现金等价物和短期投资投资于以下项目(以千为单位):
| 2024年9月30日 | |||||||||||
| 摊销后成本 |
| 未实现收益 |
| 未实现亏损 |
| 公平价值 | |||||
货币市场基金 | $ | | $ | — | $ | — | $ | | ||||
现金等价物总额 | | — | — | | ||||||||
总现金及短期投资 | $ | | $ | — | $ | — | $ | |
| 2023年12月31日 | |||||||||||
| 摊销后成本 |
| 未实现收益 |
| 未实现亏损 |
| 公平价值 | |||||
货币市场基金 | $ | | $ | — | $ | — | $ | | ||||
现金等价物总额 | | — | — | | ||||||||
总现金及短期投资 | $ | | $ | — | $ | — | $ | |
5. 公允价值衡量
公司使用以下三级公允价值层级,优先考虑衡量某些资产和负债的公平价值所使用的输入:
第 1 级是基于可观察的输入,例如在活跃市场中的报价价格;
第 2 级是基于不在活跃市场中报价的、直接或间接可观察的输入;
第 3 级是基于没有或几乎没有市场数据的不可观察输入,这要求公司制定自己的假设。
此层次结构要求公司在决定公平价值时使用可观的市场资料,并在可能的情况下最大程度地减少使用不可观的输入。以重复性基础计量公平值的项目包括货币市场基金。
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以下的公允价值层级表提供了有关公司财务资产的信息,这些资产是根据重复性的方法计量其公允价值的,并显示了公司用来判断这种公允价值的输入的公允价值层级(以千为单位):
2024年9月30日 | ||||||||||||
报价价格在 | 输入数 | |||||||||||
活跃市场 | 其他 | 输入数 |
| |||||||||
对于相同的事物 | 可观察到的输入数 | 难以观察的 |
| |||||||||
其他 | 重要输入数 | 重要输入数 |
| |||||||||
| (一级) |
| (二级) |
| (第3级) |
| 总计 | |||||
资产: | ||||||||||||
货币市场基金 | $ | | $ | — | $ | — | $ | | ||||
其他投资 | — | — | | | ||||||||
总资产 | $ | | $ | — | $ | | $ | |
2023年12月31日 | ||||||||||||
报价价格在 | 重要的 | |||||||||||
活跃的市场 | 其他 | 输入数 | ||||||||||
对于相同的 | 可观察的 | 不可观察的 | ||||||||||
项目 | 重要输入数 | 重要输入数 | ||||||||||
| (第1级) |
| (第二层) |
| (第三层) |
| 总计 | |||||
资产: |
|
|
|
|
|
|
|
| ||||
货币市场基金 | $ | | $ | — | $ | — | $ | | ||||
股票 | | — | — | | ||||||||
其他投资 | — | — | | | ||||||||
资产总额 | $ | | $ | — | $ | | $ | |
权益证券包括通过公开交易证券进行的投资。公司已判断其权益证券的预估公平价值是按照报价市场价格报告为一级资产,因为这些价值是基于相同资产的活跃市场中的报价价格。截至2021年12月31日年结束时,公司投入了$
其他投资包括透过可转换债务工具进行的投资,总额为美元。这笔投资记录在综合资产负债表中的其他非流动资产中。
2027年债券被评估为以摊销成本计量的单一负债,因为没有其他特点需要区分并识别为衍生工具。
在2023和2024年6月30日结束的三个和六个月中,有资产减损处理记录。更新计算公司进行中的研究和开发资产(“IPR&D”)公平价值所使用的关键假设可能会改变公司未来短期内回收IPR&D资产的带值估计。
截至九月三十日的九个月 | ||||||
2024 |
| 2023 | ||||
期初余额 | $ | | $ | | ||
期末余额 | $ | | $ | |
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以下表格显示了公司在以公允价值衡量的第3级负债方面的变动情况(以千为单位):
截至九月三十日的九个月 | ||||||
2024 |
| 2023 | ||||
期初余额 | $ | — | $ | | ||
支付条件性支付责任 | — | ( | ||||
公允价值的变化 | — | ( | ||||
期末余额 | $ | — | $ | — |
6. 应收帐款
应收帐款的元件如下(以千为单位):
九月三十日 | 12月31日 | |||||
2024 | 2023 | |||||
应收贸易款项 | $ | | $ | | ||
可疑帐款提存 | ( | ( | ||||
总应收帐款 | $ | | $ | |
下表总结了应收账款提存活动(以千为单位):
九月三十日 | 12月31日 | |||||
2024 | 2023 | |||||
期初余额 | $ | | $ | | ||
呆帐备抵金,扣除已回收金额 | | | ||||
已核销的呆帐 | ( | ( | ||||
期末余额 | $ | | $ | |
7. 存货
库存包括以下内容(以千为单位):
| 九月三十日 | 12月31日 | ||||
| 2024 | 2023 | ||||
原材料 | $ | | $ | | ||
在制品 | | | ||||
成品: |
|
| ||||
销货成本的递延成本 | | | ||||
制造完成的商品 | | | ||||
总完成商品 | | | ||||
总库存 | $ | | $ | |
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8. 预付费用和其他货币资产
预付费用和其他流动资产包括以下内容(以千元计):
九月三十日 | 12月31日 | |||||
2024 | 2023 | |||||
预付营业费用 | $ | | $ | | ||
预付费用和订阅 | | | ||||
预付保险 | | | ||||
Accounts payable | | | ||||
预付租金 | — | | ||||
其他 | | | ||||
预付费用及其他流动资产总额 | $ | | $ | |
9. 卖出
在2023年9月29日,公司与Industriewerk Shaeffler INA-Ingenieurdienst-,Gesellshaft mit beschrankter Haftung(“Shaeffler”)签订了一份股份购买协议,涉及出售Aerosint SA(“Aerosint”),公司的全资子公司,售价为$ 百万,其中包括卖出成本。 交易于2023年9月29日完成。
减损费用
关于 公司的2024倡议,请参见 附注24 重组费用部分,该公司批准了一项计划,出售俄亥俄州圣克莱尔斯维尔的一座设施以及该设施中的相关设备。截至2024年9月30日止九个月,公司完成了俄亥俄州圣克莱尔斯维尔设施的出售以及该设施中的相关设备,总收益为$ $
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10. 资产和计算机设备
固定资产净值包括以下项目(以千为单位):
| 九月三十日 | 12月31日 | ||||
| 2024 | 2023 | ||||
设备 | $ | | $ | | ||
租赁改良 |
| |
| | ||
土地建筑物 | | | ||||
施工进行中 |
| |
| | ||
家具和装置 |
| |
| | ||
软体 |
| |
| | ||
工具制造 |
| |
| | ||
计算机设备 |
| |
| | ||
汽车 | | | ||||
不动产和设备的毛值 |
| |
| | ||
减:累积折旧 |
| ( |
| ( | ||
总固定资产净值 | $ | | $ | |
透过折旧的支出为2023年和2024年六月三十日止的三个月和六个月分别为$9,577和$465,639。
11. 商誉及无形资产
截至所有期间结束时,有短期负债未偿。
九月三十日 | 12月31日 | ||||
2024 | 2023 | ||||
年初余额 | $ | — | $ | | |
商誉减损 | — | ( | |||
外币兑换调整 | — | ( | |||
期末余额 | $ | — | $ | — |
截至2023年12月31日,商誉完全减损。
公司于2023年10月1日进行年度商誉减损评估,得出公司单一报告单位的公允价值不低于其携带金额的结论。由于公司股价和可比公司股价持续下跌,我们于2023年12月31日进行定量评估,采用了多种收入和市场方法。所进行的定量分析结果显示,报告单位的携带价值超过了公允价值。因此,记录了$百万的商誉减损费用。公司在截至2023年12月18日的一年间共计记录了$百万的商誉减损费用。 $
公司使用收入法和市场法的加权平均值来估算公允价值。具体而言,收入法使用折现现金流法,在市场法下使用指导性公开公司以及指导性合并和收购公司的方法。在收入法下使用的重要假设包括管理层对未来营业收入和EBITDA利润率的预测,用于计算未来现金流量的预估,折现率和终端增长率。终值基于出口收入倍数,这需要对选择合适的倍数(考虑相关市场交易数据)作出重要假设。公司的估计和假设基于其对添加制造业的了解、近期表现、未来表现预期和其他公司认为合理的假设。市场法下使用的重要假设包括控制溢价和选择可比公司和可比交易。可比公司和交易的选择基于诸如产业分类、地理区域、产品供应、盈利增长和利润能力等因素。
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无形资产包括以下(单位:千元):
2024年9月30日 |
| 2023年12月31日 | ||||||||||||||||||
加权平均 | 毛 | 净值 |
| 毛 | 净值 | |||||||||||||||
剩余有用 | 携带 | 留存 | 携带 | 携带 | 留存 | 携带 | ||||||||||||||
| 寿命(以年计) |
| 金额 |
| 摊销 |
| 金额 |
| 金额 |
| 摊销 |
| 金额 | |||||||
购入的科技 | $ | | $ | | $ | |
| $ | | $ | | $ | | |||||||
商标 | | | | | | | ||||||||||||||
客户关系 | | | | | | | ||||||||||||||
已资本化的软体 | — | | | — | | | — | |||||||||||||
无形资产总额 | $ | | $ | | $ | | $ | | $ | | $ | |
截至2024年和2023年9月30日结束的三个月和九个月内,公司认列了以下摊销费用(以千元计):
Statement of | 截至 9 月 30 日止的三个月 |
| 截至九月三十日的九个月 | |||||||||||||
类别 | 操作项目 | 2024 | 2023 | 2024 | 2023 | |||||||||||
购入的科技 | 销售成本 | $ | | $ | | $ | | $ | | |||||||
购入的科技 | 研究与开发 | | | | | |||||||||||
商标 | 一般及管理费用 | | | | | |||||||||||
客户关系 | 销售和营销 | | | | | |||||||||||
已资本化的软体 | 研究与开发 | — | | — | | |||||||||||
$ | | $ | | $ | | $ | |
公司预计会承认以下摊销支出(以千元计算):
摊销费用 | |||
2024年(剩余3个月) | $ | | |
2025 | | ||
2026 | | ||
2027 | | ||
2028 | | ||
2029年及之后 | | ||
无形资产摊销总额 | $ | |
12. 其他非流通资产
以下表格汇总了公司其他非流动资产的元件(以千计):
九月三十日 | 12月31日 | |||||
2024 | 2023 | |||||
$ | | $ | | |||
其他投资 | | | ||||
长期存款 | | | ||||
云计算服务商安排 | | | ||||
其他 | | | ||||
其他非流动资产合计 | $ | | $ | |
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13. 应计费用和其他流动负债
以下表格总结了公司应计费用和其他流动负债的元件(以千为单位):
| 九月三十日 | 12月31日 | ||||
| 2024 | 2023 | ||||
薪酬和福利相关 | $ | | $ | | ||
保固准备金 | | | ||||
收购款项的当前部分 | — | | ||||
特许经营和权利金 |
| |
| | ||
库存采购 | | | ||||
专业服务 | | | ||||
2027年标注利息 | | | ||||
佣金 | | | ||||
应付所得税 | | | ||||
销售税、使用税和特许税 | | | ||||
其他 | | | ||||
总应计费用及其他流动负债 | $ | | $ | |
公司分别于2024年9月30日和2023年12月31日记录保固储备,金额如下(以千元计)。
| 九月三十日 | 12月31日 | ||||
2024 | 2023 | |||||
保固准备金,期初 | $ | | $ | | ||
并购中承担的保固准备金 | — | — | ||||
保固储备金增加 |
| |
| | ||
索赔已履行 |
| ( |
| ( | ||
期末保固储备金 | $ | | $ | |
14. DEBT
2027 Convertible Notes—In May 2022, the Company issued an aggregate of $
2027票据属于优先无抵押债务。2027票据按每年
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在2026年11月15日之前,2027年票据持有人只有在特定事件发生及指定期间内才有权将他们的2027年票据转换为股份,包括:
● | 如公司普通股每股最近报价价格,名义价值 $ |
● | 如果在 |
● | 该公司A类普通股上发生一定公司事项或分派;或 |
● | 如果公司呼吁2027年票据兑现。 |
自2026年11月15日起,2027年票据持有人可在任何时候根据他们的选择将2027年票据转换为到期日前倒数第二个预定交易日业务结束前。公司将通过支付或提供现金以及如适用的A类普通股股份来清算转换。
初始换股比率为
公司可能自2025年5月20日起,在2027年5月20日期间选择赎回现金所有或部分2027年票据。日 于到期日前的计划交易日进行交易,但仅在满足某些流动性条件并且公司A类普通股的最后报价超过
然而,除非尚有
如果发生构成“基本变更”的特定公司事件(定义在管理2027年票据的契约中),那么,除某些现金合并的有限例外情况外,2027年票据持有人可要求公司以一现金回购价购回其2027年票据,该现金回购价格等于应回购的2027年票据的本金金额,加上应付但尚未支付的利息金额(如有)至但不包括基本变更回购日期。基本变更的定义包括涉及公司的某些业务合并交易以及涉及公司A类普通股的某些退市事项。
与Nano的合并预计将导致基本性变革。如果完成合并,2027年债券只能按照每$1,000本金面额的2027年债券转换的金额转换为现金,这个金额等于(i)当时生效的转换率(根据管理2027年债券的契约定义)和(ii)每股合并考虑。如果完成合并,在结束后,合并后的公司必须提供回购所有未付的2027年债券,回购价格等于本金2027年债券的百分比,加上到回购日期为止的应计利息。
20
2027年票据被评估为按摊销成本计量的单一负债,这近似公平价值,因为没有其他特征需要分割并作为衍生金融工具认列。以下表格显示截至指定日期(以千为单位)的2027年票据的未偿本金金额和摊销价值。
九月三十日 | 12月31日 | |||||
2024 | 2023 | |||||
主要 | $ | | $ | | ||
未摊销债务折价 | ( | ( | ||||
未摊销的债券发行成本 |
| ( |
| ( | ||
损耗价值净额 | $ | | $ | |
2027年票据的年度有效利率约为
截至 9 月 30 日止的三个月 | 截至九月三十日的九个月 | |||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||
for additional information. | $ | | $ | | $ | | $ | | ||||
债务折价摊销 | | | | | ||||||||
交易成本摊销 |
| |
| |
| |
| | ||||
总利息费用 | $ | | $ | | $ | | $ | |
银行债务—在收购A.I.D.R.O.时,公司收购
15. 其他非流动负债
以下表格总结了公司其他非流动负债的元件(以千为单位):
| 九月三十日 | 12月31日 | ||||
| 2024 | 2023 | ||||
应付税款 | $ | | $ | | ||
其他 |
| |
| | ||
总其他非流动负债 | $ | | $ | |
21
16. 租赁
承租人
截至2024年9月30日,公司记录的资产为$
的所有供应商、供应商和服务提供商合同,以判断任何服务安排是否包含租赁组件。公司确定
其他与租赁相关的余额信息如下(以千为单位):
截至 9 月 30 日止的三个月 | 截至九月三十日的九个月 |
| |||||||||||
2024 | 2023 | 2024 | 2023 |
| |||||||||
租赁成本 |
|
|
|
|
|
| |||||||
营运租赁成本 | $ | | $ | | $ | | $ | | |||||
短期租赁成本 |
| — |
| |
| |
| | |||||
变量租赁成本 |
| — |
| |
| |
| | |||||
财务租赁成本 | | | | | |||||||||
租赁成本总额 | $ | | $ | | $ | | $ | | |||||
其他信息 |
|
|
|
| |||||||||
经营租赁使用的经营现金流量 | $ | | $ | | $ | | $ | | |||||
财务租赁使用的经营现金流量 | | | | | |||||||||
加权平均剩余租赁期限-营运租赁(年) |
|
| |||||||||||
加权平均剩余租赁期限-融资租赁(年) | |||||||||||||
加权平均折扣率-营运租赁 | | % | % | | % | | % | ||||||
加权平均折扣率-融资租赁 | | % | % |
| | % |
| | % |
赁赁租赁合同内隐含的利率大多数情况下难以确定,因此公司在衡量营业租赁负债时使用其增量借款利率作为折现率。 增量借款利率代表公司在租赁开始时会承担的利率估计,以在租赁期间以抵押方式借入与租金相等金额的资金。
2024年9月30日前,非可取消营业租赁下的未来最低租赁付款,包括根据金额分类不重要的未来最低租赁付款,如下(以千为单位):
营运租赁 |
| 财务租赁 | ||||
2024年(剩余3个月) | $ | | $ | — | ||
2025 |
| | | |||
2026 |
| | | |||
2027 |
| | | |||
2028 |
| | | |||
2029年及之后 | | | ||||
租约支付总额 |
| | | |||
减去代表利息的金额 |
| ( | ( | |||
| | | ||||
| ( | ( | ||||
$ | | |
22
2023 年 6 月,公司修订了位于马萨诸塞州伯灵顿的总部和营运设施的现有设施租赁,延长预定于 2024 年 4 月到期至 2029 年 4 月的租赁期。租金不是固定的,并且每年延长租金都会增加。
十七.承诺和应变
法律程序
我们不时会在一般业务过程中引起的各种索赔、诉讼和其他法律和行政诉讼。其中一些索赔、诉讼和其他程序可能涉及高度复杂的问题,并存在重大不确定性,并可能导致损害赔偿、罚款、罚款、非金钱制裁或缓解。当我们确定可能发生不利的结果并且可以合理估算损失金额时,我们会承认索赔或待处理诉讼的条款。由于诉讼的固有不确定性质,最终结果或实际结算成本可能与估计有重大不同。虽然这些索赔的结果无法确切预测,但管理层不相信任何现行法律程序的结果将对本公司的简明合并财务报表产生重大不利影响。
如前所述,2023 年 10 月 20 日,声称股东彼得罗坎佩特罗·坎帕内拉对 2021 年 11 月 21 日在特拉华州法院对桌上型金属公司和 ExOne 公司前董事和官员提出了修正了 2021 年 11 月 21 日的集体诉讼,指控违反信托责任和协助和协助违反与 eXone 合并有关的信托责任索赔(坎帕内拉诉罗克威尔等).,个案编号 2021-1013 至西洋公元)。特别是,Campanella 先生指称,ExOne 的代理声明和补充披露并没有充分披露与举报者调查有关的信息
正如前所述,
2024 年 8 月 12 日,一名称桌上型金属股东向美国纽约南区地区法院提出投诉,标题为布甘特夫诉桌上型金属有限公司,编号 1:24-cv-06092(S.D.N.Y.)(「Bugantev 投诉」),指称桌上型金属于 2024 年 8 月 1 日就附表 14A 的初步代表委任声明省略了有关公司、纳米维斯有限公司和纳诺美国一股份有限公司(「纳米合并」)之间合并的重大资料,使其中所载的披露作为虚假和误导,违反 1934 年证券交易法第 14 (a) 条及 20 (a) 条经修订。2024 年 8 月 16 日,原告人自愿拒绝布甘特夫投诉。在二零二四年九月十六日和十七日,
在二零二四年九月二十五日和二零二四年十月二日,
本公司认为,这些投诉都没有任何理由,并打算强烈地抵御这些投诉。
23
纽约交易所通知
2023年11月22日,公司收到纽约证券交易所(纽交所)通知,因公司普通股的平均收盘价在连续30个交易日内低于1.00美元,未符合《纽约证券交易所上市公司守则》第802.01C条的规定。该通知未导致公司的A类普通股从纽交所摘牌。
获得股东批准后,于2024年6月10日,公司实施了1对-
进行逆向股价拆分(“逆向股价拆分”),并且公司的A类普通股于2024年6月11日开始按照股份配股后的调整基础进行交易。2024年7月24日,公司收到纽交所通知,其A类普通股的收盘买盘价自2024年6月11日至2024年7月24日连续30个工作日均大于每股1.00美元。因此,公司已恢复符合第802.01C条的规定,此事项现已结案。如果公司A类普通股的平均收盘价再次低于每股1.00美元,并在连续30个交易日内,公司将再次收到纽交所未符合上市标准的通知并面临摘牌风险。公司的普通股、以股票为基础的金融工具以及包括在这些简明综合财务报表中的每股数据已被追溯性调整,就好像逆向股价拆分在显示的所有期间之前已经生效一样。
承诺
公司还与某些制造业、软体公司和高校签订了涉及专利技术使用的授权和版税协议。根据每项协议的条款,公司已经进行了初步且不重要的一次性支付,并且有义务支付一定百分比,从
公司在正常业务运作中,通过与德国银行的信贷机构发行短期金融担保和信用证,以向在安全要求下与某些商业交易相关的第三方提供安全。信贷机构提供的容量金额为$
截至2024年9月30日,该公司已为2026年透过未来购买承诺确定了$
18. 所得税
公司对中期的设定是根据年度有效税率的估计,根据当季发生的离散项进行调整。 公司的有效税率与美国法定税率主要由于其透支税款资产的估值准备有所不同,因为公司未来可能实现某些或全部透支税款资产的可能性。 在2024年9月30日结束的三个月和九个月内,公司分别记录了$
本公司认可未来预期税务后果的递延所得税资产和负债,这些后果已纳入本公司简明综合财务报表和税务申报表中。递延所得税资产和负债的确定基于简明综合财务报表的摊销金额与现有资产和负债的税基之间的差异,以及亏损和赊帐余额,使用预计在预计的差异将反转的年份中实施的税率。由于本公司从成立开始已经发生了累积税损,因此
24
公司认为,公司可能无法实现联邦和州税收净递延资产以及在某些非美国司法管辖区的递延税收资产的好处。
公司为与不确定税收立场相关的各种税务机构的潜在税款提供准备金。确认的金额基于公司在其税务申报或立场中是否有望在审核中持续的税收益的决定。与不确定税收立场相关的金额记录为所得税费用的组成部分。截至2024年9月30日,公司已经计提了约$
亿美元的股东权益
公司授权股份包括
2024年2月14日,公司与康泰菲兹& Co.签订了一份公开市场销售协议,根据该协议,公司可以不时通过市场交易以发行价格高达$出售公司的普通股
20. 基于股票的补偿
2020年激励奖励计划(“2020计划”)允许向公司的雇员、高管、董事、顾问和顾问授予激励股票期权、非合格期权、限制性股票和其他基于股票的奖励。截至2023年12月31日,用于未来发行的股票数量为
股票期权
截至2024年9月30日的九个月期间,计划的期权活动如下(以千股为单位):
|
| 平均 |
| |||||||
平均 | 剩余 |
| 总计 | |||||||
股数 | 行权价格 | 合同期限(年) |
| 内涵价值 | ||||||
| 股份 |
| 每股 |
| (以年为单位) |
| (以千为单位) | |||
2024年1月1日未执行 | | $ | |
| $ | | ||||
被放弃或到期 |
| ( | $ | | ||||||
2024年9月30日为止未清偿 |
| | $ | | | |||||
期权将于2024年9月30日行权 |
| | $ | | | |||||
期权将于2024年9月30日行权或有望获得行权 |
| | $ | | |
截至2023年7月31日,续借贷款协议下未偿还的借款额为
25
与现金补偿相关的期权的总扣除费用为美元
限制性股票授予
有关收购事项,公司已授予被视为后合并费用并按股份授予的受限制股票奖励(“RSA”)作为股票补偿,当股份兑现时。
在2024年9月30日结束的三个月和九个月期间,与RSA相关的股票补偿费用金额微不足道,分别为$
受限股票单位
授予员工和非员工的受限制股票单位(“RSUs”)通常在授予日起计算,经过
2020年计划下截至2024年9月30日的RSU活动如下(以千股计):
股份发帖主题 |
| 加权平均 | ||
| 受限制期限制 |
| 授予日期公允价值 | |
2024年1月1日未受限制股份余额 | | $ | ||
已行权 | | $ | ||
34,105 | ( | $ | ||
取消/弃权 | ( | $ | ||
2024年9月30日未投放股份余额 | |
与RSU相关的总股票补偿费用为$
包括根据某些业绩和市场基准条件给予的奖励。
基于绩效的限制性股票单位(包括在上文中)
截至2021年12月31日的年度内,
截至2020年12月31日的年度内,
26
基于市场的受限股票单位(包括在上面)
2021年10月,公司董事会的薪酬委员会授予了某些高管最多
截至2021年12月31日的年度
”),如果当时适用于公司高管。任何奖金
公司的奖金计划允许奖金以RSUs、现金或二者结合的形式支付。
公司的2023年奖金计划 ("2023年奖金计划") 美元奖金金额,于2024年3月31日结束的三个月内以RSU形式支付。 授予的RSU数量是根据董事会最终证明公司绩效达标和向每位员工发放奖励的日期上公司普通股的收盘价确定的。 公司将这些奖励作为基于责任的奖励进行核算,直到实现奖励为止,此时公司将这些奖励作为基于权益的奖励进行核算。 在截至2023年9月30日的三个月和九个月内,公司确认了与2023年奖金计划相关联的基于股票的补偿费用为$(
公司的2024年奖金计划("2024年奖金计划")预计将以公司普通股的收盘价确定的RSU形式支付,此收盘价为董事会最终认证公司绩效达标和向每位员工发放奖励的日期。 公司将这些奖励作为基于责任的奖励进行核算,因为与奖励相关的义务金额的货币价值主要是在成立时已知的固定货币金额,并且公司有一个无条件义务,必须或可以通过发行其股权股票来解决部分或全部义务。 公司将根据公司整体目标的预期实现,在员工必要服务期内确认股票补偿费用。 截至2024年9月30日,公司已经确认了 $
股票补偿费用
所有公司授予的股票奖励相关的总股票补偿费用,将在简明综合损益表中按以下方式报告(以千为单位):
截至9月30日,三个月的结束 | 截至9月30日的前九个月 | |||||||||||
2024 |
| 2023 |
| 2024 |
| 2023 | ||||||
研发 | $ | | $ | | $ | | $ | | ||||
总务费用 |
| |
| |
| |
| | ||||
销售和营销费用 |
| |
| |
| |
| | ||||
销售成本 |
| |
| |
| |
| | ||||
共计股份奖励支出 | $ | | $ | | $ | | $ | |
截至2023年7月31日,续借贷款协议下未偿还的借款额为
21.相关方交易
由于收购,公司承担了涉及美国各地设施的相关方租赁协议,截止至2029年。截至2024年9月30日,公司记录了$
27
公司向与公司董事会成员有关联的Lightforce Orthodontics销售产品。管理层认为销售是在与均等交易条件相同的情况下进行的。2024年9月30日结束的三个月和九个月内,公司共认定了营业收入$
公司向与公司董事会成员有关联的bloom energy销售产品。管理层认为这些销售是根据与独立交易中普遍的条款进行的。在2024年9月30日结束的三个月和九个月内,公司未从bloom energy获得任何营业收入。在2023年9月30日结束的三个月和九个月内,公司从bloom energy获得了$
The Company sells products to Viewray Systems which is an entity controlled by a shareholder. Management believes the sales were conducted on terms equivalent to those prevailing in an arm’s-length transaction. During the three and nine months ended September 30, 2024, the Company recognized an immaterial amount and $
22. SEGMENt INFORMATION
In its operation of the business, management, including the Company’s chief operating decision maker, who is also Chief Executive Officer, reviews the business as
Revenue for the three months ended September 30, 2024
| 美洲 |
| 欧洲、中东、非洲 |
| APAC(亚太地区) |
| 总费用 | |||||
产品 | $ | | | | $ | | ||||||
服务 |
| | | |
| | ||||||
总费用 | $ | | $ | | $ | | $ | |
2023年9月30日结束的三个月的营业收入
| 美洲 |
| 欧洲、中东、非洲 |
| APAC(亚太地区) |
| 总费用 | |||||
产品 | $ | | $ | | $ | | $ | | ||||
服务 |
| |
| |
| |
| | ||||
总费用 | $ | | $ | | $ | | $ | |
2024年9月30日止九个月的营业收入
| 美洲 |
| 欧洲、中东、非洲 |
| APAC(亚太地区) | 总费用 | ||||||
产品 | $ | | | | $ | | ||||||
服务 |
| | | |
| | ||||||
总费用 | $ | | $ | | $ | | $ | |
28
2023年9月30日结束的九个月营业收入
| 美洲 |
| 欧洲、中东、非洲 |
| APAC(亚太地区) |
| 总费用 | |||||
产品 | $ | | $ | | $ | | $ | | ||||
服务 |
| |
| |
| |
| | ||||
总费用 | $ | | $ | | $ | | $ | |
在2024年和2023年截至9月30日的三个和九个月内,公司从服务合同和基于云的软件许可按时间分配、硬件和消耗性产品发货以及订阅软件收入中确认了以下营业收入(以千为单位):
截至三个月结束 | 截至九个月的结束日期 | |||||||||||
2021年9月30日 | 2021年9月30日 | |||||||||||
2024 |
| 2023 |
| 2024 |
| 2023 | ||||||
营业收入在特定时间点确认 | $ | | $ | | $ | | $ | | ||||
按时间确认的收入 |
| |
| |
| |
| | ||||
总费用 | $ | | $ | | $ | | $ | |
公司的运营主要在美国。长期资产的位置,包括物业、厂房和设备、净额以及营运租赁权利资产,总结如下(以千为单位):
2021年9月30日 | 运营租赁负债: | |||||
2024 | 2023 | |||||
美洲 | $ | | $ | | ||
欧洲、中东、非洲 | | | ||||
APAC(亚太地区) | | | ||||
总长期资产 | $ | | $ | |
23. 每股净损失
公司根据归属于普通股股东的净损失和每个期间内普通股股份的加权平均数计算基本每股亏损。稀释每股收益包括通过行使未行使的股票期权和股票奖励获得的股份,在此类工具的转换会带来稀释效应的情况下。
截至9月30日,三个月的结束 | 截至9月30日的前九个月 | |||||||||||
(以千为单位,每股金额除外) | 2024 |
| 2023 |
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基本和稀释净亏损每股的分子: |
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净亏损 | $ | ( | $ | ( | $ | ( | $ | ( | ||||
