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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

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: 001-40546

 

XOMETRY, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

32-0415449

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

 

 

6116 Executive Blvd

Suite 800

North Bethesda, MD

20852

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (240) 335-7914

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Class A common stock, par value $0.000001 per share

 

XMTR

 

The Nasdaq Global Select Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

As of April 30, 2024, the registrant had 46,123,556 shares of Class A common stock, $0.000001 par value per share, outstanding.

 

 

 

 


Table of Contents

 

Page

PART I.

FINANCIAL INFORMATION

Item 1.

Financial Statements (Unaudited)

1

Condensed Consolidated Balance Sheets (Unaudited)

1

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

2

 

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)

3

Condensed Consolidated Statements of Cash Flows (Unaudited)

4

Notes to Condensed Consolidated Financial Statements (Unaudited)

5

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

21

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

34

Item 4.

Controls and Procedures

34

PART II.

OTHER INFORMATION

Item 1.

Legal Proceedings

36

Item 1A.

Risk Factors

36

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

36

Item 3.

Defaults Upon Senior Securities

36

Item 4.

Mine Safety Disclosures

36

Item 5.

Other Information

36

Item 6.

Exhibits

38

Signatures

39

 

 

i


 

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “can,” “will,” “would,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “forecasts,” “potential,” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

 

 

 

our expectations regarding our revenue, expenses and other operating results;

 

 

 

the anticipated growth of our business, including our ability to effectively manage or sustain our growth and to achieve or sustain profitability;

 

 

 

the effects of public health crises or other macroeconomic factors and geopolitical tension, which may lead to periods of global economic uncertainty;

 

 

 

future investments in our business, our anticipated capital expenditures and our estimates regarding our capital requirements;

 

 

 

our ability to attract new buyers and suppliers and successfully engage new and existing buyers and suppliers;

 

 

 

the costs and success of our sales and marketing efforts, and our ability to promote our brand;

 

 

 

our reliance on key personnel and our ability to identify, recruit and retain skilled personnel;

 

 

 

our ability to effectively manage our growth, including any international expansion;

 

 

 

our ability to obtain, maintain, protect and enforce our intellectual property or other proprietary rights and any costs associated therewith;

 

 

 

our ability to effectively manage our costs and expenses, which may be impacted by inflationary pressures;

 

 

 

our ability to compete effectively with existing competitors and new market entrants; and

 

 

 

the growth rates of the markets in which we compete.

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled Risk Factors Part II, Item 1A, and elsewhere in this Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Form 10-Q. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Form 10-Q. And while we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

The forward-looking statements made in this Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Form 10-Q to reflect events or circumstances after the date of this Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments.

ii


PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

XOMETRY, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)

(In thousands, except share and per share data)

 

 

 

March 31,

 

 

December 31,

 

 

 

2024

 

 

2023

 

 

 

 

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

45,701

 

 

$

53,424

 

Marketable securities

 

 

208,078

 

 

 

215,352

 

Accounts receivable, less allowance for credit losses of $2.4 million and $2.4 million as of March 31, 2024 and December 31, 2023

 

 

69,324

 

 

 

70,102

 

Inventory

 

 

2,890

 

 

 

2,885

 

Prepaid expenses

 

 

5,998

 

 

 

5,571

 

Other current assets

 

 

9,366

 

 

 

8,897

 

Total current assets

 

 

341,357

 

 

 

356,231

 

Property and equipment, net

 

 

37,579

 

 

 

35,637

 

Operating lease right-of-use assets

 

 

11,152

 

 

 

12,251

 

Investment in unconsolidated joint venture

 

 

4,211

 

 

 

4,114

 

Intangible assets, net

 

 

34,856

 

 

 

35,768

 

Goodwill

 

 

262,827

 

 

 

262,915

 

Other assets

 

 

489

 

 

 

471

 

Total assets

 

$

692,471

 

 

$

707,387

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

13,989

 

 

$

24,710

 

Accrued expenses

 

 

46,193

 

 

 

41,845

 

Contract liabilities

 

 

9,613

 

 

 

7,357

 

Income taxes payable

 

 

2,208

 

 

 

2,484

 

Operating lease liabilities, current portion

 

 

6,731

 

 

 

6,799

 

Total current liabilities

 

 

78,734

 

 

 

83,195

 

Convertible notes

 

 

282,234

 

 

 

281,769

 

Operating lease liabilities, net of current portion

 

 

9,345

 

 

 

10,951

 

Deferred income taxes

 

 

275

 

 

 

275

 

Other liabilities

 

 

288

 

 

 

778

 

Total liabilities

 

 

370,876

 

 

 

376,968

 

Commitments and contingencies (Note 13)

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

Preferred stock, $0.000001 par value. Authorized; 50,000,000 shares; zero shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

 

 

 

 

 

 

Class A Common stock, $0.000001 par value. Authorized; 750,000,000 shares; 46,010,987 shares and 45,489,379 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

