000178485112-312022Q1FALSEP3Ytrue00017848512022-01-012022-03-310001784851us-gaap:CommonStockMember2022-01-012022-03-310001784851us-gaap:WarrantMember2022-01-012022-03-3100017848512022-05-10xbrli:shares00017848512022-03-31iso4217:USD00017848512021-12-310001784851us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Membershpw:WarrantLiabilityMember2022-03-310001784851us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Membershpw:WarrantLiabilityMember2021-12-31iso4217:USDxbrli:shares00017848512021-01-012021-03-310001784851us-gaap:PreferredStockMember2021-12-310001784851us-gaap:CommonStockMember2021-12-310001784851us-gaap:AdditionalPaidInCapitalMember2021-12-310001784851us-gaap:RetainedEarningsMember2021-12-310001784851us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001784851us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001784851us-gaap:RetainedEarningsMember2022-01-012022-03-310001784851us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310001784851us-gaap:PreferredStockMember2022-03-310001784851us-gaap:CommonStockMember2022-03-310001784851us-gaap:AdditionalPaidInCapitalMember2022-03-310001784851us-gaap:RetainedEarningsMember2022-03-310001784851us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001784851us-gaap:PreferredStockMembersrt:ScenarioPreviouslyReportedMember2020-12-310001784851us-gaap:CommonStockMembersrt:ScenarioPreviouslyReportedMember2020-12-310001784851us-gaap:AdditionalPaidInCapitalMembersrt:ScenarioPreviouslyReportedMember2020-12-310001784851srt:ScenarioPreviouslyReportedMemberus-gaap:RetainedEarningsMember2020-12-310001784851srt:ScenarioPreviouslyReportedMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001784851srt:ScenarioPreviouslyReportedMember2020-12-310001784851us-gaap:PreferredStockMembersrt:RestatementAdjustmentMember2020-01-012020-12-310001784851us-gaap:CommonStockMembersrt:RestatementAdjustmentMember2020-01-012020-12-310001784851us-gaap:AdditionalPaidInCapitalMembersrt:RestatementAdjustmentMember2020-01-012020-12-310001784851us-gaap:PreferredStockMember2020-12-310001784851us-gaap:CommonStockMember2020-12-310001784851us-gaap:AdditionalPaidInCapitalMember2020-12-310001784851us-gaap:RetainedEarningsMember2020-12-310001784851us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-3100017848512020-12-310001784851us-gaap:CommonStockMember2021-01-012021-03-310001784851us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001784851us-gaap:RetainedEarningsMember2021-01-012021-03-310001784851us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001784851us-gaap:PreferredStockMember2021-03-310001784851us-gaap:CommonStockMember2021-03-310001784851us-gaap:AdditionalPaidInCapitalMember2021-03-310001784851us-gaap:RetainedEarningsMember2021-03-310001784851us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-3100017848512021-03-310001784851shpw:ReverseRecapitalizationMembershpw:PipeInvestorsMembershpw:ShapewaysIncMembershpw:SubscriptionAgreementMember2021-09-292021-09-290001784851shpw:ReverseRecapitalizationMembershpw:PipeInvestorsMembershpw:ShapewaysIncMembershpw:SubscriptionAgreementMember2021-09-29shpw:Additivetechnolgies0001784851srt:MinimumMember2022-01-012022-03-31shpw:Materialsandfinishesshpw:Supplychainpartnersshpw:Customersshpw:Countries0001784851us-gaap:MachineryAndEquipmentMember2022-01-012022-03-310001784851us-gaap:ComputerEquipmentMember2022-01-012022-03-310001784851us-gaap:FurnitureAndFixturesMember2022-01-012022-03-310001784851srt:MaximumMember2022-01-012022-03-3100017848512021-01-012021-12-31xbrli:pure0001784851srt:MinimumMember2022-03-310001784851srt:MaximumMember2022-03-310001784851us-gaap:IPOMember2019-10-222019-10-220001784851us-gaap:IPOMember2019-10-220001784851shpw:PrivateWarrantsMemberus-gaap:IPOMember2019-10-2200017848512019-10-220001784851shpw:PrivateWarrantsMemberus-gaap:PrivatePlacementMember2019-10-222019-10-220001784851shpw:PrivateWarrantsMemberus-gaap:PrivatePlacementMember2019-10-220001784851us-gaap:WarrantMember2022-01-012022-03-310001784851us-gaap:WarrantMember2021-01-012021-03-310001784851shpw:EarnoutSharesMember2022-01-012022-03-310001784851shpw:EarnoutSharesMember2021-01-012021-03-310001784851us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-03-310001784851us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-03-31shpw:segment0001784851shpw:DirectSalesMember2022-01-012022-03-310001784851shpw:DirectSalesMember2021-01-012021-03-310001784851shpw:MarketPlaceSalesMember2022-01-012022-03-310001784851shpw:MarketPlaceSalesMember2021-01-012021-03-310001784851us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2022-01-012022-03-310001784851us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2021-01-012021-03-310001784851us-gaap:TransferredAtPointInTimeMember2022-01-012022-03-310001784851us-gaap:TransferredAtPointInTimeMember2