基本和稀释净亏损每股的分母: |
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加权平均股份 |
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每股基本和每股摊薄净亏损 | ( | ( | ( | ( |
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公司的潜在稀释证券包括未行权的普通股期权、未解禁的限制性股票单位、未解禁的限制性股票奖励和未行权的普通股认股权证,已从计算每股稀释净损失中排除,因为其效果是降低每股净损失。因此,用于计算归属于普通股股东的基本和稀释每股净损失的加权平均未行权普通股数是相同的。
截至9月30日的前九个月 | ||||||
2024 |
| 2023 | ||||
普通股期权未行权 | | | ||||
未归属的限制性股票单位。 | | | ||||
未授予的限制性股票奖励未清偿 | — | | ||||
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所有板块股份总数 | | |
上表中的稀释表格不包括公司2024年奖励计划下授予的RSUs,预计将对2025年第一季度的杰出奖励产生影响。请参考 注20。股票基础薪酬 以获取有关公司奖励计划的更多详情。
24. RESTRUCTURING CHARGES
In June 2022, the Board of Directors approved a strategic integration and cost optimization initiative (the “2022 Initiative”) that includes a global workforce reduction, facilities consolidation, and other operational savings measures. As part of the facilities consolidation, the Company approved plans to sell
In January 2023, the Company committed to additional actions to continue and expand the 2022 Initiative. These additional actions included closing and consolidating select locations in the United States and Canada and reducing the Company’s workforce by an additional
2024年1月22日,公司承诺推行战略整合和成本优化计划(“2024计划”),包括全球约
在截至2024年9月30日的三个月和九个月内,公司分别记录了$
2024年3月14日,在对公司业务计划进行全面审查后,董事会批准了一项额外的成本削减计划,其中包括审查公司光聚合物业务的战略替代方案和一项评论
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对于其他潜在的成本节约措施(“光立体胶版倡议”),公司探讨了光立体业务的替代方案,可能包括资产剥离、投资削减或业务停止。作为光立体胶版倡议的一部分,公司对与光立体业务相关的某些资产(包括固定资产、无形资产和使用权资产)假定了缩短的可用寿命,并记录了 $
对于光立体倡议下所有承诺的重组活动,公司现在预计将发生总计税前重组费用 $
● | $ |
● | 之间的$ |
● | 之间的$ |
预计总估计费用预计将在之间。 $
在截至2024年9月30日的九个月内,公司在负债和其他流动负债中记录了2022年和2024年计划相关的活动(千美元):
截至9月30日的前九个月 | ||||||
2024 | 2023 | |||||
期初应计费用 | $ | | $ | | ||
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现金支付 | ( | ( | ||||
库存核销 | ( | ( | ||||
资产减值和摊销,待处置 | ( | — | ||||
期末应计费用 | $ | | $ | |
2024年和2023年截至9月30日的三个和九个月内,公司确认了以下作为以下开支支出的重组费用(以千计):
截至9月30日,三个月的结束 | 截至9月30日的前九个月 | |||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||
销售成本 | $ | | $ | | $ | | $ | | ||||
研发 | | | | | ||||||||
销售及营销费用 | | ( | | | ||||||||
ZSCALER, INC. |
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$ | | $ | | $ | | $ | |
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项目2.财务状况与经营结果的管理讨论与分析
本季度10-Q表格中包含前瞻性声明。除历史事实陈述外,本季度10-Q报告中的所有陈述,包括有关我们未来运营结果和财务状况、业务策略和计划、市场增长、趋势、事件以及我们未来运营目标的陈述,均属前瞻性声明。"可能","将","期待","预期","相信","打算","展望","可能","会","估计","潜在","持续","计划","目标",或这些词的否定形式或类似表达,旨在确定前瞻性声明。
此处包含的前瞻性声明基于管理层当前的预期。由于其他因素,实际结果可能与前瞻性声明中表达的结果不同,包括本季度10-Q报告中其他条款1A中提及的因素。“风险因素”。尽管我们认为前瞻性声明中反映的预期是合理的,但我们无法保证未来结果、表现或成就。我们前瞻性声明中反映的事件和情况可能无法实现或发生,实际结果可能与前瞻性声明中预测的结果有实质性不同。此外,我们在不断发展的环境中运营。新的风险因素和不确定性可能不时出现,管理层无法预测所有风险因素和不确定性。由于这些因素,我们无法向您保证本季度10-Q报告中的前瞻性声明将被证明是准确的。除非适用法律要求,我们不打算公开更新或修订本季度10-Q报告中包含的任何前瞻性声明,无论是由于任何新信息、未来事件、变化的情况还是其他原因。
请全面阅读此Form 10-Q季度报告,并理解我们未来实际结果可能会与预期大不相同。我们通过这些警告性声明对所有前瞻性声明进行限定。
业务概况
Desktop Metal正在开拓新一代集中在Additive Manufacturing 2.0的增材制造技术,专注于体积生产终端用途零部件。我们提供一套综合的集成增材制造解决方案组合,包括硬件、软件、材料和服务,支持金属、聚合物、弹性体、陶瓷、沙子、复合材料和生物兼容材料。我们的解决方案跨越产品生命周期的应用案例,从产品开发到批量生产和售后运营,涵盖汽车、医疗保健和牙科、消费品、重工业、航空航天、机械设计和研发等多个行业,.
我们继续致力于研究和开发。自2015年成立以来,我们投入了大量资源进行研究和开发,致力于构建一个广泛的专有和差异化技术组合,专注于使增材制造成为易于使用、经济且可扩展的解决方案。这些技术代表了我们未来产品推出的基石,对提升我们现有产品提供支持至关重要,并得到了800多项专利或待申请专利的支持。我们的增材制造平台利用这些技术生产工具和终端零部件,使企业能够通过覆盖价格点、吞吐量水平和运行环境的一系列解决方案来实现他们的特定目标。.
我们的产品平台相对于竞争性增材制造系统具有几个关键优势,包括突破性的打印速度、具有竞争力的零部件成本、易于访问的工作流程和软件、一站式解决方案以及支持广泛的合格材料库,销售这些材料代表来自我们增材制造解决方案的客户的循环收入来源,同时还包括系统耗材和其他服务,如安装、培训和技术支持。由于这些优势,我们的解决方案降低了采用增材制造的障碍,并解锁了传统制造通常具有成本和量优势的新应用领域。在打印机、零件和材料方面,我们打算继续投资,推进我们当前的技术组合,并开发新技术,使我们能够为更广泛的客户群提供服务并进入新的垂直市场,从而扩大我们的可寻址市场并推动对Additive Manufacturing 2.0的采用。.
我们通过市场营销和销售我们的增材制造2.0解决方案来利用我们在技术创新和产品开发方面的核心竞争力,通过领先的全球分销网络进行管理和推广,这个网络由覆盖全球40多个国家的销售和分销专业人员组成,他们在数字制造技术方面拥有数十年的经验,与我们自己的内部销售和营销团队一起工作,以在一系列行业和价格点上推广和销售产品。我们正在扩大销售能力和推广市场。
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在全球各地进行交易所。同样,我们的内部制造和供应链团队与内部工程部门和第三方代工厂商合作,在商业化和大量商业货物发货方面进行规模化初步原型。通过我们的混合分销和制造方式,我们可以全球市场大规模生产、卖出和服务我们的产品,在执行我们的策略时实现实质性的营运杠杆.
我们的专有技术解决方案还为产品零部件提供了基础,我们直接为客户制造部件并专注于关键应用和垂直领域,其中,与传统制造相比,增材制造可以在设计、性能、成本和供应链优势方面提供显著的优势。这些提供将使我们能够为客户提供更全面的解决方案套件,并推动我们增材制造 2.0 的加速采用
我们跨越选择的高价值生产应用提供解决方案,我们将其称为“杀手级应用”,包括但不限于 医疗和牙科设备,以及流体动力系统。我们认为这些提供不仅将创造高边际营收流,而且还将促进我们增材制造系统的规模化销售线索生成,并为使用新材料的高性能和专业应用铺平道路,提前介绍更广泛的市场.
运营结果
在截至2024年9月30日的三个月和九个月内,我们分别认定了3640万美元和11590万美元的营业收入,并分别录得了3540万美元和19100万美元的净亏损。在截至2024年9月30日的九个月期间,我们用于经营活动的现金为5340万美元,期末现金及现金等价物为3060万美元,流动负债为6120万美元
最近的发展
与nano dimension有限公司提出的合并建议
2024年7月2日,我们与以色列公司Nano Dimension Ltd.(“Nano”)和Nano US I, Inc.,Delaware州的一家公司及Nano的间接全资子公司(“Merger Sub”)签订了《合并协议和计划》(“合并协议”),根据合并协议,Merger Sub将与公司合并,公司作为Nano的间接全资子公司存续(“合并”)。在合并结束后(“结束”),公司的A类普通股(如下所示),将从纽约证券交易所退市,并根据1934年修正的《交易法》注销登记。
根据合并协议中规定的条款和条件,在合并的有效时间(“有效时间”),公司的每一股A类普通股,每股面值$0.0001的股份(“A类普通股”)(除(i)公司持有的优先股,面值$0.0001的股份(“优先股”),(ii)公司作为库存或由公司的子公司,Nano或Merger Sub直接持有的股份,及(iii)股东持有的有权,并已根据特拉华州普通公司法第262节要求对这些股份适用评估程序的A类普通股份进行转换,根据合并协议定义,这些股份称为“异议股份”)将自动转换为以每股$5.50美元(“每股合并考虑”)的现金金额,不含利息,根据下调调整,金额调整金额”的数额相等(“考虑调整金额”),等于桥贷款设施(如下定义)的总未偿本金与未支付利息,截至结束之日,除以$2.5 million,乘以0.10美元(在任何情况下,按照(x)进行的调整不得超过0.80美元),再加上超额股票交易费用(合并协议中定义),截至合并结束日尚未支付的所有公司交易费用除以250万美元,乘以0.10美元(在任何情况下,按照(y)进行的调整不得超过0.60美元),再加上如果公司的某些高管在结束前不签订解雇信函协议,则为0.0325美元。在有效时间,每股优先股,每股异议股份,转换为接收每股合并考虑的权利,每股A类普通股,将被取消并停止存在,以前代表这些A类普通股的证书此后将仅代表接收每股合并考虑的权利。
我们的股东已在2024年10月2日召开的股东特别会议上批准了合并。 合并需获得必要的监管批准以及其他习惯的收盘条件。
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反向股票拆分
2024年6月11日,公司进行了1比10的反向股票分割。所有公司普通股的股份、基于股票的工具以及包含在这些简明合并基本报表中的每股数据均已追溯调整,如同在所有呈现期间之前已实施股票分割。
战略整合与成本优化举措
2022年6月10日,董事会批准了一项战略整合和成本优化倡议,涉及全球员工裁减、设施整合和其他运营节省措施(“2022倡议”)。2022倡议的目的是简化我们的运营结构,降低营业费用并管理我们的现金流。2023年1月31日,我们承诺采取额外措施,继续扩展2022倡议。这些额外措施包括关闭和整合美国和加拿大的部分地点,并将我们的员工减少额外15%,优先投资和运营与近期营业收入创造相一致,推动我们实现长期财务目标。
2022倡议截至2023年12月31日完成。与2022倡议相关,我们产生了660万的税前重组费用,包括一次性终止福利及相关成本、存货减值、租约终止和设备退出成本,以及合同终止费用。由于2022倡议,我们在2022年下半年实现了2070万的成本节省,并在2023年达成了10000万年化成本节省的既定目标。
与2022倡议相关,在截至2023年12月31日的年度中,我们以690万的总收益出售了位于密歇根州特洛伊和宾夕法尼亚州北亨廷顿的设施,并在简明合并的运营报表中记录了对设施出售的微不足道的损失。在截至2023年12月31日的年度中,我们关闭了与2022倡议相关的另外四个设施。2023年9月29日,结合2022倡议,我们完成了对Aerosint SA的出售给Schaeffler AG。由于此次出售,我们确认了250万的商誉减值费用和690万与资产组价值相关的减值费用,其中包括260万的累计外币转换调整费用,在截至2023年12月31日的年度中。我们将继续与Schaeffler合作开发用于粘合剂喷墨3D打印的科技,我们保留了商业使用的选择权。
在2024年1月22日,我们承诺进行一项战略整合和成本优化计划(“2024计划”),其中包括全球 workforce 减少约20%,设施整合,产品合理化以及其他运营节省措施。我们已开始在美国进行 workforce 减少,并正在审查其他国家的 workforce 变化,时机将根据当地监管要求而有所不同。根据2024计划,我们批准了一项计划,出售位于俄亥俄州圣克莱尔斯维尔的一处设施以及该设施的相关设备。在截至2023年12月31日的年度中,我们因2024计划发生了3090万的重组费用,主要包括2650万的库存减值。因此,我们预计2024计划将产生至少5000万的年度化成本节省,导致2024年上半年成本的逐步减少。公司预计2024计划将在2024年底前基本完成。
在截至2024年9月30日的三个月和九个月中,我们分别记录了与员工解雇、福利及相关费用、库存减值、与已停产产品相关的特许权使用费以及与2024计划和2022计划相关的设施整合有关的重组费用180万和390万。在截至2023年9月30日的三个月和九个月中,我们分别记录了与员工解雇、福利及相关费用、库存减值、与已停产产品相关的特许权使用费以及与2024计划和2022计划相关的设施整合有关的重组费用10万和660万。
在2024年3月14日,经过对我们的运营计划的全面审查,董事会批准了一项额外的成本削减计划,其中包括对我们的光聚合物业务的战略替代方案审查,以及对其他潜在节省措施的审查(“光聚合物计划”)。我们探索了光聚合物业务的替代方案,可能包括出售、缩减投资或终止业务。作为光聚合物计划的一部分,我们对某些资产,包括固定资产、无形资产以及与光聚合物业务相关的使用权资产,假定较短的使用寿命,并在截至2024年9月30日的三个月和九个月中记录了6830万和8030万的增加折旧和摊销作为重组费用。 截至2024年9月30日,我们在三个月和九个月内记录了重组
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与光聚合物计划相关的员工裁员和设施整合费用分别为40万美元和130万美元。
对于光聚合物计划下所有已承诺的重组活动,公司现在预计将承担总计8210万美元至8250万美元的税前重组费用,包括以下费用:
● | 8030万美元的增量折旧和摊销,这些费用是在截至2024年9月30日的九个月内发生的; |
● | 150万美元至170万美元的一次性终止福利和相关费用,包括在截至2024年9月30日的九个月内发生的130万美元;以及 |
● | 在$30万和$50万之间的租赁终止和设备退出成本。 |
预计总费用将在$50万和$90万之间产生未来现金支出。公司不再期望因光聚合物计划而产生与长期资产相关的非现金减值费用。上述费用区间为估算,实际金额可能与这些估算存在重大差异。
与Stratasys Ltd.的合并终止。
2023年5月25日,我们与Stratasys Ltd.(“Stratasys”)、位于特拉华州的Tetris Sub Inc.(“Stratasys Merger Sub”,为Stratasys的一个直接全资子公司)及公司签订了一项合并协议和计划(“Stratasys合并协议”),根据该协议,Stratasys Merger Sub将与公司合并,公司将作为Stratasys的一个直接全资子公司存续(“Stratasys合并”)。
Stratasys合并须经Stratasys和Desktop Metal的股东批准。在2023年9月28日举行的Stratasys特别股东大会上,Stratasys股东未批准与Stratasys合并协议相关的提案。因此,在2023年9月28日,Stratasys向Desktop Metal发出了终止Stratasys合并协议的通知。因此,根据Stratasys合并协议的条款,Stratasys向Desktop Metal支付了$1000万以报销费用,这包括在浓缩合并运营报表中的一般和管理费用。终止费用于2023年10月6日支付。
影响经营业绩的关键因素
我们相信我们的表现和未来成功取决于许多因素,这些因素为我们提供了重大的机会,但也带来了风险和挑战,包括以下讨论的因素和“Risk Factors本季度报告第10-Q表格的"部分"。
我们增材制造解决方案的采用
我们相信世界正处于增材制造解决方案的采用拐点,并且我们凭借我们的专有技术和全球分销能力在众多行业中具备良好的把握这一机会的定位。我们预计,在可预见的未来,随着企业不断从传统制造工艺转向增材制造用于最终使用部件,我们的运营结果,包括营业收入和毛利率,将会波动。我们的交钥匙和成交量生产解决方案旨在使企业能够充分实现大规模增材制造的所有好处,包括几何和设计灵活性、大规模定制和供应链工程等。潜在和现有客户对这些好处的认识及其对我们解决方案的投资程度将影响我们的财务业绩。
定价、产品成本和利润率
我们为客户提供一系列增材制造解决方案,涵盖多个价格点、材料、生产能力、操作环境和技术,以便帮助他们找到实现具体目标的解决方案。由于市场特定的供需动态和产品生命周期,这些产品的定价可能因地域板块而异,同时某些产品的销售已或预期会有比其他产品更高的毛利率。因此,我们的财务表现在一定程度上依赖于
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我们在特定期间销售的产品。此外,我们面临价格竞争,我们在关键市场的竞争能力将取决于我们在新技术和成本改善方面投资的成功,以及我们为客户高效可靠地引入具有成本效益的增材制造解决方案的能力。
持续投资与创新
我们相信自己在大规模生产和交钥匙增材制造解决方案方面处于领先地位,提供突破性技术,使得通过我们广泛的产品组合实现高送转和易用性。我们的表现在很大程度上取决于我们在研发上的投资以及我们在增材制造行业处于前沿的能力。我们必须不断识别和响应快速变化的客户需求,开发和推出创新的新产品,增强现有产品,并为我们的解决方案创造客户需求。我们相信,投资于我们的增材制造解决方案将有助于长期的营业收入增长,但这可能会对我们短期的盈利能力产生不利影响。
产品的商业推出
我们不断投资于新产品的开发和现有产品的增强,以满足不断变化的客户需求,在最近几个月里,我们推出了许多新产品。在新产品商业化之前,我们必须在内部或在我们的第三方代工厂商处完成最终测试、采购和产品的生产提升。任何成功完成这些步骤的延迟可能会影响我们从这些产品中产生营业收入的能力。
收购与交易相关费用
我们的增长在很大程度上依赖于成功整合收购的公司,包括我们有效和高效地结合运营所带来的预期业务机会。我们预计,随着我们继续整合这些业务及其提供的技术、产品和服务,我们的运营结果将会波动。此外,我们的运营结果还将受到非经常性交易相关费用的影响,包括整合成本、遣散费和与这些收购相关的其他费用。
宏观经济环境
当前的宏观经济环境正在财务和运营方面影响我们的客户。客户和潜在客户面临着显著的财务压力,因为供应链限制和通货膨胀推动了运营成本的上升,而利率的上升使得获取信贷变得更为昂贵。最近几个月,消费者价格指数大幅上升。此外,在通货膨胀期间,利率历史上也会增加。2022年3月,美联储开始提高利率,以努力遏制通货膨胀。由于这些财务压力,一些客户可能会降低其资本投资计划并紧缩运营预算,这可能导致销售周期延长、采购决策延迟以及我们解决方案的价格压力。较高的利率也可能影响我们以有吸引力的利率获得债务融资的能力。由于客户在不确定的宏观经济背景下延迟购买决策和资本支出的延迟,我们在2024年头两季度的营业收入出现了下降。
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营业结果
截至2024年9月30日和2023年9月30日的三个月比较
营业收入
下表展示了我们各项营业收入的情况,以及占总营业收入的百分比和与去年相比的变化。
| 截至9月30日的三个月 |
|
|
|
|
| ||||||||||||
2024 |
| 2023 |
| 营业收入的变化 |
| |||||||||||||
(单位:千美元) |
| 营业收入 |
| % 的总计 |
|
| 营业收入 |
| % 的总计 |
|
| $ |
| % |
| |||
产品营业收入 | $ | 31,939 | 88 | % | $ | 37,502 | 88 | % | $ | (5,563) | (15) | % | ||||||
服务营业收入 |
| 4,466 |
| 12 | % | 5,248 |
| 12 | % | (782) |
| (15) | % | |||||
总营业收入 | $ | 36,405 |
| 100 | % | $ | 42,750 |
| 100 | % | $ | (6,345) |
| (15) | % |
截至2024年9月30日和2023年的三个月总营业收入分别为3640万美元和4280万美元,减少640万美元,降幅为15%。产品收入主要因2024年第三季度发货量减少而下降,这受到上述影响增材制造业的宏观经济条件的驱动。
以下表格展示了按地域板块划分的营业收入,以及总营业收入的百分比和与上个时期的变化。
| 截至9月30日的三个月内, |
| ||||||||||||||||
| 2024 |
| 2023 |
| 营业收入变动 |
| ||||||||||||
(单位:千美元) |
| 营业收入 |
| % 的总计 |
| 营业收入 |
| % 的总计 |
| $ |
| % | ||||||
美洲 | $ | 23,385 | 64 | % | $ | 28,456 | 66 | % | $ | (5,071) | (18) | % | ||||||
欧洲、中东、非洲 |
| 8,656 |
| 24 | % | 10,061 |
| 24 | % |
| (1,405) | (14) | % | |||||
亚太(亚洲-太平洋) |
| 4,364 |
| 12 | % | 4,233 |
| 10 | % |
| 131 | 3 | % | |||||
总营业收入 | $ | 36,405 |
| 100 | % | $ | 42,750 |
| 100 | % | $ | (6,345) | (15) | % |
截至2024年9月30日的三个月内,总营业收入相比于截至2023年9月30日的三个月减少,原因是所有地域板块的单位出货量下降。
销售成本
截至2024年和2023年9月30日的三个月内,总销售成本分别为3320万和4080万,减少760万,降幅为19%。销售成本的下降是由于单位出货量降低,以及由于裁员导致的薪资费用减少、设施费用降低,以及与上述举措相关的运费降低。
毛利润和毛利率
下表显示了按营业收入来源划分的毛利润,以及与上个周期相比毛利润的变化金额。
截至9月30日的三个月 | 毛利润变化 |
| ||||||||||
2024 |
| 2023 | 利润 |
| ||||||||
(单位:千美元) |
| 毛利润 |
| $ |
| % | ||||||
产品 | $ | 1,977 | $ | 327 | $ | 1,650 | 505 | % | ||||
服务 |
| 1,184 |
| 1,597 |
| (413) | (26) | % | ||||
总计 | $ | 3,161 | $ | 1,924 | $ | 1,237 | 64 | % |
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截至2024年和2023年9月30日的三个月内,总毛利润分别为320万和190万。130万的毛利润增长得益于减少的工资支出和上述举措带来的其他成本节省。
下表展示了各营业收入来源的毛利率,以及与之前时期的毛利率变化。
截至9月30日的三个月 |
| 毛利率变化 |
| ||||||
2024 | 2023 | 百分比 | |||||||
毛利率 |
| 点数 |
| % |
| ||||
产品 | 6 | % | 1 | % | 0.05 |
| 500 | % | |
服务 | 27 | % | 30 | % | (0.03) |
| (10) | % | |
总计 | 9 | % | 5 | % | 0.04 |
| 80 | % |
截至2024年和2023年9月30日的三个月内,总毛利率分别为9%和5%。毛利率同比增长,主要是由于由于光聚合物业务相关的无形资产在当前期间之前已完全摊销,因此当前期间记录的摊销较少。
研发
截至2024年和2023年9月30日的三个月内,研发费用分别为$1150万和$2050万,下降了$900万,或44%。研发费用的减少主要是由于与2023年同季度相比,股权补偿费用减少了$180万,以及与上述倡议相关的薪酬费用减少了$440万和咨询服务费用减少了$170万。
销售和市场营销
截至2024年和2023年9月30日的三个月内,销售和市场费用分别为$810万和$850万,下降了$40万,或5%。这一减少主要是由于与上述倡议相关的薪酬费用、股权补偿费用、市场支出和摊销的降低。
一般和行政管理
截至2024年和2023年9月30日的三个月内,管理费用分别为$1730万和$950万,增加了$780万,或82%。管理费用的减少主要是由于与上述倡议相关的会计、审计、法律费用、薪酬费用和股权补偿费用的下降。
利息支出
截至2024年和2023年9月30日的三个月内,利息费用分别为$170万和$100万。
利息和其他费用,净额
截至2024年9月30日和2023年9月30日的三个月期间,利息及其他费用净额分别为($0.2)百万和$30万。
所得税
截至2024年9月30日的三个月,我们记录了$30万的所得税费用,而截至2023年9月30日的三个月则录得$10万的所得税减免。费用的增加主要是由于预计在非美国管辖区的税费增加,特别是在2024年9月30日的三个月期间。
由于我们在经营的管辖区内的历史性净亏损,我们对所有递延税资产提供了估值准备金,除日本和德国外。我们继续根据我们的未来应税收入按管辖区进行评估。
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最近的历史运营结果、预计临时差异的逆转时间、我们未来可能实施的各种税务规划策略,以及基于每个报告期末可用信息,潜在运营变化对我们业务和未来期间运营预测结果的影响。在能够基于上述因素的单一或多个税务管辖区得出递延税资产可实现的结论的情况下,可能会对我们现有的估值准备金的相关部分进行逆转。
2024年9月30日和2023年已结束的九个月的比较
营业收入
下表展示了我们各项营业收入来源的收入,以及营业收入在总营业收入中的百分比和与去年相比的变化。
|
| 截至9月30日的九个月 |
|
| ||||||||||||
2024 | 2023 | 营业收入变动 |
| |||||||||||||
(单位:千美元) |
| 营业收入 |
| % 总计 |
| 营业收入 |
| % 总计 |
| $ |
| % |
| |||
产品营业收入 | $ | 98,981 | 85 | % | $ | 121,597 | 89 | % | $ | (22,616) | (19) | % | ||||
服务营业收入 |
| 16,956 |
| 15 | % | 15,755 |
| 11 | % |
| 1,201 | 8 | % | |||
总营业收入 | $ | 115,937 |
| 100 | % | $ | 137,352 |
| 100 | % | $ | (21,415) | (16) | % |
截至2024年9月30日以及2023年9月30日的九个月总营业收入分别为11590万美元和13740万美元,减少2150万美元,或16%。产品营业收入的下降主要是由于2024年前三季度因影响增材制造行业的宏观经济条件导致发货单位减少。营业收入的下降部分被服务营业收入的增加所抵消。2024年9月30日结束的九个月内,服务营业收入同比增长约8%,主要由于近期出货所带来的支持和安装营业收入的增加。
下表展示了各地域板块的营业收入,以及总营业收入的百分比和与前期的变化。
| 截至9月30日的九个月期间 |
| ||||||||||||||
2024 | 2023 | 营业收入的变化 |
| |||||||||||||
(单位:千美元) |
| 营业收入 |
| % 的总计 |
| 营业收入 |
| % 的总计 |
| $ |
| % |
| |||
美洲 | $ | 75,848 |
| 65 | % | $ | 87,952 |
| 64 | % | $ | (12,104) | (14) | % | ||
欧洲、中东、非洲 |
| 28,536 |
| 25 | % |
| 36,509 |
| 27 | % |
| (7,973) | (22) | % | ||
亚太 |
| 11,553 |
| 10 | % |
| 12,891 |
| 9 | % |
| (1,338) | (10) | % | ||
总营业收入 | $ | 115,937 |
| 100 | % | $ | 137,352 | 100 | % | $ | (21,415) | (16) | % |
截至2024年9月30日的九个月期间,总营业收入相比于截至2023年9月30日的九个月期间减少,原因是所有地域板块的单位发货量下降。
销售成本
截至2024年和2023年9月30日的九个月期间,总销售成本分别为14720万和13070万,增加了1650万或13%。销售成本的增加主要是由于与光聚合物计划相关的增量摊销,同时受到由于裁员、降低设施成本和与上述计划相关的运输成本下降的影响。
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毛利润和毛利率
下表展示了按照营业收入来源划分的毛利润,以及与前一个时期相比的毛利润变化金额。
截至九月三十日的九个月 | 毛利率的变化 |
| ||||||||||
| 2024 |
| 2023 | 利润 |
| |||||||
(单位:千美元) |
| 毛利润(亏损) |
| $ |
| % |
| |||||
产品 | $ | (37,209) | $ | 2,307 | $ | (39,516) | (1,713) | % | ||||
服务 |
| 5,975 |
| 4,342 |
| 1,633 | 38 | % | ||||
总计 | $ | (31,234) | $ | 6,649 | $ | (37,883) | (570) | % |
截至2024年9月30日和2023年的九个月总毛利润分别为(3120万美元)和660万。毛利润减少3780万美元是由于与光聚合物计划相关的增加摊销,抵消了由于上述计划实施所导致的薪资支出减少和其他成本节约。
以下表格展示了按营业收入来源划分的毛利率,以及与之前时期的毛利率变化。
| 截至9月30日的九个月 |
| 毛利率的变化 | ||||||
| 2024 | 2023 |
| 百分比 |
| ||||
| 毛利率 |
| 分数 |
| % | ||||
产品 |
| (38) | % | 2 | % | (0.40) |
| (2,000) | % |
服务 |
| 35 | % | 28 | % | 0.07 |
| 25 | % |
总计 |
| (27) | % | 5 | % | (0.32) |
| (640) | % |
截至2024年9月30日和2023年9月30日的九个月总毛利率分别为(27)%和5%。毛利率的降低主要是由于上述光聚合物计划相关的增量摊销以及营业收入的减少。
研发
截至2024年9月30日和2023年9月30日的九个月研发费用分别为4850万和6480万,减少了1630万,或25%。研发费用的减少主要是因为与上述计划相关的股票补偿费用减少了480万和工资费用减少了1110万。
销售和市场营销
截至2024年9月30日和2023年9月30日的九个月销售和市场推广费用分别为4500万和2860万,增加了1640万,或57%。销售和市场推广费用的增加是由于与光聚合物计划相关的增量摊销。此外,薪资费用、股票补偿费用、营销支出和与上述计划相关的摊销的减少部分抵消了这一增长。
一般和行政管理