 

 

 

 

 

 

Class B Common stock, $0.000001 par value. Authorized; 5,000,000 shares; 2,676,154 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

 

 

 

 

 

 

Additional paid-in capital

 

 

656,554

 

 

 

648,317

 

Accumulated other comprehensive income

 

 

381

 

 

 

855

 

Accumulated deficit

 

 

(336,488

)

 

 

(319,872

)

Total stockholders’ equity

 

 

320,447

 

 

 

329,300

 

Noncontrolling interest

 

 

1,148

 

 

 

1,119

 

Total equity

 

 

321,595

 

 

 

330,419

 

Total liabilities and stockholders’ equity

 

$

692,471

 

 

$

707,387

 

 

See accompanying notes to the unaudited condensed consolidated financial statements.

1


XOMETRY, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(In thousands, except share and per share data)

 

 

Three Months Ended
March 31,

 

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

Revenue

 

$

122,690

 

 

$

105,326

 

Cost of revenue

 

 

74,788

 

 

 

65,957

 

Gross profit

 

 

47,902

 

 

 

39,369

 

Sales and marketing

 

 

27,200

 

 

 

22,439

 

Operations and support

 

 

14,047

 

 

 

12,608

 

Product development

 

 

9,590

 

 

 

8,125

 

General and administrative

 

 

14,922

 

 

 

15,957

 

Impairment of assets

 

 

 

 

 

27

 

Total operating expenses

 

 

65,759

 

 

 

59,156

 

Loss from operations

 

 

(17,857

)

 

 

(19,787

)

Other income (expenses)

 

 

 

 

 

 

Interest expense

 

 

(1,189

)

 

 

(1,198

)

Interest and dividend income

 

 

2,732

 

 

 

2,695

 

Other (expenses) income

 

 

(387

)

 

 

17

 

Income from unconsolidated joint venture

 

 

97

 

 

 

66

 

Total other income

 

 

1,253

 

 

 

1,580

 

Loss before income taxes

 

 

(16,604

)

 

 

(18,207

)

Provision for income taxes

 

 

 

 

 

(136

)

Net loss

 

 

(16,604

)

 

 

(18,343

)

Net income attributable to noncontrolling interest

 

 

12

 

 

 

1

 

Net loss attributable to common stockholders

 

$

(16,616

)

 

$

(18,344

)

Net loss per share, basic and diluted, of Class A and Class B common stock

 

$

(0.34

)

 

$

(0.38

)

Weighted-average number of shares outstanding used to compute
   net loss per share, basic and diluted, of Class A and Class B common stock

 

 

48,577,980

 

 

 

47,699,561

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(16,604

)

 

$

(18,343

)

Comprehensive loss:

 

 

 

 

 

 

Foreign currency translation

 

 

(457

)

 

 

135

 

Total other comprehensive (loss) income

 

 

(457

)

 

 

135

 

Comprehensive loss

 

 

(17,061

)

 

 

(18,208

)

Comprehensive income attributable to noncontrolling interest

 

 

29

 

 

 

5

 

Total comprehensive loss attributable to common stockholders

 

$

(17,090

)

 

$

(18,213

)

 

See accompanying notes to the unaudited condensed consolidated financial statements.

2


 

XOMETRY, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited)

Three months ended March 31, 2024 and 2023

(In thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class A - Common Stock

 

Class B - Common Stock

 

Additional Paid-In

 

Accumulated Other Comprehensive

 

Accumulated

 

Total Stockholders'

 

Noncontrolling

 

Total

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Capital

 

Income

 

Deficit

 

Equity

 

Interest

 

Equity

 

Balance, December 31, 2023

 

45,489,379

 

$

 

 

2,676,154

 

$

 

$

648,317

 

$

855

 

$

(319,872

)

 

329,300

 

$

1,119

 

 

330,419

 

Exercise of common stock options

 

120,481

 

 

 

 

 

 

 

 

1,233

 

 

 

 

 

 

1,233

 

 

 

 

1,233

 

Vesting of restricted stock units

 

359,911

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shared issued in business combination

 

21,083

 

 

 

 

 

 

 

 

625

 

 

 

 

 

 

625

 

 

 

 

625

 

Donated common stock

 

20,133

 

 

 

 

 

 

 

 

343

 

 

 

 

 

 

343

 

 

 

 

343

 

Stock based compensation

 

 

 

 

 

 

 

 

 

6,036

 

 

 

 

 

 

6,036

 

 

 

 

6,036

 

Comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation

 

 

 

 

 

 

 

 

 

 

 

(474

)

 

 

 

(474

)

 

17

 

 

(457

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(16,616

)

 

(16,616

)

 

12

 

 

(16,604

)

Total comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(17,090

)

 

29

 

 

(17,061

)

Balance, March 31, 2024

 

46,010,987

 