021-01-012021-03-310001784851us-gaap:TransferredOverTimeMember2022-01-012022-03-310001784851us-gaap:TransferredOverTimeMember2021-01-012021-03-3100017848512021-01-010001784851us-gaap:MachineryAndEquipmentMember2022-03-310001784851us-gaap:MachineryAndEquipmentMember2021-12-310001784851us-gaap:ComputerEquipmentMember2022-03-310001784851us-gaap:ComputerEquipmentMember2021-12-310001784851us-gaap:FurnitureAndFixturesMember2022-03-310001784851us-gaap:FurnitureAndFixturesMember2021-12-310001784851us-gaap:LeaseholdImprovementsMember2022-03-310001784851us-gaap:LeaseholdImprovementsMember2021-12-31shpw:lease0001784851shpw:DesktopMetalMember2021-03-262021-03-260001784851shpw:DesktopMetalMember2021-03-260001784851shpw:DesktopMetalMember2022-01-012022-03-310001784851us-gaap:SubsequentEventMembershpw:DesktopMetalMember2022-12-31shpw:vote0001784851shpw:ExecutingALoanAgreementMembershpw:LegacyShapewaysCommonStockWarrantsMember2013-12-182013-12-180001784851shpw:ExecutingALoanAgreementMembershpw:LegacyShapewaysCommonStockWarrantsMember2013-12-180001784851shpw:ExecutingALoanAgreementMembershpw:LegacyShapewaysCommonStockWarrantsMember2014-02-032014-02-030001784851shpw:ExecutingALoanAgreementMembershpw:LegacyShapewaysCommonStockWarrantsMember2014-02-030001784851shpw:AmendedLoanAgreementMembershpw:LegacyShapewaysCommonStockWarrantsMember2015-04-222015-04-220001784851shpw:AmendedLoanAgreementMembershpw:LegacyShapewaysCommonStockWarrantsMember2015-04-220001784851shpw:PriorToTheBusinessCombinationMembershpw:LegacyShapewaysCommonStockWarrantsMember2021-09-292021-09-290001784851shpw:PriorToTheBusinessCombinationMembershpw:LegacyShapewaysCommonStockWarrantsMember2022-03-3100017848512021-09-2900017848512021-09-292021-09-290001784851shpw:LegacyShapewaysSeriesBOnePreferredStockMembershpw:LegacyShapewaysPreferredStockWarrantsMember2013-03-082013-03-080001784851shpw:LegacyShapewaysPreferredStockWarrantsMember2013-03-080001784851shpw:LegacyShapewaysPreferredStockWarrantsMember2013-03-082013-03-080001784851shpw:LegacyShapewaysPreferredStockWarrantsMember2021-05-102021-05-100001784851shpw:LegacyShapewaysSeriesBOnePreferredStockMembershpw:LegacyShapewaysCommonStockWarrantsMember2021-05-102021-05-100001784851shpw:LegacyShapewaysPreferredStockWarrantsMember2021-05-100001784851shpw:LegacyShapewaysSeriesDPreferredStockMembershpw:LegacyShapewaysPreferredStockWarrantsMember2017-06-302017-06-300001784851shpw:LegacyShapewaysPreferredStockWarrantsMember2017-06-300001784851shpw:LegacyShapewaysPreferredStockWarrantsMember2017-06-302017-06-300001784851shpw:PublicWarrantsMembershpw:PriorToMergerMember2021-09-280001784851shpw:PublicWarrantsMember2021-09-280001784851shpw:PublicWarrantsMember2021-09-282021-09-2800017848512021-09-28shpw:Day0001784851shpw:PublicWarrantsMember2022-03-310001784851shpw:PublicWarrantsMember2021-12-310001784851shpw:TwoThousandTenStockPlanMember2021-09-290001784851shpw:TwoThousandTenStockPlanMembershpw:LegacyShapewaysStockOptionMember2021-09-292021-09-290001784851shpw:TwoThousandTenStockPlanMember2022-01-012022-03-310001784851shpw:TwoThousandTenStockPlanMember2022-03-310001784851shpw:TwoThousandTwentyOneEquityIncentivePlanMember2022-03-310001784851shpw:TwoThousandTwentyOneEquityIncentivePlanMember2022-01-012022-03-310001784851srt:MinimumMember2021-01-012021-03-310001784851srt:MaximumMember2021-01-012021-03-310001784851srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2021-12-310001784851srt:CumulativeEffectPeriodOfAdoptionAdjustedBalanceMember2022-01-012022-03-310001784851shpw:TwoThousandTwentyOneEquityIncentivePlanMember2021-01-012021-03-310001784851us-gaap:RestrictedStockUnitsRSUMember2021-12-310001784851us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-03-310001784851us-gaap:RestrictedStockUnitsRSUMember2022-03-310001784851shpw:PrivateWarrantsMember2021-09-280001784851shpw:ConvertibleNoteMember2022-01-012022-03-310001784851shpw:SponsorWarrantsMembershpw:ConvertibleNoteMember2022-01-012022-03-310001784851shpw:SponsorWarrantsMember2022-03-310001784851us-gaap:MeasurementInputSharePriceMemberus-gaap:FairValueInputsLevel3Membershpw:PrivatePlacementWarrantsMember2022-03-310001784851us-gaap:MeasurementInputSharePriceMemberus-gaap:FairValueInputsLevel3Membershpw:PrivatePlacementWarrantsMember2021-12-310001784851us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputExercisePriceMembershpw:PrivatePlacementWarrantsMember2022-03-310001784851us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputExercisePriceMembershpw:PrivatePlacementWarrantsMember2021-12-310001784851us-gaap:FairValueInputsLevel3Membershpw:PrivatePlacementWarrantsMemberus-gaap:MeasurementInputExpectedTermMember2022-03-31utr:Y0001784851us-gaap:FairValueInputsLevel3Membershpw:PrivatePlacementWarrantsMemberus-gaap:MeasurementInputExpectedTermMember2021-12-310001