截至2024年9月30日和2023年9月30日的九个月一般和行政费用分别为5970万和5070万,增加了900万,或18%。一般和行政费用的增加是由于与光聚合物计划相关的增量摊销和折旧,部分被与上述计划相关的会计、审计和法律费用、工资费用和股票补偿费用的减少所抵消。
利息支出
截至2024年和2023年9月30日的九个月期间,利息支出分别为490万美元和300万美元。
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Interest and Other Expense, Net
Interest and other expense, net during the nine months ended September 30, 2024 and 2023 was $1.3 million and ($0.5) million, respectively. The increase in expense during the nine months ended September 30, 2024 is attributable to foreign currency transaction losses.
Income Taxes
We recorded an income tax expense of $0.4 million during the nine months ended September 30, 2024, compared to an income tax benefit of $0.7 million during the nine months ended September 30, 2023. The increase in expense was primarily due to an increase in expected tax expense in non-U.S. jurisdictions during the nine months ended September 30, 2024.
We have provided a valuation allowance for all of our deferred tax assets as a result of our historical net losses in the jurisdictions in which we operate, except for Japan and Germany. We continue to assess our future taxable income by jurisdiction based on our recent historical operating results, the expected timing of reversal of temporary differences, various tax planning strategies that we may be able to enact in future periods, and the impact of potential operating changes on our business and our forecast results from operations in future periods based on available information at the end of each reporting period. To the extent that we are able to reach the conclusion that deferred tax assets are realizable based on any combination of the above factors in a single, or multiple, taxing jurisdictions, a reversal of the related portion of our existing valuation allowances may occur.
Non-GAAP Financial Information
In addition to our results determined in accordance with GAAP, we believe the below non-GAAP financial measures are useful in evaluating our operational performance. We use this non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that this non-GAAP financial information, when taken collectively, may be helpful to investors in assessing our operating performance.
The non-GAAP financial information excludes, as applicable, stock-based compensation expense, amortization of acquired intangible assets, restructuring expenses, acquisition-related and other transactional charges, inventory step-up, in-process research and development assets acquired, goodwill impairment, change in fair value of investments and change in fair value of warrant liability. These items are normally included in the comparable measures calculated and presented in accordance with GAAP. Our management excludes these items when evaluating our ongoing performance and/or evaluating earnings potential, and therefore excludes them when presenting non-GAAP financial measures. Management uses non-GAAP financial measures to supplement our GAAP results.
Stock-based compensation is a non-cash expense relating to stock-based awards issued to executive officers, employees, and outside directors, consisting of options and restricted stock units. We exclude this expense because it is a non-cash expense and we assess our internal operations excluding this expense and believe it facilitates comparisons to the performance of other companies in our industry.
Amortization of acquired intangible assets is a non-cash expense that is impacted by the timing and magnitude of our acquisitions. We believe the assessment of our operations excluding these costs is relevant to an understanding of internal operations and to comparisons with the performance of other companies in our industry.
Restructuring expenses are costs related to strategic integration and cost optimization initiatives which include global workforce reductions, facilities consolidation, and other operational savings measures. We believe the assessment of our operations excluding these costs is relevant to an understanding of internal operations and to comparisons with the performance of other companies in our industry.
Acquisition-related and integration costs are direct costs related to potential and completed acquisitions, including transaction fees, due diligence costs, severance, professional fees, and integration activities. Other transactional charges include third-party costs related to structuring unusual transactions. The occurrence and amount of these costs will vary depending on the timing and size of acquisitions. We believe excluding acquisition-related costs facilitates the comparison of our financial results to our historical operating results and to other companies in our industry.
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Inventory step-up are adjustments related to recording the inventory of acquired businesses at fair value on the date of acquisition. These adjustments are booked to cost of sales. The occurrence and amount of these adjustments will vary depending on the timing and size of acquisitions. We believe excluding inventory step-up adjustments facilitates the comparison of our financial results to our historical operating results and to other companies in our industry.
Change in fair value of investments is a non-cash gain or loss impacted by the change in fair value of convertible debt instruments and the equity investment. We believe the assessment of our operations excluding this activity is relevant to an understanding of internal operations and to comparisons with the performance of other companies in our industry.
Goodwill impairment is a non-cash charge to write down the carrying amount of goodwill following a quantitative impairment assessment where it was determined that the estimated fair value of the reporting unit was less than its carrying amount. We believe the assessment of our operations excluding this charge is relevant to an understanding of internal operations and to comparisons with the performance of other companies in our industry.
Impairment charges is a non-cash charge related to certain held for sale assets during the period that were tested for recoverability and determined to be impaired. We believe the assessment of our operations excluding this charge is relevant to an understanding of internal operations and to comparisons with the performance of other companies in our industry.
We use the below non-GAAP financial measures, and we believe that they assist our investors, to make period-to-period comparisons of our operational performance because they provide a view of our operating results without items that are not, in our view, indicative of our core operating results. We believe that these non-GAAP financial measures help illustrate underlying trends in our business, and we use the measures to establish budgets and operational goals for managing our business and evaluating our performance. We believe that providing non-GAAP financial measures also affords investors a view of our operating results that may be more easily compared to the results of other companies in our industry that use similar financial measures to supplement their GAAP results.
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The items excluded from the non-GAAP financial measures often have a material impact on our financial results and such items often recur. Accordingly, the non-GAAP financial measures included in this Quarterly Report on Form 10-Q should be considered in addition to, and not as a substitute for, the comparable measures prepared in accordance with GAAP. The following tables reconcile each of these non-GAAP financial measures to its most closely comparable GAAP measure in our financial statements for the three and nine months ended September 30, 2024 and 2023:
For the Three Months Ended | For the Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
(Dollars in thousands) | 2024 |
| 2023 | 2024 | 2023 | |||||||
GAAP gross margin | $ | 3,161 | $ | 1,924 | $ | (31,234) | $ | 6,649 | ||||
Stock-based compensation included in cost of sales(1) | 459 | 517 | 1,502 | 1,787 | ||||||||
Amortization of acquired intangible assets included in cost of sales | 5,029 | 6,889 | 62,050 | 20,744 | ||||||||
Restructuring expense in cost of sales | 1,785 | 16 | 39,328 | 3,221 | ||||||||
Acquisition-related and integration costs included in cost of sales | 206 | — | 572 | 913 | ||||||||
Non-GAAP gross margin | $ | 10,640 | $ | 9,346 | $ | 72,218 | $ | 33,314 | ||||
GAAP operating loss | $ | (33,722) | $ | (45,120) | $ | (184,438) | $ | (145,954) | ||||
Stock-based compensation(2) | 5,719 | 7,683 | 20,054 | 26,699 | ||||||||
Amortization of acquired intangible assets | 6,255 | 10,398 | 93,233 | 31,297 | ||||||||
Restructuring expense(3) | 2,218 | 142 | 16,435 | 6,610 | ||||||||
Acquisition-related and integration costs | 4,768 | (5,452) | 8,073 | 3,313 | ||||||||
Goodwill impairment | — | 2,450 | — | 2,450 | ||||||||
Impairment charges | — | 6,062 | — | 6,062 | ||||||||
Non-GAAP operating loss | $ | (14,762) | $ | (23,837) | $ | (46,643) | $ | (69,523) | ||||
GAAP net loss | $ | (35,448) | $ | (46,373) | $ | (190,986) | $ | (148,742) | ||||
Stock-based compensation(2) | 5,719 | 7,683 | 20,054 | 26,699 | ||||||||
Amortization of acquired intangible assets | 6,255 | 10,398 | 93,233 | 31,297 | ||||||||
Restructuring expense(3) | 2,218 | 142 | 16,435 | 6,610 | ||||||||
Acquisition-related and integration costs | 4,768 | (5,452) | 8,073 | 3,313 | ||||||||
Goodwill impairment | — | 2,450 | — | 2,450 | ||||||||
Impairment charges | — | 6,062 | — | 6,062 | ||||||||
Change in fair value of investments | 786 | 775 | 2,600 | 1,061 | ||||||||
Non-GAAP net loss | $ | (15,702) | $ | (24,315) | $ | (50,591) | $ | (71,250) |
(1) Includes immaterial liability-award stock-based compensation expense for the three and nine months ended September 30, 2024, respectively. Includes ($0.1) million and $0.3 million of liability-award stock-based compensation expense for the three and nine months ended September 30, 2023, respectively.
(2) Includes no liability-award stock-based compensation expense and $0.5 million of liability-award stock-based compensation expense for the three and nine months ended September 30, 2024, respectively. Includes $(0.7) million and $2.2 million of liability-award stock-based compensation expense for the three and nine months ended September 30, 2023, respectively.
(3) Includes $0 and $4.3 million of depreciation classified as restructuring charges for the three and nine months ended September 30, 2024, respectively.
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For the Three Months Ended | For the Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
(Dollars in thousands) | 2024 |
| 2023 | 2024 |
| 2023 | ||||||
GAAP operating expenses |
| $ | 36,883 | $ | 47,044 | $ | 153,204 | $ | 152,603 | |||
Stock-based compensation included in operating expenses(1) | (5,260) | (7,166) | (18,552) | (24,912) | ||||||||
Amortization of acquired intangible assets included in operating expenses | (1,226) | (3,509) | (31,183) | (10,553) | ||||||||
Restructuring expense included in operating expenses | (433) | (126) | 22,893 | (3,389) | ||||||||
Acquisition-related and integration costs included in operating expenses | (4,562) | 5,452 | (7,501) | (2,400) | ||||||||
Goodwill impairment | — | (2,450) | — | (2,450) | ||||||||
Impairment charges | — | (6,062) | — | (6,062) | ||||||||
Non-GAAP operating expenses | $ | 25,402 | $ | 33,183 | $ | 118,861 | $ | 102,837 |
(1) Includes no liability-award stock-based compensation expense and $0.5 million of liability-award stock-based compensation expense for the three and nine months ended September 30, 2024, respectively. Includes $(0.6) million and $1.9 million of liability-award stock-based compensation expense for the three and nine months ended September 30, 2023, respectively.
We define “EBITDA” as net loss plus net interest income, provision for income taxes, depreciation, and amortization expense.
We define “Adjusted EBITDA” as EBITDA adjusted for change in fair value of investments, inventory step-up adjustment, stock-based compensation expense, restructuring expense, goodwill impairment and acquisition-related and integration costs.
We believe that the use of EBITDA and Adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends because it eliminates the effect of financing, capital expenditures, and non-cash expenses such as stock-based compensation and warrants, and provides investors with a means to compare our financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors. However, you should be aware when evaluating EBITDA and Adjusted EBITDA that we may incur future expenses similar to those excluded when calculating these measures. In addition, our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of these measures, especially Adjusted EBITDA, may not be comparable to other similarly titled measures computed by other companies because not all companies calculate these measures in the same fashion.
Because of these limitations, EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA and Adjusted EBITDA on a supplemental basis. You should review the reconciliation of net loss to EBITDA and Adjusted EBITDA below and not rely on any single financial measure to evaluate our business.
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The following table reconciles net loss to EBITDA and Adjusted EBITDA during the three and nine months ended September 30, 2024 and 2023:
For the Three Months Ended |
| For the Nine Months Ended | ||||||||||
September 30, | September 30, | |||||||||||
(Dollars in thousands) | 2024 |
| 2023 |
| 2024 |
| 2023 | |||||
Net loss attributable to common stockholders | $ | (35,448) | $ | (46,373) | $ | (190,986) | $ | (148,742) | ||||
Interest expense | 1,690 | 1,045 |
| 4,871 |
| 2,965 | ||||||
Income tax benefit (expense) | 264 | (141) |
| 411 |
| (675) | ||||||
Depreciation and amortization (2) | 6,255 | 13,357 |
| 102,298 |
| 40,322 | ||||||
EBITDA | (27,239) | (32,112) |
| (83,406) |
| (106,130) | ||||||
Change in fair value of investments | 786 | 775 | 2,600 | 1,061 | ||||||||
Stock-based compensation expense(1) | 5,719 | 7,683 |
| 20,054 |
| 26,699 | ||||||
Restructuring expense (2) | 2,218 | 142 | 12,105 | 6,610 | ||||||||
Goodwill impairment | — | 2,450 | — | 2,450 | ||||||||
Impairment charges | — | 6,062 | — | 6,062 | ||||||||
Acquisition-related and integration costs | 4,768 | (5,452) | 8,073 | 3,313 | ||||||||
Adjusted EBITDA | $ | (13,748) | $ | (20,452) | $ | (40,574) | $ | (59,935) |
(1) Includes no liability-award stock-based compensation expense and $0.5 million of liability-award stock-based compensation expense for the three and nine months ended September 30, 2024, respectively. Includes $(0.7) million and $2.2 million of liability-award stock-based compensation expense for the three and nine months ended September 30, 2023, respectively.