$

 

 

2,676,154

 

$

 

$

656,554

 

$

381

 

$

(336,488

)

$

320,447

 

$

1,148

 

$

321,595

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2022

 

44,822,264

 

$

 

 

2,676,154

 

$

 

$

623,081

 

$

28

 

$

(249,366

)

$

373,743

 

$

1,090

 

$

374,833

 

Exercise of common stock options

 

82,909

 

 

 

 

 

 

 

 

483

 

 

 

 

 

 

483

 

 

 

 

483

 

Vesting of restricted stock units

 

169,446

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shared issued in business combination

 

3,562

 

 

 

 

 

 

 

 

180

 

 

 

 

 

 

180

 

 

 

 

180

 

Donated common stock

 

20,133

 

 

 

 

 

 

 

 

370

 

 

 

 

 

 

370

 

 

 

 

370

 

Stock based compensation

 

 

 

 

 

 

 

 

 

4,694

 

 

 

 

 

 

4,694

 

 

 

 

4,694

 

Comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation

 

 

 

 

 

 

 

 

 

 

 

131

 

 

 

 

131

 

 

4

 

 

135

 

Net loss (income)

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,344

)

 

(18,344

)

 

1

 

 

(18,343

)

Total comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,213

)

 

5

 

 

(18,208

)

Balance, March 31, 2023

 

45,098,314

 

$

 

 

2,676,154

 

$

 

$

628,808

 

$

159

 

$

(267,710

)

$

361,257

 

$

1,095

 

$

362,352

 

 

See accompanying notes to the unaudited condensed consolidated financial statements.

3


XOMETRY, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(16,604

)

 

$

(18,343

)

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

 

 

 

 

 

 

Depreciation and amortization

 

 

3,153

 

 

 

2,566

 

Impairment of assets

 

 

 

 

 

27

 

Reduction in carrying amount of right-of-use asset

 

 

1,096

 

 

 

1,935

 

Stock based compensation

 

 

6,036

 

 

 

4,694

 

Revaluation of contingent consideration

 

 

137

 

 

 

 

Income from unconsolidated joint venture

 

 

(97

)

 

 

(66

)

Donation of common stock

 

 

343

 

 

 

370

 

Loss on sale of property and equipment

 

 

 

 

 

91

 

Amortization of deferred costs on convertible notes

 

 

464

 

 

 

466

 

Deferred taxes benefit

 

 

 

 

 

(23

)

Changes in other assets and liabilities:

 

 

 

 

 

 

Accounts receivable, net

 

 

532

 

 

 

(2,804

)

Inventory

 

 

(40

)

 

 

133

 

Prepaid expenses

 

 

(433

)

 

 

185

 

Other assets

 

 

(442

)

 

 

(3,687

)

Accounts payable

 

 

(10,649

)

 

 

(503

)

Accrued expenses

 

 

4,440

 

 

 

(2,119

)

Contract liabilities

 

 

2,277

 

 

 

1,436

 

Lease liabilities

 

 

(1,671

)

 

 

(970

)

Income taxes payable

 

 

(276

)

 

 

157

 

Net cash used in operating activities

 

 

(11,734

)

 

 

(16,455

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of marketable securities

 

 

(2,726

)

 

 

(2,688

)

Proceeds from sale of marketable securities

 

 

10,000

 

 

 

 

Purchases of property and equipment

 

 

(4,347

)

 

 

(4,186

)

Proceeds from sale of property and equipment

 

 

 

 

 

223

 

Cash paid for business combination, net of cash acquired

 

 

 

 

 

(3,349

)

Net cash provided by (used in) investing activities

 

 

2,927

 

 

 

(10,000

)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from stock options exercised

 

 

1,233

 

 

 

483

 

Net cash provided by financing activities

 

 

1,233

 

 

 

483

 

Effect of foreign currency translation on cash and cash equivalents

 

 

(149

)

 

 

15

 

Net decrease in cash and cash equivalents

 

 

(7,723

)

 

(25,957

)

Cash and cash equivalents at beginning of the period

 

 

53,424

 

 

 

65,662

 

Cash and cash equivalents at end of the period

 

$

45,701

 

 

$

39,705

 

Supplemental cash flow information:

 

 

 

 

 

 

Cash paid for interest

 

$

1,438

 

 

$

1,438

 

Non-cash investing and financing activities:

 

 

 

 

 

 

Non-cash purchase of property and equipment

 

 

 

 

 

78

 

Non-cash consideration in connection with business combination

 

 

 

 

 

1,593

 

 

See accompanying notes to the unaudited condensed consolidated financial statements.