784851us-gaap:MeasurementInputPriceVolatilityMemberus-gaap:FairValueInputsLevel3Membershpw:PrivatePlacementWarrantsMember2022-03-310001784851us-gaap:MeasurementInputPriceVolatilityMemberus-gaap:FairValueInputsLevel3Membershpw:PrivatePlacementWarrantsMember2021-12-310001784851us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputRiskFreeInterestRateMembershpw:PrivatePlacementWarrantsMember2022-03-310001784851us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputRiskFreeInterestRateMembershpw:PrivatePlacementWarrantsMember2021-12-310001784851us-gaap:MeasurementInputExpectedDividendRateMemberus-gaap:FairValueInputsLevel3Membershpw:PrivatePlacementWarrantsMember2022-03-310001784851us-gaap:MeasurementInputExpectedDividendRateMemberus-gaap:FairValueInputsLevel3Membershpw:PrivatePlacementWarrantsMember2021-12-310001784851us-gaap:FairValueInputsLevel3Membershpw:MeasurementInputFairValuePerWarrantMembershpw:PrivatePlacementWarrantsMember2022-03-310001784851us-gaap:FairValueInputsLevel3Membershpw:MeasurementInputFairValuePerWarrantMembershpw:PrivatePlacementWarrantsMember2021-12-310001784851us-gaap:FairValueInputsLevel3Memberus-gaap:WarrantMember2021-12-310001784851us-gaap:FairValueInputsLevel3Memberus-gaap:WarrantMember2022-01-012022-03-310001784851us-gaap:FairValueInputsLevel3Memberus-gaap:WarrantMember2022-03-310001784851shpw:PrivateWarrantsMember2022-03-310001784851shpw:PrivateWarrantsMember2021-12-310001784851shpw:EarnoutSharesMember2022-03-310001784851shpw:TradingPriceOneMembershpw:EarnoutSharesMember2021-09-290001784851shpw:TradingPriceTwoMembershpw:EarnoutSharesMember2021-09-290001784851shpw:TradingPriceOneMember2021-09-290001784851shpw:TradingPriceTwoMember2021-09-290001784851shpw:EarnoutSharesMember2021-09-292021-09-290001784851us-gaap:FairValueMeasurementsNonrecurringMembershpw:EarnoutSharesMember2022-03-310001784851us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMembershpw:CustomerOneMember2022-01-012022-03-310001784851us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMembershpw:CustomerOneMember2021-01-012021-03-310001784851us-gaap:SupplierConcentrationRiskMembershpw:VendorOneMemberus-gaap:CostOfGoodsTotalMember2022-01-012022-03-310001784851us-gaap:SupplierConcentrationRiskMembershpw:VendorOneMemberus-gaap:CostOfGoodsTotalMember2021-01-012021-03-310001784851us-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMembershpw:CustomerOneMember2022-01-012022-03-310001784851shpw:CustomerTwoMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2022-01-012022-03-310001784851us-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMembershpw:CustomerOneMember2021-01-012021-12-310001784851shpw:CustomerTwoMemberus-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2021-01-012021-12-310001784851us-gaap:AccountsPayableMemberus-gaap:SupplierConcentrationRiskMembershpw:VendorOneMember2022-01-012022-03-310001784851us-gaap:AccountsPayableMembershpw:VendorTwoMemberus-gaap:SupplierConcentrationRiskMember2022-01-012022-03-310001784851us-gaap:AccountsPayableMemberus-gaap:SupplierConcentrationRiskMembershpw:VendorOneMember2021-01-012021-12-310001784851us-gaap:AccountsPayableMembershpw:VendorTwoMemberus-gaap:SupplierConcentrationRiskMember2021-01-012021-12-310001784851us-gaap:SubsequentEventMember2022-04-012022-05-16shpw:acquisition
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM 10-Q
____________________
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
OR
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____to _____
Commission file number: 001-39092
____________________
SHAPEWAYS HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
____________________
Delaware87-2876494
(State or other jurisdiction of incorporation)(I.R.S. Employer Identification No.)
30-02 48th Avenue
Long Island City, NY 11101
(Address of principal executive offices) (Zip Code)
(646) 979-9885
(Registrant’s telephone number, including area code)
____________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class:
Trading
Symbol(s)
Name of each exchange
on which registered:
Common Stock, par value $0.0001 per shareSHPW
New York Stock Exchange
Warrants, each whole warrant exercisable for
 one share of Common Stock for $11.50 per share
SHPW WS
New York Stock Exchange
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 x No o
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 (§232.0405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
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
o
Accelerated filer
o
Non-accelerated filer
x
Smaller reporting company
x
Emerging growth company
x
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. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b2 of the Exchange Act). Yes ☐ No x
As of May 10, 2022 the registrant had 48,948,321 shares of common stock outstanding.


