Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2020 | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | Desktop Metal, Inc. |
Entity Central Index Key | 0001754820 |
Document Type | S-1/A |
Entity Filer Category | Non-accelerated Filer |
Amendment Flag | false |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 66,161 | $ 29,043 |
Short-term investments | 84,754 | 64,229 |
Accounts receivable, net of allowance for doubtful accounts $0.5 million and $0.2 million | 4,523 | 3,058 |
Inventory | 8,405 | 3,982 |
Deferred cost of goods sold | 262 | 2,991 |
Prepaid expenses and other current assets | 1,626 | 2,435 |
Total current assets | 165,731 | 105,738 |
Restricted cash | 612 | 612 |
Property and equipment, net | 18,387 | 18,997 |
Non-current investments | 450 | |
Capitalized software, net | 446 | 788 |
Right-of-use assets | 2,289 | 2,353 |
Goodwill | 2,252 | |
Acquired technology, net | 2,994 | |
Total Assets | 192,711 | 128,938 |
Current liabilities: | ||
Accounts payable | 10,228 | 14,573 |
Customer deposits | 2,325 | 2,173 |
Current portion of operating lease liability | 806 | 626 |
Accrued expenses and other current liabilities | 5,053 | 1,806 |
Deferred revenue | 2,230 | 3,922 |
Total current liabilities | 20,642 | 23,100 |
Long-term debt, net of deferred financing costs | 9,972 | 9,953 |
Lease liability, net of current portion | 3,026 | 3,565 |
Total liabilities | 33,640 | 36,618 |
Commitments and Contingences | ||
Convertible Preferred Stock | 436,533 | 276,889 |
Stockholders' Equity: | ||
Common Stock, $0.0001 par value-authorized, 156,000,000 shares; issued and outstanding, 31,388,426 and 29,083,805 shares at December 31, 2019 and 2018, respectively (includes unvested 4,575,313 and 9,731,550 shares of restricted stock) | 3 | 2 |
Additional paid-in capital | 16,722 | 6,440 |
Notes receivable | (249) | |
Accumulated deficit | (294,262) | (190,666) |
Accumulated other comprehensive income | 75 | (96) |
Total Stockholders' Equity | (277,462) | (184,569) |
Total Liabilities, Convertible Preferred Stock and Stockholders' Equity | $ 192,711 | $ 128,938 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Allowance for doubtful accounts | $ 0.5 | $ 0.2 | $ 0 |
Common stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 156,000,000 | 156,000,000 | 156,000,000 |
Common Stock, shares, issued | 31,797,295 | 31,388,426 | 29,083,805 |
Common Stock, shares, outstanding | 31,797,295 | 31,388,426 | 29,083,805 |
Unvested shares | 459,000 | ||
Restricted stock | |||
Unvested shares | 274,467 | 4,575,313 | 9,731,550 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | 24 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | |
Revenues | |||||
Total revenues | $ 8,101 | $ 20,876 | $ 26,439 | $ 1,034 | |
Cost of sales | |||||
Total cost of sales | 21,510 | 38,518 | 50,796 | 5,468 | |
Gross margin | (13,409) | (17,642) | (24,357) | (4,434) | |
Operating expenses: | |||||
Research and development | 31,362 | 40,623 | 54,656 | 59,607 | |
Sales and marketing | 9,994 | 13,927 | 18,749 | 14,674 | |
General and administrative | 11,004 | 8,290 | 11,283 | 44,898 | |
Total operating expenses | 52,360 | 62,840 | 84,688 | 119,179 | |
Loss from operations | (65,769) | (80,482) | (109,045) | (123,613) | |
Interest expense | (253) | (389) | (503) | (261) | |
Interest and other income, net | 995 | 5,102 | 5,952 | 2,535 | |
Loss before income taxes | (65,027) | (75,769) | (103,596) | (121,339) | |
Provision for income taxes | $ 0 | ||||
Net loss | $ (65,027) | $ (75,769) | $ (103,596) | $ (121,339) | |
Net loss per share-basic and diluted | $ (2.21) | $ (3.38) | $ (4.43) | $ (7.36) | |
Product | |||||
Revenues | |||||
Total revenues | $ 6,113 | $ 18,655 | $ 22,758 | $ 751 | |
Cost of sales | |||||
Total cost of sales | 18,145 | 35,218 | 45,268 | 4,572 | |
Service | |||||
Revenues | |||||
Total revenues | 1,988 | 2,221 | 3,681 | 283 | |
Cost of sales | |||||
Total cost of sales | $ 3,365 | $ 3,300 | $ 5,528 | $ 896 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||
Net loss | $ (65,027) | $ (75,769) | $ (103,596) | $ (121,339) |
Other comprehensive income, net of taxes: | ||||
Unrealized (loss) gain on available-for-sale marketable securities, net | (70) | 227 | 171 | 114 |
Total comprehensive loss, net of taxes of $0 | $ (65,097) | $ (75,542) | $ (103,425) | $ (121,225) |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parentheticals) - USD ($) $ in Thousands | 9 Months Ended | 24 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | |||
Tax on Comprehensive income (loss) | $ 0 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CONV
CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Convertible Preferred Stock | Series E Preferred Stock | Series E1 Preferred Stock | Common Stock | Additional Paid-In Capital | Notes Receivable | Accumulated Deficit | Accumulated Other Comprehensive (Loss) Income | Total |
BALANCE at Dec. 31, 2017 | $ 241,789 | ||||||||
BALANCE (in shares) at Dec. 31, 2017 | 79,994,884 | ||||||||
Temporary Equity, Carrying Amount, Including Portion Attributable to Noncontrolling Interests [Abstract] | |||||||||
Issuance of Preferred Stock | $ 35,100 | ||||||||
Issuance of Preferred Stock (in shares) | 4,097,785 | ||||||||
BALANCE at Dec. 31, 2018 | $ 276,889 | ||||||||
BALANCE (in shares) at Dec. 31, 2018 | 84,092,669 | 0 | 0 | ||||||
BALANCE at Dec. 31, 2017 | $ 2 | $ 2,810 | $ (69,327) | $ (210) | $ (66,725) | ||||
BALANCE (in shares) at Dec. 31, 2017 | 12,971,191 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Exercise of common stock options | 373 | 373 | |||||||
Exercise of common stock options (in shares) | 526,898 | ||||||||
Vesting of restricted Common Stock | 8 | 8 | |||||||
Vesting of restricted Common Stock (in shares) | 5,575,000 | ||||||||
Stock-based compensation expense | 2,965 | 2,965 | |||||||
Common Stock warrants issued | 35 | 35 | |||||||
Issuance of notes receivable to stockholder | 249 | $ (249) | |||||||
Issuance of notes receivable to stockholder (in shares) | 279,166 | ||||||||
Net loss | (121,339) | (121,339) | |||||||
Other comprehensive income (loss) | 114 | 114 | |||||||
BALANCE at Dec. 31, 2018 | $ 2 | 6,440 | (249) | (190,666) | (96) | (184,569) | |||
BALANCE (in shares) at Dec. 31, 2018 | 19,352,255 | ||||||||
Temporary Equity, Carrying Amount, Including Portion Attributable to Noncontrolling Interests [Abstract] | |||||||||
Issuance of Preferred Stock | $ 134,667 | $ 24,977 | |||||||
Issuance of Preferred Stock (in shares) | 13,450,703 | 2,494,737 | |||||||
BALANCE at Sep. 30, 2019 | $ 436,533 | ||||||||
BALANCE (in shares) at Sep. 30, 2019 | 100,038,109 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Exercise of common stock options | 606 | 606 | |||||||
Exercise of common stock options (in shares) | 902,175 | ||||||||
Vesting of restricted Common Stock | 6 | 6 | |||||||
Vesting of restricted Common Stock (in shares) | 4,221,144 | ||||||||
Stock-based compensation expense | 3,430 | 3,430 | |||||||
Common Stock warrants issued | 905 | 905 | |||||||
Issuance of Common Stock for acquisitions | 3,563 | 3,563 | |||||||
Issuance of Common Stock for acquisitions (in shares) | 873,203 | ||||||||
Repayment of notes receivable | (249) | 249 | |||||||
Repayment of notes receivable (in shares) | (62,610) | ||||||||
Net loss | (75,769) | (75,769) | |||||||
Other comprehensive income (loss) | 227 | 227 | |||||||
BALANCE at Sep. 30, 2019 | $ 2 | 14,701 | (266,435) | 131 | $ (251,601) | ||||
BALANCE (in shares) at Sep. 30, 2019 | 25,286,167 | ||||||||
BALANCE at Dec. 31, 2018 | $ 276,889 | ||||||||
BALANCE (in shares) at Dec. 31, 2018 | 84,092,669 | 0 | 0 | ||||||
Temporary Equity, Carrying Amount, Including Portion Attributable to Noncontrolling Interests [Abstract] | |||||||||
Issuance of Preferred Stock | $ 134,667 | $ 24,977 | |||||||
Issuance of Preferred Stock (in shares) | 13,450,703 | 2,494,737 | |||||||
BALANCE at Dec. 31, 2019 | $ 436,533 | ||||||||
BALANCE (in shares) at Dec. 31, 2019 | 100,038,109 | 13,450,703 | 2,494,737 | 100,038,109 | |||||
BALANCE at Dec. 31, 2018 | $ 2 | 6,440 | (249) | (190,666) | (96) | $ (184,569) | |||
BALANCE (in shares) at Dec. 31, 2018 | 19,352,255 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Exercise of common stock options | 708 | 708 | |||||||
Exercise of common stock options (in shares) | 996,753 | ||||||||
Vesting of restricted Common Stock | $ 1 | 7 | 8 | ||||||
Vesting of restricted Common Stock (in shares) | 5,653,512 | ||||||||
Stock-based compensation expense | 5,215 | 5,215 | |||||||
Common Stock warrants issued | 1,038 | 1,038 | |||||||
Issuance of Common Stock for acquisitions | 3,563 | 3,563 | |||||||
Issuance of Common Stock for acquisitions (in shares) | 873,203 | ||||||||
Repayment of notes receivable | (249) | $ 249 | |||||||
Repayment of notes receivable (in shares) | (62,610) | ||||||||
Net loss | (103,596) | (103,596) | |||||||
Other comprehensive income (loss) | 171 | 171 | |||||||
BALANCE at Dec. 31, 2019 | $ 3 | 16,722 | (294,262) | 75 | $ (277,462) | ||||
BALANCE (in shares) at Dec. 31, 2019 | 26,813,113 | ||||||||
BALANCE at Sep. 30, 2020 | $ 436,533 | ||||||||
BALANCE (in shares) at Sep. 30, 2020 | 13,450,703 | 2,494,737 | 100,038,109 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Exercise of common stock options | 255 | $ 255 | |||||||
Exercise of common stock options (in shares) | 408,869 | ||||||||
Vesting of restricted Common Stock | 6 | 6 | |||||||
Vesting of restricted Common Stock (in shares) | 4,300,846 | ||||||||
Stock-based compensation expense | 4,228 | 4,228 | |||||||
Common Stock warrants issued | 43 | 43 | |||||||
Net loss | (65,027) | (65,027) | |||||||
Other comprehensive income (loss) | (70) | (70) | |||||||
BALANCE at Sep. 30, 2020 | $ 3 | $ 21,254 | $ (359,289) | $ 5 | $ (338,027) | ||||
BALANCE (in shares) at Sep. 30, 2020 | 31,522,828 |
CONSOLIDATED STATEMENTS OF CO_3
CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - (Parenthetical) - USD ($) $ in Thousands | Jan. 14, 2019 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Convertible Preferred Stock | ||||
Stock issuance cost | $ 169 | |||
Series E Preferred Stock | ||||
Stock issuance cost | $ 100 | $ 124 | $ 124 | |
Series E1 Preferred Stock | ||||
Stock issuance cost | $ 20 | $ 22 | $ 22 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (103,596) | $ (121,339) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 8,087 | 4,204 |
Stock-based compensation | 5,215 | 2,965 |
Expense related to Common Stock warrants issued | 1,038 | 35 |
Loss (gain) on disposal of property and equipment | (7) | 63 |
Gain on investment, related to Make Composites, Inc. | (1,426) | |
Impairment of capitalized software | 444 | |
Accretion of discount on investments | (1,570) | (540) |
Amortization of debt financing cost | 19 | |
Net decrease (increase) in accrued interest related to marketable securities | (36) | 135 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,465) | (3,058) |
Inventory and deferred cost of goods sold | (1,694) | (6,973) |
Prepaid expenses and other current assets | 809 | 651 |
Accounts payable | (4,455) | 9,066 |
Accrued expenses and other current liabilities | 3,272 | (501) |
Customer deposits | 152 | 609 |
Deferred revenue | (1,693) | 3,922 |
Change in right of use assets and lease liabilities, net | (296) | (241) |
Net cash used in operating activities | (97,202) | (111,002) |
Cash Flows from Investing Activities: | ||
Purchases of property and equipment | (6,867) | (13,970) |
Proceeds from sale of property and equipment | 14 | |
Capitalized software, net | (321) | (806) |
Purchase of marketable securities | (215,584) | (96,828) |
Proceeds from sales and maturities of marketable securities | 196,836 | 151,047 |
Cash paid for acquisition, net of cash acquired | (96) | |
Other investments | (450) | |
Net cash provided by (used in) investing activities | (26,032) | 39,007 |
Cash Flows from Financing Activities | ||
Proceeds from Preferred Stock issuances, net of issuance cost | 159,644 | 35,100 |
Proceeds from exercise of stock options | 708 | 373 |
Proceeds from term loan | 9,953 | |
Net cash (used in) provided by financing activities | 160,352 | 45,426 |
Net (decrease) increase in cash, cash equivalents, and restricted cash | 37,118 | (26,569) |
Cash and cash equivalents at beginning of year | 29,043 | 55,612 |
Restricted cash | 612 | 612 |
Cash, cash equivalents, and restricted cash at end of period | 66,773 | 29,655 |
Supplemental cash flow information: | ||
Interest paid | 485 | 251 |
Noncash investing and financing activities: | ||
Common Stock issued for acquisitions | 3,563 | |
Additions to right of use assets and lease liabilities | 296 | |
Purchase of property and equipment included in accrued expenses and other current liabilities | 109 | $ 307 |
Common Stock forfeited in satisfaction of note receivable | $ 249 |
ORGANIZATION, NATURE OF BUSINES
ORGANIZATION, NATURE OF BUSINESS, AND RISK AND UNCERTAINTIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
ORGANIZATION, NATURE OF BUSINESS, AND RISK AND UNCERTAINTIES | ||
ORGANIZATION, NATURE OF BUSINESS, AND RISK AND UNCERTAINTIES | 1. Organization, Nature of Business, and Risk and Uncertainties Organization and Nature of Business References to “Desktop Metal” and the “Company” in the financial results of the nine months ended September 30, 2020 refer to Desktop Metal, Inc., a Delaware corporation, together with its subsidiaries, prior to the closing of the transactions contemplated by the Agreement and Plan of Merger, dated September 26, 2020, by and among Trine Acquisition Corp., a Delaware corporation, Sparrow Merger Sub, Inc., a wholly-owned subsidiary of Trine, and the Company (as amended, the “Merger Agreement”). The transactions contemplated by the Merger Agreement closed on December 9, 2020, at which time the Company was renamed Desktop Metal Operating, Inc. and became a wholly-owned subsidiary of Trine Acquisition Corp. These financial results for the nine months ended September 30, 2020 reflect only the financial results of the Company prior to the closing of the transactions contemplated by the Merger Agreement. Desktop Metal, Inc. and subsidiaries (“the “Company”, “Desktop Metal”) is a Delaware corporation headquartered in Burlington, Massachusetts. The Company was founded in 2015 and is accelerating the transformation of manufacturing with 3D printing solutions for engineers, designers, and manufacturers. The Company designs, produces and markets 3D printing products to a variety of end customers. Risks and Uncertainties The Company is subject to a number of risks similar to those of other companies of similar size in its industry, including, but not limited to, the need for successful development of products, the need for additional funding, competition from substitute products and services from larger companies, protection of proprietary technology, patent litigation, dependence on key individuals, and risks associated with changes in information technology. The Company has financed its operations to date primarily with proceeds from the sale of preferred stock. The Company’s long‑term success is dependent upon its ability to successfully market its products and services; generate revenue; maintain or reduce its operating costs and expenses; meet its obligations; obtain additional capital when needed; and, ultimately, achieve profitable operations. Management believes that existing cash and investments as of September 30, 2020, when coupled with the cash raised through the merger, will be sufficient to fund operating and capital expenditure requirements through at least twelve months from the date of issuance of these condensed consolidated financial statements. | 1. ORGANIZATION, NATURE OF BUSINESS, AND RISK AND UNCERTAINTIES Organization and Nature of Business Desktop Metal, Inc. and subsidiaries (the “Company” “Desktop Metal”) is a Delaware corporation headquartered in Burlington, Massachusetts. The Company was founded in 2015 and is accelerating the transformation of manufacturing with 3D printing solutions for engineers, designers, and manufacturers. The Company designs, produces and markets 3D printing systems to a variety of end customers. Risks and Uncertainties The Company is subject to a number of risks similar to those of other companies of similar size in its industry, including, but not limited to, the need for successful development of products, the need for additional funding, competition from substitute products and services from larger companies, protection of proprietary technology, patent litigation, dependence on key individuals, and risks associated with changes in information technology. The Company has financed its operations to date primarily with proceeds from the sale of Convertible Preferred Stock. The Company’s long‑term success is dependent upon its ability to successfully market its products and services; generate revenue; maintain or reduce its operating costs and expenses; meet its obligations; obtain additional capital when needed; and, ultimately, achieve profitable operations. Management believes that existing cash and investments as of September 2020 will be sufficient to fund operating and capital expenditure requirements through at least twelve months from the date of issuance of these consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. Basis of Presentation and Summary of Significant Accounting Policies Unaudited Interim Financial Statements The unaudited condensed consolidated financial statements include the accounts of Desktop Metal, Inc. and wholly‑owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in condensed consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The information as of December 31, 2019 included in the unaudited condensed consolidated balance sheets was derived from the Company’s audited consolidated financial statements. The unaudited condensed consolidated financial statements included in this Current Report on Form 8-K were prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments (all of which are considered of a normal recurring nature) considered necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods and dates presented. The results of operations for the nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements and related notes included elsewhere in this Current Report on Form 8-K. Basis of Presentation The unaudited condensed consolidated financial statements of the Company are presented for Desktop Metal, Inc. (“Parent”) and its wholly‑owned subsidiaries. The Company has prepared the accompanying unaudited condensed consolidated financial statements pursuant to GAAP. Preparing financial statements requires the Company to make estimates and assumptions that affect the amounts that are reported in the condensed consolidated financial statements and accompanying disclosures. Although these estimates are based on the Company’s best knowledge of current events and actions that the Company may undertake in the future, actual results may be different from the Company’s estimates. The results of operations presented herein are not necessarily indicative of the Company’s results for any future period. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make judgements, estimates and assumptions regarding uncertainties that affect the reported amounts of assets, liabilities and related disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Although the Company regularly assesses these estimates, actual results could differ materially from these estimates. Changes in estimates are recorded in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances available at the time estimates are made, including the Company’s expectation at the time regarding the duration, scope and severity of the ongoing COVID‑19 pandemic and the potential continued disruption of global economic conditions due to the pandemic. Actual results may differ from management’s estimates if these results differ from historical experience or other assumptions prove not to be substantially accurate, even if such assumptions are reasonable when made. Cash and Cash Equivalents Cash equivalents include all highly liquid investments maturing within 90 days or less from the date of purchase. Cash equivalents consist of money market funds, totaling $33.9 million and $40.5 million as of September 30, 2020 and December 31, 2019, respectively, as well as other highly liquid cash equivalents totaling $0.0 million and $25.0 million as of September 30, 2020 and December 31, 2019, respectively. Short‑Term Investments All of the Company’s investments, which consist of debt securities, are classified as available for sale and are carried at fair value. Unrealized gains and losses considered to be temporary in nature are recorded as a component of accumulated other comprehensive loss, net of related income taxes. The Company reviews all investments for reductions in fair value that are other than temporary. When such reductions occur, the cost of the investment is adjusted to fair value through recording a loss on investments in the condensed consolidated statements of operations. Gains and losses on investments are calculated on the basis of specific identification. Revenue Product Revenue and Service Revenue Product revenue include sales of the Company’s 3-D metal systems, which consist of modular printers furnaces, and debinders as well as sales of accessories and consumables. These consumables are primarily comprised of materials used by the printers during the printing process to produce parts and other wear items or components in the products that must be replaced after certain amounts of use. Certain on‑premises software that is embedded with the hardware and sold with the product bundle and is included within product revenue. Revenue from products is recognized upon transfer of control, which is generally at the point of shipment. The Company typically recognizes revenue on embedded software once the customer has been given access to the software. Services revenue includes revenue from various cloud‑based software solutions the Company offers to facilitate the design of parts and operation of the Company’s products. The Company offers multiple software products, which are licensed through either a cloud‑based solution and/or an on‑premises software subscription, depending on the product. For the cloud‑based solution, the Company typically provides an annual subscription that the customer does not have the right to take possession of and is renewed at expiration. The revenue from the cloud‑based solution is recognized ratably over the annual term as the Company considers the services provided under the cloud‑based solution to be a series of distinct performance obligations, as the Company provides continuous daily access to the cloud solution. For on‑premises software subscriptions, the Company typically recognizes revenue once the customer has been given access to the software. Service revenue also consists of installation, training, and post-installation customer support. When the Company enters into development contracts, control of the development service is transferred over time, and the related revenue is recognized over time. Revenue Recognition The Company adopted Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers , on January 1, 2018, using the full retrospective method. Revenue is measured as the amount of consideration expected to be received in exchange for transferring goods or providing services. The amount of consideration is typically a fixed price at the contract inception. Consideration from shipping and handling is recorded on a gross basis within product revenue. The Company determines revenue recognition through the following steps: · Identification of the contract, or contracts, with a customer · Identification of the performance obligations in the contract · Determination of the transaction price · Allocation of the transaction price to the performance obligations in the contract · Recognition of revenue when, or as, the Company satisfies a performance obligation Nature of Products and Services The Company sells its products primarily through authorized resellers, independent sales agents, and its own internal sales team. Revenue from hardware and consumables is recognized upon transfer of control, which is generally at the point of shipment. The cloud‑based software solution is typically provided as an annual license that the customer does not have the right to take possession of and is renewed each year. The revenue from the cloud‑based solution is recognized ratably over the annual term as the Company considers the services provided under the licenses to be a series of distinct performance obligations. For the on‑premise software, the Company typically recognizes revenue once the customer has been given access to the software. The Company’s post-installation customer support is primarily sold through one‑year annual contracts and such revenue is recognized ratably over the term of the agreement. Service Revenue from installation and training is recognized as performed. The Company’s terms of sale generally provide payment terms that are customary in the countries where the Company transacts business. To reduce credit risk in connection with certain sales, the Company may, depending upon the circumstances, require significant deposits or payment in full prior to shipment. Due to the short‑term nature of the Company’s contracts substantially all of the outstanding performance obligations are recognized within one year. Shipping and handling activities that occur after control over a product has transferred to a customer are accounted for as fulfillment activities rather than performance obligations, as allowed under a practical expedient provided by ASC 606. The shipping and handling fees charged to customers are recognized as revenue and the related costs are included in cost of sales at the point in time when ownership of the product is transferred to the customer. Sales taxes and value added taxes collected concurrently with revenue generating activities are excluded from revenue. Significant Judgements The Company enters into contracts with customers that can include hardware products and cloud-based software, which are determined to be distinct and accounted for as separate performance obligations. Products or services that are promised to a customer can be considered distinct if both of the following criteria are met: (i) the customer can benefit from the products or services either on its own or together with other readily available resources and (ii) the Company’s promise to transfer the products, software, or services to the customer is separately identifiable from other promises in the contract. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Judgement is required to determine the standalone selling price (SSP). The transaction price is allocated to each distinct performance obligation on a relative standalone selling price basis and revenue is recognized for each performance obligation when control has passed. In most cases, the Company is able to establish SSP based on historical transaction data of the observable prices of hardware products sold separately in comparable circumstances to similar customers, observable renewal rates for software and post-installation support, and the Company’s best estimates selling price at which the Company would have sold the product regularly on a stand‑alone basis for training and installation. The Company reassesses the SSP on a periodic basis or when facts and circumstances change. Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, customer deposits and deferred revenues (contract liabilities) on the condensed consolidated balance sheets. Timing of revenue recognition may differ from the timing of invoicing to customers. The Company records a receivable at the time of invoicing. For most of the Company’s contracts, customers are invoiced when products are shipped or when services are performed. The Company typically bills in advance for post‑installation support and cloud‑based software licenses, resulting in deferred revenue. The Company’s deferred revenue balance was $1.1 million and $2.2 million as of September 30, 2020 and December 31, 2019, respectively. The deferred revenue consists primarily of billed post-installation customer support and cloud‑based software licenses that are recognized ratably over the term of the agreement, and to a lesser extent related to contracts that have outstanding performance obligations, and contracts that have acceptance terms that have not yet been fulfilled. When products have been delivered, but the product revenue associated with the arrangement has been deferred as described above, the Company includes the costs for the delivered items in prepaid expenses and other current assets on the condensed consolidated balance sheets until recognition of the related revenue occurs, at which time it is recognized in cost of sales. The Company’s deferred cost of sales balance was $0 and $0.3 million as of September 30, 2020 and December 31, 2019, respectively. As the Company’s contracts are primarily one year or less, substantially all deferred revenue outstanding at the end of the fiscal year is recognized during the following year. For the periods ended September 30, 2020 and 2019, the Company paid commissions to its external partners and internal sales team. The Company acts as a principal in the contracts with its partners as the Company controls the product, establishes the price, and bears the risk of nonperformance. The Company records the revenue on a gross basis and commissions are recorded as a sales and marketing expense. The Company recognizes its commission expense as a point‑in‑time expense as contract obligations are primarily completed within a one‑year contract period. See Note 12 for additional information related to disaggregation of revenue. Allowance for Doubtful Accounts In evaluating the collectability of accounts receivable, the Company assesses a number of factors, including specific customers’ abilities to meet their financial obligations, the length of time receivables are past due, and historical collection experience. If circumstances related to specific customers change, or economic conditions deteriorate such that past collection experience is no longer relevant, the Company’s estimate of the recoverability of accounts receivable could be further reduced from the levels provided for in the condensed consolidated financial statements. The Company evaluates specific accounts for which the Company believes a customer may have an inability to meet their financial obligations. In these cases, the Company uses judgment, based on available facts and circumstances, and records a specific reserve for that customer to reduce the receivable to an amount the Company expects to collect. These specific reserves are reevaluated and adjusted as additional information is received that impacts the amount reserved. As of September 30, 2020, and December 31, 2019, the Company has recorded $0.5 million and $0.2 million respectively, in allowance for doubtful accounts. Bad debt expense was $0.3 million and $0 million for the nine months ended September 30, 2020 and September 30, 2019, respectively. As of September 30, 2020, the Company had one customer that represented 10% or more of accounts receivables, which accounted for 10% of total accounts receivable. As of December 31, 2019, no single customer accounted for more than 10% of total accounts receivables. Net Loss Per share The Company presents basic and diluted loss per common share amounts. Basic loss per common share is calculated by dividing net loss by the weighted average number of common shares outstanding during the applicable period. The denominator for diluted net loss per share is a computation of the weighted‑average number of ordinary shares and the potential dilutive ordinary shares outstanding during the period. Potential dilutive shares outstanding include the dilutive effect of in‑the‑money options, unvested Restricted Stock Agreements (“RSAs”), and unvested Restricted Stock Units (“RSUs”) using the treasury stock method. In periods in which the Company reports a net loss, diluted net loss per share is generally the same as basic net loss per share since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. See Note 14 for further information. Warranty Reserve Substantially all of the Company’s products, including hardware, and software are covered by a standard assurance warranty of one year. In the event of a failure of a hardware or software product covered by this warranty, the Company may repair or replace the software or hardware product at its option. The Company’s warranty reserve reflects estimated material and labor costs for potential or actual product issues in its installed base for which the Company expects to incur an obligation. The Company periodically assesses the adequacy of the warranty reserve and adjusts the amount as necessary. If the data used to calculate the adequacy of the warranty reserve are not indicative of future requirements, additional or reduced warranty reserves may be required. As of September 30, 2020 and December 31, 2019, the Company has recorded $1.7 million and $1.5 million, respectively, of warranty reserve within accrued expenses and other current liabilities on the condensed consolidated balance sheets. Accrued warranty at each balance sheet date consisted of the following (in thousands): September 30, 2020 December 31, 2019 Warranty reserve, at the beginning of the year $ 1,491 $ 116 Additions to warranty reserve 375 2,352 Claims fulfilled (132) (977) Warranty reserve, at the end of the period $ 1,734 $ 1,491 Warranty reserve is recorded in cost of sales in the condensed consolidated statement of operations. Inventory Inventory is stated at the lower of cost or net realizable value, determined on a first‑in, first‑out basis, and consists of the following (in thousands): September 30, 2020 December 31, 2019 Work in process $ 3,062 $ 1,081 Finished goods 7,301 7,324 $ 10,363 $ 8,405 The Company provides for inventory losses based on obsolescence and levels in excess of forecasted demand. In these cases, inventory is reduced to the estimated net realizable value based on historical usage and expected demand. Inventory provisions based on obsolescence and inventory in excess of forecasted demand are recorded in cost of sales in the condensed consolidated statement of operations. Concentrations of Credit Risk and Off‑Balance‑Sheet Risk The Company has no significant off‑balance‑sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that potentially expose the Company to concentrations of credit risk consist mainly of cash and cash equivalents. The Company maintains its cash and cash equivalents principally with accredited financial institutions of high‑credit standing. Property and Equipment Property and equipment are stated at cost. Expenditures for repairs and maintenance are expensed as incurred. When assets are retired or disposed of, the assets and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is included in the determination of net income or loss. Depreciation is recorded using the straight‑line method over the estimated useful lives of the related assets. Business Combinations The Company allocates the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The estimates used to value the net assets acquired are based in part on historical experience and information obtained from the management of the acquired company. The Company generally values the identifiable intangible assets acquired using a discounted cash flow model. The significant estimates used in valuing certain of the intangible assets, include, but are not limited to future expected cash flows of the asset, discount rates to determine the present value of the future cash flows and expected technology life cycles. Intangible assets are amortized over their estimated useful life; the period over which the Company anticipates generating economic benefit from the asset. Fair value adjustments subsequent to the acquisition date, that are not measurement period adjustments, are recognized in earnings. Deferred Transaction Costs and Transaction Costs Payable As part of the contemplated reverse recapitalization transaction with Trine Acquisition Corp, (“Trine”) the details of which are discussed in an initial S-4 filed with the SEC by on September 15, 2020 and subsequent amendments, the Company has accrued direct and incremental transaction costs related to the merger which will be deducted from the combined entity’s additional paid-in capital at the closing of the transaction when the proceeds are received. As of September 30, 2020, the Company had recorded $2.3 million of transaction costs payable to advisers, which $1.7 million is included in accounts payable and $0.6 million is included in accrued expenses and other current liabilities in the condensed consolidated balance sheets. Goodwill and Intangible Assets The Company has recorded $2.3 million of goodwill and $3.3 million of acquired technology as a result of two business combinations completed during the year ended December 31, 2019. As of September 30, 2020, the Company has recorded $0.8 million of accumulated amortization on the acquired technology. Goodwill represents the future economic benefits arising from other assets acquired in a business combination or an acquisition that is not individually identified and separately recorded. The excess of the purchase price over the estimated fair value of net assets of businesses acquired in a business combination is recognized as goodwill. Intangible assets consist of identifiable intangible assets, including developed technology, resulting from the Company’s acquisitions. Goodwill is not amortized but is tested for impairment at least annually (as of the first day of the fourth quarter) or as circumstances indicate the value may no longer be recoverable. To assess if goodwill is impaired, the Company performs a qualitative assessment to determine whether further impairment testing is necessary. The Company then compares the carrying amount of the single reporting unit to the fair value of the reporting unit. An excess carrying value over fair value would indicate that goodwill may be impaired. The Company evaluates definite‑lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If indicators of impairment are present, the Company then compares the estimated undiscounted cash flows that the specific asset is expected to generate to its carrying value. If such assets are impaired, the impairment recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value. To date, there have been no impairments of goodwill or intangible assets. Intangible assets are amortized over their useful lives. Impairment of Long‑Lived Assets The Company evaluates whether events or circumstances have occurred that indicate that the estimated remaining useful life of its long‑lived assets may warrant revision or that the carrying value of these assets may be impaired. The Company does not believe that any events have occurred through September 30, 2020, that would indicate its long‑lived assets are impaired. Stock‑Based Compensation The Company accounts for all stock options granted to employees and nonemployees using a fair value method. Stock‑based compensation is measured at the grant‑date fair value of the award and is then recognized as the related services are rendered, typically over the vesting period. The measurement date for employee awards is generally the date of the grant and the measurement date for nonemployee awards is generally the date the performance of services is completed. The Company estimates forfeitures that will occur in their determination of the expense recorded. Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the Company’s condensed consolidated financial statements and tax returns. Deferred tax assets and liabilities are determined based upon the differences between the condensed consolidated financial statements carrying amounts and the tax bases of existing assets and liabilities and for loss and credit carryforwards, using enacted tax rates expected to be in effect in the years in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that these assets may not be realized. The Company provides reserves for potential payments of taxes to various tax authorities related to uncertain tax positions. Amounts recognized are based on a determination of whether a tax benefit taken by the Company in its tax filings or positions is “more likely than not” to be sustained on audit. The amount recognized is equal to the largest amount that is more than 50% likely to be sustained. Interest and penalties associated with uncertain tax positions are recorded as a component of income tax expense. As of September 30, 2020 and December 31, 2019, the Company has not identified any uncertain tax positions for which reserves would be required. Recently Issued Accounting Standards In December 2019, the FASB issued ASU 2019‑12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by eliminating some exceptions to the general approach in Accounting Standards Codification 740, Income Taxes. It also clarifies certain aspects of the existing guidance to promote more consistent application. This standard is effective for calendar‑year public business entities in 2021 and interim periods within that year, and early adoption is permitted. The Company is currently in the process of evaluating the impact the new standard will have on the consolidated financial statements. In June 2018, the FASB issued ASU No. 2018‑07, Compensation‑Stock Compensation (Topic 718): Improvements to Nonemployee Share‑Based Payment Accounting , which substantially aligns the measurement and classification guidance for share‑based payments to nonemployees with the guidance for share‑based payments to employees. The ASU also clarifies that any share‑based payment issued to a customer should be evaluated by the new revenue recognition standard. The new ASU requires a modified retrospective transition approach. The ASU is effective for the Company for the year ending December 31, 2020. Due to the Company’s Emerging Growth Company (EGC) status, the Company is permitted to defer adoption of ASU 2018‑07 in interim periods and adopt for its annual financial statements. Refer to Note 11 for discussion on stock‑compensation expense. In January 2017, the FASB issued ASU No. 2017‑04, “ Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ” (“ASU 2017‑ 04”), which eliminates the performance of Step 2 from the goodwill impairment test. In performing its annual or interim impairment testing, an entity will instead compare the fair value of the reporting unit with its carrying amount and recognize any impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Additionally, an entity should consider income tax effects from any tax‑deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss. As a smaller reporting company pursuant to Rule 12b‑2 of the Securities Exchange Act of 1934, as amended, these changes become effective for the Company on January 1, 2023. The Company is currently evaluating the potential impact of these changes on its consolidated financial statements. In June 2016, the FASB issued ASU 2016‑13, “ Financial Instruments—Credit Losses .” This ASU added a new impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses. The CECL model applies to most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and other loan commitments. The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected credit losses on assets that have a low risk of loss. As a smaller reporting company pursuant to Rule 12b‑2 of the Securities Exchange Act of 1934, as amended, these changes become effective for the Company on January 1, 2023. The Company is currently evaluating the potential impact of these changes on its consolidated financial statements. | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The consolidated financial statements of the Company are prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”). The accompanying consolidated financial statements include the accounts of Desktop Metal, Inc. and its wholly owned subsidiaries, Desktop Metal Securities Corporation and Desktop Metal GmbH. The functional currency of Desktop Metal GmbH is U.S. Dollars. All intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires the Company’s management to make judgements, estimates and assumptions regarding uncertainties that affect the reported amounts of assets, liabilities and related disclosures of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Although the Company regularly assesses these estimates, actual results could differ materially from these estimates. Changes in estimates are recorded in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances. Actual results may differ from management’s estimates if these results differ from historical experience or other assumptions prove not to be substantially accurate, even if such assumptions are reasonable when made. Cash and Cash Equivalents Cash equivalents include all highly liquid investments maturing within 90 days or less from the date of purchase. Cash equivalents, consist of money market funds, totaling $40.5 million and $24 million as of December 31, 2019 and 2018 respectively, as well as other highly‑liquid cash equivalents totaling $25 million as of December 31, 2019. Short‑Term Investments All of the Company’s investments, which consist of debt securities, are classified as available for sale and are carried at fair value. Unrealized gains and losses considered to be temporary in nature are recorded as a component of accumulated other comprehensive loss, net of related income taxes. The Company reviews all investments for reductions in fair value that are other than temporary. When such reductions occur, the cost of the investment is adjusted to fair value through recording a loss on investments in the consolidated statements of operations. Gains and losses on investments are calculated on the basis of specific identification. Restricted Cash The Company maintains a letter of credit for the benefit of the landlord for their office facility. The issuer of the letter of credit requires the Company to maintain a deposit in the amount of $0.6 million to secure the letter, which is reported as restricted cash in the consolidated balance sheets. This letter of credit automatically renews every year until it matures on February 7, 2024; therefore, it is classified as long term in nature at December 31, 2019 and 2018. Revenue Product Revenue and Service Revenue Product revenue include sales of the Company’s 3‑D metal systems, which consist of modular printers, furnaces, and debinders as well as sale of accessories and consumables. These consumables are primarily comprised of materials, which are used by the printers during the printing process to produce parts. Certain on‑premises software that is embedded with the hardware and sold with the product bundle and is included within product revenue. Revenue from products is recognized upon transfer of control, which is generally at the point of shipment. The Company typically recognizes revenue on embedded software once the customer has been given access to the software. Services revenue includes revenue from various software cloud-based solutions the Company offers to facilitate the design of parts and operation of the Company’s products. The Company offers multiple software products, which are licensed through either a cloud‑based solution and/or an on‑premises software subscription, depending on the product. For the cloud‑based solution, the Company typically provides an annual subscription that the customer does not have the right to take possession of and is renewed at expiration. The revenue from the cloud‑based solution is recognized ratably over the annual term as the Company considers the services provided under the cloud‑based solution to be a series of distinct performance obligations, as the Company provides continuous daily access to the cloud solution. For on‑premises software subscriptions, the Company typically recognizes revenue once the customer has been given access to the software. Service revenue also consists of installation, training, and post contract support. When the Company enters into development contracts, control of the development service is transferred over time, and the related revenue is recognized over time. Revenue Recognition The Company adopted Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers , on January 1, 2018, using the full retrospective method. Revenue is measured as the amount of consideration expected to be received in exchange for transferring goods or providing services. The amount of consideration is typically a fixed price at the contract inception. Consideration from shipping and handling is recorded on a gross basis within product revenue. The Company determines revenue recognition through the following steps: · Identification of the contract, or contracts, with a customer · Identification of the performance obligations in the contract · Determination of the transaction price · Allocation of the transaction price to the performance obligations in the contract · Recognition of revenue when, or as, the Company satisfies a performance obligation Nature of Products and Services The Company sells its products primarily through authorized resellers, independent sales agents, and its own sales force. Revenue from hardware and consumables is recognized upon transfer of control, which is generally at the point of shipment. The Company’s post‑contract support is primarily sold through one‑year annual contracts and post contract support revenue is recognized ratably over the term of the agreement. Post contract support is related to the service and maintenance of the Company’s hardware products after delivery and installation to the customer. Service revenue from installation and training is recognized as performed. Our terms of sale generally provide payment terms that are customary in the countries where the Company transacts business. To reduce credit risk in connection with certain sales, the Company may, depending upon the circumstances, require deposits or payment in full prior to shipment. Due to the short term nature of our contracts substantially all of our outstanding performance obligations are recognized within one year. Shipping and handling activities that occur after control over a product has transferred to a customer are accounted for as fulfillment activities rather than performance obligations, as allowed under a practical expedient provided by ASC 606. The shipping and handling fees charged to customers are recognized as revenue and the related costs are included in cost of revenue at the point in time when ownership of the product is transferred to the customer. Sales taxes and value added taxes collected concurrently with revenue generating activities are excluded from revenue. Significant Judgements The Company enters into contracts with customers that can include various combinations of hardware products, software licenses, and services, which are distinct and accounted for as separate performance obligations. Products or services that are promised to a customer can be considered distinct if both of the following criteria are met: (i) the customer can benefit from the products or services either on its own or together with other readily available resources and (ii) the Company’s promise to transfer the products, software, or services to the customer is separately identifiable from other promises in the contract. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Judgement is required to determine the standalone selling price (SSP). The transaction price is allocated to each distinct performance obligation on a relative standalone selling price basis and revenue is recognized for each performance obligation when control has passed. In most cases, the Company is able to establish SSP based historical transaction data of the observable prices of hardware products sold separately in comparable circumstances to similar customers, observable renewal rates for software and post contract support, and the Company’s best estimates selling price at which the Company would have sold the product regularly on a stand‑alone basis for training and installation. The Company reassesses the SSP on a periodic basis or when facts and circumstances change. Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, customer deposits and deferred revenues (contract liabilities) on the consolidated balance sheets. Timing of revenue recognition may differ from the timing of invoicing to customers. The Company record a receivable at the time of invoicing. For most contracts, customers are invoiced when products are shipped or when services are performed. The Company will typically bill in advance for post‑contract support and cloud‑based software licenses, resulting in deferred revenue. When products have been delivered, but the product revenue associated with the arrangement has been deferred the Company includes the costs for the delivered items in deferred costs of goods sold on the consolidated balance sheets until recognition of the related revenue occurs, at which time it is recognized in cost of goods sold. As of December 31, 2019, the Company deferred approximately $2.2 million of revenue and $0.3 million of costs, included in deferred costs of goods sold. The $3.9 million of revenue deferred as of December 31, 2018 was recognized as revenue in 2019. The deferred revenue consists primarily of billed post contract support and cloud‑based software licenses that are recognized ratably over the term of the agreement, and to a lesser extent related to contracts that have outstanding performance obligations, and contracts that have acceptance terms that have not yet been fulfilled. As of December 31, 2018, the Company deferred approximately $3.9 million of revenue and $3 million of costs, included in deferred costs of goods sold for hardware products delivered in 2018, and the remaining obligations for software, and services products to be delivered in 2019. The Company began shipping its 3‑D metal solutions during the fourth quarter of 2018. Due to the lack of history of the performance of the product and associated risk of return, as well as the lack of history of estimating additional costs associated with installation, the Company considered these as variable revenue constraints that required deferral of revenue for certain customers. The Company has recognized revenue only to the extent that it is probable that a significant reversal will not occur. As our contracts are primarily one year or less, substantially all deferred revenue outstanding at the end of the year is recognized during the following year. Our terms of sale generally provide payment terms that are customary in the countries where we transact business. To reduce credit risk in connection with certain sales, we may, depending upon the circumstances, require deposits prior to shipment. During the years ended December 31, 2019 and 2018, the Company pays commissions to its external partners and internal sales team. The Company acts as a principal in the contracts with their partners as the Company controls the product, establishes the price, and bears the risk of nonperformance. The Company records the revenue on a gross basis and commissions are recorded as a sales and marketing expense. The Company recognizes its commission expense as a point‑in‑time expense as contract obligations are primarily completed within a one‑year contract period. See Note 14 for additional information related to disaggregation of revenue. Allowance for Doubtful Accounts In evaluating the collectability of accounts receivable, the Company assesses a number of factors, including specific customers’ abilities to meet their financial obligations, the length of time receivables are past due, and historical collection experience. If circumstances related to specific customers change, or economic conditions deteriorate such that our past collection experience is no longer relevant, our estimate of the recoverability of our accounts receivable could be further reduced from the levels provided for in the consolidated financial statements. The Company evaluates specific accounts for which it is believed a customer may have an inability to meet their financial obligations. In these cases, judgment is applied, based on available facts and circumstances, and record a specific reserve is recorded for that customer to reduce the receivable to an amount expected to be collected. These specific reserves are reevaluated and adjusted as additional information is received that impacts the amount reserved. As of December 31, 2019, and 2018, the Company has recorded $0.2 million and $0.0 million respectively, in allowance of doubtful accounts. In the years ended December 31, 2019 and 2018 the Company recorded bad debt expense of $0.2 million and $0.0 million, respectively. Earnings Per share The Company presents basic and diluted loss per common share amounts. Basic loss per common share is calculated by dividing net loss available to Common Stockholders by the weighted average number of common shares outstanding during the applicable period. The denominator for diluted earnings per share is a computation of the weighted‑average number of ordinary shares and the potential dilutive ordinary shares outstanding during the period. Potential dilutive shares outstanding include the dilutive effect of in‑the‑money options and unvested Restricted Stock Agreements (“RSAs”) using the treasury stock method. See Note 16 for further information. Warranty Reserve Substantially, all of the Company’s products, hardware, and software are covered by a standard assurance warranty of one year. In the event of a failure of hardware product or software covered by this warranty, the Company may repair or replace the software or hardware product at its option. The Company’s warranty reserve reflects estimated material and labor costs for potential or actual product issues in its installed base for which the Company expects to incur an obligation. The Company periodically assesses the adequacy of the warranty reserve and adjusts the amount as necessary. If the data used to calculate the adequacy of the warranty reserve are not indicative of future requirements, additional or reduced warranty reserves may be required. As of December 31, 2019 and 2018 the Company has recorded $1.5 million and $0.1 million, respectively, of warranty reserve within accrued expenses and other current liabilities on the consolidated balance sheets. Accrued warranty consisted of the following (in thousands): Years Ended December 31, 2019 2018 Warranty reserve, at the beginning of the year $ 116 $ — Additions to warranty reserve 2,352 116 Claims fulfilled (977) — Warranty reserve, at the end of the year $ 1,491 $ 116 Warranty reserve is recorded through cost of sales in the consolidated statements of operations. Inventory and Deferred Cost of Goods Sold Inventory is stated at the lower of cost or net realizable value, determined on a first‑in, first‑out basis, and consists of the following (in thousands): Years Ended December 31, 2019 2018 Work in process $ 1,081 $ 2,741 Finished goods 7,324 1,241 $ 8,405 $ 3,982 The Company provides for inventory losses based on obsolescence and levels in excess of forecasted demand. In these cases, inventory is reduced to the estimated net realizable value based on historical usage and expected demand. Inventory provisions based on obsolescence and inventory in excess of forecasted demand are recorded through cost of sales in the consolidated statements of operations. Concentrations of Credit Risk and Off‑Balance‑Sheet Risk The Company has no significant off‑balance‑sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that potentially expose the Company to concentrations of credit risk consist mainly of cash and cash equivalents. The Company maintains its cash and cash equivalents principally with accredited financial institutions of high‑credit standing. Customer Deposits Payments received from customers who have placed reservations or purchase orders in advance of shipment are refundable upon cancellation or non‑delivery by the Company and are included within customer deposits on the consolidated balance sheets. Property and Equipment Property and equipment is stated at cost. Expenditures for repairs and maintenance are expensed as incurred. When assets are retired or disposed of, the assets and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is included in the determination of net income or loss. Depreciation is recorded using the straight‑line method over the estimated useful lives of the related assets. Business Combinations The Company allocates the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The estimates used to value the net assets acquired are based in part on historical experience and information obtained from the management of the acquired company. The Company generally values the identifiable intangible assets acquired using a discounted cash flow model. The significant estimates used in valuing certain of the intangible assets, include, but are not limited to future expected cash flows of the asset, discount rates to determine the present value of the future cash flows and expected technology life cycles. Intangible assets are amortized over their estimated useful life; the period over which the Company anticipates generating economic benefit from the asset. Fair value adjustments subsequent to the acquisition date, that are not measurement period adjustments, are recognized in earnings. Goodwill and Intangible Assets The Company has recorded $2.3 million of goodwill and $3.3 million of acquired technology, net of $0.3 million of amortization expense as of December 31, 2019, as a result of two business combinations completed during the year ended December 31, 2019. Goodwill represents the future economic benefits arising from other assets acquired in a business combination or an acquisition that is not individually identified and separately recorded. The excess of the purchase price over the estimated fair value of net assets of businesses acquired in a business combination is recognized as goodwill. Intangible assets consist of identifiable intangible assets, including developed technology, resulting from the Company’s acquisitions. Goodwill is not amortized but is tested for impairment at least annually (as of the first day of the fourth quarter) or as circumstances indicate the value may no longer be recoverable. To assess if goodwill is impaired, the Company performs a qualitative assessment to determine whether further impairment testing is necessary. The Company then compares the carrying amount of the single reporting unit to the fair value of the reporting unit. An excess carrying value over fair value would indicate that goodwill may be impaired. The Company evaluates definite‑lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If indicators of impairment are present, the Company then compares the estimated undiscounted cash flows that the specific asset is expected to generate to its carrying value. If such assets are impaired, the impairment recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value. To date, there have been no impairments of goodwill or intangible assets. Intangible assets are amortized over their useful life. Impairment of Long‑Lived Assets The Company evaluates whether events or circumstances have occurred that indicate that the estimated remaining useful life of its long‑lived assets may warrant revision or that the carrying value of these assets may be impaired. The Company does not believe that any events have occurred through December 31, 2019, that would indicate its long‑lived assets are impaired, other than the capitalized software as detailed in Note 6. Research and Development Research and development costs are expensed as incurred. Research and development expense includes costs, primarily related to salaries and benefits for employees and prototypes and design expenses, incurred to develop intellectual property and is charged to expense as incurred. Costs incurred internally in researching and developing a software product to be sold to customers are charged to expense until technological feasibility has been established for the product. Once technological feasibility is established, software costs are capitalized until the product is available for general release to customers. Judgment is required in determining when technological feasibility of a product is established. The Company has determined that technological feasibility for software products is reached after all high‑risk development issues have been resolved through coding and testing. Generally, this occurs shortly before the products are released, such that there are no material costs to capitalize. Advertising Expense Advertising expense is included within sales and marketing expense in the consolidated statements of operations and was $0.1 million, $0.1 million for the years ended December 31, 2019 and 2018, respectively. It primarily includes promotional expenditures and is expensed as incurred; as such, efforts have not met the direct‑response criteria required for capitalization. Stock‑Based Compensation The Company accounts for all stock options granted to employees and nonemployees using a fair value method. Stock‑based compensation is measured at the grant‑date fair value of the award and is then recognized as the related services are rendered, typically over the vesting period. The measurement date for employee awards is generally the date of the grant and the measurement date for nonemployee awards is generally the date the performance of services is completed. The Company estimates forfeitures that will occur in their determination of the expense recorded. Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the Company’s consolidated financial statements and tax returns. Deferred tax assets and liabilities are determined based upon the differences between the consolidated financial statements carrying amounts and the tax bases of existing assets and liabilities and for loss and credit carryforwards, using enacted tax rates expected to be in effect in the years in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that these assets may not be realized. The Company provides reserves for potential payments of taxes to various tax authorities related to uncertain tax positions. Amounts recognized are based on a determination of whether a tax benefit taken by the Company in its tax filings or positions is “more likely than not” to be sustained on audit. The amount recognized is equal to the largest amount that is more than 50% likely to be sustained. Interest and penalties associated with uncertain tax positions are recorded as a component of income tax expense. As of December 31, 2019 and 2018, the Company has not identified any uncertain tax positions for which reserves would be required. Comprehensive Loss The Company’s comprehensive loss consists of its net loss and unrealized gain and loss from investments. Recently Issued Accounting Standards Recently Adopted Accounting Guidance In November 2016, the Financial Accounting Standards Board (FASB) Issued Accounting Standards Update (ASU) No. 2016‑18, Statement of Cash Flows (Topic 230): Restricted Cash , that requires the changes in restricted cash and restricted cash equivalents that result from transfers between cash, cash equivalents, and restricted cash and restricted cash equivalents should not be presented as cash flow activities in the consolidated statements of cash flows. The Company has adopted the ASU as of January 1, 2019 on a retrospective basis. In January 2016, the FASB Issued ASU No. 2016‑01, Recognition and Measurement of Financial Assets and Financial Liabilities , which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Although the ASU retains many current requirements, it significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments. The Company has adopted the ASU as of January 1, 2019, with no effect on the Company’s net loss or other comprehensive loss. Recent Accounting Guidance Not Yet Adopted In December 2019, the FASB issued ASU 2019‑12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by eliminating some exceptions to the general approach in Accounting Standards Codification 740, Income Taxes. It also clarifies certain aspects of the existing guidance to promote more consistent application. This standard is effective for calendar‑year public business entities in 2021 and interim periods within that year, and early adoption is permitted. The Company is currently in the process of evaluating the impact the new standard will have on our consolidated financial statements. In June 2018, the FASB issued ASU No. 2018‑07, Compensation‑Stock Compensation (Topic 718): Improvements to Nonemployee Share‑Based Payment Accounting , which substantially aligns the measurement and classification guidance for share‑based payments to nonemployees with the guidance for share‑based payments to employees. The ASU also clarifies that any share‑based payment issued to a customer should be evaluated by the new revenue recognition standard. The new ASU requires a modified retrospective transition approach. The ASU is effective for the Company beginning January 1, 2020. The Company intends to adopt the updated standard when it reports its annual results. In January 2017, the FASB issued ASU No. 2017‑04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017‑04”), which eliminates the performance of Step 2 from the goodwill impairment test. In performing its annual or interim impairment testing, an entity will instead compare the fair value of the reporting unit with its carrying amount and recognize any impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Additionally, an entity should consider income tax effects from any tax‑deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss. As a smaller reporting company pursuant to Rule 12b‑2 of the Securities Exchange Act of 1934, as amended, these changes become effective for the Company on January 1, 2023. The Company is currently evaluating the potential impact of these changes on its consolidated financial statements. In June 2016, the FASB issued ASU 2016‑13, Financial Instruments—Credit Losses. This ASU added a new impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses. The CECL model applies to most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and other loan commitments. The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected credit losses on assets that have a low risk of loss. As a smaller reporting company pursuant to Rule 12b‑2 of the Securities Exchange Act of 1934, as amended, these changes become effective for the Company on January 1, 2023. The Company is currently evaluating the potential impact of these changes on its consolidated financial statements. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