4


XOMETRY, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

(Unaudited)

(1) Organization and Description of Business

Xometry, Inc. (“Xometry”, the “Company”, “we”, or “our”) was incorporated in the State of Delaware in May 2013. Xometry is a global artificial intelligence (“AI”) powered online marketplace connecting buyers with suppliers of manufacturing services, driving the digital transformation of one of the largest industries in the world. We use our proprietary AI, machine learning and cloud-based services, including our Thomasnet® platform, to help buyers efficiently source custom-manufactured parts and assemblies, and empower suppliers of manufacturing services to grow their businesses. Xometry's corporate headquarters is located in North Bethesda, Maryland.

Our AI-enabled technology platform is powered by proprietary machine learning algorithms and datasets, resulting in a sophisticated two-sided marketplace that is rapidly digitizing the manufacturing industry. As a result, buyers can procure the products they want on demand, and suppliers can source new manufacturing opportunities that match their specific capabilities and capacity, ultimately resulting in locally resilient supply chains so goods can get to market faster. Every interaction on our marketplace provides rich data insights that allow us to continuously improve our AI models and create new products and services, fueling powerful network effects as we scale.

 

We use proprietary technology to enable product designers, engineers, buyers, and supply chain professionals to instantly access the capacity of a global network of manufacturing facilities. The Company’s platform makes it possible for buyers to quickly receive pricing, expected lead times, manufacturability feedback and place orders on the Company’s platform. The network allows the Company to provide high volumes of unique parts, including custom components and assemblies for its buyers.

 

Xometry’s suppliers’ capabilities include computer numerical control manufacturing, sheet metal forming, sheet cutting, 3D printing (including fused deposition modeling, direct metal laser sintering, PolyJet, stereolithography, selective laser sintering, binder jetting, carbon digital light synthesis, multi jet fusion and lubricant sublayer photo-curing), die casting, stamping, injection molding, urethane casting, tube cutting, tube bending, as well as finishing services, rapid prototyping and high-volume production. Xometry's extensible technology platform allows the Company to add new technologies and processes to gain more wallet share with our buyers.

We empower suppliers to grow their manufacturing businesses and improve machine uptime by providing access to an extensive, diverse base of buyers. We also offer suppliers supporting products and services to meet their unique needs. Through Thomasnet, a leading industrial sourcing platform in North America, we offer suppliers an array of digital advertising and marketing services and data solutions. In addition, our suite of supplier services includes financial service products to stabilize and enhance cash flow and a cloud-based manufacturing execution system to help suppliers optimize their productivity.

 

(2) Basis of Presentation and Summary of Significant Accounting Policies

(a)
Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K filed with the SEC on February 29, 2024.

The condensed consolidated balance sheet as of December 31, 2023, included herein, was derived from the audited financial statements as of that date, but may not include all disclosures including certain notes required by U.S. GAAP on an annual reporting basis. In the opinion of management, the accompanying condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, comprehensive loss, stockholders' equity and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year 2023 or any future period. The Company has two reporting segments which are referred to as: (1) the United States (“U.S.”) and (2) International.

5


Foreign Operations and Comprehensive Loss

The U.S. dollar (“USD”) is the functional currency for Xometry’s consolidated subsidiary operating in the U.S. The primary functional currency for the Company's consolidated subsidiaries operating in Germany and to a lesser extent, United Kingdom, Turkey, China and Japan, is the Euro, British Pound Sterling, Turkish Lira, Yuan and the Yen, respectively. For the Company’s consolidated subsidiaries whose functional currencies are not the USD, the Company translates their financial statements into USD. The Company translates assets and liabilities at the exchange rate in effect as of the financial statement date. Revenue and expense accounts are translated using an average exchange rate for the period. Gains and losses resulting from translation are included in accumulated other comprehensive income, as a separate component of equity.

Noncontrolling Interest

We have a 66.67% ownership in Incom Co., LTD. As we have a controlling interest in Incom Co., LTD, we have consolidated Incom Co., LTD into our unaudited condensed consolidated financial statements. The portion of equity in Incom Co., LTD not owned by the Company is accounted for as a noncontrolling interest. We present the portion of any equity that we do not own in a consolidated entity as noncontrolling interest and classify their interest as a component of total equity, separate from total stockholders’ equity on our Condensed Consolidated Balance Sheets. We include net (loss) income attributable to the noncontrolling interests in net loss in our Condensed Consolidated Statements of Operations and Comprehensive Loss.

(b)
Use of Estimates

The preparation of the Company’s unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions, which affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates.

(c)
Business Combinations

The Company accounts for business combinations using the acquisition method of accounting, which requires, among other things, allocation of the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed at their estimated fair values on the acquisition date. The excess of the fair value of purchase consideration over the values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair value of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to the valuation of intangible assets. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, not to exceed one year from the date of acquisition, the Company may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition date. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are reflected in the consolidated statements of operations. Acquisition costs, such as legal and consulting fees, are expensed as incurred.

(d)
Fair Value Measurements and Financial Instruments

The Company measures certain assets and liabilities at fair value on a recurring basis based on an expected exit price, which represents the amount that would be received on the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability.