Table of Contents
SHAPEWAYS HOLDINGS, INC.
TABLE OF CONTENTS


Table of Contents
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (the “Report”), including, without limitation, the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” includes 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”). All statements, other than statements of present or historical fact included in or incorporated by reference in this Report, regarding the future financial performance of Shapeways Holdings, Inc. (the “Company,” “Shapeways,” “we,” “us” or “our”), as well as the Company’s strategy, future operations, future operating results, financial position, estimated revenues, and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “should,” “would,” “will,” “seek,” “target,” and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements are based on information available as of the date of this Report and on the current expectations, forecasts and assumptions of the management of the Company, involve a number of judgments, risks and uncertainties and are inherently subject to changes in circumstances and their potential effects and speak only as of the date of such statements. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the Company’s control) or other assumptions that may cause actual results or performance to be materially different from those expressed, contemplated or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under Part II, Item 1A “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. These risks and others described under Part II, Item 1A: “Risk Factors” may not be exhaustive.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance and the Company’s actual results of operations, financial condition and liquidity, and developments in the industry in the Company operates may differ materially from those made in or suggested by the forward-looking statements contained in this Report. In addition, even if the Company’s results or operations, financial condition and liquidity, and developments in the industry in which it operates are consistent with the forward-looking statements contained in this Report, those results or developments may not be indicative of results or developments in subsequent periods.


Table of Contents
PART 1 - FINANCIAL INFORMATION
ITEM 1. Financial Statements
SHAPEWAYS HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
March 31, 2022December 31, 2021
(Unaudited)
Assets
Current assets
Cash and cash equivalents$64,692 $79,677 
Restricted cash141 142 
Accounts receivable1,504 1,372 
Inventory894 927 
Prepaid expenses and other current assets6,939 4,360 
Total current assets74,170 86,478 
Property and equipment, net12,464 4,388 
Right-of-use assets, net703 842 
Goodwill1,835 1,835 
Security deposits175 175 
Total assets$89,347 $93,718 
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable$1,705 $1,909 
Accrued expenses and other liabilities3,486 2,645 
Operating lease liabilities, current551 639 
Deferred revenue515 921 
Total current liabilities6,257 6,114 
Operating lease liabilities, net of current portion252 326 
Warrant liabilities1,130 2,274 
Total liabilities7,639 8,714 
Commitments and contingencies
Stockholders’ equity
Preferred stock ($0.0001 par value; 10,000,000 shares authorized; none issued and outstanding as of March 31, 2022 and December 31, 2021, respectively)
  