PROPERTY AND EQUIPMENT | ||
PROPERTY AND EQUIPMENT | 3. Property and Equipment Depreciation is expensed using the straight‑line method over the estimated useful lives of the assets as follows: Asset Classification Useful Life Equipment 3‑5 years Furniture and fixtures 3 years Computer equipment 3 years Tooling 3 years Software 3 years Leasehold improvements Shorter of asset’s useful life or remaining life of the lease Property and equipment—net consisted of the following at September 30, 2020 and December 31, 2019 (in thousands): September 30, 2020 December 31, 2019 Equipment $ 13,502 $ 13,358 Furniture and fixtures 895 895 Computer equipment 1,089 1,089 Tooling 1,823 1,823 Software 1,235 954 Leasehold improvements 13,870 13,880 Construction in process 845 170 Property and equipment—gross 33,259 32,169 Less: accumulated depreciation (19,658) (13,782) Property and equipment—net $ 13,601 $ 18,387 Depreciation and amortization expense was $5.9 million and $5.3 million for the nine months ended September 30, 2020 and September 30, 2019 respectively. | 3. PROPERTY AND EQUIPMENT Depreciation is expensed using the straight‑line method over the estimated useful lives of the assets as follows: Asset Classification Useful Life Equipment 3‑5 years Furniture and fixtures 3 years Computer equipment 3 Years Tooling 3 Years Software 3 Years Leasehold improvements Shorter of asset’s useful life or remaining life of the lease Property and equipment—net consisted of the following at December 31, 2019 and 2018 (in thousands): Years Ended December 31, 2019 2018 Equipment $ 13,358 $ 8,306 Furniture and fixtures 895 875 Computer equipment 1,089 1,045 Tooling 1,823 1,303 Software 954 302 Leasehold improvements 13,880 13,357 Construction in process 170 — Property and equipment—gross 32,169 25,188 Less: accumulated depreciation (13,782) (6,191) Property and equipment—net $ 18,387 $ 18,997 Depreciation and amortization expense was $7.6 million and $4.1 million for the years ended December 31, 2019 and 2018, respectively. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2019 | |
ACQUISITIONS | |
ACQUISITIONS | 4. ACQUISITIONS In July 2019, the Company acquired all outstanding shares of Make Composites, Inc. (“Make”) for a total purchase price of $5.4 million through the issuance of 873,203 shares of the Company’s Common Stock. Make is a composite printer research and development company that was acquired primarily for the complementary technology. The Company incurred transaction costs totaling $0.1 million that are included in general and administrative expenses in the consolidated statements of operations. The purchase price was allocated with $1.9 million to goodwill, $3.2 million to acquired technology, and $0.3 million to acquired tangible assets, consisting primarily of cash. The Company recorded a gain of $1.4 million on its original non‑controlling investment of Make. This gain is recorded in interest and other income, net in the consolidated statements of operations. The goodwill acquired is deductible for income tax purposes. As of December 31, 2019, the Company’s accounting for the acquisition is complete. In connection with the acquisition, the Company issued restricted stock, options and warrants to employees and contractors of Make which have future service obligations to vest and are accounted for as post‑combination expense. In March 2019, the Company acquired all outstanding shares of addLEAP AB, a Swedish3D printer research and development company, for a purchase price of $0.4 million paid in cash. The acquisition was completed to further the Company’s advances in 3D printing. The purchase price was allocated to $0.3 million of goodwill and $0.1 million of acquired technology. Total transaction costs of $0.1 million are included in general and administrative expenses in the consolidated statements of operations. The goodwill acquired is deductible for income tax purposes. As of December 31, 2019, the Company’s accounting for the acquisition is complete. In connection with the acquisition, the Company issued 74,843 shares of restricted stock that have future service obligations to vest and are accounted for as post‑combination expense. |
ACQUIRED TECHNOLOGY
ACQUIRED TECHNOLOGY | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
ACQUIRED TECHNOLOGY. | ||
ACQUIRED TECHNOLOGY | 4. Acquired Technology Acquired technology consisted of the following (in thousands): Accumulated Balance Gross Value Estimated Life Amortization September 30, 2020 Total acquired technology $ 3,270 5 years $ 817 $ 2,453 The Company recognized amortization expense of $0.5 million and $0.1 million for the nine months ended September 30, 2020 and 2019, respectively. The Company expects to recognize $0.2 million of amortization expense for the remaining three months of 2020, $0.6 million annually in the years ended December 31, 2021 through 2023, and $0.4 million in 2024. The weighted‑average remaining amortization period is 3.8 years. | 5. ACQUIRED TECHNOLOGY Acquired technology consisted of the following (in thousands): Accumulated Balance Gross Value Estimated Life Amortization December 31, 2019 Total acquired technology $ 3,270 5 years $ 276 $ 2,994 The Company recognized $0.3 million of amortization expense as of December 31, 2019 and expects to recognize $0.7 million of amortization expense annually in the years ended December 31, 2020, through 2023, and $0.4 million in 2024. The weighted‑average remaining amortization period is 4.5 years. |
CAPITALIZED SOFTWARE
CAPITALIZED SOFTWARE | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
CAPITALIZED SOFTWARE. | ||
CAPITALIZED SOFTWARE | 5. Capitalized Software, net The Company capitalizes certain costs related to the development and implementation of cloud computing software. Costs incurred during the application development phase are capitalized only when the Company believes it is probable the development will result in new or additional functionality. The types of costs capitalized during the application development phase include employee compensation, as well as consulting fees for third‑party developers working on these projects. The capitalized costs are amortized on a straight‑line basis over the estimated useful life of the asset, which is typically 3 years. The Company incurred $0.1 million in amortization expense in each of the nine month periods ended September 30, 2020 and 2019. Capitalized software, net at the each balance sheet date consists of the following (in thousands): September 30, 2020 December 31, 2019 Capitalized software development costs $ 1,127 $ 1,127 Accumulated amortization (770) (237) Impairment — (444) Total capitalized software costs $ 357 $ 446 The Company expects to incur amortization expense of $0.1 million for the remaining three months of 2020, and $0.1 million in each of the years ending 2021, and 2022. | 6. CAPITALIZED SOFTWARE The Company capitalizes certain costs related to the development and implementation of cloud computing software. Costs incurred during the application development phase are capitalized only when the Company believes it is probable the development will result in new or additional functionality. The types of costs capitalized during the application development phase include employee compensation, as well as consulting fees for third‑party developers working on these projects. The capitalized costs are amortized on a straight‑line basis over the estimated useful life of the asset, which is typically 3 years. The Company incurred $0.2 million and $18,000 in amortization expense for the years ended December 31, 2019 and 2018, respectively. The Company recorded an impairment charge of $0.4 million in the year ended December 31, 2019, for software that will no longer be utilized by the Company. Capitalized software consists of the following (in thousands): Years Ended December 31, 2019 2018 Capitalized software development costs $ 1,127 $ 806 Accumulated amortization (237) (18) Impairment (444) — Total capitalized software costs $ 446 $ 788 The Company expects to incur amortization expense of $0.2 million, $0.1 million, and $0.1 million for the years ending 2020, 2021, and 2022, respectively. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2020 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 6. Fair Value Measurements The Company uses the following three‑tier fair value hierarchy, which prioritizes the inputs used in measuring the fair values for certain of its assets and liabilities: Level 1 is based on observable inputs, such as quoted prices in active markets; Level 2 is based on inputs other than the quoted prices in active markets that are observable either directly or indirectly; and Level 3 is based on unobservable inputs in which there is little or no market data, which requires the Company to develop its own assumptions. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. Items measured at fair value on a recurring basis include money market funds. The following fair value hierarchy table presents information about the Company’s financial assets measured at fair value on a recurring basis and indicates the fair value hierarchy of the inputs the Company utilized to determine such fair value at September 30, 2020 and December 31, 2019 (in thousands): September 30, 2020 Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Items Inputs Inputs (Level 1) (Level 2) (Level 3) Total Assets: Money market funds $ 33,858 $ — $ — $ 33,858 Asset‑backed securities — 3,105 — 3,105 Corporate bonds — 30,084 — 30,084 Government bonds 19,991 — — 19,991 Total assets $ 53,849 $ 33,189 $ — $ 87,038 December 31, 2019 Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Items Inputs Inputs (Level 1) (Level 2) (Level 3) Total Assets: Money market funds $ 40,454 $ — $ — $ 40,454 Asset‑backed securities — 16,806 — 16,806 Corporate bonds — 67,948 — 67,948 Repurchase agreements — 25,001 — 25,001 Total assets $ 40,454 $ 109,755 $ — $ 150,209 All investments mature within one year. |
SHORT TERM INVESTMENTS
SHORT TERM INVESTMENTS | 12 Months Ended |
Dec. 31, 2019 | |
SHORT TERM INVESTMENTS | |
SHORT TERM INVESTMENTS | 8. SHORT‑TERM INVESTMENTS The Company invests its excess cash in fixed income instruments denominated and payable in U.S. dollars including U.S. treasury securities, corporate bonds and asset‑backed securities in accordance with the Company’s investment policy that primarily seeks to maintain adequate liquidity and preserve capital. The Company has designated all investments as available‑for‑sale and therefore such investments are reported at fair value. Unrealized gains or losses on investments are recorded in accumulated other comprehensive gain (loss), a component of stockholders’ equity. The following table summarizes the Company’s short‑term investments (in thousands): December 31, 2019 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Asset‑backed securities $ 16,786 $ 20 $ — $ 16,806 Corporate bonds 67,893 55 — 67,948 $ 84,679 $ 75 $ — $ 84,754 December 31, 2018 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Asset‑backed securities $ 13,350 $ — $ (65) $ 13,285 Corporate bonds 50,975 — (31) 50,944 $ 64,325 $ — $ (96) $ 64,229 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 7. Accrued Expenses and Other Current Liabilities The following table summarizes the Company’s components of accrued expenses and other current liabilities (in thousands): September 30, 2020 December 31, 2019 Warranty reserve $ 1,734 $ 1,491 Compensation and benefits related 657 897 Professional services 2,043 780 Inventory purchases 86 620 Accrued sales and use tax 470 578 Transaction costs payable 577 — Other 488 687 $ 6,055 $ 5,053 | 9. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES The following table summarizes the Company’s components of accrued expenses and other current liabilities (in thousands): Years Ended December 31, 2019 2018 Warranty reserve $ $ 116 Compensation and benefits related 278 Professional services 517 Inventory purchases 381 Accrued sales and use tax 4 Other 510 $ 5,053 $ 1,806 |
DEBT
DEBT | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
DEBT | ||
DEBT | 8. Debt Term Loan —In June 2018, the Company entered into a $20 million term loan for 36 months. The loan provided $10 million immediately funded with the additional $10 million available to be drawn in up to three draws of not less than $2 million for 12 months from close of the facility. The loan is interest‑only for the full 36 months with the principal due at maturity in June 2021. Interest is calculated using the Wall Street Journal Prime rate minus 0.5%, payable monthly in arrears (4.75% at December 31, 2019 and 3.25% at September 30, 2020). The loan contains a cash trigger. If the Company’s cash and investments fall below $30 million, cash equal to the total amount of the outstanding debt is required to be placed in a restricted money market account. The loan also contains reporting requirements and gives the lender first priority lien on all assets. The outstanding amount as of September 30, 2020 and December 31, 2019 was $10 million and $10 million, respectively. The $10 million is due to be paid in June 2021. Deferred Financing Costs —In connection with the above borrowings, the Company incurred $0.06 million of expenses, which have been recorded as deferred financing costs. The Company amortizes these costs over the life of the borrowing. During the nine months ended September 30, 2020 and 2019, the Company recorded $0.01 million and $0.01 million respectively, of interest expense related to the amortization of the financing costs. As of September 30, 2020 and December 31, 2019, the remaining unamortized balance of deferred financing costs totaled $0.01 million and $0.03 million, respectively, and is included in long term debt, net of deferred financing costs in the condensed consolidated balance sheets. | 10. DEBT Term Loan —In June 2018, the Company entered into a $20 million term loan for 36 months. The loan provided $10 million immediately funded with the additional $10 million available to be drawn in up to three draws of not less than $2 million for 12 months from close of the facility. The loan is interest‑only for the full 36 months with the principal due at maturity in June 2021. Interest is calculated using the Wall Street Journal Prime rate minus 0.5%, payable monthly in arrears (4.75% at December 31, 2019 and 5.50% at December 31, 2018). The loan contains a cash trigger. If the Company’s cash and investments fall below $30 million, cash equal to the total amount of the outstanding debt is required to be placed in a restricted money market account. The loan also contains reporting requirements and gives the lender first priority lien on all assets. The outstanding amount as of December 31, 2019 and 2018 was $10 million and $10 million, respectively. The $10 million is due to be paid in June 2021. Deferred Financing Costs —In connection with the above borrowings, the Company incurred $56,539 of expenses, which have been recorded as deferred financing costs. The Company amortizes these costs over the life of the borrowing. During the years ended December 31, 2019 and 2018, the Company recorded $18,846 and $9,423, respectively, of interest expense related to the amortization of the financing costs. As of December 31, 2019 and 2018, the remaining unamortized balance of deferred financing costs totaled $28,270 and $47,116, respectively, and is included in long‑term debt, net of deferred financing costs in the consolidated balance sheets. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
COMMITMENTS AND CONTINGENCIES. | ||
COMMITMENTS AND CONTINGENCIES | 9. Commitments and Contingencies Upon adoption of ASC 842, the Company identified real estate and equipment leases and recorded right of use assets of $3.4 million and lease liabilities of $4.7 million. The difference between the value of the right of use assets and lease liabilities is due to the reclassification of existing deferred rent, prepaid rent, and unamortized lease incentives as of January 1, 2018 totaling $1.3 million. At September 30, 2020, the Company recorded $1.9 million as a right of use asset and $3.2 million as an operating lease liability. At December 31, 2019, the Company recorded $2.3 million as a right of use asset and $3.8 million as a right of use liability. The Company assesses its right of use asset and other lease related assets for impairment. There were no impairments recorded related to these assets during the nine months ended September 30, 2020 and the year ended December 31, 2019. The Company identified one service agreement that contained an embedded lease. The agreement does not contain fixed or minimum payments, but the Company has concluded that the variable lease expense totaled $0.03 million for the nine months ended September 30, 2020 and $0.03 million for the nine months ended September 30, 2019. Information about other lease‑related balances is as follows (in thousands): September 30, 2020 2019 Lease cost Operating lease cost $ 561 $ 479 Short‑term lease cost — 24 Variable lease cost 30 30 Total lease cost $ 591 $ 533 Other Information Operating cash flows from operating leases $ 805 $ 701 Weighted‑average remaining lease term—operating leases (years) 3.5 4.5 Weighted‑average discount rate—operating leases 7.6 % 7.6 % The rate implicit in the lease is not readily determinable in most of the Company’s leases, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease. As of September 30, 2020, the Company does not have material operating leases that have not commenced. Future minimum lease payments under noncancelable operating leases at September 30, 2020, are as follows (in thousands): 2020 (remaining 3 months) $ 268 2021 1,071 2022 1,070 2023 1,028 2024 258 Total lease payments 3,695 Less amount representing interest (462) Total lease liability 3,233 Less current portion of lease liability (858) Lease liability, net of current portion $ 2,375 Legal Proceedings —From time to time, the Company may face legal claims or actions in the normal course of business. At each reporting date, the Company evaluates whether a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company is presently a respondent in a Judicial Arbitration and Mediation Services (JAMS) arbitration brought against it by a competitor. The basis for the claim is the alleged violation of a provision of a 2018 settlement agreement between the two companies, which provided that neither company could make statements that misrepresented the functionality of the other company’s products. The arbitration is currently set to commence in late 2020. Critical phases of the arbitration remain and therefore any loss cannot be estimated at this time. | 11. COMMITMENTS AND CONTINGENCIES Leases In February 2016, the FASB established Topic 842, Leases , by issuing ASU No. 2016‑02, Leases (Topic 842) , which requires lessees to recognize leases on balance sheet and disclose key information about leasing arrangements. The Company adopted the lease standard on January 1, 2018, using a modified retrospective approach, applying the new standard to all leases existing at January 1, 2018. The Company elected the permitted practical expedients to not reassess the following related to leases that commenced before the effective date of ASC 842: (i) whether any expired or existing contracts contain leases; (ii) the lease classification for any expired or existing leases; and (iii) initial direct costs for any existing leases. The lease standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short‑term lease recognition and therefore, the Company does not recognize right‑of‑use assets or lease liabilities for leases with less than a twelve‑month duration. The Company also elected the practical expedient to not separate lease and non‑lease components for all of its leases. Upon adoption of ASC 842, the Company identified real estate and equipment leases and recorded right of use assets of $3.4 million and operating lease liabilities of $4.7 million. The difference between the value of the right of use assets and lease liabilities is due to the reclassification of existing deferred rent, prepaid rent, and unamortized lease incentives as of January 1, 2018 totaling $1.3 million. At December 31, 2019, the Company recorded $2.3 million as a right of use asset and $3.8 million as an operating lease liability. At December 31, 2018, the Company recorded $2.4 million as a right of use asset and $4.2 million as an operating lease liability. The Company assesses its right‑of‑use asset and other lease‑related assets for impairment. There were no impairments recorded related to these assets during the years ended December 31, 2019 and December 31, 2018. The Company identified one service agreement that contained an embedded lease. The agreement does not contain fixed or minimum payments, but the Company has concluded that the variable lease expense totaled $40,481, $38,253 during the years ended December 31, 2019 and 2018, respectively. Information about other lease‑related balances is as follows (in thousands): Years Ended December 31, 2019 2018 Lease cost Operating lease cost $ 655 $ 627 Short‑term lease cost 32 62 Variable lease cost 40 38 Total lease cost $ 727 $ 727 Other Information Operating cash flows from operating leases $ 951 $ 868 Weighted‑average remaining lease term—operating leases (years) 4.2 5.3 Weighted‑average discount rate—operating leases 7.6 % 7.6 % The rate implicit in the lease is not readily determinable in most of the Company’s leases, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease. Future minimum lease payments under noncancelable operating leases at December 31, 2019, are as follows (in thousands): 2020 $ 2021 1,071 2022 1,069 2023 1,028 2024 258 Total lease payments 4,499 Less amount representing interest (667) Total lease liability 3,832 Less current portion of lease liability (806) Lease liability, net of current portion $ 3,026 As of December 31, 2019, the Company does not have material operating leases that have not commenced. Legal Proceedings From time to time, the Company may face legal claims or actions in the normal course of business. At each reporting date, the Company evaluates whether a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company expenses as incurred the costs related to its legal proceedings. In 2018, the Company was engaged in litigation with a competitor with both parties asserting claims of patent infringement and trade secret misappropriation. The litigation was resolved in October 2018 when the parties entered into a settlement agreement. The legal proceedings and settlement amount of $36.2 million is reflected in general and administrative expenses on the statement of operations in the year ended December 31, 2018. The Company is presently a respondent in a Judicial Arbitration and Mediation Services (JAMS) arbitration brought against it by a competitor. The basis for the claim is the alleged violation of a provision of a 2018 settlement agreement between the two companies, which provided that neither company could make statements that misrepresented the functionality of the other company’s products. The arbitration is presently set to commence in late 2020. Critical phases of the arbitration remain and therefore any loss cannot be estimated at this time. |
INCOME TAXES
INCOME TAXES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
INCOME TAXES | ||
INCOME TAXES | 10. Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the Company’s consolidated financial statements and tax returns. Deferred tax assets and liabilities are determined based upon the differences between the consolidated financial statements carrying amounts and the tax bases of existing assets and liabilities and for loss and credit carryforwards, using enacted tax rates expected to be in effect in the years in which the differences are expected to reverse. The Company has provided a full valuation allowance against the net deferred tax assets as the Company has determined that it was more likely than not that the Company would not realize the benefits of federal and state net deferred tax assets. The Company provides reserves for potential payments of taxes to various tax authorities related to uncertain tax positions. Amounts recognized are based on a determination of whether a tax benefit taken by the Company in its tax filings or positions is “more likely than not” to be sustained on audit. The amount recognized is equal to the largest amount that is more than 50% likely to be sustained. Interest and penalties associated with uncertain tax positions are recorded as a component of income tax expense. As of September 30, 2020 and December 31, 2019, the Company has not identified any uncertain tax positions for which reserves would be required. | 12. INCOME TAXES During the years ended December 31, 2018 and 2019, the Company recorded no income tax benefits due to the losses incurred due to the uncertainty of future taxable income. For financial reporting purposes, Income (Loss) before provision for income taxes, includes the following components: Years Ended December 31, 2019 2018 United States $ (103,596) $ (121,339) Foreign — — Loss before income taxes $ (103,596) $ (121,339) A reconciliation of the expected income tax (benefit) computed using the federal statutory income tax rate to the Company’s effective income tax rate is as follows for the year ended December 31, 2018 and 2019: Years Ended December 31, 2019 2018 Effective income tax rate: Expected income tax benefit at the federal statutory rate 21 % 21 % State taxes 6 % 6 % Change in valuation allowance (30) % (26) % Research and development credit carryover 2 % 3 % Legal proceedings and settlement expense — % % Permanent differences 1 % — % Effective income tax rate — % — % As of December 31, 2019 and 2018, deferred tax assets consist of the following (in thousands): Years Ended December 31, 2019 2018 Deferred tax assets: Federal and state net operating carryforwards $ 56,333 $ 23,310 Research and development and other credits 11,072 7,567 Capitalized start‑up costs 17,032 24,048 Compensation‑related items 1,286 568 Deferred lease liability 1,111 1,212 Other deferred tax assets 2,068 379 Total gross deferred tax asset 88,902 57,084 Valuation allowance (87,370) (56,405) Net deferred tax asset 1,532 679 Deferred tax liabilities: Right‑of‑use asset (664) (679) Acquired technology (868) — Total deferred tax liabilities (1,532) (679) Net deferred tax asset $ — $ — Realization of deferred tax assets is dependent upon the generation of future taxable income. As required by ASC 740 Income Taxes , the Company evaluated the positive and negative evidence bearing upon its ability to realize the deferred tax assets as of December 31, 2019. As a result of the fact that the Company has incurred tax losses from inception, the Company has determined that it was more likely than not that the Company would not realize the benefits of federal and state net deferred tax assets. Accordingly, a full valuation allowance was established against the net deferred tax assets as of December 31, 2019 and 2018. Changes in the valuation allowance for deferred tax assets during the year ended December 31, 2018, and 2019 were as follows: Years Ended December 31, 2019 2018 Valuation allowance at beginning of the year $ 56,405 $ 21,700 Increases recorded to income tax provision 30,965 34,705 Decreases recorded as a benefit to income tax provision — — Increases recorded as an adjustment to equity — — Valuation allowance at end of year $ 87,370 $ 56,405 As of December 31, 2019 and December 31, 2018 the Company had federal net operating loss carryforwards of $197.7 million and $79.6 million, respectively, which may be available to reduce future taxable income. These carryforwards generated in 2017 and prior expire at various dates through 2037. The $152.2 million in carryforwards generated from 2018 forward do not expire. As of December 31, 2019, and 2018, the Company had State net operating loss carryforwards of $184.2 million and $80.8 million, respectively, which may be available to reduce future taxable income. These carryforwards expire at various dates through 2039. In addition, the Company had federal and state research and development tax credit carryforwards of $11.1 million available to reduce future tax liabilities, which will expire at various dates through 2034. Utilization of the Company’s net operating loss (“NOL”) carryforwards and research and development (“R&D”) credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that have occurred previously or that could occur in the future in accordance with Section 382 of the Internal Revenue Code of 1986 (“Section 382”) as well as similar state provisions. These ownership changes may limit the amount of NOL and R&D credit carryforwards that can be utilized annually to offset future taxable income and taxes, respectively. In general, an ownership changes as defined by Section 382 results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50% over a three‑year period. The Company has not conducted a study to assess whether a change of control has occurred or whether there have been multiple changes of control since inception due to significant complexity with such a study. If the Company has experienced a change of control, as defined by Section 382, at any time since inception, utilization of the net operating loss carryforward or research and development tax credits carryforwards would be subject to an annual limitation under Section 382, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long‑term tax‑exempt rate, and then could be subject to additional adjustments, as required. Any limitation may result in expiration of a portion of the net operating loss carryforward or research and development tax credit carryforwards before utilization. The Company files income tax returns in the U.S. federal tax jurisdiction, Massachusetts and Rhode Island. Since the Company is in a loss carryforward position, the Company is generally subject to examination by the US federal, state and local income tax authorities for all tax years in which a loss carryforward is available. The Company is currently not under examination by the Internal Revenue Service of any other jurisdiction for any tax years. The Company has not recorded any interest or penalties on any unrecognized tax benefits since inception. The Company does not believe material uncertain tax positions have arisen to date. |
CONVERTIBLE PREFERRED STOCK AND
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY | ||
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY | 11. Convertible Preferred Stock and Stockholders’ Equity Authorized Shares —At September 30, 2020 and December 31, 2019 the Company’s authorized shares consisted of 156,000,000 shares of Common Stock, $0.0001 par value (the “Common Stock”) and 100,038,109 shares of Preferred Stock, respectively, par value of $0.0001 per share; 26,189,545 of which are designated as Series A Convertible Preferred Stock (“Series A Preferred Stock”), 23,675,035 of which are designated as Series B Convertible Preferred Stock (“Series B Preferred Stock”), 13,152,896 shares are designated as Series C Convertible Preferred Stock (“Series C Preferred Stock”), 21,075,193 shares are designated as Series D Convertible Preferred Stock (“Series D Preferred Stock”), 13,450,703 shares are designated as Series E Convertible Preferred Stock (“Series E Preferred Stock”), and 2,494,737 shares are designated as Series E‑1 Convertible Preferred Stock (“Series E‑1 Preferred Stock”) (collectively, the “Series Preferred Stock”). Preferred Stock On January 29, 2018 and June 29, 2018, the Company issued 4,086,111 and 11,674 shares of Series D Preferred Stock, respectively, at a purchase price of $8.5656 per share. On January 14, 2019 the Company issued 13,450,703 shares of Series E Preferred Stock at a purchase price of $10.0211 per share. The issuance costs for Series E Preferred Stock were $0.1 million. On January 14, 2019 the Company issued 2,494,737 shares of Series E‑1 Preferred Stock at a purchase price of $10.0211 per share. The issuance costs for Series E‑1 Preferred Stock were $0.02 million. The following table summarizes details of Preferred Stock authorized, issued and outstanding as of September 30, 2020 and December 31, 2019 ($ in thousands): Convertible Preferred Stock Classes September 30, 2020 December 31, 2019 Series A Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding, 26,189,545 and 26,189,545 shares, (liquidation preference of $255,348 and $106,853 at September 30, 2020 and December 31, 2019, respectively) $ 13,878 $ 13,878 Series B Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding, 23,675,035 and 23,675,035 shares (liquidation preference of $230,832 and $96,594 at September 30, 2020 and December 31, 2019, respectively) 37,806 37,806 Series C Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding, 13,152,896 and 13,152,896 shares (liquidation preference of $128,241 and $53,664 at September 30, 2020 and December 31, 2019, respectively) 44,852 44,852 Series D Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding, 21,075,193 and 21,075,193 shares (liquidation preference of $205,483 and $180,522 at September 30, 2020 and December 31, 2019, respectively) 180,353 180,353 Series E Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding 13,450,703 and 13,450,703 shares (liquidation preference of $134,791 and $134,791 at September 30, 2020 and December 31, 2019, respectively) 134,667 134,667 Series E‑1 Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding 2,494,737 and 2,494,737 shares (liquidation preference of $25,000 and $25,000 at September 30, 2020 and December 31, 2019, respectively) 24,977 24,977 Total $ 436,533 $ 436,533 The following describes the rights and preferences of the Company’s Series Preferred Stock: Voting —The holders of Series Preferred Stock vote together with all other classes and series of stock as a single class on an as‑converted basis. Each share of Series Preferred Stock entitles the holder to such number of votes per share as shall equal the whole number of shares of Common Stock into which such share of Series Preferred Stock is then convertible. The holders of the Series A Preferred Stock are entitled to elect one director to the Company’s board of directors, the holders of the Series B Preferred Stock are entitled to elect two directors to the Company’s board of directors, and the holders of Series C Preferred Stock are entitled to elect one director to the Company’s board of directors. The holders of the Series E Preferred Stock are entitled to elect one director to the Company’s board of directors, and the holders of the Common Stock are entitled to elect two directors to the Company’s board of directors. The holders of Series Preferred Stock retain rights to vote on certain specified matters as set forth in the Company’s certificate of incorporation. The holders of Series E‑1 Preferred Stock are not entitled to vote on election of a director. Dividends —The Series Preferred Stock are entitled to receive dividends at the rate of 8% of the original issue price for each series of Series Preferred Stock payable only when, as and if, declared by the Company’s board of directors. Through September 30, 2020, no dividends have been declared. Liquidation —Upon any liquidation, dissolution, or winding‑up of the Company, whether voluntary or involuntary, the holders of the Series Preferred Stock are entitled to first be paid out of assets available for distribution, on a pari passu basis, prior and in preference to any distribution to the holders of the Company’s Common Stock, the greater of (a) an amount equal to $0.53372 per share for the Series A Preferred Stock, $1.6013 per share for Series B Preferred Stock, $3.4213 per share for the Series C Preferred Stock, $8.5656 per share for the Series D Preferred Stock, and $10.0211 per share for the Series E and Series E‑1 Preferred Stock, plus declared but unpaid dividends and (b) an amount per share that would have been payable had all shares of the Series Preferred Stock been converted to shares of Common Stock immediately prior to any liquidation, dissolution, or winding‑up of the Company. After payment of all preferential amounts required to be paid to the holders of Series Preferred Stock, the remaining assets of the Company available for distribution to the stockholders shall be distributed among the holders of shares of Common Stock pro rata based on the number of shares held by each such holder. Conversion —Each holder of Series Preferred Stock has the right, at their option at any time, to convert any such shares of Series Preferred Stock into fully paid and nonassessable shares of Common Stock. The conversion ratio is determined by dividing the original issue price of such share of Series Preferred Stock by the conversion price then in effect, which is initially equal to $0.53372 per share for the Series A Preferred Stock, $1.6013 per share for Series B Preferred Stock, $3.4213 per share for the Series C Preferred Stock, $8.5656 per share for the Series D Preferred Stock, and $10.0211 per share for the Series E and Series E‑1 Preferred Stock. The conversion price is subject to adjustment if certain dilutive events occur. Conversion is mandatory in the event of a firm‑commitment underwritten initial public offering of the Company’s Common Stock with a value of at least $5.13 per common share and $50 million in proceeds to the Company or upon the election of a majority of the holders of Series Preferred Stock, voting as a single class on an as‑converted basis. Redemption —The Series Preferred Stock is not subject to mandatory or optional redemption other than in connection with a liquidation, dissolution, or winding‑up of the Company. Common Stock Restricted Stock Agreements —During 2015, the Company issued 27,850,000 shares of Common Stock to the initial founders and certain employees of the Company at a purchase price of $0.0001 per share. The shares issued to the founders are subject to the Company’s right to repurchase at the original purchase price and such right to repurchase generally lapses at the rate of 20% of the shares upon the first anniversary of the grant date and at the rate of 1.67% per month thereafter over four years. The refundable purchase price related to the shares is reported as current liabilities until the shares are vested. During the year ended December 31, 2019, as part of the Company’s acquisitions, the Company issued 497,290 shares of restricted stock with a value of $2.0 million which are considered post‑combination consideration and accounted for as stock‑based compensation as the shares vest. The shares vest over a four-year service period. The activity for stock subject to vesting for the nine‑month period ended September 30, 2020 is as follows (shares in thousands): Shares subject Weighted Average to Vesting Purchase Price Balance of unvested shares as of January 1, 2020 4,575 $0.001 Issuance of additional shares — — Vested (4,301) 0.001 Balance of unvested shares as of September 30, 2020 274 $0.001 At September 30, 2020, the remaining weighted‑average vesting period for the stock subject to vesting was 0.7 years. Stock Incentive Plan —In 2015, the board of directors approved the adoption of the 2015 stock incentive plan (the “Plan”). The Plan allows for the award of incentive and nonqualified stock options, restricted stock, and other stock‑based awards to employees, officers, directors, consultants, and advisers of the Company. Awards may be made under the Plan for up to 21,522,567 shares of Common Stock. The Board of Directors administers the Plan and determines the exercise price of options, purchase price for restricted stock, the rates at which awards vest, and the other terms and conditions of the awards. Options and restricted stock generally vest 25% of the shares upon the first anniversary of the grant date and at the rate of 2.0833% per month thereafter over a three-year period for employees or over the service period for nonemployees and expire 10 years from the date of grant. No tax benefits were realized from options and other share‑based payment arrangements during the year. As part of an acquisition completed in July 2019, the Company assumed the 2018 equity incentive plan of Make Composites, Inc. (the “Make Plan”). The Make Plan allows for the award of incentive and nonqualified stock options and warrants for those employees and contractors that were hired as part of the acquisition. The plan allows for 193,223 options and warrants to be issued, which were issued in 2019, with no additional options to be issued in the future. The Board of Directors administers the Make Plan and determines the exercise price of options, purchase price for restricted stock, the rates at which awards vest, and the other terms and conditions of the awards. Options and restricted stock generally vest 25% of the shares upon the first anniversary of the grant date and at the rate of 2.0833% per month thereafter over a three-year period for employees or over the service period for nonemployees and expire 10 years from the date of grant. No tax benefits were realized from options and other share‑based payment arrangements during the year. The Company grants stock options at exercise prices deemed by the Board of Directors to be equal to the fair value of the Common Stock at the time of grant. The fair value of Common Stock has been determined by the Board of Directors of the Company at each stock option measurement date based on a variety of different factors, including the results obtained from independent third‑party appraisals, the Company’s consolidated financial position and historical financial performance, the status of technological development within the Company, the composition and ability of the current engineering and management team, an evaluation and benchmark of the Company’s competition, the current climate in the marketplace, the illiquid nature of the Common Stock, arm’s‑length sales of the Company’s capital stock (including convertible preferred stock), the effect of the rights and preferences of the Series Preferred Stock, and the prospects of a liquidity event, among others. During the nine months ended September 30, 2020 and 2019, the Company granted options to purchase 6,925,144 and 4,107,709 shares of Common Stock to employees with a fair value of $29.8 million and $8.9 million, respectively, calculated using the Black‑Scholes option‑pricing model with the following assumptions: September 30, 2020 September 30, 2019 Risk‑free interest rate 0.3 % – 1.7 % 1.9 % – 2.6 % Expected volatility 52.7 % – 54.2 % 53.3 % – 53.6 % Expected life (in years) 5.9 – 6.3 5.6 – 6.1 Expected dividend yield — — Fair value of Common Stock $ 1.71 – $ 9.75 $ During the nine months ended September 30, 2020 and September 30, 2019 the Company issued options to purchase 10,000 and 97,919 shares of Common Stock to consultants with a fair value of $0.1 million and $0.3 million, respectively, calculated using the Black Scholes option pricing model with the following assumptions September 30, 2020 September 30, 2019 Risk‑free interest rate 0.6 % – 0.8 % 1.5 % – 2.5 % Expected volatility 54.3 % – 54.8 % 54.4 % – 54.9 % Expected life (in years) 9.4 – 10.0 9.4 – 10.0 Expected dividend yield — — Fair value of Common Stock $ 1.71 – $ 9.75 $ The risk‑free interest rate assumption is based upon observed interest rates appropriate for the term of the related stock options. The expected life of employee stock options was calculated using the average of the contractual term of the option and the weighted‑average vesting period of the option, as the Company does not have sufficient history to use an alternative method to the simplified method to calculate an expected life for employees. For grants where the simplified method is precluded, the Company’s estimate of expected term is based forecasted exercises. For nonemployee grants, the Company uses the contractual term of the options. The Company has not paid a dividend and is not expected to pay a dividend in the foreseeable future. Expected volatility for the Company’s common stock was determined based on an average of the historical volatility of a peer group of similar public companies. At September 30, 2020, the total unrecognized stock‑based compensation expense related to unvested stock options aggregated $16.5 million. The costs are expected to be recognized over a weighted‑average period of 3.8 years. Total stock‑based compensation expense related to all of the Company’s stock‑based awards granted is reported in the consolidated statements of operations as follows (in thousands): September 30, 2020 2019 Research and development $ 2,176 $ 1,501 Sales and marketing expense 715 1,020 General and administrative expense 1,070 668 Cost of sales 267 241 Total stock-based compensation expenses $ 4,228 $ 3,430 There were 1,960,118 shares available for award under the Plan at September 30, 2020. The option activity of the Plan and Make Plan for the nine months ended September 30, 2020 is as follows: Weighted-Average Weighted-Average Remaining Number of Exercise Price Contractual Term Shares per Share (in years) Outstanding at January 1, 2020 14,792 $ 2.45 7.84 Granted 6,935 1.85 Exercised (409) 0.65 Forfeited/expired (5,287) 3.57 Outstanding at September 30, 2020 16,031 1.87 7.85 Options vested at September 30, 2020 8,167 1.83 6.38 Options vested or expected to vest at September 30, 2020 15,384 $ 1.87 7.78 The aggregate intrinsic value of options outstanding at September 30, 2020 is $126.3 million. The weighted average grant date fair value for options granted during the nine months ended September 30, 2020 and the nine months ended September 30, 2019 was approximately $4.30 and $2.11, respectively. The aggregate intrinsic value of options exercised during the nine months ended September 30, 2020 and the nine months ended September 30, 2019 was $1.7 million and $3.0 million, respectively. In July 2020, in order to incentivize and retain personnel, the Company repriced employee unvested stock option grants to the most recent common stock valuation. Vested awards were not eligible for repricing. Employees were allowed to opt out of the repricing of the unvested stock option grants by providing notice to the Company within a short period of time following the repricing. If an employee did not opt out of the repricing, all unvested options held by such employee were repriced and subject a new vesting schedule. Repriced options vest over a period of four years from the date of the repricing, with one-year cliff vesting and monthly vesting thereafter. The repricing affected 116 employees, at an incremental compensation cost of $3.6 million to the Company. Restricted Stock Units – RSUs awarded to employees generally vest over four years from the anniversary of the date of grant, with 1-year cliff vesting and monthly vesting thereafter, provided the employee remains continuously employed with the Company. Shares of the Company’s stock are delivered to the employee upon vesting, subject to payment of applicable withholding taxes. The fair value of RSUs is equal to the estimated fair market value of the Company’s common stock on the date of grant. Total unrecognized compensation costs related to non-vested RSUs at September 30, 2020 was approximately $4.1 million and is expected to be recognized over a period of 3.9 years. The total expense recognized during the nine months ended September 30, 2020 was $0.2 million. RSU activity under the Plan for the nine months ended September 30, 2020 is as follows: Shares subject Weighted Average to Vesting Grant Date Fair Value Balance of unvested shares as of January 1, 2020 — — Issuance of additional shares $ 9.75 Vested — — Balance of unvested shares as of September 30, 2020 $ 9.75 Common Stock Reserved for Future Issuance —As of September 30, 2020 and 2019, the Company has reserved the following shares of Common Stock for future issuance (in thousands): September 30, 2020 September 30, 2019 Common Stock options outstanding 16,031 14,490 Restricted Stock units outstanding 459 — Shares available for issuance under the Plan 1,960 4,463 Convertible Preferred Stock outstanding 100,038 100,038 Common Stock warrants outstanding 919 464 Total shares of authorized Common Stock reserved for future issuance 119,407 119,455 In May 2017, the Company entered into a strategic collaboration agreement with an investor, pursuant to which such investor would sell and distribute the Company’s products. In connection with this agreement, the Company agreed to issue warrants purchase up to 2,000,000 shares of Common Stock. The investor is eligible to receive a warrant to purchase one share of Common Stock for every $35.00 in revenue generated by the Company from the investor’s resellers. Each warrant is issued at an exercise price equal to $5.00 per share (subject to appropriate adjustment in the event of a stock dividend, stock split, combination, or other similar recapitalization) and expires on December 31, 2027. The Company issued warrants for the purchase of 399,960 and 477,629 shares of its common stock during the nine months ended September 30, 2020 and 2019. respectively. The Company recorded $0.04 million and $0.9 million related to the fair value of the warrants during the nine months ended September 30, 2020 and 2019, respectively. The assumptions used in the Black Scholes pricing model are the same as those used for nonemployee options. | 13. CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY Authorized Shares —At December 31, 2019 and 2018, the Company’s authorized shares consisted of 156,000,000 shares of Common Stock, $0.0001 par value (the “Common Stock”) 100,038,109 shares of Convertible Preferred Stock, respectively, par value of $0.0001 per share; 26,189,545 of which are designated as Series A Convertible Preferred Stock (“Series A Preferred Stock”), 23,675,035 of which are designated as Series B Convertible Preferred Stock (“Series B Preferred Stock”), 13,152,896 shares are designated as Series C Convertible Preferred Stock (“Series C Preferred Stock”), 21,075,193 shares are designated as Series D Convertible Preferred Stock (“Series D Preferred Stock”), 13,450,703 shares are designated as Series E Convertible Preferred Stock (“Series E Preferred Stock”), and 2,494,737 shares are designated as Series E‑1 Convertible Preferred Stock (“Series E‑1 Preferred Stock”) (collectively, the “Series Preferred Stock”). Preferred Stock On January 29, 2018 and June 29, 2018, the Company issued 4,086,111 and 11,674 shares of Series D Preferred Stock, respectively, at a purchase price of $8.5656 per share. The issuance costs for Series D Preferred Stock in 2018 were $0.2 million. On January 14, 2019 the Company issued 13,450,703 shares of Series E Preferred Stock at a purchase price of $10.0211 per share. The issuance costs for Series E Preferred Stock were $0.1 million. On January 14. 2019 the Company issued 2,494,737 shares of Series E‑1 Preferred Stock at a purchase price of $10.0211 per share. The issuance costs for Series E‑1 Preferred Stock were $0.02 million. The following table summarizes details of Convertible Preferred Stock authorized, issued and outstanding as of December 31, 2019 and 2018 ($ in thousands): Years Ended December 31, Convertible Preferred Stock Classes 2019 2018 Series A Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding, 26,189,545 and 26,189,545 shares, (liquidation preference of $106,853 and $88,783 at December 31, 2019 and 2018, respectively) $ $ 13,878 Series B Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding, 23,675,035 and 23,675,035 shares (liquidation preference of $96,594 and $80,258 at December 31, 2019 and 2018, respectively) 37,806 Series C Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding, 13,152,896 and 13,152,896 shares (liquidation preference of $53,664 and $45,000 at December 31, 2019 and 2018, respectively) 44,852 Series D Convertible Preferred Stock, $0.0001 par value—authorized, issued and outstanding, 21,075,193 and 21,075,193 shares (liquidation preference of $180,522 and $180,522 at December 31, 2019 and 2018, respectively) 180,353 Series E Convertible Preferred Stock, $0.0001 par value—authorized, 13,450,703 shares; issued and outstanding, 13,450,703 and 0 shares (liquidation preference of $134,791 and $0 at December 31, 2019 and 2018, respectively) — Series E‑1 Convertible Preferred Stock, $0.0001 par value—authorized, 2,494,737 shares; issued and outstanding, 2,494,737 and 0 shares (liquidation preference of $25,000 and $0 at December 31, 2019 and 2018, respectively) — Total $ $ 276,889 The following describes the rights and preferences of the Company’s Series Preferred Stock: Voting —The holders of Series Preferred Stock vote together with all other classes and series of stock as a single class on an as‑converted basis. Each share of Series Preferred Stock entitles the holder to such number of votes per share as shall equal the whole number of shares of Common Stock into which such share of Series Preferred Stock is then convertible. The holders of the Series A Preferred Stock are entitled to elect one director to the Company’s board of directors, the holders of the Series B Preferred Stock are entitled to elect two directors to the Company’s board of directors, the holders of Series C Preferred Stock are entitled to elect one director to the Company’s board of directors, the holders of the Series E Preferred Stock are entitled to elect one director to the Company’s board of directors, and the holders of the Common Stock are entitled to elect two directors to the Company’s board of directors. The holders of Series Preferred Stock retain rights to vote on certain specified matters as set forth in the Company’s certificate of incorporation. The holders of Series E‑1 Preferred Stock are not entitled to vote in elections of directors. Dividends —The Series Preferred Stock are entitled to receive dividends at the rate of 8% of the original issue price for each series of Series Preferred Stock payable only when, as and if, declared by the Company’s board of directors. Through December 31, 2019, no dividends have been declared. Liquidation —Upon any liquidation, dissolution, or winding‑up of the Company, whether voluntary or involuntary, the holders of the Series Preferred Stock are entitled to first be paid out of assets available for distribution, on a pari passu basis, prior and in preference to any distribution to the holders of the Company’s Common Stock, the greater of (a) an amount equal to $0.53372 per share for the Series A Preferred Stock, $1.6013 per share for Series B Preferred Stock, $3.4213 per share for the Series C Preferred Stock, $8.5656 per share for the Series D Preferred Stock, and $10.0211 per share for the Series E and Series E‑1 Preferred Stock, plus declared but unpaid dividends and (b) an amount per share that would have been payable had all shares of the Series Preferred Stock been converted to shares of Common Stock immediately prior to any liquidation, dissolution, or winding‑up of the Company. After payment of all preferential amounts required to be paid to the holders of Series Preferred Stock, the remaining assets of the Company available for distribution to the stockholders shall be distributed among the holders of shares of Common Stock pro rata based on the number of shares held by each such holder. Conversion —Each holder of Series Preferred Stock has the right, at their option at any time, to convert any such shares of Series Preferred Stock into fully paid and nonassessable shares of Common Stock. The conversion ratio is determined by dividing the original issue price of such share of Series Preferred Stock by the conversion price then in effect, which is initially equal to $0.53372 per share for the Series A Preferred Stock, $1.6013 per share for Series B Preferred Stock, $3.4213 per share for the Series C Preferred Stock, $8.5656 per share for the Series D Preferred Stock, and $10.0211 per share for the Series E and Series E‑1 Preferred Stock. The conversion price is subject to adjustment if certain dilutive events occur. Conversion is mandatory in the event of a firm‑commitment underwritten initial public offering of the Company’s Common Stock with a value of at least $5.13 per common share and $50 million in proceeds to the Company or upon the election of a majority of the holders of Series Preferred Stock, voting as a single class on an as‑converted basis. Redemption —The Series Preferred Stock is not subject to mandatory or optional redemption other than in connection with a liquidation, dissolution, or winding‑up of the Company. Common Stock Restricted Stock Agreements —During 2015, the Company issued 27,850,000 shares of Common Stock to the initial founders and certain employees of the Company at a purchase price of $0.0001 per share. The shares issued to the founders are subject to the Company’s right to repurchase at the original purchase price and such right to repurchase generally lapses at the rate of 20% of the shares upon the first anniversary of the grant date and at the rate of 1.67% per month thereafter over four years. The refundable purchase price related to the shares is reported as current liabilities until the shares are vested During the year ended December 31, 2019, as part of the Company’s acquisitions, the Company issued 497,290 shares of restricted stock with a value of $2.0 million which are considered post‑combination consideration and accounted for as stock‑based compensation as the shares vest. The shares vest over a four-year service period. The activity for stock subject to vesting for the years ended December 31, 2019 and 2018, are as follows (shares in thousands): Shared subject Weighted Average to Vesting Purchase Price Balance of unvested shares as of January 1, 2019 9,731 0.0001 Issuance of additional shares 0.0001 Vested (5,653) 0.0001 Balance of unvested shares as of December 31, 2019 4,575 0.0001 At December 31, 2019, the remaining weighted‑average vesting period for the stock subject to vesting was 0.7 years. In March 2018, the Company issued a promissory note totaling $248,874 in exchange for 279,166 shares of Common Stock. The note accrued interest at the rate of 2.57% per annum and was fully collateralized by the assets of the holder. The Company has accounted for the note as recourse note and has recorded it as a deduction from stockholders’ equity. The note plus $6,571 interest was settled with the Company through the repurchase of 62,610 shares of Common Stock by the Company, at the then current fair value in March 2019. Stock Incentive Plan —In 2015, the Board of Directors approved the adoption of the 2015 stock incentive plan (the “Plan”). The Plan allows for the award of incentive and nonqualified stock options, restricted stock, and other stock‑based awards to employees, officers, directors, consultants, and advisers of the Company. Awards may be made under the Plan for up to 21,522,567 shares of Common Stock. The Board of Directors administers the Plan and determines the exercise price of options, purchase price for restricted stock, the rates at which awards vest, and the other terms and conditions of the awards. Options and restricted stock generally vest 25% of the shares upon the first anniversary of the grant date and at the rate of 2.0833% per month thereafter over a three-year period for employees or over the service period for nonemployees and expire 10 years from the date of grant. No tax benefits were realized from options and other share‑based payment arrangements during the year. As part of the Make acquisition, the Company assumed the 2018 equity incentive plan of Make Composites, Inc. (the “Make Plan”). The Make Plan allows for the award of incentive and nonqualified stock options and warrants for those employees and contractors that were hired as part of the acquisition. The Make Plan allows for 190,223 options and warrants to be issued, which were issued in 2019, with no additional options to be issued in the future. The Board of Directors administers the Make Plan and determines the exercise price of options, purchase price for restricted stock, the rates at which awards vest, and the other terms and conditions of the awards. Options and restricted stock generally vest 25% of the shares upon the first anniversary of the grant date and at the rate of 2.0833% per month thereafter over a three-year period for employees or over the service period for nonemployees and expire 10 years from the date of grant. No tax benefits were realized from options and other share‑based payment arrangements during the year. The Company grants stock options at exercise prices deemed by the Board of Directors to be equal to the fair value of the Common Stock at the time of grant. The fair value of Common Stock has been determined by the Board of Directors of the Company at each stock option measurement date based on a variety of different factors, including the results obtained from independent third‑party appraisals, the Company’s consolidated financial position and historical financial performance, the status of technological development within the Company, the composition and ability of the current engineering and management team, an evaluation and benchmark of the Company’s competition, the current climate in the marketplace, the illiquid nature of the Common Stock, arm’s‑length sales of the Company’s capital stock (including Convertible Preferred Stock), the effect of the rights and preferences of the Series Preferred Stock, and the prospects of a liquidity event, among others. In 2019 and 2018 , the Company granted options to purchase 4,692,509 shares and 2,387,517 shares of Common Stock to employees with a fair value of $10.1 million and $3.9 million, respectively, calculated using the Black‑Scholes option‑pricing model with the following assumptions: Years Ended December 31, 2019 2018 Risk‑free interest rate 1.7%–2.6 % 2.7%–3.0 % Expected volatility 52.7%–53.6 % 52.9%–53.8 % Expected life (in years) 5.6–6.1 5.3–6.1 Expected dividend yield — — Fair value of Common Stock $ 4.08 $ 3.39 The Company issued no options to consultants during the year ended December 31, 2018. In 2019, the Company granted options to purchase 97,919 shares of Common Stock to consultants with a fair value of $0.6 million, calculated using the Black‑Scholes option‑pricing model with the following assumptions, with the options valued at the date in which they vest: Years Ended December 31, 2019 2018 Risk‑free interest rate 1.4%–3.1 % 2.1%–3.1 % Expected volatility 52.4%–61.5 % 53.7%–61.5 % Expected life (in years) 6.2–10.0 7.2–10.0 Expected dividend yield — — Fair value of Common Stock $ 4.08 $ 3.39 The risk‑free interest rate assumption is based upon observed interest rates appropriate for the term of the related stock options. The expected life of employee stock options was calculated using the average of the contractual term of the option and the weighted‑average vesting period of the option, as the Company does not have sufficient history to use an alternative method to the simplified method to calculate an expected life for employees. For nonemployee grants, the Company uses the contractual term of the options. The Company has not paid a dividend and is not expected to pay a dividend in the foreseeable future. Expected volatility for the Company’s Common Stock was determined based on an average of the historical volatility of a peer group of similar public companies. At December 31, 2019 and 2018, the total unrecognized stock‑based compensation expense related to unvested stock options aggregated $13.0 million and $6.9 million, respectively. The costs are expected to be recognized over a weighted‑average period of one year. Total stock‑based compensation expense related to all of the Company’s stock‑based awards granted is reported in the consolidated statements of operations as follows (in thousands): Years Ended December 31, 2019 2018 Research and development $ $ 1,696 Sales and marketing expense 567 General and administrative expense 658 Cost of sales 44 Total stock based compensation expenses $ $ 2,965 There were 3,894,467 shares available for award under the Plan at December 31, 2019. The option activity of the Plan and Make Plan for the year ended December 31, 2019, is as follows (shares in thousands): Weighted-Average Weighted-Average Remaining Number of Exercise Price Contractual Term Shares per Share (in years) Outstanding at January 1, 2019 12,007 $ 1.65 8.21 Granted 4,790 3.98 Exercised (997) 0.71 Forfeited/expired (1,008) 1.88 — Outstanding at December 31, 2019 14,792 2.45 7.84 Options vested at December 31, 2019 7,195 1.52 6.92 Options vested or expected to vest at December 31, 2019 14,555 2.44 7.82 The aggregate intrinsic value of options outstanding at December 31, 2019 is $24.04 million. The weighted‑average grant‑date fair value for options granted during 2019 and 2018 was approximately $2.17 and $1.64, respectively. The aggregate intrinsic value of options exercised during the years ended December 31, 2019 and 2018, was $3.4 million and $2.1 million, respectively. Common Stock Reserved for Future Issuance —As of December 31, 2019 and 2018, the Company has reserved the following shares of Common Stock for future issuance (in thousands): Years Ended December 31, 2019 2018 Common Stock options outstanding 12,007 Shares available for issuance under the Plan 565 Convertible Preferred Stock outstanding 84,093 Common Stock warrants outstanding 2,000 Total shares of authorized Common Stock reserved for future issuance 98,665 In May 2017, the Company entered into a strategic collaboration agreement with an investor allowing the investor’s resellers to sell and distribute the Company’s products. In consideration for this agreement, the Company agreed to issue warrants to purchase up to 2,000,000 shares of Common Stock. The investor is eligible to receive a warrant to purchase one share of Common Stock for every $35.00 in revenue generated by the Company from the investor’s resellers. Each warrant is issued at an exercise price equal to $5.00 per share (subject to appropriate adjustment in the event of a stock dividend, stock split, combination, or other similar recapitalization) and shall expire on December 31, 2027. The Company issued 501,113 warrants in 2019 and 18,389 in 2018. The Company recorded $1.0 million related to the fair value of the warrants in 2019 and $34,939 in 2018, calculated using the Black‑Scholes warrant‑pricing model. The assumptions used in the Black‑Scholes pricing model are the same as those used for nonemployee options. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