The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis, whereby inputs used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 - Unobservable inputs reflecting the Company’s own assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.

The carrying amounts of certain of the Company’s financial instruments, which include cash and cash equivalents, accounts receivable, prepaid expenses and other assets, accounts payable, accrued expenses and contract liabilities approximate their fair values due to their short maturities. The Company's marketable securities are recorded at fair value.

6


(e)
Cash and Cash Equivalents

Cash and cash equivalents consist of cash held in checking accounts. These investments are stated at cost, which approximates fair value.

(f)
Marketable Securities

The Company measures its marketable securities at fair value. The Company's marketable securities represent our investments in a short term money market fund. These marketable securities have maturities of three months or less. As of March 31, 2024 and December 31, 2023, the Company's marketable securities of $208.1 million and $215.4 million, respectively, were recorded at fair value, within Level 1 of the fair value hierarchy. The fair value of the Company’s Level 1 financial instruments is based on quoted prices in active markets, total fair value is the published market price per unit multiplied by the number of units held without consideration of transaction costs, discounts or blockage factors.

(g)
Accounts Receivable

Accounts receivable are stated at the amount the Company expects to collect from outstanding balances. The Company's accounts receivable do not bear interest. Amounts collected on accounts receivable are included in net cash used in operating activities in the Condensed Consolidated Statements of Cash Flows. For buyers for which the Company provides credit, the Company performs credit inquiries, including reference checks, and queries credit ratings services and other publicly available information. Management provides for probable uncollectible amounts through a provision for bad debt expense and an adjustment to a valuation allowance based on the age of the outstanding amounts, each customer’s expected ability to pay and collection history, current market conditions, and reasonable and supportable forecasts of future economic conditions to determine whether the allowance is appropriate. The Company reviews its valuation allowance monthly. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable.

Allowance For Credit Losses

The allowance for credit losses related to accounts receivable and changes were as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

Allowance for credit losses

 

 

 

 

 

 

Balance at beginning of year, January 1

 

$

2,444

 

 

$

1,988

 

Charge to provision accounts

 

 

252

 

 

 

2,186

 

Write-offs or other

 

 

(298

)

 

 

(1,730

)

Balance at period end, March 31 and December 31, respectively

 

$

2,398

 

 

$

2,444

 

 

(h)
Property and Equipment and Long-Lived Assets

Property and equipment are stated at cost. Depreciation is calculated on the straight-line method over the estimated useful life of the assets, which range from two to nine years, or in the case of leasehold improvements, over the shorter of the remaining lease term or the useful life of the asset.

Property and equipment and intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

Property and equipment includes capitalized internal-use software development costs. Eligible internal-use software development costs are capitalized subsequent to the completion of the preliminary project stage. Such costs include internal and external direct development costs totaling $4.0 million for the three months ended March 31, 2024 and $19.7 million for the year ended December 31, 2023. After all substantial testing and deployment is completed and the software is ready for its intended use, capitalization is discontinued and the internal-use software costs are placed in service and amortized using the straight-line method over the estimated useful life of the software, generally three years.

7


(i)
Goodwill

Goodwill represents the excess purchase price over the estimated fair value of net assets acquired in a business combination. As of March 31, 2024 and December 31, 2023, the Company's goodwill is attributable to both the U.S. and International reporting units. Goodwill is not amortized. The Company tests goodwill for impairment annually in the fourth quarter, or more frequently, if events or changes in circumstances indicate that the carrying value of a reporting unit, including goodwill, might be impaired.

In testing for goodwill impairment, we first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. These qualitative factors assessed may include the following: (i) significant changes in the manner of our use of the assets or the strategy of our overall business, (ii) certain restructuring initiatives, (iii) significant negative industry or economic trends and (iv) significant decline in our share price for a sustained period. If, after assessing the totality of events or circumstances, we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then additional impairment testing is not required. However, if we conclude otherwise, we proceed to the quantitative assessment.

(j)
Revenue

The Company derives the majority of its marketplace revenue in the U.S. and Europe from the sale of parts and assemblies fulfilled using a vast network of suppliers. The Company recognizes revenue from the sales to our customers pursuant to Financial Accounting Standard Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”).

The Company determines that a contract exists between the Company and the customer when the customer accepts the quote and places the order, all of which are governed by the Company’s standard terms and conditions or other agreed terms with Xometry’s buyers. Upon completion of an order through Xometry’s platform, the Company identifies the performance obligation(s) within that order to complete the sale of the manufactured part(s) or assembly. Using Xometry’s in-house technology, the Company determines the price for the manufactured part(s) or assembly on a stand-alone basis at order initiation. The Company recognizes revenue from sales to Xometry’s customers upon shipment, at which point control over the part(s) or assembly have transferred.