Common stock ($0.0001 par value; 120,000,000 shares authorized; 48,845,706 and 48,627,739 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively)
5 5 
Additional paid-in capital198,972 198,179 
Accumulated deficit(116,848)(112,811)
Accumulated other comprehensive loss(421)(369)
Total stockholders’ equity 81,708 85,004 
Total liabilities and stockholders’ equity$89,347 $93,718 


The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1

Table of Contents
SHAPEWAYS HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
(UNAUDITED)
(in thousands, except share and per share amounts)
Three Months Ended March 31,
20222021
Revenue, net$7,570 $8,789 
Cost of revenue4,161 4,660 
Gross profit3,409 4,129 
Operating expenses
Selling, general and administrative6,145 3,033 
Research and development2,065 1,310 
Total operating expenses8,210 4,343 
Loss from operations(4,801)(214)
Other income (expense)
Long-term debt forgiveness 2,000 
Change in fair value of warrant liabilities762  
Interest expense (151)
Interest income1  
Other income1  
Total other income, net764 1,849 
(Loss) income before income tax benefit(4,037)1,635 
Income tax benefit  73 
Net (loss) income(4,037)1,708 
Net (loss) income per share:
Basic$(0.08)$0.05 
Diluted$(0.08)$0.05 
Weighted average common shares outstanding: (1)
Basic53,142,447 35,993,403 
Diluted53,142,447 35,993,403 
Other comprehensive (loss) income
Foreign currency translation adjustment(52)(9)
Comprehensive (loss) income(4,089)1,699 
(1)Retroactively restated the common shares for 2021 due to the reverse recapitalization as described in Notes 1 and 2.



The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2

Table of Contents
SHAPEWAYS HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
(Unaudited)
(in thousands, except share and per share amounts)
Preferred Stock Common Stock
Three Months Ended March 31, 2022
Shares Amount Shares AmountAdditional
Paid-In
 Capital
Accumulated
 Deficit
Accumulated Other
 Comprehensive
 Loss
Total
 Stockholders’
 Equity (Deficit)
Balance at January 1, 2022 $ 48,627,739 $5 $198,179 $(112,811)$(369)$85,004 
Issuance of Legacy Shapeways common stock upon exercise of stock options— — 217,967 99 99 
Stock-based compensation expense— — — 312 312 
Net loss— — — — (4,037)(4,037)
Transfer of Private Warrants to Public Warrants— — — — 382 — — 382 
Foreign currency translation— — — — — (52)(52)
Balance at March 31, 2022  48,845,706 5198,972 (116,848)(421)81,708 
Preferred Stock
Common Stock    
Three Months Ended March 31, 2021
Shares
Amount
SharesAmountAdditional
Paid-In
Capital
Accumulated
Deficit
Accumulated Other
Comprehensive
Loss
Total
Stockholders’
Equity (Deficit)
Balance at January 1, 2021 (as previously reported)22,579,695 $2 16,211,567 $2 $112,993 $(114,567)$(277)$(1,847)
Retroactive application of reverse recapitalization(22,579,695)(2)15,972,696 11$— 
Balance at January 1, 2021 (after effect of reverse recapitalization) (1)
 $— 32,184,263 $3 $112,994 $(114,567)$(277)$(1,847)
Issuance of Legacy Shapeways common stock upon exercise of stock options— 35,895 16$16 
Stock-based compensation expense— — 174$174 
Net income— — 1,708$1,708 
Foreign currency translation— — (9)$(9)
Balance at March 31, 2021 32,220,158 3113,184(112,859)(286)$42 
(1)Retroactively restated for the reverse recapitalization as described in Notes 1 and 2.
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3

Table of Contents
SHAPEWAYS HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands, except share and per share amounts)
Three Months Ended March 31,
20222021
Cash flows from operating activities:
Net (loss) income(4,037)1,708 
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization182141
Stock-based compensation expense312174
Non-cash lease expense131845
Non-cash debt forgiveness (2,000)
Change in fair value of warrant liabilities(762) 
Change in operating assets and liabilities:
Accounts receivable(134)(708)
Inventory2450
Prepaid expenses and other assets(2,567)(558)
Accounts payable(193)(35)
Accrued expenses and other liabilities851353
Lease liabilities(154)(874)
Deferred revenue(406)(36)
Net cash used in operating activities(6,753)(940)
Cash flows from investing activities:
Purchases of property and equipment(8,258)(136)
Net cash used in investing activities(8,258)(136)
Cash flows from financing activities:
Proceeds from issuance of common stock9916
Repayments of loans payable (460)
Net cash provided by (used in) financing activities99$(444)
Net change in cash and cash equivalents and restricted cash$(14,912)$(1,520)
Effect of change in foreign currency exchange rates on cash and cash equivalents and restricted cash(74)(12)
Cash and cash equivalents and restricted cash at beginning of period79,8198,709
Cash and cash equivalents and restricted cash at end of period$64,833 $7,177 
Supplemental disclosure of cash and non-cash transactions:
Cash paid for interest$ $33 