(2) In connection with the Photopolymer Initiative, we recorded incremental depreciation and amortization for the shortened useful life of various fixed assets and intangibles to restructuring charges. For the three and nine months ended September 30, 2024, we recorded incremental depreciation of $0 and $4.3 million, respectively, and incremental amortization of $0 and $71.1 million, respectively. These amounts are listed in the depreciation and amortization line.
Liquidity and Capital Resources
We have incurred a net loss in each of our annual periods since our inception, and we have an accumulated deficit of $1,823.2 million as of September 30, 2024. We incurred net losses $191.0 million and $148.7 million during the nine months ended September 30, 2024 and 2023, respectively. We expect to continue to incur additional losses and negative cash flows from operations in the near term. As of September 30, 2024, we had $30.6 million in cash and cash equivalents.
Since inception, we have received cumulative net proceeds from the Business Combination, the exercise of warrants, and the sale of our preferred and common stock of $973.4 million to fund our operations, and in May 2022 we received aggregate net proceeds of $111.4 million from the sale of 6.0% Convertible Senior Notes due 2027 as described below. As of September 30, 2024, our principal sources of liquidity were our cash and cash equivalents of $30.6 million which are principally invested in money market funds and fixed income instruments.
Pursuant to the Merger Agreement, Nano agreed to provide us with a multi-draw term loan credit facility in an aggregate principal amount not to exceed $20.0 million (the “Bridge Loan Facility”), which amount shall be available at our request at any time and from time to time after January 7, 2025, subject to a monthly borrowing cap and subject to the execution of definitive loan documents to be mutually agreed by us and Nano (the “Bridge Loan Documentation”). If executed, the Bridge Loan Documentation will reflect the terms and be subject to the conditions set forth on the Bridge Loan Term Sheet (attached to the Merger Agreement) or such terms as may otherwise be agreed in writing by us and Nano. We may, but are not obligated to, execute the Bridge Loan Documentation and borrow under the Bridge Loan Facility. The Bridge Loan Facility is intended to supplement the Company’s working capital and liquidity on an as-needed basis to bridge to the closing of the Merger.
In May 2022, we issued $115.0 million principal amount of our 6.0% Convertible Senior Notes due 2027 (“2027 Notes”). The 2027 Notes were issued pursuant to, and are governed by, an indenture, dated as of May 13, 2022, between us and U.S. Bank Trust Company, National Association, as trustee. Pursuant to the purchase agreement between us and the initial purchasers of the Notes, we granted the initial purchasers an option to purchase up to an additional $15.0 million principal amount of 2027 Notes, which was exercised on May 19, 2022. We received aggregate net proceeds of $111.4 million from the sale of the 2027 Notes.
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Our material cash requirements have consisted of operating activities, research and development costs, purchase price for acquisitions, transaction costs and capital expenditures. While our cash expenditures increased in recent quarters in connection with the 2024 Initiative, and we expect the 2022 Initiative and the 2024 Initiative to reduce cash expenditures in the long term. As of September 30, 2024, we had lease payment obligations of $26.6 million, with $7.9 million payable within 12 months.
Capital expenditures for the nine months ended September 30, 2024, totaled $0.7 million and consisted primarily of lab equipment and leasehold improvements. As of September 30, 2024, we did not have any capital expenditures payable within 12 months. As of September 30, 2024, we had $30.6 million in cash and cash equivalents and no short term investments. Our future cash requirements will depend on many factors including our revenue, research and development efforts, investments in, complementary or enhancing technologies or businesses, the success of the 2024 Initiative, the timing and extent of additional capital expenditures to invest in existing and new facilities, the expansion of sales and marketing and the introduction of and demand for new products.
We expect to continue to incur net losses and negative cash flows from operations, particularly as we continue to invest in commercialization and new product development. We believe that our existing capital resources will be sufficient to support our operating plan and cash commitments into the first quarter of 2025. This belief is based on assumptions that may change as a result of many factors currently unknown to us. If we require additional financing before the Merger is completed, we will need to enter into the Bridge Loan Documentation and borrow under the Bridge Loan Facility, and if the Merger is not completed, we will need to further increase our capital resources by issuing additional shares of our capital stock or offering debt or other equity securities, including senior or subordinated notes, debt securities convertible into equity, or shares of preferred stock, and we may need to do so sooner than we expect. If sources of financing are available, they may result in substantial dilution to our stockholders. There is no assurance that sources of financing will be available on a timely basis, or on satisfactory terms, or at all. If sources of financing are not available, we may be forced to seek protection from our creditors through bankruptcy proceedings, discontinue operations, or liquidate our assets, and we may receive less than the value at which those assets are carried on our unaudited interim financial statements. These conditions raise substantial doubt regarding our ability to continue as a going concern within one year after the date of the filing of this Quarterly Report. For additional information, see Note 1 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.
We have enacted, and intend to continue to enact, cost savings measures to preserve capital. In June 2022, we announced a strategic integration and cost optimization initiative that included a global workforce reduction, facilities consolidation, and other operational savings measures (the “2022 Initiative”). On January 31, 2023, we committed to additional actions to continue and expand the 2022 Initiative. These additional actions included closing and consolidating select locations in the United States and Canada and reducing our workforce by an additional 15%, prioritizing investments and operations in line with near-term revenue generation, positioning us to achieve our long-term financial goals. As a result of the 2022 Initiative, we realized $20.7 million in cost savings in the second half of 2022 and we have completed our stated goal of $100 million annualized cost savings in 2023.
On January 22, 2024, we committed to a strategic integration and cost optimization initiative (the “2024 Initiative”) that includes a global workforce reduction of approximately 20%, facilities consolidation, product rationalization and other operational savings measures. We commenced workforce reductions in the United States and we are reviewing workforce changes in other countries, the timing of which will vary according to local regulatory requirements. As a result of the 2024 Initiative, we anticipate at least $50 million of aggregate annualized cost savings resulting in sequential cost reductions across the first half of 2024.
On March 14, 2024, following a comprehensive review of our operating plan, the Board of Directors approved an additional cost reduction plan that includes a review of strategic alternatives for our photopolymer business and a review of other potential cost saving actions (the “Photopolymer Initiative”). We explored alternatives for the photopolymer business, which may include divestitures, curtailment of investment or winding down of the business. As part of the Photopolymer Initiative, we assumed a shortened useful life on certain assets, including fixed assets, intangibles, and right of use assets, related to the photopolymer business and recorded $68.3 million and $80.3 million in incremental depreciation and amortization for the three and nine months ended September 30, 2024. During the three and nine months ended September 30, 2024, we recorded restructuring charges of $0.4 million and $1.3 million, respectively, related to employee severance and facility consolidations in connection with the Photopolymer Initiative.
We may undertake other potential specific initiatives to reduce our operating expenses and manage our cash flows. These initiatives could include disposing of certain of our assets, rationalizing our product portfolio, workforce adjustments based on changes to the business, manufacturing consolidation, improving our supply chain and logistics, improving our inventory management
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and consolidating certain of our facilities. These initiatives may not be successful, and they may not generate the cost savings we expect. Certain future events, such as a global recession, a material supply chain disruption or other events outside our control, may occur and could negatively impact our operating results and cash position and may require us to use our existing capital resources more quickly than we currently anticipate. These events may cause us to undertake additional cost savings measures or seek additional sources of financing. We also regularly evaluate opportunities to raise capital through the issuance of debt or equity, as well as potential strategic opportunities, including divestitures, entering into or exiting lines of business, business combinations, joint ventures, strategic alliances, strategic investments and other strategic transactions.
Cash Flows
Since inception, we have primarily used proceeds from the Business Combination, issuances of preferred stock and debt instruments to fund our operations and complete acquisitions. The following table sets forth a summary of cash flows for the nine months ended September 30, 2024, and 2023:
| For the Nine Months Ended | |||||
September 30, | ||||||
(Dollars in thousands) |
| 2024 |
| 2023 | ||
Net cash used in operating activities | $ | (53,399) | $ | (91,854) | ||
Net cash provided by investing activities |
| 884 |
| 118,568 | ||
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 change in cash, cash equivalents, and restricted cash | $ | (53,853) | $ | 26,972 |
Operating Activities
Net cash used in operating activities was $53.4 million for the nine months ended September 30, 2024, primarily consisting of $191.0 million of net losses, adjusted for non-cash items, which primarily included depreciation and amortization expense of $103.8 million and stock-based compensation expense of $18.1 million, as well as $12.1 million in cash provided by working capital.
Net cash used in operating activities was $91.9 million for the nine months ended September 30, 2023, primarily consisting of $148.7 million of net losses, adjusted for non-cash items, which primarily included depreciation and amortization expense of $40.3 million and stock-based compensation expense of $26.7 million, as well as $20.1 million in cash consumed by working capital. This increase in cash consumed by working capital was primarily driven by an increase in inventory to support new product launches and commercialization of existing products.
Investing Activities
Net cash provided by investing activities was $0.9 million for the nine months ended September 30, 2024, consisting of purchases of property and equipment of $0.8 million and proceeds from sales of property and equipment of $1.7 million.
Net cash provided by investing activities was $118.6 million for the nine months ended September 30, 2023, primarily consisting of proceeds from sales and maturities of marketable securities of $112.7 million, partially offset by purchases of marketable securities of $5.0 million. We also purchased $2.7 million of property and equipment and received $10.0 million in proceeds from the sale of property and equipment.
Financing Activities
Net cash used in financing activities was $0.6 million for the nine months ended September 30, 2024, consisting primarily of $0.4 million in payments of taxes related to net share settlements upon vesting of restricted stock units and $0.2 million in repayment of loans.
Net cash provided by financing activities was $0.7 million for the nine months ended September 30, 2023, consisting primarily of $1.2 million in proceeds from the exercise of stock options, partially offset by $0.3 million in repayment of loans.
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Critical Accounting Policies and Significant Estimates
There were no material changes in the first three months of 2024 to the information provided under the heading “Critical Accounting Policies and Estimates” included in our Annual Report on Form 10-K for the year ended December 31, 2023.
Off-Balance Sheet Arrangements
In the normal course of operations, ExOne’s German subsidiary, ExOne GmbH, issues short-term financial guarantees and letters of credit to third parties in connection with certain commercial transactions requiring security through a credit facility with a German bank. At September 30, 2024, there were no outstanding balances from financial guarantees and letters of credit issued under the credit facility. For further discussion related to financial guarantees and letters of credit, refer to Note 17 in our condensed consolidated financial statements in this Quarterly Report on Form 10-Q.
We have no other off-balance sheet arrangements and do not utilize any “structured debt,” “special purpose” or similar unconsolidated entities for liquidity or financing purposes.
Recent Accounting Pronouncements
Information regarding recent accounting pronouncements is included in Note 2. Summary of Significant Accounting Policies to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risks from fluctuations in interest rates and foreign currency translation, which may adversely affect our results of operations and financial condition. We seek to minimize these risks through regular operating and financing activities and, if we consider it to be appropriate, through the use of derivative financial instruments. We do not purchase, hold, or sell derivative financial instruments for trading or speculative purposes.
Interest Rate Risk
Our exposure to market risk for changes in interest rates relates primarily to our cash, cash equivalents and short-term investment portfolio. Our investment strategy is focused on preserving capital and supporting our liquidity requirements, while earning a reasonable market return. We invest in a variety of U.S. government securities, corporate debt securities, asset-backed securities, and commercial paper. The market value of our marketable securities may decline if current market interest rates rise. As of September 30, 2024, the fair value of our cash and cash equivalents was $30.6 million. A 10% change in interest rates would have an immaterial impact on the fair value of our investment portfolio. Our marketable securities are recorded at fair value, and gains and losses from these securities are recognized within other comprehensive income as they occur.
Foreign Currency Risk
The majority of our operations in Europe and Asia use the local currency as the functional currency. We translate the financial statements of the operations in Europe in Asia to United States dollars and as such we are exposed to foreign currency risk. Currently, we do not use foreign currency forward contracts to manage exchange rate risk, as the amount subject to foreign currency risk is not material to our overall operations and results.
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision of our Chief Executive Officer and Chief Financial Officer, our management has evaluated the effectiveness of the design and operation of our “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15(d)-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. As described in our Annual Report on Form 10-K for the year ended December 31, 2023, we identified material weaknesses in our internal control over financial reporting. As a result of these material weaknesses, our Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2024, our disclosure controls and procedures are not effective to provide reasonable assurance that information required to be disclosed in the reports we file and submit under the Securities and Exchange Act is recorded, processed, summarized, and reported as and when required.
Notwithstanding these material weaknesses noted above, our management, including our Chief Executive Officer and Chief Financial Officer, has concluded that our financial statements included in this Quarterly Report on Form 10-Q present fairly, in all material respects, our financial position, results of operations, and cash flows for the periods presented in accordance with accounting principles generally accepted in the United States of America.
Changes in Internal Control Over Financial Reporting
During the nine months ended September 30, 2024, we continued to implement certain internal controls in connection with remediation efforts related to the material weaknesses identified in our Annual Report on Form 10-K for the year ended December 31, 2023. There were no changes to our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the nine months ended September 30, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on Effectiveness of Internal Controls
Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and implemented, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, errors, and instances of fraud, if any, within the Company have been or will be detected.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
We are from time to time subject to various claims, lawsuits and other legal and administrative proceedings arising in the ordinary course of business. Some of these claims, lawsuits and other proceedings may involve highly complex issues that are subject to substantial uncertainties, and could result in damages, fines, penalties, non-monetary sanctions, or relief. We recognize provisions for claims or pending litigation when we determine that an unfavorable outcome is probable, and the amount of loss can be reasonably estimated. Due to the inherent uncertain nature of litigation, the ultimate outcome or actual cost of settlement may materially vary from estimates. While the outcome of these claims cannot be predicted with certainty, management does not believe that the outcome of any current legal proceedings will have a material adverse impact on the Company’s condensed consolidated financial statements.
As previously disclosed, on October 20, 2023, purported stockholder Pietro Campanella filed an amendment to the November 21, 2021 class action complaint in Delaware Court of Chancery against Desktop Metal, Inc., and former directors and officers of The ExOne Company, alleging breach of fiduciary duty and aiding and abetting breach of fiduciary duty claims in connection with the ExOne Merger (Campanella v. Rockwell, et al., Case No. 2021-1013-LWW). In particular, Mr. Campanella alleges that ExOne’s proxy statement and supplemental disclosures did not adequately disclose information related to a whistleblower investigation at one of Desktop Metal’s subsidiaries, EnvisionTEC, and the resignation of EnvisionTEC’s CEO, prior to the ExOne stockholder vote.
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Defendants filed their motion to dismiss the complaint on January 12, 2024. The parties completed briefing on the motion to dismiss on May 22, 2024, and a hearing on the motion to dismiss was held on October 16, 2024.
As previously disclosed, four alleged shareholders of Desktop Metal stock filed purported securities class action complaints in the United States District Court for the District of Massachusetts, alleging that Desktop Metal and certain of its officers and directors violated Sections 10(b) and 20(a) of the Securities and Exchange Act by making false or misleading statements regarding EnvisionTEC’s manufacturing and product compliance practices and procedures. Plaintiffs filed a Consolidated Complaint on December 19, 2022. The parties completed briefing on the motion to dismiss in May 2023, and Judge Indira Talwani held oral argument on September 13, 2023. The Court issued a decision dismissing the Consolidated Complaint with prejudice and entered Judgment for defendants on September 21, 2023. On October 13, 2023, Lead Plaintiff Sophia Zhou filed a Notice of Appeal. The parties completed briefing on the Zhou Appeal in May 2024, and oral argument before the U.S. Court of Appeals for the First Circuit was held on September 10, 2024. On October 28, 2024, the Court of Appeals affirmed Judge Talwani’s order dismissing the Consolidated Complaint.
On August 12, 2024, a purported stockholder of Desktop Metal filed a complaint in the United States District Court for the Southern District of New York, captioned Bugantev v. Desktop Metal, Inc., No. 1:24-cv-06092 (S.D.N.Y.) (the “Bugantev Complaint”), alleging that Desktop Metal’s August 1, 2024 Preliminary Proxy Statement on Schedule 14A omitted material information with respect to the merger by and among the Company, Nano Dimension Ltd., and Nano US I, Inc. (the “Nano Merger”), rendering the disclosures set forth therein false and misleading in violation of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934, as amended. On August 16, 2024, plaintiff voluntarily dismissed the Bugantev Complaint. On September 16 and 17, 2024, two purported stockholders of Desktop Metal filed complaints in the Supreme Court of the State of New York, County of New York, captioned Floyd v. Desktop Metal and Clark v. Desktop Metal, respectively, alleging negligent misrepresentation and concealment claims based on purported disclosure deficiencies in the Company’s Definitive Proxy Statement, filed August 15, 2024.
On September 25, 2024 and October 2, 2024, two purported stockholders of Desktop Metal filed actions in the Court of Chancery of the State of Delaware seeking certain books and records related to the Nano Merger under Section 220 of the Delaware General Corporations Code. The actions are captioned Nyren v. Desktop Metal, et al. and McDonald v. Desktop Metal, respectively.
The Company believes that these complaints are all without merit and intends to defend against them vigorously.
Item 1A. Risk Factors
Summary of Risk Factors
Our business is subject to numerous risks. Below is a summary of the principal factors that could cause our actual results to differ materially from those expressed in forward-looking statements made by us or on our behalf. This summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found under the heading “Risk Factors” immediately following this section and should be carefully considered, together with other information in this Quarterly Report on Form 10-Q and our other filings with the SEC, before making an investment decision regarding our Class A common stock.
• Our negative cash flows and current lack of financial resources raise substantial doubt as to our ability to continue as a going concern. If we are unable to raise additional funding to meet our operational needs, we may be forced to limit or cease our operations and/or liquidate our assets.
• We may experience significant delays in the design, production and launch of our additive manufacturing solutions, and we may be unable to successfully commercialize products on our planned timelines.
• If demand for our products does not grow as expected, or if market adoption of additive manufacturing does not continue to develop, or develops more slowly than expected, our revenues may stagnate or decline, and our business may be adversely affected.
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• The additive manufacturing industry in which we operate is characterized by rapid technological change, which requires us to continue to develop new products and innovations to meet constantly evolving customer demands and which could adversely affect market adoption of our products.
• We cannot guarantee that our restructuring activities and other cost savings measures will achieve their intended results.
• Difficulties or delays in integrating the businesses and operations of acquired companies into Desktop Metal, or realizing the expected benefits of these acquisitions, may adversely affect the company’s future results.
• We are an early-stage company with a history of losses. We have not been profitable historically and may not achieve or maintain profitability in the future.
• Future sales, or the perception of future sales, of our Class A common stock by us or our existing stockholders in the public market could cause the market price for our Class A common stock to decline.
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Risk Factors
Our business is subject to numerous risks. You should carefully consider the risks and uncertainties described below and the other information in this Quarterly Report on Form 10-Q before making an investment decision regarding our Class A common stock. Our business, financial condition, results of operations, or prospects could be materially and adversely affected if any of these risks occurs, and as a result, the market price of our Class A common stock could decline, and you could lose all or part of your investment. This Quarterly Report on Form 10-Q also contains forward-looking statements that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements.” Our actual results could differ materially and adversely from those anticipated in these forward-looking statements as a result of certain factors, including those set forth below.
Risks Related to Our Financial Position and Need for Additional Capital
Our negative cash flows and current lack of financial resources raise substantial doubt as to our ability to continue as a going concern. If we are unable to raise additional funding to meet our operational needs, we may be forced to limit or cease our operations and/or liquidate our assets.
Although our unaudited consolidated interim financial statements have been prepared assuming our company will continue as a going concern, our negative cash flows and current lack of financial resources raise substantial doubt as to our ability to satisfy our obligations as they become due within one year from the date of filing of this Quarterly Report on Form 10-Q. As of September 30, 2024, we had an accumulated deficit of $1,823.2 million and cash and cash equivalents of $30.6 million, and we incurred a net loss of $191.0 million in the nine months ended September 30, 2024. We expect our losses to continue for the foreseeable future. We believe that our existing capital resources will be sufficient to support our operating plan and cash commitments into the first quarter of 2025. This believe is based on assumptions that may change as a result of many factors currently unknown to us. If we require additional financing before the Merger is completed, we will need to enter into the Bridge Loan Documentation and borrow under the Bridge Loan Facility, and if the Merger is not completed, we will need to further increase our capital resources by issuing additional shares of our capital stock or offering debt or other equity securities, including senior or subordinated notes, debt securities convertible into equity, or shares of preferred stock, and we may need to do so sooner than we expect. If sources of financing are available, they may result in substantial dilution to our stockholders. There is no assurance that sources of financing will be available on a timely basis, or on satisfactory terms, or at all. If we are unable to procure additional financing when needed, we would not be able to continue as a going concern. We may be forced to seek protection from our creditors through bankruptcy proceedings, discontinue operations, or liquidate our assets, and we may receive less than the value at which those assets are carried on our unaudited interim financial statements. Any of these outcomes could cause our shareholders to lose some or all of their investment.
Even if we are able to raise significant additional capital necessary to continue our operations over the next year, if we are unable to obtain additional adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to pursue our business objectives, develop our technology and products, and respond to business opportunities, challenges, unforeseen circumstances or developments could be significantly limited, and our business, financial condition, results of operations and prospects could be materially and adversely affected.
We are an early-stage company with a history of losses. We have not been profitable historically and may not achieve or maintain profitability in the future.
We experienced net losses in each year from our inception, including net losses of $323.3 million, $740.3 million, and $240.3 million for the years ended December 31, 2023, 2022 and 2021, respectively. We believe we will continue to incur operating losses and negative cash flow in the near-term as we continue to invest in our business, in particular across our research and development efforts and sales and marketing programs. These investments may not result in increased revenue or growth in our business or enable us to achieve profitability.
In addition, as a public company, we incur significant additional legal, accounting and other expenses in order to comply with public company reporting, and disclosure requirements. We will also incur additional legal, accounting and other expenses in connection with acquisitions and integration activities associated therewith. These increased expenditures may make it harder for us to
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achieve and maintain future profitability. Revenue growth and growth in our customer base may not be sustainable, and we may not achieve sufficient revenue to achieve or maintain profitability. We may incur significant losses in the future for a number of reasons, including due to the other risks described in this Quarterly Report on Form 10-Q, and we may encounter unforeseen expenses, difficulties, complications and delays and other unknown events. As a result, our losses may be larger than anticipated, we may incur significant losses for the foreseeable future, and we may not achieve profitability, and even if we do, we may not be able to maintain or increase profitability. Furthermore, if our future growth and operating performance fail to meet investor or securities analyst expectations, or if we have future negative cash flow or losses resulting from our investment in acquiring customers or expanding our operations, this could have a material adverse effect on our business, financial condition, and results of operations.
Our limited operating history and rapid growth makes evaluating our current business and future prospects difficult and may increase the risk of your investment.
Much of our growth has occurred in recent periods. Our limited operating history may make it difficult for you to evaluate our current business and our future prospects, as we continue to grow our business. Our ability to forecast our future operating results is subject to a number of uncertainties, including our ability to plan for and model future growth. We have encountered, and will continue to encounter, risks and uncertainties frequently experienced by growing companies in rapidly evolving industries, as we continue to grow our business. If our assumptions regarding these uncertainties, which we use to plan our business, are incorrect or change in reaction to changes in our markets, or if we do not address these risks successfully, our operating and financial results could differ materially from our expectations, our business could suffer, and the trading price of our stock may decline.
Our operating results and financial condition may fluctuate from period to period.