The Company has concluded that the Company is principal in the sale of part(s) and assemblies that use the Company’s network of third-party manufacturers because the Company controls the manufacturing by obtaining a right to direct a third-party manufacturer to fulfill the performance obligation Xometry has with the Company’s customers on Xometry’s behalf. The Company has considered the following conditions of the sale: (i) the Company has the obligation of providing the specified product to the customer, (ii) the Company has discretion with respect to establishing the price of the product and the price the Company pays the suppliers and the Company has margin risk on all of Xometry’s sales, (iii) the Company has discretion in determining how to fulfill each order, including selecting the supplier and (iv) Xometry bears certain risk for product quality to the extent the customer is not satisfied with the final product.

Xometry also derives revenue from its supplier services which is a suite of services offered to our suppliers. Revenue also includes the sale of marketing services which includes advertising. This revenue is generally recognized as control is transferred to the customer, in an amount reflecting the consideration we expect to be entitled to in exchange for such product or service. From time to time, a purchase order with a customer may involve multiple performance obligations, including a combination of some or all of our products. Judgment may be required in determining whether products are considered distinct performance obligations that should be accounted for separately or as one combined performance obligation. Revenue is recognized over the period or at the point in time in which the performance obligations are satisfied. Consideration is typically determined based on a fixed unit price for the quantity of product transferred. For purchase orders involving multiple performance obligations, the transaction price is allocated to each performance obligation based on relative standalone selling price, and recognized as revenue when each individual product or service is transferred to the customer.

Revenue is shown net of estimated returns, refunds, and allowances. At March 31, 2024 and December 31, 2023, the Company has a provision for estimated returns, refunds or allowances of $0.04 million and $0.1 million, respectively.

Sales tax and, if applicable, duties and/or tariffs collected from customers and remitted to governmental authorities is excluded from revenue.

8


Contract Liabilities

Contract liabilities are primarily derived from payments received in advance or at the time an order is placed, for which the associated performance obligations have not been satisfied and revenue has not been recognized based on the Company’s revenue recognition criteria described above.

The following table presents contract liabilities as of December 31, 2023 and March 31, 2024 (in thousands):

 

Rollforward of contract liabilities:

 

 

 

Contract liabilities at December 31, 2023

 

$

7,357

 

Revenue recognized

 

 

(48,051

)

Payments received in advance

 

 

50,307

 

Contract liabilities at March 31, 2024

 

$

9,613

 

 

During the three months ended March 31, 2024, the Company recognized approximately $5.6 million of revenue related to its contract liabilities as of December 31, 2023.

Sales Contract Acquisition Costs

 

The Company’s incremental costs to obtain a contract may include a sales commission which is generally determined on a per order basis. For marketplace contracts, the Company recognizes costs over a period of one year or less. For supplier service contracts in excess of one year, the Company amortizes such costs on a straight-line basis over the average customer life of two years for new customers and over the renewal period for existing customers which is generally one year. Sales commissions are included in the Company's sales and marketing expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss. For the three months ended March 31, 2024 and 2023, the Company recognized approximately $2.6 million and $2.0 million, respectively of amortization related to deferred sales commissions. As of March 31, 2024 and December 31, 2023, the Company had deferred sales contract acquisition costs of $2.2 million and $3.1 million, respectively which is classified in other current assets on the Condensed Consolidated Balance Sheets.

(k)
Cost of Revenue

Cost of revenue for marketplace primarily consists of the cost of the products that are manufactured or produced by the Company’s suppliers for delivery to buyers on the Company's platform, internal and external production costs, shipping costs, and certain internal depreciation.

 

Cost of revenue for supplier services primarily consists of internal and external production costs and website hosting.

(l)
Leases

The Company determines if an arrangement contains a lease and the classification of that lease, if applicable, at its inception. Operating leases are included in operating lease right-of-use ("ROU") assets, operating lease liabilities, current portion and operating lease liabilities, net of current portion in the Condensed Consolidated Balance Sheets. For leases with terms of twelve months or less, the Company does not recognize ROU assets or lease liabilities on the Condensed Consolidated Balance Sheets. Additionally, the Company elected to use the practical expedient to not separate lease and non-lease components for leases of real estate, meaning that for these leases, the non-lease components are included in the associated ROU asset and lease liability balances on the Company’s Condensed Consolidated Balance Sheets.

 

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments under the lease. Operating lease ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The implicit rate within the Company’s operating leases is generally not determinable, as such the Company uses its incremental borrowing rate at lease commencement to determine the present value of lease payments. The operating lease ROU asset also includes any lease prepayments, offset by lease incentives. Certain of the Company’s leases include options to extend or terminate the lease. The expected lease term includes options to extend or terminate the lease when it is reasonably certain the Company will exercise such option.

Lease expense is recognized on a straight-line basis over the term of the lease.