SEGMENT INFORMATION | ||
SEGMENT INFORMATION | 12. 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 one segment. The Company currently ships its product to markets in the Americas, Europe, Middle East and Africa (“EMEA”), and Asia Pacific (“APAC”). The Company anticipates additional products launching in the near term future, across those same markets. Disaggregated revenue data for those markets is as follows (in thousands): Revenue during nine months ended September 30, 2020 Americas EMEA APAC Total Product $ 2,372 $ 2,411 $ 1,330 $ 6,113 Services 962 888 138 1,988 Total $ 3,334 $ 3,299 $ 1,468 $ 8,101 Revenue during nine months ended September 30, 2019 Americas EMEA APAC Total Product $ 11,561 $ 5,909 $ 1,185 $ 18,655 Services 1,851 341 29 2,221 Total $ 13,412 $ 6,250 $ 1,214 $ 20,876 During the nine months ended September 30, 2020 and 2019, the Company recognized the following revenue from service contracts and cloud‑based software licenses over time, and hardware and consumable product shipments and subscription software at a point in time (in thousands): Nine Months Ended September 30, 2020 2019 Revenue recognized at a point in time $ 6,113 $ 18,655 Revenue recognized over time 1,988 2,221 Total $ 8,101 $ 20,876 For the nine months ended September 30, 2020 and 2019, no single customer accounted for more than 10% of the Company’s consolidated revenue. The Company’s long‑lived assets are substantially all located in the United States where the Company’s primary operations are located. | 14. SEGMENT INFORMATION In its operation of the business, management, including the Company’s chief operating decision maker, who is also our Chief Executive Officer, reviews the business as one segment. The Company currently ships its product to markets in the Americas, Europe Middle East and Africa (“EMEA”), and Asia Pacific (“APAC”). Disaggregated revenue data for those markets is as follows (in thousands): Revenue during the year ended December 31, 2019 Americas EMEA APAC Product $ 12,746 $ 8,430 $ 1,582 Services 3,055 563 63 Total $ 15,801 $ 8,993 $ 1,645 Revenue during the year ended December 31, 2018 Americas EMEA APAC Product $ 751 $ — $ — Services 283 — — Total $ 1,034 $ — $ — During the years ended December 31, 2019 and 2018, the Company recognized the following revenue from service contracts and cloud‑based software licenses over time, and hardware and consumable product shipments and subscription software at a point in time (in thousands): Years Ended December 31, 2019 2018 Revenue recognized at a point in time $ 22,758 $ 751 Revenue recognized over time 3,681 283 Total $ 26,439 $ 1,034 For the years ended December 31, 2019 and 2018, no single customer accounted for more than 10% of our consolidated revenue. The Company’s long‑lived assets are substantially all located in the United States where the Company’s primary operations are located. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
RELATED PARTY TRANSACTIONS | ||
RELATED PARTY TRANSACTIONS | 13. Related‑Party Transactions In 2017, the Company issued warrants related to the strategic collaboration agreement (Note 11). The investor was no longer considered a related party in the nine months ended September 30, 2020 and the year ended December 31, 2019. | 15. RELATED‑PARTY TRANSACTIONS The Company recorded $34,939 related to the warrants issued during the year ended December 31, 2018 related to the strategic collaboration agreement (Note 13). The investor was no longer considered a related‑party in the year ended December 31, 2019. As of December 31, 2018, the Company recognized $0.1 million of revenue and $0.1 million of deferred revenue from sales to two investors. The Company invested $0.5 million in a company, Make, during the year ended December 31, 2018, of which common investors own approximately 31% of the outstanding shares. The Company completed the acquisition of Make in the year ended December 31, 2019 (Note 4). |
NET LOSS PER SHARE
NET LOSS PER SHARE | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
NET LOSS PER SHARE | ||
NET LOSS PER SHARE | 14. Net Loss Per Share The Company computes basic loss per share using net loss attributable to Desktop Metal, Inc. Common Stockholders and the weighted‑average number of common shares outstanding during each period. Diluted earnings per share include shares issuable upon exercise of outstanding stock options and stock‑based awards where the conversion of such instruments would be dilutive. September 30, (in thousands, except per share amounts) 2020 2019 Numerator for basic and diluted net loss per share: Net loss attributable to Desktop Metal, Inc Common Stockholders $ (65,027) $ (75,769) Denominator for basic and diluted net loss per share: Weighted average shares 29,457 Net loss per share—Basic and Diluted $ (2.21) $ (3.38) For the nine months ended September 30, 2020 and 2019 the effect of dilutive securities, including non‑vested stock options restricted stock awards, warrants, and Convertible Preferred Stock, was excluded from the denominator for the calculation of diluted net loss per share because the Company recognized a net loss for the period and their inclusion would be antidilutive. Dilutive securities excluded were 117,722,359 and 121,001,479 shares for the nine months ended September 30, 2020 and 2019, respectively. | 16. NET LOSS PER SHARE The Company computes basic loss per share using net loss attributable to Desktop Metal, Inc. Common Stockholders and the weighted‑average number of common shares outstanding during each period. Diluted earnings per share include shares issuable upon exercise of outstanding stock options and stock‑based awards where the conversion of such instruments would be dilutive. Years Ended December 31, (in thousands, except per share amounts) 2019 2018 Numerator for basic and diluted net loss per share: Net loss attributable to Desktop Metal, Inc Common Stockholders $ (103,596) $ (121,339) Denominator for basic and diluted net loss per share: Weighted average shares 23,379 16,495 Net loss per share—Basic and Diluted $ (4.43) $ (7.36) For the years ended December 31, 2019 and 2018 the effect of dilutive securities, including non‑vested stock options, restricted stock awards, warrants, and Convertible Preferred Stock, was excluded from the denominator for the calculation of diluted net loss per share because we recognized a net loss for the period and their inclusion would be antidilutive. Dilutive securities excluded were 115,349,706 and 96,117,086 shares for the years ended December 31, 2019 and 2018, respectively. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
SUBSEQUENT EVENTS | ||
SUBSEQUENT EVENTS | 15. Subsequent Events As described in Note 1, the Company completed the Business Combination on December 9, 2020. Management has evaluated subsequent events occurring through December 11, 2020, the date that these condensed consolidated financial statements were available to be issued and determined that no additional subsequent events occurred that would require recognition or disclosure in these condensed consolidated financial statements other than those in this note. | 17. SUBSEQUENT EVENTS The coronavirus (“COVID‑19”) pandemic, as well as the response to mitigate the spread and effects of COVID‑19 may impact the Company and its customers, as well as the demand for its products and services. The impact of COVID‑19 on the Company’s operational results in subsequent periods will largely depend on future developments, cannot be accurately predicted. These developments may include, but are not limited to, new information concerning the severity of COVID‑19, the degree of success of actions take to contain or treat COVID‑19 and the reactions by consumers, companies, governmental entities, and capital markets to such actions. In April 2020, the Company received loan proceeds in the amount of approximately $5.4 million under the Paycheck Protection Program (PPP). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses. The Company repaid the loan in its entirety on May 13, 2020. In July 2020 in order to incentivize and retain personnel, the Company repriced employee unvested stock option grants to the most recent 409A private stock valuation. Vested awards were not eligible for repricing. The repriced option is subject to a new four year vesting schedule with a vesting commencement date of September 1, 2020. Employees had the ability to opt out of the repricing of the unvested stock option grants by providing notice to the Company. On August 26, 2020, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Trine Acquisition Corp (“Trine”) to affect a business combination between Trine and the Company with the Company surviving the merger as a wholly owned subsidiary of Trine. At the effective time of the Merger, each share of Desktop Metal Convertible Preferred Stock and each share of Desktop Metal Common Stock will be converted into the right to receive such number of shares of Trine’s Class A Common Stock. The aggregate consideration for the transaction payable to Desktop Metal existing stockholders is capped at $1.8 billion. The consummation of the proposed transaction is subject to the receipt of the requisite approval of the stockholders of each Trine and Desktop Metal and the fulfillment of certain other closing conditions. Management has evaluated subsequent events occurring through September 14, 2020, the date that these consolidated financial statements were available to be issued and determined that no additional subsequent events occurred that would require recognition or disclosure in these consolidated financial statements other than those in this note. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Unaudited Interim Financial Statements | Unaudited Interim Financial Statements The unaudited condensed consolidated financial statements include the accounts of Desktop Metal, Inc. and wholly‑owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in condensed consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The information as of December 31, 2019 included in the unaudited condensed consolidated balance sheets was derived from the Company’s audited consolidated financial statements. The unaudited condensed consolidated financial statements included in this Current Report on Form 8-K were prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments (all of which are considered of a normal recurring nature) considered necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods and dates presented. The results of operations for the nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements and related notes included elsewhere in this Current Report on Form 8-K. | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements of the Company are presented for Desktop Metal, Inc. (“Parent”) and its wholly‑owned subsidiaries. The Company has prepared the accompanying unaudited condensed consolidated financial statements pursuant to GAAP. Preparing financial statements requires the Company to make estimates and assumptions that affect the amounts that are reported in the condensed consolidated financial statements and accompanying disclosures. Although these estimates are based on the Company’s best knowledge of current events and actions that the Company may undertake in the future, actual results may be different from the Company’s estimates. The results of operations presented herein are not necessarily indicative of the Company’s results for any future period. | Basis of Presentation The consolidated financial statements of the Company are prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”). The accompanying consolidated financial statements include the accounts of Desktop Metal, Inc. and its wholly owned subsidiaries, Desktop Metal Securities Corporation and Desktop Metal GmbH. The functional currency of Desktop Metal GmbH is U.S. Dollars. All intercompany transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make judgements, estimates and assumptions regarding uncertainties that affect the reported amounts of assets, liabilities and related disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Although the Company regularly assesses these estimates, actual results could differ materially from these estimates. Changes in estimates are recorded in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances available at the time estimates are made, including the Company’s expectation at the time regarding the duration, scope and severity of the ongoing COVID‑19 pandemic and the potential continued disruption of global economic conditions due to the pandemic. Actual results may differ from management’s estimates if these results differ from historical experience or other assumptions prove not to be substantially accurate, even if such assumptions are reasonable when made. | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires the Company’s management to make judgements, estimates and assumptions regarding uncertainties that affect the reported amounts of assets, liabilities and related disclosures of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Although the Company regularly assesses these estimates, actual results could differ materially from these estimates. Changes in estimates are recorded in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances. Actual results may differ from management’s estimates if these results differ from historical experience or other assumptions prove not to be substantially accurate, even if such assumptions are reasonable when made. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents include all highly liquid investments maturing within 90 days or less from the date of purchase. Cash equivalents consist of money market funds, totaling $33.9 million and $40.5 million as of September 30, 2020 and December 31, 2019, respectively, as well as other highly liquid cash equivalents totaling $0.0 million and $25.0 million as of September 30, 2020 and December 31, 2019, respectively. | Cash and Cash Equivalents Cash equivalents include all highly liquid investments maturing within 90 days or less from the date of purchase. Cash equivalents, consist of money market funds, totaling $40.5 million and $24 million as of December 31, 2019 and 2018 respectively, as well as other highly‑liquid cash equivalents totaling $25 million as of December 31, 2019. |
Short-Term Investments | Short‑Term Investments All of the Company’s investments, which consist of debt securities, are classified as available for sale and are carried at fair value. Unrealized gains and losses considered to be temporary in nature are recorded as a component of accumulated other comprehensive loss, net of related income taxes. The Company reviews all investments for reductions in fair value that are other than temporary. When such reductions occur, the cost of the investment is adjusted to fair value through recording a loss on investments in the condensed consolidated statements of operations. Gains and losses on investments are calculated on the basis of specific identification. | Short‑Term Investments All of the Company’s investments, which consist of debt securities, are classified as available for sale and are carried at fair value. Unrealized gains and losses considered to be temporary in nature are recorded as a component of accumulated other comprehensive loss, net of related income taxes. The Company reviews all investments for reductions in fair value that are other than temporary. When such reductions occur, the cost of the investment is adjusted to fair value through recording a loss on investments in the consolidated statements of operations. Gains and losses on investments are calculated on the basis of specific identification. |
Restricted Cash | Restricted Cash The Company maintains a letter of credit for the benefit of the landlord for their office facility. The issuer of the letter of credit requires the Company to maintain a deposit in the amount of $0.6 million to secure the letter, which is reported as restricted cash in the consolidated balance sheets. This letter of credit automatically renews every year until it matures on February 7, 2024; therefore, it is classified as long term in nature at December 31, 2019 and 2018. | |
Revenue | Revenue Product Revenue and Service Revenue Product revenue include sales of the Company’s 3-D metal systems, which consist of modular printers furnaces, and debinders as well as sales of accessories and consumables. These consumables are primarily comprised of materials used by the printers during the printing process to produce parts and other wear items or components in the products that must be replaced after certain amounts of use. Certain on‑premises software that is embedded with the hardware and sold with the product bundle and is included within product revenue. Revenue from products is recognized upon transfer of control, which is generally at the point of shipment. The Company typically recognizes revenue on embedded software once the customer has been given access to the software. Services revenue includes revenue from various cloud‑based software solutions the Company offers to facilitate the design of parts and operation of the Company’s products. The Company offers multiple software products, which are licensed through either a cloud‑based solution and/or an on‑premises software subscription, depending on the product. For the cloud‑based solution, the Company typically provides an annual subscription that the customer does not have the right to take possession of and is renewed at expiration. The revenue from the cloud‑based solution is recognized ratably over the annual term as the Company considers the services provided under the cloud‑based solution to be a series of distinct performance obligations, as the Company provides continuous daily access to the cloud solution. For on‑premises software subscriptions, the Company typically recognizes revenue once the customer has been given access to the software. Service revenue also consists of installation, training, and post-installation customer support. When the Company enters into development contracts, control of the development service is transferred over time, and the related revenue is recognized over time. Revenue Recognition The Company adopted Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers , on January 1, 2018, using the full retrospective method. Revenue is measured as the amount of consideration expected to be received in exchange for transferring goods or providing services. The amount of consideration is typically a fixed price at the contract inception. Consideration from shipping and handling is recorded on a gross basis within product revenue. The Company determines revenue recognition through the following steps: · Identification of the contract, or contracts, with a customer · Identification of the performance obligations in the contract · Determination of the transaction price · Allocation of the transaction price to the performance obligations in the contract · Recognition of revenue when, or as, the Company satisfies a performance obligation Nature of Products and Services The Company sells its products primarily through authorized resellers, independent sales agents, and its own internal sales team. Revenue from hardware and consumables is recognized upon transfer of control, which is generally at the point of shipment. The cloud‑based software solution is typically provided as an annual license that the customer does not have the right to take possession of and is renewed each year. The revenue from the cloud‑based solution is recognized ratably over the annual term as the Company considers the services provided under the licenses to be a series of distinct performance obligations. For the on‑premise software, the Company typically recognizes revenue once the customer has been given access to the software. The Company’s post-installation customer support is primarily sold through one‑year annual contracts and such revenue is recognized ratably over the term of the agreement. Service Revenue from installation and training is recognized as performed. The Company’s terms of sale generally provide payment terms that are customary in the countries where the Company transacts business. To reduce credit risk in connection with certain sales, the Company may, depending upon the circumstances, require significant deposits or payment in full prior to shipment. Due to the short‑term nature of the Company’s contracts substantially all of the outstanding performance obligations are recognized within one year. Shipping and handling activities that occur after control over a product has transferred to a customer are accounted for as fulfillment activities rather than performance obligations, as allowed under a practical expedient provided by ASC 606. The shipping and handling fees charged to customers are recognized as revenue and the related costs are included in cost of sales at the point in time when ownership of the product is transferred to the customer. Sales taxes and value added taxes collected concurrently with revenue generating activities are excluded from revenue. Significant Judgements The Company enters into contracts with customers that can include hardware products and cloud-based software, which are determined to be distinct and accounted for as separate performance obligations. Products or services that are promised to a customer can be considered distinct if both of the following criteria are met: (i) the customer can benefit from the products or services either on its own or together with other readily available resources and (ii) the Company’s promise to transfer the products, software, or services to the customer is separately identifiable from other promises in the contract. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Judgement is required to determine the standalone selling price (SSP). The transaction price is allocated to each distinct performance obligation on a relative standalone selling price basis and revenue is recognized for each performance obligation when control has passed. In most cases, the Company is able to establish SSP based on historical transaction data of the observable prices of hardware products sold separately in comparable circumstances to similar customers, observable renewal rates for software and post-installation support, and the Company’s best estimates selling price at which the Company would have sold the product regularly on a stand‑alone basis for training and installation. The Company reassesses the SSP on a periodic basis or when facts and circumstances change. Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, customer deposits and deferred revenues (contract liabilities) on the condensed consolidated balance sheets. Timing of revenue recognition may differ from the timing of invoicing to customers. The Company records a receivable at the time of invoicing. For most of the Company’s contracts, customers are invoiced when products are shipped or when services are performed. The Company typically bills in advance for post‑installation support and cloud‑based software licenses, resulting in deferred revenue. The Company’s deferred revenue balance was $1.1 million and $2.2 million as of September 30, 2020 and December 31, 2019, respectively. The deferred revenue consists primarily of billed post-installation customer support and cloud‑based software licenses that are recognized ratably over the term of the agreement, and to a lesser extent related to contracts that have outstanding performance obligations, and contracts that have acceptance terms that have not yet been fulfilled. When products have been delivered, but the product revenue associated with the arrangement has been deferred as described above, the Company includes the costs for the delivered items in prepaid expenses and other current assets on the condensed consolidated balance sheets until recognition of the related revenue occurs, at which time it is recognized in cost of sales. The Company’s deferred cost of sales balance was $0 and $0.3 million as of September 30, 2020 and December 31, 2019, respectively. As the Company’s contracts are primarily one year or less, substantially all deferred revenue outstanding at the end of the fiscal year is recognized during the following year. For the periods ended September 30, 2020 and 2019, the Company paid commissions to its external partners and internal sales team. The Company acts as a principal in the contracts with its partners as the Company controls the product, establishes the price, and bears the risk of nonperformance. The Company records the revenue on a gross basis and commissions are recorded as a sales and marketing expense. The Company recognizes its commission expense as a point‑in‑time expense as contract obligations are primarily completed within a one‑year contract period. See Note 12 for additional information related to disaggregation of revenue. | Revenue Product Revenue and Service Revenue Product revenue include sales of the Company’s 3‑D metal systems, which consist of modular printers, furnaces, and debinders as well as sale of accessories and consumables. These consumables are primarily comprised of materials, which are used by the printers during the printing process to produce parts. Certain on‑premises software that is embedded with the hardware and sold with the product bundle and is included within product revenue. Revenue from products is recognized upon transfer of control, which is generally at the point of shipment. The Company typically recognizes revenue on embedded software once the customer has been given access to the software. Services revenue includes revenue from various software cloud-based solutions the Company offers to facilitate the design of parts and operation of the Company’s products. The Company offers multiple software products, which are licensed through either a cloud‑based solution and/or an on‑premises software subscription, depending on the product. For the cloud‑based solution, the Company typically provides an annual subscription that the customer does not have the right to take possession of and is renewed at expiration. The revenue from the cloud‑based solution is recognized ratably over the annual term as the Company considers the services provided under the cloud‑based solution to be a series of distinct performance obligations, as the Company provides continuous daily access to the cloud solution. For on‑premises software subscriptions, the Company typically recognizes revenue once the customer has been given access to the software. Service revenue also consists of installation, training, and post contract support. When the Company enters into development contracts, control of the development service is transferred over time, and the related revenue is recognized over time. Revenue Recognition The Company adopted Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers , on January 1, 2018, using the full retrospective method. Revenue is measured as the amount of consideration expected to be received in exchange for transferring goods or providing services. The amount of consideration is typically a fixed price at the contract inception. Consideration from shipping and handling is recorded on a gross basis within product revenue. The Company determines revenue recognition through the following steps: · Identification of the contract, or contracts, with a customer · Identification of the performance obligations in the contract · Determination of the transaction price · Allocation of the transaction price to the performance obligations in the contract · Recognition of revenue when, or as, the Company satisfies a performance obligation Nature of Products and Services The Company sells its products primarily through authorized resellers, independent sales agents, and its own sales force. Revenue from hardware and consumables is recognized upon transfer of control, which is generally at the point of shipment. The Company’s post‑contract support is primarily sold through one‑year annual contracts and post contract support revenue is recognized ratably over the term of the agreement. Post contract support is related to the service and maintenance of the Company’s hardware products after delivery and installation to the customer. Service revenue from installation and training is recognized as performed. Our terms of sale generally provide payment terms that are customary in the countries where the Company transacts business. To reduce credit risk in connection with certain sales, the Company may, depending upon the circumstances, require deposits or payment in full prior to shipment. Due to the short term nature of our contracts substantially all of our outstanding performance obligations are recognized within one year. Shipping and handling activities that occur after control over a product has transferred to a customer are accounted for as fulfillment activities rather than performance obligations, as allowed under a practical expedient provided by ASC 606. The shipping and handling fees charged to customers are recognized as revenue and the related costs are included in cost of revenue at the point in time when ownership of the product is transferred to the customer. Sales taxes and value added taxes collected concurrently with revenue generating activities are excluded from revenue. Significant Judgements The Company enters into contracts with customers that can include various combinations of hardware products, software licenses, and services, which are distinct and accounted for as separate performance obligations. Products or services that are promised to a customer can be considered distinct if both of the following criteria are met: (i) the customer can benefit from the products or services either on its own or together with other readily available resources and (ii) the Company’s promise to transfer the products, software, or services to the customer is separately identifiable from other promises in the contract. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Judgement is required to determine the standalone selling price (SSP). The transaction price is allocated to each distinct performance obligation on a relative standalone selling price basis and revenue is recognized for each performance obligation when control has passed. In most cases, the Company is able to establish SSP based historical transaction data of the observable prices of hardware products sold separately in comparable circumstances to similar customers, observable renewal rates for software and post contract support, and the Company’s best estimates selling price at which the Company would have sold the product regularly on a stand‑alone basis for training and installation. The Company reassesses the SSP on a periodic basis or when facts and circumstances change. Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, customer deposits and deferred revenues (contract liabilities) on the consolidated balance sheets. Timing of revenue recognition may differ from the timing of invoicing to customers. The Company record a receivable at the time of invoicing. For most contracts, customers are invoiced when products are shipped or when services are performed. The Company will typically bill in advance for post‑contract support and cloud‑based software licenses, resulting in deferred revenue. When products have been delivered, but the product revenue associated with the arrangement has been deferred the Company includes the costs for the delivered items in deferred costs of goods sold on the consolidated balance sheets until recognition of the related revenue occurs, at which time it is recognized in cost of goods sold. As of December 31, 2019, the Company deferred approximately $2.2 million of revenue and $0.3 million of costs, included in deferred costs of goods sold. The $3.9 million of revenue deferred as of December 31, 2018 was recognized as revenue in 2019. The deferred revenue consists primarily of billed post contract support and cloud‑based software licenses that are recognized ratably over the term of the agreement, and to a lesser extent related to contracts that have outstanding performance obligations, and contracts that have acceptance terms that have not yet been fulfilled. As of December 31, 2018, the Company deferred approximately $3.9 million of revenue and $3 million of costs, included in deferred costs of goods sold for hardware products delivered in 2018, and the remaining obligations for software, and services products to be delivered in 2019. The Company began shipping its 3‑D metal solutions during the fourth quarter of 2018. Due to the lack of history of the performance of the product and associated risk of return, as well as the lack of history of estimating additional costs associated with installation, the Company considered these as variable revenue constraints that required deferral of revenue for certain customers. The Company has recognized revenue only to the extent that it is probable that a significant reversal will not occur. As our contracts are primarily one year or less, substantially all deferred revenue outstanding at the end of the year is recognized during the following year. Our terms of sale generally provide payment terms that are customary in the countries where we transact business. To reduce credit risk in connection with certain sales, we may, depending upon the circumstances, require deposits prior to shipment. During the years ended December 31, 2019 and 2018, the Company pays commissions to its external partners and internal sales team. The Company acts as a principal in the contracts with their partners as the Company controls the product, establishes the price, and bears the risk of nonperformance. The Company records the revenue on a gross basis and commissions are recorded as a sales and marketing expense. The Company recognizes its commission expense as a point‑in‑time expense as contract obligations are primarily completed within a one‑year contract period. See Note 14 for additional information related to disaggregation of revenue. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts In evaluating the collectability of accounts receivable, the Company assesses a number of factors, including specific customers’ abilities to meet their financial obligations, the length of time receivables are past due, and historical collection experience. If circumstances related to specific customers change, or economic conditions deteriorate such that past collection experience is no longer relevant, the Company’s estimate of the recoverability of accounts receivable could be further reduced from the levels provided for in the condensed consolidated financial statements. The Company evaluates specific accounts for which the Company believes a customer may have an inability to meet their financial obligations. In these cases, the Company uses judgment, based on available facts and circumstances, and records a specific reserve for that customer to reduce the receivable to an amount the Company expects to collect. These specific reserves are reevaluated and adjusted as additional information is received that impacts the amount reserved. As of September 30, 2020, and December 31, 2019, the Company has recorded $0.5 million and $0.2 million respectively, in allowance for doubtful accounts. Bad debt expense was $0.3 million and $0 million for the nine months ended September 30, 2020 and September 30, 2019, respectively. As of September 30, 2020, the Company had one customer that represented 10% or more of accounts receivables, which accounted for 10% of total accounts receivable. As of December 31, 2019, no single customer accounted for more than 10% of total accounts receivables. | Allowance for Doubtful Accounts In evaluating the collectability of accounts receivable, the Company assesses a number of factors, including specific customers’ abilities to meet their financial obligations, the length of time receivables are past due, and historical collection experience. If circumstances related to specific customers change, or economic conditions deteriorate such that our past collection experience is no longer relevant, our estimate of the recoverability of our accounts receivable could be further reduced from the levels provided for in the consolidated financial statements. The Company evaluates specific accounts for which it is believed a customer may have an inability to meet their financial obligations. In these cases, judgment is applied, based on available facts and circumstances, and record a specific reserve is recorded for that customer to reduce the receivable to an amount expected to be collected. These specific reserves are reevaluated and adjusted as additional information is received that impacts the amount reserved. As of December 31, 2019, and 2018, the Company has recorded $0.2 million and $0.0 million respectively, in allowance of doubtful accounts. In the years ended December 31, 2019 and 2018 the Company recorded bad debt expense of $0.2 million and $0.0 million, respectively. |
Earnings Per share | Net Loss Per share The Company presents basic and diluted loss per common share amounts. Basic loss per common share is calculated by dividing net loss by the weighted average number of common shares outstanding during the applicable period. The denominator for diluted net loss per share is a computation of the weighted‑average number of ordinary shares and the potential dilutive ordinary shares outstanding during the period. Potential dilutive shares outstanding include the dilutive effect of in‑the‑money options, unvested Restricted Stock Agreements (“RSAs”), and unvested Restricted Stock Units (“RSUs”) using the treasury stock method. In periods in which the Company reports a net loss, diluted net loss per share is generally the same as basic net loss per share since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. See Note 14 for further information. | Earnings Per share The Company presents basic and diluted loss per common share amounts. Basic loss per common share is calculated by dividing net loss available to Common Stockholders by the weighted average number of common shares outstanding during the applicable period. The denominator for diluted earnings per share is a computation of the weighted‑average number of ordinary shares and the potential dilutive ordinary shares outstanding during the period. Potential dilutive shares outstanding include the dilutive effect of in‑the‑money options and unvested Restricted Stock Agreements (“RSAs”) using the treasury stock method. See Note 16 for further information. |
Warranty Reserve | Warranty Reserve Substantially all of the Company’s products, including hardware, and software are covered by a standard assurance warranty of one year. In the event of a failure of a hardware or software product covered by this warranty, the Company may repair or replace the software or hardware product at its option. The Company’s warranty reserve reflects estimated material and labor costs for potential or actual product issues in its installed base for which the Company expects to incur an obligation. The Company periodically assesses the adequacy of the warranty reserve and adjusts the amount as necessary. If the data used to calculate the adequacy of the warranty reserve are not indicative of future requirements, additional or reduced warranty reserves may be required. As of September 30, 2020 and December 31, 2019, the Company has recorded $1.7 million and $1.5 million, respectively, of warranty reserve within accrued expenses and other current liabilities on the condensed consolidated balance sheets. Accrued warranty at each balance sheet date consisted of the following (in thousands): September 30, 2020 December 31, 2019 Warranty reserve, at the beginning of the year $ 1,491 $ 116 Additions to warranty reserve 375 2,352 Claims fulfilled (132) (977) Warranty reserve, at the end of the period $ 1,734 $ 1,491 Warranty reserve is recorded in cost of sales in the condensed consolidated statement of operations. | Warranty Reserve Substantially, all of the Company’s products, hardware, and software are covered by a standard assurance warranty of one year. In the event of a failure of hardware product or software covered by this warranty, the Company may repair or replace the software or hardware product at its option. The Company’s warranty reserve reflects estimated material and labor costs for potential or actual product issues in its installed base for which the Company expects to incur an obligation. The Company periodically assesses the adequacy of the warranty reserve and adjusts the amount as necessary. If the data used to calculate the adequacy of the warranty reserve are not indicative of future requirements, additional or reduced warranty reserves may be required. As of December 31, 2019 and 2018 the Company has recorded $1.5 million and $0.1 million, respectively, of warranty reserve within accrued expenses and other current liabilities on the consolidated balance sheets. Accrued warranty consisted of the following (in thousands): Years Ended December 31, 2019 2018 Warranty reserve, at the beginning of the year $ 116 $ — Additions to warranty reserve 2,352 116 Claims fulfilled (977) — Warranty reserve, at the end of the year $ 1,491 $ 116 Warranty reserve is recorded through cost of sales in the consolidated statements of operations. |
Inventory | Inventory Inventory is stated at the lower of cost or net realizable value, determined on a first‑in, first‑out basis, and consists of the following (in thousands): September 30, 2020 December 31, 2019 Work in process $ 3,062 $ 1,081 Finished goods 7,301 7,324 $ 10,363 $ 8,405 The Company provides for inventory losses based on obsolescence and levels in excess of forecasted demand. In these cases, inventory is reduced to the estimated net realizable value based on historical usage and expected demand. Inventory provisions based on obsolescence and inventory in excess of forecasted demand are recorded in cost of sales in the condensed consolidated statement of operations. | Inventory and Deferred Cost of Goods Sold Inventory is stated at the lower of cost or net realizable value, determined on a first‑in, first‑out basis, and consists of the following (in thousands): Years Ended December 31, 2019 2018 Work in process $ 1,081 $ 2,741 Finished goods 7,324 1,241 $ 8,405 $ 3,982 The Company provides for inventory losses based on obsolescence and levels in excess of forecasted demand. In these cases, inventory is reduced to the estimated net realizable value based on historical usage and expected demand. Inventory provisions based on obsolescence and inventory in excess of forecasted demand are recorded through cost of sales in the consolidated statements of operations. |
Concentrations of Credit Risk and Off-Balance-Sheet Risk | Concentrations of Credit Risk and Off‑Balance‑Sheet Risk The Company has no significant off‑balance‑sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that potentially expose the Company to concentrations of credit risk consist mainly of cash and cash equivalents. The Company maintains its cash and cash equivalents principally with accredited financial institutions of high‑credit standing. | Concentrations of Credit Risk and Off‑Balance‑Sheet Risk The Company has no significant off‑balance‑sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that potentially expose the Company to concentrations of credit risk consist mainly of cash and cash equivalents. The Company maintains its cash and cash equivalents principally with accredited financial institutions of high‑credit standing. |
Customer deposit | Customer Deposits Payments received from customers who have placed reservations or purchase orders in advance of shipment are refundable upon cancellation or non‑delivery by the Company and are included within customer deposits on the consolidated balance sheets. | |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Expenditures for repairs and maintenance are expensed as incurred. When assets are retired or disposed of, the assets and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is included in the determination of net income or loss. Depreciation is recorded using the straight‑line method over the estimated useful lives of the related assets. | Property and Equipment Property and equipment is stated at cost. Expenditures for repairs and maintenance are expensed as incurred. When assets are retired or disposed of, the assets and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is included in the determination of net income or loss. Depreciation is recorded using the straight‑line method over the estimated useful lives of the related assets. |
Business Combinations | Business Combinations The Company allocates the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The estimates used to value the net assets acquired are based in part on historical experience and information obtained from the management of the acquired company. The Company generally values the identifiable intangible assets acquired using a discounted cash flow model. The significant estimates used in valuing certain of the intangible assets, include, but are not limited to future expected cash flows of the asset, discount rates to determine the present value of the future cash flows and expected technology life cycles. Intangible assets are amortized over their estimated useful life; the period over which the Company anticipates generating economic benefit from the asset. Fair value adjustments subsequent to the acquisition date, that are not measurement period adjustments, are recognized in earnings. | Business Combinations The Company allocates the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The estimates used to value the net assets acquired are based in part on historical experience and information obtained from the management of the acquired company. The Company generally values the identifiable intangible assets acquired using a discounted cash flow model. The significant estimates used in valuing certain of the intangible assets, include, but are not limited to future expected cash flows of the asset, discount rates to determine the present value of the future cash flows and expected technology life cycles. Intangible assets are amortized over their estimated useful life; the period over which the Company anticipates generating economic benefit from the asset. Fair value adjustments subsequent to the acquisition date, that are not measurement period adjustments, are recognized in earnings. |
Deferred Transaction Costs and Transaction Costs Payable | Deferred Transaction Costs and Transaction Costs Payable As part of the contemplated reverse recapitalization transaction with Trine Acquisition Corp, (“Trine”) the details of which are discussed in an initial S-4 filed with the SEC by on September 15, 2020 and subsequent amendments, the Company has accrued direct and incremental transaction costs related to the merger which will be deducted from the combined entity’s additional paid-in capital at the closing of the transaction when the proceeds are received. As of September 30, 2020, the Company had recorded $2.3 million of transaction costs payable to advisers, which $1.7 million is included in accounts payable and $0.6 million is included in accrued expenses and other current liabilities in the condensed consolidated balance sheets. | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The Company has recorded $2.3 million of goodwill and $3.3 million of acquired technology as a result of two business combinations completed during the year ended December 31, 2019. As of September 30, 2020, the Company has recorded $0.8 million of accumulated amortization on the acquired technology. Goodwill represents the future economic benefits arising from other assets acquired in a business combination or an acquisition that is not individually identified and separately recorded. The excess of the purchase price over the estimated fair value of net assets of businesses acquired in a business combination is recognized as goodwill. Intangible assets consist of identifiable intangible assets, including developed technology, resulting from the Company’s acquisitions. Goodwill is not amortized but is tested for impairment at least annually (as of the first day of the fourth quarter) or as circumstances indicate the value may no longer be recoverable. To assess if goodwill is impaired, the Company performs a qualitative assessment to determine whether further impairment testing is necessary. The Company then compares the carrying amount of the single reporting unit to the fair value of the reporting unit. An excess carrying value over fair value would indicate that goodwill may be impaired. The Company evaluates definite‑lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If indicators of impairment are present, the Company then compares the estimated undiscounted cash flows that the specific asset is expected to generate to its carrying value. If such assets are impaired, the impairment recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value. To date, there have been no impairments of goodwill or intangible assets. Intangible assets are amortized over their useful lives. | Goodwill and Intangible Assets The Company has recorded $2.3 million of goodwill and $3.3 million of acquired technology, net of $0.3 million of amortization expense as of December 31, 2019, as a result of two business combinations completed during the year ended December 31, 2019. Goodwill represents the future economic benefits arising from other assets acquired in a business combination or an acquisition that is not individually identified and separately recorded. The excess of the purchase price over the estimated fair value of net assets of businesses acquired in a business combination is recognized as goodwill. Intangible assets consist of identifiable intangible assets, including developed technology, resulting from the Company’s acquisitions. Goodwill is not amortized but is tested for impairment at least annually (as of the first day of the fourth quarter) or as circumstances indicate the value may no longer be recoverable. To assess if goodwill is impaired, the Company performs a qualitative assessment to determine whether further impairment testing is necessary. The Company then compares the carrying amount of the single reporting unit to the fair value of the reporting unit. An excess carrying value over fair value would indicate that goodwill may be impaired. The Company evaluates definite‑lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If indicators of impairment are present, the Company then compares the estimated undiscounted cash flows that the specific asset is expected to generate to its carrying value. If such assets are impaired, the impairment recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value. To date, there have been no impairments of goodwill or intangible assets. Intangible assets are amortized over their useful life. |
Impairment of Long-Lived Assets | Impairment of Long‑Lived Assets The Company evaluates whether events or circumstances have occurred that indicate that the estimated remaining useful life of its long‑lived assets may warrant revision or that the carrying value of these assets may be impaired. The Company does not believe that any events have occurred through September 30, 2020, that would indicate its long‑lived assets are impaired. | Impairment of Long‑Lived Assets The Company evaluates whether events or circumstances have occurred that indicate that the estimated remaining useful life of its long‑lived assets may warrant revision or that the carrying value of these assets may be impaired. The Company does not believe that any events have occurred through December 31, 2019, that would indicate its long‑lived assets are impaired, other than the capitalized software as detailed in Note 6. |
Research and Development | Research and Development Research and development costs are expensed as incurred. Research and development expense includes costs, primarily related to salaries and benefits for employees and prototypes and design expenses, incurred to develop intellectual property and is charged to expense as incurred. Costs incurred internally in researching and developing a software product to be sold to customers are charged to expense until technological feasibility has been established for the product. Once technological feasibility is established, software costs are capitalized until the product is available for general release to customers. Judgment is required in determining when technological feasibility of a product is established. The Company has determined that technological feasibility for software products is reached after all high‑risk development issues have been resolved through coding and testing. Generally, this occurs shortly before the products are released, such that there are no material costs to capitalize. | |
Advertising Expense | Advertising Expense Advertising expense is included within sales and marketing expense in the consolidated statements of operations and was $0.1 million, $0.1 million for the years ended December 31, 2019 and 2018, respectively. It primarily includes promotional expenditures and is expensed as incurred; as such, efforts have not met the direct‑response criteria required for capitalization. | |
Stock-Based Compensation | Stock‑Based Compensation The Company accounts for all stock options granted to employees and nonemployees using a fair value method. Stock‑based compensation is measured at the grant‑date fair value of the award and is then recognized as the related services are rendered, typically over the vesting period. The measurement date for employee awards is generally the date of the grant and the measurement date for nonemployee awards is generally the date the performance of services is completed. The Company estimates forfeitures that will occur in their determination of the expense recorded. | Stock‑Based Compensation The Company accounts for all stock options granted to employees and nonemployees using a fair value method. Stock‑based compensation is measured at the grant‑date fair value of the award and is then recognized as the related services are rendered, typically over the vesting period. The measurement date for employee awards is generally the date of the grant and the measurement date for nonemployee awards is generally the date the performance of services is completed. The Company estimates forfeitures that will occur in their determination of the expense recorded. |
Income Taxes | Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the Company’s condensed consolidated financial statements and tax returns. Deferred tax assets and liabilities are determined based upon the differences between the condensed consolidated financial statements carrying amounts and the tax bases of existing assets and liabilities and for loss and credit carryforwards, using enacted tax rates expected to be in effect in the years in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that these assets may not be realized. The Company provides reserves for potential payments of taxes to various tax authorities related to uncertain tax positions. Amounts recognized are based on a determination of whether a tax benefit taken by the Company in its tax filings or positions is “more likely than not” to be sustained on audit. The amount recognized is equal to the largest amount that is more than 50% likely to be sustained. Interest and penalties associated with uncertain tax positions are recorded as a component of income tax expense. As of September 30, 2020 and December 31, 2019, the Company has not identified any uncertain tax positions for which reserves would be required. | Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the Company’s consolidated financial statements and tax returns. Deferred tax assets and liabilities are determined based upon the differences between the consolidated financial statements carrying amounts and the tax bases of existing assets and liabilities and for loss and credit carryforwards, using enacted tax rates expected to be in effect in the years in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that these assets may not be realized. The Company provides reserves for potential payments of taxes to various tax authorities related to uncertain tax positions. Amounts recognized are based on a determination of whether a tax benefit taken by the Company in its tax filings or positions is “more likely than not” to be sustained on audit. The amount recognized is equal to the largest amount that is more than 50% likely to be sustained. Interest and penalties associated with uncertain tax positions are recorded as a component of income tax expense. As of December 31, 2019 and 2018, the Company has not identified any uncertain tax positions for which reserves would be required. |