The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4

Table of Contents
SHAPEWAYS HOLDINGS, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

Note 1. Organization

On September 29, 2021 (the “Closing” or the “Closing Date”), Galileo Acquisition Corp., a Cayman Islands exempted company (“Galileo” and after the Domestication (as defined below) “Shapeways”), a publicly-traded special purpose acquisition company, consummated the transactions described in the Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) dated April 28, 2021, by and among Galileo Founders Holdings, L.P. (the “Sponsor”), Galileo Acquisition Corp., Galileo Acquisition Holdings, Inc., a Delaware corporation and wholly-owned subsidiary of Galileo (“Merger Sub”), and Shapeways, Inc., a Delaware corporation (“Legacy Shapeways”), whereby Merger Sub merged with and into Legacy Shapeways, the separate corporate existence of Merger Sub ceasing and Legacy Shapeways being the surviving corporation and a wholly owned subsidiary of Shapeways (the “Merger”).

Further, on the Closing Date, Galileo was domesticated and continued as a Delaware corporation (the “Domestication” and, together with the Merger, the “Business Combination”), changing its name to “Shapeways Holdings, Inc.” (the “Company” and/or “Shapeways”). Simultaneously with the execution of the Business Combination, Galileo entered into subscription agreements pursuant to which certain investors agreed to purchase an aggregate of 7,500,000 shares of Common Stock for a purchase price of $10.00 per share and $75,000,000 in the aggregate (the “PIPE Investment”). At the Closing, the Company consummated the PIPE Investment. Shapeways also operates through its wholly-owned subsidiary, Shapeways BV, which was incorporated in the Netherlands on December 10, 2008.

Shapeways is a leader in the large and fast-growing digital manufacturing industry combining high quality, flexible on-demand manufacturing powered by purpose-built proprietary software which enables customers to rapidly transform digital designs into physical products, globally. Shapeways makes industrial-grade additive manufacturing accessible by fully digitizing the end-to-end manufacturing process, and by providing a broad range of solutions utilizing 11 additive manufacturing technologies and more than 100 materials and finishes, with the ability to easily scale new innovation. Shapeways has delivered over 23 million parts to 1 million customers in over 180 countries.
Note 2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information as defined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and in accordance with the instruction to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. The condensed consolidated financial statements include the accounts of its wholly owned subsidiaries, Legacy Shapeways and Shapeways BV. All intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, the accompanying condensed consolidated interim financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. These unaudited condensed consolidated interim financial statements should be read along with the audited financial statements included in the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2021, as filed with the SEC on April 1, 2022 (the “Annual Report”).

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 that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.

5

Table of Contents
SHAPEWAYS HOLDINGS, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
Functional Currency

The local currency is the functional currency for Shapeways BV’s operations outside the United States. Assets and liabilities of these operations are translated into U.S. Dollars at the exchange rate in effect at the end of each period. Income statement accounts are translated at the average exchange rate prevailing during the period. Translation adjustments arising from the use of differing exchange rates from period to period are included as a component of other comprehensive loss within stockholders’ equity (deficit). Gains and losses from foreign currency transactions are included in net loss for the period.

Cash, Cash Equivalents and Restricted Cash

Cash includes cash on hand and demand deposits. The Company maintains its deposits at high quality financial institutions and monitors the credit ratings of those institutions. The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. While cash held by financial institutions may at times exceed federally insured limits, the Company believes that no material credit or market risk exposure exists due to the high quality of the institutions. The Company has not experienced any losses on such accounts. Restricted cash represents cash required to be held as collateral for the Company’s credit cards and security deposit for its facility in the Netherlands. Accordingly, these balances contain restrictions as to their availability and usage and are classified as restricted cash in the condensed consolidated balance sheets.

The reconciliation of cash, cash equivalents and restricted cash reported within the applicable condensed consolidated balance sheet that sum to the total of the same such amount shown in the condensed consolidated statements of cash flows is as follows:
March 31,
2022
December 31,
2021
Cash and cash equivalents$64,692 $79,677 
Restricted cash141 142 
$64,833 $79,819 

Accounts Receivable

Accounts receivables are recorded at the invoiced amount and are generally unsecured as they are uncollateralized. The Company provides an allowance for doubtful accounts to reduce receivables to their estimated net realizable value. Judgement is exercised in establishing allowances and estimates are based on the customers’ payment history and liquidity. Any amounts that were previously recognized as revenue and subsequently determined to be uncollectible are charged to bad debt expense included in selling, general and administrative expense in the accompanying condensed consolidated statements of operations and comprehensive loss. Given the nature and historical collectability of the Company’s accounts receivable, an allowance for doubtful accounts was not deemed necessary at March 31, 2022 and December 31, 2021.