9


(m)
Sales and Marketing

Sales and marketing expenses are expensed as incurred and include the costs of digital marketing strategies, branding costs and other advertising costs, certain depreciation and amortization expense, contract acquisition costs and compensation expenses, including stock-based compensation, to the Company’s sales and marketing employees. For the three months ended March 31, 2024 and 2023, the Company's advertising cost were $8.3 million and $8.1 million, respectively.

(n)
Operations and Support

Operations and support expenses are the costs the Company incurs in support of the customers and suppliers on Xometry’s platforms which are provided by phone, email and chat for purposes of resolving customer and supplier related matters. These costs primarily consist of compensation expenses of the support staff, including stock-based compensation, certain depreciation and amortization expense and software costs used in delivering customer and supplier services.

(o)
Product Development

Product development costs which are not eligible for capitalization are expensed as incurred. This account also includes compensation expenses, including stock-based compensation to the Company’s employees performing these functions and certain depreciation and amortization expense.

(p)
General and Administrative

General and administrative expenses primarily consist of compensation expenses, including stock-based compensation expenses, for executive, finance, legal and other administrative personnel, professional service fees and certain depreciation and amortization expense.

(q)
Stock Based Compensation

All stock-based compensation, including stock options, restricted stock units and performance restricted stock units (“PRSUs”), are measured at the grant date fair value of the award. The Company estimates grant date fair value of stock options using the Black-Scholes option-pricing model. The fair value of stock options, performance restricted stock units and restricted stock units is recognized as compensation expense on a straight-line basis over the requisite service period, which is typically three to four years. The fair value of the restricted stock units and PRSUs is determined using the fair value of the Company's Class A common stock on the date of grant. Forfeitures are recorded in the period in which they occur.

The Black-Scholes model considers several variables and assumptions in estimating the fair value of stock-based awards.

These variables include:

expected annual dividend yield;
expected volatility over the expected term;
expected term;
risk free interest rate;
per share value of the underlying common stock; and
exercise price.

For all stock options granted, the Company calculated the expected term using the simplified method for “plain vanilla” stock option awards. The risk-free interest rate is based on the yield available on U.S. Treasury issuances similar in duration to the expected term of the stock-based award. The Company estimates its expected share price volatility based on the historical volatility of publicly traded peer companies and/or its own volatility and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded share price. The Company utilized a dividend yield of zero, as it had no history or plan of declaring dividends on its common stock.

The fair value for PRSUs is recognized on a ratable basis over the requisite service period of three years when it is probable the performance conditions of the awards will be met. The Company reassesses the probability of vesting at each reporting period and adjusts the total compensation expense of the award based on this probability assessment.

10


(r)
Net Loss Per Share Attributable to Common Stockholders

The Company computes net loss per share using the two-class method required for multiple classes of common stock and participating securities. The two-class method requires income available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. Certain unvested share-based payment awards that contain nonforfeitable rights to dividends are treated as participating securities and therefore included in computing net income per share using the two-class method. The rights, including the liquidation and dividend rights, of the Class A common stock and Class B common stock are substantially identical, other than voting rights. Accordingly, the Class A common stock and Class B common stock shared proportionately in the Company’s net losses.

(s)
Recently Issued Accounting Standards

In November 2023, the FASB issued Accounting Standard Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, it requires a public entity to disclose the title and position of the Chief Operating Decision Maker (“CODM”). The ASU does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. A public entity should apply the amendments in this ASU retrospectively to all prior periods presented in the financial statements. We expect this ASU to only impact our disclosures with no impacts to our results of operations, cash flows and financial condition.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which focuses on the rate reconciliation and income taxes paid. ASU No. 2023-09 requires a public business entity (“PBE”) to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold. In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received. For PBEs, the new standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted. An entity may apply the amendments in this ASU prospectively by providing the revised disclosures for the period ending December 31, 2025, and continuing to provide the pre-ASU disclosures for the prior periods, or may apply the amendments retrospectively by providing the revised disclosures for all period presented. We expect this ASU to only impact our disclosures with no impacts to our results of operations, cash flows, and financial condition.

There are currently no other accounting standards that have been issued, but not yet adopted, that are expected to have a significant impact on the Company’s consolidated financial position, results of operations or cash flows upon adoption.

(3) Credit Concentrations

Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities and accounts receivable. The Company maintains its cash and cash equivalents and marketable securities which at times may exceed federally insured limits, in deposit accounts at major financial institutions. A majority of the Company’s buyers are located in the United States.

For the three months ended March 31, 2024 and 2023, no single buyer accounted for more than 10% of the Company's revenue. As of March 31, 2024, and December 31, 2023, no single buyer accounted for more than 10% of the Company’s accounts receivable.