Comprehensive Loss | Comprehensive Loss The Company’s comprehensive loss consists of its net loss and unrealized gain and loss from investments. | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In December 2019, the FASB issued ASU 2019‑12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by eliminating some exceptions to the general approach in Accounting Standards Codification 740, Income Taxes. It also clarifies certain aspects of the existing guidance to promote more consistent application. This standard is effective for calendar‑year public business entities in 2021 and interim periods within that year, and early adoption is permitted. The Company is currently in the process of evaluating the impact the new standard will have on the consolidated financial statements. In June 2018, the FASB issued ASU No. 2018‑07, Compensation‑Stock Compensation (Topic 718): Improvements to Nonemployee Share‑Based Payment Accounting , which substantially aligns the measurement and classification guidance for share‑based payments to nonemployees with the guidance for share‑based payments to employees. The ASU also clarifies that any share‑based payment issued to a customer should be evaluated by the new revenue recognition standard. The new ASU requires a modified retrospective transition approach. The ASU is effective for the Company for the year ending December 31, 2020. Due to the Company’s Emerging Growth Company (EGC) status, the Company is permitted to defer adoption of ASU 2018‑07 in interim periods and adopt for its annual financial statements. Refer to Note 11 for discussion on stock‑compensation expense. In January 2017, the FASB issued ASU No. 2017‑04, “ Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ” (“ASU 2017‑ 04”), which eliminates the performance of Step 2 from the goodwill impairment test. In performing its annual or interim impairment testing, an entity will instead compare the fair value of the reporting unit with its carrying amount and recognize any impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Additionally, an entity should consider income tax effects from any tax‑deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss. As a smaller reporting company pursuant to Rule 12b‑2 of the Securities Exchange Act of 1934, as amended, these changes become effective for the Company on January 1, 2023. The Company is currently evaluating the potential impact of these changes on its consolidated financial statements. In June 2016, the FASB issued ASU 2016‑13, “ Financial Instruments—Credit Losses .” This ASU added a new impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses. The CECL model applies to most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and other loan commitments. The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected credit losses on assets that have a low risk of loss. As a smaller reporting company pursuant to Rule 12b‑2 of the Securities Exchange Act of 1934, as amended, these changes become effective for the Company on January 1, 2023. The Company is currently evaluating the potential impact of these changes on its consolidated financial statements | Recently Issued Accounting Standards Recently Adopted Accounting Guidance In November 2016, the Financial Accounting Standards Board (FASB) Issued Accounting Standards Update (ASU) No. 2016‑18, Statement of Cash Flows (Topic 230): Restricted Cash , that requires the changes in restricted cash and restricted cash equivalents that result from transfers between cash, cash equivalents, and restricted cash and restricted cash equivalents should not be presented as cash flow activities in the consolidated statements of cash flows. The Company has adopted the ASU as of January 1, 2019 on a retrospective basis. In January 2016, the FASB Issued ASU No. 2016‑01, Recognition and Measurement of Financial Assets and Financial Liabilities , which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Although the ASU retains many current requirements, it significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments. The Company has adopted the ASU as of January 1, 2019, with no effect on the Company’s net loss or other comprehensive loss. Recent Accounting Guidance Not Yet Adopted In December 2019, the FASB issued ASU 2019‑12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by eliminating some exceptions to the general approach in Accounting Standards Codification 740, Income Taxes. It also clarifies certain aspects of the existing guidance to promote more consistent application. This standard is effective for calendar‑year public business entities in 2021 and interim periods within that year, and early adoption is permitted. The Company is currently in the process of evaluating the impact the new standard will have on our consolidated financial statements. In June 2018, the FASB issued ASU No. 2018‑07, Compensation‑Stock Compensation (Topic 718): Improvements to Nonemployee Share‑Based Payment Accounting , which substantially aligns the measurement and classification guidance for share‑based payments to nonemployees with the guidance for share‑based payments to employees. The ASU also clarifies that any share‑based payment issued to a customer should be evaluated by the new revenue recognition standard. The new ASU requires a modified retrospective transition approach. The ASU is effective for the Company beginning January 1, 2020. The Company intends to adopt the updated standard when it reports its annual results. In January 2017, the FASB issued ASU No. 2017‑04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017‑04”), which eliminates the performance of Step 2 from the goodwill impairment test. In performing its annual or interim impairment testing, an entity will instead compare the fair value of the reporting unit with its carrying amount and recognize any impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Additionally, an entity should consider income tax effects from any tax‑deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss. As a smaller reporting company pursuant to Rule 12b‑2 of the Securities Exchange Act of 1934, as amended, these changes become effective for the Company on January 1, 2023. The Company is currently evaluating the potential impact of these changes on its consolidated financial statements. In June 2016, the FASB issued ASU 2016‑13, Financial Instruments—Credit Losses. This ASU added a new impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses. The CECL model applies to most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and other loan commitments. The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected credit losses on assets that have a low risk of loss. As a smaller reporting company pursuant to Rule 12b‑2 of the Securities Exchange Act of 1934, as amended, these changes become effective for the Company on January 1, 2023. The Company is currently evaluating the potential impact of these changes on its consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Schedule of Inventory | Inventory is stated at the lower of cost or net realizable value, determined on a first‑in, first‑out basis, and consists of the following (in thousands): September 30, 2020 December 31, 2019 Work in process $ 3,062 $ 1,081 Finished goods 7,301 7,324 $ 10,363 $ 8,405 | Inventory is stated at the lower of cost or net realizable value, determined on a first‑in, first‑out basis, and consists of the following (in thousands): Years Ended December 31, 2019 2018 Work in process $ 1,081 $ 2,741 Finished goods 7,324 1,241 $ 8,405 $ 3,982 |
Schedule of Accrued warranty | Accrued warranty at each balance sheet date consisted of the following (in thousands): September 30, 2020 December 31, 2019 Warranty reserve, at the beginning of the year $ 1,491 $ 116 Additions to warranty reserve 375 2,352 Claims fulfilled (132) (977) Warranty reserve, at the end of the period $ 1,734 $ 1,491 | Accrued warranty consisted of the following (in thousands): Years Ended December 31, 2019 2018 Warranty reserve, at the beginning of the year $ 116 $ — Additions to warranty reserve 2,352 116 Claims fulfilled (977) — Warranty reserve, at the end of the year $ 1,491 $ 116 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
PROPERTY AND EQUIPMENT | ||
Schedule of estimated useful lives of the assets | estimated useful lives of the assets as follows: Asset Classification Useful Life Equipment 3‑5 years Furniture and fixtures 3 years Computer equipment 3 years Tooling 3 years Software 3 years Leasehold improvements Shorter of asset’s useful life or remaining life of the lease | Asset Classification Useful Life Equipment 3‑5 years Furniture and fixtures 3 years Computer equipment 3 Years Tooling 3 Years Software 3 Years Leasehold improvements Shorter of asset’s useful life or remaining life of the lease |
Schedule of property and equipment-net | Property and equipment—net consisted of the following at September 30, 2020 and December 31, 2019 (in thousands): September 30, 2020 December 31, 2019 Equipment $ 13,502 $ 13,358 Furniture and fixtures 895 895 Computer equipment 1,089 1,089 Tooling 1,823 1,823 Software 1,235 954 Leasehold improvements 13,870 13,880 Construction in process 845 170 Property and equipment—gross 33,259 32,169 Less: accumulated depreciation (19,658) (13,782) Property and equipment—net $ 13,601 $ 18,387 | Years Ended December 31, 2019 2018 Equipment $ 13,358 $ 8,306 Furniture and fixtures 895 875 Computer equipment 1,089 1,045 Tooling 1,823 1,303 Software 954 302 Leasehold improvements 13,880 13,357 Construction in process 170 — Property and equipment—gross 32,169 25,188 Less: accumulated depreciation (13,782) (6,191) Property and equipment—net $ 18,387 $ 18,997 |
ACQUIRED TECHNOLOGY (Tables)
ACQUIRED TECHNOLOGY (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
ACQUIRED TECHNOLOGY. | ||
Schedule of acquired technology | Acquired technology consisted of the following (in thousands): Accumulated Balance Gross Value Estimated Life Amortization September 30, 2020 Total acquired technology $ 3,270 5 years $ 817 $ 2,453 | Accumulated Balance Gross Value Estimated Life Amortization December 31, 2019 Total acquired technology $ 3,270 5 years $ 276 $ 2,994 |
CAPITALIZED SOFTWARE (Tables)
CAPITALIZED SOFTWARE (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
CAPITALIZED SOFTWARE. | ||
Schedule of capitalized software | Capitalized software, net at the each balance sheet date consists of the following (in thousands): September 30, 2020 December 31, 2019 Capitalized software development costs $ 1,127 $ 1,127 Accumulated amortization (770) (237) Impairment — (444) Total capitalized software costs $ 357 $ 446 | Years Ended December 31, 2019 2018 Capitalized software development costs $ 1,127 $ 806 Accumulated amortization (237) (18) Impairment (444) — Total capitalized software costs $ 446 $ 788 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
FAIR VALUE MEASUREMENTS | ||
Schedule of financial assets measured at fair value on a recurring basis | The following fair value hierarchy table presents information about the Company’s financial assets measured at fair value on a recurring basis and indicates the fair value hierarchy of the inputs the Company utilized to determine such fair value at September 30, 2020 and December 31, 2019 (in thousands): September 30, 2020 Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Items Inputs Inputs (Level 1) (Level 2) (Level 3) Total Assets: Money market funds $ 33,858 $ — $ — $ 33,858 Asset‑backed securities — 3,105 — 3,105 Corporate bonds — 30,084 — 30,084 Government bonds 19,991 — — 19,991 Total assets $ 53,849 $ 33,189 $ — $ 87,038 December 31, 2019 Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Items Inputs Inputs (Level 1) (Level 2) (Level 3) Total Assets: Money market funds $ 40,454 $ — $ — $ 40,454 Asset‑backed securities — 16,806 — 16,806 Corporate bonds — 67,948 — 67,948 Repurchase agreements — 25,001 — 25,001 Total assets $ 40,454 $ 109,755 $ — $ 150,209 | The following fair value hierarchy table presents information about the Company’s financial assets measured at fair value on a recurring basis and indicates the fair value hierarchy of the inputs the Company utilized to determine such fair value (in thousands): December 31, 2019 Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Items Inputs Inputs (Level 1) (Level 2) (Level 3) Total Assets: Money market funds $ 40,454 $ — $ — $ 40,454 Asset‑backed securities — 16,806 — 16,806 Corporate bonds — 67,948 — 67,948 Other investments — 25,001 — 25,001 Total assets $ 40,454 $ 109,755 $ — $ 150,209 December 31, 2018 Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Items Inputs Inputs (Level 1) (Level 2) (Level 3) Total Assets: Money market funds $ 24,380 $ — $ — $ 24,380 Asset‑backed securities — 13,285 — 13,285 Corporate bonds — 50,944 — 50,944 Other investments — — 450 450 Total assets $ 24,380 $ 64,229 $ 450 $ 89,059 |
SHORT TERM INVESTMENTS (Tables)
SHORT TERM INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SHORT TERM INVESTMENTS | |
Schedule of shortterm investments | The following table summarizes the Company’s short‑term investments (in thousands): December 31, 2019 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Asset‑backed securities $ 16,786 $ 20 $ — $ 16,806 Corporate bonds 67,893 55 — 67,948 $ 84,679 $ 75 $ — $ 84,754 December 31, 2018 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Asset‑backed securities $ 13,350 $ — $ (65) $ 13,285 Corporate bonds 50,975 — (31) 50,944 $ 64,325 $ — $ (96) $ 64,229 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||
Schedule of Accrued Expenses and Other Current Liabilities | The following table summarizes the Company’s components of accrued expenses and other current liabilities (in thousands): September 30, 2020 December 31, 2019 Warranty reserve $ 1,734 $ 1,491 Compensation and benefits related 657 897 Professional services 2,043 780 Inventory purchases 86 620 Accrued sales and use tax 470 578 Transaction costs payable 577 — Other 488 687 $ 6,055 $ 5,053 | The following table summarizes the Company’s components of accrued expenses and other current liabilities (in thousands): Years Ended December 31, 2019 2018 Warranty reserve $ $ 116 Compensation and benefits related 278 Professional services 517 Inventory purchases 381 Accrued sales and use tax 4 Other 510 $ 5,053 $ 1,806 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
COMMITMENTS AND CONTINGENCIES. | ||
Schedule of other lease related balances | Information about other lease‑related balances is as follows (in thousands): September 30, 2020 2019 Lease cost Operating lease cost $ 561 $ 479 Short‑term lease cost — 24 Variable lease cost 30 30 Total lease cost $ 591 $ 533 Other Information Operating cash flows from operating leases $ 805 $ 701 Weighted‑average remaining lease term—operating leases (years) 3.5 4.5 Weighted‑average discount rate—operating leases 7.6 % 7.6 % | Information about other lease‑related balances is as follows (in thousands): Years Ended December 31, 2019 2018 Lease cost Operating lease cost $ 655 $ 627 Short‑term lease cost 32 62 Variable lease cost 40 38 Total lease cost $ 727 $ 727 Other Information Operating cash flows from operating leases $ 951 $ 868 Weighted‑average remaining lease term—operating leases (years) 4.2 5.3 Weighted‑average discount rate—operating leases 7.6 % 7.6 % |
Schedule of future minimum lease payments | Future minimum lease payments under noncancelable operating leases at September 30, 2020, are as follows (in thousands): 2020 (remaining 3 months) $ 268 2021 1,071 2022 1,070 2023 1,028 2024 258 Total lease payments 3,695 Less amount representing interest (462) Total lease liability 3,233 Less current portion of lease liability (858) Lease liability, net of current portion $ 2,375 | Future minimum lease payments under noncancelable operating leases at December 31, 2019, are as follows (in thousands): 2020 $ 2021 1,071 2022 1,069 2023 1,028 2024 258 Total lease payments 4,499 Less amount representing interest (667) Total lease liability 3,832 Less current portion of lease liability (806) Lease liability, net of current portion $ 3,026 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAXES | |
Schedule of components Income (Loss) before provision for income taxes | Years Ended December 31, 2019 2018 United States $ (103,596) $ (121,339) Foreign — — Loss before income taxes $ (103,596) $ (121,339) |
Schedule of Reconciliation of the expected income tax (benefit) computed using the federal statutory income tax rate | Years Ended December 31, 2019 2018 Effective income tax rate: Expected income tax benefit at the federal statutory rate 21 % 21 % State taxes 6 % 6 % Change in valuation allowance (30) % (26) % Research and development credit carryover 2 % 3 % Legal proceedings and settlement expense — % % Permanent differences 1 % — % Effective income tax rate — % — % |
Schedule of deferred net tax assets | As of December 31, 2019 and 2018, deferred tax assets consist of the following (in thousands): Years Ended December 31, 2019 2018 Deferred tax assets: Federal and state net operating carryforwards $ 56,333 $ 23,310 Research and development and other credits 11,072 7,567 Capitalized start‑up costs 17,032 24,048 Compensation‑related items 1,286 568 Deferred lease liability 1,111 1,212 Other deferred tax assets 2,068 379 Total gross deferred tax asset 88,902 57,084 Valuation allowance (87,370) (56,405) Net deferred tax asset 1,532 679 Deferred tax liabilities: Right‑of‑use asset (664) (679) Acquired technology (868) — Total deferred tax liabilities (1,532) (679) Net deferred tax asset $ — $ — |
Schedule of changes in the valuation allowance for deferred tax assets | Years Ended December 31, 2019 2018 Valuation allowance at beginning of the year $ 56,405 $ 21,700 Increases recorded to income tax provision 30,965 34,705 Decreases recorded as a benefit to income tax provision — — Increases recorded as an adjustment to equity — — Valuation allowance at end of year $ 87,370 $ 56,405 |
CONVERTIBLE PREFERRED STOCK A_2
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Summarizes details of Preferred Stock authorized, issued and outstanding | The following table summarizes details of Preferred Stock authorized, issued and outstanding as of September 30, 2020 and December 31, 2019 ($ in thousands): Convertible Preferred Stock Classes September 30, 2020 December 31, 2019 Series A Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding, 26,189,545 and 26,189,545 shares, (liquidation preference of $255,348 and $106,853 at September 30, 2020 and December 31, 2019, respectively) $ 13,878 $ 13,878 Series B Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding, 23,675,035 and 23,675,035 shares (liquidation preference of $230,832 and $96,594 at September 30, 2020 and December 31, 2019, respectively) 37,806 37,806 Series C Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding, 13,152,896 and 13,152,896 shares (liquidation preference of $128,241 and $53,664 at September 30, 2020 and December 31, 2019, respectively) 44,852 44,852 Series D Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding, 21,075,193 and 21,075,193 shares (liquidation preference of $205,483 and $180,522 at September 30, 2020 and December 31, 2019, respectively) 180,353 180,353 Series E Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding 13,450,703 and 13,450,703 shares (liquidation preference of $134,791 and $134,791 at September 30, 2020 and December 31, 2019, respectively) 134,667 134,667 Series E‑1 Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding 2,494,737 and 2,494,737 shares (liquidation preference of $25,000 and $25,000 at September 30, 2020 and December 31, 2019, respectively) 24,977 24,977 Total $ 436,533 $ 436,533 | The following table summarizes details of Convertible Preferred Stock authorized, issued and outstanding as of December 31, 2019 and 2018 ($ in thousands): Years Ended December 31, Convertible Preferred Stock Classes 2019 2018 Series A Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding, 26,189,545 and 26,189,545 shares, (liquidation preference of $106,853 and $88,783 at December 31, 2019 and 2018, respectively) $ $ 13,878 Series B Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding, 23,675,035 and 23,675,035 shares (liquidation preference of $96,594 and $80,258 at December 31, 2019 and 2018, respectively) 37,806 Series C Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding, 13,152,896 and 13,152,896 shares (liquidation preference of $53,664 and $45,000 at December 31, 2019 and 2018, respectively) 44,852 Series D Convertible Preferred Stock, $0.0001 par value—authorized, issued and outstanding, 21,075,193 and 21,075,193 shares (liquidation preference of $180,522 and $180,522 at December 31, 2019 and 2018, respectively) 180,353 Series E Convertible Preferred Stock, $0.0001 par value—authorized, 13,450,703 shares; issued and outstanding, 13,450,703 and 0 shares (liquidation preference of $134,791 and $0 at December 31, 2019 and 2018, respectively) — Series E‑1 Convertible Preferred Stock, $0.0001 par value—authorized, 2,494,737 shares; issued and outstanding, 2,494,737 and 0 shares (liquidation preference of $25,000 and $0 at December 31, 2019 and 2018, respectively) — Total $ $ 276,889 The activity for stock subject to vesting for the years ended December 31, 2019 and 2018, are as follows (shares in thousands): Shared subject Weighted Average to Vesting Purchase Price Balance of unvested shares as of January 1, 2019 9,731 0.0001 Issuance of additional shares 0.0001 Vested (5,653) 0.0001 Balance of unvested shares as of December 31, 2019 4,575 0.0001 |
Schedule of stock-based compensation expense | Total stock‑based compensation expense related to all of the Company’s stock‑based awards granted is reported in the consolidated statements of operations as follows (in thousands): September 30, 2020 2019 Research and development $ 2,176 $ 1,501 Sales and marketing expense 715 1,020 General and administrative expense 1,070 668 Cost of sales 267 241 Total stock-based compensation expenses $ 4,228 $ 3,430 | Total stock‑based compensation expense related to all of the Company’s stock‑based awards granted is reported in the consolidated statements of operations as follows (in thousands): Years Ended December 31, 2019 2018 Research and development $ $ 1,696 Sales and marketing expense 567 General and administrative expense 658 Cost of sales 44 Total stock based compensation expenses $ $ 2,965 |
Schedule of option activity | Weighted-Average Weighted-Average Remaining Number of Exercise Price Contractual Term Shares per Share (in years) Outstanding at January 1, 2020 14,792 $ 2.45 7.84 Granted 6,935 1.85 Exercised (409) 0.65 Forfeited/expired (5,287) 3.57 Outstanding at September 30, 2020 16,031 1.87 7.85 Options vested at September 30, 2020 8,167 1.83 6.38 Options vested or expected to vest at September 30, 2020 15,384 $ 1.87 7.78 | There were 3,894,467 shares available for award under the Plan at December 31, 2019. The option activity of the Plan and Make Plan for the year ended December 31, 2019, is as follows (shares in thousands): Weighted-Average Weighted-Average Remaining Number of Exercise Price Contractual Term Shares per Share (in years) Outstanding at January 1, 2019 12,007 $ 1.65 8.21 Granted 4,790 3.98 Exercised (997) 0.71 Forfeited/expired (1,008) 1.88 — Outstanding at December 31, 2019 14,792 2.45 7.84 Options vested at December 31, 2019 7,195 1.52 6.92 Options vested or expected to vest at December 31, 2019 14,555 2.44 7.82 |
Common Stock Reserved for Future Issuance | As of September 30, 2020 and 2019, the Company has reserved the following shares of Common Stock for future issuance (in thousands): September 30, 2020 September 30, 2019 Common Stock options outstanding 16,031 14,490 Restricted Stock units outstanding 459 — Shares available for issuance under the Plan 1,960 4,463 Convertible Preferred Stock outstanding 100,038 100,038 Common Stock warrants outstanding 919 464 Total shares of authorized Common Stock reserved for future issuance 119,407 119,455 | Common Stock Reserved for Future Issuance —As of December 31, 2019 and 2018, the Company has reserved the following shares of Common Stock for future issuance (in thousands): Years Ended December 31, 2019 2018 Common Stock options outstanding 12,007 Shares available for issuance under the Plan 565 Convertible Preferred Stock outstanding 84,093 Common Stock warrants outstanding 2,000 Total shares of authorized Common Stock reserved for future issuance 98,665 |
Restricted stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
RSU activity under the Plan | The activity for stock subject to vesting for the nine‑month period ended September 30, 2020 is as follows (shares in thousands): Shares subject Weighted Average to Vesting Purchase Price Balance of unvested shares as of January 1, 2020 4,575 $0.001 Issuance of additional shares — — Vested (4,301) 0.001 Balance of unvested shares as of September 30, 2020 274 $0.001 | |
RSU | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
RSU activity under the Plan | Shares subject Weighted Average to Vesting Grant Date Fair Value Balance of unvested shares as of January 1, 2020 — — Issuance of additional shares $ 9.75 Vested — — Balance of unvested shares as of September 30, 2020 $ 9.75 | |
Consultant | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Schedule of assumptions using Black-Scholes option-pricing model | September 30, 2020 September 30, 2019 Risk‑free interest rate 0.6 % – 0.8 % 1.5 % – 2.5 % Expected volatility 54.3 % – 54.8 % 54.4 % – 54.9 % Expected life (in years) 9.4 – 10.0 9.4 – 10.0 Expected dividend yield — — Fair value of Common Stock $ 1.71 – $ 9.75 $ | Years Ended December 31, 2019 2018 Risk‑free interest rate 1.4%–3.1 % 2.1%–3.1 % Expected volatility 52.4%–61.5 % 53.7%–61.5 % Expected life (in years) 6.2–10.0 7.2–10.0 Expected dividend yield — — Fair value of Common Stock $ 4.08 $ 3.39 |
Employee | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Schedule of assumptions using Black-Scholes option-pricing model | September 30, 2020 September 30, 2019 Risk‑free interest rate 0.3 % – 1.7 % 1.9 % – 2.6 % Expected volatility 52.7 % – 54.2 % 53.3 % – 53.6 % Expected life (in years) 5.9 – 6.3 5.6 – 6.1 Expected dividend yield — — Fair value of Common Stock $ 1.71 – $ 9.75 $ | Years Ended December 31, 2019 2018 Risk‑free interest rate 1.7%–2.6 % 2.7%–3.0 % Expected volatility 52.7%–53.6 % 52.9%–53.8 % Expected life (in years) 5.6–6.1 5.3–6.1 Expected dividend yield — — Fair value of Common Stock $ 4.08 $ 3.39 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
SEGMENT INFORMATION | ||
Schedule of disaggregation of revenue by geographic areas | Americas EMEA APAC Total Product $ 2,372 $ 2,411 $ 1,330 $ 6,113 Services 962 888 138 1,988 Total $ 3,334 $ 3,299 $ 1,468 $ 8,101 Americas EMEA APAC Total Product $ 11,561 $ 5,909 $ 1,185 $ 18,655 Services 1,851 341 29 2,221 Total $ 13,412 $ 6,250 $ 1,214 $ 20,876 | The Company currently ships its product to markets in the Americas, Europe Middle East and Africa (“EMEA”), and Asia Pacific (“APAC”). Disaggregated revenue data for those markets is as follows (in thousands): Revenue during the year ended December 31, 2019 Americas EMEA APAC Product $ 12,746 $ 8,430 $ 1,582 Services 3,055 563 63 Total $ 15,801 $ 8,993 $ 1,645 Revenue during the year ended December 31, 2018 Americas EMEA APAC Product $ 751 $ — $ — Services 283 — — Total $ 1,034 $ — $ — |
Schedule of disaggregation of revenue | During the nine months ended September 30, 2020 and 2019, the Company recognized the following revenue from service contracts and cloud‑based software licenses over time, and hardware and consumable product shipments and subscription software at a point in time (in thousands): Nine Months Ended September 30, 2020 2019 Revenue recognized at a point in time $ 6,113 $ 18,655 Revenue recognized over time 1,988 2,221 Total $ 8,101 $ 20,876 | the Company recognized the following revenue from service contracts and cloud‑based software licenses over time, and hardware and consumable product shipments and subscription software at a point in time (in thousands): Years Ended December 31, 2019 2018 Revenue recognized at a point in time $ 22,758 $ 751 Revenue recognized over time 3,681 283 Total $ 26,439 $ 1,034 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
NET LOSS PER SHARE | ||
Schedule of Net Loss Per Share, Basic and Diluted | September 30, (in thousands, except per share amounts) 2020 2019 Numerator for basic and diluted net loss per share: Net loss attributable to Desktop Metal, Inc Common Stockholders $ (65,027) $ (75,769) Denominator for basic and diluted net loss per share: Weighted average shares 29,457 Net loss per share—Basic and Diluted $ (2.21) $ (3.38) | Years Ended December 31, (in thousands, except per share amounts) 2019 2018 Numerator for basic and diluted net loss per share: Net loss attributable to Desktop Metal, Inc Common Stockholders $ (103,596) $ (121,339) Denominator for basic and diluted net loss per share: Weighted average shares 23,379 16,495 Net loss per share—Basic and Diluted $ (4.43) $ (7.36) |
ORGANIZATION, NATURE OF BUSIN_2
ORGANIZATION, NATURE OF BUSINESS, AND RISK AND UNCERTAINTIES (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
ORGANIZATION, NATURE OF BUSINESS, AND RISK AND UNCERTAINTIES | ||
Number of months cash and Investments sufficient to fund operating and capital expenditure | 12 months | 12 months |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020USD ($)item | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | |
Significant Accounting Policies [Line Items] | ||||
Money market funds | $ 33,900 | $ 40,500 | $ 24,000 | |
Other highly liquid cash equivalents | 0 | 25,000 | ||
Deferred revenue from sales to investors | 1,100 | 2,200 | 3,900 | |
Deferred revenue recognized | 3,900 | |||
Deferred cost of sales | 0 | 300 | 3,000 | |
Allowance for doubtful accounts | 500 | 200 | 0 | |
Bad debt expense | $ 300 | $ 0 | $ 200 | 0 |
Number of customers represents more than 10% of total accounts receivable | item | 1 | 0 | ||
Transaction costs payable | $ 2,300 | |||
Warranty reserve | 1,734 | $ 1,491 | 116 | |
Sales and marketing expense | ||||
Significant Accounting Policies [Line Items] | ||||
Advertising Expense | 100 | 100 | ||
Accounts Payable | ||||
Significant Accounting Policies [Line Items] | ||||
Transaction costs payable | 1,700 | |||
Accrued expenses and other current liabilities | ||||
Significant Accounting Policies [Line Items] | ||||
Transaction costs payable | $ 600 | |||
Warranty reserve | 1,500 | $ 100 | ||
Restricted Cash | ||||
Significant Accounting Policies [Line Items] | ||||
Security deposit | $ 600 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Warranty Reserve (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Standard assurance warranty period | 1 year | 1 year |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Warranty reserve, at the beginning of the year | $ 1,491 | $ 116 |
Additions to warranty reserve | 375 | 2,352 |
Claims fulfilled | (132) | (977) |
Warranty reserve, at the end of the period | $ 1,734 | $ 1,491 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Inventory | |||
Work in process | $ 3,062 | $ 1,081 | $ 2,741 |
Finished goods | 7,301 | 7,324 | 1,241 |
Inventory | $ 10,363 | $ 8,405 | $ 3,982 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill and Intangible Assets (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($)item | |
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill | $ 2,252,000 | $ 2,252,000 | |
Acquired Technology | $ 3,300,000 | ||
Number of Business Combinations | 2 | ||
Accumulated amortization | $ 300,000 | ||
Impairment of goodwill or intangible assets | $ 0 | 0 | |
Acquired technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Acquired Technology | 3,270,000 | 3,300,000 | |
Accumulated amortization | $ 817,000 | $ 800,000 | $ 276,000 |
PROPERTY AND EQUIPMENT - Estima
PROPERTY AND EQUIPMENT - Estimated Useful Lives (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 3 years | 3 years |
Equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 5 years | 5 years |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 3 years | 3 years |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 3 years | 3 years |
Tooling | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 3 years | 3 years |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 3 years | 3 years |
PROPERTY AND EQUIPMENT - Proper
PROPERTY AND EQUIPMENT - Property and Equipment - Net (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||||
Property and equipment-gross | $ 33,259 | $ 32,169 | $ 25,188 | |
Less: accumulated depreciation | (19,658) | (13,782) | (6,191) | |
Property, Plant and Equipment, Net, Total | 13,601 | 18,387 | 18,997 | |
Depreciation and amortization expense | 6,525 | $ 5,754 | 8,087 | 4,204 |
Equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment-gross | 13,502 | 13,358 | ||
Property, Plant and Equipment, Net, Total | 13,358 | 8,306 | ||
Furniture and fixtures | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment-gross | 895 | 895 | ||
Property, Plant and Equipment, Net, Total | 895 | 875 | ||
Computer equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment-gross | 1,089 | 1,089 | ||
Property, Plant and Equipment, Net, Total | 1,089 | 1,045 | ||
Tooling | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment-gross | 1,823 | 1,823 | ||
Property, Plant and Equipment, Net, Total | 1,823 | 1,303 | ||
Software | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment-gross | 1,235 | 954 | ||
Property, Plant and Equipment, Net, Total | 954 | 302 | ||
Leasehold improvements | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment-gross | 13,870 | 13,880 | ||
Property, Plant and Equipment, Net, Total | 13,880 | 13,357 | ||
Construction in process | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment-gross | 845 | 170 | ||
Property, Plant and Equipment, Net, Total | 170 | |||
PPE not including acquired technology or capitalized software | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation and amortization expense | $ 5,900 | $ 5,300 | $ 7,600 | $ 4,100 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Thousands | 1 Months Ended | |||
Jul. 31, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Dec. 31, 2019 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 2,252 | $ 2,252 | ||
Make Composites, Inc. | ||||
Business Acquisition [Line Items] | ||||
Purchase consideration | $ 5,400 | |||
issuance of shares of the Common Stock on aquisition | 873,203 | |||
Goodwill | $ 1,900 | |||
Acquired technology | 3,200 | |||
Acquired tangible assets | 300 | |||
Amount of gain on its original non controlling investment | 1,400 | |||
Make Composites, Inc. | General and administrative expenses | ||||
Business Acquisition [Line Items] | ||||
Transaction costs | $ 100 | |||
addLEAP AB | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 300 | |||
Acquired technology | 100 | |||
Payment to acquire business | $ 400 | |||
addLEAP AB | Restricted stock | ||||
Business Acquisition [Line Items] | ||||
issuance of shares of the Common Stock on aquisition | 74,843 | |||
addLEAP AB | General and administrative expenses | ||||
Business Acquisition [Line Items] | ||||
Transaction costs | $ 100 |
ACQUIRED TECHNOLOGY (Details)
ACQUIRED TECHNOLOGY (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2020 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Life | 5 years | |||
Accumulated Amortization | $ 300 | |||
Balance December 31, 2020 | $ 2,453 | 2,994 | ||
Acquired technology | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Gross Value | 3,270 | |||
Estimated Life | 5 years | |||
Accumulated Amortization | $ 817 | 276 | $ 800 | |
Balance December 31, 2020 | 2,453 | 2,994 | ||
Amortization expense | 500 | $ 100 | 300 | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||||
Remaining three months of 2020 | 200 | |||
2021 | 600 | 700 | ||
2022 | 600 | 700 | ||
2023 | 600 | 700 | ||
2024 | $ 400 | 700 | ||
2025 | $ 400 | |||
Weighted-average remaining amortization period | 3 years 9 months 18 days | 4 years 6 months |
CAPITALIZED SOFTWARE (Details)
CAPITALIZED SOFTWARE (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Capitalized software development costs | $ 1,127 | $ 806 | ||
Accumulated amortization | (237) | (18) | ||
Impairment | (444) | |||
Total capitalized software costs | $ 357 | $ 446 | 788 | |
Capitalized Software | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Capitalized cost estimated useful life | 3 years | 3 years | ||
Amortization expense | $ 100 | $ 100 | $ 200 | $ 18,000,000 |
Capitalized software development costs | 1,127 | 1,127 | ||
Accumulated amortization | (770) | (237) | ||
Impairment | (444) | |||
Total capitalized software costs | 357 | 446 | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||||
Remaining three months of 2020 | 100 | |||
2021 | 100 | 200 | ||
2022 | $ 100 | 100 | ||
2023 | $ 100 |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets measured on recurring basis (Details) - Recurring - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | |||
Total assets at fair value | $ 87,038 | $ 150,209 | $ 89,059 |
Money market funds | |||
Assets | |||
Total assets at fair value | 33,858 | 40,454 | 24,380 |
Assetbacked securities | |||
Assets | |||
Total assets at fair value | 3,105 | 16,806 | 13,285 |
Corporate bonds | |||
Assets | |||
Total assets at fair value | 30,084 | 67,948 | 50,944 |
Repurchase agreements | |||
Assets | |||
Total assets at fair value | 25,001 | 450 | |
Government bonds | |||
Assets | |||
Total assets at fair value | 19,991 | 25,001 | |
Level 1 | |||
Assets | |||
Total assets at fair value | 53,849 | 40,454 | 24,380 |
Level 1 | Money market funds | |||
Assets | |||
Total assets at fair value | 33,858 | 40,454 | 24,380 |
Level 1 | Government bonds | |||
Assets | |||
Total assets at fair value | 19,991 | ||
Level 2 | |||
Assets | |||
Total assets at fair value | 33,189 | 109,755 | 64,229 |
Level 2 | Assetbacked securities | |||
Assets | |||
Total assets at fair value | 3,105 | 16,806 | 13,285 |
Level 2 | Corporate bonds | |||
Assets | |||
Total assets at fair value | $ 30,084 | 67,948 | 50,944 |
Level 2 | Repurchase agreements | |||
Assets | |||
Total assets at fair value | 25,001 | ||
Level 2 | Government bonds | |||
Assets | |||
Total assets at fair value | $ 25,001 | ||
Level 3 | |||
Assets | |||
Total assets at fair value | 450 | ||
Level 3 | Repurchase agreements | |||
Assets | |||
Total assets at fair value | $ 450 |
SHORT TERM INVESTMENTS (Details
SHORT TERM INVESTMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 84,679 | $ 64,325 |
Unrealized Gains | 75 | |
Unrealized Losses | 0 | (96) |
Fair Value | 84,754 | 64,229 |
Assetbacked securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 16,786 | 13,350 |
Unrealized Gains | 20 | |
Unrealized Losses | 0 | (65) |
Fair Value | 16,806 | 13,285 |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 67,893 | 50,975 |
Unrealized Gains | 55 | |
Unrealized Losses | 0 | (31) |
Fair Value | $ 67,948 | $ 50,944 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |||
Warranty reserve | $ 1,734 | $ 1,491 | $ 116 |
Compensation and benefits related | 657 | 897 | 278 |
Professional services | 2,043 | 780 | 517 |
Inventory purchases | 86 | 620 | 381 |
Accrued sales and use tax | 470 | 578 | 4 |
Transaction costs payable | 577 | ||
Other | 488 | 687 | 510 |
Total | $ 6,055 | $ 5,053 | $ 1,806 |
DEBT (Details)
DEBT (Details) | 1 Months Ended | 9 Months Ended | 12 Months Ended | 24 Months Ended | |
Jun. 30, 2018USD ($)item | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2019USD ($) | |
Debt Instrument [Line Items] | |||||
Proceeds from term loan | $ 5,379,000 | ||||
Interest rate | 4.75% | 5.50% | 4.75% | ||
Cash and Investments | $ 30,000,000 | $ 30,000,000 | |||
Outstanding amount | 10,000,000 | $ 10,000,000 | 10,000,000 | ||
Debt, current | 10,000,000 | $ 10,000,000 | |||
Deferred financing costs | $ 56,539 | ||||
Amortization of issuance cost | $ 18,846 | $ 9,423 | |||
Prime Rate | |||||
Debt Instrument [Line Items] | |||||
Spread percentage | 0.50% | ||||
Term loan | |||||
Debt Instrument [Line Items] | |||||
Nominal amount | $ 20,000,000 | ||||
Term of loan | 36 months | ||||
Proceeds from term loan | $ 10,000,000 | ||||
Remaining borrowing capacity | $ 10,000,000 | ||||
Threshold Number of times additional amount drawn | item | 3 | ||||
Threshold duration for amount draw down | 12 months | ||||
Minimum amount to be drawn | $ 2,000,000 | ||||
Spread percentage | 0.50% | ||||
Interest rate | 3.25% | 4.75% | 4.75% | ||
Outstanding amount | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 | ||
Debt, current | 10,000,000 | ||||
Deferred financing costs | 60,000 | ||||
Amortization of issuance cost | 10,000 | 10,000 | |||
Deferred financing costs, net | $ 10,000 | $ 30,000 | $ 30,000 | ||
Term loan | Prime Rate | |||||
Debt Instrument [Line Items] | |||||
Cash and Investments | $ 30,000,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) | 9 Months Ended | 12 Months Ended | 24 Months Ended | |||
Sep. 30, 2020USD ($)agreement | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($)agreement | Dec. 31, 2018USD ($) | Dec. 31, 2019USD ($) | Jan. 01, 2018USD ($) | |
Leases | ||||||
Right of use assets | $ 1,935,000 | $ 2,289,000 | $ 2,353,000 | $ 2,289,000 | $ 3,400,000 | |
Operating Lease, Liability | 3,233,000 | 3,832,000 | 4,200,000 | 3,832,000 | 4,700,000 | |
Difference of right of use assets and lease liability | 1,300,000 | |||||
Impairment loss | $ 0 | $ 0 | $ 0 | |||
Number of service agreements contained embedded lease | agreement | 1 | 1 | ||||
Variable lease expenses | $ 30,000 | $ 30,000 | $ 40,481 | $ 38,253 | ||
Cumulative Effect, Period of Adoption, Adjustment [Member] | ||||||
Leases | ||||||
Right of use assets | 3,400,000 | |||||
Operating Lease, Liability | 4,700,000 | |||||
Difference of right of use assets and lease liability | $ 1,300,000 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Other lease related balances (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Lease cost | ||||
Operating lease cost | $ 561,000 | $ 479,000 | $ 655,000 | $ 627,000 |
Short-term lease cost | 24,000 | 32,000 | 62,000 | |
Variable lease cost | 30,000 | 30,000 | 40,481 | 38,253 |
Total lease cost | 591,000 | 533,000 | 727,000 | 727,000 |
Operating cash flows from operating leases | $ 805,000 | $ 701,000 | $ 951,000 | $ 868,000 |
Weighted-average remaining lease term-operating leases (years) | 3 years 6 months | 4 years 6 months | 4 years 2 months 12 days | 5 years 3 months 18 days |
Weighted-average discount rate-operating leases | 7.60% | 7.60% | 7.60% | 7.60% |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Future minimum lease payments (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2018 |
COMMITMENTS AND CONTINGENCIES. | ||||
2020 (remaining 3 months) | $ 268 | |||
2020 | 1,071 | $ 1,073 | ||
2021 | 1,070 | 1,071 | ||
2022 | 1,028 | 1,069 | ||
2023 | 258 | 1,028 | ||
2024 | 258 | |||
Total lease payments | 3,695 | 4,499 | ||
Less amount representing interest | (462) | (667) | ||
Total lease liability | 3,233 | 3,832 | $ 4,200 | $ 4,700 |
Less current portion of lease liability | (858) | (806) | (626) | |
Lease liability, net of current portion | $ 2,375 | $ 3,026 | $ 3,565 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES - Legal Proceedings (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
General and administrative expenses | |
Legal Proceedings | |
Legal proceedings and settlement amount | $ 36.2 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | 24 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | |
INCOME TAXES | |||
Income tax benefits | $ 0 | ||
United States | $ (103,596) | $ (121,339) | |
Loss before income taxes | $ (103,596) | $ (121,339) |
INCOME TAXES - Components Incom
INCOME TAXES - Components Income (Loss) Before Provision for Income Taxes (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Effective income tax rate: | ||
Expected income tax benefit at the federal statutory rate | 21.00% | 21.00% |
State taxes | 6.00% | 6.00% |
Change in valuation allowance | (30.00%) | (26.00%) |
Research and development credit carryover | 2.00% | 3.00% |
Legal proceedings and settlement expense | (4.00%) | |
Permanent differences | 1.00% |
INCOME TAXES - Components of De
INCOME TAXES - Components of Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | |||
Federal and state net operating carryforwards | $ 56,333 | $ 23,310 | |
Research and development and other credits | 11,072 | 7,567 | |
Capitalized startup costs | 17,032 | 24,048 | |
Compensationrelated items | 1,286 | 568 | |
Deferred lease liability | 1,111 | 1,212 | |
Other deferred tax assets | 2,068 | 379 | |
Total gross deferred tax asset | 88,902 | 57,084 | |
Valuation allowance | (87,370) | (56,405) | $ (21,700) |
Net deferred tax asset | 1,532 | 679 | |
Deferred tax liabilities: | |||
Rightofuse asset | (664) | (679) | |
Acquired technology | (868) | ||
Total deferred tax liabilities | $ (1,532) | $ (679) |
INCOME TAXES - Valuation Allowa
INCOME TAXES - Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
INCOME TAXES | ||
Valuation allowance at beginning of the year | $ 56,405 | $ 21,700 |
Increases recorded to income tax provision | 30,965 | 34,705 |
Valuation allowance at end of year | $ 87,370 | $ 56,405 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards, not subject to expiration | $ 152.2 | |
Federal and state research and development tax credit carryforwards | $ 11.1 | |
Federal tax | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 197.7 | 79.6 |
State and local jurisdiction | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $ 184.2 | $ 80.8 |
CONVERTIBLE PREFERRED STOCK A_3
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (Details) $ / shares in Units, $ in Thousands | Jan. 14, 2019USD ($)$ / sharesshares | Sep. 30, 2020USD ($)director$ / sharesshares | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($)director$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Jun. 29, 2018$ / sharesshares | Jan. 29, 2018$ / sharesshares |
Convertible Preferred Stock and Stockholders' Equity | |||||||
Common stock, shares authorized | shares | 156,000,000 | 156,000,000 | 156,000,000 | ||||
Common stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Dividend rate (as a percent) | 8.00% | 8.00% | |||||
Dividend declared | $ | $ 0 | $ 0 | |||||
Firm-commitment underwritten initial public offering | $ 5.13 | ||||||
Proceeds from common stock | $ | $ 50,000 | ||||||
Common Stock | |||||||
Convertible Preferred Stock and Stockholders' Equity | |||||||
Common stock, shares authorized | shares | 156,000,000 | 156,000,000 | |||||
Common stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |||||
Number of directors entitled to elect | director | 2 | 2 | |||||
Firm-commitment underwritten initial public offering | $ 5.13 | ||||||
Proceeds from common stock | $ | $ 50,000 | ||||||
Preferred Stock | |||||||
Convertible Preferred Stock and Stockholders' Equity | |||||||
Preferred stock, Shares authorized | shares | 100,038,109 | 100,038,109 | 100,038,109 | ||||
Preferred stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Series A Preferred Stock | |||||||
Convertible Preferred Stock and Stockholders' Equity | |||||||
Common stock, shares authorized | shares | 26,189,545 | 26,189,545 | |||||
Preferred stock, Shares authorized | shares | 26,189,545 | 26,189,545 | |||||
Number of directors entitled to elect | director | 1 | 1 | |||||
Liquidation preference (in dollars per share) | $ 0.53372 | $ 0.53372 | |||||
Conversion price (in dollars per share) | $ 0.53372 | $ 0.53372 | |||||
Series B Preferred Stock | |||||||
Convertible Preferred Stock and Stockholders' Equity | |||||||
Common stock, shares authorized | shares | 23,675,035 | 23,675,035 | |||||
Preferred stock, Shares authorized | shares | 23,675,035 | 23,675,035 | |||||
Number of directors entitled to elect | director | 2 | 2 | |||||
Liquidation preference (in dollars per share) | $ 1.6013 | $ 1.6013 | |||||
Conversion price (in dollars per share) | $ 1.6013 | $ 1.6013 | |||||
Series C Preferred Stock | |||||||
Convertible Preferred Stock and Stockholders' Equity | |||||||
Common stock, shares authorized | shares | 13,152,896 | 13,152,896 | |||||
Preferred stock, Shares authorized | shares | 13,152,896 | 13,152,896 | |||||
Number of directors entitled to elect | director | 1 | 1 | |||||
Liquidation preference (in dollars per share) | $ 3.4213 | $ 3.4213 | |||||
Conversion price (in dollars per share) | $ 3.4213 | $ 3.4213 | |||||
Series D Preferred Stock | |||||||
Convertible Preferred Stock and Stockholders' Equity | |||||||
Common stock, shares authorized | shares | 21,075,193 | 21,075,193 | |||||
Preferred stock, Shares authorized | shares | 21,075,193 | 21,075,193 | |||||
Preferred stock, shares issued | shares | 11,674 | 4,086,111 | |||||
Share price | $ 8.5656 | $ 8.5656 | |||||
Stock issuance cost | $ | $ 200 | ||||||
Liquidation preference (in dollars per share) | $ 8.5656 | $ 8.5656 | |||||
Conversion price (in dollars per share) | $ 8.5656 | $ 8.5656 | |||||
Series E Preferred Stock | |||||||
Convertible Preferred Stock and Stockholders' Equity | |||||||
Common stock, shares authorized | shares | 13,450,703 | 13,450,703 | |||||
Preferred stock, Shares authorized | shares | 13,450,703 | 13,450,703 | |||||
Preferred stock, shares issued | shares | 13,450,703 | ||||||
Share price | $ 10.0211 | ||||||
Stock issuance cost | $ | $ 100 | $ 124 | $ 124 | ||||
Number of directors entitled to elect | director | 1 | 1 | |||||
Liquidation preference (in dollars per share) | $ 10.0211 | $ 10.0211 | |||||
Conversion price (in dollars per share) | $ 10.0211 | $ 10.0211 | |||||
Series E1 Preferred Stock | |||||||
Convertible Preferred Stock and Stockholders' Equity | |||||||
Common stock, shares authorized | shares | 2,494,737 | 2,494,737 | |||||
Preferred stock, Shares authorized | shares | 2,494,737 | 2,494,737 | |||||
Preferred stock, shares issued | shares | 2,494,737 | ||||||
Share price | $ 10.0211 | ||||||
Stock issuance cost | $ | $ 20 | $ 22 | $ 22 | ||||
Liquidation preference (in dollars per share) | $ 10.0211 | $ 10.0211 | |||||
Conversion price (in dollars per share) | $ 10.0211 | $ 10.0211 |
CONVERTIBLE PREFERRED STOCK A_4
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - Convertible Preferred Stock Classes (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Class of Stock [Line Items] | |||
Convertible Preferred Stock, Outstanding | 100,038,109 | 100,038,109 | |
Total | $ 436,533,000 | $ 436,533,000 | $ 276,889,000 |
Series A Preferred Stock | |||
Class of Stock [Line Items] | |||
Convertible Preferred Stock, par value | $ 0.0001 | $ 0.0001 | |
Convertible Preferred Stock, Authorized | 26,189,545 | 26,189,545 | 26,189,545 |
Convertible Preferred Stock, Issued | 26,189,545 | 26,189,545 | 26,189,545 |
Convertible Preferred Stock, Outstanding | 26,189,545 | 26,189,545 | |
Convertible Preferred Stock, Liquidation preference | $ 255,348 | $ 106,853,000 | $ 88,783,000 |
Total | 13,878,000 | 13,878,000 | $ 13,878,000 |
Series B Preferred Stock | |||
Class of Stock [Line Items] | |||
Convertible Preferred Stock, par value | $ 0.0001 | $ 0.0001 | |
Convertible Preferred Stock, Authorized | 23,675,035 | 23,675,035 | 23,675,035 |
Convertible Preferred Stock, Issued | 23,675,035 | 23,675,035 | 23,675,035 |
Convertible Preferred Stock, Outstanding | 23,675,035 | 23,675,035 | |
Convertible Preferred Stock, Liquidation preference | $ 230,832,000 | $ 96,594,000 | $ 80,258,000 |
Total | 37,806,000 | 37,806,000 | $ 37,806,000 |
Series C Preferred Stock | |||
Class of Stock [Line Items] | |||
Convertible Preferred Stock, par value | $ 0.0001 | $ 0.0001 | |
Convertible Preferred Stock, Authorized | 13,152,896 | 13,152,896 | |
Convertible Preferred Stock, Issued | 13,152,896 | 13,152,896 | 13,152,896 |
Convertible Preferred Stock, Outstanding | 13,152,896 | 13,152,896 | |
Convertible Preferred Stock, Liquidation preference | $ 128,241,000 | $ 53,664,000 | $ 45,000,000 |
Total | 44,852,000 | 44,852,000 | $ 44,852,000 |
Series D Preferred Stock | |||
Class of Stock [Line Items] | |||
Convertible Preferred Stock, par value | $ 0.0001 | $ 0.0001 | |
Convertible Preferred Stock, Authorized | 21,075,193 | 21,075,193 | 21,075,193 |
Convertible Preferred Stock, Issued | 21,075,193 | 21,075,193 | 21,075,193 |
Convertible Preferred Stock, Outstanding | 21,075,193 | 21,075,193 | |
Convertible Preferred Stock, Liquidation preference | $ 205,483,000 | $ 180,522,000 | $ 180,522,000 |
Total | 180,353,000 | 180,353,000 | $ 180,353,000 |
Series E Preferred Stock | |||
Class of Stock [Line Items] | |||
Convertible Preferred Stock, par value | $ 0.0001 | $ 0.0001 | |
Convertible Preferred Stock, Authorized | 13,450,703 | 13,450,703 | 13,450,703 |
Convertible Preferred Stock, Issued | 13,450,703 | 13,450,703 | 0 |
Convertible Preferred Stock, Outstanding | 13,450,703 | 13,450,703 | 0 |
Convertible Preferred Stock, Liquidation preference | $ 134,791,000 | $ 134,791,000 | $ 0 |
Total | 134,667,000 | 134,667,000 | |
Series E1 Preferred Stock | |||
Class of Stock [Line Items] | |||
Convertible Preferred Stock, par value | $ 0.0001 | $ 0.0001 | |
Convertible Preferred Stock, Authorized | 2,494,737 | 2,494,737 | 2,494,737 |
Convertible Preferred Stock, Issued | 2,494,737 | 2,494,737 | 0 |
Convertible Preferred Stock, Outstanding | 2,494,737 | 2,494,737 | 0 |
Convertible Preferred Stock, Liquidation preference | $ 25,000,000 | $ 25,000,000 | $ 0 |
Total | $ 24,977,000 | $ 24,977,000 |
CONVERTIBLE PREFERRED STOCK A_5
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - Restricted Stock Agreements (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting of restricted Common Stock | $ 6 | $ 6 | $ 8 | $ 8 | |
Weighted-average remaining contractual term (in years) | 7 years 10 months 6 days | 7 years 10 months 2 days | 8 years 2 months 16 days | ||
Restricted stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares issued | 27,850,000 | ||||
Share price | $ 0.0001 | ||||
Percentage of shares on which right to repurchase lapses | 20.00% | ||||
Percentage of shares per month on which right to repurchase lapses | 1.67% | ||||
Right to repurchase expiry term | 4 years | ||||
Vesting of restricted Common Stock (in shares) | 497,290 | ||||
Vesting of restricted Common Stock | $ 2,000 | ||||
Vesting period | 4 years | ||||
Weighted-average remaining contractual term (in years) | 8 months 12 days | 8 months 12 days |
CONVERTIBLE PREFERRED STOCK A_6
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - The activity for stock subject to vesting (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Shared subject to vesting | ||
Balance at end of period, unvested shares (in shares) | 459,000 | |
Restricted stock | ||
Shared subject to vesting | ||
Balance at beginning of period, unvested shares (in shares) | 4,575,313 | 9,731,550 |
Issuance of additional shares (in shares) | 497,000 | |
Vested (in shares) | (4,301,000) | (5,653,000) |
Balance at end of period, unvested shares (in shares) | 274,467 | 4,575,313 |
Weighted Average Grant Date Fair Value | ||
Balance at beginning of Period, unvested shares (in dollars per share) | $ 0.0001 | $ 0.0001 |
Issuance of additional shares (in dollars per share) | 0.0001 | |
Vested (in dollars per share) | 0.0010 | 0.0001 |
Balance at end of Period, unvested shares (in dollars per share) | $ 0.0010 | $ 0.0001 |
CONVERTIBLE PREFERRED STOCK A_7
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - Stock Incentive Plan (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jul. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Amount of convertible notes issued | $ 248,874 | ||||||
Shares issues upon conversion | 279,166 | ||||||
Accrued interest rate | 2.57% | ||||||
Accrued interest | $ 6,571 | ||||||
Repurchase of common stock | 62,610 | ||||||
Granted (in shares) | 6,935,000 | 4,790,000 | |||||
Unrecognized stock-based compensation expense, stock options | $ 16,500 | $ 13,000 | $ 6,900 | ||||
Weighted-average period | 3 years 9 months 18 days | 1 year | |||||
Shares available for grant | 1,960,118 | 4,463,000 | 3,894,467 | 565,000 | |||
Consultant | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options and warrants to be issued | 0 | ||||||
Granted (in shares) | 10,000 | 97,919 | 97,919 | ||||
Fair value of shares | $ 300 | $ 100 | $ 600 | ||||
Employee | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Granted (in shares) | 6,925,144 | 4,107,709 | 4,692,509 | 2,387,517 | |||
Fair value of shares | $ 29,800 | $ 8,900 | $ 10,100 | $ 3,900 | |||
2015 stock incentive plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Awards made under the plan | 21,522,567 | ||||||
Vesting percentage | 25.00% | ||||||
Monthly vesting percentage rate | 2.0833% | ||||||
Vesting period | 3 years | ||||||
Expiration period | 10 years | ||||||
Tax benefits from share based compensation | $ 0 | ||||||
2015 stock incentive plan | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Awards made under the plan | 21,522,567 | ||||||
Make Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 25.00% | 25.00% | |||||
Monthly vesting percentage rate | 2.0833% | 2.0833% | |||||
Vesting period | 3 years | 3 years | |||||
Expiration period | 10 years | 10 years | |||||
Tax benefits from share based compensation | $ 0 | $ 0 | |||||
Options and warrants to be issued | 193,223 | 190,223 | |||||
Granted (in shares) | 0 |
CONVERTIBLE PREFERRED STOCK A_8
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - Common Stock to Employees (Details) - Employee - $ / shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free interest rate, Minimum | 0.30% | 1.90% | 1.70% | 2.70% |
Risk-free interest rate, Maximum | 1.70% | 2.60% | 2.60% | 3.00% |
Expected volatility, Minimum | 52.70% | 53.30% | 52.70% | 52.90% |
Expected volatility, Maximum | 54.20% | 53.60% | 53.60% | 53.80% |
Expected life, Minimum (in years) | 5 years 10 months 24 days | 5 years 7 months 6 days | 5 years 7 months 6 days | 5 years 3 months 18 days |
Expected life, Maximum (in years) | 6 years 3 months 18 days | 6 years 1 month 6 days | 6 years 1 month 6 days | 6 years 1 month 6 days |
Fair value of Common Stock | $ 4.08 | $ 4.08 | $ 3.39 | |
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of Common Stock | $ 1.71 | |||
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of Common Stock | $ 9.75 |
CONVERTIBLE PREFERRED STOCK A_9
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - Common Stock to Consultants (Details) - Consultant - $ / shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free interest rate, Minimum | 0.60% | 1.50% | 1.40% | 2.10% |
Risk-free interest rate, Maximum | 0.80% | 2.50% | 3.10% | 3.10% |
Expected volatility, Minimum | 54.30% | 54.40% | 52.40% | 53.70% |
Expected volatility, Maximum | 54.80% | 54.90% | 61.50% | 61.50% |
Expected life, Minimum (in years) | 9 years 4 months 24 days | 9 years 4 months 24 days | 6 years 2 months 12 days | 7 years 2 months 12 days |
Expected life, Maximum (in years) | 10 years | 10 years | 10 years | 10 years |
Fair value of Common Stock | $ 4.08 | $ 4.08 | $ 3.39 | |
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of Common Stock | $ 1.71 | |||
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of Common Stock | $ 9.75 |
CONVERTIBLE PREFERRED STOCK _10
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock based compensation expenses | $ 4,228 | $ 3,430 | $ 5,215 | $ 2,965 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock based compensation expenses | 2,176 | 1,501 | 2,713 | 1,696 |
Sales and marketing expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock based compensation expenses | 715 | 1,020 | 1,373 | 567 |
General and administrative expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock based compensation expenses | 1,070 | 668 | 941 | 658 |
Cost of sales | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock based compensation expenses | $ 267 | $ 241 | $ 188 | $ 44 |
CONVERTIBLE PREFERRED STOCK _11
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - Option Activity of the Plan (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jul. 31, 2020USD ($)employee | Sep. 30, 2020USD ($)$ / sharesshares | Sep. 30, 2019USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | |
Number of shares | |||||
Outstanding at beginning of period (in shares) | shares | 14,792 | 12,007 | 12,007 | ||
Granted (in shares) | shares | 6,935 | 4,790 | |||
Exercised (in shares) | shares | (409) | (997) | |||
Forfeited/expired (in shares) | shares | (5,287) | (1,008) | |||
Outstanding at end of period (in shares) | shares | 16,031 | 14,792 | 12,007 | ||
Options vested at end of period (in shares) | shares | 8,167 | 7,195 | |||
Options vested or expected to vest at end of period (in shares) | shares | 15,384 | 14,555 | |||
Weighted-Average Exercise Price per share | |||||
Outstanding at beginning of period (in dollars per share) | $ 2.45 | $ 1.65 | $ 1.65 | ||
Granted (in dollars per share) | 1.85 | 3.98 | |||
Exercised (in dollars per share) | 0.65 | 0.71 | |||
Forfeited/expired (in dollars per share) | 3.57 | 1.88 | |||
Outstanding at end of period (in dollars per share) | 1.87 | 2.45 | $ 1.65 | ||
Options vested at end of period (in dollars per share) | 1.83 | 1.52 | |||
Options vested or expected to vest at September 30, 2020 | $ 1.87 | $ 2.44 | |||
Weighted-average remaining contractual term (in years) | 7 years 10 months 6 days | 7 years 10 months 2 days | 8 years 2 months 16 days | ||
Weighted-average remaining contractual term, Granted (in years) | 9 years 3 months 4 days | ||||
Weighted-average remaining contractual term, Exercised (in years) | 1 year 8 months 5 days | ||||
Options vested at December 31, 2020 | 6 years 4 months 17 days | 6 years 11 months 1 day | |||
Options vested or expected to vest at September 30, 2020 | 7 years 9 months 11 days | 7 years 9 months 26 days | |||
Aggregate intrinsic value of options outstanding | $ | $ 126,300 | $ 24,040 | |||
Weighted average grant date fair value for options granted | $ 4.30 | $ 2.11 | $ 2.17 | $ 1.64 | |
Aggregate intrinsic value of options exercised | $ | $ 1,700 | $ 3,000 | $ 3,400 | $ 2,100 | |
Vesting period of repriced options | 4 years | ||||
Cliff vesting period | 1 year | ||||
Number of employees affected by repricing | employee | 116 | ||||
Incremental compensation cost | $ | $ 3,600 |
CONVERTIBLE PREFERRED STOCK _12
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - Common Stock Reserved for Future Issuance (Details) - shares | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY | ||||
Common Stock options outstanding | 16,031,000 | 14,792,000 | 14,490,000 | 12,007,000 |
Restricted Stock units outstanding | 459,000 | |||
Shares available for issuance under the Plan | 1,960,118 | 3,894,467 | 4,463,000 | 565,000 |
Convertible Preferred Stock outstanding | 100,038,000 | 100,038,000 | 100,038,000 | 84,093,000 |
Common Stock warrants outstanding | 919,000 | 2,032,000 | 464,000 | 2,000,000 |
Total shares of authorized Common Stock reserved for future issuance | 119,407,000 | 120,756,000 | 119,455,000 | 98,665,000 |
CONVERTIBLE PREFERRED STOCK _13
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | May 31, 2017 |
Class of Warrant or Right [Line Items] | ||||||
Warrants to purchase shares | 399,960 | 501,113 | 477,629 | 18,389 | 2,000,000 | |
Number of common stock purchased by each warrant | 1 | 1 | ||||
Revenue generated per share | $ 35 | $ 35 | ||||
Exercise price | $ 5 | $ 5 | ||||
Fair value of the warrants | $ 40 | $ 1,000 | $ 900 | $ 34,939 | ||
Maximum | ||||||
Class of Warrant or Right [Line Items] | ||||||
Warrants to purchase shares | 2,000,000 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) | 9 Months Ended | 12 Months Ended | 24 Months Ended | ||
Sep. 30, 2020USD ($)segmentclient | Sep. 30, 2019USD ($)client | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2019USD ($) | |
Segment Information | |||||
Number of segments | 1 | 1 | |||
Revenue | $ 8,101,000 | $ 20,876,000 | $ 26,439,000 | $ 1,034,000 | |
Number of clients representing 10% or more of the company's total revenue | 0 | 0 | 0 | ||
Revenue recognized at a point in time | |||||
Segment Information | |||||
Revenue | $ 6,113,000 | $ 18,655,000 | 22,758,000 | 751,000 | |
Revenue recognized over time | |||||
Segment Information | |||||
Revenue | 1,988,000 | 2,221,000 | 3,681,000 | 283,000 | |
Product | |||||
Segment Information | |||||
Revenue | 6,113,000 | 18,655,000 | 22,758,000 | 751,000 | |
Service | |||||
Segment Information | |||||
Revenue | 1,988,000 | 2,221,000 | 3,681,000 | 283,000 | |
Americas | |||||
Segment Information | |||||
Revenue | 3,334,000 | 13,412,000 | 15,801,000 | 1,034,000 | |
Americas | Product | |||||
Segment Information | |||||
Revenue | 2,372,000 | 11,561,000 | 12,746,000 | 751,000 | |
Americas | Service | |||||
Segment Information | |||||
Revenue | 962,000 | 1,851,000 | 3,055,000 | $ 283,000 | |
EMEA | |||||
Segment Information | |||||
Revenue | 3,299,000 | 6,250,000 | 8,993,000 | ||
EMEA | Product | |||||
Segment Information | |||||
Revenue | 2,411,000 | 5,909,000 | 8,430,000 | ||
EMEA | Service | |||||
Segment Information | |||||
Revenue | 888,000 | 341,000 | 563,000 | ||
APAC | |||||
Segment Information | |||||
Revenue | 1,468,000 | 1,214,000 | 1,645,000 | ||
APAC | Product | |||||
Segment Information | |||||
Revenue | 1,330,000 | 1,185,000 | 1,582,000 | ||
APAC | Service | |||||
Segment Information | |||||
Revenue | $ 138,000 | $ 29,000 | $ 63,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)client | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) | |
Related Party Transaction [Line Items] | |||
Fair value of the warrants | $ 34,939 | ||
Deferred revenue from sales to investors | 3,900 | $ 1,100 | $ 2,200 |
Amount of investment | $ 500 | ||
Percentage of outstanding shares | 31.00% | ||
Investors | |||
Related Party Transaction [Line Items] | |||
Revenue from sales to investors | $ 100 | ||
Number of investors | client | 2 | ||
Deferred revenue from sales to investors | $ 100 |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Numerator for basic and diluted net loss per share: | ||||
Net loss attributable to Desktop Metal, Inc Common Stockholders | $ (65,027) | $ (75,769) | $ (103,596) | $ (121,339) |
Denominator for basic and diluted net loss per share: | ||||
Weighted average shares | 29,457,000 | 22,395,000 | 23,379,000 | 16,495,000 |
Net loss per share-Basic and Diluted | $ (2.21) | $ (3.38) | $ (4.43) | $ (7.36) |
Dilutive securities excluded | 117,722,359 | 121,001,479 | 115,349,706 | 96,117,086 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ in Millions | Aug. 26, 2020 | Jul. 31, 2020 | Apr. 30, 2020 |
Agreement and Plan of Merger | Trine Acquisition Corp | |||
Subsequent Event [Line Items] | |||
Business Combination ,Maximum Consideration Receivable | $ 1,800 | ||
Subsequent Event [Member] | Share-based Payment Arrangement, Option [Member] | |||
Subsequent Event [Line Items] | |||
Vesting period | 4 years | ||
Paycheck Protection Program | |||
Subsequent Event [Line Items] | |||
Loan Proceeds | $ 5.4 |
CONSOLIDATED BALANCE SHEETS_2
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 37,356 | $ 66,161 |
Short-term investments | 53,180 | 84,754 |
Accounts receivable, net of allowance for doubtful accounts $0.5 million and $0.2 million | 1,642 | 4,523 |
Inventory | 10,363 | 8,405 |
Prepaid expenses and other current assets | 806 | 1,888 |
Total current assets | 103,347 | 165,731 |
Restricted cash | 612 | 612 |