Our operating results and financial condition fluctuate from quarter-to-quarter and year-to-year and are likely to continue to vary due to a number of factors, many of which will not be within our control. Both our business and the additive manufacturing industry are changing and evolving rapidly, and our historical operating results may not be useful in predicting our future operating results. If our operating results do not meet the guidance that we provide to the marketplace or the expectations of securities analysts or investors, the market price of our Class A common stock will likely decline. Fluctuations in our operating results and financial condition may be due to a number of factors, including:
• the degree of market acceptance of our products and services;
• our ability to compete with competitors and new entrants into our markets;
• the mix of products and services that we sell during any period;
• the timing of our sales and deliveries of our products to customers;
• the geographic distribution of our sales;
• changes in our pricing policies or those of our competitors, including our response to price competition;
• changes in the amount that we spend to develop and manufacture new products or technologies;
• changes in the amounts that we spend to promote our products and services;
• changes in the cost of satisfying our warranty obligations and servicing our installed customer base;
• expenses and/or liabilities resulting from litigation;
• delays between our expenditures to develop and market new or enhanced solutions and the generation of revenue from those solutions;
• unforeseen liabilities or difficulties in integrating our acquisitions or newly acquired businesses;
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• disruptions to our information technology systems or our third-party contract manufacturers;
• general economic and industry conditions that effect customer demand;
• seasonal reductions in business activity in certain parts of the world, particularly during the summer months in Europe;
• the impact of the COVID-19 pandemic on our customers, suppliers, manufacturers, and operations; and
• changes in accounting rules and tax laws.
In addition, our revenues and operating results may fluctuate from quarter-to-quarter and year-to-year due to our sales cycle and seasonality among our customers. Generally, our additive manufacturing solutions are subject to the adoption and capital expenditure cycles of our customers. As a result, we typically conduct a larger portion of our business during the fourth quarter of our fiscal year relative to the other quarters. Our quarterly sales also have often reflected a pattern in which a disproportionate percentage of each quarter’s total sales occurs towards the end of the quarter. This uneven sales pattern makes predicting revenue, earnings, cash flow from operations, adjusted EBITDA and working capital for each period difficult, increases the risk of unanticipated variations in our quarterly results and financial condition, and places pressure on our inventory management and logistics systems. We face a number of uncertainties related to our ability to achieve our targets in a given quarter, including: we may be unable to obtain materials as a result of global supply chain issues, our customers may decline or be unable to take delivery of products during holidays, and we may not receive our expected level of purchase orders or payments. If these or other events were to occur, our results for a given quarter could be negatively impacted and may vary materially and adversely from our stated expectations and the estimates or expectations of securities research analysts, investors, and other market participants.
Additionally, for our more complex solutions, which may require customers to make additional facilities investment, potential customers may spend a substantial amount of time performing internal assessments prior to making a purchase decision. This may cause us to devote significant effort in advance of a potential sale without any guarantee of receiving any related revenues. As a result, revenues and operating results for future periods are difficult to predict with any significant degree of certainty, which could lead to adverse effects on our inventory levels and overall financial condition.
Due to the foregoing factors, and the other risks discussed in this Quarterly Report on Form 10-Q, investors should not rely on quarter-over-quarter and year-over-year comparisons of our operating results as an indicator of our future performance.
We may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.
We have funded our operations since inception primarily through debt and equity financings and sales. We cannot be certain when or if our operations will generate sufficient cash to fully fund our ongoing operations or the growth of our business. We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges and opportunities, including the need to develop new features or enhance our products, improve our operating infrastructure, or acquire complementary businesses and technologies. Accordingly, we may need to engage in equity or debt financings to secure additional funds if our existing sources of cash and any funds generated from operations do not provide us with sufficient capital. If we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our Class A common stock. Any debt financing that we may secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges and opportunities could be significantly impaired, and our business may be adversely affected.
Bank failures or other events affecting financial institutions could have a material adverse effect on our business, financial condition or liquidity, or have other adverse consequences.
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We maintain the majority of our cash and cash equivalents in accounts with major financial institutions, and our deposits at certain of these institutions exceed insurance limits. Market conditions can impact the viability of these institutions. In the event of failure of any of the financial institutions where we maintain our cash and cash equivalents, there can be no assurance that we would be able to access uninsured funds in a timely manner or at all. Any inability to access or delay in accessing these funds could adversely affect our business, financial condition, and liquidity.
Risks Related to the Proposed Merger with Nano
The Merger may not be completed and the Merger Agreement may be terminated in accordance with its terms.
The Merger is subject to a number of conditions that must be satisfied or waived, in each case, prior to the completion of the Merger, as specified in the Merger Agreement. These conditions to the completion of the Merger, some of which are beyond our control, may not be satisfied or waived in a timely manner or at all, and, accordingly, the Merger may be delayed or not completed.
Additionally, either party may terminate the Merger Agreement under certain circumstances, including, among other reasons, if the Merger is not completed by January 31, 2025 (subject, under certain circumstances, to extension to March 31, 2025).
If the Merger Agreement is terminated under certain circumstances specified in the Merger Agreement, we may be required to pay Nano a termination fee of $7.875 million or an expense reimbursement in an amount not to exceed $6.0 million.
Our stockholders cannot be certain of the exact amount of Per Share Merger Consideration they will receive as it is subject to downward adjustment pursuant to the terms of the Merger Agreement.
At the Effective Time of the Merger, each share of our Class A common stock held by our existing stockholders will be converted automatically into the right to receive the Per Share Merger Consideration, without interest, subject to downward adjustment, subject further to any tax withholding, by an amount equal to the sum of (x) the product of (A) the aggregate principal amount outstanding under the Bridge Loan Facility together with accrued and unpaid interest, as of the closing of the Merger divided by $2,500,000, and (B) $0.10 (provided that in no event shall 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 $2,500,000, and (B) $0.10 (provided that in no event shall the adjustment pursuant to (y) hereunder be greater than $0.60), plus (z) $0.0325 if certain our executive officers do not execute severance letter agreements prior to the closing.
Because the amount of the Per Share Merger Consideration to be received by our stockholders is subject to downward adjustment and will not be determined until three (3) business days before the closing of the Merger, stockholders will not know with certainty the exact amount of Per Share Merger Consideration they will receive upon consummation of the Merger. As of the date of this Quarterly Report on Form 10-Q, based on forecasted Company Transaction Expenses, our expectation that we will not draw on the Bridge Loan Facility and our expectations regarding the severance letter agreements, we estimate that adjustments to the Per Share Merger Consideration will total $0.44 per share, resulting in an adjusted Per Share Merger Consideration of $5.06 per share. No assurance can be given, however, that the adjustments will not be greater than anticipated. If the Company Transaction Expenses are greater than anticipated or if we have unanticipated liquidity needs, either as a result of a longer than expected time to closing or other unforeseen costs or other events, causing us to draw on the Bridge Loan Facility, the Per Share Merger Consideration will be reduced. If all of the reductions are fully realized, the Per Share Merger Consideration will be reduced to $4.07 per share.
Failure to complete the proposed Merger with Nano could have material and adverse effects on our business, financial results and stock price.
If the Merger is not completed on a timely basis, or at all, for any reason, our stock price could be adversely effected, our ongoing business may be adversely affected and, without realizing any of the benefits of having completed the Merger, we would be subject to a number of risks, including the following:
• | we will be required to pay our expenses relating to the Merger, such as certain legal, accounting, financial advisory and printing fees, whether or not the Merger is completed; |
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• | time and resources committed by our management team to matters relating to the Merger (including integration planning) could otherwise have been devoted to our existing business and the pursuit of other opportunities that may have been beneficial to us; |
• | the market price of our Class A common stock could decline to the extent that the current market price reflects a market assumption that the Merger will be completed; |
• | we may experience negative reactions from our suppliers, customers, distribution channels, business partners, industry contacts and other third parties, which in turn could affect our marketing and sales operations or our ability to compete for new business or obtain renewals in the marketplace more broadly; |
• | we may experience negative reactions from employees; |
• | we and/or our management team could be subject to litigation related to any failure to complete the Merger or any enforcement proceeding commenced against us to perform our obligations under the Merger Agreement; and |
• | we may be required, in certain circumstances, to pay a termination fee of $7.875 million or an expense reimbursement in an amount not to exceed $6.0 million to Nano. |
In addition to the above risks, if the Merger Agreement is terminated and our board of directors seeks an alternative transaction, our stockholders cannot be certain that we will be able to find a party willing to engage in a transaction on more attractive terms than the Merger. The efforts and costs to satisfy the closing conditions of the Merger may place a significant burden on management and internal resources, and the Merger and related transactions, whether or not consummated, may result in a diversion of management’s attention from day-to-day operations. Any significant diversion of management’s attention away from ongoing business and difficulties encountered in the Merger process could have a material adverse effect on our business, results of operations and financial condition. Any of the above risks could materially affect our business, financial results and stock price.
The Merger Agreement contains provisions that could discourage a potential competing acquirer that might be willing to pay more to acquire or merge with either Desktop Metal or Nano.
The Merger Agreement contains “no shop” provisions that restrict our ability to, among other things, solicit, initiate, induce, facilitate or knowingly encourage any acquisition proposal or any inquiry or proposal that may be reasonably be expected to lead to an acquisition proposal; enter into, participate in, maintain or continue any communications or negotiations regarding, or deliver or make available any non-public information with respect to, or take any other action regarding, any actual or potential acquisition proposal; agree to, accept, approve, endorse or recommend (or publicly propose or announce any intention or desire to agree to, accept, approve, endorse or recommend) any acquisition proposal; or enter into any letter of intent or any other contract, agreement, commitment or other written arrangement contemplating or otherwise relating to any acquisition proposal. Although our board of directors is permitted to effect a change of recommendation, after complying with certain procedures set forth in the Merger Agreement, in response to an acquisition proposal if it determines in good faith judgment, after consulting with its outside legal counsel, that such acquisition proposal constitutes a superior proposal, its doing so would entitle Nano to terminate the Merger Agreement and collect a $7.875 million termination fee. These provisions could discourage a potential competing acquirer from considering or proposing an acquisition or merger, even if it were prepared to pay consideration with a higher value than that implied by the merger consideration, or might result in a potential competing acquirer proposing to pay a lower per share price than it might otherwise have proposed to pay because of the added expense of the termination fee.
Until the completion of the Merger or the termination of the Merger Agreement in accordance with its terms, we are prohibited from entering into certain transactions and taking certain actions that might otherwise be beneficial to our business and our stockholders.
Prior to the Effective Time of the Merger, the Merger Agreement restricts us from taking specified actions without the consent of Nano (which consent may not be unreasonably withheld or delayed) and requires that our and our subsidiaries’ business be conducted in the ordinary course consistent with past practice in all material respects. These restrictions may prevent us from making appropriate changes to our business or organizational structure or from pursuing attractive business opportunities that may arise prior to the completion of the Merger and could have the effect of delaying or preventing other strategic transactions. Adverse effects arising from
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the pendency of the Merger could be exacerbated by any delays in consummation of the Merger or termination of the Merger Agreement.
Risks Related to Our Business and Industry
We may experience significant delays in the design, production and launch of our additive manufacturing solutions, and we may be unable to successfully commercialize products on our planned timelines.
There are often delays in the design, testing, manufacture and commercial release of new products, and any delay in the launch of our products could materially damage our brand, business, growth prospects, financial condition, and operating results. Even if we successfully complete the design, testing and manufacture for one or all of our products under development, we may fail to develop a commercially successful product on the timeline we expect for a number of reasons, including:
• misalignment between the products and customer needs;
• lack of innovation of the product;
• failure of the product to perform in accordance with customer expectations or industry standards;
• ineffective distribution and marketing;
• delay in obtaining any required regulatory approvals;
• unexpected production costs; or
• release of competitive products.
Our success in the market for the products we develop will depend largely on our ability to prove our products’ capabilities in a timely manner. Upon demonstration, our customers may not believe that our products and/or technology have the capabilities they were designed to have or that we believe they have. Furthermore, even if we do successfully demonstrate our products’ capabilities, potential customers may be more comfortable doing business with another larger and more established company or may take longer than expected to make the decision to order our products. Significant revenue from new product investments may not be achieved for a number of years, if at all. If the timing of our launch of new products and/or of our customers’ acceptance of such products is different than our assumptions, our revenue and results of operations may be adversely affected.
We may experience significant delays or other obstacles in the design, production, launch and/or maintenance of produced parts offerings, and we may be unable to successfully commercialize said offerings.
We are building out produced parts offerings for customers, and produced parts is an existing offering of some of our recently-acquired businesses. These offerings present similar challenges and risks to those outlined herein with respect to the design, production, launch and profitability of new additive manufacturing solutions. We have a limited history operating in the direct manufacturing and produced parts businesses, and as a result we may face challenges in designing or delivering parts that meet customer specifications, both on time and cost-effectively. Additionally, our produced parts in the healthcare and dental industry may be subject to regulatory approvals and controls, which may delay the design, production or launch of products. In particular, we may fail to develop commercially successful produced parts offerings if we are unable to meet customer needs or industry standards, if we fail to meet our desired gross margins or customer price expectations, or if our marketing and distribution strategy proves ineffective. If we are unsuccessful in establishing such offerings, sales of our additive manufacturing solutions and our overall operating results could suffer.
Our business activities have been disrupted and may continue to be disrupted by the COVID-19 pandemic.
In 2020 and 2021, the COVID-19 pandemic caused disruption and volatility in the global economy and capital markets, which increased the cost of capital and adversely impacted access to capital.
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If future variants of COVID-19 cause any of these events to recur, we or our customers may be unable to perform fully on our contracts, which will likely result in increases in costs and reduction in revenue. These cost increases and revenue reduction may not be fully recoverable or adequately covered by insurance. The long-term effects of COVID-19 to the global economy and to us are difficult to assess or predict and may include a further decline in the market prices of our products, risks to employee health and safety, risks for the deployment of our products and services and reduced sales in geographic locations impacted. Any prolonged restrictive measures put in place in order to control COVID-19 or other adverse public health developments in any of our targeted markets may have a material and adverse effect on our business operations and results of operations.
We cannot guarantee that our restructuring activities and other cost savings measures will achieve their intended results.
In June 2022, we implemented a strategic integration and cost savings initiative (the “2022 Initiative”) to match strategic and financial objectives and optimize resources for long term growth. In January 2023, we expanded the 2022 Initiative. On January 22, 2024, we committed to a strategic integration and cost optimization initiative (the “2024 Initiative”) that includes a global workforce reduction of approximately 20%, facilities consolidation, product rationalization and other operational savings measures. On March 14, 2024, following a comprehensive review of the Company’s operating plan, the Board of Directors approved an additional cost reduction plan that includes a review of strategic alternatives for our photopolymer business and a review of other potential cost saving actions. We have incurred, and expect to continue to incur, substantial costs in connection with these initiatives. Our ability to achieve the anticipated cost savings and other benefits from these initiatives within the expected time frame is subject to many estimates and assumptions. There can be no assurance that the anticipated cost savings will be achieved, or that they will not be significantly and materially less than anticipated, or that the completion of such cost savings initiatives will be effectively accomplished. In addition, our ability to realize the anticipated cost savings are subject to significant business, economic and competitive uncertainties, and contingencies, many of which are beyond our control, such as operating difficulties, supply chain disruptions, local regulations, employment laws or general economic or industry conditions. Failure to realize the anticipated cost savings, it could have a material negative impact on our results of operations and financial position.
In addition, our restructuring activities and cost savings initiatives may subject us to litigation risks and expenses and may have other consequences, such as attrition beyond our planned reduction in workforce, a negative effect on employee morale and productivity or a negative effect on our ability to attract highly skilled employees. Our competitors may use our restructuring plans to seek to gain a competitive advantage over us. As a result, our restructuring plans and cost savings initiatives may negatively affect our revenue and operating results in the future.
Changes in our product mix may impact our gross margins and financial performance.
Our financial performance may be affected by the mix of products and services we sell during a given period. Our products are sold, and will continue to be sold, at different price points. Sales of certain of our products have, or are expected to have, higher gross margins than others. If our product mix shifts too far into lower gross margin products, and we are not able to sufficiently reduce the engineering, production and other costs associated with those products or substantially increase the sales of our higher gross margin products, our profitability could be reduced. Additionally, the introduction of new products or services may further heighten quarterly fluctuations in gross profit and gross profit margins due to manufacturing ramp-up and start-up costs. We may experience significant quarterly fluctuations in gross profit margins or operating income or loss due to the impact of the mix of products, channels, or geographic areas in which we sell our products from period to period. Our financial performance also depends on the portion of our produced parts revenue supplied using additive manufacturing processes, which may enable higher gross margins and operational efficiencies as compared to conventional manufacturing technologies.
If we fail to meet our customers’ price expectations, demand for our products and product lines could be negatively impacted and our business and results of operations could suffer.
Demand for our product lines is sensitive to price. We believe our competitive pricing has been an important factor in our results to date. Therefore, changes in our pricing strategies can have a significant impact on our business and ability to generate revenue. Many factors, including our production and personnel costs and our competitors’ pricing and marketing strategies, can significantly impact our pricing strategies. If we fail to meet our customers’ price expectations in any given period, demand for our products and product lines could be negatively impacted and our business and results of operations could suffer.
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If demand for our products does not grow as expected, or if market adoption of additive manufacturing does not continue to develop, or develops more slowly than expected, our revenues may stagnate or decline, and our business may be adversely affected.
The industrial manufacturing market, which today is dominated by conventional manufacturing processes that do not involve 3D printing technology, is undergoing a shift towards additive manufacturing. We may not be able to develop effective strategies to raise awareness among potential customers of the benefits of additive manufacturing technologies or our products may not address the specific needs or provide the level of functionality or economics required by potential customers to encourage the continuation of this shift towards additive manufacturing. If additive manufacturing technology does not continue to gain broader market acceptance as an alternative to conventional manufacturing processes, or does so more slowly than anticipated, or if the marketplace adopts additive manufacturing technologies that differ from our technologies, we may not be able to increase or sustain the level of sales of our products, and our operating results would be adversely affected as a result.
Declines in the prices of our products and services, or in our volume of sales, together with our relatively inflexible cost structure, may adversely affect our financial results.
Our business is subject to price competition. Such price competition may adversely affect our results of operation, especially during periods of decreased demand. Decreased demand also adversely impacts the volume of our systems sales. If our business is not able to offset price reductions resulting from these pressures, or decreased volume of sales due to contractions in the market, by improved operating efficiencies and reduced expenditures, then our operating results will be adversely affected.
Certain of our operating costs are fixed and cannot readily be reduced, which diminishes the positive impact of our restructuring programs on our operating results. To the extent the demand for our products slows, or the additive manufacturing market contracts, we may be faced with excess manufacturing capacity and related costs that cannot readily be reduced, which will adversely impact our financial condition and results of operations.
Our business model is predicated, in part, on building a customer base that will generate a recurring stream of revenues through the sale of our consumables and service contracts. If that recurring stream of revenues does not develop as expected, or if our business model changes as the industry evolves, our operating results may be adversely affected.
Our business model is dependent, in part, on our ability to maintain and increase sales of our proprietary consumables and service contracts as they generate recurring revenues. Existing and future customers of our systems may not purchase our consumables or related service contracts at the rate we expect for certain product lines or at the same rate at which customers currently purchase those consumables and services. In addition, our entry-level systems focused on low-volume production generally use a lower volume of consumables relative to our volume throughput systems focused on high-volume production. If our current and future customers purchase a lower volume of our consumable materials or service contracts, or if our entry-level systems represent an increasing percentage of our future installed customer base, resulting overall in lower purchases of consumables and service contracts on average than our current installed customer base or than we expect, our recurring revenue stream relative to our total revenues would be reduced and our operating results would be adversely affected.
Defects in new products or in enhancements to our existing products that give rise to product returns or warranty or other claims could result in material expenses, diversion of management time and attention and damage to our reputation.
Our additive manufacturing solutions are complex and may contain undetected defects or errors when first introduced or as enhancements are released that, despite testing, are not discovered until after a machine has been used. This could result in delayed market acceptance of those products or claims from resellers, customers, or others, which may result in litigation, increased end user warranty, support and repair or replacement costs, damage to our reputation and business, or significant costs and diversion of support and engineering personnel to correct the defect or error. We may from time to time become subject to warranty or product liability claims related to product quality issues that could lead us to incur significant expenses.
We attempt to include provisions in our agreements with customers that are designed to limit our exposure to potential liability for damages arising from defects or errors in our products. However, it is possible that these limitations may not be effective as a result of unfavorable judicial decisions or laws enacted in the future.
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The sale and support of our products entails the risk of product liability claims. Any product liability claim brought against us, regardless of its merit, could result in material expense, diversion of management time and attention, damage to our business and reputation and brand, and cause us to fail to retain existing customers or to fail to attract new customers.
Our operations could suffer if we are unable to attract and retain key management or other key employees.
We believe our success has depended, and continues to depend, on the efforts and talents of our senior management and other key personnel, including, in particular, our Co-Founder, Chief Executive Officer, and Chairman, Ric Fulop. Our executive team is critical to the management of our business and operations, as well as to the development of our strategy. Members of our senior management team may resign at any time. The loss of the services of any members of our senior management team, especially Mr. Fulop, could delay or prevent the successful implementation of our strategy or our commercialization of new applications for our systems or other products, or could otherwise adversely affect our ability to manage our company effectively and carry out our business plan. There is no assurance that if any senior executive leaves in the future, we will be able to rapidly replace him or her and transition smoothly towards his or her successor, without any adverse impact on our operations.
To support the continued growth of our business, we may need to effectively recruit and hire new employees, and we need to effectively integrate, develop, motivate, and retain new and existing employees. High demand exists for senior management and other key personnel (including scientific, technical, engineering, financial and sales personnel) in the additive manufacturing industry, and there can be no assurance that we will be able to retain our current key personnel. We experience intense competition for qualified personnel. While we intend to continue to provide competitive compensation packages to attract and retain key personnel, some of our competitors for these employees have greater resources, making it difficult for us to compete successfully for key personnel. Moreover, new employees may not become as productive as we expect since we may face challenges in adequately integrating them into our workforce and culture. If we cannot attract and retain sufficiently qualified technical employees for our research and product development activities, as well as experienced sales and marketing personnel, we may be unable to develop and commercialize new products or new applications for existing products. Furthermore, possible shortages of key personnel, including engineers, in the regions surrounding our Boston facility could require us to pay more to hire and retain key personnel, thereby increasing our costs.
Departing employees’ knowledge of our business and industry can be extremely difficult to replace and provides their future employers with a competitive advantage. Where applicable law permits, we generally enter into non-competition agreements with our employees. These agreements prohibit our employees from competing directly with us or working for our competitors or clients while they work for us, and in some cases, for a limited period after they cease working for us. We may be unable to enforce these agreements under the laws of the jurisdictions in which our employees work, and it may be difficult for us to restrict our competitors from benefiting from the expertise that our former employees or consultants developed while working for us. If we cannot demonstrate that our legally protectable interests will be harmed, we may be unable to prevent our competitors from benefiting from the expertise of our former employees or consultants and our ability to remain competitive may be diminished.
If we fail to grow our business as anticipated, our net sales, gross margin and operating margin will be adversely affected. If we grow as anticipated but fail to manage our growth and expand our operations accordingly, our business may be harmed and our results of operation may suffer.
Over the past several years, we have experienced rapid growth, and we are attempting to continue to grow our business substantially. To this end, we have made, and expect to continue to make, significant investments in our business, including investments in our infrastructure, technology, marketing, and sales efforts. These investments include dedicated facilities expansion and increased staffing, both domestic and international. If our business does not generate the level of revenue required to support our investment, our net sales and profitability will be adversely affected.
Our ability to effectively manage our anticipated growth and expansion of our operations will also require us to enhance our operational, financial and management controls and infrastructure, human resources policies and reporting systems. These enhancements and improvements may require significant capital expenditures, investments in additional headcount and other operating expenditures and allocation of valuable management and employee resources. Our future financial performance and our ability to execute on our business plan will depend, in part, on our ability to effectively manage any future growth and expansion. There are no guarantees we will be able to do so in an efficient or timely manner, or at all.