Inventory

Inventory consists of raw materials, work in progress and finished goods at the Company’s distribution center. Raw materials are stated at the lower of cost or net realizable value, determined by the first-in-first-out method. Finished goods and work in progress are valued using a methodology to determine the cost of each 3D printed object using allocations for material, labor, machine time and overhead. The Company periodically reviews its inventory for slow-moving, damaged and discontinued items and provides allowances to reduce such items identified to their recoverable amounts. As of March 31, 2022 and December 31, 2021, the Company determined an allowance was not deemed necessary.

Property and Equipment, net

Property and equipment are stated at cost, less accumulated depreciation. Maintenance and repairs are charged to expense when incurred. Additions and improvements that extend the economic useful life of the asset are capitalized and depreciated over the remaining useful lives of the assets. The cost and accumulated depreciation of assets sold or retired are
6

Table of Contents
SHAPEWAYS HOLDINGS, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
removed from the respective accounts, and any resulting gain or loss is reflected in current earnings. No impairment charges were recorded for the three months ended March 31, 2022 and March 31, 2021. Depreciation is recognized using the straight-line method in amounts considered to be sufficient to allocate the cost of the assets to operations over the estimated useful lives or lease terms, as follows:
Asset CategoryDepreciable Life
Machinery and equipment5 years
Computers and IT equipment3 years
Furniture and fixtures7 years
Leasehold improvements**
**Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or estimated useful life of the asset.

Long-Lived Assets, Including Definite-Lived Intangible Assets

Intangible assets, which consist of technology, customer relationships, and trademarks, are stated at cost less accumulated amortization. Amortization is generally recorded on a straight-line basis over estimated useful lives ranging from three to eight years. The Company periodically reviews the estimated useful lives of intangible assets and adjusts when events indicate that a shorter life is appropriate. In accordance with authoritative accounting guidance, capitalization of costs to develop software begin when preliminary development efforts are successful and completed. Costs related to the design or maintenance of internal-use software are expensed as incurred.

Long-lived assets, other than goodwill and other indefinite-lived intangibles, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows derived from such assets.

Factors that the Company considers in deciding when to perform an impairment review include significant changes in the Company’s forecasted projections for the asset or asset group for reasons including, but not limited to, significant underperformance of a product in relation to expectations, significant changes, or planned changes in the Company’s use of the assets, significant negative industry or economic trends, and new or competing products that enter the marketplace. The impairment test is based on a comparison of the undiscounted cash flows expected to be generated from the use of the asset group. If impairment is indicated, the asset is written down by the amount by which the carrying value of the asset exceeds the related fair value of the asset with the related impairment charge recognized within the statements of operations and comprehensive loss. No impairment charges were recorded for the three months ended March 31, 2022 and March 31, 2021.

Goodwill

Goodwill, which represents the excess of purchase prices over the fair value of net assets acquired, is carried at cost. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value-based test. Goodwill is evaluated for impairment on an annual basis at a level of reporting referred to as the reporting unit, and more frequently if adverse events or changes in circumstances indicate that the asset may be impaired.

Under ASC 350, Intangibles - Goodwill and Other, the Company has the option to first assess the qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative goodwill impairment test. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the goodwill impairment test is performed. Impairment tests are performed on a quarterly basis. Management uses the future discounted cash flows valuation approach to determine the fair value of reporting units and determines whether the fair value of reporting units exceeded its carrying amounts. If the fair value exceeds the carrying amount, then no impairment is recognized. If the carrying amount recorded exceeds the fair value calculated, then an impairment charge is recognized for
7

Table of Contents
SHAPEWAYS HOLDINGS, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
the difference. The impairment review requires management to make judgments in determining various assumptions with respect to revenues, operating margins, growth rates and discount rates. The judgments made in determining the projected cash flows used to estimate the fair value can materially impact the Company’s financial condition and results of operations. There was no impairment of goodwill as of March 31, 2022 or December 31, 2021.

Fair Value Measurements

The Company applies ASC 820, Fair Value Measurement (“ASC 820”), which establishes framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances.
The valuation hierarchy is composed of three levels. The classification within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The levels within the valuation hierarchy are described below:
Level 1 - Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities.
Level 2 - Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals.
Level 3 - Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities.