Property and equipment, net | 13,601 | 18,387 |
Capitalized software, net | 357 | 446 |
Right-of-use assets | 1,935 | 2,289 |
Goodwill | 2,252 | 2,252 |
Acquired technology, net | 2,453 | 2,994 |
Deferred transaction costs | 2,741 | |
Total Assets | 127,298 | 192,711 |
Current liabilities: | ||
Accounts payable | 6,604 | 10,228 |
Customer deposits | 1,778 | 2,325 |
Current portion of operating lease liability | 858 | 806 |
Accrued expenses and other current liabilities | 6,055 | 5,053 |
Deferred revenue | 1,136 | 2,230 |
Current portion of long-term debt, net of deferred financing costs | 9,986 | |
Total current liabilities | 26,417 | 20,642 |
Long-term debt, net of deferred financing costs | 9,972 | |
Lease liability, net of current portion | 2,375 | 3,026 |
Total liabilities | 28,792 | 33,640 |
Commitments and Contingences (Note 9) | ||
Convertible Preferred Stock (Note 11) | 436,533 | 436,533 |
Stockholders' Equity: | ||
Common Stock, $0.0001 par value-authorized, 156,000,000 shares; issued and outstanding, 31,797,295 and 31,388,426 shares at September 30, 2020 and December 31, 2019, respectively (includes unvested 274,467 and 4,575,313 shares of restricted stock) | 3 | 3 |
Additional paid-in capital | 21,254 | 16,722 |
Accumulated deficit | (359,289) | (294,262) |
Accumulated other comprehensive income | 5 | 75 |
Total Stockholders' Equity | (338,027) | (277,462) |
Total Liabilities, Convertible Preferred Stock and Stockholders' Equity | $ 127,298 | $ 192,711 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Allowance for doubtful accounts | $ 0.5 | $ 0.2 | $ 0 |
Common stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 156,000,000 | 156,000,000 | 156,000,000 |
Common Stock, shares, issued | 31,797,295 | 31,388,426 | 29,083,805 |
Common Stock, shares, outstanding | 31,797,295 | 31,388,426 | 29,083,805 |
Unvested shares | 459,000 | ||
Restricted stock | |||
Unvested shares | 274,467 | 4,575,313 | 9,731,550 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | 24 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | |
Revenues | |||||
Total revenues | $ 8,101 | $ 20,876 | $ 26,439 | $ 1,034 | |
Cost of sales | |||||
Total cost of sales | 21,510 | 38,518 | 50,796 | 5,468 | |
Gross margin | (13,409) | (17,642) | (24,357) | (4,434) | |
Operating expenses: | |||||
Research and development | 31,362 | 40,623 | 54,656 | 59,607 | |
Sales and marketing | 9,994 | 13,927 | 18,749 | 14,674 | |
General and administrative | 11,004 | 8,290 | 11,283 | 44,898 | |
Total operating expenses | 52,360 | 62,840 | 84,688 | 119,179 | |
Loss from operations | (65,769) | (80,482) | (109,045) | (123,613) | |
Interest expense | (253) | (389) | (503) | (261) | |
Interest and other income, net | 995 | 5,102 | 5,952 | 2,535 | |
Loss before income taxes | (65,027) | (75,769) | (103,596) | (121,339) | |
Provision for income taxes | $ 0 | ||||
Net loss | $ (65,027) | $ (75,769) | $ (103,596) | $ (121,339) | |
Net loss per share-basic and diluted | $ (2.21) | $ (3.38) | $ (4.43) | $ (7.36) | |
Product | |||||
Revenues | |||||
Total revenues | $ 6,113 | $ 18,655 | $ 22,758 | $ 751 | |
Cost of sales | |||||
Total cost of sales | 18,145 | 35,218 | 45,268 | 4,572 | |
Service | |||||
Revenues | |||||
Total revenues | 1,988 | 2,221 | 3,681 | 283 | |
Cost of sales | |||||
Total cost of sales | $ 3,365 | $ 3,300 | $ 5,528 | $ 896 |
CONSOLIDATED STATEMENTS OF CO_4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||
Net loss | $ (65,027) | $ (75,769) | $ (103,596) | $ (121,339) |
Other comprehensive income, net of taxes: | ||||
Unrealized (loss) gain on available-for-sale marketable securities, net | (70) | 227 | 171 | 114 |
Total comprehensive loss, net of taxes of $0 | $ (65,097) | $ (75,542) | $ (103,425) | $ (121,225) |
CONSOLIDATED STATEMENTS OF CO_5
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parentheticals) - USD ($) $ in Thousands | 9 Months Ended | 24 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | |||
Tax on Comprehensive income (loss) | $ 0 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CO_6
CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Convertible Preferred Stock | Series E Preferred Stock | Series E1 Preferred Stock | Common Stock | Additional Paid-In Capital | Notes Receivable | Accumulated Deficit | Accumulated Other Comprehensive (Loss) Income | Total |
BALANCE at Dec. 31, 2017 | $ 241,789 | ||||||||
BALANCE (in shares) at Dec. 31, 2017 | 79,994,884 | ||||||||
Temporary Equity, Carrying Amount, Including Portion Attributable to Noncontrolling Interests [Abstract] | |||||||||
Issuance of Preferred Stock | $ 35,100 | ||||||||
Issuance of Preferred Stock (in shares) | 4,097,785 | ||||||||
BALANCE at Dec. 31, 2018 | $ 276,889 | ||||||||
BALANCE (in shares) at Dec. 31, 2018 | 84,092,669 | 0 | 0 | ||||||
BALANCE at Dec. 31, 2017 | $ 2 | $ 2,810 | $ (69,327) | $ (210) | $ (66,725) | ||||
BALANCE (in shares) at Dec. 31, 2017 | 12,971,191 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Exercise of common stock options | 373 | 373 | |||||||
Exercise of common stock options (in shares) | 526,898 | ||||||||
Vesting of restricted Common Stock | 8 | 8 | |||||||
Vesting of restricted Common Stock (in shares) | 5,575,000 | ||||||||
Stock-based compensation expense | 2,965 | 2,965 | |||||||
Common Stock warrants issued | 35 | 35 | |||||||
Net loss | (121,339) | (121,339) | |||||||
BALANCE at Dec. 31, 2018 | $ 2 | 6,440 | $ (249) | (190,666) | (96) | (184,569) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Other comprehensive income (loss) | 114 | 114 | |||||||
BALANCE (in shares) at Dec. 31, 2018 | 19,352,255 | ||||||||
Temporary Equity, Carrying Amount, Including Portion Attributable to Noncontrolling Interests [Abstract] | |||||||||
Issuance of Preferred Stock | $ 134,667 | $ 24,977 | |||||||
Issuance of Preferred Stock (in shares) | 13,450,703 | 2,494,737 | |||||||
BALANCE at Sep. 30, 2019 | $ 436,533 | ||||||||
BALANCE (in shares) at Sep. 30, 2019 | 100,038,109 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Exercise of common stock options | 606 | 606 | |||||||
Exercise of common stock options (in shares) | 902,175 | ||||||||
Vesting of restricted Common Stock | 6 | 6 | |||||||
Vesting of restricted Common Stock (in shares) | 4,221,144 | ||||||||
Stock-based compensation expense | 3,430 | 3,430 | |||||||
Common Stock warrants issued | 905 | 905 | |||||||
Issuance of Common Stock for acquisitions | 3,563 | 3,563 | |||||||
Issuance of Common Stock for acquisitions (in shares) | 873,203 | ||||||||
Repayment of notes receivable | (249) | 249 | |||||||
Repayment of notes receivable (in shares) | (62,610) | ||||||||
Net loss | (75,769) | (75,769) | |||||||
BALANCE at Sep. 30, 2019 | $ 2 | 14,701 | (266,435) | 131 | (251,601) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Other comprehensive income (loss) | 227 | $ 227 | |||||||
BALANCE (in shares) at Sep. 30, 2019 | 25,286,167 | ||||||||
BALANCE at Dec. 31, 2018 | $ 276,889 | ||||||||
BALANCE (in shares) at Dec. 31, 2018 | 84,092,669 | 0 | 0 | ||||||
Temporary Equity, Carrying Amount, Including Portion Attributable to Noncontrolling Interests [Abstract] | |||||||||
Issuance of Preferred Stock | $ 134,667 | $ 24,977 | |||||||
Issuance of Preferred Stock (in shares) | 13,450,703 | 2,494,737 | |||||||
BALANCE at Dec. 31, 2019 | $ 436,533 | ||||||||
BALANCE (in shares) at Dec. 31, 2019 | 100,038,109 | 13,450,703 | 2,494,737 | 100,038,109 | |||||
BALANCE at Dec. 31, 2018 | $ 2 | 6,440 | (249) | (190,666) | (96) | $ (184,569) | |||
BALANCE (in shares) at Dec. 31, 2018 | 19,352,255 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Exercise of common stock options | 708 | 708 | |||||||
Exercise of common stock options (in shares) | 996,753 | ||||||||
Vesting of restricted Common Stock | $ 1 | 7 | 8 | ||||||
Vesting of restricted Common Stock (in shares) | 5,653,512 | ||||||||
Stock-based compensation expense | 5,215 | 5,215 | |||||||
Common Stock warrants issued | 1,038 | 1,038 | |||||||
Issuance of Common Stock for acquisitions | 3,563 | 3,563 | |||||||
Issuance of Common Stock for acquisitions (in shares) | 873,203 | ||||||||
Repayment of notes receivable | (249) | $ 249 | |||||||
Repayment of notes receivable (in shares) | (62,610) | ||||||||
Net loss | (103,596) | (103,596) | |||||||
BALANCE at Dec. 31, 2019 | $ 3 | 16,722 | (294,262) | 75 | (277,462) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Other comprehensive income (loss) | 171 | $ 171 | |||||||
BALANCE (in shares) at Dec. 31, 2019 | 26,813,113 | ||||||||
BALANCE at Sep. 30, 2020 | $ 436,533 | ||||||||
BALANCE (in shares) at Sep. 30, 2020 | 13,450,703 | 2,494,737 | 100,038,109 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Exercise of common stock options | 255 | $ 255 | |||||||
Exercise of common stock options (in shares) | 408,869 | ||||||||
Vesting of restricted Common Stock | 6 | 6 | |||||||
Vesting of restricted Common Stock (in shares) | 4,300,846 | ||||||||
Stock-based compensation expense | 4,228 | 4,228 | |||||||
Common Stock warrants issued | 43 | 43 | |||||||
Net loss | (65,027) | (65,027) | |||||||
BALANCE at Sep. 30, 2020 | $ 3 | $ 21,254 | $ (359,289) | 5 | (338,027) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Other comprehensive income (loss) | $ (70) | $ (70) | |||||||
BALANCE (in shares) at Sep. 30, 2020 | 31,522,828 |
CONSOLIDATED STATEMENTS OF CO_7
CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - (Parenthetical) - USD ($) $ in Thousands | Jan. 14, 2019 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Convertible Preferred Stock | ||||
Stock issuance cost | $ 169 | |||
Series E Preferred Stock | ||||
Stock issuance cost | $ 100 | $ 124 | $ 124 | |
Series E1 Preferred Stock | ||||
Stock issuance cost | $ 20 | $ 22 | $ 22 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Cash Flows from Operating Activities: | |
Net loss | $ (65,027) |
Adjustments to reconcile net loss to net cash used in operating activities: | |
Depreciation and amortization | 6,525 |
Stock-based compensation | 4,228 |
Expense related to Common Stock warrants issued | 43 |
Loss (gain) on disposal of property and equipment | 10 |
Accretion of discount on investments | 34 |
Net decrease (increase) in accrued interest related to marketable securities | 162 |
Changes in operating assets and liabilities: | |
Accounts receivable | 2,881 |
Inventory | (1,958) |
Prepaid expenses and other current assets | 1,082 |
Accounts payable | (5,467) |
Accrued expenses and other current liabilities | 444 |
Customer deposits | (547) |
Deferred revenue | (1,094) |
Change in right of use assets and lease liabilities, net | (243) |
Net cash used in operating activities | (58,927) |
Cash Flows from Investing Activities: | |
Purchases of property and equipment | (1,039) |
Purchase of marketable securities | (62,810) |
Proceeds from sales and maturities of marketable securities | 94,116 |
Net cash provided by (used in) investing activities | 30,267 |
Cash Flows from Financing Activities | |
Proceeds from exercise of stock options | 255 |
Proceeds from PPP loan | 5,379 |
Repayment of PPP loan | (5,379) |
Deferred financing costs paid | (400) |
Net cash (used in) provided by financing activities | (145) |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (28,805) |
Cash and cash equivalents at beginning of year | 66,161 |
Restricted cash | 612 |
Cash, cash equivalents, and restricted cash at end of period | 37,968 |
Supplemental cash flow information: | |
Interest paid | 253 |
Noncash investing and financing activities: | |
Purchase of property and equipment included in accrued expenses and other current liabilities | 79 |
Deferred transaction costs not yet paid included in accrued expenses and other current liabilities | $ 2,341 |
ORGANIZATION, NATURE OF BUSIN_3
ORGANIZATION, NATURE OF BUSINESS, AND RISK AND UNCERTAINTIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
ORGANIZATION, NATURE OF BUSINESS, AND RISK AND UNCERTAINTIES | ||
ORGANIZATION, NATURE OF BUSINESS, AND RISK AND UNCERTAINTIES | 1. Organization, Nature of Business, and Risk and Uncertainties Organization and Nature of Business References to “Desktop Metal” and the “Company” in the financial results of the nine months ended September 30, 2020 refer to Desktop Metal, Inc., a Delaware corporation, together with its subsidiaries, prior to the closing of the transactions contemplated by the Agreement and Plan of Merger, dated September 26, 2020, by and among Trine Acquisition Corp., a Delaware corporation, Sparrow Merger Sub, Inc., a wholly-owned subsidiary of Trine, and the Company (as amended, the “Merger Agreement”). The transactions contemplated by the Merger Agreement closed on December 9, 2020, at which time the Company was renamed Desktop Metal Operating, Inc. and became a wholly-owned subsidiary of Trine Acquisition Corp. These financial results for the nine months ended September 30, 2020 reflect only the financial results of the Company prior to the closing of the transactions contemplated by the Merger Agreement. Desktop Metal, Inc. and subsidiaries (“the “Company”, “Desktop Metal”) is a Delaware corporation headquartered in Burlington, Massachusetts. The Company was founded in 2015 and is accelerating the transformation of manufacturing with 3D printing solutions for engineers, designers, and manufacturers. The Company designs, produces and markets 3D printing products to a variety of end customers. Risks and Uncertainties The Company is subject to a number of risks similar to those of other companies of similar size in its industry, including, but not limited to, the need for successful development of products, the need for additional funding, competition from substitute products and services from larger companies, protection of proprietary technology, patent litigation, dependence on key individuals, and risks associated with changes in information technology. The Company has financed its operations to date primarily with proceeds from the sale of preferred stock. The Company’s long‑term success is dependent upon its ability to successfully market its products and services; generate revenue; maintain or reduce its operating costs and expenses; meet its obligations; obtain additional capital when needed; and, ultimately, achieve profitable operations. Management believes that existing cash and investments as of September 30, 2020, when coupled with the cash raised through the merger, will be sufficient to fund operating and capital expenditure requirements through at least twelve months from the date of issuance of these condensed consolidated financial statements. | 1. ORGANIZATION, NATURE OF BUSINESS, AND RISK AND UNCERTAINTIES Organization and Nature of Business Desktop Metal, Inc. and subsidiaries (the “Company” “Desktop Metal”) is a Delaware corporation headquartered in Burlington, Massachusetts. The Company was founded in 2015 and is accelerating the transformation of manufacturing with 3D printing solutions for engineers, designers, and manufacturers. The Company designs, produces and markets 3D printing systems to a variety of end customers. Risks and Uncertainties The Company is subject to a number of risks similar to those of other companies of similar size in its industry, including, but not limited to, the need for successful development of products, the need for additional funding, competition from substitute products and services from larger companies, protection of proprietary technology, patent litigation, dependence on key individuals, and risks associated with changes in information technology. The Company has financed its operations to date primarily with proceeds from the sale of Convertible Preferred Stock. The Company’s long‑term success is dependent upon its ability to successfully market its products and services; generate revenue; maintain or reduce its operating costs and expenses; meet its obligations; obtain additional capital when needed; and, ultimately, achieve profitable operations. Management believes that existing cash and investments as of September 2020 will be sufficient to fund operating and capital expenditure requirements through at least twelve months from the date of issuance of these consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. Basis of Presentation and Summary of Significant Accounting Policies Unaudited Interim Financial Statements The unaudited condensed consolidated financial statements include the accounts of Desktop Metal, Inc. and wholly‑owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in condensed consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The information as of December 31, 2019 included in the unaudited condensed consolidated balance sheets was derived from the Company’s audited consolidated financial statements. The unaudited condensed consolidated financial statements included in this Current Report on Form 8-K were prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments (all of which are considered of a normal recurring nature) considered necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods and dates presented. The results of operations for the nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements and related notes included elsewhere in this Current Report on Form 8-K. Basis of Presentation The unaudited condensed consolidated financial statements of the Company are presented for Desktop Metal, Inc. (“Parent”) and its wholly‑owned subsidiaries. The Company has prepared the accompanying unaudited condensed consolidated financial statements pursuant to GAAP. Preparing financial statements requires the Company to make estimates and assumptions that affect the amounts that are reported in the condensed consolidated financial statements and accompanying disclosures. Although these estimates are based on the Company’s best knowledge of current events and actions that the Company may undertake in the future, actual results may be different from the Company’s estimates. The results of operations presented herein are not necessarily indicative of the Company’s results for any future period. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make judgements, estimates and assumptions regarding uncertainties that affect the reported amounts of assets, liabilities and related disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Although the Company regularly assesses these estimates, actual results could differ materially from these estimates. Changes in estimates are recorded in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances available at the time estimates are made, including the Company’s expectation at the time regarding the duration, scope and severity of the ongoing COVID‑19 pandemic and the potential continued disruption of global economic conditions due to the pandemic. Actual results may differ from management’s estimates if these results differ from historical experience or other assumptions prove not to be substantially accurate, even if such assumptions are reasonable when made. Cash and Cash Equivalents Cash equivalents include all highly liquid investments maturing within 90 days or less from the date of purchase. Cash equivalents consist of money market funds, totaling $33.9 million and $40.5 million as of September 30, 2020 and December 31, 2019, respectively, as well as other highly liquid cash equivalents totaling $0.0 million and $25.0 million as of September 30, 2020 and December 31, 2019, respectively. Short‑Term Investments All of the Company’s investments, which consist of debt securities, are classified as available for sale and are carried at fair value. Unrealized gains and losses considered to be temporary in nature are recorded as a component of accumulated other comprehensive loss, net of related income taxes. The Company reviews all investments for reductions in fair value that are other than temporary. When such reductions occur, the cost of the investment is adjusted to fair value through recording a loss on investments in the condensed consolidated statements of operations. Gains and losses on investments are calculated on the basis of specific identification. Revenue Product Revenue and Service Revenue Product revenue include sales of the Company’s 3-D metal systems, which consist of modular printers furnaces, and debinders as well as sales of accessories and consumables. These consumables are primarily comprised of materials used by the printers during the printing process to produce parts and other wear items or components in the products that must be replaced after certain amounts of use. Certain on‑premises software that is embedded with the hardware and sold with the product bundle and is included within product revenue. Revenue from products is recognized upon transfer of control, which is generally at the point of shipment. The Company typically recognizes revenue on embedded software once the customer has been given access to the software. Services revenue includes revenue from various cloud‑based software solutions the Company offers to facilitate the design of parts and operation of the Company’s products. The Company offers multiple software products, which are licensed through either a cloud‑based solution and/or an on‑premises software subscription, depending on the product. For the cloud‑based solution, the Company typically provides an annual subscription that the customer does not have the right to take possession of and is renewed at expiration. The revenue from the cloud‑based solution is recognized ratably over the annual term as the Company considers the services provided under the cloud‑based solution to be a series of distinct performance obligations, as the Company provides continuous daily access to the cloud solution. For on‑premises software subscriptions, the Company typically recognizes revenue once the customer has been given access to the software. Service revenue also consists of installation, training, and post-installation customer support. When the Company enters into development contracts, control of the development service is transferred over time, and the related revenue is recognized over time. Revenue Recognition The Company adopted Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers , on January 1, 2018, using the full retrospective method. Revenue is measured as the amount of consideration expected to be received in exchange for transferring goods or providing services. The amount of consideration is typically a fixed price at the contract inception. Consideration from shipping and handling is recorded on a gross basis within product revenue. The Company determines revenue recognition through the following steps: · Identification of the contract, or contracts, with a customer · Identification of the performance obligations in the contract · Determination of the transaction price · Allocation of the transaction price to the performance obligations in the contract · Recognition of revenue when, or as, the Company satisfies a performance obligation Nature of Products and Services The Company sells its products primarily through authorized resellers, independent sales agents, and its own internal sales team. Revenue from hardware and consumables is recognized upon transfer of control, which is generally at the point of shipment. The cloud‑based software solution is typically provided as an annual license that the customer does not have the right to take possession of and is renewed each year. The revenue from the cloud‑based solution is recognized ratably over the annual term as the Company considers the services provided under the licenses to be a series of distinct performance obligations. For the on‑premise software, the Company typically recognizes revenue once the customer has been given access to the software. The Company’s post-installation customer support is primarily sold through one‑year annual contracts and such revenue is recognized ratably over the term of the agreement. Service Revenue from installation and training is recognized as performed. The Company’s terms of sale generally provide payment terms that are customary in the countries where the Company transacts business. To reduce credit risk in connection with certain sales, the Company may, depending upon the circumstances, require significant deposits or payment in full prior to shipment. Due to the short‑term nature of the Company’s contracts substantially all of the outstanding performance obligations are recognized within one year. Shipping and handling activities that occur after control over a product has transferred to a customer are accounted for as fulfillment activities rather than performance obligations, as allowed under a practical expedient provided by ASC 606. The shipping and handling fees charged to customers are recognized as revenue and the related costs are included in cost of sales at the point in time when ownership of the product is transferred to the customer. Sales taxes and value added taxes collected concurrently with revenue generating activities are excluded from revenue. Significant Judgements The Company enters into contracts with customers that can include hardware products and cloud-based software, which are determined to be distinct and accounted for as separate performance obligations. Products or services that are promised to a customer can be considered distinct if both of the following criteria are met: (i) the customer can benefit from the products or services either on its own or together with other readily available resources and (ii) the Company’s promise to transfer the products, software, or services to the customer is separately identifiable from other promises in the contract. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Judgement is required to determine the standalone selling price (SSP). The transaction price is allocated to each distinct performance obligation on a relative standalone selling price basis and revenue is recognized for each performance obligation when control has passed. In most cases, the Company is able to establish SSP based on historical transaction data of the observable prices of hardware products sold separately in comparable circumstances to similar customers, observable renewal rates for software and post-installation support, and the Company’s best estimates selling price at which the Company would have sold the product regularly on a stand‑alone basis for training and installation. The Company reassesses the SSP on a periodic basis or when facts and circumstances change. Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, customer deposits and deferred revenues (contract liabilities) on the condensed consolidated balance sheets. Timing of revenue recognition may differ from the timing of invoicing to customers. The Company records a receivable at the time of invoicing. For most of the Company’s contracts, customers are invoiced when products are shipped or when services are performed. The Company typically bills in advance for post‑installation support and cloud‑based software licenses, resulting in deferred revenue. The Company’s deferred revenue balance was $1.1 million and $2.2 million as of September 30, 2020 and December 31, 2019, respectively. The deferred revenue consists primarily of billed post-installation customer support and cloud‑based software licenses that are recognized ratably over the term of the agreement, and to a lesser extent related to contracts that have outstanding performance obligations, and contracts that have acceptance terms that have not yet been fulfilled. When products have been delivered, but the product revenue associated with the arrangement has been deferred as described above, the Company includes the costs for the delivered items in prepaid expenses and other current assets on the condensed consolidated balance sheets until recognition of the related revenue occurs, at which time it is recognized in cost of sales. The Company’s deferred cost of sales balance was $0 and $0.3 million as of September 30, 2020 and December 31, 2019, respectively. As the Company’s contracts are primarily one year or less, substantially all deferred revenue outstanding at the end of the fiscal year is recognized during the following year. For the periods ended September 30, 2020 and 2019, the Company paid commissions to its external partners and internal sales team. The Company acts as a principal in the contracts with its partners as the Company controls the product, establishes the price, and bears the risk of nonperformance. The Company records the revenue on a gross basis and commissions are recorded as a sales and marketing expense. The Company recognizes its commission expense as a point‑in‑time expense as contract obligations are primarily completed within a one‑year contract period. See Note 12 for additional information related to disaggregation of revenue. Allowance for Doubtful Accounts In evaluating the collectability of accounts receivable, the Company assesses a number of factors, including specific customers’ abilities to meet their financial obligations, the length of time receivables are past due, and historical collection experience. If circumstances related to specific customers change, or economic conditions deteriorate such that past collection experience is no longer relevant, the Company’s estimate of the recoverability of accounts receivable could be further reduced from the levels provided for in the condensed consolidated financial statements. The Company evaluates specific accounts for which the Company believes a customer may have an inability to meet their financial obligations. In these cases, the Company uses judgment, based on available facts and circumstances, and records a specific reserve for that customer to reduce the receivable to an amount the Company expects to collect. These specific reserves are reevaluated and adjusted as additional information is received that impacts the amount reserved. As of September 30, 2020, and December 31, 2019, the Company has recorded $0.5 million and $0.2 million respectively, in allowance for doubtful accounts. Bad debt expense was $0.3 million and $0 million for the nine months ended September 30, 2020 and September 30, 2019, respectively. As of September 30, 2020, the Company had one customer that represented 10% or more of accounts receivables, which accounted for 10% of total accounts receivable. As of December 31, 2019, no single customer accounted for more than 10% of total accounts receivables. Net Loss Per share The Company presents basic and diluted loss per common share amounts. Basic loss per common share is calculated by dividing net loss by the weighted average number of common shares outstanding during the applicable period. The denominator for diluted net loss per share is a computation of the weighted‑average number of ordinary shares and the potential dilutive ordinary shares outstanding during the period. Potential dilutive shares outstanding include the dilutive effect of in‑the‑money options, unvested Restricted Stock Agreements (“RSAs”), and unvested Restricted Stock Units (“RSUs”) using the treasury stock method. In periods in which the Company reports a net loss, diluted net loss per share is generally the same as basic net loss per share since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. See Note 14 for further information. Warranty Reserve Substantially all of the Company’s products, including hardware, and software are covered by a standard assurance warranty of one year. In the event of a failure of a hardware or software product covered by this warranty, the Company may repair or replace the software or hardware product at its option. The Company’s warranty reserve reflects estimated material and labor costs for potential or actual product issues in its installed base for which the Company expects to incur an obligation. The Company periodically assesses the adequacy of the warranty reserve and adjusts the amount as necessary. If the data used to calculate the adequacy of the warranty reserve are not indicative of future requirements, additional or reduced warranty reserves may be required. As of September 30, 2020 and December 31, 2019, the Company has recorded $1.7 million and $1.5 million, respectively, of warranty reserve within accrued expenses and other current liabilities on the condensed consolidated balance sheets. Accrued warranty at each balance sheet date consisted of the following (in thousands): September 30, 2020 December 31, 2019 Warranty reserve, at the beginning of the year $ 1,491 $ 116 Additions to warranty reserve 375 2,352 Claims fulfilled (132) (977) Warranty reserve, at the end of the period $ 1,734 $ 1,491 Warranty reserve is recorded in cost of sales in the condensed consolidated statement of operations. Inventory Inventory is stated at the lower of cost or net realizable value, determined on a first‑in, first‑out basis, and consists of the following (in thousands): September 30, 2020 December 31, 2019 Work in process $ 3,062 $ 1,081 Finished goods 7,301 7,324 $ 10,363 $ 8,405 The Company provides for inventory losses based on obsolescence and levels in excess of forecasted demand. In these cases, inventory is reduced to the estimated net realizable value based on historical usage and expected demand. Inventory provisions based on obsolescence and inventory in excess of forecasted demand are recorded in cost of sales in the condensed consolidated statement of operations. Concentrations of Credit Risk and Off‑Balance‑Sheet Risk The Company has no significant off‑balance‑sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that potentially expose the Company to concentrations of credit risk consist mainly of cash and cash equivalents. The Company maintains its cash and cash equivalents principally with accredited financial institutions of high‑credit standing. Property and Equipment Property and equipment are stated at cost. Expenditures for repairs and maintenance are expensed as incurred. When assets are retired or disposed of, the assets and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is included in the determination of net income or loss. Depreciation is recorded using the straight‑line method over the estimated useful lives of the related assets. Business Combinations The Company allocates the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The estimates used to value the net assets acquired are based in part on historical experience and information obtained from the management of the acquired company. The Company generally values the identifiable intangible assets acquired using a discounted cash flow model. The significant estimates used in valuing certain of the intangible assets, include, but are not limited to future expected cash flows of the asset, discount rates to determine the present value of the future cash flows and expected technology life cycles. Intangible assets are amortized over their estimated useful life; the period over which the Company anticipates generating economic benefit from the asset. Fair value adjustments subsequent to the acquisition date, that are not measurement period adjustments, are recognized in earnings. Deferred Transaction Costs and Transaction Costs Payable As part of the contemplated reverse recapitalization transaction with Trine Acquisition Corp, (“Trine”) the details of which are discussed in an initial S-4 filed with the SEC by on September 15, 2020 and subsequent amendments, the Company has accrued direct and incremental transaction costs related to the merger which will be deducted from the combined entity’s additional paid-in capital at the closing of the transaction when the proceeds are received. As of September 30, 2020, the Company had recorded $2.3 million of transaction costs payable to advisers, which $1.7 million is included in accounts payable and $0.6 million is included in accrued expenses and other current liabilities in the condensed consolidated balance sheets. Goodwill and Intangible Assets The Company has recorded $2.3 million of goodwill and $3.3 million of acquired technology as a result of two business combinations completed during the year ended December 31, 2019. As of September 30, 2020, the Company has recorded $0.8 million of accumulated amortization on the acquired technology. Goodwill represents the future economic benefits arising from other assets acquired in a business combination or an acquisition that is not individually identified and separately recorded. The excess of the purchase price over the estimated fair value of net assets of businesses acquired in a business combination is recognized as goodwill. Intangible assets consist of identifiable intangible assets, including developed technology, resulting from the Company’s acquisitions. Goodwill is not amortized but is tested for impairment at least annually (as of the first day of the fourth quarter) or as circumstances indicate the value may no longer be recoverable. To assess if goodwill is impaired, the Company performs a qualitative assessment to determine whether further impairment testing is necessary. The Company then compares the carrying amount of the single reporting unit to the fair value of the reporting unit. An excess carrying value over fair value would indicate that goodwill may be impaired. The Company evaluates definite‑lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If indicators of impairment are present, the Company then compares the estimated undiscounted cash flows that the specific asset is expected to generate to its carrying value. If such assets are impaired, the impairment recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value. To date, there have been no impairments of goodwill or intangible assets. Intangible assets are amortized over their useful lives. Impairment of Long‑Lived Assets The Company evaluates whether events or circumstances have occurred that indicate that the estimated remaining useful life of its long‑lived assets may warrant revision or that the carrying value of these assets may be impaired. The Company does not believe that any events have occurred through September 30, 2020, that would indicate its long‑lived assets are impaired. Stock‑Based Compensation The Company accounts for all stock options granted to employees and nonemployees using a fair value method. Stock‑based compensation is measured at the grant‑date fair value of the award and is then recognized as the related services are rendered, typically over the vesting period. The measurement date for employee awards is generally the date of the grant and the measurement date for nonemployee awards is generally the date the performance of services is completed. The Company estimates forfeitures that will occur in their determination of the expense recorded. Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the Company’s condensed consolidated financial statements and tax returns. Deferred tax assets and liabilities are determined based upon the differences between the condensed consolidated financial statements carrying amounts and the tax bases of existing assets and liabilities and for loss and credit carryforwards, using enacted tax rates expected to be in effect in the years in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that these assets may not be realized. The Company provides reserves for potential payments of taxes to various tax authorities related to uncertain tax positions. Amounts recognized are based on a determination of whether a tax benefit taken by the Company in its tax filings or positions is “more likely than not” to be sustained on audit. The amount recognized is equal to the largest amount that is more than 50% likely to be sustained. Interest and penalties associated with uncertain tax positions are recorded as a component of income tax expense. As of September 30, 2020 and December 31, 2019, the Company has not identified any uncertain tax positions for which reserves would be required. Recently Issued Accounting Standards In December 2019, the FASB issued ASU 2019‑12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by eliminating some exceptions to the general approach in Accounting Standards Codification 740, Income Taxes. It also clarifies certain aspects of the existing guidance to promote more consistent application. This standard is effective for calendar‑year public business entities in 2021 and interim periods within that year, and early adoption is permitted. The Company is currently in the process of evaluating the impact the new standard will have on the consolidated financial statements. In June 2018, the FASB issued ASU No. 2018‑07, Compensation‑Stock Compensation (Topic 718): Improvements to Nonemployee Share‑Based Payment Accounting , which substantially aligns the measurement and classification guidance for share‑based payments to nonemployees with the guidance for share‑based payments to employees. The ASU also clarifies that any share‑based payment issued to a customer should be evaluated by the new revenue recognition standard. The new ASU requires a modified retrospective transition approach. The ASU is effective for the Company for the year ending December 31, 2020. Due to the Company’s Emerging Growth Company (EGC) status, the Company is permitted to defer adoption of ASU 2018‑07 in interim periods and adopt for its annual financial statements. Refer to Note 11 for discussion on stock‑compensation expense. In January 2017, the FASB issued ASU No. 2017‑04, “ Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ” (“ASU 2017‑ 04”), which eliminates the performance of Step 2 from the goodwill impairment test. In performing its annual or interim impairment testing, an entity will instead compare the fair value of the reporting unit with its carrying amount and recognize any impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Additionally, an entity should consider income tax effects from any tax‑deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss. As a smaller reporting company pursuant to Rule 12b‑2 of the Securities Exchange Act of 1934, as amended, these changes become effective for the Company on January 1, 2023. The Company is currently evaluating the potential impact of these changes on its consolidated financial statements. In June 2016, the FASB issued ASU 2016‑13, “ Financial Instruments—Credit Losses .” This ASU added a new impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses. The CECL model applies to most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and other loan commitments. The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected credit losses on assets that have a low risk of loss. As a smaller reporting company pursuant to Rule 12b‑2 of the Securities Exchange Act of 1934, as amended, these changes become effective for the Company on January 1, 2023. The Company is currently evaluating the potential impact of these changes on its consolidated financial statements. | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The consolidated financial statements of the Company are prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”). The accompanying consolidated financial statements include the accounts of Desktop Metal, Inc. and its wholly owned subsidiaries, Desktop Metal Securities Corporation and Desktop Metal GmbH. The functional currency of Desktop Metal GmbH is U.S. Dollars. All intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires the Company’s management to make judgements, estimates and assumptions regarding uncertainties that affect the reported amounts of assets, liabilities and related disclosures of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Although the Company regularly assesses these estimates, actual results could differ materially from these estimates. Changes in estimates are recorded in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances. Actual results may differ from management’s estimates if these results differ from historical experience or other assumptions prove not to be substantially accurate, even if such assumptions are reasonable when made. Cash and Cash Equivalents Cash equivalents include all highly liquid investments maturing within 90 days or less from the date of purchase. Cash equivalents, consist of money market funds, totaling $40.5 million and $24 million as of December 31, 2019 and 2018 respectively, as well as other highly‑liquid cash equivalents totaling $25 million as of December 31, 2019. Short‑Term Investments All of the Company’s investments, which consist of debt securities, are classified as available for sale and are carried at fair value. Unrealized gains and losses considered to be temporary in nature are recorded as a component of accumulated other comprehensive loss, net of related income taxes. The Company reviews all investments for reductions in fair value that are other than temporary. When such reductions occur, the cost of the investment is adjusted to fair value through recording a loss on investments in the consolidated statements of operations. Gains and losses on investments are calculated on the basis of specific identification. Restricted Cash The Company maintains a letter of credit for the benefit of the landlord for their office facility. The issuer of the letter of credit requires the Company to maintain a deposit in the amount of $0.6 million to secure the letter, which is reported as restricted cash in the consolidated balance sheets. This letter of credit automatically renews every year until it matures on February 7, 2024; therefore, it is classified as long term in nature at December 31, 2019 and 2018. Revenue Product Revenue and Service Revenue Product revenue include sales of the Company’s 3‑D metal systems, which consist of modular printers, furnaces, and debinders as well as sale of accessories and consumables. These consumables are primarily comprised of materials, which are used by the printers during the printing process to produce parts. Certain on‑premises software that is embedded with the hardware and sold with the product bundle and is included within product revenue. Revenue from products is recognized upon transfer of control, which is generally at the point of shipment. The Company typically recognizes revenue on embedded software once the customer has been given access to the software. Services revenue includes revenue from various software cloud-based solutions the Company offers to facilitate the design of parts and operation of the Company’s products. The Company offers multiple software products, which are licensed through either a cloud‑based solution and/or an on‑premises software subscription, depending on the product. For the cloud‑based solution, the Company typically provides an annual subscription that the customer does not have the right to take possession of and is renewed at expiration. The revenue from the cloud‑based solution is recognized ratably over the annual term as the Company considers the services provided under the cloud‑based solution to be a series of distinct performance obligations, as the Company provides continuous daily access to the cloud solution. For on‑premises software subscriptions, the Company typically recognizes revenue once the customer has been given access to the software. Service revenue also consists of installation, training, and post contract support. When the Company enters into development contracts, control of the development service is transferred over time, and the related revenue is recognized over time. Revenue Recognition The Company adopted Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers , on January 1, 2018, using the full retrospective method. Revenue is measured as the amount of consideration expected to be received in exchange for transferring goods or providing services. The amount of consideration is typically a fixed price at the contract inception. Consideration from shipping and handling is recorded on a gross basis within product revenue. The Company determines revenue recognition through the following steps: · Identification of the contract, or contracts, with a customer · Identification of the performance obligations in the contract · Determination of the transaction price · Allocation of the transaction price to the performance obligations in the contract · Recognition of revenue when, or as, the Company satisfies a performance obligation Nature of Products and Services The Company sells its products primarily through authorized resellers, independent sales agents, and its own sales force. Revenue from hardware and consumables is recognized upon transfer of control, which is generally at the point of shipment. The Company’s post‑contract support is primarily sold through one‑year annual contracts and post contract support revenue is recognized ratably over the term of the agreement. Post contract support is related to the service and maintenance of the Company’s hardware products after delivery and installation to the customer. Service revenue from installation and training is recognized as performed. Our terms of sale generally provide payment terms that are customary in the countries where the Company transacts business. To reduce credit risk in connection with certain sales, the Company may, depending upon the circumstances, require deposits or payment in full prior to shipment. Due to the short term nature of our contracts substantially all of our outstanding performance obligations are recognized within one year. Shipping and handling activities that occur after control over a product has transferred to a customer are accounted for as fulfillment activities rather than performance obligations, as allowed under a practical expedient provided by ASC 606. The shipping and handling fees charged to customers are recognized as revenue and the related costs are included in cost of revenue at the point in time when ownership of the product is transferred to the customer. Sales taxes and value added taxes collected concurrently with revenue generating activities are excluded from revenue. Significant Judgements The Company enters into contracts with customers that can include various combinations of hardware products, software licenses, and services, which are distinct and accounted for as separate performance obligations. Products or services that are promised to a customer can be considered distinct if both of the following criteria are met: (i) the customer can benefit from the products or services either on its own or together with other readily available resources and (ii) the Company’s promise to transfer the products, software, or services to the customer is separately identifiable from other promises in the contract. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Judgement is required to determine the standalone selling price (SSP). The transaction price is allocated to each distinct performance obligation on a relative standalone selling price basis and revenue is recognized for each performance obligation when control has passed. In most cases, the Company is able to establish SSP based historical transaction data of the observable prices of hardware products sold separately in comparable circumstances to similar customers, observable renewal rates for software and post contract support, and the Company’s best estimates selling price at which the Company would have sold the product regularly on a stand‑alone basis for training and installation. The Company reassesses the SSP on a periodic basis or when facts and circumstances change. Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, customer deposits and deferred revenues (contract liabilities) on the consolidated balance sheets. Timing of revenue recognition may differ from the timing of invoicing to customers. The Company record a receivable at the time of invoicing. For most contracts, customers are invoiced when products are shipped or when services are performed. The Company will typically bill in advance for post‑contract support and cloud‑based software licenses, resulting in deferred revenue. When products have been delivered, but the product revenue associated with the arrangement has been deferred the Company includes the costs for the delivered items in deferred costs of goods sold on the consolidated balance sheets until recognition of the related revenue occurs, at which time it is recognized in cost of goods sold. As of December 31, 2019, the Company deferred approximately $2.2 million of revenue and $0.3 million of costs, included in deferred costs of goods sold. The $3.9 million of revenue deferred as of December 31, 2018 was recognized as revenue in 2019. The deferred revenue consists primarily of billed post contract support and cloud‑based software licenses that are recognized ratably over the term of the agreement, and to a lesser extent related to contracts that have outstanding performance obligations, and contracts that have acceptance terms that have not yet been fulfilled. As of December 31, 2018, the Company deferred approximately $3.9 million of revenue and $3 million of costs, included in deferred costs of goods sold for hardware products delivered in 2018, and the remaining obligations for software, and services products to be delivered in 2019. The Company began shipping its 3‑D metal solutions during the fourth quarter of 2018. Due to the lack of history of the performance of the product and associated risk of return, as well as the lack of history of estimating additional costs associated with installation, the Company considered these as variable revenue constraints that required deferral of revenue for certain customers. The Company has recognized revenue only to the extent that it is probable that a significant reversal will not occur. As our contracts are primarily one year or less, substantially all deferred revenue outstanding at the end of the year is recognized during the following year. Our terms of sale generally provide payment terms that are customary in the countries where we transact business. To reduce credit risk in connection with certain sales, we may, depending upon the circumstances, require deposits prior to shipment. During the years ended December 31, 2019 and 2018, the Company pays commissions to its external partners and internal sales team. The Company acts as a principal in the contracts with their partners as the Company controls the product, establishes the price, and bears the risk of nonperformance. The Company records the revenue on a gross basis and commissions are recorded as a sales and marketing expense. The Company recognizes its commission expense as a point‑in‑time expense as contract obligations are primarily completed within a one‑year contract period. See Note 14 for additional information related to disaggregation of revenue. Allowance for Doubtful Accounts In evaluating the collectability of accounts receivable, the Company assesses a number of factors, including specific customers’ abilities to meet their financial obligations, the length of time receivables are past due, and historical collection experience. If circumstances related to specific customers change, or economic conditions deteriorate such that our past collection experience is no longer relevant, our estimate of the recoverability of our accounts receivable could be further reduced from the levels provided for in the consolidated financial statements. The Company evaluates specific accounts for which it is believed a customer may have an inability to meet their financial obligations. In these cases, judgment is applied, based on available facts and circumstances, and record a specific reserve is recorded for that customer to reduce the receivable to an amount expected to be collected. These specific reserves are reevaluated and adjusted as additional information is received that impacts the amount reserved. As of December 31, 2019, and 2018, the Company has recorded $0.2 million and $0.0 million respectively, in allowance of doubtful accounts. In the years ended December 31, 2019 and 2018 the Company recorded bad debt expense of $0.2 million and $0.0 million, respectively. Earnings Per share The Company presents basic and diluted loss per common share amounts. Basic loss per common share is calculated by dividing net loss available to Common Stockholders by the weighted average number of common shares outstanding during the applicable period. The denominator for diluted earnings per share is a computation of the weighted‑average number of ordinary shares and the potential dilutive ordinary shares outstanding during the period. Potential dilutive shares outstanding include the dilutive effect of in‑the‑money options and unvested Restricted Stock Agreements (“RSAs”) using the treasury stock method. See Note 16 for further information. Warranty Reserve Substantially, all of the Company’s products, hardware, and software are covered by a standard assurance warranty of one year. In the event of a failure of hardware product or software covered by this warranty, the Company may repair or replace the software or hardware product at its option. The Company’s warranty reserve reflects estimated material and labor costs for potential or actual product issues in its installed base for which the Company expects to incur an obligation. The Company periodically assesses the adequacy of the warranty reserve and adjusts the amount as necessary. If the data used to calculate the adequacy of the warranty reserve are not indicative of future requirements, additional or reduced warranty reserves may be required. As of December 31, 2019 and 2018 the Company has recorded $1.5 million and $0.1 million, respectively, of warranty reserve within accrued expenses and other current liabilities on the consolidated balance sheets. Accrued warranty consisted of the following (in thousands): Years Ended December 31, 2019 2018 Warranty reserve, at the beginning of the year $ 116 $ — Additions to warranty reserve 2,352 116 Claims fulfilled (977) — Warranty reserve, at the end of the year $ 1,491 $ 116 Warranty reserve is recorded through cost of sales in the consolidated statements of operations. Inventory and Deferred Cost of Goods Sold Inventory is stated at the lower of cost or net realizable value, determined on a first‑in, first‑out basis, and consists of the following (in thousands): Years Ended December 31, 2019 2018 Work in process $ 1,081 $ 2,741 Finished goods 7,324 1,241 $ 8,405 $ 3,982 The Company provides for inventory losses based on obsolescence and levels in excess of forecasted demand. In these cases, inventory is reduced to the estimated net realizable value based on historical usage and expected demand. Inventory provisions based on obsolescence and inventory in excess of forecasted demand are recorded through cost of sales in the consolidated statements of operations. Concentrations of Credit Risk and Off‑Balance‑Sheet Risk The Company has no significant off‑balance‑sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that potentially expose the Company to concentrations of credit risk consist mainly of cash and cash equivalents. The Company maintains its cash and cash equivalents principally with accredited financial institutions of high‑credit standing. Customer Deposits Payments received from customers who have placed reservations or purchase orders in advance of shipment are refundable upon cancellation or non‑delivery by the Company and are included within customer deposits on the consolidated balance sheets. Property and Equipment Property and equipment is stated at cost. Expenditures for repairs and maintenance are expensed as incurred. When assets are retired or disposed of, the assets and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is included in the determination of net income or loss. Depreciation is recorded using the straight‑line method over the estimated useful lives of the related assets. Business Combinations The Company allocates the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The estimates used to value the net assets acquired are based in part on historical experience and information obtained from the management of the acquired company. The Company generally values the identifiable intangible assets acquired using a discounted cash flow model. The significant estimates used in valuing certain of the intangible assets, include, but are not limited to future expected cash flows of the asset, discount rates to determine the present value of the future cash flows and expected technology life cycles. Intangible assets are amortized over their estimated useful life; the period over which the Company anticipates generating economic benefit from the asset. Fair value adjustments subsequent to the acquisition date, that are not measurement period adjustments, are recognized in earnings. Goodwill and Intangible Assets The Company has recorded $2.3 million of goodwill and $3.3 million of acquired technology, net of $0.3 million of amortization expense as of December 31, 2019, as a result of two business combinations completed during the year ended December 31, 2019. Goodwill represents the future economic benefits arising from other assets acquired in a business combination or an acquisition that is not individually identified and separately recorded. The excess of the purchase price over the estimated fair value of net assets of businesses acquired in a business combination is recognized as goodwill. Intangible assets consist of identifiable intangible assets, including developed technology, resulting from the Company’s acquisitions. Goodwill is not amortized but is tested for impairment at least annually (as of the first day of the fourth quarter) or as circumstances indicate the value may no longer be recoverable. To assess if goodwill is impaired, the Company performs a qualitative assessment to determine whether further impairment testing is necessary. The Company then compares the carrying amount of the single reporting unit to the fair value of the reporting unit. An excess carrying value over fair value would indicate that goodwill may be impaired. The Company evaluates definite‑lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If indicators of impairment are present, the Company then compares the estimated undiscounted cash flows that the specific asset is expected to generate to its carrying value. If such assets are impaired, the impairment recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value. To date, there have been no impairments of goodwill or intangible assets. Intangible assets are amortized over their useful life. Impairment of Long‑Lived Assets The Company evaluates whether events or circumstances have occurred that indicate that the estimated remaining useful life of its long‑lived assets may warrant revision or that the carrying value of these assets may be impaired. The Company does not believe that any events have occurred through December 31, 2019, that would indicate its long‑lived assets are impaired, other than the capitalized software as detailed in Note 6. Research and Development Research and development costs are expensed as incurred. Research and development expense includes costs, primarily related to salaries and benefits for employees and prototypes and design expenses, incurred to develop intellectual property and is charged to expense as incurred. Costs incurred internally in researching and developing a software product to be sold to customers are charged to expense until technological feasibility has been established for the product. Once technological feasibility is established, software costs are capitalized until the product is available for general release to customers. Judgment is required in determining when technological feasibility of a product is established. The Company has determined that technological feasibility for software products is reached after all high‑risk development issues have been resolved through coding and testing. Generally, this occurs shortly before the products are released, such that there are no material costs to capitalize. Advertising Expense Advertising expense is included within sales and marketing expense in the consolidated statements of operations and was $0.1 million, $0.1 million for the years ended December 31, 2019 and 2018, respectively. It primarily includes promotional expenditures and is expensed as incurred; as such, efforts have not met the direct‑response criteria required for capitalization. Stock‑Based Compensation The Company accounts for all stock options granted to employees and nonemployees using a fair value method. Stock‑based compensation is measured at the grant‑date fair value of the award and is then recognized as the related services are rendered, typically over the vesting period. The measurement date for employee awards is generally the date of the grant and the measurement date for nonemployee awards is generally the date the performance of services is completed. The Company estimates forfeitures that will occur in their determination of the expense recorded. Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the Company’s consolidated financial statements and tax returns. Deferred tax assets and liabilities are determined based upon the differences between the consolidated financial statements carrying amounts and the tax bases of existing assets and liabilities and for loss and credit carryforwards, using enacted tax rates expected to be in effect in the years in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that these assets may not be realized. The Company provides reserves for potential payments of taxes to various tax authorities related to uncertain tax positions. Amounts recognized are based on a determination of whether a tax benefit taken by the Company in its tax filings or positions is “more likely than not” to be sustained on audit. The amount recognized is equal to the largest amount that is more than 50% likely to be sustained. Interest and penalties associated with uncertain tax positions are recorded as a component of income tax expense. As of December 31, 2019 and 2018, the Company has not identified any uncertain tax positions for which reserves would be required. Comprehensive Loss The Company’s comprehensive loss consists of its net loss and unrealized gain and loss from investments. Recently Issued Accounting Standards Recently Adopted Accounting Guidance In November 2016, the Financial Accounting Standards Board (FASB) Issued Accounting Standards Update (ASU) No. 2016‑18, Statement of Cash Flows (Topic 230): Restricted Cash , that requires the changes in restricted cash and restricted cash equivalents that result from transfers between cash, cash equivalents, and restricted cash and restricted cash equivalents should not be presented as cash flow activities in the consolidated statements of cash flows. The Company has adopted the ASU as of January 1, 2019 on a retrospective basis. In January 2016, the FASB Issued ASU No. 2016‑01, Recognition and Measurement of Financial Assets and Financial Liabilities , which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Although the ASU retains many current requirements, it significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments. The Company has adopted the ASU as of January 1, 2019, with no effect on the Company’s net loss or other comprehensive loss. Recent Accounting Guidance Not Yet Adopted In December 2019, the FASB issued ASU 2019‑12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by eliminating some exceptions to the general approach in Accounting Standards Codification 740, Income Taxes. It also clarifies certain aspects of the existing guidance to promote more consistent application. This standard is effective for calendar‑year public business entities in 2021 and interim periods within that year, and early adoption is permitted. The Company is currently in the process of evaluating the impact the new standard will have on our consolidated financial statements. In June 2018, the FASB issued ASU No. 2018‑07, Compensation‑Stock Compensation (Topic 718): Improvements to Nonemployee Share‑Based Payment Accounting , which substantially aligns the measurement and classification guidance for share‑based payments to nonemployees with the guidance for share‑based payments to employees. The ASU also clarifies that any share‑based payment issued to a customer should be evaluated by the new revenue recognition standard. The new ASU requires a modified retrospective transition approach. The ASU is effective for the Company beginning January 1, 2020. The Company intends to adopt the updated standard when it reports its annual results. In January 2017, the FASB issued ASU No. 2017‑04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017‑04”), which eliminates the performance of Step 2 from the goodwill impairment test. In performing its annual or interim impairment testing, an entity will instead compare the fair value of the reporting unit with its carrying amount and recognize any impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Additionally, an entity should consider income tax effects from any tax‑deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss. As a smaller reporting company pursuant to Rule 12b‑2 of the Securities Exchange Act of 1934, as amended, these changes become effective for the Company on January 1, 2023. The Company is currently evaluating the potential impact of these changes on its consolidated financial statements. In June 2016, the FASB issued ASU 2016‑13, Financial Instruments—Credit Losses. This ASU added a new impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses. The CECL model applies to most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and other loan commitments. The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected credit losses on assets that have a low risk of loss. As a smaller reporting company pursuant to Rule 12b‑2 of the Securities Exchange Act of 1934, as amended, these changes become effective for the Company on January 1, 2023. The Company is currently evaluating the potential impact of these changes on its consolidated financial statements. |