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We may experience significant delays or obstacles to realizing the success of our Desktop Labs platform and Desktop Health product offerings.
The Desktop Labs platform and our Desktop Health products aim to leverage our proprietary additive manufacturing technologies and materials to grow the market for existing applications in the dental market and identify, develop and/or commercialize future solutions in the healthcare and dental markets for personalized patient care spanning dentistry, orthodontics, dermatology, orthopedics, cardiology, plastic surgery and printed regenerative tissues and grafts. These businesses operate in a highly competitive space which may make it difficult for us to implement business plans and expectations and identify and realize opportunities. In addition, their technology, products, materials, and applications may be subject to strict regulatory requirements in the United States and other countries. The regulatory approval or clearance process may be lengthy and costly, and regulatory requirements may impact the timing of, or our ability to, commercialize the regulated technology, products, materials, and applications. The success of these parts of our business will also depend on our ability to attract, hire, and retain qualified personnel, establish sales, marketing and distribution infrastructure, and establish and maintain supply and manufacturing relationships.
Our existing and planned global operations subject us to a variety of risks and uncertainties that could adversely affect our business and operating results. Our business is subject to risks associated with selling machines and other products in non-United States locations.
Our products and services are distributed in more than 40 countries around the world, and we derive a substantial percentage of our sales from these international markets. In 2023, we derived approximately 37% of our revenues from countries outside the United States. Accordingly, we face significant operational risks from doing business internationally (including the conflict between Ukraine and Russia and the conflict in Israel and surrounding areas).
Our operating results may be affected by volatility in currency exchange rates and our ability to effectively manage our currency transaction risks. Transactions in which we participate that are denominated in other than US Dollars may subject the company to currency exchange losses because we do not currently engage in currency swaps or other currency hedging strategies to address this risk. As we realize our strategy to expand internationally, our exposure to currency risks may increase. Given the volatility of exchange rates, we can give no assurance that we will be able to effectively manage our currency transaction risks or that any volatility in currency exchange rates will not have an adverse effect on our results of operations.
Other risks and uncertainties we face from our global operations include:
• difficulties in staffing and managing foreign operations;
• limited protection for the enforcement of contract and intellectual property rights in certain countries where we may sell our products or work with suppliers or other third parties;
• potentially longer sales and payment cycles and potentially greater difficulties in collecting accounts receivable;
• costs and difficulties of customizing products for foreign countries;
• challenges in providing solutions across a significant distance, in different languages and among different cultures;
• laws and business practices favoring local competition;
• being subject to a wide variety of complex foreign laws, treaties and regulations and adjusting to any unexpected changes in such laws, treaties and regulations;
• specific and significant regulations, including the European Union’s General Data Protection Regulation, or GDPR, which imposes compliance obligations on companies who possess the personal data of EU residents;
• uncertainty and resultant political, financial and market instability arising from the United Kingdom’s exit from the European Union;
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• compliance with U.S. laws affecting activities of U.S. companies abroad, including the U.S. Foreign Corrupt Practices Act;
• tariffs, trade barriers and other regulatory or contractual limitations on our ability to sell or develop our products in certain foreign markets;
• operating in countries with a higher incidence of corruption and fraudulent business practices;
• changes in regulatory requirements, including export controls, tariffs and embargoes, other trade restrictions, competition, corporate practices, and data privacy and security concerns;
• potential adverse tax consequences arising from global operations;
• seasonal reductions in business activity in certain parts of the world, particularly during the summer months in Europe and at year end globally;
• rapid changes in government, economic and political policies and conditions; and
• political or civil unrest or instability, war, international hostilities, terrorism or epidemics and other similar outbreaks or events.
In addition, additive manufacturing has been identified by the U.S. government as an emerging technology and is currently being further evaluated for national security impacts. We expect additional regulatory changes to be implemented that will result in increased and/or new export controls related to additive manufacturing, components and related materials and software. These changes, if implemented, may result in our being required to obtain additional approvals and/or licenses to sell additive manufacturing products and services in the global market.
Additionally, we have teams that are engaged in marketing, selling, and supporting our products internationally, and we must hire and train experienced personnel to staff and manage our foreign operations. To the extent that we experience difficulties in recruiting, training, managing, and retaining international employees, particularly managers and other members of our international sales team, we may experience difficulties in sales productivity in international markets.
Our failure to effectively manage the risks and uncertainties associated with our global operations could limit the future growth of our business and adversely affect our business and operating results.
Global economic, political and social conditions and uncertainties in the markets that we serve may adversely impact our business.
Our performance depends on the financial health and strength of our customers, which in turn is dependent on the economic conditions of the markets in which we and our customers operate. A decline in the global economy, difficulties in the financial services sector and credit markets, continuing geopolitical uncertainties and other macroeconomic factors all affect the spending behavior of potential customers. The economic uncertainty in Europe, the United States, India, China, and other countries may cause end-users to further delay or reduce technology purchases.
We also face risks from financial difficulties or other uncertainties experienced by our suppliers, distributors or other third parties on which we rely. If third parties are unable to supply us with required materials or components or otherwise assist us in operating our business, our business could be harmed.
For example, the possibility of an ongoing trade war between the United States and China may impact the cost of raw materials, finished products or components used in our products and our ability to sell our products in China. Other changes in U.S. social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment could also adversely affect our business. In addition, the United Kingdom’s exit from the European Union on January 31, 2020 may result in increased costs of barriers to trade, and uncertainty surrounding this transition may have an effect on global economic conditions and the stability of global financial markets, which in turn could have a material adverse effect on our business, financial condition, and results of operations. If global economic conditions remain volatile for a prolonged period or if European economies experience further disruption, our results of operations could be adversely affected.
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In the future, some of our arrangements for additive manufacturing solutions may contain customer-specific provisions that may impact the period in which we recognize the related revenues under GAAP.
Some customers that purchase additive manufacturing solutions from us may require specific, customized factors relating to their intended use of the solution or the installation of the product in the customers’ facilities. These specific, customized factors are occasionally required by customers to be included in our commercial agreements governing these sales. As a result, our responsiveness to our customers’ specific requirements has the potential to impact the period in which we recognize the revenue relating to that additive manufacturing system sale.
Similarly, some of our customers must build or prepare facilities to install a subset of our additive manufacturing solutions, and the completion of such projects can be unpredictable, which can impact the period in which we recognize the revenue relating to that additive manufacturing solution sale.
We rely on our information technology systems to manage numerous aspects of our business and a failure, or disruption breach of these systems could adversely affect our business.
We rely on our information technology systems to manage numerous aspects of our business, including to efficiently purchase products from our suppliers, provide procurement and logistic services, ship products to our customers, manage our accounting and financial functions, including our internal controls, and maintain our research and development data. Our information technology systems are an essential component of our business and any failure, disruption, or breach of such systems could significantly limit our ability to manage and operate our business efficiently. Any actual or perceived failure of our information technology systems to perform properly could disrupt our supply chain, product development and customer experience, which may lead to increased overhead costs and decreased sales and have an adverse effect on our reputation and our financial condition. In addition, during the COVID-19 pandemic, a substantial portion of our employees have continued to work remotely, making us more dependent on potentially vulnerable communications systems and making us more vulnerable to cyberattacks.
Although we take steps and incur significant costs to secure our information technology systems, including our computer systems, intranet and internet sites, email and other telecommunications and data networks, there can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with, or effective, and our systems may be vulnerable to attack, damage or interruption. Disruption to our information technology systems could result from power outages, computer and telecommunications and electrical failures, computer viruses and malware, malicious code, hacking, cyberattacks (including ransomware attack), phishing attacks and other social engineering schemes, human error, fraud, denial or degradation of service attacks and sophisticated nation-state and nation-state supported actors or other security breaches, catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes, acts of war, terrorism and theft or usage errors by our employees.
Attacks upon information technology systems are increasing in their frequency, levels of persistence, sophistication and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives and expertise. Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. We may also experience security breaches that may remain undetected for an extended period. Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.
We and certain of our service providers are from time to time subject to cyberattacks and security incidents. While we do not believe that we have experienced any significant system failure, accident or security breach to date, our reputation, results of operations, business and financial condition could be adversely affected if, as a result of a significant cyber-event or otherwise:
• our operations are disrupted or shut down;
• our confidential, proprietary information is stolen, lost or disclosed;
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• we are subject to regulatory investigation, we incur costs with respect to the investigation, remediation and potential notification to counterparties or data subjects, or we are required to pay penalties or fines in connection with stolen customer, employee or other personal information;
• we must dedicate significant resources to system repairs or increase cyber security protection; or
• we otherwise incur significant litigation or other costs.
Further, our information technology systems are damaged or cease to function properly, or, if we do not replace or upgrade certain systems, we may incur substantial costs to repair or replace them and may experience an interruption of our normal business activities or loss of critical data. Any such disruption could adversely affect our reputation, results of operations, business and financial condition.
Additionally, some of the companies we acquire may not have made the same level of investment in security measures for their information technology systems which may require that we invest significant resources to get those systems to the level of security we require. Additionally, some of the companies we acquire may not have the same level of information technology systems which may require that we invest significant resources to get those systems to the level of security we require.
We also rely on information technology systems maintained by third parties, including third-party cloud computing services and the information technology systems of our suppliers for both our internal operations and our customer-facing infrastructure related to our additive manufacturing solutions. These systems are also vulnerable to the types of interruption and damage described above but we have less ability to take measures to protect against such disruptions or to resolve them if they were to occur. Information technology problems faced by third parties on which we rely could adversely impact our results of operations, business and financial condition as well as negatively impact our brand reputation.
If we fail to implement or are delayed in the implementation of our new ERP system platform, we may not be able to effectively transact our business or produce our financial statements on a timely basis and without incurrence of additional costs, which would adversely affect our business, results of operations and cash flows.
We are currently implementing Oracle Enterprise Resource Planning, or ERP, to manage enterprise functions for our significant subsidiaries. This integration involves significant complexity, requiring us to move and reconfigure all of our current system processes, transactions, data and controls to a new platform. Due to this complexity and the scope and volume of changes involved in this implementation, we may experience delays and higher than planned resource needs in our migration efforts. Although we will conduct testing, assessments and validation to ensure that our internal financial and accounting controls will be effective post-implementation, we may nevertheless experience difficulties in transacting our business due to system challenges, delays or process deficiencies following the initial launch of the system, which could impair our ability to conduct our business or to produce accurate financial statements on a timely basis. If our ability to conduct our business or to produce accurate financial statements on a timely basis is impaired, our business, results of operations and cash flows would be adversely affected.
Our current levels of insurance may not be adequate for our potential liabilities.
We maintain insurance to cover our potential exposure for most claims and losses, including potential product and non-product related claims, lawsuits and administrative proceedings seeking damages or other remedies arising out of our commercial operations. However, our insurance coverage is subject to various exclusions, self-retentions and deductibles. We may be faced with types of liabilities that are not covered under our insurance policies, such as environmental contamination or terrorist attacks, or that exceed our policy limits. Even a partially uninsured claim of significant size, if successful, could have an adverse effect on our financial condition.
In addition, we may not be able to continue to obtain insurance coverage on commercially reasonable terms, or at all. Our existing policies may be cancelled or otherwise terminated by the insurer, and/or the companies that we acquire may not be eligible for certain types or limits of insurance. Maintaining adequate insurance and successfully accessing insurance coverage for a claim can require a significant amount of our management’s time, and we may be forced to spend a substantial amount of money in that process.
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Due to our acquisition activity, the existing information technology systems and cyber controls of the acquired entities and integration efforts with respect thereto, as well as the state of the cyber insurance market generally, the costs for our cyber insurance increased in 2023, and the cost of such insurance could continue to increase for future policy periods. Our cyber insurance coverage does not extend to all of our group companies. Although we are working to implement more robust cybersecurity controls and infrastructure for these entities, we may continue to be unable to secure cyber risk coverage for them for future periods. Moreover, the scope and limits of our cyber insurance coverage may not be sufficient or available to cover all expenses or other losses, including fines, or all types of claims that may arise in connection with cyberattacks, security compromises, and other related incidents.
Uncertainty and instability resulting from the conflict between Russia and Ukraine could negatively impact our business, financial condition and operations.
The ongoing war in Ukraine could negatively impact global and regional financial markets which could result in businesses postponing spending in response to tighter credit, higher unemployment, financial market volatility, negative financial news, and other factors. In addition, our suppliers and contractors may have staff, operations, materials, or equipment located in Ukraine or Russia which could impact our supply chain. Moreover, we outsource some of our software development and design to third-party contractors that have employees and consultants located in Ukraine, Russia and/or Belarus. Poor relations between the United States and Russia, sanctions by the United States and the European Union against Russia, and any escalation of political tensions or economic instability in the area could have an adverse impact on our third-party contractors. In particular, Russia’s invasion of Ukraine and the increased tensions among the United States, the North Atlantic Treaty Organization and Russia could increase the scope of armed conflict, cyberwarfare and economic instability that could disrupt or delay the operations of these resources in Russia, Belarus and/or Ukraine, disrupt or delay communication with such resources or the flow of funds to support their operations, or otherwise render our resources unavailable.
Macroeconomic conditions could have a materially adverse impact on our business, financial condition, or results of operations.
Macroeconomic conditions, such as high inflation, changes to monetary policy, high interest rates, volatile currency exchange rates, as well as credit and sovereign debt concerns in certain European countries, concerns about slowed growth in China and other markets, outside of the U.S., decreasing consumer confidence and spending, including capital spending, concerns about the stability and liquidity of certain financial institutions, and global or local recessions can adversely impact demand for our products, which could negatively impact our business, financial condition, or results of operations. Recent macroeconomic conditions have been adversely impacted by political instability and military hostilities in multiple geographies (including the conflict between Ukraine and Russia and the conflict in Israel and surrounding areas) and monetary and financial uncertainties.
The additive manufacturing industry in which we operate is characterized by rapid technological change, which requires us to continue to develop new products and innovations to meet constantly evolving customer demands and which could adversely affect market adoption of our products.
Our revenues are derived from the sale of additive manufacturing systems, produced parts, and related consumables and services. We have encountered and will continue to encounter challenges experienced by growing companies in a market subject to rapid innovation and technological change. While we intend to invest substantial resources to remain on the forefront of technological development, continuing advances in additive manufacturing technology, changes in customer requirements and preferences and the emergence of new standards, regulations and certifications could adversely affect adoption of our products either generally or for particular applications. Our ability to compete in the additive manufacturing market depends, in large part, on our success in developing and introducing new additive manufacturing systems and technology, in improving our existing products and technology and qualifying new materials which our systems can support. We believe that we must continuously enhance and expand the functionality and features of our products and technologies in order to remain competitive. However, we may not be able to:
• develop cost-effective new products and technologies that address the increasingly complex needs of prospective customers;
• enhance our existing products and technologies;
• respond to technological advances and emerging industry standards and certifications on a cost-effective and timely basis;
• adequately protect our intellectual property as we develop new products and technologies;
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• identify the appropriate technology or product to which to devote our resources; or
• ensure the availability of cash resources to fund research and development.
Even if we successfully introduce new additive manufacturing products and technologies and enhance our existing products and technologies, it is possible that these will eventually supplant our existing products or that our competitors will develop new products and technologies that will replace our own. As a result, any of our products may be rendered obsolete or uneconomical by our or our competitors’ technological advances, leading to a loss in market share, decline in revenue and adverse effects on our business and prospects.
The additive manufacturing industry is competitive. We expect to face increasing competition in many aspects of our business, which could cause our operating results to suffer.
The additive manufacturing industry in which we operate is fragmented and competitive. We compete for customers with a wide variety of producers of additive manufacturing and/or 3D printing equipment that creates 3D objects and end-use parts, as well as with providers of materials and services for this equipment. Some of our existing and potential competitors are researching, designing, developing, and marketing other types of products and services that may render our existing or future products obsolete, uneconomical, or less competitive. Existing and potential competitors may also have substantially greater financial, technical, marketing and sales, manufacturing, distribution, and other resources than we do, including name recognition, as well as experience and expertise in developing and protecting intellectual property rights and operating within certain international markets, any of which may enable them to compete effectively against us. For example, a number of companies that have substantial resources have announced that they are beginning production of 3D printing systems, which will further enhance the competition we face.
Future competition may arise from the development of allied or related techniques for equipment, materials and services that are not encompassed by our patents, from the issuance of patents to other companies that may inhibit our ability to develop certain products and from improvements to existing technologies.
We intend to continue to follow a strategy of continuing product development and distribution network expansion to enhance our competitive position to the extent practicable. But we cannot provide assurance that we will be able to maintain our current position or continue to compete successfully against current and future sources of competition. If we do not keep pace with technological change and introduce competitive new products and technologies, demand for our products may decline, and our operating results may suffer.
Because the additive manufacturing market is rapidly evolving, forecasts of market growth in this Quarterly Report on Form 10-Q may not be accurate.
Market opportunity estimates and growth forecasts included in this Quarterly Report on Form 10-Q are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. Even if these markets experience the forecasted growth described in this Quarterly Report on Form 10-Q, we may not grow our business at similar rates, or at all. Our future growth is subject to many factors, including market adoption of our products, which is subject to many risks and uncertainties. Accordingly, the forecasts and estimates of market size and growth described in this Quarterly Report on Form 10-Q, including our estimates that the size of the total addressable market is expected to be more than $100 billion in 2030, should not be taken as indicative of our future growth.
Risks Related to Acquisitions
Difficulties or delays integrating the businesses and operations of acquired companies into Desktop Metal, or realizing the expected benefits of these acquisitions, may adversely affect the company’s future results.
Acquisitions involve numerous risks, any of which could harm our business and negatively affect our financial condition and results of operations. The success of our acquisitions, including EnvisionTEC and ExOne, will depend in part on our ability to realize the anticipated business opportunities from combining the operations of acquired companies with our business in an efficient and effective manner. Ongoing and expanded integration processes could take longer than anticipated and could result in the loss of key employees, the disruption of each company’s ongoing businesses, tax costs or inefficiencies, or inconsistencies in standards, controls, information technology systems, procedures and policies, any of which could adversely affect our ability to maintain relationships
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with customers, employees or other third parties, or our ability to achieve the anticipated benefits of the acquisitions, and could harm our financial performance. Specifically, our ability to address the following integration matters may impact realization of anticipated benefits of our acquisitions:
• combining the operations and corporate functions of acquired companies;
• meeting the capital requirements of the acquired companies, in a manner that permits us to achieve any cost savings or other synergies anticipated to result from the acquisitions;
• integrating and unifying the offerings and services available to customers;
• identifying and eliminating redundant and underperforming functions, product lines and assets;
• harmonizing the acquired companies’ operating practices, employee development and compensation programs, internal controls and other policies, procedures and processes;
• consolidating the acquired companies’ administrative and information technology infrastructure; and
• coordinating distribution efforts.
If we are unable to successfully or timely integrate the operations of acquired companies with our business, we may incur unanticipated liabilities and be unable to realize the revenue growth, synergies and other anticipated benefits resulting from the acquisitions, and our business, results of operations and financial condition could be materially and adversely affected.
In addition, at times the attention of certain management individuals may be focused on the integration of the acquired businesses and diverted from day-to-day business operations or other opportunities that may have been beneficial to us, which may disrupt our ongoing business.
We have incurred significant costs in connection with our acquisitions. The substantial majority of these costs are non-recurring acquisition expenses. These non-recurring costs and expenses are reflected in the condensed consolidated financial statements included in this Annual Report on Form 10-K. We may incur additional costs in the integration of acquired companies and may not achieve cost synergies and other benefits sufficient to offset the incremental costs of these acquisitions.
As part of our growth strategy, we may acquire or make investments in other businesses, patents, technologies, products or services. Our efforts to do so, or our failure to do so successfully, could disrupt our business and have an adverse impact on our financial condition.
As part of our business strategy, we may acquire and invest in other companies, patents, technologies, products and/or services. To the extent we seek to grow our business through acquisitions, we may not be able to successfully identify attractive acquisition opportunities or consummate any such acquisitions if we cannot reach an agreement on commercially favorable terms, if we lack sufficient resources to finance the transaction on our own and cannot obtain financing at a reasonable cost or if regulatory authorities prevent such transaction from being consummated. The identification of potential targets, negotiation with targets and due diligence may divert management’s attention from their day-to-day responsibilities and require the incurrence of related costs. In addition, competition for acquisitions in the markets in which we operate during recent years has increased, and may continue to increase, which may result in an increase in the costs of acquisitions or cause us to refrain from making certain acquisitions. We may not be able to complete future acquisitions on favorable terms, if at all.
If we do complete future acquisitions, we cannot assure you that they will ultimately strengthen our competitive position or that they will be viewed positively by customers, financial markets, or investors. Furthermore, future acquisitions could pose numerous additional risks to our operations, including:
•diversion of management’s attention from their day-to-day responsibilities;
•unanticipated costs or liabilities associated with the acquisition;
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•incurrence of acquisition-related costs, which would be recognized as a current period expense;
•problems integrating the purchased business, products or technologies;
•challenges in achieving strategic objectives, cost savings and other anticipated benefits;
• | inability to maintain relationships with key customers, suppliers, vendors and other third parties on which the purchased business relies; |
• | the difficulty of incorporating acquired technology and rights into our platform and of maintaining quality and security standards consistent with our brand; |
•difficulty in maintaining controls, procedures, and policies during the transition and integration;
• | challenges in integrating the new workforce and the potential loss of key employees, particularly those of the acquired business; and |
•use of substantial portions of our available cash or the incurrence of debt to consummate the acquisition.
If we proceed with a particular acquisition, we may have to use cash, issue new equity securities with dilutive effects on existing shareholders, incur indebtedness, assume contingent liabilities, or amortize assets or expenses in a manner that might have a material adverse effect on our financial condition and results of operations. Acquisitions will also require us to record certain acquisition-related costs and other items as current period expenses, which would have the effect of reducing our reported earnings in the period in which an acquisition is consummated. In addition, we could also face unknown liabilities or write-offs due to our acquisitions, which could result in a significant charge to our earnings in the period in which they occur. We will also be required to record goodwill or other long-lived asset impairment charges (if any) in the periods in which they occur, which could result in a significant charge to our earnings in any such period.
Achieving the expected returns and synergies from future acquisitions will depend, in part, upon our ability to integrate the products and services, technology, administrative functions and personnel of these businesses into our product lines in an efficient and effective manner. We cannot assure you that we will be able to do so, that our acquired businesses will perform at levels and on the timelines anticipated by our management or that we will be able to obtain these synergies. In addition, acquired technologies and intellectual property may be rendered obsolete or uneconomical by our own or our competitors’ technological advances. Management resources may also be diverted from operating our existing businesses to certain acquisition integration challenges. If we are unable to successfully integrate acquired businesses, our anticipated revenues and profits may be lower. Our profit margins may also be lower, or diluted, following the acquisition of companies whose profit margins are less than those of our existing businesses.
Risks Related to Third Parties
We could be subject to personal injury, property damage, product liability, warranty and other claims involving allegedly defective products that we supply.
The products we supply are sometimes used in potentially hazardous or critical applications, such as the assembled parts of an aircraft, medical device or automobile, that could result in death, personal injury, property damage, loss of production, punitive damages, and consequential damages. While we have not experienced any such claims to date, actual or claimed defects in the products we supply could result in our being named as a defendant in lawsuits asserting potentially large claims.
We attempt to include legal provisions in our agreements with customers that are designed to limit our exposure to potential liability for damages arising from defects or errors in our products. However, it is possible that these limitations may not be effective as a result of unfavorable judicial decisions or laws enacted in the future. Any such lawsuit, regardless of merit, could result in material expense, diversion of management time and efforts and damage to our reputation, and could cause us to fail to retain or attract customers, which could adversely affect our results of operations.
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We depend on our network of resellers and our business could be adversely affected if they do not perform as expected.