(4) Inventory

Inventory consists of raw materials, work-in-process and finished goods. Raw materials (plastics and metals) become manufactured products in the additive and subtractive manufacturing processes. Work-in-progress represents manufacturing costs associated with customer orders that are not yet complete. Finished goods represents product awaiting shipment. Inventory consists of the following as of March 31, 2024 and December 31, 2023 (in thousands):

 

 

 

March 31,

 

 

December 31,

 

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

Raw materials

 

$

915

 

 

$

1,129

 

Work-in-progress

 

 

795

 

 

 

696

 

Finished goods

 

 

1,180

 

 

 

1,060

 

Total

 

$

2,890

 

 

$

2,885

 

 

11


 

(5) Property and Equipment and Long-Lived Assets

Property and equipment consist of the following as of March 31, 2024 and December 31, 2023 (in thousands):

 

 

 

 

 

March 31,

 

 

December 31,

 

 

 

Useful Life

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

Technology hardware

 

3 years

 

$

3,369

 

 

$

3,355

 

Manufacturing equipment

 

2 - 9 years

 

 

5,482

 

 

 

5,482

 

Capitalized software development

 

3 years

 

 

47,893

 

 

 

44,004

 

Leasehold improvements

 

Shorter of useful
life or lease term

 

 

1,791

 

 

 

1,365

 

Furniture and fixtures

 

7 years

 

 

2,451

 

 

 

2,630

 

Total

 

 

 

 

60,986

 

 

 

56,836

 

Less accumulated depreciation

 

 

 

 

(23,407

)

 

 

(21,199

)

Property and Equipment, net

 

 

 

$

37,579

 

 

$

35,637

 

 

Depreciation and amortization expense for the three months ended March 31, 2024 and 2023 was as follows (in thousands):

 

 

Three Months Ended March 31,

 

 

2024

 

 

2023

 

Cost of revenue

$

185

 

 

$

44

 

Sales and marketing

 

26

 

 

 

-

 

Operations and support

 

36

 

 

 

12

 

Product development

 

1,871

 

 

 

1,269

 

General and administrative

 

128

 

 

 

316

 

Total depreciation expense

$

2,246

 

 

$

1,641

 

 

(6) Leases

Operating lease expense for the three months ended March 31, 2024 and 2023 was as follows (in thousands):

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

 

 

 

 

Cost of revenue

 

$

18

 

 

$

18

 

General and administrative

 

 

1,263

 

 

 

2,214

 

Total operating lease expense

 

$

1,281

 

 

$

2,232

 

 

(7) Acquisition

Tridi

On January 2, 2023, the Company acquired Tridi Teknoloj A.S. (“Tridi”) located in Istanbul, Türkiye pursuant to a Share Purchase Agreement. The acquisition of Tridi extends the Company's marketplace capabilities in Europe and provides the Company with access to the Turkish market. The Company accounted for the acquisition as a business combination. The goodwill of $4.8 million arising from the acquisition of Tridi related to expected synergies including access to the Turkish market and an established supplier network. The goodwill is included in our International reporting segment and is not deductible for tax purposes. The aggregate non-contingent portion of the purchase price was approximately $3.8 million in cash, of which approximately $0.4 million was withheld and paid during the first quarter of 2024. In addition, the purchase price included a contingent consideration arrangement to the former owner of Tridi up to a maximum amount of $1.25 million (undiscounted) in shares of the Company’s Class A common stock in two installments on the first and second anniversary of the acquisition. The contingent consideration arrangement is tied to the achievement of revenue thresholds. The initial fair value of the contingent consideration of $0.9 million was estimated by applying an income valuation approach. The measurement is based on inputs that are not observable in the market (Level 3 inputs). Key assumptions made include (a) discount rate and (b) probability weighted assumptions about achieving revenue thresholds. As of March 31, 2024 and December 31, 2023, the total contingent consideration had a fair value of $0.6 million and $1.1 million,

12


respectively. During the quarter ended March 31, 2024, the Company recorded an approximate $0.1 million increase to the contingent consideration liability with a corresponding expense recognized in general and administrative expense on our Condensed Consolidated Statements of Operations and Comprehensive Loss. In February 2024, the Company issued 21,083 shares of Class A common stock with a value of $0.6 million to the former owners of Tridi wih respect to the first installment.

The following table (in thousands) summarizes the consideration paid for Tridi and the final fair value of the assets acquired and liabilities assumed on the acquisition date:

Consideration:

 

 

 

Cash

 

$

3,824

 

Settlement of preexisting relationship

 

 

357

 

Fair value of contingent consideration

 

 

860

 

Fair value of consideration

 

 

5,041

 

 

 

 

 

Recognized amounts of identifiable assets acquired and liabilities assumed:

 

 

 

Current assets

 

 

460

 

Property and equipment

 

 

22

 

Intangible asset

 

 

96

 

Current liabilities

 

 

(373

)

Total identifiable net assets assumed

 

 

205

 

Goodwill

 

 

4,836

 

Total

 

$

5,041

 

The estimated fair value of the intangible asset acquired was determined by the Company. The Company engaged a third‑party expert to assist with the valuation analysis. The Company used a cost me