PROPERTY AND EQUIPMENT_2
PROPERTY AND EQUIPMENT | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
PROPERTY AND EQUIPMENT | ||
PROPERTY AND EQUIPMENT | 3. Property and Equipment Depreciation is expensed using the straight‑line method over the estimated useful lives of the assets as follows: Asset Classification Useful Life Equipment 3‑5 years Furniture and fixtures 3 years Computer equipment 3 years Tooling 3 years Software 3 years Leasehold improvements Shorter of asset’s useful life or remaining life of the lease Property and equipment—net consisted of the following at September 30, 2020 and December 31, 2019 (in thousands): September 30, 2020 December 31, 2019 Equipment $ 13,502 $ 13,358 Furniture and fixtures 895 895 Computer equipment 1,089 1,089 Tooling 1,823 1,823 Software 1,235 954 Leasehold improvements 13,870 13,880 Construction in process 845 170 Property and equipment—gross 33,259 32,169 Less: accumulated depreciation (19,658) (13,782) Property and equipment—net $ 13,601 $ 18,387 Depreciation and amortization expense was $5.9 million and $5.3 million for the nine months ended September 30, 2020 and September 30, 2019 respectively. | 3. PROPERTY AND EQUIPMENT Depreciation is expensed using the straight‑line method over the estimated useful lives of the assets as follows: Asset Classification Useful Life Equipment 3‑5 years Furniture and fixtures 3 years Computer equipment 3 Years Tooling 3 Years Software 3 Years Leasehold improvements Shorter of asset’s useful life or remaining life of the lease Property and equipment—net consisted of the following at December 31, 2019 and 2018 (in thousands): Years Ended December 31, 2019 2018 Equipment $ 13,358 $ 8,306 Furniture and fixtures 895 875 Computer equipment 1,089 1,045 Tooling 1,823 1,303 Software 954 302 Leasehold improvements 13,880 13,357 Construction in process 170 — Property and equipment—gross 32,169 25,188 Less: accumulated depreciation (13,782) (6,191) Property and equipment—net $ 18,387 $ 18,997 Depreciation and amortization expense was $7.6 million and $4.1 million for the years ended December 31, 2019 and 2018, respectively. |
ACQUISITIONS_2
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2019 | |
ACQUISITIONS | |
ACQUISITIONS | 4. ACQUISITIONS In July 2019, the Company acquired all outstanding shares of Make Composites, Inc. (“Make”) for a total purchase price of $5.4 million through the issuance of 873,203 shares of the Company’s Common Stock. Make is a composite printer research and development company that was acquired primarily for the complementary technology. The Company incurred transaction costs totaling $0.1 million that are included in general and administrative expenses in the consolidated statements of operations. The purchase price was allocated with $1.9 million to goodwill, $3.2 million to acquired technology, and $0.3 million to acquired tangible assets, consisting primarily of cash. The Company recorded a gain of $1.4 million on its original non‑controlling investment of Make. This gain is recorded in interest and other income, net in the consolidated statements of operations. The goodwill acquired is deductible for income tax purposes. As of December 31, 2019, the Company’s accounting for the acquisition is complete. In connection with the acquisition, the Company issued restricted stock, options and warrants to employees and contractors of Make which have future service obligations to vest and are accounted for as post‑combination expense. In March 2019, the Company acquired all outstanding shares of addLEAP AB, a Swedish3D printer research and development company, for a purchase price of $0.4 million paid in cash. The acquisition was completed to further the Company’s advances in 3D printing. The purchase price was allocated to $0.3 million of goodwill and $0.1 million of acquired technology. Total transaction costs of $0.1 million are included in general and administrative expenses in the consolidated statements of operations. The goodwill acquired is deductible for income tax purposes. As of December 31, 2019, the Company’s accounting for the acquisition is complete. In connection with the acquisition, the Company issued 74,843 shares of restricted stock that have future service obligations to vest and are accounted for as post‑combination expense. |
ACQUIRED TECHNOLOGY_2
ACQUIRED TECHNOLOGY | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
ACQUIRED TECHNOLOGY. | ||
ACQUIRED TECHNOLOGY | 4. Acquired Technology Acquired technology consisted of the following (in thousands): Accumulated Balance Gross Value Estimated Life Amortization September 30, 2020 Total acquired technology $ 3,270 5 years $ 817 $ 2,453 The Company recognized amortization expense of $0.5 million and $0.1 million for the nine months ended September 30, 2020 and 2019, respectively. The Company expects to recognize $0.2 million of amortization expense for the remaining three months of 2020, $0.6 million annually in the years ended December 31, 2021 through 2023, and $0.4 million in 2024. The weighted‑average remaining amortization period is 3.8 years. | 5. ACQUIRED TECHNOLOGY Acquired technology consisted of the following (in thousands): Accumulated Balance Gross Value Estimated Life Amortization December 31, 2019 Total acquired technology $ 3,270 5 years $ 276 $ 2,994 The Company recognized $0.3 million of amortization expense as of December 31, 2019 and expects to recognize $0.7 million of amortization expense annually in the years ended December 31, 2020, through 2023, and $0.4 million in 2024. The weighted‑average remaining amortization period is 4.5 years. |
CAPITALIZED SOFTWARE_2
CAPITALIZED SOFTWARE | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
CAPITALIZED SOFTWARE. | ||
CAPITALIZED SOFTWARE | 5. Capitalized Software, net The Company capitalizes certain costs related to the development and implementation of cloud computing software. Costs incurred during the application development phase are capitalized only when the Company believes it is probable the development will result in new or additional functionality. The types of costs capitalized during the application development phase include employee compensation, as well as consulting fees for third‑party developers working on these projects. The capitalized costs are amortized on a straight‑line basis over the estimated useful life of the asset, which is typically 3 years. The Company incurred $0.1 million in amortization expense in each of the nine month periods ended September 30, 2020 and 2019. Capitalized software, net at the each balance sheet date consists of the following (in thousands): September 30, 2020 December 31, 2019 Capitalized software development costs $ 1,127 $ 1,127 Accumulated amortization (770) (237) Impairment — (444) Total capitalized software costs $ 357 $ 446 The Company expects to incur amortization expense of $0.1 million for the remaining three months of 2020, and $0.1 million in each of the years ending 2021, and 2022. | 6. CAPITALIZED SOFTWARE The Company capitalizes certain costs related to the development and implementation of cloud computing software. Costs incurred during the application development phase are capitalized only when the Company believes it is probable the development will result in new or additional functionality. The types of costs capitalized during the application development phase include employee compensation, as well as consulting fees for third‑party developers working on these projects. The capitalized costs are amortized on a straight‑line basis over the estimated useful life of the asset, which is typically 3 years. The Company incurred $0.2 million and $18,000 in amortization expense for the years ended December 31, 2019 and 2018, respectively. The Company recorded an impairment charge of $0.4 million in the year ended December 31, 2019, for software that will no longer be utilized by the Company. Capitalized software consists of the following (in thousands): Years Ended December 31, 2019 2018 Capitalized software development costs $ 1,127 $ 806 Accumulated amortization (237) (18) Impairment (444) — Total capitalized software costs $ 446 $ 788 The Company expects to incur amortization expense of $0.2 million, $0.1 million, and $0.1 million for the years ending 2020, 2021, and 2022, respectively. |
FAIR VALUE MEASUREMENTS_2
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2020 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 6. Fair Value Measurements The Company uses the following three‑tier fair value hierarchy, which prioritizes the inputs used in measuring the fair values for certain of its assets and liabilities: Level 1 is based on observable inputs, such as quoted prices in active markets; Level 2 is based on inputs other than the quoted prices in active markets that are observable either directly or indirectly; and Level 3 is based on unobservable inputs in which there is little or no market data, which requires the Company to develop its own assumptions. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. Items measured at fair value on a recurring basis include money market funds. The following fair value hierarchy table presents information about the Company’s financial assets measured at fair value on a recurring basis and indicates the fair value hierarchy of the inputs the Company utilized to determine such fair value at September 30, 2020 and December 31, 2019 (in thousands): September 30, 2020 Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Items Inputs Inputs (Level 1) (Level 2) (Level 3) Total Assets: Money market funds $ 33,858 $ — $ — $ 33,858 Asset‑backed securities — 3,105 — 3,105 Corporate bonds — 30,084 — 30,084 Government bonds 19,991 — — 19,991 Total assets $ 53,849 $ 33,189 $ — $ 87,038 December 31, 2019 Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Items Inputs Inputs (Level 1) (Level 2) (Level 3) Total Assets: Money market funds $ 40,454 $ — $ — $ 40,454 Asset‑backed securities — 16,806 — 16,806 Corporate bonds — 67,948 — 67,948 Repurchase agreements — 25,001 — 25,001 Total assets $ 40,454 $ 109,755 $ — $ 150,209 All investments mature within one year. |
SHORT TERM INVESTMENTS_2
SHORT TERM INVESTMENTS | 12 Months Ended |
Dec. 31, 2019 | |
SHORT TERM INVESTMENTS | |
SHORT TERM INVESTMENTS | 8. SHORT‑TERM INVESTMENTS The Company invests its excess cash in fixed income instruments denominated and payable in U.S. dollars including U.S. treasury securities, corporate bonds and asset‑backed securities in accordance with the Company’s investment policy that primarily seeks to maintain adequate liquidity and preserve capital. The Company has designated all investments as available‑for‑sale and therefore such investments are reported at fair value. Unrealized gains or losses on investments are recorded in accumulated other comprehensive gain (loss), a component of stockholders’ equity. The following table summarizes the Company’s short‑term investments (in thousands): December 31, 2019 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Asset‑backed securities $ 16,786 $ 20 $ — $ 16,806 Corporate bonds 67,893 55 — 67,948 $ 84,679 $ 75 $ — $ 84,754 December 31, 2018 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Asset‑backed securities $ 13,350 $ — $ (65) $ 13,285 Corporate bonds 50,975 — (31) 50,944 $ 64,325 $ — $ (96) $ 64,229 |
ACCRUED EXPENSES AND OTHER CU_4
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 7. Accrued Expenses and Other Current Liabilities The following table summarizes the Company’s components of accrued expenses and other current liabilities (in thousands): September 30, 2020 December 31, 2019 Warranty reserve $ 1,734 $ 1,491 Compensation and benefits related 657 897 Professional services 2,043 780 Inventory purchases 86 620 Accrued sales and use tax 470 578 Transaction costs payable 577 — Other 488 687 $ 6,055 $ 5,053 | 9. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES The following table summarizes the Company’s components of accrued expenses and other current liabilities (in thousands): Years Ended December 31, 2019 2018 Warranty reserve $ $ 116 Compensation and benefits related 278 Professional services 517 Inventory purchases 381 Accrued sales and use tax 4 Other 510 $ 5,053 $ 1,806 |
DEBT_2
DEBT | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
DEBT | ||
DEBT | 8. Debt Term Loan —In June 2018, the Company entered into a $20 million term loan for 36 months. The loan provided $10 million immediately funded with the additional $10 million available to be drawn in up to three draws of not less than $2 million for 12 months from close of the facility. The loan is interest‑only for the full 36 months with the principal due at maturity in June 2021. Interest is calculated using the Wall Street Journal Prime rate minus 0.5%, payable monthly in arrears (4.75% at December 31, 2019 and 3.25% at September 30, 2020). The loan contains a cash trigger. If the Company’s cash and investments fall below $30 million, cash equal to the total amount of the outstanding debt is required to be placed in a restricted money market account. The loan also contains reporting requirements and gives the lender first priority lien on all assets. The outstanding amount as of September 30, 2020 and December 31, 2019 was $10 million and $10 million, respectively. The $10 million is due to be paid in June 2021. Deferred Financing Costs —In connection with the above borrowings, the Company incurred $0.06 million of expenses, which have been recorded as deferred financing costs. The Company amortizes these costs over the life of the borrowing. During the nine months ended September 30, 2020 and 2019, the Company recorded $0.01 million and $0.01 million respectively, of interest expense related to the amortization of the financing costs. As of September 30, 2020 and December 31, 2019, the remaining unamortized balance of deferred financing costs totaled $0.01 million and $0.03 million, respectively, and is included in long term debt, net of deferred financing costs in the condensed consolidated balance sheets. | 10. DEBT Term Loan —In June 2018, the Company entered into a $20 million term loan for 36 months. The loan provided $10 million immediately funded with the additional $10 million available to be drawn in up to three draws of not less than $2 million for 12 months from close of the facility. The loan is interest‑only for the full 36 months with the principal due at maturity in June 2021. Interest is calculated using the Wall Street Journal Prime rate minus 0.5%, payable monthly in arrears (4.75% at December 31, 2019 and 5.50% at December 31, 2018). The loan contains a cash trigger. If the Company’s cash and investments fall below $30 million, cash equal to the total amount of the outstanding debt is required to be placed in a restricted money market account. The loan also contains reporting requirements and gives the lender first priority lien on all assets. The outstanding amount as of December 31, 2019 and 2018 was $10 million and $10 million, respectively. The $10 million is due to be paid in June 2021. Deferred Financing Costs —In connection with the above borrowings, the Company incurred $56,539 of expenses, which have been recorded as deferred financing costs. The Company amortizes these costs over the life of the borrowing. During the years ended December 31, 2019 and 2018, the Company recorded $18,846 and $9,423, respectively, of interest expense related to the amortization of the financing costs. As of December 31, 2019 and 2018, the remaining unamortized balance of deferred financing costs totaled $28,270 and $47,116, respectively, and is included in long‑term debt, net of deferred financing costs in the consolidated balance sheets. |
COMMITMENTS AND CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
COMMITMENTS AND CONTINGENCIES. | ||
COMMITMENTS AND CONTINGENCIES | 9. Commitments and Contingencies Upon adoption of ASC 842, the Company identified real estate and equipment leases and recorded right of use assets of $3.4 million and lease liabilities of $4.7 million. The difference between the value of the right of use assets and lease liabilities is due to the reclassification of existing deferred rent, prepaid rent, and unamortized lease incentives as of January 1, 2018 totaling $1.3 million. At September 30, 2020, the Company recorded $1.9 million as a right of use asset and $3.2 million as an operating lease liability. At December 31, 2019, the Company recorded $2.3 million as a right of use asset and $3.8 million as a right of use liability. The Company assesses its right of use asset and other lease related assets for impairment. There were no impairments recorded related to these assets during the nine months ended September 30, 2020 and the year ended December 31, 2019. The Company identified one service agreement that contained an embedded lease. The agreement does not contain fixed or minimum payments, but the Company has concluded that the variable lease expense totaled $0.03 million for the nine months ended September 30, 2020 and $0.03 million for the nine months ended September 30, 2019. Information about other lease‑related balances is as follows (in thousands): September 30, 2020 2019 Lease cost Operating lease cost $ 561 $ 479 Short‑term lease cost — 24 Variable lease cost 30 30 Total lease cost $ 591 $ 533 Other Information Operating cash flows from operating leases $ 805 $ 701 Weighted‑average remaining lease term—operating leases (years) 3.5 4.5 Weighted‑average discount rate—operating leases 7.6 % 7.6 % The rate implicit in the lease is not readily determinable in most of the Company’s leases, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease. As of September 30, 2020, the Company does not have material operating leases that have not commenced. Future minimum lease payments under noncancelable operating leases at September 30, 2020, are as follows (in thousands): 2020 (remaining 3 months) $ 268 2021 1,071 2022 1,070 2023 1,028 2024 258 Total lease payments 3,695 Less amount representing interest (462) Total lease liability 3,233 Less current portion of lease liability (858) Lease liability, net of current portion $ 2,375 Legal Proceedings —From time to time, the Company may face legal claims or actions in the normal course of business. At each reporting date, the Company evaluates whether a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company is presently a respondent in a Judicial Arbitration and Mediation Services (JAMS) arbitration brought against it by a competitor. The basis for the claim is the alleged violation of a provision of a 2018 settlement agreement between the two companies, which provided that neither company could make statements that misrepresented the functionality of the other company’s products. The arbitration is currently set to commence in late 2020. Critical phases of the arbitration remain and therefore any loss cannot be estimated at this time. | 11. COMMITMENTS AND CONTINGENCIES Leases In February 2016, the FASB established Topic 842, Leases , by issuing ASU No. 2016‑02, Leases (Topic 842) , which requires lessees to recognize leases on balance sheet and disclose key information about leasing arrangements. The Company adopted the lease standard on January 1, 2018, using a modified retrospective approach, applying the new standard to all leases existing at January 1, 2018. The Company elected the permitted practical expedients to not reassess the following related to leases that commenced before the effective date of ASC 842: (i) whether any expired or existing contracts contain leases; (ii) the lease classification for any expired or existing leases; and (iii) initial direct costs for any existing leases. The lease standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short‑term lease recognition and therefore, the Company does not recognize right‑of‑use assets or lease liabilities for leases with less than a twelve‑month duration. The Company also elected the practical expedient to not separate lease and non‑lease components for all of its leases. Upon adoption of ASC 842, the Company identified real estate and equipment leases and recorded right of use assets of $3.4 million and operating lease liabilities of $4.7 million. The difference between the value of the right of use assets and lease liabilities is due to the reclassification of existing deferred rent, prepaid rent, and unamortized lease incentives as of January 1, 2018 totaling $1.3 million. At December 31, 2019, the Company recorded $2.3 million as a right of use asset and $3.8 million as an operating lease liability. At December 31, 2018, the Company recorded $2.4 million as a right of use asset and $4.2 million as an operating lease liability. The Company assesses its right‑of‑use asset and other lease‑related assets for impairment. There were no impairments recorded related to these assets during the years ended December 31, 2019 and December 31, 2018. The Company identified one service agreement that contained an embedded lease. The agreement does not contain fixed or minimum payments, but the Company has concluded that the variable lease expense totaled $40,481, $38,253 during the years ended December 31, 2019 and 2018, respectively. Information about other lease‑related balances is as follows (in thousands): Years Ended December 31, 2019 2018 Lease cost Operating lease cost $ 655 $ 627 Short‑term lease cost 32 62 Variable lease cost 40 38 Total lease cost $ 727 $ 727 Other Information Operating cash flows from operating leases $ 951 $ 868 Weighted‑average remaining lease term—operating leases (years) 4.2 5.3 Weighted‑average discount rate—operating leases 7.6 % 7.6 % The rate implicit in the lease is not readily determinable in most of the Company’s leases, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease. Future minimum lease payments under noncancelable operating leases at December 31, 2019, are as follows (in thousands): 2020 $ 2021 1,071 2022 1,069 2023 1,028 2024 258 Total lease payments 4,499 Less amount representing interest (667) Total lease liability 3,832 Less current portion of lease liability (806) Lease liability, net of current portion $ 3,026 As of December 31, 2019, the Company does not have material operating leases that have not commenced. Legal Proceedings From time to time, the Company may face legal claims or actions in the normal course of business. At each reporting date, the Company evaluates whether a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company expenses as incurred the costs related to its legal proceedings. In 2018, the Company was engaged in litigation with a competitor with both parties asserting claims of patent infringement and trade secret misappropriation. The litigation was resolved in October 2018 when the parties entered into a settlement agreement. The legal proceedings and settlement amount of $36.2 million is reflected in general and administrative expenses on the statement of operations in the year ended December 31, 2018. The Company is presently a respondent in a Judicial Arbitration and Mediation Services (JAMS) arbitration brought against it by a competitor. The basis for the claim is the alleged violation of a provision of a 2018 settlement agreement between the two companies, which provided that neither company could make statements that misrepresented the functionality of the other company’s products. The arbitration is presently set to commence in late 2020. Critical phases of the arbitration remain and therefore any loss cannot be estimated at this time. |
INCOME TAXES_2
INCOME TAXES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
INCOME TAXES | ||
INCOME TAXES | 10. Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the Company’s consolidated financial statements and tax returns. Deferred tax assets and liabilities are determined based upon the differences between the consolidated financial statements carrying amounts and the tax bases of existing assets and liabilities and for loss and credit carryforwards, using enacted tax rates expected to be in effect in the years in which the differences are expected to reverse. The Company has provided a full valuation allowance against the net deferred tax assets as the Company has determined that it was more likely than not that the Company would not realize the benefits of federal and state net deferred tax assets. The Company provides reserves for potential payments of taxes to various tax authorities related to uncertain tax positions. Amounts recognized are based on a determination of whether a tax benefit taken by the Company in its tax filings or positions is “more likely than not” to be sustained on audit. The amount recognized is equal to the largest amount that is more than 50% likely to be sustained. Interest and penalties associated with uncertain tax positions are recorded as a component of income tax expense. As of September 30, 2020 and December 31, 2019, the Company has not identified any uncertain tax positions for which reserves would be required. | 12. INCOME TAXES During the years ended December 31, 2018 and 2019, the Company recorded no income tax benefits due to the losses incurred due to the uncertainty of future taxable income. For financial reporting purposes, Income (Loss) before provision for income taxes, includes the following components: Years Ended December 31, 2019 2018 United States $ (103,596) $ (121,339) Foreign — — Loss before income taxes $ (103,596) $ (121,339) A reconciliation of the expected income tax (benefit) computed using the federal statutory income tax rate to the Company’s effective income tax rate is as follows for the year ended December 31, 2018 and 2019: Years Ended December 31, 2019 2018 Effective income tax rate: Expected income tax benefit at the federal statutory rate 21 % 21 % State taxes 6 % 6 % Change in valuation allowance (30) % (26) % Research and development credit carryover 2 % 3 % Legal proceedings and settlement expense — % % Permanent differences 1 % — % Effective income tax rate — % — % As of December 31, 2019 and 2018, deferred tax assets consist of the following (in thousands): Years Ended December 31, 2019 2018 Deferred tax assets: Federal and state net operating carryforwards $ 56,333 $ 23,310 Research and development and other credits 11,072 7,567 Capitalized start‑up costs 17,032 24,048 Compensation‑related items 1,286 568 Deferred lease liability 1,111 1,212 Other deferred tax assets 2,068 379 Total gross deferred tax asset 88,902 57,084 Valuation allowance (87,370) (56,405) Net deferred tax asset 1,532 679 Deferred tax liabilities: Right‑of‑use asset (664) (679) Acquired technology (868) — Total deferred tax liabilities (1,532) (679) Net deferred tax asset $ — $ — Realization of deferred tax assets is dependent upon the generation of future taxable income. As required by ASC 740 Income Taxes , the Company evaluated the positive and negative evidence bearing upon its ability to realize the deferred tax assets as of December 31, 2019. As a result of the fact that the Company has incurred tax losses from inception, the Company has determined that it was more likely than not that the Company would not realize the benefits of federal and state net deferred tax assets. Accordingly, a full valuation allowance was established against the net deferred tax assets as of December 31, 2019 and 2018. Changes in the valuation allowance for deferred tax assets during the year ended December 31, 2018, and 2019 were as follows: Years Ended December 31, 2019 2018 Valuation allowance at beginning of the year $ 56,405 $ 21,700 Increases recorded to income tax provision 30,965 34,705 Decreases recorded as a benefit to income tax provision — — Increases recorded as an adjustment to equity — — Valuation allowance at end of year $ 87,370 $ 56,405 As of December 31, 2019 and December 31, 2018 the Company had federal net operating loss carryforwards of $197.7 million and $79.6 million, respectively, which may be available to reduce future taxable income. These carryforwards generated in 2017 and prior expire at various dates through 2037. The $152.2 million in carryforwards generated from 2018 forward do not expire. As of December 31, 2019, and 2018, the Company had State net operating loss carryforwards of $184.2 million and $80.8 million, respectively, which may be available to reduce future taxable income. These carryforwards expire at various dates through 2039. In addition, the Company had federal and state research and development tax credit carryforwards of $11.1 million available to reduce future tax liabilities, which will expire at various dates through 2034. Utilization of the Company’s net operating loss (“NOL”) carryforwards and research and development (“R&D”) credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that have occurred previously or that could occur in the future in accordance with Section 382 of the Internal Revenue Code of 1986 (“Section 382”) as well as similar state provisions. These ownership changes may limit the amount of NOL and R&D credit carryforwards that can be utilized annually to offset future taxable income and taxes, respectively. In general, an ownership changes as defined by Section 382 results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50% over a three‑year period. The Company has not conducted a study to assess whether a change of control has occurred or whether there have been multiple changes of control since inception due to significant complexity with such a study. If the Company has experienced a change of control, as defined by Section 382, at any time since inception, utilization of the net operating loss carryforward or research and development tax credits carryforwards would be subject to an annual limitation under Section 382, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long‑term tax‑exempt rate, and then could be subject to additional adjustments, as required. Any limitation may result in expiration of a portion of the net operating loss carryforward or research and development tax credit carryforwards before utilization. The Company files income tax returns in the U.S. federal tax jurisdiction, Massachusetts and Rhode Island. Since the Company is in a loss carryforward position, the Company is generally subject to examination by the US federal, state and local income tax authorities for all tax years in which a loss carryforward is available. The Company is currently not under examination by the Internal Revenue Service of any other jurisdiction for any tax years. The Company has not recorded any interest or penalties on any unrecognized tax benefits since inception. The Company does not believe material uncertain tax positions have arisen to date. |
CONVERTIBLE PREFERRED STOCK _14
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY | ||
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY | 11. Convertible Preferred Stock and Stockholders’ Equity Authorized Shares —At September 30, 2020 and December 31, 2019 the Company’s authorized shares consisted of 156,000,000 shares of Common Stock, $0.0001 par value (the “Common Stock”) and 100,038,109 shares of Preferred Stock, respectively, par value of $0.0001 per share; 26,189,545 of which are designated as Series A Convertible Preferred Stock (“Series A Preferred Stock”), 23,675,035 of which are designated as Series B Convertible Preferred Stock (“Series B Preferred Stock”), 13,152,896 shares are designated as Series C Convertible Preferred Stock (“Series C Preferred Stock”), 21,075,193 shares are designated as Series D Convertible Preferred Stock (“Series D Preferred Stock”), 13,450,703 shares are designated as Series E Convertible Preferred Stock (“Series E Preferred Stock”), and 2,494,737 shares are designated as Series E‑1 Convertible Preferred Stock (“Series E‑1 Preferred Stock”) (collectively, the “Series Preferred Stock”). Preferred Stock On January 29, 2018 and June 29, 2018, the Company issued 4,086,111 and 11,674 shares of Series D Preferred Stock, respectively, at a purchase price of $8.5656 per share. On January 14, 2019 the Company issued 13,450,703 shares of Series E Preferred Stock at a purchase price of $10.0211 per share. The issuance costs for Series E Preferred Stock were $0.1 million. On January 14, 2019 the Company issued 2,494,737 shares of Series E‑1 Preferred Stock at a purchase price of $10.0211 per share. The issuance costs for Series E‑1 Preferred Stock were $0.02 million. The following table summarizes details of Preferred Stock authorized, issued and outstanding as of September 30, 2020 and December 31, 2019 ($ in thousands): Convertible Preferred Stock Classes September 30, 2020 December 31, 2019 Series A Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding, 26,189,545 and 26,189,545 shares, (liquidation preference of $255,348 and $106,853 at September 30, 2020 and December 31, 2019, respectively) $ 13,878 $ 13,878 Series B Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding, 23,675,035 and 23,675,035 shares (liquidation preference of $230,832 and $96,594 at September 30, 2020 and December 31, 2019, respectively) 37,806 37,806 Series C Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding, 13,152,896 and 13,152,896 shares (liquidation preference of $128,241 and $53,664 at September 30, 2020 and December 31, 2019, respectively) 44,852 44,852 Series D Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding, 21,075,193 and 21,075,193 shares (liquidation preference of $205,483 and $180,522 at September 30, 2020 and December 31, 2019, respectively) 180,353 180,353 Series E Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding 13,450,703 and 13,450,703 shares (liquidation preference of $134,791 and $134,791 at September 30, 2020 and December 31, 2019, respectively) 134,667 134,667 Series E‑1 Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding 2,494,737 and 2,494,737 shares (liquidation preference of $25,000 and $25,000 at September 30, 2020 and December 31, 2019, respectively) 24,977 24,977 Total $ 436,533 $ 436,533 The following describes the rights and preferences of the Company’s Series Preferred Stock: Voting —The holders of Series Preferred Stock vote together with all other classes and series of stock as a single class on an as‑converted basis. Each share of Series Preferred Stock entitles the holder to such number of votes per share as shall equal the whole number of shares of Common Stock into which such share of Series Preferred Stock is then convertible. The holders of the Series A Preferred Stock are entitled to elect one director to the Company’s board of directors, the holders of the Series B Preferred Stock are entitled to elect two directors to the Company’s board of directors, and the holders of Series C Preferred Stock are entitled to elect one director to the Company’s board of directors. The holders of the Series E Preferred Stock are entitled to elect one director to the Company’s board of directors, and the holders of the Common Stock are entitled to elect two directors to the Company’s board of directors. The holders of Series Preferred Stock retain rights to vote on certain specified matters as set forth in the Company’s certificate of incorporation. The holders of Series E‑1 Preferred Stock are not entitled to vote on election of a director. Dividends —The Series Preferred Stock are entitled to receive dividends at the rate of 8% of the original issue price for each series of Series Preferred Stock payable only when, as and if, declared by the Company’s board of directors. Through September 30, 2020, no dividends have been declared. Liquidation —Upon any liquidation, dissolution, or winding‑up of the Company, whether voluntary or involuntary, the holders of the Series Preferred Stock are entitled to first be paid out of assets available for distribution, on a pari passu basis, prior and in preference to any distribution to the holders of the Company’s Common Stock, the greater of (a) an amount equal to $0.53372 per share for the Series A Preferred Stock, $1.6013 per share for Series B Preferred Stock, $3.4213 per share for the Series C Preferred Stock, $8.5656 per share for the Series D Preferred Stock, and $10.0211 per share for the Series E and Series E‑1 Preferred Stock, plus declared but unpaid dividends and (b) an amount per share that would have been payable had all shares of the Series Preferred Stock been converted to shares of Common Stock immediately prior to any liquidation, dissolution, or winding‑up of the Company. After payment of all preferential amounts required to be paid to the holders of Series Preferred Stock, the remaining assets of the Company available for distribution to the stockholders shall be distributed among the holders of shares of Common Stock pro rata based on the number of shares held by each such holder. Conversion —Each holder of Series Preferred Stock has the right, at their option at any time, to convert any such shares of Series Preferred Stock into fully paid and nonassessable shares of Common Stock. The conversion ratio is determined by dividing the original issue price of such share of Series Preferred Stock by the conversion price then in effect, which is initially equal to $0.53372 per share for the Series A Preferred Stock, $1.6013 per share for Series B Preferred Stock, $3.4213 per share for the Series C Preferred Stock, $8.5656 per share for the Series D Preferred Stock, and $10.0211 per share for the Series E and Series E‑1 Preferred Stock. The conversion price is subject to adjustment if certain dilutive events occur. Conversion is mandatory in the event of a firm‑commitment underwritten initial public offering of the Company’s Common Stock with a value of at least $5.13 per common share and $50 million in proceeds to the Company or upon the election of a majority of the holders of Series Preferred Stock, voting as a single class on an as‑converted basis. Redemption —The Series Preferred Stock is not subject to mandatory or optional redemption other than in connection with a liquidation, dissolution, or winding‑up of the Company. Common Stock Restricted Stock Agreements —During 2015, the Company issued 27,850,000 shares of Common Stock to the initial founders and certain employees of the Company at a purchase price of $0.0001 per share. The shares issued to the founders are subject to the Company’s right to repurchase at the original purchase price and such right to repurchase generally lapses at the rate of 20% of the shares upon the first anniversary of the grant date and at the rate of 1.67% per month thereafter over four years. The refundable purchase price related to the shares is reported as current liabilities until the shares are vested. During the year ended December 31, 2019, as part of the Company’s acquisitions, the Company issued 497,290 shares of restricted stock with a value of $2.0 million which are considered post‑combination consideration and accounted for as stock‑based compensation as the shares vest. The shares vest over a four-year service period. The activity for stock subject to vesting for the nine‑month period ended September 30, 2020 is as follows (shares in thousands): Shares subject Weighted Average to Vesting Purchase Price Balance of unvested shares as of January 1, 2020 4,575 $0.001 Issuance of additional shares — — Vested (4,301) 0.001 Balance of unvested shares as of September 30, 2020 274 $0.001 At September 30, 2020, the remaining weighted‑average vesting period for the stock subject to vesting was 0.7 years. Stock Incentive Plan —In 2015, the board of directors approved the adoption of the 2015 stock incentive plan (the “Plan”). The Plan allows for the award of incentive and nonqualified stock options, restricted stock, and other stock‑based awards to employees, officers, directors, consultants, and advisers of the Company. Awards may be made under the Plan for up to 21,522,567 shares of Common Stock. The Board of Directors administers the Plan and determines the exercise price of options, purchase price for restricted stock, the rates at which awards vest, and the other terms and conditions of the awards. Options and restricted stock generally vest 25% of the shares upon the first anniversary of the grant date and at the rate of 2.0833% per month thereafter over a three-year period for employees or over the service period for nonemployees and expire 10 years from the date of grant. No tax benefits were realized from options and other share‑based payment arrangements during the year. As part of an acquisition completed in July 2019, the Company assumed the 2018 equity incentive plan of Make Composites, Inc. (the “Make Plan”). The Make Plan allows for the award of incentive and nonqualified stock options and warrants for those employees and contractors that were hired as part of the acquisition. The plan allows for 193,223 options and warrants to be issued, which were issued in 2019, with no additional options to be issued in the future. The Board of Directors administers the Make Plan and determines the exercise price of options, purchase price for restricted stock, the rates at which awards vest, and the other terms and conditions of the awards. Options and restricted stock generally vest 25% of the shares upon the first anniversary of the grant date and at the rate of 2.0833% per month thereafter over a three-year period for employees or over the service period for nonemployees and expire 10 years from the date of grant. No tax benefits were realized from options and other share‑based payment arrangements during the year. The Company grants stock options at exercise prices deemed by the Board of Directors to be equal to the fair value of the Common Stock at the time of grant. The fair value of Common Stock has been determined by the Board of Directors of the Company at each stock option measurement date based on a variety of different factors, including the results obtained from independent third‑party appraisals, the Company’s consolidated financial position and historical financial performance, the status of technological development within the Company, the composition and ability of the current engineering and management team, an evaluation and benchmark of the Company’s competition, the current climate in the marketplace, the illiquid nature of the Common Stock, arm’s‑length sales of the Company’s capital stock (including convertible preferred stock), the effect of the rights and preferences of the Series Preferred Stock, and the prospects of a liquidity event, among others. During the nine months ended September 30, 2020 and 2019, the Company granted options to purchase 6,925,144 and 4,107,709 shares of Common Stock to employees with a fair value of $29.8 million and $8.9 million, respectively, calculated using the Black‑Scholes option‑pricing model with the following assumptions: September 30, 2020 September 30, 2019 Risk‑free interest rate 0.3 % – 1.7 % 1.9 % – 2.6 % Expected volatility 52.7 % – 54.2 % 53.3 % – 53.6 % Expected life (in years) 5.9 – 6.3 5.6 – 6.1 Expected dividend yield — — Fair value of Common Stock $ 1.71 – $ 9.75 $ During the nine months ended September 30, 2020 and September 30, 2019 the Company issued options to purchase 10,000 and 97,919 shares of Common Stock to consultants with a fair value of $0.1 million and $0.3 million, respectively, calculated using the Black Scholes option pricing model with the following assumptions September 30, 2020 September 30, 2019 Risk‑free interest rate 0.6 % – 0.8 % 1.5 % – 2.5 % Expected volatility 54.3 % – 54.8 % 54.4 % – 54.9 % Expected life (in years) 9.4 – 10.0 9.4 – 10.0 Expected dividend yield — — Fair value of Common Stock $ 1.71 – $ 9.75 $ The risk‑free interest rate assumption is based upon observed interest rates appropriate for the term of the related stock options. The expected life of employee stock options was calculated using the average of the contractual term of the option and the weighted‑average vesting period of the option, as the Company does not have sufficient history to use an alternative method to the simplified method to calculate an expected life for employees. For grants where the simplified method is precluded, the Company’s estimate of expected term is based forecasted exercises. For nonemployee grants, the Company uses the contractual term of the options. The Company has not paid a dividend and is not expected to pay a dividend in the foreseeable future. Expected volatility for the Company’s common stock was determined based on an average of the historical volatility of a peer group of similar public companies. At September 30, 2020, the total unrecognized stock‑based compensation expense related to unvested stock options aggregated $16.5 million. The costs are expected to be recognized over a weighted‑average period of 3.8 years. Total stock‑based compensation expense related to all of the Company’s stock‑based awards granted is reported in the consolidated statements of operations as follows (in thousands): September 30, 2020 2019 Research and development $ 2,176 $ 1,501 Sales and marketing expense 715 1,020 General and administrative expense 1,070 668 Cost of sales 267 241 Total stock-based compensation expenses $ 4,228 $ 3,430 There were 1,960,118 shares available for award under the Plan at September 30, 2020. The option activity of the Plan and Make Plan for the nine months ended September 30, 2020 is as follows: Weighted-Average Weighted-Average Remaining Number of Exercise Price Contractual Term Shares per Share (in years) Outstanding at January 1, 2020 14,792 $ 2.45 7.84 Granted 6,935 1.85 Exercised (409) 0.65 Forfeited/expired (5,287) 3.57 Outstanding at September 30, 2020 16,031 1.87 7.85 Options vested at September 30, 2020 8,167 1.83 6.38 Options vested or expected to vest at September 30, 2020 15,384 $ 1.87 7.78 The aggregate intrinsic value of options outstanding at September 30, 2020 is $126.3 million. The weighted average grant date fair value for options granted during the nine months ended September 30, 2020 and the nine months ended September 30, 2019 was approximately $4.30 and $2.11, respectively. The aggregate intrinsic value of options exercised during the nine months ended September 30, 2020 and the nine months ended September 30, 2019 was $1.7 million and $3.0 million, respectively. In July 2020, in order to incentivize and retain personnel, the Company repriced employee unvested stock option grants to the most recent common stock valuation. Vested awards were not eligible for repricing. Employees were allowed to opt out of the repricing of the unvested stock option grants by providing notice to the Company within a short period of time following the repricing. If an employee did not opt out of the repricing, all unvested options held by such employee were repriced and subject a new vesting schedule. Repriced options vest over a period of four years from the date of the repricing, with one-year cliff vesting and monthly vesting thereafter. The repricing affected 116 employees, at an incremental compensation cost of $3.6 million to the Company. Restricted Stock Units – RSUs awarded to employees generally vest over four years from the anniversary of the date of grant, with 1-year cliff vesting and monthly vesting thereafter, provided the employee remains continuously employed with the Company. Shares of the Company’s stock are delivered to the employee upon vesting, subject to payment of applicable withholding taxes. The fair value of RSUs is equal to the estimated fair market value of the Company’s common stock on the date of grant. Total unrecognized compensation costs related to non-vested RSUs at September 30, 2020 was approximately $4.1 million and is expected to be recognized over a period of 3.9 years. The total expense recognized during the nine months ended September 30, 2020 was $0.2 million. RSU activity under the Plan for the nine months ended September 30, 2020 is as follows: Shares subject Weighted Average to Vesting Grant Date Fair Value Balance of unvested shares as of January 1, 2020 — — Issuance of additional shares $ 9.75 Vested — — Balance of unvested shares as of September 30, 2020 $ 9.75 Common Stock Reserved for Future Issuance —As of September 30, 2020 and 2019, the Company has reserved the following shares of Common Stock for future issuance (in thousands): September 30, 2020 September 30, 2019 Common Stock options outstanding 16,031 14,490 Restricted Stock units outstanding 459 — Shares available for issuance under the Plan 1,960 4,463 Convertible Preferred Stock outstanding 100,038 100,038 Common Stock warrants outstanding 919 464 Total shares of authorized Common Stock reserved for future issuance 119,407 119,455 In May 2017, the Company entered into a strategic collaboration agreement with an investor, pursuant to which such investor would sell and distribute the Company’s products. In connection with this agreement, the Company agreed to issue warrants purchase up to 2,000,000 shares of Common Stock. The investor is eligible to receive a warrant to purchase one share of Common Stock for every $35.00 in revenue generated by the Company from the investor’s resellers. Each warrant is issued at an exercise price equal to $5.00 per share (subject to appropriate adjustment in the event of a stock dividend, stock split, combination, or other similar recapitalization) and expires on December 31, 2027. The Company issued warrants for the purchase of 399,960 and 477,629 shares of its common stock during the nine months ended September 30, 2020 and 2019. respectively. The Company recorded $0.04 million and $0.9 million related to the fair value of the warrants during the nine months ended September 30, 2020 and 2019, respectively. The assumptions used in the Black Scholes pricing model are the same as those used for nonemployee options. | 13. CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY Authorized Shares —At December 31, 2019 and 2018, the Company’s authorized shares consisted of 156,000,000 shares of Common Stock, $0.0001 par value (the “Common Stock”) 100,038,109 shares of Convertible Preferred Stock, respectively, par value of $0.0001 per share; 26,189,545 of which are designated as Series A Convertible Preferred Stock (“Series A Preferred Stock”), 23,675,035 of which are designated as Series B Convertible Preferred Stock (“Series B Preferred Stock”), 13,152,896 shares are designated as Series C Convertible Preferred Stock (“Series C Preferred Stock”), 21,075,193 shares are designated as Series D Convertible Preferred Stock (“Series D Preferred Stock”), 13,450,703 shares are designated as Series E Convertible Preferred Stock (“Series E Preferred Stock”), and 2,494,737 shares are designated as Series E‑1 Convertible Preferred Stock (“Series E‑1 Preferred Stock”) (collectively, the “Series Preferred Stock”). Preferred Stock On January 29, 2018 and June 29, 2018, the Company issued 4,086,111 and 11,674 shares of Series D Preferred Stock, respectively, at a purchase price of $8.5656 per share. The issuance costs for Series D Preferred Stock in 2018 were $0.2 million. On January 14, 2019 the Company issued 13,450,703 shares of Series E Preferred Stock at a purchase price of $10.0211 per share. The issuance costs for Series E Preferred Stock were $0.1 million. On January 14. 2019 the Company issued 2,494,737 shares of Series E‑1 Preferred Stock at a purchase price of $10.0211 per share. The issuance costs for Series E‑1 Preferred Stock were $0.02 million. The following table summarizes details of Convertible Preferred Stock authorized, issued and outstanding as of December 31, 2019 and 2018 ($ in thousands): Years Ended December 31, Convertible Preferred Stock Classes 2019 2018 Series A Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding, 26,189,545 and 26,189,545 shares, (liquidation preference of $106,853 and $88,783 at December 31, 2019 and 2018, respectively) $ $ 13,878 Series B Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding, 23,675,035 and 23,675,035 shares (liquidation preference of $96,594 and $80,258 at December 31, 2019 and 2018, respectively) 37,806 Series C Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding, 13,152,896 and 13,152,896 shares (liquidation preference of $53,664 and $45,000 at December 31, 2019 and 2018, respectively) 44,852 Series D Convertible Preferred Stock, $0.0001 par value—authorized, issued and outstanding, 21,075,193 and 21,075,193 shares (liquidation preference of $180,522 and $180,522 at December 31, 2019 and 2018, respectively) 180,353 Series E Convertible Preferred Stock, $0.0001 par value—authorized, 13,450,703 shares; issued and outstanding, 13,450,703 and 0 shares (liquidation preference of $134,791 and $0 at December 31, 2019 and 2018, respectively) — Series E‑1 Convertible Preferred Stock, $0.0001 par value—authorized, 2,494,737 shares; issued and outstanding, 2,494,737 and 0 shares (liquidation preference of $25,000 and $0 at December 31, 2019 and 2018, respectively) — Total $ $ 276,889 The following describes the rights and preferences of the Company’s Series Preferred Stock: Voting —The holders of Series Preferred Stock vote together with all other classes and series of stock as a single class on an as‑converted basis. Each share of Series Preferred Stock entitles the holder to such number of votes per share as shall equal the whole number of shares of Common Stock into which such share of Series Preferred Stock is then convertible. The holders of the Series A Preferred Stock are entitled to elect one director to the Company’s board of directors, the holders of the Series B Preferred Stock are entitled to elect two directors to the Company’s board of directors, the holders of Series C Preferred Stock are entitled to elect one director to the Company’s board of directors, the holders of the Series E Preferred Stock are entitled to elect one director to the Company’s board of directors, and the holders of the Common Stock are entitled to elect two directors to the Company’s board of directors. The holders of Series Preferred Stock retain rights to vote on certain specified matters as set forth in the Company’s certificate of incorporation. The holders of Series E‑1 Preferred Stock are not entitled to vote in elections of directors. Dividends —The Series Preferred Stock are entitled to receive dividends at the rate of 8% of the original issue price for each series of Series Preferred Stock payable only when, as and if, declared by the Company’s board of directors. Through December 31, 2019, no dividends have been declared. Liquidation —Upon any liquidation, dissolution, or winding‑up of the Company, whether voluntary or involuntary, the holders of the Series Preferred Stock are entitled to first be paid out of assets available for distribution, on a pari passu basis, prior and in preference to any distribution to the holders of the Company’s Common Stock, the greater of (a) an amount equal to $0.53372 per share for the Series A Preferred Stock, $1.6013 per share for Series B Preferred Stock, $3.4213 per share for the Series C Preferred Stock, $8.5656 per share for the Series D Preferred Stock, and $10.0211 per share for the Series E and Series E‑1 Preferred Stock, plus declared but unpaid dividends and (b) an amount per share that would have been payable had all shares of the Series Preferred Stock been converted to shares of Common Stock immediately prior to any liquidation, dissolution, or winding‑up of the Company. After payment of all preferential amounts required to be paid to the holders of Series Preferred Stock, the remaining assets of the Company available for distribution to the stockholders shall be distributed among the holders of shares of Common Stock pro rata based on the number of shares held by each such holder. Conversion —Each holder of Series Preferred Stock has the right, at their option at any time, to convert any such shares of Series Preferred Stock into fully paid and nonassessable shares of Common Stock. The conversion ratio is determined by dividing the original issue price of such share of Series Preferred Stock by the conversion price then in effect, which is initially equal to $0.53372 per share for the Series A Preferred Stock, $1.6013 per share for Series B Preferred Stock, $3.4213 per share for the Series C Preferred Stock, $8.5656 per share for the Series D Preferred Stock, and $10.0211 per share for the Series E and Series E‑1 Preferred Stock. The conversion price is subject to adjustment if certain dilutive events occur. Conversion is mandatory in the event of a firm‑commitment underwritten initial public offering of the Company’s Common Stock with a value of at least $5.13 per common share and $50 million in proceeds to the Company or upon the election of a majority of the holders of Series Preferred Stock, voting as a single class on an as‑converted basis. Redemption —The Series Preferred Stock is not subject to mandatory or optional redemption other than in connection with a liquidation, dissolution, or winding‑up of the Company. Common Stock Restricted Stock Agreements —During 2015, the Company issued 27,850,000 shares of Common Stock to the initial founders and certain employees of the Company at a purchase price of $0.0001 per share. The shares issued to the founders are subject to the Company’s right to repurchase at the original purchase price and such right to repurchase generally lapses at the rate of 20% of the shares upon the first anniversary of the grant date and at the rate of 1.67% per month thereafter over four years. The refundable purchase price related to the shares is reported as current liabilities until the shares are vested During the year ended December 31, 2019, as part of the Company’s acquisitions, the Company issued 497,290 shares of restricted stock with a value of $2.0 million which are considered post‑combination consideration and accounted for as stock‑based compensation as the shares vest. The shares vest over a four-year service period. The activity for stock subject to vesting for the years ended December 31, 2019 and 2018, are as follows (shares in thousands): Shared subject Weighted Average to Vesting Purchase Price Balance of unvested shares as of January 1, 2019 9,731 0.0001 Issuance of additional shares 0.0001 Vested (5,653) 0.0001 Balance of unvested shares as of December 31, 2019 4,575 0.0001 At December 31, 2019, the remaining weighted‑average vesting period for the stock subject to vesting was 0.7 years. In March 2018, the Company issued a promissory note totaling $248,874 in exchange for 279,166 shares of Common Stock. The note accrued interest at the rate of 2.57% per annum and was fully collateralized by the assets of the holder. The Company has accounted for the note as recourse note and has recorded it as a deduction from stockholders’ equity. The note plus $6,571 interest was settled with the Company through the repurchase of 62,610 shares of Common Stock by the Company, at the then current fair value in March 2019. Stock Incentive Plan —In 2015, the Board of Directors approved the adoption of the 2015 stock incentive plan (the “Plan”). The Plan allows for the award of incentive and nonqualified stock options, restricted stock, and other stock‑based awards to employees, officers, directors, consultants, and advisers of the Company. Awards may be made under the Plan for up to 21,522,567 shares of Common Stock. The Board of Directors administers the Plan and determines the exercise price of options, purchase price for restricted stock, the rates at which awards vest, and the other terms and conditions of the awards. Options and restricted stock generally vest 25% of the shares upon the first anniversary of the grant date and at the rate of 2.0833% per month thereafter over a three-year period for employees or over the service period for nonemployees and expire 10 years from the date of grant. No tax benefits were realized from options and other share‑based payment arrangements during the year. As part of the Make acquisition, the Company assumed the 2018 equity incentive plan of Make Composites, Inc. (the “Make Plan”). The Make Plan allows for the award of incentive and nonqualified stock options and warrants for those employees and contractors that were hired as part of the acquisition. The Make Plan allows for 190,223 options and warrants to be issued, which were issued in 2019, with no additional options to be issued in the future. The Board of Directors administers the Make Plan and determines the exercise price of options, purchase price for restricted stock, the rates at which awards vest, and the other terms and conditions of the awards. Options and restricted stock generally vest 25% of the shares upon the first anniversary of the grant date and at the rate of 2.0833% per month thereafter over a three-year period for employees or over the service period for nonemployees and expire 10 years from the date of grant. No tax benefits were realized from options and other share‑based payment arrangements during the year. The Company grants stock options at exercise prices deemed by the Board of Directors to be equal to the fair value of the Common Stock at the time of grant. The fair value of Common Stock has been determined by the Board of Directors of the Company at each stock option measurement date based on a variety of different factors, including the results obtained from independent third‑party appraisals, the Company’s consolidated financial position and historical financial performance, the status of technological development within the Company, the composition and ability of the current engineering and management team, an evaluation and benchmark of the Company’s competition, the current climate in the marketplace, the illiquid nature of the Common Stock, arm’s‑length sales of the Company’s capital stock (including Convertible Preferred Stock), the effect of the rights and preferences of the Series Preferred Stock, and the prospects of a liquidity event, among others. In 2019 and 2018 , the Company granted options to purchase 4,692,509 shares and 2,387,517 shares of Common Stock to employees with a fair value of $10.1 million and $3.9 million, respectively, calculated using the Black‑Scholes option‑pricing model with the following assumptions: Years Ended December 31, 2019 2018 Risk‑free interest rate 1.7%–2.6 % 2.7%–3.0 % Expected volatility 52.7%–53.6 % 52.9%–53.8 % Expected life (in years) 5.6–6.1 5.3–6.1 Expected dividend yield — — Fair value of Common Stock $ 4.08 $ 3.39 The Company issued no options to consultants during the year ended December 31, 2018. In 2019, the Company granted options to purchase 97,919 shares of Common Stock to consultants with a fair value of $0.6 million, calculated using the Black‑Scholes option‑pricing model with the following assumptions, with the options valued at the date in which they vest: Years Ended December 31, 2019 2018 Risk‑free interest rate 1.4%–3.1 % 2.1%–3.1 % Expected volatility 52.4%–61.5 % 53.7%–61.5 % Expected life (in years) 6.2–10.0 7.2–10.0 Expected dividend yield — — Fair value of Common Stock $ 4.08 $ 3.39 The risk‑free interest rate assumption is based upon observed interest rates appropriate for the term of the related stock options. The expected life of employee stock options was calculated using the average of the contractual term of the option and the weighted‑average vesting period of the option, as the Company does not have sufficient history to use an alternative method to the simplified method to calculate an expected life for employees. For nonemployee grants, the Company uses the contractual term of the options. The Company has not paid a dividend and is not expected to pay a dividend in the foreseeable future. Expected volatility for the Company’s Common Stock was determined based on an average of the historical volatility of a peer group of similar public companies. At December 31, 2019 and 2018, the total unrecognized stock‑based compensation expense related to unvested stock options aggregated $13.0 million and $6.9 million, respectively. The costs are expected to be recognized over a weighted‑average period of one year. Total stock‑based compensation expense related to all of the Company’s stock‑based awards granted is reported in the consolidated statements of operations as follows (in thousands): Years Ended December 31, 2019 2018 Research and development $ $ 1,696 Sales and marketing expense 567 General and administrative expense 658 Cost of sales 44 Total stock based compensation expenses $ $ 2,965 There were 3,894,467 shares available for award under the Plan at December 31, 2019. The option activity of the Plan and Make Plan for the year ended December 31, 2019, is as follows (shares in thousands): Weighted-Average Weighted-Average Remaining Number of Exercise Price Contractual Term Shares per Share (in years) Outstanding at January 1, 2019 12,007 $ 1.65 8.21 Granted 4,790 3.98 Exercised (997) 0.71 Forfeited/expired (1,008) 1.88 — Outstanding at December 31, 2019 14,792 2.45 7.84 Options vested at December 31, 2019 7,195 1.52 6.92 Options vested or expected to vest at December 31, 2019 14,555 2.44 7.82 The aggregate intrinsic value of options outstanding at December 31, 2019 is $24.04 million. The weighted‑average grant‑date fair value for options granted during 2019 and 2018 was approximately $2.17 and $1.64, respectively. The aggregate intrinsic value of options exercised during the years ended December 31, 2019 and 2018, was $3.4 million and $2.1 million, respectively. Common Stock Reserved for Future Issuance —As of December 31, 2019 and 2018, the Company has reserved the following shares of Common Stock for future issuance (in thousands): Years Ended December 31, 2019 2018 Common Stock options outstanding 12,007 Shares available for issuance under the Plan 565 Convertible Preferred Stock outstanding 84,093 Common Stock warrants outstanding 2,000 Total shares of authorized Common Stock reserved for future issuance 98,665 In May 2017, the Company entered into a strategic collaboration agreement with an investor allowing the investor’s resellers to sell and distribute the Company’s products. In consideration for this agreement, the Company agreed to issue warrants to purchase up to 2,000,000 shares of Common Stock. The investor is eligible to receive a warrant to purchase one share of Common Stock for every $35.00 in revenue generated by the Company from the investor’s resellers. Each warrant is issued at an exercise price equal to $5.00 per share (subject to appropriate adjustment in the event of a stock dividend, stock split, combination, or other similar recapitalization) and shall expire on December 31, 2027. The Company issued 501,113 warrants in 2019 and 18,389 in 2018. The Company recorded $1.0 million related to the fair value of the warrants in 2019 and $34,939 in 2018, calculated using the Black‑Scholes warrant‑pricing model. The assumptions used in the Black‑Scholes pricing model are the same as those used for nonemployee options. |