We rely heavily on our global network of resellers to sell our products and to provide installation and support services to customers in their respective geographic regions. These resellers may not be as effective in selling our products or installing and supporting our customers as we expect. Further, our contracts with our resellers provide for termination for convenience, and if our contracts with a significant number of resellers, or with the most effective resellers, were to terminate or if they would otherwise fail or refuse to sell certain of our products, we may not be able to find replacements that are as qualified or as successful in a timely manner, if at all. In addition, if our resellers do not perform as anticipated, or if we are unable to secure qualified and successful resellers, our sales will suffer, which would have an adverse effect on our revenues and operating results. Because we also depend upon our resellers to provide installation and support services for products, if our reseller relationship were terminated or limited to certain products, we may face disruption in providing support for our customers, which would adversely affect our reputation and our results of operations. Any failure to offer high-quality technical support services may adversely affect our relationships with our customers and adversely affect our financial results.
Additionally, a default by one or more resellers that have a significant receivables balance could have an adverse impact on our financial results. We have reviewed our policies that govern credit and collections and will continue to monitor them in light of current payment status and economic conditions. In addition, we try to reduce the credit exposures of our accounts receivable by instituting credit limits. However, there can be no assurance that our efforts to identify potential credit risks will be successful. Our inability to timely identify resellers that are credit risks could result in defaults at a time when such resellers have high accounts receivable balances with us. Any such default would result in a significant charge against our earnings and adversely affect our results of operations and financial condition.
We could face liability if our additive manufacturing solutions are used by our customers to print dangerous objects.
Customers may use our additive manufacturing systems to print parts that could be used in a harmful way or could otherwise be dangerous. For example, there have been news reports that 3D printers were used to print guns or other weapons. We have little, if any, control over what objects our customers print using our products, and it may be difficult, if not impossible, for us to monitor and prevent customers from printing weapons with our products. There can be no assurance that we will not be held liable if someone were injured or killed by a weapon printed by a customer using one of our products.
We depend on a limited number of third-party contract manufacturers for a significant portion of our manufacturing needs. If these third-party manufacturers experience any delay, disruption or quality control problems in their operations, we could lose market share and our brand may suffer.
We depend on third-party contract manufacturers for the production of several of our additive manufacturing systems. While there are several potential manufacturers for most of these products, several of our products are manufactured, assembled, tested and generally packaged by a limited number of third-party manufacturers. In most cases, we rely on these manufacturers to procure components and, in some cases, subcontract engineering work. Our reliance on a limited number of contract manufacturers involves a number of risks, including:
• unexpected increases in manufacturing and repair costs;
• inability to control the quality and reliability of finished products;
• inability to control delivery schedules;
• potential liability for expenses incurred by third-party contract manufacturers in reliance on our forecasts that later prove to be inaccurate;
• potential lack of adequate capacity to manufacture all or a part of the products we require; and
• potential labor unrest affecting the ability of the third-party manufacturers to produce our products.
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If any of our third-party contract manufacturers experience a delay, disruption, or quality control problems in their operations, including due to the COVID-19 pandemic, or if a primary third-party contract manufacturer does not renew its agreement with us, our operations could be significantly disrupted, and our product shipments could be delayed. Qualifying a new manufacturer and commencing volume production is expensive and time consuming. Ensuring that a contract manufacturer is qualified to manufacture our products to our standards is time consuming. In addition, there is no assurance that a contract manufacturer can scale its production of our products at the volumes and in the quality that we require. If a contract manufacturer is unable to do these things, we may have to move production for the products to a new or existing third-party manufacturer, which would take significant effort and our business, results of operations and financial condition could be materially adversely affected.
As we contemplate moving manufacturing into different jurisdictions, we may be subject to additional significant challenges in ensuring that quality, processes, and costs, among other issues, are consistent with our expectations. For example, while we expect our third-party contract manufacturers to be responsible for cost resulting from manufacturing defects, there is no assurance that we will be able to collect such reimbursements from these manufacturers, which exposes us to take on additional risk for potential failures of our products.
In addition, because we use a limited number of third-party contract manufacturers, increases in the prices charged may have an adverse effect on our results of operations, as we may be unable to find a contract manufacturer who can supply us at a lower price. As a result, the loss of a limited source supplier could adversely affect our relationships with our customers and our results of operations and financial condition.
All of our products must satisfy safety and regulatory standards and some of our products must also receive government certifications. Our third-party contract manufacturers are primarily responsible for conducting the tests that support our applications for most regulatory approvals for our products. If our third-party contract manufacturers fail to timely and accurately conduct these tests, we may be unable to obtain the necessary domestic or foreign regulatory approvals or certifications to sell our products in certain jurisdictions. As a result, we would be unable to sell our products and our sales and profitability could be reduced, our relationships with our sales channel could be harmed and our reputation and brand would suffer.
If our suppliers become unavailable or inadequate, our customer relationships, results of operations and financial condition may be adversely affected.
We acquire certain of our materials, which are critical to the ongoing operation and future growth of our business, from several third parties. If we or one of our contract manufacturers has a supply chain disruption, or our relationship with any of our contract manufacturers or key suppliers terminates, we could experience delays. While most manufacturing equipment and materials for our products are available from multiple suppliers, certain of those items are only available from limited sources. Should any of these suppliers become unavailable or inadequate, or impose terms unacceptable to us, such as increased pricing terms, we could be required to spend a significant amount of time and expense to develop alternate sources of supply, and we may not be successful in doing so on terms acceptable to us, or at all. As a result, the loss of a limited source supplier could adversely affect our relationship with our customers as well as our results of operations and financial condition.
Our facilities and the facilities of our third-party contract manufacturers, suppliers, and customers, are vulnerable to disruption due to natural or other disasters, including climate-related events, strikes and other events beyond our control.
A major earthquake, fire, tsunami, hurricane, cyclone or other disaster, such as a pandemic, major flood, seasonal storms, droughts, extreme temperatures, nuclear event or terrorist attack affecting our facilities or the areas in which they are located, or affecting those of our customers or third-party manufacturers or suppliers, could significantly disrupt our or their operations and delay or prevent product shipment or installation during the time required to repair, reinforce, rebuild or replace our or their damaged manufacturing facilities. These delays could be lengthy and costly. Climate change may contribute to increased frequency or intensity of certain of these events, as well as contribute to chronic changes in the physical environment (such as changes to ambient temperature and precipitation patterns or sea-level rise) any of which may impair the operating conditions of our facilities or the facilities of our customers or third-party manufacturers or suppliers, or otherwise adversely impact our operations and value chain (including the delivery of our services and products), access to capital, access to insurance or access to talent. If any of our facilities or those of our third-party contract manufacturers, suppliers or customers are negatively impacted by such a disaster, production, shipment, and installation of our products could be delayed, which can impact the period in which we recognize the revenue related to that product sale. Additionally, customers may delay purchases of our products until operations return to normal. Even if we are able
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to respond quickly to a disaster, the continued effects of the disaster could create uncertainty in our business operations. In addition, concerns about terrorism, the effects of a terrorist attack, political turmoil, labor strikes, war or the outbreak of epidemic diseases (including the outbreak of COVID-19) could have a negative effect on our operations and sales.
Risks Related to Our Class A Common Stock
Our issuance of additional shares of Class A common stock or convertible securities may dilute investors’ equity interest in the Company and could adversely affect our stock price.
From time to time, we have issued, and we expect in the future to issue, additional shares of our Class A common stock or securities convertible into our Class A common stock pursuant to a variety of transactions, including acquisitions. Additional shares of our Class A common stock may also be issued upon exercise of outstanding stock options and warrants to purchase our Class A common stock. The issuance by us of additional shares of our Class A common stock or securities convertible into our Class A common stock would dilute investors’ equity interest in the Company and the sale of a significant amount of such shares in the public market could adversely affect prevailing market prices of our Class A common stock. Subject to the satisfaction of vesting conditions and the expiration of lockup agreements, shares issuable upon exercise of options will be available for resale immediately in the public market without restriction.
In the future, we expect to obtain financing or to further increase our capital resources by issuing additional shares of our capital stock or offering debt or other equity securities, including senior or subordinated notes, debt securities convertible into equity, or shares of preferred stock. Issuing additional shares of our capital stock, other equity securities, or securities convertible into equity may dilute the economic and voting rights of our existing stockholders, reduce the market price of our Class A common stock, or both. Debt securities convertible into equity could be subject to adjustments in the conversion ratio pursuant to which certain events may increase the number of equity securities issuable upon conversion. Preferred stock, if issued, could have a preference with respect to liquidating distributions or a preference with respect to dividend payments that could limit our ability to pay dividends to the holders of our Class A common stock. Our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, which may adversely affect the amount, timing, or nature of our future offerings. As a result, holders of our Class A common stock bear the risk that our future offerings may reduce the market price of our Class A common stock and dilute their percentage ownership.
Future sales, or the perception of future sales, of our Class A common stock by us or our existing stockholders in the public market could cause the market price for our Class A common stock to decline.
The sale of substantial amounts of shares of our Class A common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares of our Class A common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. Certain shares of our common stock are freely tradable without restriction under the Securities Act, except for any shares of our Class A common stock that may be held or acquired by our directors, executive officers, and other affiliates, as that term is defined in the Securities Act, which are restricted securities under the Securities Act. Restricted securities may not be sold in the public market unless the sale is registered under the Securities Act or an exemption from registration is available. Any such sales, including sales of a substantial number of shares or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock. We may also issue shares of our common stock or securities convertible into our common stock from time to time in connection with financings, acquisitions, investments, or otherwise. Any such issuance could result in ownership dilution to you as a stockholder and cause the trading price of our common stock to decline.
Our directors, executive officers and stockholders affiliated with our directors and executive officers own a significant percentage of our Class A common stock and, if they choose to act together, will be able to exert significant control over matters subject to shareholder approval.
Our directors, executive officers, and stockholders affiliated with our directors and executive officers exert significant influence on us. As of December 31, 2023, these holders owned approximately 13.9% of our outstanding Class A common stock. As a result, these holders, acting together, have significant control over all matters that require approval of our stockholders, including the election of directors, amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate
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transactions. The interests of these holders may not always coincide with our corporate interests or the interests of other stockholders, and they may act in a manner with which you may not agree or that may not be in the best interests of our other stockholders.
Anti-takeover provisions in our governing documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our Class A common stock.
Our certificate of incorporation, bylaws, and Delaware law contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by our board of directors. Among other things, our certificate of incorporation and bylaws include the following provisions:
• | a staggered board, which means that our board of directors is classified into three classes of directors with staggered three-year terms and directors are only able to be removed from office for cause; |
• | limitations on convening special stockholder meetings, which could make it difficult for our stockholders to adopt desired governance changes; |
• | a prohibition on stockholder action by written consent, which means that our stockholders will only be able to take action at a meeting of stockholders and will not be able to take action by written consent for any matter; |
• | a forum selection clause, which means certain litigation against us can only be brought in Delaware; |
• | the authorization of undesignated preferred stock, the terms of which may be established and shares of which may be issued without further action by our stockholders; and |
• | advance notice procedures, which apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders. |
These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management. As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the DGCL, which prevents interested stockholders, such as certain stockholders holding more than 15% of our outstanding Class A common stock, from engaging in certain business combinations unless (i) prior to the time such stockholder became an interested stockholder, our board of directors approved the transaction that resulted in such stockholder becoming an interested stockholder, (ii) upon consummation of the transaction that resulted in such stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of our Class A common stock, or (iii) following board approval, such business combination receives the approval of the holders of at least two-thirds of our outstanding Class A common stock not held by such interested stockholder at an annual or special meeting of stockholders.
Any provision of our certificate of incorporation, our bylaws or Delaware law that has the effect of delaying, preventing, or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our Class A common stock and could also affect the price that some investors are willing to pay for our Class A common stock.
Our certificate of incorporation and bylaws provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
Our certificate of incorporation and bylaws provide that, unless we consent in writing to the selection of an alternative forum, the (a) Court of Chancery of the State of Delaware (or, in the event that the Chancery Court does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive forum for: (i) any derivative action, suit or proceeding brought on our behalf; (ii) any action, suit or proceeding asserting a claim of breach of fiduciary duty owed by any of our directors, officers, or stockholders to us or to our stockholders; (iii) any action, suit or proceeding asserting a claim arising pursuant to the DGCL, our certificate of incorporation or bylaws; or (iv) any action, suit or proceeding asserting a claim governed by the internal affairs doctrine; and (b) subject to the foregoing, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a
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cause of action arising under the Securities Act. Notwithstanding the foregoing, such forum selection provisions shall not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal courts of the United States have exclusive jurisdiction. The choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage such lawsuits against us and our directors, officers, and other employees. Alternatively, if a court were to find the choice of forum provision contained in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition.
Additionally, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. As noted above, our certificate of incorporation and bylaws provide that the federal district courts of the United States of America shall have jurisdiction over any action arising under the Securities Act. Accordingly, there is uncertainty as to whether a court would enforce such provision. Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.
Risks Related to Our Indebtedness
Our indebtedness and liabilities could limit the cash flow available for our operations, expose us to risks that could adversely affect our business, financial condition and results of operations and impair our ability to satisfy our obligations under the 2027 Notes.
In May 2022, we issued $115.0 million principal amount of 6.0% Convertible Senior Notes due 2027. We may also incur additional indebtedness to meet future financing needs. Our indebtedness could have significant negative consequences for our security holders and our business, results of operations and financial condition by, among other things:
• | increasing our vulnerability to adverse economic and industry conditions; |
• | limiting our ability to obtain additional financing; |
• | requiring the dedication of a substantial portion of our cash flow from operations to service our indebtedness, which will reduce the amount of cash available for other purposes; |
• | limiting our flexibility to plan for, or react to, changes in our business; |
• | diluting the interests of our existing stockholders as a result of issuing shares of our Class A common stock upon conversion of the 2027 Notes; and |
• | placing us at a possible competitive disadvantage with competitors that are less leveraged than we or have better access to capital. |
Our business may not generate sufficient funds, and we may otherwise be unable to maintain sufficient cash reserves, to pay amounts due under our indebtedness, including the 2027 Notes, and our cash needs may increase in the future. In addition, any future indebtedness that we may incur may contain financial and other restrictive covenants that limit our ability to operate our business, raise capital or make payments under any existing indebtedness. If we fail to comply with these covenants or to make payments under any existing indebtedness when due, then we would be in default under that indebtedness, which could, in turn, result in that and any other existing indebtedness becoming immediately payable in full.
We may be unable to raise the funds necessary to repurchase the 2027 Notes for cash following a fundamental change (as defined in the indenture governing the 2027 Notes), or to pay the cash amounts due upon conversion, and any other existing indebtedness may limit our ability to repurchase the 2027 Notes or pay cash upon their conversion.
Noteholders may require us to repurchase the 2027 Notes following a fundamental change at a cash repurchase price generally equal to the principal amount of the 2027 Notes to be repurchased, plus accrued and unpaid interest, if any. In addition, upon conversion, we will satisfy part or all of our conversion obligation in cash. We may not have enough available cash or be able to obtain financing at the time we are required to repurchase the 2027 Notes or pay the cash amounts due upon conversion. In addition,
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applicable law, regulatory authorities and the agreements governing any other indebtedness may restrict our ability to repurchase the 2027 Notes or pay the cash amounts due upon conversion. Our failure to repurchase the 2027 Notes or pay the cash amounts due upon conversion when required will constitute a default under the indenture. A default under the indenture or the fundamental change itself could also lead to a default under agreements governing any other indebtedness, which may result in that other indebtedness becoming immediately payable in full. We may not have sufficient funds to satisfy all amounts due under any other indebtedness and the 2027 Notes.
Provisions in the indenture governing the 2027 Notes could delay or prevent an otherwise beneficial takeover of us.
Certain provisions in the 2027 Notes and the indenture governing the 2027 Notes could make a third-party attempt to acquire us more difficult or expensive. For example, if a takeover constitutes a fundamental change, then holders of the 2027 Notes will have the right to require us to repurchase their 2027 Notes for cash. In addition, if a takeover constitutes a make-whole fundamental change, (as defined in the indenture governing the 2027 Notes), then we may be required to temporarily increase the conversion rate. In either case, and in other cases, our obligations under the 2027 Notes and the indenture could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management, including in a transaction that holders of our 2027 Notes or holders of our Class A common stock may view as favorable.
Risks Related to Compliance Matters
Failure of our global operations to comply with anti-corruption laws and various trade restrictions, such as sanctions and export controls, could have an adverse effect on our business.
We operate in a number of countries throughout the world, including countries known to have a reputation for corruption. Doing business on a global basis requires us to comply with anti-corruption laws and regulations imposed by governments around the world with jurisdiction over our operations, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010, as well as the laws of the countries where we do business. We are also subject to various trade restrictions, including trade and economic sanctions and export controls, imposed by governments around the world with jurisdiction over our operations. For example, in accordance with trade sanctions administered by the Office of Foreign Assets Control and the U.S. Department of Commerce, we are prohibited from engaging in transactions involving certain persons and certain designated countries or territories, including Russia, Belarus, Cuba, Iran, Syria, North Korea and the Crimea Region of Ukraine. In addition, our products are subject to export regulations that can involve significant compliance time and may add additional overhead cost to our products. In recent years the U.S. government has had a renewed focus on export matters. For example, the Export Control Reform Act of 2018 and regulatory guidance have imposed additional controls, and may result in the imposition of further additional controls, on the export of certain “emerging and foundational technologies.” Our current and future products may be subject to these heightened regulations, which could increase our compliance costs.
We are committed to doing business in accordance with applicable anti-corruption laws and regulations and with applicable trade restrictions. We are subject, however, to the risk that our affiliated entities or our and our affiliates’ respective officers, directors, employees, and agents (including distributors of our products) may take action determined to be in violation of such laws and regulations. Any violation by any of these persons could result in substantial fines, sanctions, legal expenses, civil and/or criminal penalties, or curtailment of operations in certain jurisdictions, and might adversely affect our operating results. In addition, actual or alleged violations could damage our reputation and ability to do business.
We are subject to environmental, health and safety laws and regulations related to our operations and the use of our additive manufacturing systems, produced parts, and consumable materials, which could subject us to compliance costs and/or potential liability in the event of non-compliance.
We are subject to domestic and foreign environmental laws and regulations governing our operations, including, but not limited to, emissions into the air and water and the use, handling, disposal and remediation of hazardous substances. A certain risk of environmental liability is inherent in our production activities. These laws and regulations govern, among other things, the generation, use, storage, registration, handling, and disposal of chemicals and waste materials, the presence of specified substances in electrical products, the emission and discharge of hazardous materials into the ground, air or water, the cleanup of contaminated sites, including any contamination that results from spills due to our failure to properly dispose of chemicals and other waste materials and the health and safety of our employees. Under these laws, regulations, and requirements, we could also be subject to liability for improper
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disposal of chemicals and waste materials, including those resulting from the use of our systems and accompanying materials by end-users. Accidents or other incidents that occur at our facilities or involve our personnel or operations could result in claims for damages against us. In the event we are found to be financially responsible, as a result of environmental or other laws or by court order, for environmental damages alleged to have been caused by us or occurring on our premises, we could be required to pay substantial monetary damages or undertake expensive remedial obligations. If our operations fail to comply with such laws or regulations, we may be subject to fines and other civil, administrative, or criminal sanctions, including the revocation of permits and licenses necessary to continue our business activities, as well as substantial legal expenses. In addition, we may be required to pay damages or civil judgments in respect of third-party claims, including those relating to personal injury (including exposure to hazardous substances that we generate, use, store, handle, transport, manufacture or dispose of), property damage or contribution claims. Some environmental laws allow for strict, joint and several liabilities for remediation costs, regardless of fault. We may be identified as a potentially responsible party under such laws. The amount of any costs, including fines or damages payments that we might incur under such circumstances could substantially exceed any insurance we have to cover such losses. Any of these events, alone or in combination, could have a material adverse effect on our business, financial condition and results of operations and could adversely affect our reputation.
The export of our products internationally from our production facilities subjects us to environmental laws and regulations concerning the import and export of chemicals and hazardous substances such as the United States Toxic Substances Control Act and the Registration, Evaluation, Authorization and Restriction of Chemical Substances. These laws and regulations require the testing and registration of some chemicals that we ship along with, or that form a part of, our systems and other products. If we fail to comply with these or similar laws and regulations, we may be required to make significant expenditures to reformulate the chemicals that we use in our products and materials or incur costs to register such chemicals to gain and/or regain compliance. Additionally, we could be subject to significant fines or other civil and criminal penalties should we not achieve such compliance.
The SEC’s rules on climate change disclosures proposed in March 2022, if adopted, will increase our costs and expenditures, as well as the costs, expenditures and expectations of many of our third parties. The cost of complying with other current and future environmental, health and safety laws applicable to our operations and the operations of many of our third parties, or the liabilities arising from past releases of, or exposure to, hazardous substances, may result in future expenditures. Any of these developments, alone or in combination, could have an adverse effect on our business, financial condition, and results of operations.
Increasing attention to, and evolving expectations for, environmental, social, and governance (“ESG”) initiatives could increase our costs, harm our reputation, or otherwise adversely impact our business.
Companies across industries are facing increasing scrutiny from a variety of stakeholders related to their ESG practices. Expectations regarding voluntary ESG initiatives and disclosures may result in increased costs, changes in demand for certain offerings, enhanced compliance or disclosure obligations, or other adverse impacts to our business, financial condition, or results of operations. While we may at times engage in voluntary ESG initiatives, such initiatives may be costly and may not have the desired effect. We may experience pressure to make commitments relating to ESG matters that affect us, but we may be unable to make such commitments for strategic or cost-related reasons (or be perceived as not making commitments to the extent expected by stakeholders), in which case, we may experience reputational fallout, negative impacts with respect to our stakeholder relations or limitations with respect to our access to capital or insurance. Unfavorable ESG ratings could lead to increased negative investor sentiment towards us, which could negatively impact our share price as well as our access to and cost of capital. To the extent ESG matters negatively impact our reputation, it may also impede our ability to compete as effectively to attract and retain employees or customers, which may adversely impact our operations.
Aspects of our business are subject to data privacy, data use and data security regulations and other requirements, which could increase our costs, and our actual or perceived failure to comply with such obligations could adversely affect our business, results of operations, and financial condition.
The global data protection landscape is rapidly evolving, and we are or may become subject to numerous state, federal and foreign laws, requirements and regulations governing the collection, use, disclosure, retention, and security of personally identifiable information we collect from our employees, prospects, and our customers. Data privacy and security laws and regulations may limit the use and disclosure of certain personal information and require us to adopt certain cybersecurity and data handling practices that may affect our ability to effectively market our services to current, past, or prospective customers. We must comply with data privacy laws in the United States, Europe and other countries and jurisdictions where we conduct business.
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For example, in Europe the GDPR became effective May 25, 2018 and imposes strict requirements for processing the personal data of individuals within the European Economic Area, or EEA, or in the context of our activities within the EEA. Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant undertaking, whichever is greater. In addition to fines, a breach of the GDPR may result in regulatory investigations, reputational damage, orders to cease/ change our data processing activities, enforcement notices, assessment notices (for a compulsory audit) and/ or civil claims (including class actions). Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the United States, and the efficacy and longevity of current transfer mechanisms between the EEA, and the United States remains uncertain. Case law from the Court of Justice of the European Union states that reliance on the standard contractual clauses, or SCCs, - a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism - alone may not necessarily be sufficient in all circumstances and that transfers must be assessed on a case-by-case basis. On July 10, 2023, the European Commission adopted its Adequacy Decision in relation to the new EU-US Data Privacy Framework, or DPF, rendering the DPF effective as a GDPR transfer mechanism to U.S. entities self-certified under the DPF. We expect the existing legal complexity and uncertainty regarding international personal data transfers to continue. As supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the SCCs cannot be used, and/or start taking enforcement action, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.
We are also subject to the retained version of the GDPR as it forms part of the law of England and Wales, Scotland and Northern Ireland, the UK General Data Protection Data Protection Regulation and Data Protection Act 2018, or collectively, the UK GDPR, which imposes separate but similar obligations to those under the GDPR and comparable penalties, including fines of up to £17.5 million or 4% of a noncompliant undertaking’s global annual revenue for the preceding financial year, whichever is greater. On October 12, 2023, the UK Extension to the DPF came into effect (as approved by the UK Government), as a data transfer mechanism from the UK to U.S. entities self-certified under the DPF.
