UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
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(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
☐ |
Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐
As of November 15, 2021, the registrant had
Table of Contents
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Page |
PART I. |
1 |
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Item 1. |
1 |
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1 |
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Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) |
2 |
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Unaudited Statement of Changes in Convertible Preferred Stock and Stockholders' Equity (Deficit) |
3 |
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5 |
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Unaudited Notes to Condensed Consolidated Financial Statements |
6 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
22 |
Item 3. |
35 |
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Item 4. |
35 |
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PART II. |
37 |
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Item 1. |
37 |
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Item 1A. |
37 |
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Item 2. |
71 |
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Item 3. |
71 |
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Item 4. |
71 |
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Item 5. |
71 |
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Item 6. |
72 |
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73 |
Risk Factors Summary
The risk factors detailed in Item 1A entitled “Risk Factors” in this Quarterly Report on Form 10-Q are the risks that we believe are material to our investors and a reader should carefully consider them. Those risks are not all of the risks we face and other factors not presently known to us or that we currently believe are immaterial may also affect our business if they occur. The following is a summary of the risk factors detailed in Item 1A:
EXPLANATORY NOTE
On July 14, 2021, we consummated the merger (the "Merger") contemplated by the Agreement and Plan of Merger, dated as of February 23, 2021 (the “Merger Agreement”), by and among one, a Cayman Islands exempted company limited by shares (“one”), Caspian Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of one (“Merger Sub”), and MarkForged, Inc., a Delaware corporation (“Legacy Markforged”). As a result of the Merger, Legacy Markforged merged with and into Merger Sub with Legacy Markforged surviving as our wholly-owned subsidiary and, following one’s filing of a notice of deregistration and necessary accompanying documents with the Cayman Islands Registrar of Companies, and a certificate of incorporation and a certificate of corporate domestication with the Secretary of State of the State of Delaware, under which one was domesticated, one changed its name to “Markforged Holding Corporation.”
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains statements that are forward-looking and as such are not historical facts. This includes, without limitation, statements regarding the financial position, business strategy and the plans and objectives of management for our future operations of Markforged Holding Corporation. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this Quarterly Report on Form 10-Q, words such as “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “intend”, “may”, “might”, “plan”, “possible”, “potential”, “predict”, “project”, “should”, “strive”, “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
Forward-looking statements in this Quarterly Report on Form 10-Q include, for example, statements about:
These forward-looking statements are based on information available as of the date of this Quarterly Report on Form 10-Q and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. You should not place undue reliance on these forward-looking statements.
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
MARKFORGED HOLDING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
As of September 30, 2021 and December 31, 2020
(In thousands, except share data and par value amounts) (Unaudited)
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September 30, |
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December 31, |
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Assets |
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Current assets |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable, net |
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Inventory |
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Prepaid expenses |
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Other current assets |
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Total current assets |
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Property and equipment, net |
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Other assets |
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Total assets |
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$ |
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$ |
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Liabilities, Convertible Preferred Stock, and Stockholders’ Equity (Deficit) |
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Current liabilities |
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Accounts payable |
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$ |
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Accrued expenses |
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Deferred revenue |
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Other current liabilities |
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Total current liabilities |
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Long-term debt |
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Long-term deferred revenue |
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Deferred rent |
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Contingent earnout liability |
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Other liabilities |
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Total liabilities |
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Convertible preferred stock (Note 9) |
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Stockholders’ equity (deficit) |
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Common stock, $ |
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Additional paid-in capital |
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Treasury stock, |
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Accumulated deficit |
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Total stockholders’ equity (deficit) |
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Total liabilities, convertible preferred stock, and stockholders’ equity (deficit) |
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$ |
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$ |
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See notes to the unaudited condensed consolidated financial statements.
1
MARKFORGED HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
For the three and nine months ended September 30, 2021 and 2020
(In thousands, except share data and per share data) (Unaudited)
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2021 |
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2020 |
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2021 |
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2020 |
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Revenue |
$ |
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$ |
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$ |
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$ |
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Cost of revenue |
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Gross profit |
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Operating expenses |
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Sales and marketing |
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Research and development |
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General and administrative |
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Total operating expenses |
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Loss from operations |
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( |
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( |
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Change in fair value of warrant liabilities |
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( |
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( |
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Change in fair value of contingent earnout liability |
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Other (expense) income, net |
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( |
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( |
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Interest expense |
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( |
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( |
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Interest income |
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Profit (loss) before income taxes |
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( |
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Income tax (benefit) expense |
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Net profit (loss) and comprehensive income (loss) |
$ |
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$ |
( |
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$ |
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$ |
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Weighted average shares outstanding - basic |
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Weighted average shares outstanding - diluted |
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Net profit (loss) per share - basic |
$ |
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$ |
( |
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$ |
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$ |
( |
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Net profit (loss) per share - diluted |
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( |
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See notes to the unaudited condensed consolidated financial statements.
2
MARKFORGED HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
For the three and nine months ended September 30, 2021 and 2020
(In thousands, except share data) (Unaudited)
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Convertible Preferred Stock |
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Common Stock |
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Additional |
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Treasury Stock |
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Note |
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Accumulated |
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Total |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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Shares |
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Amount |
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Receivable |
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Deficit |
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(Deficit) |
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Total |
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December 31, 2020 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
( |
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$ |
( |
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$ |
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Exercise of common |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Stock-based |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Exercise of Series D |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Net profit (loss) and |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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( |
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( |
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March 31, 2021 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
( |
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$ |
( |
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$ |
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Exercise of common |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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$ |
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$ |
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Stock-based |
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— |
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— |
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— |
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— |
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— |
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Exercise of Series D |
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— |
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— |
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— |
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— |
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Exercise of common stock |
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Net profit (loss) and |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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( |
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( |
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June 30, 2021 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
( |
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$ |
( |
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$ |
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Exercise of common |
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— |
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— |
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— |
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Stock-based |
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— |
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— |
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— |
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— |
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Exercise of Series D |
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— |
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— |
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— |
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— |
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— |
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— |
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Conversion of convertible preferred stock into common stock upon reverse recapitalization |
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( |
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( |
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— |
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— |
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— |
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— |
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— |
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Retirement of Treasury Stock upon reverse recapitalization |
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— |
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— |
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( |
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— |
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( |
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( |
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— |
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— |
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— |
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— |
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Repurchase of common stock upon reverse recapitalization |
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— |
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— |
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( |
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— |
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( |
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— |
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— |
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— |
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— |
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( |
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( |
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Issuance of common stock upon the reverse recapitalization, net of transaction costs |
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— |
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— |
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— |
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— |
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— |
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— |
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Issuance of common stock related to PIPE Investment |
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— |
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— |
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— |
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— |
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Recognition of derivative liability related to earnout |
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— |
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— |
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— |
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— |
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( |
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— |
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— |
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— |
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— |
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( |
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Earnout stock-based compensation expense |
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Net profit (loss) and |
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— |
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— |
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— |
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— |
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September 30, 2021 |
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$ |
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$ |
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$ |
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