SEGMENT INFORMATION_2
SEGMENT INFORMATION | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
SEGMENT INFORMATION | ||
SEGMENT INFORMATION | 12. 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 one segment. The Company currently ships its product to markets in the Americas, Europe, Middle East and Africa (“EMEA”), and Asia Pacific (“APAC”). The Company anticipates additional products launching in the near term future, across those same markets. Disaggregated revenue data for those markets is as follows (in thousands): Revenue during nine months ended September 30, 2020 Americas EMEA APAC Total Product $ 2,372 $ 2,411 $ 1,330 $ 6,113 Services 962 888 138 1,988 Total $ 3,334 $ 3,299 $ 1,468 $ 8,101 Revenue during nine months ended September 30, 2019 Americas EMEA APAC Total Product $ 11,561 $ 5,909 $ 1,185 $ 18,655 Services 1,851 341 29 2,221 Total $ 13,412 $ 6,250 $ 1,214 $ 20,876 During the nine months ended September 30, 2020 and 2019, the Company recognized the following revenue from service contracts and cloud‑based software licenses over time, and hardware and consumable product shipments and subscription software at a point in time (in thousands): Nine Months Ended September 30, 2020 2019 Revenue recognized at a point in time $ 6,113 $ 18,655 Revenue recognized over time 1,988 2,221 Total $ 8,101 $ 20,876 For the nine months ended September 30, 2020 and 2019, no single customer accounted for more than 10% of the Company’s consolidated revenue. The Company’s long‑lived assets are substantially all located in the United States where the Company’s primary operations are located. | 14. SEGMENT INFORMATION In its operation of the business, management, including the Company’s chief operating decision maker, who is also our Chief Executive Officer, reviews the business as one segment. The Company currently ships its product to markets in the Americas, Europe Middle East and Africa (“EMEA”), and Asia Pacific (“APAC”). Disaggregated revenue data for those markets is as follows (in thousands): Revenue during the year ended December 31, 2019 Americas EMEA APAC Product $ 12,746 $ 8,430 $ 1,582 Services 3,055 563 63 Total $ 15,801 $ 8,993 $ 1,645 Revenue during the year ended December 31, 2018 Americas EMEA APAC Product $ 751 $ — $ — Services 283 — — Total $ 1,034 $ — $ — During the years ended December 31, 2019 and 2018, the Company recognized the following revenue from service contracts and cloud‑based software licenses over time, and hardware and consumable product shipments and subscription software at a point in time (in thousands): Years Ended December 31, 2019 2018 Revenue recognized at a point in time $ 22,758 $ 751 Revenue recognized over time 3,681 283 Total $ 26,439 $ 1,034 For the years ended December 31, 2019 and 2018, no single customer accounted for more than 10% of our consolidated revenue. The Company’s long‑lived assets are substantially all located in the United States where the Company’s primary operations are located. |
RELATED PARTY TRANSACTIONS_2
RELATED PARTY TRANSACTIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
RELATED PARTY TRANSACTIONS | ||
RELATED PARTY TRANSACTIONS | 13. Related‑Party Transactions In 2017, the Company issued warrants related to the strategic collaboration agreement (Note 11). The investor was no longer considered a related party in the nine months ended September 30, 2020 and the year ended December 31, 2019. | 15. RELATED‑PARTY TRANSACTIONS The Company recorded $34,939 related to the warrants issued during the year ended December 31, 2018 related to the strategic collaboration agreement (Note 13). The investor was no longer considered a related‑party in the year ended December 31, 2019. As of December 31, 2018, the Company recognized $0.1 million of revenue and $0.1 million of deferred revenue from sales to two investors. The Company invested $0.5 million in a company, Make, during the year ended December 31, 2018, of which common investors own approximately 31% of the outstanding shares. The Company completed the acquisition of Make in the year ended December 31, 2019 (Note 4). |
NET LOSS PER SHARE_2
NET LOSS PER SHARE | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
NET LOSS PER SHARE | ||
NET LOSS PER SHARE | 14. Net Loss Per Share The Company computes basic loss per share using net loss attributable to Desktop Metal, Inc. Common Stockholders and the weighted‑average number of common shares outstanding during each period. Diluted earnings per share include shares issuable upon exercise of outstanding stock options and stock‑based awards where the conversion of such instruments would be dilutive. September 30, (in thousands, except per share amounts) 2020 2019 Numerator for basic and diluted net loss per share: Net loss attributable to Desktop Metal, Inc Common Stockholders $ (65,027) $ (75,769) Denominator for basic and diluted net loss per share: Weighted average shares 29,457 Net loss per share—Basic and Diluted $ (2.21) $ (3.38) For the nine months ended September 30, 2020 and 2019 the effect of dilutive securities, including non‑vested stock options restricted stock awards, warrants, and Convertible Preferred Stock, was excluded from the denominator for the calculation of diluted net loss per share because the Company recognized a net loss for the period and their inclusion would be antidilutive. Dilutive securities excluded were 117,722,359 and 121,001,479 shares for the nine months ended September 30, 2020 and 2019, respectively. | 16. NET LOSS PER SHARE The Company computes basic loss per share using net loss attributable to Desktop Metal, Inc. Common Stockholders and the weighted‑average number of common shares outstanding during each period. Diluted earnings per share include shares issuable upon exercise of outstanding stock options and stock‑based awards where the conversion of such instruments would be dilutive. Years Ended December 31, (in thousands, except per share amounts) 2019 2018 Numerator for basic and diluted net loss per share: Net loss attributable to Desktop Metal, Inc Common Stockholders $ (103,596) $ (121,339) Denominator for basic and diluted net loss per share: Weighted average shares 23,379 16,495 Net loss per share—Basic and Diluted $ (4.43) $ (7.36) For the years ended December 31, 2019 and 2018 the effect of dilutive securities, including non‑vested stock options, restricted stock awards, warrants, and Convertible Preferred Stock, was excluded from the denominator for the calculation of diluted net loss per share because we recognized a net loss for the period and their inclusion would be antidilutive. Dilutive securities excluded were 115,349,706 and 96,117,086 shares for the years ended December 31, 2019 and 2018, respectively. |
SUBSEQUENT EVENTS_2
SUBSEQUENT EVENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
SUBSEQUENT EVENTS | ||
SUBSEQUENT EVENTS | 15. Subsequent Events As described in Note 1, the Company completed the Business Combination on December 9, 2020. Management has evaluated subsequent events occurring through December 11, 2020, the date that these condensed consolidated financial statements were available to be issued and determined that no additional subsequent events occurred that would require recognition or disclosure in these condensed consolidated financial statements other than those in this note. | 17. SUBSEQUENT EVENTS The coronavirus (“COVID‑19”) pandemic, as well as the response to mitigate the spread and effects of COVID‑19 may impact the Company and its customers, as well as the demand for its products and services. The impact of COVID‑19 on the Company’s operational results in subsequent periods will largely depend on future developments, cannot be accurately predicted. These developments may include, but are not limited to, new information concerning the severity of COVID‑19, the degree of success of actions take to contain or treat COVID‑19 and the reactions by consumers, companies, governmental entities, and capital markets to such actions. In April 2020, the Company received loan proceeds in the amount of approximately $5.4 million under the Paycheck Protection Program (PPP). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses. The Company repaid the loan in its entirety on May 13, 2020. In July 2020 in order to incentivize and retain personnel, the Company repriced employee unvested stock option grants to the most recent 409A private stock valuation. Vested awards were not eligible for repricing. The repriced option is subject to a new four year vesting schedule with a vesting commencement date of September 1, 2020. Employees had the ability to opt out of the repricing of the unvested stock option grants by providing notice to the Company. On August 26, 2020, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Trine Acquisition Corp (“Trine”) to affect a business combination between Trine and the Company with the Company surviving the merger as a wholly owned subsidiary of Trine. At the effective time of the Merger, each share of Desktop Metal Convertible Preferred Stock and each share of Desktop Metal Common Stock will be converted into the right to receive such number of shares of Trine’s Class A Common Stock. The aggregate consideration for the transaction payable to Desktop Metal existing stockholders is capped at $1.8 billion. The consummation of the proposed transaction is subject to the receipt of the requisite approval of the stockholders of each Trine and Desktop Metal and the fulfillment of certain other closing conditions. Management has evaluated subsequent events occurring through September 14, 2020, the date that these consolidated financial statements were available to be issued and determined that no additional subsequent events occurred that would require recognition or disclosure in these consolidated financial statements other than those in this note. |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Unaudited Interim Financial Statements | Unaudited Interim Financial Statements The unaudited condensed consolidated financial statements include the accounts of Desktop Metal, Inc. and wholly‑owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in condensed consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The information as of December 31, 2019 included in the unaudited condensed consolidated balance sheets was derived from the Company’s audited consolidated financial statements. The unaudited condensed consolidated financial statements included in this Current Report on Form 8-K were prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments (all of which are considered of a normal recurring nature) considered necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods and dates presented. The results of operations for the nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements and related notes included elsewhere in this Current Report on Form 8-K. | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements of the Company are presented for Desktop Metal, Inc. (“Parent”) and its wholly‑owned subsidiaries. The Company has prepared the accompanying unaudited condensed consolidated financial statements pursuant to GAAP. Preparing financial statements requires the Company to make estimates and assumptions that affect the amounts that are reported in the condensed consolidated financial statements and accompanying disclosures. Although these estimates are based on the Company’s best knowledge of current events and actions that the Company may undertake in the future, actual results may be different from the Company’s estimates. The results of operations presented herein are not necessarily indicative of the Company’s results for any future period. | Basis of Presentation The consolidated financial statements of the Company are prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”). The accompanying consolidated financial statements include the accounts of Desktop Metal, Inc. and its wholly owned subsidiaries, Desktop Metal Securities Corporation and Desktop Metal GmbH. The functional currency of Desktop Metal GmbH is U.S. Dollars. All intercompany transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make judgements, estimates and assumptions regarding uncertainties that affect the reported amounts of assets, liabilities and related disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Although the Company regularly assesses these estimates, actual results could differ materially from these estimates. Changes in estimates are recorded in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances available at the time estimates are made, including the Company’s expectation at the time regarding the duration, scope and severity of the ongoing COVID‑19 pandemic and the potential continued disruption of global economic conditions due to the pandemic. Actual results may differ from management’s estimates if these results differ from historical experience or other assumptions prove not to be substantially accurate, even if such assumptions are reasonable when made. | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires the Company’s management to make judgements, estimates and assumptions regarding uncertainties that affect the reported amounts of assets, liabilities and related disclosures of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Although the Company regularly assesses these estimates, actual results could differ materially from these estimates. Changes in estimates are recorded in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances. Actual results may differ from management’s estimates if these results differ from historical experience or other assumptions prove not to be substantially accurate, even if such assumptions are reasonable when made. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents include all highly liquid investments maturing within 90 days or less from the date of purchase. Cash equivalents consist of money market funds, totaling $33.9 million and $40.5 million as of September 30, 2020 and December 31, 2019, respectively, as well as other highly liquid cash equivalents totaling $0.0 million and $25.0 million as of September 30, 2020 and December 31, 2019, respectively. | Cash and Cash Equivalents Cash equivalents include all highly liquid investments maturing within 90 days or less from the date of purchase. Cash equivalents, consist of money market funds, totaling $40.5 million and $24 million as of December 31, 2019 and 2018 respectively, as well as other highly‑liquid cash equivalents totaling $25 million as of December 31, 2019. |
Short-Term Investments | Short‑Term Investments All of the Company’s investments, which consist of debt securities, are classified as available for sale and are carried at fair value. Unrealized gains and losses considered to be temporary in nature are recorded as a component of accumulated other comprehensive loss, net of related income taxes. The Company reviews all investments for reductions in fair value that are other than temporary. When such reductions occur, the cost of the investment is adjusted to fair value through recording a loss on investments in the condensed consolidated statements of operations. Gains and losses on investments are calculated on the basis of specific identification. | Short‑Term Investments All of the Company’s investments, which consist of debt securities, are classified as available for sale and are carried at fair value. Unrealized gains and losses considered to be temporary in nature are recorded as a component of accumulated other comprehensive loss, net of related income taxes. The Company reviews all investments for reductions in fair value that are other than temporary. When such reductions occur, the cost of the investment is adjusted to fair value through recording a loss on investments in the consolidated statements of operations. Gains and losses on investments are calculated on the basis of specific identification. |
Restricted Cash | Restricted Cash The Company maintains a letter of credit for the benefit of the landlord for their office facility. The issuer of the letter of credit requires the Company to maintain a deposit in the amount of $0.6 million to secure the letter, which is reported as restricted cash in the consolidated balance sheets. This letter of credit automatically renews every year until it matures on February 7, 2024; therefore, it is classified as long term in nature at December 31, 2019 and 2018. | |
Revenue | Revenue Product Revenue and Service Revenue Product revenue include sales of the Company’s 3-D metal systems, which consist of modular printers furnaces, and debinders as well as sales of accessories and consumables. These consumables are primarily comprised of materials used by the printers during the printing process to produce parts and other wear items or components in the products that must be replaced after certain amounts of use. Certain on‑premises software that is embedded with the hardware and sold with the product bundle and is included within product revenue. Revenue from products is recognized upon transfer of control, which is generally at the point of shipment. The Company typically recognizes revenue on embedded software once the customer has been given access to the software. Services revenue includes revenue from various cloud‑based software solutions the Company offers to facilitate the design of parts and operation of the Company’s products. The Company offers multiple software products, which are licensed through either a cloud‑based solution and/or an on‑premises software subscription, depending on the product. For the cloud‑based solution, the Company typically provides an annual subscription that the customer does not have the right to take possession of and is renewed at expiration. The revenue from the cloud‑based solution is recognized ratably over the annual term as the Company considers the services provided under the cloud‑based solution to be a series of distinct performance obligations, as the Company provides continuous daily access to the cloud solution. For on‑premises software subscriptions, the Company typically recognizes revenue once the customer has been given access to the software. Service revenue also consists of installation, training, and post-installation customer support. When the Company enters into development contracts, control of the development service is transferred over time, and the related revenue is recognized over time. Revenue Recognition The Company adopted Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers , on January 1, 2018, using the full retrospective method. Revenue is measured as the amount of consideration expected to be received in exchange for transferring goods or providing services. The amount of consideration is typically a fixed price at the contract inception. Consideration from shipping and handling is recorded on a gross basis within product revenue. The Company determines revenue recognition through the following steps: · Identification of the contract, or contracts, with a customer · Identification of the performance obligations in the contract · Determination of the transaction price · Allocation of the transaction price to the performance obligations in the contract · Recognition of revenue when, or as, the Company satisfies a performance obligation Nature of Products and Services The Company sells its products primarily through authorized resellers, independent sales agents, and its own internal sales team. Revenue from hardware and consumables is recognized upon transfer of control, which is generally at the point of shipment. The cloud‑based software solution is typically provided as an annual license that the customer does not have the right to take possession of and is renewed each year. The revenue from the cloud‑based solution is recognized ratably over the annual term as the Company considers the services provided under the licenses to be a series of distinct performance obligations. For the on‑premise software, the Company typically recognizes revenue once the customer has been given access to the software. The Company’s post-installation customer support is primarily sold through one‑year annual contracts and such revenue is recognized ratably over the term of the agreement. Service Revenue from installation and training is recognized as performed. The Company’s terms of sale generally provide payment terms that are customary in the countries where the Company transacts business. To reduce credit risk in connection with certain sales, the Company may, depending upon the circumstances, require significant deposits or payment in full prior to shipment. Due to the short‑term nature of the Company’s contracts substantially all of the outstanding performance obligations are recognized within one year. Shipping and handling activities that occur after control over a product has transferred to a customer are accounted for as fulfillment activities rather than performance obligations, as allowed under a practical expedient provided by ASC 606. The shipping and handling fees charged to customers are recognized as revenue and the related costs are included in cost of sales at the point in time when ownership of the product is transferred to the customer. Sales taxes and value added taxes collected concurrently with revenue generating activities are excluded from revenue. Significant Judgements The Company enters into contracts with customers that can include hardware products and cloud-based software, which are determined to be distinct and accounted for as separate performance obligations. Products or services that are promised to a customer can be considered distinct if both of the following criteria are met: (i) the customer can benefit from the products or services either on its own or together with other readily available resources and (ii) the Company’s promise to transfer the products, software, or services to the customer is separately identifiable from other promises in the contract. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Judgement is required to determine the standalone selling price (SSP). The transaction price is allocated to each distinct performance obligation on a relative standalone selling price basis and revenue is recognized for each performance obligation when control has passed. In most cases, the Company is able to establish SSP based on historical transaction data of the observable prices of hardware products sold separately in comparable circumstances to similar customers, observable renewal rates for software and post-installation support, and the Company’s best estimates selling price at which the Company would have sold the product regularly on a stand‑alone basis for training and installation. The Company reassesses the SSP on a periodic basis or when facts and circumstances change. Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, customer deposits and deferred revenues (contract liabilities) on the condensed consolidated balance sheets. Timing of revenue recognition may differ from the timing of invoicing to customers. The Company records a receivable at the time of invoicing. For most of the Company’s contracts, customers are invoiced when products are shipped or when services are performed. The Company typically bills in advance for post‑installation support and cloud‑based software licenses, resulting in deferred revenue. The Company’s deferred revenue balance was $1.1 million and $2.2 million as of September 30, 2020 and December 31, 2019, respectively. The deferred revenue consists primarily of billed post-installation customer support and cloud‑based software licenses that are recognized ratably over the term of the agreement, and to a lesser extent related to contracts that have outstanding performance obligations, and contracts that have acceptance terms that have not yet been fulfilled. When products have been delivered, but the product revenue associated with the arrangement has been deferred as described above, the Company includes the costs for the delivered items in prepaid expenses and other current assets on the condensed consolidated balance sheets until recognition of the related revenue occurs, at which time it is recognized in cost of sales. The Company’s deferred cost of sales balance was $0 and $0.3 million as of September 30, 2020 and December 31, 2019, respectively. As the Company’s contracts are primarily one year or less, substantially all deferred revenue outstanding at the end of the fiscal year is recognized during the following year. For the periods ended September 30, 2020 and 2019, the Company paid commissions to its external partners and internal sales team. The Company acts as a principal in the contracts with its partners as the Company controls the product, establishes the price, and bears the risk of nonperformance. The Company records the revenue on a gross basis and commissions are recorded as a sales and marketing expense. The Company recognizes its commission expense as a point‑in‑time expense as contract obligations are primarily completed within a one‑year contract period. See Note 12 for additional information related to disaggregation of revenue. | Revenue Product Revenue and Service Revenue Product revenue include sales of the Company’s 3‑D metal systems, which consist of modular printers, furnaces, and debinders as well as sale of accessories and consumables. These consumables are primarily comprised of materials, which are used by the printers during the printing process to produce parts. Certain on‑premises software that is embedded with the hardware and sold with the product bundle and is included within product revenue. Revenue from products is recognized upon transfer of control, which is generally at the point of shipment. The Company typically recognizes revenue on embedded software once the customer has been given access to the software. Services revenue includes revenue from various software cloud-based solutions the Company offers to facilitate the design of parts and operation of the Company’s products. The Company offers multiple software products, which are licensed through either a cloud‑based solution and/or an on‑premises software subscription, depending on the product. For the cloud‑based solution, the Company typically provides an annual subscription that the customer does not have the right to take possession of and is renewed at expiration. The revenue from the cloud‑based solution is recognized ratably over the annual term as the Company considers the services provided under the cloud‑based solution to be a series of distinct performance obligations, as the Company provides continuous daily access to the cloud solution. For on‑premises software subscriptions, the Company typically recognizes revenue once the customer has been given access to the software. Service revenue also consists of installation, training, and post contract support. When the Company enters into development contracts, control of the development service is transferred over time, and the related revenue is recognized over time. Revenue Recognition The Company adopted Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers , on January 1, 2018, using the full retrospective method. Revenue is measured as the amount of consideration expected to be received in exchange for transferring goods or providing services. The amount of consideration is typically a fixed price at the contract inception. Consideration from shipping and handling is recorded on a gross basis within product revenue. The Company determines revenue recognition through the following steps: · Identification of the contract, or contracts, with a customer · Identification of the performance obligations in the contract · Determination of the transaction price · Allocation of the transaction price to the performance obligations in the contract · Recognition of revenue when, or as, the Company satisfies a performance obligation Nature of Products and Services The Company sells its products primarily through authorized resellers, independent sales agents, and its own sales force. Revenue from hardware and consumables is recognized upon transfer of control, which is generally at the point of shipment. The Company’s post‑contract support is primarily sold through one‑year annual contracts and post contract support revenue is recognized ratably over the term of the agreement. Post contract support is related to the service and maintenance of the Company’s hardware products after delivery and installation to the customer. Service revenue from installation and training is recognized as performed. Our terms of sale generally provide payment terms that are customary in the countries where the Company transacts business. To reduce credit risk in connection with certain sales, the Company may, depending upon the circumstances, require deposits or payment in full prior to shipment. Due to the short term nature of our contracts substantially all of our outstanding performance obligations are recognized within one year. Shipping and handling activities that occur after control over a product has transferred to a customer are accounted for as fulfillment activities rather than performance obligations, as allowed under a practical expedient provided by ASC 606. The shipping and handling fees charged to customers are recognized as revenue and the related costs are included in cost of revenue at the point in time when ownership of the product is transferred to the customer. Sales taxes and value added taxes collected concurrently with revenue generating activities are excluded from revenue. Significant Judgements The Company enters into contracts with customers that can include various combinations of hardware products, software licenses, and services, which are distinct and accounted for as separate performance obligations. Products or services that are promised to a customer can be considered distinct if both of the following criteria are met: (i) the customer can benefit from the products or services either on its own or together with other readily available resources and (ii) the Company’s promise to transfer the products, software, or services to the customer is separately identifiable from other promises in the contract. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Judgement is required to determine the standalone selling price (SSP). The transaction price is allocated to each distinct performance obligation on a relative standalone selling price basis and revenue is recognized for each performance obligation when control has passed. In most cases, the Company is able to establish SSP based historical transaction data of the observable prices of hardware products sold separately in comparable circumstances to similar customers, observable renewal rates for software and post contract support, and the Company’s best estimates selling price at which the Company would have sold the product regularly on a stand‑alone basis for training and installation. The Company reassesses the SSP on a periodic basis or when facts and circumstances change. Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, customer deposits and deferred revenues (contract liabilities) on the consolidated balance sheets. Timing of revenue recognition may differ from the timing of invoicing to customers. The Company record a receivable at the time of invoicing. For most contracts, customers are invoiced when products are shipped or when services are performed. The Company will typically bill in advance for post‑contract support and cloud‑based software licenses, resulting in deferred revenue. When products have been delivered, but the product revenue associated with the arrangement has been deferred the Company includes the costs for the delivered items in deferred costs of goods sold on the consolidated balance sheets until recognition of the related revenue occurs, at which time it is recognized in cost of goods sold. As of December 31, 2019, the Company deferred approximately $2.2 million of revenue and $0.3 million of costs, included in deferred costs of goods sold. The $3.9 million of revenue deferred as of December 31, 2018 was recognized as revenue in 2019. The deferred revenue consists primarily of billed post contract support and cloud‑based software licenses that are recognized ratably over the term of the agreement, and to a lesser extent related to contracts that have outstanding performance obligations, and contracts that have acceptance terms that have not yet been fulfilled. As of December 31, 2018, the Company deferred approximately $3.9 million of revenue and $3 million of costs, included in deferred costs of goods sold for hardware products delivered in 2018, and the remaining obligations for software, and services products to be delivered in 2019. The Company began shipping its 3‑D metal solutions during the fourth quarter of 2018. Due to the lack of history of the performance of the product and associated risk of return, as well as the lack of history of estimating additional costs associated with installation, the Company considered these as variable revenue constraints that required deferral of revenue for certain customers. The Company has recognized revenue only to the extent that it is probable that a significant reversal will not occur. As our contracts are primarily one year or less, substantially all deferred revenue outstanding at the end of the year is recognized during the following year. Our terms of sale generally provide payment terms that are customary in the countries where we transact business. To reduce credit risk in connection with certain sales, we may, depending upon the circumstances, require deposits prior to shipment. During the years ended December 31, 2019 and 2018, the Company pays commissions to its external partners and internal sales team. The Company acts as a principal in the contracts with their partners as the Company controls the product, establishes the price, and bears the risk of nonperformance. The Company records the revenue on a gross basis and commissions are recorded as a sales and marketing expense. The Company recognizes its commission expense as a point‑in‑time expense as contract obligations are primarily completed within a one‑year contract period. See Note 14 for additional information related to disaggregation of revenue. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts In evaluating the collectability of accounts receivable, the Company assesses a number of factors, including specific customers’ abilities to meet their financial obligations, the length of time receivables are past due, and historical collection experience. If circumstances related to specific customers change, or economic conditions deteriorate such that past collection experience is no longer relevant, the Company’s estimate of the recoverability of accounts receivable could be further reduced from the levels provided for in the condensed consolidated financial statements. The Company evaluates specific accounts for which the Company believes a customer may have an inability to meet their financial obligations. In these cases, the Company uses judgment, based on available facts and circumstances, and records a specific reserve for that customer to reduce the receivable to an amount the Company expects to collect. These specific reserves are reevaluated and adjusted as additional information is received that impacts the amount reserved. As of September 30, 2020, and December 31, 2019, the Company has recorded $0.5 million and $0.2 million respectively, in allowance for doubtful accounts. Bad debt expense was $0.3 million and $0 million for the nine months ended September 30, 2020 and September 30, 2019, respectively. As of September 30, 2020, the Company had one customer that represented 10% or more of accounts receivables, which accounted for 10% of total accounts receivable. As of December 31, 2019, no single customer accounted for more than 10% of total accounts receivables. | Allowance for Doubtful Accounts In evaluating the collectability of accounts receivable, the Company assesses a number of factors, including specific customers’ abilities to meet their financial obligations, the length of time receivables are past due, and historical collection experience. If circumstances related to specific customers change, or economic conditions deteriorate such that our past collection experience is no longer relevant, our estimate of the recoverability of our accounts receivable could be further reduced from the levels provided for in the consolidated financial statements. The Company evaluates specific accounts for which it is believed a customer may have an inability to meet their financial obligations. In these cases, judgment is applied, based on available facts and circumstances, and record a specific reserve is recorded for that customer to reduce the receivable to an amount expected to be collected. These specific reserves are reevaluated and adjusted as additional information is received that impacts the amount reserved. As of December 31, 2019, and 2018, the Company has recorded $0.2 million and $0.0 million respectively, in allowance of doubtful accounts. In the years ended December 31, 2019 and 2018 the Company recorded bad debt expense of $0.2 million and $0.0 million, respectively. |
Earnings Per share | Net Loss Per share The Company presents basic and diluted loss per common share amounts. Basic loss per common share is calculated by dividing net loss by the weighted average number of common shares outstanding during the applicable period. The denominator for diluted net loss per share is a computation of the weighted‑average number of ordinary shares and the potential dilutive ordinary shares outstanding during the period. Potential dilutive shares outstanding include the dilutive effect of in‑the‑money options, unvested Restricted Stock Agreements (“RSAs”), and unvested Restricted Stock Units (“RSUs”) using the treasury stock method. In periods in which the Company reports a net loss, diluted net loss per share is generally the same as basic net loss per share since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. See Note 14 for further information. | Earnings Per share The Company presents basic and diluted loss per common share amounts. Basic loss per common share is calculated by dividing net loss available to Common Stockholders by the weighted average number of common shares outstanding during the applicable period. The denominator for diluted earnings per share is a computation of the weighted‑average number of ordinary shares and the potential dilutive ordinary shares outstanding during the period. Potential dilutive shares outstanding include the dilutive effect of in‑the‑money options and unvested Restricted Stock Agreements (“RSAs”) using the treasury stock method. See Note 16 for further information. |
Warranty Reserve | Warranty Reserve Substantially all of the Company’s products, including hardware, and software are covered by a standard assurance warranty of one year. In the event of a failure of a hardware or software product covered by this warranty, the Company may repair or replace the software or hardware product at its option. The Company’s warranty reserve reflects estimated material and labor costs for potential or actual product issues in its installed base for which the Company expects to incur an obligation. The Company periodically assesses the adequacy of the warranty reserve and adjusts the amount as necessary. If the data used to calculate the adequacy of the warranty reserve are not indicative of future requirements, additional or reduced warranty reserves may be required. As of September 30, 2020 and December 31, 2019, the Company has recorded $1.7 million and $1.5 million, respectively, of warranty reserve within accrued expenses and other current liabilities on the condensed consolidated balance sheets. Accrued warranty at each balance sheet date consisted of the following (in thousands): September 30, 2020 December 31, 2019 Warranty reserve, at the beginning of the year $ 1,491 $ 116 Additions to warranty reserve 375 2,352 Claims fulfilled (132) (977) Warranty reserve, at the end of the period $ 1,734 $ 1,491 Warranty reserve is recorded in cost of sales in the condensed consolidated statement of operations. | Warranty Reserve Substantially, all of the Company’s products, hardware, and software are covered by a standard assurance warranty of one year. In the event of a failure of hardware product or software covered by this warranty, the Company may repair or replace the software or hardware product at its option. The Company’s warranty reserve reflects estimated material and labor costs for potential or actual product issues in its installed base for which the Company expects to incur an obligation. The Company periodically assesses the adequacy of the warranty reserve and adjusts the amount as necessary. If the data used to calculate the adequacy of the warranty reserve are not indicative of future requirements, additional or reduced warranty reserves may be required. As of December 31, 2019 and 2018 the Company has recorded $1.5 million and $0.1 million, respectively, of warranty reserve within accrued expenses and other current liabilities on the consolidated balance sheets. Accrued warranty consisted of the following (in thousands): Years Ended December 31, 2019 2018 Warranty reserve, at the beginning of the year $ 116 $ — Additions to warranty reserve 2,352 116 Claims fulfilled (977) — Warranty reserve, at the end of the year $ 1,491 $ 116 Warranty reserve is recorded through cost of sales in the consolidated statements of operations. |
Inventory | Inventory Inventory is stated at the lower of cost or net realizable value, determined on a first‑in, first‑out basis, and consists of the following (in thousands): September 30, 2020 December 31, 2019 Work in process $ 3,062 $ 1,081 Finished goods 7,301 7,324 $ 10,363 $ 8,405 The Company provides for inventory losses based on obsolescence and levels in excess of forecasted demand. In these cases, inventory is reduced to the estimated net realizable value based on historical usage and expected demand. Inventory provisions based on obsolescence and inventory in excess of forecasted demand are recorded in cost of sales in the condensed consolidated statement of operations. | Inventory and Deferred Cost of Goods Sold Inventory is stated at the lower of cost or net realizable value, determined on a first‑in, first‑out basis, and consists of the following (in thousands): Years Ended December 31, 2019 2018 Work in process $ 1,081 $ 2,741 Finished goods 7,324 1,241 $ 8,405 $ 3,982 The Company provides for inventory losses based on obsolescence and levels in excess of forecasted demand. In these cases, inventory is reduced to the estimated net realizable value based on historical usage and expected demand. Inventory provisions based on obsolescence and inventory in excess of forecasted demand are recorded through cost of sales in the consolidated statements of operations. |
Concentrations of Credit Risk and Off-Balance-Sheet Risk | Concentrations of Credit Risk and Off‑Balance‑Sheet Risk The Company has no significant off‑balance‑sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that potentially expose the Company to concentrations of credit risk consist mainly of cash and cash equivalents. The Company maintains its cash and cash equivalents principally with accredited financial institutions of high‑credit standing. | Concentrations of Credit Risk and Off‑Balance‑Sheet Risk The Company has no significant off‑balance‑sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that potentially expose the Company to concentrations of credit risk consist mainly of cash and cash equivalents. The Company maintains its cash and cash equivalents principally with accredited financial institutions of high‑credit standing. |
Customer deposit | Customer Deposits Payments received from customers who have placed reservations or purchase orders in advance of shipment are refundable upon cancellation or non‑delivery by the Company and are included within customer deposits on the consolidated balance sheets. | |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Expenditures for repairs and maintenance are expensed as incurred. When assets are retired or disposed of, the assets and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is included in the determination of net income or loss. Depreciation is recorded using the straight‑line method over the estimated useful lives of the related assets. | Property and Equipment Property and equipment is stated at cost. Expenditures for repairs and maintenance are expensed as incurred. When assets are retired or disposed of, the assets and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is included in the determination of net income or loss. Depreciation is recorded using the straight‑line method over the estimated useful lives of the related assets. |
Business Combinations | Business Combinations The Company allocates the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The estimates used to value the net assets acquired are based in part on historical experience and information obtained from the management of the acquired company. The Company generally values the identifiable intangible assets acquired using a discounted cash flow model. The significant estimates used in valuing certain of the intangible assets, include, but are not limited to future expected cash flows of the asset, discount rates to determine the present value of the future cash flows and expected technology life cycles. Intangible assets are amortized over their estimated useful life; the period over which the Company anticipates generating economic benefit from the asset. Fair value adjustments subsequent to the acquisition date, that are not measurement period adjustments, are recognized in earnings. | Business Combinations The Company allocates the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The estimates used to value the net assets acquired are based in part on historical experience and information obtained from the management of the acquired company. The Company generally values the identifiable intangible assets acquired using a discounted cash flow model. The significant estimates used in valuing certain of the intangible assets, include, but are not limited to future expected cash flows of the asset, discount rates to determine the present value of the future cash flows and expected technology life cycles. Intangible assets are amortized over their estimated useful life; the period over which the Company anticipates generating economic benefit from the asset. Fair value adjustments subsequent to the acquisition date, that are not measurement period adjustments, are recognized in earnings. |
Deferred Transaction Costs and Transaction Costs Payable | Deferred Transaction Costs and Transaction Costs Payable As part of the contemplated reverse recapitalization transaction with Trine Acquisition Corp, (“Trine”) the details of which are discussed in an initial S-4 filed with the SEC by on September 15, 2020 and subsequent amendments, the Company has accrued direct and incremental transaction costs related to the merger which will be deducted from the combined entity’s additional paid-in capital at the closing of the transaction when the proceeds are received. As of September 30, 2020, the Company had recorded $2.3 million of transaction costs payable to advisers, which $1.7 million is included in accounts payable and $0.6 million is included in accrued expenses and other current liabilities in the condensed consolidated balance sheets. | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The Company has recorded $2.3 million of goodwill and $3.3 million of acquired technology as a result of two business combinations completed during the year ended December 31, 2019. As of September 30, 2020, the Company has recorded $0.8 million of accumulated amortization on the acquired technology. Goodwill represents the future economic benefits arising from other assets acquired in a business combination or an acquisition that is not individually identified and separately recorded. The excess of the purchase price over the estimated fair value of net assets of businesses acquired in a business combination is recognized as goodwill. Intangible assets consist of identifiable intangible assets, including developed technology, resulting from the Company’s acquisitions. Goodwill is not amortized but is tested for impairment at least annually (as of the first day of the fourth quarter) or as circumstances indicate the value may no longer be recoverable. To assess if goodwill is impaired, the Company performs a qualitative assessment to determine whether further impairment testing is necessary. The Company then compares the carrying amount of the single reporting unit to the fair value of the reporting unit. An excess carrying value over fair value would indicate that goodwill may be impaired. The Company evaluates definite‑lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If indicators of impairment are present, the Company then compares the estimated undiscounted cash flows that the specific asset is expected to generate to its carrying value. If such assets are impaired, the impairment recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value. To date, there have been no impairments of goodwill or intangible assets. Intangible assets are amortized over their useful lives. | Goodwill and Intangible Assets The Company has recorded $2.3 million of goodwill and $3.3 million of acquired technology, net of $0.3 million of amortization expense as of December 31, 2019, as a result of two business combinations completed during the year ended December 31, 2019. Goodwill represents the future economic benefits arising from other assets acquired in a business combination or an acquisition that is not individually identified and separately recorded. The excess of the purchase price over the estimated fair value of net assets of businesses acquired in a business combination is recognized as goodwill. Intangible assets consist of identifiable intangible assets, including developed technology, resulting from the Company’s acquisitions. Goodwill is not amortized but is tested for impairment at least annually (as of the first day of the fourth quarter) or as circumstances indicate the value may no longer be recoverable. To assess if goodwill is impaired, the Company performs a qualitative assessment to determine whether further impairment testing is necessary. The Company then compares the carrying amount of the single reporting unit to the fair value of the reporting unit. An excess carrying value over fair value would indicate that goodwill may be impaired. The Company evaluates definite‑lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If indicators of impairment are present, the Company then compares the estimated undiscounted cash flows that the specific asset is expected to generate to its carrying value. If such assets are impaired, the impairment recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value. To date, there have been no impairments of goodwill or intangible assets. Intangible assets are amortized over their useful life. |
Impairment of Long-Lived Assets | Impairment of Long‑Lived Assets The Company evaluates whether events or circumstances have occurred that indicate that the estimated remaining useful life of its long‑lived assets may warrant revision or that the carrying value of these assets may be impaired. The Company does not believe that any events have occurred through September 30, 2020, that would indicate its long‑lived assets are impaired. | Impairment of Long‑Lived Assets The Company evaluates whether events or circumstances have occurred that indicate that the estimated remaining useful life of its long‑lived assets may warrant revision or that the carrying value of these assets may be impaired. The Company does not believe that any events have occurred through December 31, 2019, that would indicate its long‑lived assets are impaired, other than the capitalized software as detailed in Note 6. |
Research and Development | Research and Development Research and development costs are expensed as incurred. Research and development expense includes costs, primarily related to salaries and benefits for employees and prototypes and design expenses, incurred to develop intellectual property and is charged to expense as incurred. Costs incurred internally in researching and developing a software product to be sold to customers are charged to expense until technological feasibility has been established for the product. Once technological feasibility is established, software costs are capitalized until the product is available for general release to customers. Judgment is required in determining when technological feasibility of a product is established. The Company has determined that technological feasibility for software products is reached after all high‑risk development issues have been resolved through coding and testing. Generally, this occurs shortly before the products are released, such that there are no material costs to capitalize. | |
Advertising Expense | Advertising Expense Advertising expense is included within sales and marketing expense in the consolidated statements of operations and was $0.1 million, $0.1 million for the years ended December 31, 2019 and 2018, respectively. It primarily includes promotional expenditures and is expensed as incurred; as such, efforts have not met the direct‑response criteria required for capitalization. | |
Stock-Based Compensation | Stock‑Based Compensation The Company accounts for all stock options granted to employees and nonemployees using a fair value method. Stock‑based compensation is measured at the grant‑date fair value of the award and is then recognized as the related services are rendered, typically over the vesting period. The measurement date for employee awards is generally the date of the grant and the measurement date for nonemployee awards is generally the date the performance of services is completed. The Company estimates forfeitures that will occur in their determination of the expense recorded. | Stock‑Based Compensation The Company accounts for all stock options granted to employees and nonemployees using a fair value method. Stock‑based compensation is measured at the grant‑date fair value of the award and is then recognized as the related services are rendered, typically over the vesting period. The measurement date for employee awards is generally the date of the grant and the measurement date for nonemployee awards is generally the date the performance of services is completed. The Company estimates forfeitures that will occur in their determination of the expense recorded. |
Income Taxes | Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the Company’s condensed consolidated financial statements and tax returns. Deferred tax assets and liabilities are determined based upon the differences between the condensed consolidated financial statements carrying amounts and the tax bases of existing assets and liabilities and for loss and credit carryforwards, using enacted tax rates expected to be in effect in the years in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that these assets may not be realized. The Company provides reserves for potential payments of taxes to various tax authorities related to uncertain tax positions. Amounts recognized are based on a determination of whether a tax benefit taken by the Company in its tax filings or positions is “more likely than not” to be sustained on audit. The amount recognized is equal to the largest amount that is more than 50% likely to be sustained. Interest and penalties associated with uncertain tax positions are recorded as a component of income tax expense. As of September 30, 2020 and December 31, 2019, the Company has not identified any uncertain tax positions for which reserves would be required. | Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the Company’s consolidated financial statements and tax returns. Deferred tax assets and liabilities are determined based upon the differences between the consolidated financial statements carrying amounts and the tax bases of existing assets and liabilities and for loss and credit carryforwards, using enacted tax rates expected to be in effect in the years in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that these assets may not be realized. The Company provides reserves for potential payments of taxes to various tax authorities related to uncertain tax positions. Amounts recognized are based on a determination of whether a tax benefit taken by the Company in its tax filings or positions is “more likely than not” to be sustained on audit. The amount recognized is equal to the largest amount that is more than 50% likely to be sustained. Interest and penalties associated with uncertain tax positions are recorded as a component of income tax expense. As of December 31, 2019 and 2018, the Company has not identified any uncertain tax positions for which reserves would be required. |