In the U.S., certain states have also adopted data privacy and security laws and regulations, which govern the privacy, processing and protection of personal information. For example, the California Consumer Privacy Act of 2018, or CCPA, and became effective on January 1, 2020. Similar laws have been passed in other states and are continuing to be proposed at the state and federal level.
These laws create new individual privacy rights and impose increased obligations, including disclosure obligations, on companies handling personal data. In many jurisdictions, consumers must be notified in the event of a data security breach, and such notification requirements continue to increase in scope and cost. Data privacy and security laws and regulations may limit the use and disclosure of certain information and require us to adopt certain cybersecurity and data handling practices that may affect our ability to effectively market our services to current, past, or prospective customers. While we have invested in, and intend to continue to invest in, resources to comply with these standards, we may not be successful in doing so, and any actual or perceived failure to comply could result in additional cost and liability to us, damage our reputation and have an adverse effect on our business, results of operations and reputation.
As data privacy, data use and data security laws are interpreted and applied, compliance costs may increase, particularly in the context of ensuring that adequate data protection and data transfer mechanisms are in place. In recent years, there has been increasing regulatory enforcement and litigation activity in this area in the United States, Germany and in various other countries in which we operate.
Compliance with regulations for medical devices and solutions is expensive and time-consuming, and failure to obtain or maintain approvals, clearances, or compliance could impact financial projections and/or subject us to penalties or liabilities.
Our Desktop Labs and Desktop Health products and services, and healthcare provider customers and distributors, are and will be subject to extensive federal, state, local and foreign regulations, including, without limitation, regulations with respect to approvals and clearances for products, design, manufacturing and testing, labeling, marketing, sales, quality control, and data privacy and security. Unless an exemption applies, we must obtain clearance or approval from the Food and Drug Administration (or comparable foreign regulatory body) before a medical device or solution can be marketed or sold; this process involves significant time, effort and expense. The healthcare market overall is highly regulated and subject to frequent and sudden change. Our failure to secure clearances
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or approvals or comply with regulations could have an adverse impact on our business and reputation and subject us to lost research and development costs, withdrawal of clearance/approval, operating restrictions, liabilities, fines, penalties and/or litigation.
Risks Related to Intellectual Property
Third-party lawsuits and assertions alleging our infringement of patents, trade secrets or other intellectual property rights may have a significant adverse effect on our financial condition.
Third parties may own issued patents and pending patent applications that exist in fields relevant to additive manufacturing. Some of these third parties may assert that we are employing their proprietary technology without authorization. There may be third-party patents or patent applications with claims related to additive manufacturing. Because patent applications can take many years to issue, there may be currently pending patent applications which may later result in issued patents that our additive technologies may infringe. In addition, third parties may obtain patents in the future and claim that our technologies infringe upon these patents. Any third-party lawsuits or other assertion to which we are subject alleging our infringement of patents, trade secrets or other intellectual property rights may have a significant adverse effect on our financial condition.
We may incur substantial costs enforcing and defending our intellectual property rights.
We may incur substantial expense and costs in protecting, enforcing, and defending our intellectual property rights against third parties. Intellectual property disputes may be costly and can be disruptive to our business operations by diverting attention and energies of management and key technical personnel and by increasing our costs of doing business. Third-party intellectual property claims asserted against us could subject us to significant liabilities, require us to enter into royalty and licensing arrangements on unfavorable terms, prevent us from assembling or licensing certain of our products, subject us to injunctions restricting our sale of products, cause severe disruptions to our operations or the marketplaces in which we compete or require us to satisfy indemnification commitments with our customers, including contractual provisions under various license arrangements. In addition, we may incur significant costs in acquiring the necessary third-party intellectual property rights for use in our products. Any of these could have an adverse effect on our business and financial condition.
If we are unable to adequately protect or enforce our intellectual property rights, such information may be used by others to compete against us, in particular in developing consumables that could be used with our printing systems in place of our proprietary consumables.
We have devoted substantial resources to the development of our technology and related intellectual property rights. Our success and future revenue growth will depend, in part, on our ability to protect our intellectual property. We rely on a combination of registered and unregistered intellectual property and protect our rights using patents, licenses, trademarks, trade secrets, confidentiality and assignment of invention agreements and other methods.
Despite our efforts to protect our proprietary rights, it is possible that competitors or other unauthorized third parties may obtain, copy, use or disclose our technologies, inventions, processes or improvements. We cannot provide assurance that any of our existing or future patents or other intellectual property rights will not be challenged, invalidated or circumvented, or will otherwise provide us with meaningful protection. Our pending patent applications may not be granted, and we may not be able to obtain foreign patents or pending applications corresponding to our U.S. patents. Even if foreign patents are granted, effective enforcement in foreign countries may not be available.
Our trade secrets, know-how and other unregistered proprietary rights are a key aspect of our intellectual property portfolio. While we take reasonable steps to protect our trade secrets and confidential information and enter into confidentiality and invention assignment agreements intended to protect such rights, such agreements can be difficult and costly to enforce or may not provide adequate remedies if violated, and we may not have entered into such agreements with all relevant parties. Such agreements may be breached, and trade secrets or confidential information may be willfully or unintentionally disclosed, including by employees who may leave our company and join our competitors, or our competitors or other parties may learn of the information in some other way. The disclosure to, or independent development by, a competitor of any of our trade secrets, know-how or other technology not protected by a patent or other intellectual property system could materially reduce or eliminate any competitive advantage that we may have over such competitor. This concern could manifest itself in particular with respect to our proprietary consumables that are used with our systems. Portions of our proprietary consumables may not be afforded patent protection. Chemical companies or other
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producers of raw materials used in our consumables may be able to develop consumables that are compatible to a large extent with our products, whether independently or in contravention of our trade secret rights and related proprietary and contractual rights. If such consumables are made available to owners of our systems, and are purchased in place of our proprietary consumables, our revenues and profitability would be reduced, and we could be forced to reduce prices for our proprietary consumables.
If our patents and other intellectual property do not adequately protect our technology, our competitors may be able to offer products similar to ours. Our competitors may also be able to develop similar technology independently or design around our patents and other intellectual property. Any of the foregoing events would lead to increased competition and reduce our revenue or gross margin, which would adversely affect our operating results.
If we attempt enforcement of our intellectual property rights, we may be, and have been in the past, subject or party to claims, negotiations or complex, protracted litigation. Intellectual property disputes and litigation, regardless of merit, can be costly and disruptive to our business operations by diverting attention and energies of management and key technical personnel and by increasing our costs of doing business. Any of the foregoing could adversely affect our business and financial condition.
As part of any settlement or other compromise to avoid complex, protracted litigation, we may agree not to pursue future claims against a third party, including related to alleged infringement of our intellectual property rights. Part of any settlement or other compromise with another party may resolve a potentially costly dispute but may also have future repercussions on our ability to defend and protect our intellectual property rights, which in turn could adversely affect our business.
Our additive manufacturing software contains third-party open-source software components, and failure to comply with the terms of the underlying open-source software licenses could restrict our ability to sell our products.
Our additive manufacturing software contains components that are licensed under so-called “open source,” “free” or other similar licenses. Open-source software is made available to the general public on an “as-is” basis under the terms of a non-negotiable license. We currently combine our proprietary software with open-source software, but not in a manner that we believe requires the release of the source code of our proprietary software to the public. We do not plan to integrate our proprietary software with open-source software in ways that would require the release of the source code of our proprietary software to the public; however, our use and distribution of open-source software may entail greater risks than use of third-party commercial software. Open-source licensors generally do not provide warranties or other contractual protections regarding infringement claims or the quality of the code. In addition, if we combine our proprietary software with open-source software in a certain manner, we could, under certain open-source licenses, be required to release to the public or remove the source code of our proprietary software. We may also face claims alleging noncompliance with open-source license terms or infringement or misappropriation of proprietary software. These claims could result in litigation, require us to purchase a costly license or remove the software. In addition, if the license terms for open-source software that we use change, we may be forced to re-engineer our solutions, incur additional costs or discontinue the sale of our offerings if re-engineering could not be accomplished on a timely basis. Although we monitor our use of open-source software to avoid subjecting our offerings to unintended conditions, there is a risk that these licenses could be construed in a way that could impose unanticipated conditions or restrictions on our ability to commercialize our offerings. We cannot guarantee that we have incorporated open-source software in our software in a manner that will not subject us to liability or in a manner that is consistent with our current policies and procedures.
General Risk Factors
If we cannot meet the continued listing requirements of the NYSE, the NYSE may delist our common stock, which would have an adverse impact on the trading, liquidity and market price of our common stock.
On November 22, 2023, we were notified by the NYSE that we were not in compliance with Section 802.01C of the NYSE Listed Company Manual because the average closing price of our Class A common stock was less than $1.00 over a consecutive 30 trading-day period. Pursuant to NYSE rules, our Class A common stock continues to be listed and traded on NYSE during the cure period, subject to our compliance with other continued listing requirements. We notified the NYSE of our intent to cure the deficiency and return to compliance with the NYSE continued listing requirements.
On June 10, 2024 after obtaining stockholder approval, we effected a 1-for-10 reverse stock split (the “Reverse Stock Split”), and the Company’s Class A common stock began trading on the post-split adjusted basis on June 11, 2024. On July 24, 2024, we were
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notified by the NYSE that the closing bid price of our Class A common stock had been greater than $1.00 per share for 30 consecutive business days, from June 11, 2024 to July 24, 2024 . Accordingly, we have regained compliance with the requirements of Section 802.01C and this matter is now closed. If the average closing price our Class A common stock again is below $1.00 over a consecutive 30 trading-day period, we would again receive another notice of non-compliance with NYSE’s listing standards and face the risk of delisting.
No assurance can be given that we will be able to continue to comply with the NYSE minimum price requirement or maintain compliance with the other continued listing requirements of the NYSE. If we are unable to stay in compliance with the NYSE’s continued listing requirements and our Class A common stock is suspended from trading and delisted, it could have adverse consequences including, among others, reducing the number of investors willing to hold or acquire our Class A common stock, reducing the liquidity and market price of our Class A common stock, adverse publicity and a reduced interest in us from investors, analysts and other market participants. A delisting could impair our ability to raise additional capital through the public markets and our ability to attract and retain employees by means of equity compensation. In addition, the delisting of our Class A common stock from the NYSE would constitute a “fundamental change” under the terms of the indenture governing our 6.0% Convertible Senior Notes due 2027 (the “2027 Notes”), whereupon holders of the 2027 Notes may require us to repurchase for cash all or part of their Convertible Notes at a purchase price equal to the principal amount of the 2027 Notes to be repurchased plus accrued and unpaid interest to, but excluding, the repurchase date.
Our Class A common stock price may be volatile or may decline regardless of our operating performance. You may lose some or all of your investment.
The trading price of our Class A common stock is likely to be volatile. The stock market recently has experienced extreme volatility. This volatility often has been unrelated or disproportionate to the operating performance of particular companies. You may not be able to resell your shares at an attractive price due to several of factors such as those listed in this section and the following:
• | the impact of the COVID-19 pandemic on our financial condition and the results of operations; |
• | our operating and financial performance and prospects; |
• | our quarterly or annual earnings or those of other companies in our industry compared to market expectations; |
• | conditions that impact demand for our products; |
• | future announcements concerning our business, our customers’ businesses, or our competitors’ businesses; |
• | the public’s reaction to our press releases, other public announcements, and filings with the SEC; |
• | the size of our public float; |
• | coverage by or changes in financial estimates by securities analysts or failure to meet their expectations; |
• | market and industry perception of our success, or lack thereof, in pursuing our growth strategy; |
• | strategic actions by us or our competitors, such as acquisitions or restructurings; |
• | changes in laws or regulations which adversely affect our industry or us; |
• | changes in accounting standards, policies, guidance, interpretations or principles; |
• | changes in senior management or key personnel; |
• | issuances, exchanges or sales, or expected issuances, exchanges, or sales of our capital stock; |
• | changes in our dividend policy; |
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• | adverse resolution of new or pending litigation against us; and |
• | changes in general market, economic and political conditions in the United States and global economies or financial markets, including those resulting from natural disasters, terrorist attacks, acts of war and responses to such events. |
These broad market and industry factors may materially reduce the market price of our Class A common stock, regardless of our operating performance. In addition, price volatility may be greater if the public float and trading volume of our Class A common stock is low. As a result, you may suffer a loss on your investment.
In the past, following periods of market volatility, stockholders have instituted securities class action litigation. If we were involved in securities litigation, has the potential to create a substantial costs and divert resources and the attention of executive management regardless of the outcome of such litigation.
If securities analysts do not publish research or reports about us, or if they issue unfavorable commentary about us or our industry or downgrade our Class A common stock, the price of our Class A common stock could decline.
The trading market for our Class A common stock depends, in part, on the research and reports that third-party securities analysts publish about us and the industries in which we operate. We may be unable or slow to attract research coverage and if one or more analysts cease coverage of us, the price and trading volume of our securities would likely be negatively impacted. If any of the analysts that may cover us change their recommendation regarding our Class A common stock adversely, or provide more favorable relative recommendations about our competitors, the price of our Class A common stock would likely decline. If any analyst that may cover us ceases covering us or fails to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price or trading volume of our Class A common stock to decline. Moreover, if one or more of the analysts who cover us downgrades our Class A common stock, or if our reporting results do not meet their expectations, the market price of our Class A common stock could decline.
The obligations associated with being a public company involve significant expenses and require significant resources and management attention, which may divert from our business operations.
We are subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act. The Exchange Act requires that we file annual, quarterly, and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective internal control over financial reporting. Now that we have ceased to be an “emerging growth company” an attestation report on internal control over financial reporting is required to be issued by our independent registered public accounting firm. As a result, we have incurred, and will continue to incur, increased legal, accounting, and other expenses. Our entire management team and many of our other employees will continue to devote substantial time to compliance and may not effectively or efficiently manage our transition into a public company.
In addition, the need to establish the corporate infrastructure demanded of a public company may also divert management’s attention from implementing our business strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make, changes to our internal control over financial reporting, including IT controls, and procedures for financial reporting and accounting systems to meet our reporting obligations as a public company. However, the measures we take may not be sufficient to satisfy our obligations as a public company. If we do not continue to develop and implement the right processes and tools to manage our changing enterprise and maintain our culture, our ability to compete successfully and achieve our business objectives could be impaired, which could negatively impact our business, financial condition, and results of operations. In addition, we cannot predict or estimate the amount of additional costs we may incur to comply with these requirements.
These rules and regulations result in our incurring legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified people to serve on our board of directors, our board committees, or as executive officers.
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As a public reporting company, we will be subject to rules and regulations established from time to time by the SEC regarding our internal control over financial reporting. If we fail to establish and maintain effective internal control over financial reporting and disclosure controls and procedures, we may not be able to accurately report our financial results or report them in a timely manner.
We are subject to the rules and regulations established from time to time by the SEC and the NYSE. These rules and regulations require, among other things that we establish and periodically evaluate procedures with respect to our internal control over financial reporting. Reporting obligations as a public company are likely to place a considerable strain on our financial and management systems, processes, and controls, as well as on our personnel.
In addition, as a public company, we are required to document and test our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act so that our management can certify as to the effectiveness of our internal control over financial reporting.
We have identified material weaknesses in our internal controls over financial reporting as of December 31, 2023. Our internal controls over financial reporting currently do not meet all of the standards contemplated by Section 404 of Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, and failure to achieve and maintain effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could impair our ability to produce timely and accurate financial statements or comply with applicable regulations and have a material adverse effect on our business.
We are required to maintain internal control over financial reporting and to report any material weaknesses in these controls. The process of designing and implementing effective internal controls is a continuous effort that will require us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company. If we are unable to establish or maintain appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations on a timely basis or result in material misstatements in our condensed consolidated financial statements, which could harm our operating results. In addition, we will be required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. The rules governing the standards that must be met for our management to assess our internal control over financial reporting are complex and require significant documentation, testing, and possible remediation. Testing and maintaining internal controls may divert management’s attention from other matters that are important to our business. Our independent registered public accounting firm will be required to attest to the effectiveness of our internal control over financial reporting on an annual basis.
In addition to our results determined in accordance with GAAP, we believe certain non-GAAP measures may be useful in evaluating our operating performance. We present certain non-GAAP financial measures in this Quarterly Report on Form 10-Q and intend to continue to present certain non-GAAP financial measures in future filings with the SEC and other public statements. Any failure to accurately report and present our non-GAAP financial measures could cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of our Class A common stock.
Matters impacting our internal controls may cause us to be unable to report our financial information on a timely basis and thereby subject us to adverse regulatory consequences, including sanctions by the SEC or violations of applicable NYSE listing rules, which may result in a breach of the covenants under existing or future financing arrangements. There also could be a negative reaction in the financial markets due to a loss of investor confidence in us and the reliability of our financial statements. Confidence in the reliability of our financial statements also could suffer if we or our independent registered public accounting firm continue to report a material weakness in our internal controls over financial reporting. This could materially adversely affect us and lead to a decline in the market price of our Class A common stock.
As of December 31, 2023, our management and auditors determined that material weaknesses existed in our internal control over financial reporting due to the fact that we had not fully integrated our acquired subsidiaries into our control structure, and with our limited accounting department personnel, this may not be achievable. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim condensed consolidated financial statements will not be prevented or detected on a timely basis. While we have instituted plans to remediate the issue described above and continue to take remediation steps, including hiring additional personnel,
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including a vice president of accounting with public company experience, we continued to have a limited number of personnel with the level of GAAP accounting knowledge, specifically related to complex accounting transactions, commensurate with our financial reporting requirements.
Although we believe the hiring of additional accounting resources, implementation of additional reviews and processes requiring timely account reconciliations and analysis and implementation of processes and controls to better identify and manage segregation of duties will remediate the material weakness with respect to insufficient personnel, there can be no assurance that the material weakness will be remediated on a timely basis or at all, or that additional material weaknesses will not be identified in the future. If we are unable to remediate the material weakness, our ability to record, process, and report financial information accurately, and to prepare financial statements within the time periods specified by the rules and forms of the SEC, could be adversely affected which, in turn, may adversely affect our reputation and business and the market price of our Class A common stock.
We are, and have been in the recent past, subject to litigation.
We are currently, and have been in the recent past, subject to litigation, and we could be subject to further litigation in the future. Although we vigorously pursue favorable outcomes, we can provide no assurance as to the outcome of any current or future lawsuits or allegations, and any such actions may result in judgments against us for significant damages. Resolution of any such matters can be prolonged and costly, and the ultimate results or judgments are uncertain due to the inherent uncertainty in litigation and other proceedings. In addition, the additive manufacturing industry has been, and may continue to be, litigious, particularly with respect to intellectual property claims. Moreover, our potential liabilities are subject to change over time due to new developments, changes in settlement strategy or the impact of evidentiary requirements. Regardless of the outcome, litigation has resulted in the past, and may result in the future, in significant legal expenses and require significant attention and resources of management. As a result, any present or future litigation that may be brought against us by any third party could result in losses, damages and expenses that have a significant adverse effect on our financial condition.
We do not intend to pay dividends on our Class A common stock for the foreseeable future.
We currently intend to retain all available funds and any future earnings to fund the development and growth of our business. As a result, we do not anticipate declaring or paying any cash dividends on our Class A common stock in the foreseeable future. Any decision to declare and pay dividends in the future will be made at the discretion of our board of directors and will depend on, among other things, our business prospects, results of operations, financial condition, cash requirements and availability, certain restrictions related to our indebtedness, industry trends and other factors that our board of directors may deem relevant. Any such decision will also be subject to compliance with contractual restrictions and covenants in the agreements governing our current and future indebtedness. In addition, we may incur additional indebtedness, the terms of which may further restrict or prevent us from paying dividends on our Class A common stock. As a result, you may have to sell some or all of your Class A common stock after price appreciation in order to generate cash flow from your investment, which you may not be able to do. Our inability or decision not to pay dividends, particularly when others in our industry have elected to do so, could also adversely affect the market price of our Class A common stock.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds, and Issuer Purchases of Equity Securities
Recent Sales of Unregistered Securities
All issuances of unregistered securities by us during the three months ended September 30, 2024, have been included previously in a Current Report on Form 8-K.
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发行人 股票的购买
以下表格列出了截至2024年9月30日为止的我们普通股的购买情况:
Period | 购买的股票总数 (1) | 每股平均购买价格 | 作为公开宣布计划的一部分购买的股票总数 | 可能在该计划下购买的股票的美元近似价值 | ||||||||
2024年7月1日至2024年7月30日 | 570 | $ | 8.52 | — | — | |||||||
2024年8月1日至2024年8月31日 | 5,467 | $ | 6.51 | — | — | |||||||
2024年9月1日至2024年9月30日 | 62 | $ | 5.81 | — | — | |||||||
总计 | 6,099 | — |
(1) 所有板块的股份均以满足最低税务预扣义务的方式从员工那里扣押,这些义务与发行A类普通股有关。
项目3. 面对高级证券的违约情况
无。
第4项矿业安全披露。
不适用。
第5项其他信息。
(a) | 正如公司在2023年12月31日结束的年度10-k表格的第90亿项中先前报告的那样,o2024年3月14日,在对公司业务计划进行全面审查后,董事会批准了一项额外的成本削减计划,包括审查公司光聚合物业务的战略替代方案,以及审查其他潜在的节约成本措施(“光聚合物计划”)。 公司探讨了光聚合物业务的替代方案,可能包括剥离、减少投资或逐步停止业务。 作为光聚合物计划的一部分,公司假设了某些资产的缩短可用寿命,包括光聚合物业务相关的固定资产、无形资产和使用权资产,并在2024年9月30日结束的三个月和九个月内的重组费用中,分别记录了0元和8030万美元的递增折旧和摊销费用。 在2024年9月30日结束的三个月和九个月中,公司分别记录了40万美元和130万美元的重组费用,用于与光聚合物计划相关的员工裁员和设施整合。 |
对于光聚合物计划下承诺的所有重组活动,公司现在预计将承担总计在税前的8200万至8250万美元的重组费用,其中包括以下费用:
● | 递增的折旧和摊销费,发生在2024年9月30日结束的九个月期间; |
● | 一次性终止福利及相关费用约150万至170万元,包括在2024年9月30日结束的九个月期间发生的130万元;以及 |
● | 租赁终止和设备退出费用约30万至50万美元。 |
预计总估计费用预计将导致未来现金支出在50万美元至90万美元之间。公司不再预计因与光聚合物计划相关的长期资产而产生非现金减值费用。上述费用范围仅为估计,实际金额可能与这些估计有实质不同。
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附件指数
参照而成 | ||||||||
展览 |
|
| 表格 |
| 展览 |
| 归档日期 | |
2.1 | 8-K | 2.1 | 7/3/2024 | |||||
10.1 | 8-K | 10.2 | 7/3/2024 | |||||
31.1 | * | |||||||
31.2 | * | |||||||
32.1 | * | |||||||
101.INS | 内联XBRL实例文档 | * | ||||||
101.SCH | 行内XBRL分类扩展模式文档 | * | ||||||
101.CAL | 内联XBRL分类计算链接基础文档 | * | ||||||
101.DEF | Inline XBRL分类定义链接库文件 | * | ||||||
101.LAB | 行内XBRL分类扩展标签链接库文档 | * | ||||||
101.PRE | 行内XBRL分类扩展演示链接库文档 | * | ||||||
104 | 封面互动数据文件(格式为内联XBRL,包含在展示文件101中) | * |
* | 与本季度报告表10-Q一起提交。 |
** | 根据S-k规则第601(b)(2)项,本协议及合并计划的某些附件和附表已被省略。公司特此承诺应请求向证券交易委员会提供此类文件的副本;但公司保留对任何此类文件部分内容请求保密处理的权利。 |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
DESKTOP METAL, INC. | |||
Date: October 31, 2024 | By: | /s/ Ric Fulop | |
Ric Fulop | |||
Chief Executive Officer | |||
(Principal Executive Officer) | |||
Date: October 31, 2024 | By: | /s/ Jason Cole | |
Jason Cole | |||
Chief Financial Officer | |||
(Principal Financial Officer and Principal Accounting Officer) |
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