Comprehensive Loss | Comprehensive Loss The Company’s comprehensive loss consists of its net loss and unrealized gain and loss from investments. | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In December 2019, the FASB issued ASU 2019‑12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by eliminating some exceptions to the general approach in Accounting Standards Codification 740, Income Taxes. It also clarifies certain aspects of the existing guidance to promote more consistent application. This standard is effective for calendar‑year public business entities in 2021 and interim periods within that year, and early adoption is permitted. The Company is currently in the process of evaluating the impact the new standard will have on the consolidated financial statements. In June 2018, the FASB issued ASU No. 2018‑07, Compensation‑Stock Compensation (Topic 718): Improvements to Nonemployee Share‑Based Payment Accounting , which substantially aligns the measurement and classification guidance for share‑based payments to nonemployees with the guidance for share‑based payments to employees. The ASU also clarifies that any share‑based payment issued to a customer should be evaluated by the new revenue recognition standard. The new ASU requires a modified retrospective transition approach. The ASU is effective for the Company for the year ending December 31, 2020. Due to the Company’s Emerging Growth Company (EGC) status, the Company is permitted to defer adoption of ASU 2018‑07 in interim periods and adopt for its annual financial statements. Refer to Note 11 for discussion on stock‑compensation expense. In January 2017, the FASB issued ASU No. 2017‑04, “ Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ” (“ASU 2017‑ 04”), which eliminates the performance of Step 2 from the goodwill impairment test. In performing its annual or interim impairment testing, an entity will instead compare the fair value of the reporting unit with its carrying amount and recognize any impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Additionally, an entity should consider income tax effects from any tax‑deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss. As a smaller reporting company pursuant to Rule 12b‑2 of the Securities Exchange Act of 1934, as amended, these changes become effective for the Company on January 1, 2023. The Company is currently evaluating the potential impact of these changes on its consolidated financial statements. In June 2016, the FASB issued ASU 2016‑13, “ Financial Instruments—Credit Losses .” This ASU added a new impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses. The CECL model applies to most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and other loan commitments. The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected credit losses on assets that have a low risk of loss. As a smaller reporting company pursuant to Rule 12b‑2 of the Securities Exchange Act of 1934, as amended, these changes become effective for the Company on January 1, 2023. The Company is currently evaluating the potential impact of these changes on its consolidated financial statements | Recently Issued Accounting Standards Recently Adopted Accounting Guidance In November 2016, the Financial Accounting Standards Board (FASB) Issued Accounting Standards Update (ASU) No. 2016‑18, Statement of Cash Flows (Topic 230): Restricted Cash , that requires the changes in restricted cash and restricted cash equivalents that result from transfers between cash, cash equivalents, and restricted cash and restricted cash equivalents should not be presented as cash flow activities in the consolidated statements of cash flows. The Company has adopted the ASU as of January 1, 2019 on a retrospective basis. In January 2016, the FASB Issued ASU No. 2016‑01, Recognition and Measurement of Financial Assets and Financial Liabilities , which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Although the ASU retains many current requirements, it significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments. The Company has adopted the ASU as of January 1, 2019, with no effect on the Company’s net loss or other comprehensive loss. Recent Accounting Guidance Not Yet Adopted In December 2019, the FASB issued ASU 2019‑12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by eliminating some exceptions to the general approach in Accounting Standards Codification 740, Income Taxes. It also clarifies certain aspects of the existing guidance to promote more consistent application. This standard is effective for calendar‑year public business entities in 2021 and interim periods within that year, and early adoption is permitted. The Company is currently in the process of evaluating the impact the new standard will have on our consolidated financial statements. In June 2018, the FASB issued ASU No. 2018‑07, Compensation‑Stock Compensation (Topic 718): Improvements to Nonemployee Share‑Based Payment Accounting , which substantially aligns the measurement and classification guidance for share‑based payments to nonemployees with the guidance for share‑based payments to employees. The ASU also clarifies that any share‑based payment issued to a customer should be evaluated by the new revenue recognition standard. The new ASU requires a modified retrospective transition approach. The ASU is effective for the Company beginning January 1, 2020. The Company intends to adopt the updated standard when it reports its annual results. In January 2017, the FASB issued ASU No. 2017‑04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017‑04”), which eliminates the performance of Step 2 from the goodwill impairment test. In performing its annual or interim impairment testing, an entity will instead compare the fair value of the reporting unit with its carrying amount and recognize any impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. Additionally, an entity should consider income tax effects from any tax‑deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss. As a smaller reporting company pursuant to Rule 12b‑2 of the Securities Exchange Act of 1934, as amended, these changes become effective for the Company on January 1, 2023. The Company is currently evaluating the potential impact of these changes on its consolidated financial statements. In June 2016, the FASB issued ASU 2016‑13, Financial Instruments—Credit Losses. This ASU added a new impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses. The CECL model applies to most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and other loan commitments. The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected credit losses on assets that have a low risk of loss. As a smaller reporting company pursuant to Rule 12b‑2 of the Securities Exchange Act of 1934, as amended, these changes become effective for the Company on January 1, 2023. The Company is currently evaluating the potential impact of these changes on its consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Schedule of Inventory | Inventory is stated at the lower of cost or net realizable value, determined on a first‑in, first‑out basis, and consists of the following (in thousands): September 30, 2020 December 31, 2019 Work in process $ 3,062 $ 1,081 Finished goods 7,301 7,324 $ 10,363 $ 8,405 | Inventory is stated at the lower of cost or net realizable value, determined on a first‑in, first‑out basis, and consists of the following (in thousands): Years Ended December 31, 2019 2018 Work in process $ 1,081 $ 2,741 Finished goods 7,324 1,241 $ 8,405 $ 3,982 |
Schedule of Accrued warranty | Accrued warranty at each balance sheet date consisted of the following (in thousands): September 30, 2020 December 31, 2019 Warranty reserve, at the beginning of the year $ 1,491 $ 116 Additions to warranty reserve 375 2,352 Claims fulfilled (132) (977) Warranty reserve, at the end of the period $ 1,734 $ 1,491 | Accrued warranty consisted of the following (in thousands): Years Ended December 31, 2019 2018 Warranty reserve, at the beginning of the year $ 116 $ — Additions to warranty reserve 2,352 116 Claims fulfilled (977) — Warranty reserve, at the end of the year $ 1,491 $ 116 |
PROPERTY AND EQUIPMENT (Table_2
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
PROPERTY AND EQUIPMENT | ||
Schedule of estimated useful lives of the assets | estimated useful lives of the assets as follows: Asset Classification Useful Life Equipment 3‑5 years Furniture and fixtures 3 years Computer equipment 3 years Tooling 3 years Software 3 years Leasehold improvements Shorter of asset’s useful life or remaining life of the lease | Asset Classification Useful Life Equipment 3‑5 years Furniture and fixtures 3 years Computer equipment 3 Years Tooling 3 Years Software 3 Years Leasehold improvements Shorter of asset’s useful life or remaining life of the lease |
Schedule of property and equipment-net | Property and equipment—net consisted of the following at September 30, 2020 and December 31, 2019 (in thousands): September 30, 2020 December 31, 2019 Equipment $ 13,502 $ 13,358 Furniture and fixtures 895 895 Computer equipment 1,089 1,089 Tooling 1,823 1,823 Software 1,235 954 Leasehold improvements 13,870 13,880 Construction in process 845 170 Property and equipment—gross 33,259 32,169 Less: accumulated depreciation (19,658) (13,782) Property and equipment—net $ 13,601 $ 18,387 | Years Ended December 31, 2019 2018 Equipment $ 13,358 $ 8,306 Furniture and fixtures 895 875 Computer equipment 1,089 1,045 Tooling 1,823 1,303 Software 954 302 Leasehold improvements 13,880 13,357 Construction in process 170 — Property and equipment—gross 32,169 25,188 Less: accumulated depreciation (13,782) (6,191) Property and equipment—net $ 18,387 $ 18,997 |
ACQUIRED TECHNOLOGY (Tables)_2
ACQUIRED TECHNOLOGY (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
ACQUIRED TECHNOLOGY. | ||
Schedule of acquired technology | Acquired technology consisted of the following (in thousands): Accumulated Balance Gross Value Estimated Life Amortization September 30, 2020 Total acquired technology $ 3,270 5 years $ 817 $ 2,453 | Accumulated Balance Gross Value Estimated Life Amortization December 31, 2019 Total acquired technology $ 3,270 5 years $ 276 $ 2,994 |
CAPITALIZED SOFTWARE (Tables)_2
CAPITALIZED SOFTWARE (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
CAPITALIZED SOFTWARE. | ||
Schedule of capitalized software | Capitalized software, net at the each balance sheet date consists of the following (in thousands): September 30, 2020 December 31, 2019 Capitalized software development costs $ 1,127 $ 1,127 Accumulated amortization (770) (237) Impairment — (444) Total capitalized software costs $ 357 $ 446 | Years Ended December 31, 2019 2018 Capitalized software development costs $ 1,127 $ 806 Accumulated amortization (237) (18) Impairment (444) — Total capitalized software costs $ 446 $ 788 |
FAIR VALUE MEASUREMENTS (Tabl_2
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
FAIR VALUE MEASUREMENTS | ||
Schedule of financial assets measured at fair value on a recurring basis | The following fair value hierarchy table presents information about the Company’s financial assets measured at fair value on a recurring basis and indicates the fair value hierarchy of the inputs the Company utilized to determine such fair value at September 30, 2020 and December 31, 2019 (in thousands): September 30, 2020 Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Items Inputs Inputs (Level 1) (Level 2) (Level 3) Total Assets: Money market funds $ 33,858 $ — $ — $ 33,858 Asset‑backed securities — 3,105 — 3,105 Corporate bonds — 30,084 — 30,084 Government bonds 19,991 — — 19,991 Total assets $ 53,849 $ 33,189 $ — $ 87,038 December 31, 2019 Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Items Inputs Inputs (Level 1) (Level 2) (Level 3) Total Assets: Money market funds $ 40,454 $ — $ — $ 40,454 Asset‑backed securities — 16,806 — 16,806 Corporate bonds — 67,948 — 67,948 Repurchase agreements — 25,001 — 25,001 Total assets $ 40,454 $ 109,755 $ — $ 150,209 | The following fair value hierarchy table presents information about the Company’s financial assets measured at fair value on a recurring basis and indicates the fair value hierarchy of the inputs the Company utilized to determine such fair value (in thousands): December 31, 2019 Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Items Inputs Inputs (Level 1) (Level 2) (Level 3) Total Assets: Money market funds $ 40,454 $ — $ — $ 40,454 Asset‑backed securities — 16,806 — 16,806 Corporate bonds — 67,948 — 67,948 Other investments — 25,001 — 25,001 Total assets $ 40,454 $ 109,755 $ — $ 150,209 December 31, 2018 Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Items Inputs Inputs (Level 1) (Level 2) (Level 3) Total Assets: Money market funds $ 24,380 $ — $ — $ 24,380 Asset‑backed securities — 13,285 — 13,285 Corporate bonds — 50,944 — 50,944 Other investments — — 450 450 Total assets $ 24,380 $ 64,229 $ 450 $ 89,059 |
SHORT TERM INVESTMENTS (Table_2
SHORT TERM INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SHORT TERM INVESTMENTS | |
Schedule of shortterm investments | The following table summarizes the Company’s short‑term investments (in thousands): December 31, 2019 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Asset‑backed securities $ 16,786 $ 20 $ — $ 16,806 Corporate bonds 67,893 55 — 67,948 $ 84,679 $ 75 $ — $ 84,754 December 31, 2018 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Asset‑backed securities $ 13,350 $ — $ (65) $ 13,285 Corporate bonds 50,975 — (31) 50,944 $ 64,325 $ — $ (96) $ 64,229 |
ACCRUED EXPENSES AND OTHER CU_5
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||
Schedule of Accrued Expenses and Other Current Liabilities | The following table summarizes the Company’s components of accrued expenses and other current liabilities (in thousands): September 30, 2020 December 31, 2019 Warranty reserve $ 1,734 $ 1,491 Compensation and benefits related 657 897 Professional services 2,043 780 Inventory purchases 86 620 Accrued sales and use tax 470 578 Transaction costs payable 577 — Other 488 687 $ 6,055 $ 5,053 | The following table summarizes the Company’s components of accrued expenses and other current liabilities (in thousands): Years Ended December 31, 2019 2018 Warranty reserve $ $ 116 Compensation and benefits related 278 Professional services 517 Inventory purchases 381 Accrued sales and use tax 4 Other 510 $ 5,053 $ 1,806 |
COMMITMENTS AND CONTINGENCIES_6
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
COMMITMENTS AND CONTINGENCIES. | ||
Schedule of other lease related balances | Information about other lease‑related balances is as follows (in thousands): September 30, 2020 2019 Lease cost Operating lease cost $ 561 $ 479 Short‑term lease cost — 24 Variable lease cost 30 30 Total lease cost $ 591 $ 533 Other Information Operating cash flows from operating leases $ 805 $ 701 Weighted‑average remaining lease term—operating leases (years) 3.5 4.5 Weighted‑average discount rate—operating leases 7.6 % 7.6 % | Information about other lease‑related balances is as follows (in thousands): Years Ended December 31, 2019 2018 Lease cost Operating lease cost $ 655 $ 627 Short‑term lease cost 32 62 Variable lease cost 40 38 Total lease cost $ 727 $ 727 Other Information Operating cash flows from operating leases $ 951 $ 868 Weighted‑average remaining lease term—operating leases (years) 4.2 5.3 Weighted‑average discount rate—operating leases 7.6 % 7.6 % |
Schedule of future minimum lease payments | Future minimum lease payments under noncancelable operating leases at September 30, 2020, are as follows (in thousands): 2020 (remaining 3 months) $ 268 2021 1,071 2022 1,070 2023 1,028 2024 258 Total lease payments 3,695 Less amount representing interest (462) Total lease liability 3,233 Less current portion of lease liability (858) Lease liability, net of current portion $ 2,375 | Future minimum lease payments under noncancelable operating leases at December 31, 2019, are as follows (in thousands): 2020 $ 2021 1,071 2022 1,069 2023 1,028 2024 258 Total lease payments 4,499 Less amount representing interest (667) Total lease liability 3,832 Less current portion of lease liability (806) Lease liability, net of current portion $ 3,026 |
INCOME TAXES (Tables)_2
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAXES | |
Schedule of components Income (Loss) before provision for income taxes | Years Ended December 31, 2019 2018 United States $ (103,596) $ (121,339) Foreign — — Loss before income taxes $ (103,596) $ (121,339) |
Schedule of Reconciliation of the expected income tax (benefit) computed using the federal statutory income tax rate | Years Ended December 31, 2019 2018 Effective income tax rate: Expected income tax benefit at the federal statutory rate 21 % 21 % State taxes 6 % 6 % Change in valuation allowance (30) % (26) % Research and development credit carryover 2 % 3 % Legal proceedings and settlement expense — % % Permanent differences 1 % — % Effective income tax rate — % — % |
Schedule of deferred net tax assets | As of December 31, 2019 and 2018, deferred tax assets consist of the following (in thousands): Years Ended December 31, 2019 2018 Deferred tax assets: Federal and state net operating carryforwards $ 56,333 $ 23,310 Research and development and other credits 11,072 7,567 Capitalized start‑up costs 17,032 24,048 Compensation‑related items 1,286 568 Deferred lease liability 1,111 1,212 Other deferred tax assets 2,068 379 Total gross deferred tax asset 88,902 57,084 Valuation allowance (87,370) (56,405) Net deferred tax asset 1,532 679 Deferred tax liabilities: Right‑of‑use asset (664) (679) Acquired technology (868) — Total deferred tax liabilities (1,532) (679) Net deferred tax asset $ — $ — |
Schedule of changes in the valuation allowance for deferred tax assets | Years Ended December 31, 2019 2018 Valuation allowance at beginning of the year $ 56,405 $ 21,700 Increases recorded to income tax provision 30,965 34,705 Decreases recorded as a benefit to income tax provision — — Increases recorded as an adjustment to equity — — Valuation allowance at end of year $ 87,370 $ 56,405 |
CONVERTIBLE PREFERRED STOCK _15
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Summarizes details of Preferred Stock authorized, issued and outstanding | The following table summarizes details of Preferred Stock authorized, issued and outstanding as of September 30, 2020 and December 31, 2019 ($ in thousands): Convertible Preferred Stock Classes September 30, 2020 December 31, 2019 Series A Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding, 26,189,545 and 26,189,545 shares, (liquidation preference of $255,348 and $106,853 at September 30, 2020 and December 31, 2019, respectively) $ 13,878 $ 13,878 Series B Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding, 23,675,035 and 23,675,035 shares (liquidation preference of $230,832 and $96,594 at September 30, 2020 and December 31, 2019, respectively) 37,806 37,806 Series C Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding, 13,152,896 and 13,152,896 shares (liquidation preference of $128,241 and $53,664 at September 30, 2020 and December 31, 2019, respectively) 44,852 44,852 Series D Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding, 21,075,193 and 21,075,193 shares (liquidation preference of $205,483 and $180,522 at September 30, 2020 and December 31, 2019, respectively) 180,353 180,353 Series E Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding 13,450,703 and 13,450,703 shares (liquidation preference of $134,791 and $134,791 at September 30, 2020 and December 31, 2019, respectively) 134,667 134,667 Series E‑1 Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding 2,494,737 and 2,494,737 shares (liquidation preference of $25,000 and $25,000 at September 30, 2020 and December 31, 2019, respectively) 24,977 24,977 Total $ 436,533 $ 436,533 | The following table summarizes details of Convertible Preferred Stock authorized, issued and outstanding as of December 31, 2019 and 2018 ($ in thousands): Years Ended December 31, Convertible Preferred Stock Classes 2019 2018 Series A Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding, 26,189,545 and 26,189,545 shares, (liquidation preference of $106,853 and $88,783 at December 31, 2019 and 2018, respectively) $ $ 13,878 Series B Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding, 23,675,035 and 23,675,035 shares (liquidation preference of $96,594 and $80,258 at December 31, 2019 and 2018, respectively) 37,806 Series C Convertible Preferred Stock, $0.0001 par value—authorized, issued, and outstanding, 13,152,896 and 13,152,896 shares (liquidation preference of $53,664 and $45,000 at December 31, 2019 and 2018, respectively) 44,852 Series D Convertible Preferred Stock, $0.0001 par value—authorized, issued and outstanding, 21,075,193 and 21,075,193 shares (liquidation preference of $180,522 and $180,522 at December 31, 2019 and 2018, respectively) 180,353 Series E Convertible Preferred Stock, $0.0001 par value—authorized, 13,450,703 shares; issued and outstanding, 13,450,703 and 0 shares (liquidation preference of $134,791 and $0 at December 31, 2019 and 2018, respectively) — Series E‑1 Convertible Preferred Stock, $0.0001 par value—authorized, 2,494,737 shares; issued and outstanding, 2,494,737 and 0 shares (liquidation preference of $25,000 and $0 at December 31, 2019 and 2018, respectively) — Total $ $ 276,889 The activity for stock subject to vesting for the years ended December 31, 2019 and 2018, are as follows (shares in thousands): Shared subject Weighted Average to Vesting Purchase Price Balance of unvested shares as of January 1, 2019 9,731 0.0001 Issuance of additional shares 0.0001 Vested (5,653) 0.0001 Balance of unvested shares as of December 31, 2019 4,575 0.0001 |
Schedule of stock-based compensation expense | Total stock‑based compensation expense related to all of the Company’s stock‑based awards granted is reported in the consolidated statements of operations as follows (in thousands): September 30, 2020 2019 Research and development $ 2,176 $ 1,501 Sales and marketing expense 715 1,020 General and administrative expense 1,070 668 Cost of sales 267 241 Total stock-based compensation expenses $ 4,228 $ 3,430 | Total stock‑based compensation expense related to all of the Company’s stock‑based awards granted is reported in the consolidated statements of operations as follows (in thousands): Years Ended December 31, 2019 2018 Research and development $ $ 1,696 Sales and marketing expense 567 General and administrative expense 658 Cost of sales 44 Total stock based compensation expenses $ $ 2,965 |
Schedule of option activity | Weighted-Average Weighted-Average Remaining Number of Exercise Price Contractual Term Shares per Share (in years) Outstanding at January 1, 2020 14,792 $ 2.45 7.84 Granted 6,935 1.85 Exercised (409) 0.65 Forfeited/expired (5,287) 3.57 Outstanding at September 30, 2020 16,031 1.87 7.85 Options vested at September 30, 2020 8,167 1.83 6.38 Options vested or expected to vest at September 30, 2020 15,384 $ 1.87 7.78 | There were 3,894,467 shares available for award under the Plan at December 31, 2019. The option activity of the Plan and Make Plan for the year ended December 31, 2019, is as follows (shares in thousands): Weighted-Average Weighted-Average Remaining Number of Exercise Price Contractual Term Shares per Share (in years) Outstanding at January 1, 2019 12,007 $ 1.65 8.21 Granted 4,790 3.98 Exercised (997) 0.71 Forfeited/expired (1,008) 1.88 — Outstanding at December 31, 2019 14,792 2.45 7.84 Options vested at December 31, 2019 7,195 1.52 6.92 Options vested or expected to vest at December 31, 2019 14,555 2.44 7.82 |
Common Stock Reserved for Future Issuance | As of September 30, 2020 and 2019, the Company has reserved the following shares of Common Stock for future issuance (in thousands): September 30, 2020 September 30, 2019 Common Stock options outstanding 16,031 14,490 Restricted Stock units outstanding 459 — Shares available for issuance under the Plan 1,960 4,463 Convertible Preferred Stock outstanding 100,038 100,038 Common Stock warrants outstanding 919 464 Total shares of authorized Common Stock reserved for future issuance 119,407 119,455 | Common Stock Reserved for Future Issuance —As of December 31, 2019 and 2018, the Company has reserved the following shares of Common Stock for future issuance (in thousands): Years Ended December 31, 2019 2018 Common Stock options outstanding 12,007 Shares available for issuance under the Plan 565 Convertible Preferred Stock outstanding 84,093 Common Stock warrants outstanding 2,000 Total shares of authorized Common Stock reserved for future issuance 98,665 |
Restricted stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
RSU activity under the Plan | The activity for stock subject to vesting for the nine‑month period ended September 30, 2020 is as follows (shares in thousands): Shares subject Weighted Average to Vesting Purchase Price Balance of unvested shares as of January 1, 2020 4,575 $0.001 Issuance of additional shares — — Vested (4,301) 0.001 Balance of unvested shares as of September 30, 2020 274 $0.001 | |
RSU | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
RSU activity under the Plan | Shares subject Weighted Average to Vesting Grant Date Fair Value Balance of unvested shares as of January 1, 2020 — — Issuance of additional shares $ 9.75 Vested — — Balance of unvested shares as of September 30, 2020 $ 9.75 | |
Consultant | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Schedule of assumptions using Black-Scholes option-pricing model | September 30, 2020 September 30, 2019 Risk‑free interest rate 0.6 % – 0.8 % 1.5 % – 2.5 % Expected volatility 54.3 % – 54.8 % 54.4 % – 54.9 % Expected life (in years) 9.4 – 10.0 9.4 – 10.0 Expected dividend yield — — Fair value of Common Stock $ 1.71 – $ 9.75 $ | Years Ended December 31, 2019 2018 Risk‑free interest rate 1.4%–3.1 % 2.1%–3.1 % Expected volatility 52.4%–61.5 % 53.7%–61.5 % Expected life (in years) 6.2–10.0 7.2–10.0 Expected dividend yield — — Fair value of Common Stock $ 4.08 $ 3.39 |
Employee | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Schedule of assumptions using Black-Scholes option-pricing model | September 30, 2020 September 30, 2019 Risk‑free interest rate 0.3 % – 1.7 % 1.9 % – 2.6 % Expected volatility 52.7 % – 54.2 % 53.3 % – 53.6 % Expected life (in years) 5.9 – 6.3 5.6 – 6.1 Expected dividend yield — — Fair value of Common Stock $ 1.71 – $ 9.75 $ | Years Ended December 31, 2019 2018 Risk‑free interest rate 1.7%–2.6 % 2.7%–3.0 % Expected volatility 52.7%–53.6 % 52.9%–53.8 % Expected life (in years) 5.6–6.1 5.3–6.1 Expected dividend yield — — Fair value of Common Stock $ 4.08 $ 3.39 |
SEGMENT INFORMATION (Tables)_2
SEGMENT INFORMATION (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
SEGMENT INFORMATION | ||
Schedule of disaggregation of revenue by geographic areas | Americas EMEA APAC Total Product $ 2,372 $ 2,411 $ 1,330 $ 6,113 Services 962 888 138 1,988 Total $ 3,334 $ 3,299 $ 1,468 $ 8,101 Americas EMEA APAC Total Product $ 11,561 $ 5,909 $ 1,185 $ 18,655 Services 1,851 341 29 2,221 Total $ 13,412 $ 6,250 $ 1,214 $ 20,876 | The Company currently ships its product to markets in the Americas, Europe Middle East and Africa (“EMEA”), and Asia Pacific (“APAC”). Disaggregated revenue data for those markets is as follows (in thousands): Revenue during the year ended December 31, 2019 Americas EMEA APAC Product $ 12,746 $ 8,430 $ 1,582 Services 3,055 563 63 Total $ 15,801 $ 8,993 $ 1,645 Revenue during the year ended December 31, 2018 Americas EMEA APAC Product $ 751 $ — $ — Services 283 — — Total $ 1,034 $ — $ — |
Schedule of disaggregation of revenue | During the nine months ended September 30, 2020 and 2019, the Company recognized the following revenue from service contracts and cloud‑based software licenses over time, and hardware and consumable product shipments and subscription software at a point in time (in thousands): Nine Months Ended September 30, 2020 2019 Revenue recognized at a point in time $ 6,113 $ 18,655 Revenue recognized over time 1,988 2,221 Total $ 8,101 $ 20,876 | the Company recognized the following revenue from service contracts and cloud‑based software licenses over time, and hardware and consumable product shipments and subscription software at a point in time (in thousands): Years Ended December 31, 2019 2018 Revenue recognized at a point in time $ 22,758 $ 751 Revenue recognized over time 3,681 283 Total $ 26,439 $ 1,034 |
NET LOSS PER SHARE (Tables)_2
NET LOSS PER SHARE (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
NET LOSS PER SHARE | ||
Schedule of Net Loss Per Share, Basic and Diluted | September 30, (in thousands, except per share amounts) 2020 2019 Numerator for basic and diluted net loss per share: Net loss attributable to Desktop Metal, Inc Common Stockholders $ (65,027) $ (75,769) Denominator for basic and diluted net loss per share: Weighted average shares 29,457 Net loss per share—Basic and Diluted $ (2.21) $ (3.38) | Years Ended December 31, (in thousands, except per share amounts) 2019 2018 Numerator for basic and diluted net loss per share: Net loss attributable to Desktop Metal, Inc Common Stockholders $ (103,596) $ (121,339) Denominator for basic and diluted net loss per share: Weighted average shares 23,379 16,495 Net loss per share—Basic and Diluted $ (4.43) $ (7.36) |
ORGANIZATION, NATURE OF BUSIN_4
ORGANIZATION, NATURE OF BUSINESS, AND RISK AND UNCERTAINTIES (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
ORGANIZATION, NATURE OF BUSINESS, AND RISK AND UNCERTAINTIES | ||
Number of months cash and Investments sufficient to fund operating and capital expenditure | 12 months | 12 months |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020USD ($)item | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | |
Significant Accounting Policies [Line Items] | ||||
Money market funds | $ 33,900 | $ 40,500 | $ 24,000 | |
Other highly liquid cash equivalents | 0 | 25,000 | ||
Deferred revenue from sales to investors | 1,100 | 2,200 | 3,900 | |
Deferred revenue recognized | 3,900 | |||
Deferred cost of sales | 0 | 300 | 3,000 | |
Allowance for doubtful accounts | 500 | 200 | 0 | |
Bad debt expense | $ 300 | $ 0 | $ 200 | 0 |
Number of customers represents more than 10% of total accounts receivable | item | 1 | 0 | ||
Transaction costs payable | $ 2,300 | |||
Warranty reserve | 1,734 | $ 1,491 | 116 | |
Sales and marketing expense | ||||
Significant Accounting Policies [Line Items] | ||||
Advertising Expense | 100 | 100 | ||
Accounts Payable | ||||
Significant Accounting Policies [Line Items] | ||||
Transaction costs payable | 1,700 | |||
Accrued expenses and other current liabilities | ||||
Significant Accounting Policies [Line Items] | ||||
Transaction costs payable | $ 600 | |||
Warranty reserve | 1,500 | $ 100 | ||
Restricted Cash | ||||
Significant Accounting Policies [Line Items] | ||||
Security deposit | $ 600 |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Warranty Reserve (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Standard assurance warranty period | 1 year | 1 year |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Warranty reserve, at the beginning of the year | $ 1,491 | $ 116 |
Additions to warranty reserve | 375 | 2,352 |
Claims fulfilled | (132) | (977) |
Warranty reserve, at the end of the period | $ 1,734 | $ 1,491 |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Inventory | |||
Work in process | $ 3,062 | $ 1,081 | $ 2,741 |
Finished goods | 7,301 | 7,324 | 1,241 |
Inventory | $ 10,363 | $ 8,405 | $ 3,982 |
SUMMARY OF SIGNIFICANT ACCOU_14
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill and Intangible Assets (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($)item | |
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill | $ 2,252,000 | $ 2,252,000 | |
Acquired Technology | $ 3,300,000 | ||
Number of Business Combinations | 2 | ||
Accumulated amortization | $ 300,000 | ||
Impairment of goodwill or intangible assets | $ 0 | 0 | |
Acquired technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Acquired Technology | 3,270,000 | 3,300,000 | |
Accumulated amortization | $ 817,000 | $ 800,000 | $ 276,000 |
PROPERTY AND EQUIPMENT - Esti_2
PROPERTY AND EQUIPMENT - Estimated Useful Lives (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 3 years | 3 years |
Equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 5 years | 5 years |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 3 years | 3 years |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 3 years | 3 years |
Tooling | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 3 years | 3 years |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 3 years | 3 years |
PROPERTY AND EQUIPMENT - Prop_2
PROPERTY AND EQUIPMENT - Property and Equipment - Net (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||||
Property and equipment-gross | $ 33,259 | $ 32,169 | $ 25,188 | |
Less: accumulated depreciation | (19,658) | (13,782) | (6,191) | |
Property, Plant and Equipment, Net, Total | 13,601 | 18,387 | 18,997 | |
Depreciation and amortization expense | 6,525 | $ 5,754 | 8,087 | 4,204 |
Equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment-gross | 13,502 | 13,358 | ||
Property, Plant and Equipment, Net, Total | 13,358 | 8,306 | ||
Furniture and fixtures | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment-gross | 895 | 895 | ||
Property, Plant and Equipment, Net, Total | 895 | 875 | ||
Computer equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment-gross | 1,089 | 1,089 | ||
Property, Plant and Equipment, Net, Total | 1,089 | 1,045 | ||
Tooling | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment-gross | 1,823 | 1,823 | ||
Property, Plant and Equipment, Net, Total | 1,823 | 1,303 | ||
Software | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment-gross | 1,235 | 954 | ||
Property, Plant and Equipment, Net, Total | 954 | 302 | ||
Leasehold improvements | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment-gross | 13,870 | 13,880 | ||
Property, Plant and Equipment, Net, Total | 13,880 | 13,357 | ||
Construction in process | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment-gross | 845 | 170 | ||
Property, Plant and Equipment, Net, Total | 170 | |||
PPE not including acquired technology or capitalized software | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation and amortization expense | $ 5,900 | $ 5,300 | $ 7,600 | $ 4,100 |
ACQUISITIONS (Details)_2
ACQUISITIONS (Details) - USD ($) $ in Thousands | 1 Months Ended | |||
Jul. 31, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Dec. 31, 2019 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 2,252 | $ 2,252 | ||
Make Composites, Inc. | ||||
Business Acquisition [Line Items] | ||||
Purchase consideration | $ 5,400 | |||
issuance of shares of the Common Stock on aquisition | 873,203 | |||
Goodwill | $ 1,900 | |||
Acquired technology | 3,200 | |||
Acquired tangible assets | 300 | |||
Amount of gain on its original non controlling investment | 1,400 | |||
Make Composites, Inc. | General and administrative expenses | ||||
Business Acquisition [Line Items] | ||||
Transaction costs | $ 100 | |||
addLEAP AB | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 300 | |||
Acquired technology | 100 | |||
Payment to acquire business | $ 400 | |||
addLEAP AB | Restricted stock | ||||
Business Acquisition [Line Items] | ||||
issuance of shares of the Common Stock on aquisition | 74,843 | |||
addLEAP AB | General and administrative expenses | ||||
Business Acquisition [Line Items] | ||||
Transaction costs | $ 100 |
ACQUIRED TECHNOLOGY (Details)_2
ACQUIRED TECHNOLOGY (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2020 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Estimated Life | 5 years | |||
Accumulated Amortization | $ 300 | |||
Balance December 31, 2020 | $ 2,453 | 2,994 | ||
Acquired technology | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Gross Value | 3,270 | |||
Estimated Life | 5 years | |||
Accumulated Amortization | $ 817 | 276 | $ 800 | |
Balance December 31, 2020 | 2,453 | 2,994 | ||
Amortization expense | 500 | $ 100 | 300 | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||||
Remaining three months of 2020 | 200 | |||
2021 | 600 | 700 | ||
2022 | 600 | 700 | ||
2023 | 600 | 700 | ||
2024 | $ 400 | 700 | ||
2025 | $ 400 | |||
Weighted-average remaining amortization period | 3 years 9 months 18 days | 4 years 6 months |
CAPITALIZED SOFTWARE (Details_2
CAPITALIZED SOFTWARE (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Capitalized software development costs | $ 1,127 | $ 806 | ||
Accumulated amortization | (237) | (18) | ||
Impairment | (444) | |||
Total capitalized software costs | $ 357 | $ 446 | 788 | |
Capitalized Software | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Capitalized cost estimated useful life | 3 years | 3 years | ||
Amortization expense | $ 100 | $ 100 | $ 200 | $ 18,000,000 |
Capitalized software development costs | 1,127 | 1,127 | ||
Accumulated amortization | (770) | (237) | ||
Impairment | (444) | |||
Total capitalized software costs | 357 | 446 | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||||
Remaining three months of 2020 | 100 | |||
2021 | 100 | 200 | ||
2022 | $ 100 | 100 | ||
2023 | $ 100 |
FAIR VALUE MEASUREMENTS - Ass_2
FAIR VALUE MEASUREMENTS - Assets measured on recurring basis (Details) - Recurring - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | |||
Total assets at fair value | $ 87,038 | $ 150,209 | $ 89,059 |
Money market funds | |||
Assets | |||
Total assets at fair value | 33,858 | 40,454 | 24,380 |
Assetbacked securities | |||
Assets | |||
Total assets at fair value | 3,105 | 16,806 | 13,285 |
Corporate bonds | |||
Assets | |||
Total assets at fair value | 30,084 | 67,948 | 50,944 |
Repurchase agreements | |||
Assets | |||
Total assets at fair value | 25,001 | 450 | |
Government bonds | |||
Assets | |||
Total assets at fair value | 19,991 | 25,001 | |
Level 1 | |||
Assets | |||
Total assets at fair value | 53,849 | 40,454 | 24,380 |
Level 1 | Money market funds | |||
Assets | |||
Total assets at fair value | 33,858 | 40,454 | 24,380 |
Level 1 | Government bonds | |||
Assets | |||
Total assets at fair value | 19,991 | ||
Level 2 | |||
Assets | |||
Total assets at fair value | 33,189 | 109,755 | 64,229 |
Level 2 | Assetbacked securities | |||
Assets | |||
Total assets at fair value | 3,105 | 16,806 | 13,285 |
Level 2 | Corporate bonds | |||
Assets | |||
Total assets at fair value | $ 30,084 | 67,948 | 50,944 |
Level 2 | Repurchase agreements | |||
Assets | |||
Total assets at fair value | 25,001 | ||
Level 2 | Government bonds | |||
Assets | |||
Total assets at fair value | $ 25,001 | ||
Level 3 | |||
Assets | |||
Total assets at fair value | 450 | ||
Level 3 | Repurchase agreements | |||
Assets | |||
Total assets at fair value | $ 450 |
SHORT TERM INVESTMENTS (Detai_2
SHORT TERM INVESTMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 84,679 | $ 64,325 |
Unrealized Gains | 75 | |
Unrealized losses | 0 | 96 |
Fair Value | 84,754 | 64,229 |
Assetbacked securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 16,786 | 13,350 |
Unrealized Gains | 20 | |
Unrealized losses | 0 | 65 |
Fair Value | 16,806 | 13,285 |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 67,893 | 50,975 |
Unrealized Gains | 55 | |
Unrealized losses | 0 | 31 |
Fair Value | $ 67,948 | $ 50,944 |
ACCRUED EXPENSES AND OTHER CU_6
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |||
Warranty reserve | $ 1,734 | $ 1,491 | $ 116 |
Compensation and benefits related | 657 | 897 | 278 |
Professional services | 2,043 | 780 | 517 |
Inventory purchases | 86 | 620 | 381 |
Accrued sales and use tax | 470 | 578 | 4 |
Transaction costs payable | 577 | ||
Other | 488 | 687 | 510 |
Total | $ 6,055 | $ 5,053 | $ 1,806 |
DEBT (Details)_2
DEBT (Details) | 1 Months Ended | 9 Months Ended | 12 Months Ended | 24 Months Ended | |
Jun. 30, 2018USD ($)item | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2019USD ($) | |
Debt Instrument [Line Items] | |||||
Proceeds from PPP loan | $ 5,379,000 | ||||
Interest rate | 4.75% | 5.50% | 4.75% | ||
Cash and Investments | $ 30,000,000 | $ 30,000,000 | |||
Outstanding amount | 10,000,000 | $ 10,000,000 | 10,000,000 | ||
Debt, current | 10,000,000 | $ 10,000,000 | |||
Deferred financing costs | $ 56,539 | ||||
Amortization of issuance cost | $ 18,846 | $ 9,423 | |||
Prime Rate | |||||
Debt Instrument [Line Items] | |||||
Spread percentage | 0.50% | ||||
Term loan | |||||
Debt Instrument [Line Items] | |||||
Nominal amount | $ 20,000,000 | ||||
Term of loan | 36 months | ||||
Proceeds from PPP loan | $ 10,000,000 | ||||
Remaining borrowing capacity | $ 10,000,000 | ||||
Threshold Number of times additional amount drawn | item | 3 | ||||
Minimum amount to be drawn | $ 2,000,000 | ||||
Spread percentage | 0.50% | ||||
Interest rate | 3.25% | 4.75% | 4.75% | ||
Outstanding amount | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 | ||
Debt, current | 10,000,000 | ||||
Deferred financing costs | 60,000 | ||||
Amortization of issuance cost | 10,000 | 10,000 | |||
Deferred financing costs, net | $ 10,000 | $ 30,000 | $ 30,000 | ||
Term loan | Prime Rate | |||||
Debt Instrument [Line Items] | |||||
Cash and Investments | $ 30,000,000 |
COMMITMENTS AND CONTINGENCIES_7
COMMITMENTS AND CONTINGENCIES (Details) | 9 Months Ended | 12 Months Ended | 24 Months Ended | |||
Sep. 30, 2020USD ($)agreement | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($)agreement | Dec. 31, 2018USD ($) | Dec. 31, 2019USD ($) | Jan. 01, 2018USD ($) | |
Leases | ||||||
Right of use assets | $ 1,935,000 | $ 2,289,000 | $ 2,353,000 | $ 2,289,000 | $ 3,400,000 | |
Operating Lease, Liability | 3,233,000 | 3,832,000 | 4,200,000 | 3,832,000 | 4,700,000 | |
Difference of right of use assets and lease liability | 1,300,000 | |||||
Impairment loss | $ 0 | $ 0 | $ 0 | |||
Number of service agreements contained embedded lease | agreement | 1 | 1 | ||||
Variable lease expenses | $ 30,000 | $ 30,000 | $ 40,481 | $ 38,253 | ||
Cumulative Effect, Period of Adoption, Adjustment [Member] | ||||||
Leases | ||||||
Right of use assets | 3,400,000 | |||||
Operating Lease, Liability | 4,700,000 | |||||
Difference of right of use assets and lease liability | $ 1,300,000 |
COMMITMENTS AND CONTINGENCIES_8
COMMITMENTS AND CONTINGENCIES - Other lease related balances (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Lease cost | ||||
Operating lease cost | $ 561,000 | $ 479,000 | $ 655,000 | $ 627,000 |
Short-term lease cost | 24,000 | 32,000 | 62,000 | |
Variable lease cost | 30,000 | 30,000 | 40,481 | 38,253 |
Total lease cost | 591,000 | 533,000 | 727,000 | 727,000 |
Operating cash flows from operating leases | $ 805,000 | $ 701,000 | $ 951,000 | $ 868,000 |
Weighted-average remaining lease term-operating leases (years) | 3 years 6 months | 4 years 6 months | 4 years 2 months 12 days | 5 years 3 months 18 days |
Weighted-average discount rate-operating leases | 7.60% | 7.60% | 7.60% | 7.60% |
COMMITMENTS AND CONTINGENCIES_9
COMMITMENTS AND CONTINGENCIES - Future minimum lease payments (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2018 |
COMMITMENTS AND CONTINGENCIES. | ||||
2020 (remaining 3 months) | $ 268 | |||
2021 | 1,071 | $ 1,073 | ||
2022 | 1,070 | 1,071 | ||
2023 | 1,028 | 1,069 | ||
2024 | 258 | 1,028 | ||
2025 | 258 | |||
Total lease payments | 3,695 | 4,499 | ||
Less amount representing interest | (462) | (667) | ||
Total lease liability | 3,233 | 3,832 | $ 4,200 | $ 4,700 |
Less current portion of lease liability | (858) | (806) | (626) | |
Lease liability, net of current portion | $ 2,375 | $ 3,026 | $ 3,565 |
COMMITMENTS AND CONTINGENCIE_10
COMMITMENTS AND CONTINGENCIES - Legal Proceedings (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
General and administrative expenses | |
Legal Proceedings | |
Legal proceedings and settlement amount | $ 36.2 |
INCOME TAXES (Details)_2
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | 24 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | |
INCOME TAXES | |||
Income tax benefits | $ 0 | ||
United States | $ (103,596) | $ (121,339) | |
Loss before income taxes | $ (103,596) | $ (121,339) |
INCOME TAXES - Components Inc_2
INCOME TAXES - Components Income (Loss) Before Provision for Income Taxes (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Effective income tax rate: | ||
Expected income tax benefit at the federal statutory rate | 21.00% | 21.00% |
State taxes | 6.00% | 6.00% |
Change in valuation allowance | (30.00%) | (26.00%) |
Research and development credit carryover | 2.00% | 3.00% |
Legal proceedings and settlement expense | (4.00%) | |
Permanent differences | 1.00% |
INCOME TAXES - Components of _2
INCOME TAXES - Components of Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | |||
Federal and state net operating carryforwards | $ 56,333 | $ 23,310 | |
Research and development and other credits | 11,072 | 7,567 | |
Capitalized startup costs | 17,032 | 24,048 | |
Compensationrelated items | 1,286 | 568 | |
Deferred lease liability | 1,111 | 1,212 | |
Other deferred tax assets | 2,068 | 379 | |
Total gross deferred tax asset | 88,902 | 57,084 | |
Valuation allowance | (87,370) | (56,405) | $ (21,700) |
Net deferred tax asset | 1,532 | 679 | |
Deferred tax liabilities: | |||
Rightofuse asset | (664) | (679) | |
Acquired technology | (868) | ||
Total deferred tax liabilities | $ (1,532) | $ (679) |
INCOME TAXES - Valuation Allo_2
INCOME TAXES - Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
INCOME TAXES | ||
Valuation allowance at beginning of the year | $ 56,405 | $ 21,700 |
Increases recorded to income tax provision | 30,965 | 34,705 |
Valuation allowance at end of year | $ 87,370 | $ 56,405 |
INCOME TAXES - Narrative (Det_2
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards, not subject to expiration | $ 152.2 | |
Federal and state research and development tax credit carryforwards | $ 11.1 | |
Federal tax | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 197.7 | 79.6 |
State and local jurisdiction | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $ 184.2 | $ 80.8 |
CONVERTIBLE PREFERRED STOCK _16
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (Details) $ / shares in Units, $ in Thousands | Jan. 14, 2019USD ($)$ / sharesshares | Sep. 30, 2020USD ($)director$ / sharesshares | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($)director$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Jun. 29, 2018$ / sharesshares | Jan. 29, 2018$ / sharesshares |
Convertible Preferred Stock and Stockholders' Equity | |||||||
Common stock, shares authorized | shares | 156,000,000 | 156,000,000 | 156,000,000 | ||||
Common stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Dividend rate (as a percent) | 8.00% | 8.00% | |||||
Dividend declared | $ | $ 0 | $ 0 | |||||
Firm-commitment underwritten initial public offering | $ 5.13 | ||||||
Proceeds from common stock | $ | $ 50,000 | ||||||
Common Stock | |||||||
Convertible Preferred Stock and Stockholders' Equity | |||||||
Common stock, shares authorized | shares | 156,000,000 | 156,000,000 | |||||
Common stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |||||
Number of directors entitled to elect | director | 2 | 2 | |||||
Firm-commitment underwritten initial public offering | $ 5.13 | ||||||
Proceeds from common stock | $ | $ 50,000 | ||||||
Preferred Stock | |||||||
Convertible Preferred Stock and Stockholders' Equity | |||||||
Preferred stock, Shares authorized | shares | 100,038,109 | 100,038,109 | 100,038,109 | ||||
Preferred stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Series A Preferred Stock | |||||||
Convertible Preferred Stock and Stockholders' Equity | |||||||
Common stock, shares authorized | shares | 26,189,545 | 26,189,545 | |||||
Preferred stock, Shares authorized | shares | 26,189,545 | 26,189,545 | |||||
Number of directors entitled to elect | director | 1 | 1 | |||||
Liquidation preference (in dollars per share) | $ 0.53372 | $ 0.53372 | |||||
Conversion price (in dollars per share) | $ 0.53372 | $ 0.53372 | |||||
Series B Preferred Stock | |||||||
Convertible Preferred Stock and Stockholders' Equity | |||||||
Common stock, shares authorized | shares | 23,675,035 | 23,675,035 | |||||
Preferred stock, Shares authorized | shares | 23,675,035 | 23,675,035 | |||||
Number of directors entitled to elect | director | 2 | 2 | |||||
Liquidation preference (in dollars per share) | $ 1.6013 | $ 1.6013 | |||||
Conversion price (in dollars per share) | $ 1.6013 | $ 1.6013 | |||||
Series C Preferred Stock | |||||||
Convertible Preferred Stock and Stockholders' Equity | |||||||
Common stock, shares authorized | shares | 13,152,896 | 13,152,896 | |||||
Preferred stock, Shares authorized | shares | 13,152,896 | 13,152,896 | |||||
Number of directors entitled to elect | director | 1 | 1 | |||||
Liquidation preference (in dollars per share) | $ 3.4213 | $ 3.4213 | |||||
Conversion price (in dollars per share) | $ 3.4213 | $ 3.4213 | |||||
Series D Preferred Stock | |||||||
Convertible Preferred Stock and Stockholders' Equity | |||||||
Common stock, shares authorized | shares | 21,075,193 | 21,075,193 | |||||
Preferred stock, Shares authorized | shares | 21,075,193 | 21,075,193 | |||||
Preferred stock, shares issued | shares | 11,674 | 4,086,111 | |||||
Share price | $ 8.5656 | $ 8.5656 | |||||
Stock issuance cost | $ | $ 200 | ||||||
Liquidation preference (in dollars per share) | $ 8.5656 | $ 8.5656 | |||||
Conversion price (in dollars per share) | $ 8.5656 | $ 8.5656 | |||||
Series E Preferred Stock | |||||||
Convertible Preferred Stock and Stockholders' Equity | |||||||
Common stock, shares authorized | shares | 13,450,703 | 13,450,703 | |||||
Preferred stock, Shares authorized | shares | 13,450,703 | 13,450,703 | |||||
Preferred stock, shares issued | shares | 13,450,703 | ||||||
Share price | $ 10.0211 | ||||||
Stock issuance cost | $ | $ 100 | $ 124 | $ 124 | ||||
Number of directors entitled to elect | director | 1 | 1 | |||||
Liquidation preference (in dollars per share) | $ 10.0211 | $ 10.0211 | |||||
Conversion price (in dollars per share) | $ 10.0211 | $ 10.0211 | |||||
Series E1 Preferred Stock | |||||||
Convertible Preferred Stock and Stockholders' Equity | |||||||
Common stock, shares authorized | shares | 2,494,737 | 2,494,737 | |||||
Preferred stock, Shares authorized | shares | 2,494,737 | 2,494,737 | |||||
Preferred stock, shares issued | shares | 2,494,737 | ||||||
Share price | $ 10.0211 | ||||||
Stock issuance cost | $ | $ 20 | $ 22 | $ 22 | ||||
Liquidation preference (in dollars per share) | $ 10.0211 | $ 10.0211 | |||||
Conversion price (in dollars per share) | $ 10.0211 | $ 10.0211 |
CONVERTIBLE PREFERRED STOCK _17
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - Convertible Preferred Stock Classes (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Class of Stock [Line Items] | |||
Convertible Preferred Stock, Outstanding | 100,038,109 | 100,038,109 | |
Total | $ 436,533,000 | $ 436,533,000 | $ 276,889,000 |
Series A Preferred Stock | |||
Class of Stock [Line Items] | |||
Convertible Preferred Stock, par value | $ 0.0001 | $ 0.0001 | |
Convertible Preferred Stock, Authorized | 26,189,545 | 26,189,545 | 26,189,545 |
Convertible Preferred Stock, Issued | 26,189,545 | 26,189,545 | 26,189,545 |
Convertible Preferred Stock, Outstanding | 26,189,545 | 26,189,545 | |
Convertible Preferred Stock, Liquidation preference | $ 255,348 | $ 106,853,000 | $ 88,783,000 |
Total | 13,878,000 | 13,878,000 | $ 13,878,000 |
Series B Preferred Stock | |||
Class of Stock [Line Items] | |||
Convertible Preferred Stock, par value | $ 0.0001 | $ 0.0001 | |
Convertible Preferred Stock, Authorized | 23,675,035 | 23,675,035 | 23,675,035 |
Convertible Preferred Stock, Issued | 23,675,035 | 23,675,035 | 23,675,035 |
Convertible Preferred Stock, Outstanding | 23,675,035 | 23,675,035 | |
Convertible Preferred Stock, Liquidation preference | $ 230,832,000 | $ 96,594,000 | $ 80,258,000 |
Total | 37,806,000 | 37,806,000 | $ 37,806,000 |
Series C Preferred Stock | |||
Class of Stock [Line Items] | |||
Convertible Preferred Stock, par value | $ 0.0001 | $ 0.0001 | |
Convertible Preferred Stock, Authorized | 13,152,896 | 13,152,896 | |
Convertible Preferred Stock, Issued | 13,152,896 | 13,152,896 | 13,152,896 |
Convertible Preferred Stock, Outstanding | 13,152,896 | 13,152,896 | |
Convertible Preferred Stock, Liquidation preference | $ 128,241,000 | $ 53,664,000 | $ 45,000,000 |
Total | 44,852,000 | 44,852,000 | $ 44,852,000 |
Series D Preferred Stock | |||
Class of Stock [Line Items] | |||
Convertible Preferred Stock, par value | $ 0.0001 | $ 0.0001 | |
Convertible Preferred Stock, Authorized | 21,075,193 | 21,075,193 | 21,075,193 |
Convertible Preferred Stock, Issued | 21,075,193 | 21,075,193 | 21,075,193 |
Convertible Preferred Stock, Outstanding | 21,075,193 | 21,075,193 | |
Convertible Preferred Stock, Liquidation preference | $ 205,483,000 | $ 180,522,000 | $ 180,522,000 |
Total | 180,353,000 | 180,353,000 | $ 180,353,000 |
Series E Preferred Stock | |||
Class of Stock [Line Items] | |||
Convertible Preferred Stock, par value | $ 0.0001 | $ 0.0001 | |
Convertible Preferred Stock, Authorized | 13,450,703 | 13,450,703 | 13,450,703 |
Convertible Preferred Stock, Issued | 13,450,703 | 13,450,703 | 0 |
Convertible Preferred Stock, Outstanding | 13,450,703 | 13,450,703 | 0 |
Convertible Preferred Stock, Liquidation preference | $ 134,791,000 | $ 134,791,000 | $ 0 |
Total | 134,667,000 | 134,667,000 | |
Series E1 Preferred Stock | |||
Class of Stock [Line Items] | |||
Convertible Preferred Stock, par value | $ 0.0001 | $ 0.0001 | |
Convertible Preferred Stock, Authorized | 2,494,737 | 2,494,737 | 2,494,737 |
Convertible Preferred Stock, Issued | 2,494,737 | 2,494,737 | 0 |
Convertible Preferred Stock, Outstanding | 2,494,737 | 2,494,737 | 0 |
Convertible Preferred Stock, Liquidation preference | $ 25,000,000 | $ 25,000,000 | $ 0 |
Total | $ 24,977,000 | $ 24,977,000 |
CONVERTIBLE PREFERRED STOCK _18
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - Restricted Stock Agreements (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting of restricted Common Stock | $ 6 | $ 6 | $ 8 | $ 8 | |
Weighted-average remaining contractual term (in years) | 7 years 10 months 6 days | 7 years 10 months 2 days | 8 years 2 months 16 days | ||
Restricted stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares issued | 27,850,000 | ||||
Share price | $ 0.0001 | ||||
Percentage of shares on which right to repurchase lapses | 20.00% | ||||
Percentage of shares per month on which right to repurchase lapses | 1.67% | ||||
Right to repurchase expiry term | 4 years | ||||
Vesting of restricted Common Stock (in shares) | 497,290 | ||||
Vesting of restricted Common Stock | $ 2,000 | ||||
Vesting period | 4 years | ||||
Weighted-average remaining contractual term (in years) | 8 months 12 days | 8 months 12 days |
CONVERTIBLE PREFERRED STOCK _19
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - The activity for stock subject to vesting (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Shared subject to vesting | ||
Balance at end of period, unvested shares (in shares) | 459,000 | |
Restricted stock | ||
Shared subject to vesting | ||
Balance at beginning of period, unvested shares (in shares) | 4,575,313 | 9,731,550 |
Issuance of additional shares (in shares) | 497,000 | |
Vested (in shares) | (4,301,000) | (5,653,000) |
Balance at end of period, unvested shares (in shares) | 274,467 | 4,575,313 |
Weighted Average Grant Date Fair Value | ||
Balance at beginning of Period, unvested shares (in dollars per share) | $ 0.0001 | $ 0.0001 |
Issuance of additional shares (in dollars per share) | 0.0001 | |
Vested (in dollars per share) | 0.0010 | 0.0001 |
Balance at end of Period, unvested shares (in dollars per share) | $ 0.0010 | $ 0.0001 |
CONVERTIBLE PREFERRED STOCK _20
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - Stock Incentive Plan (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jul. 31, 2019 | Mar. 31, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Amount of convertible notes issued | $ 248,874 | ||||||
Shares issues upon conversion | 279,166 | ||||||
Accrued interest rate | 2.57% | ||||||
Accrued interest | $ 6,571 | ||||||
Repurchase of common stock | 62,610 | ||||||
Granted (in shares) | 6,935,000 | 4,790,000 | |||||
Unrecognized stock-based compensation expense, stock options | $ 16,500 | $ 13,000 | $ 6,900 | ||||
Weighted-average period | 3 years 9 months 18 days | 1 year | |||||
Shares available for grant | 1,960,118 | 4,463,000 | 3,894,467 | 565,000 | |||
Consultant | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options and warrants to be issued | 0 | ||||||
Granted (in shares) | 10,000 | 97,919 | 97,919 | ||||
Fair value of shares | $ 300 | $ 100 | $ 600 | ||||
Employee | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Granted (in shares) | 6,925,144 | 4,107,709 | 4,692,509 | 2,387,517 | |||
Fair value of shares | $ 29,800 | $ 8,900 | $ 10,100 | $ 3,900 | |||
2015 stock incentive plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Awards made under the plan | 21,522,567 | ||||||
Vesting percentage | 25.00% | ||||||
Monthly vesting percentage rate | 2.0833% | ||||||
Vesting period | 3 years | ||||||
Expiration period | 10 years | ||||||
Tax benefits from share based compensation | $ 0 | ||||||
2015 stock incentive plan | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Awards made under the plan | 21,522,567 | ||||||
Make Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 25.00% | 25.00% | |||||
Monthly vesting percentage rate | 2.0833% | 2.0833% | |||||
Vesting period | 3 years | 3 years | |||||
Expiration period | 10 years | 10 years | |||||
Tax benefits from share based compensation | $ 0 | $ 0 | |||||
Options and warrants to be issued | 193,223 | 190,223 | |||||
Granted (in shares) | 0 |
CONVERTIBLE PREFERRED STOCK _21
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - Common Stock to Employees (Details) - Employee - $ / shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free interest rate, Minimum | 0.30% | 1.90% | 1.70% | 2.70% |
Risk-free interest rate, Maximum | 1.70% | 2.60% | 2.60% | 3.00% |
Expected volatility, Minimum | 52.70% | 53.30% | 52.70% | 52.90% |
Expected volatility, Maximum | 54.20% | 53.60% | 53.60% | 53.80% |
Expected life, Minimum (in years) | 5 years 10 months 24 days | 5 years 7 months 6 days | 5 years 7 months 6 days | 5 years 3 months 18 days |
Expected life, Maximum (in years) | 6 years 3 months 18 days | 6 years 1 month 6 days | 6 years 1 month 6 days | 6 years 1 month 6 days |
Fair value of Common Stock | $ 4.08 | $ 4.08 | $ 3.39 | |
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of Common Stock | $ 1.71 | |||
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of Common Stock | $ 9.75 |
CONVERTIBLE PREFERRED STOCK _22
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - Common Stock to Consultants (Details) - Consultant - $ / shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free interest rate, Minimum | 0.60% | 1.50% | 1.40% | 2.10% |
Risk-free interest rate, Maximum | 0.80% | 2.50% | 3.10% | 3.10% |
Expected volatility, Minimum | 54.30% | 54.40% | 52.40% | 53.70% |
Expected volatility, Maximum | 54.80% | 54.90% | 61.50% | 61.50% |
Expected life, Minimum (in years) | 9 years 4 months 24 days | 9 years 4 months 24 days | 6 years 2 months 12 days | 7 years 2 months 12 days |
Expected life, Maximum (in years) | 10 years | 10 years | 10 years | 10 years |
Fair value of Common Stock | $ 4.08 | $ 4.08 | $ 3.39 | |
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of Common Stock | $ 1.71 | |||
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of Common Stock | $ 9.75 |
CONVERTIBLE PREFERRED STOCK _23
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock based compensation expenses | $ 4,228 | $ 3,430 | $ 5,215 | $ 2,965 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock based compensation expenses | 2,176 | 1,501 | 2,713 | 1,696 |
Sales and marketing expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock based compensation expenses | 715 | 1,020 | 1,373 | 567 |
General and administrative expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock based compensation expenses | 1,070 | 668 | 941 | 658 |
Cost of sales | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock based compensation expenses | $ 267 | $ 241 | $ 188 | $ 44 |
CONVERTIBLE PREFERRED STOCK _24
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - Option Activity of the Plan (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jul. 31, 2020USD ($)employee | Sep. 30, 2020USD ($)$ / sharesshares | Sep. 30, 2019USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | |
Number of shares | |||||
Outstanding at beginning of period (in shares) | shares | 14,792 | 12,007 | 12,007 | ||
Granted (in shares) | shares | 6,935 | 4,790 | |||
Exercised (in shares) | shares | (409) | (997) | |||
Forfeited/expired (in shares) | shares | (5,287) | (1,008) | |||
Outstanding at end of period (in shares) | shares | 16,031 | 14,792 | 12,007 | ||
Options vested at end of period (in shares) | shares | 8,167 | 7,195 | |||
Options vested or expected to vest at end of period (in shares) | shares | 15,384 | 14,555 | |||
Weighted-Average Exercise Price per share | |||||
Outstanding at beginning of period (in dollars per share) | $ 2.45 | $ 1.65 | $ 1.65 | ||
Granted (in dollars per share) | 1.85 | 3.98 | |||
Exercised (in dollars per share) | 0.65 | 0.71 | |||
Forfeited/expired (in dollars per share) | 3.57 | 1.88 | |||
Outstanding at end of period (in dollars per share) | 1.87 | 2.45 | $ 1.65 | ||
Options vested at end of period (in dollars per share) | 1.83 | 1.52 | |||
Options vested or expected to vest at September 30, 2020 | $ 1.87 | $ 2.44 | |||
Weighted-average remaining contractual term (in years) | 7 years 10 months 6 days | 7 years 10 months 2 days | 8 years 2 months 16 days | ||
Options vested at December 31, 2020 | 6 years 4 months 17 days | 6 years 11 months 1 day | |||
Options vested or expected to vest at September 30, 2020 | 7 years 9 months 11 days | 7 years 9 months 26 days | |||
Aggregate intrinsic value of options outstanding | $ | $ 126,300 | $ 24,040 | |||
Weighted average grant date fair value for options granted | $ 4.30 | $ 2.11 | $ 2.17 | $ 1.64 | |
Aggregate intrinsic value of options exercised | $ | $ 1,700 | $ 3,000 | $ 3,400 | $ 2,100 | |
Vesting period of repriced options | 4 years | ||||
Cliff vesting period | 1 year | ||||
Number of employees affected by repricing | employee | 116 | ||||
Incremental compensation cost | $ | $ 3,600 |
CONVERTIBLE PREFERRED STOCK _25
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - Common Stock Reserved for Future Issuance (Details) - shares | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY | ||||
Common Stock options outstanding | 16,031,000 | 14,792,000 | 14,490,000 | 12,007,000 |
Restricted Stock units outstanding | 459,000 | |||
Shares available for issuance under the Plan | 1,960,118 | 3,894,467 | 4,463,000 | 565,000 |
Convertible Preferred Stock outstanding | 100,038,000 | 100,038,000 | 100,038,000 | 84,093,000 |
Common Stock warrants outstanding | 919,000 | 2,032,000 | 464,000 | 2,000,000 |
Total shares of authorized Common Stock reserved for future issuance | 119,407,000 | 120,756,000 | 119,455,000 | 98,665,000 |
CONVERTIBLE PREFERRED STOCK _26
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | May 31, 2017 |
Class of Warrant or Right [Line Items] | ||||||
Warrants to purchase shares | 399,960 | 501,113 | 477,629 | 18,389 | 2,000,000 | |
Number of common stock purchased by each warrant | 1 | 1 | ||||
Revenue generated per share | $ 35 | $ 35 | ||||
Exercise price | $ 5 | $ 5 | ||||
Fair value of the warrants | $ 40 | $ 1,000 | $ 900 | $ 34,939 | ||
Maximum | ||||||
Class of Warrant or Right [Line Items] | ||||||
Warrants to purchase shares | 2,000,000 |
SEGMENT INFORMATION (Details)_2
SEGMENT INFORMATION (Details) | 9 Months Ended | 12 Months Ended | 24 Months Ended | ||
Sep. 30, 2020USD ($)segmentclient | Sep. 30, 2019USD ($)client | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2019USD ($) | |
Segment Information | |||||
Number of segments | 1 | 1 | |||
Revenue | $ 8,101,000 | $ 20,876,000 | $ 26,439,000 | $ 1,034,000 | |
Number of clients representing 10% or more of the company's total revenue | 0 | 0 | 0 | ||
Revenue recognized at a point in time | |||||
Segment Information | |||||
Revenue | $ 6,113,000 | $ 18,655,000 | 22,758,000 | 751,000 | |
Revenue recognized over time | |||||
Segment Information | |||||
Revenue | 1,988,000 | 2,221,000 | 3,681,000 | 283,000 | |
Product | |||||
Segment Information | |||||
Revenue | 6,113,000 | 18,655,000 | 22,758,000 | 751,000 | |
Service | |||||
Segment Information | |||||
Revenue | 1,988,000 | 2,221,000 | 3,681,000 | 283,000 | |
Americas | |||||
Segment Information | |||||
Revenue | 3,334,000 | 13,412,000 | 15,801,000 | 1,034,000 | |
Americas | Product | |||||
Segment Information | |||||
Revenue | 2,372,000 | 11,561,000 | 12,746,000 | 751,000 | |
Americas | Service | |||||
Segment Information | |||||
Revenue | 962,000 | 1,851,000 | 3,055,000 | $ 283,000 | |
EMEA | |||||
Segment Information | |||||
Revenue | 3,299,000 | 6,250,000 | 8,993,000 | ||
EMEA | Product | |||||
Segment Information | |||||
Revenue | 2,411,000 | 5,909,000 | 8,430,000 | ||
EMEA | Service | |||||
Segment Information | |||||
Revenue | 888,000 | 341,000 | 563,000 | ||
APAC | |||||
Segment Information | |||||
Revenue | 1,468,000 | 1,214,000 | 1,645,000 | ||
APAC | Product | |||||
Segment Information | |||||
Revenue | 1,330,000 | 1,185,000 | 1,582,000 | ||
APAC | Service | |||||
Segment Information | |||||
Revenue | $ 138,000 | $ 29,000 | $ 63,000 |
RELATED PARTY TRANSACTIONS (D_2
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Sep. 30, 2020 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | |||
Fair value of the warrants | $ 34,939 | ||
Deferred revenue from sales to investors | 3,900 | $ 1,100 | $ 2,200 |
Amount of investment | $ 500 | ||
Percentage of outstanding shares | 31.00% | ||
Investors | |||
Related Party Transaction [Line Items] | |||
Revenue from sales to investors | $ 100 | ||
Deferred revenue from sales to investors | $ 100 |
NET LOSS PER SHARE (Details)_2
NET LOSS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Numerator for basic and diluted net loss per share: | ||||
Net loss attributable to Desktop Metal, Inc Common Stockholders | $ (65,027) | $ (75,769) | $ (103,596) | $ (121,339) |
Denominator for basic and diluted net loss per share: | ||||
Weighted average shares | 29,457,000 | 22,395,000 | 23,379,000 | 16,495,000 |
Net loss per share-Basic and Diluted | $ (2.21) | $ (3.38) | $ (4.43) | $ (7.36) |
Dilutive securities excluded | 117,722,359 | 121,001,479 | 115,349,706 | 96,117,086 |
SUBSEQUENT EVENTS (Details)_2
SUBSEQUENT EVENTS (Details) - USD ($) $ in Millions | Aug. 26, 2020 | Apr. 30, 2020 |
Agreement and Plan of Merger | Trine Acquisition Corp | ||
Subsequent Event [Line Items] | ||
Business Combination ,Maximum Consideration Receivable | $ 1,800 | |
Paycheck Protection Program | ||
Subsequent Event [Line Items] | ||
Loan Proceeds | $ 5.4 |
CONVERTIBLE PREFERRED STOCK _27
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - Restricted Stock Units (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted-average period | 3 years 9 months 18 days | 1 year | ||
Total expense recognized | $ 4,228 | $ 3,430 | $ 5,215 | $ 2,965 |
RSU | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
Unrecognized compensation costs, non-vested RSUs | $ 4,100 | |||
Weighted-average period | 3 years 10 months 24 days | |||
Total expense recognized | $ 200 |
CONVERTIBLE PREFERRED STOCK _28
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - RSU Activity (Details) | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Shared subject to vesting | |
Balance at end of period, unvested shares (in shares) | 459,000 |
RSU | |
Shared subject to vesting | |
Issuance of additional shares (in shares) | 459 |
Balance at end of period, unvested shares (in shares) | 459 |
Weighted Average Grant Date Fair Value | |
Issuance of additional shares (in dollars per share) | $ / shares | $ 9.75 |
Balance at end of Period, unvested shares (in dollars per share) | $ / shares | $ 9.75 |