Business Combination

The Business Combination with Galileo was accounted for as a reverse recapitalization, in accordance with U.S. GAAP (the “Reverse Recapitalization”) and Galileo was treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination has been treated as the equivalent of Legacy Shapeways issuing stock for the net assets of Galileo, accompanied by a recapitalization.

The consolidated assets, liabilities and results of operations prior to the Reverse Recapitalization are those of Legacy Shapeways. The shares and corresponding capital amounts and losses per share, prior to the Merger, have been retroactively adjusted based on shares reflecting the recapitalization conversion ratio of 0.8293 (the “Conversion Ratio”) established in the Merger.

Revenue Recognition

Revenue is derived from two primary sources: (a) products and services and (b) software.

The Company recognizes revenue following the five-step model prescribed under ASC 606: (i) identify contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the products or services it transfers to the customer. These contracts have different terms based on the scope, performance obligations, and complexity of the project, which often requires us to make judgments and estimates in recognizing revenues.
8

Table of Contents
SHAPEWAYS HOLDINGS, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

Performance obligations are satisfied both at a point of time and over time. All revenue is recognized based on the satisfaction of the performance obligation to date (see Note 3).

Leases

The Company’s lease arrangements relate primarily to office and manufacturing space and equipment. The Company’s leases generally have initial terms ranging from 5 to 10 years and may include renewal options and rent escalation clauses. The Company is typically required to make fixed minimum rent payments relating to its right to use an underlying leased asset. Additionally, the Company’s leases do not contain significantly restrictive covenants or residual value guarantees.

The Company determines if an arrangement is a lease at inception and classifies its leases at commencement. Operating leases are presented as right-of-use (“ROU”) assets and the corresponding lease liabilities are included in operating lease liabilities, current and operating lease liabilities on the Company’s condensed consolidated balance sheets. The Company does not currently maintain any finance lease arrangements. ROU assets represent the Company’s right to use an underlying asset and lease liabilities represent the Company’s obligation for lease payments in exchange for the ability to use the asset for the duration of the lease term. The Company does not recognize short term leases that have a term of twelve months or less as ROU assets or lease liabilities. The Company’s short-term leases are not material and do not have a material impact on its ROU assets or lease liabilities.

ROU assets and lease liabilities are recognized at commencement date and determined using the present value of the future minimum lease payments over the lease term. The Company uses an incremental borrowing rate based on estimated rate of interest for collateralized borrowing since the Company’s leases do not include an implicit interest rate. The estimated incremental borrowing rate considers market data, actual lease economic environment, and actual lease term at commencement date. The lease term may include options to extend when it is reasonably certain that the Company will exercise that option. ROU assets include lease payments made in advance, and excludes any incentives received or initial direct costs incurred. The Company recognizes lease expense on a straight-line basis over the lease term.

The Company has lease agreements which contain both lease and non-lease components, which it has elected to account for as a single lease component. As such, minimum lease payments include fixed payments for non-lease components within a lease agreement, but exclude variable lease payments not dependent on an index or rate, such as common area maintenance, operating expenses, utilities, or other costs that are subject to fluctuation from period to period.

Stock-based Compensation

The Company recognizes stock-based compensation expense for all options and other arrangements within the scope of ASC 718, Stock Compensation. Stock-based compensation expense is measured at the date of grant, based on the fair value of the award, and is recognized using the straight-line method over the employee’s requisite service period. Compensation for stock-based awards with vesting conditions other than service are recognized at the time that those conditions will be achieved. Forfeitures are recognized as they are incurred.

Public and Private Common Stock Warrant Liabilities

As part of Galileo’s initial public offering, Galileo issued to third party investors 13,800,000 units, consisting of one ordinary share of Galileo and one warrant, at a price of $10.00 per unit. Each whole warrant entitles the holder to purchase one share of Common Stock at an exercise price of $11.50 per share (the “Public Warrants”). Simultaneously with the closing of Galileo’s initial public offering, Galileo completed the private sale of 4,110,000 warrants to Galileo’s sponsor and EarlyBirdCapital, Inc. at a purchase price of $1.00 per warrant (the “Private Warrants”). In connection with the Business Combination, Galileo’s sponsor exercised its right to convert the aggregate outstanding principal amount of the convertible promissory note issued by Galileo into an aggregate of 500,000 Sponsor Warrants, with terms equivalent to the Private Warrants.

The Private Warrants are identical to the Public Warrants, except that the Private Warrants (i) will not be redeemable by the Company and (ii) may be exercised for cash or on a cashless basis, so long as they are held by the initial purchaser or
9

Table of Contents
SHAPEWAYS HOLDINGS, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
any of its permitted transferees. If the Private Warrants are held by holders other than the initial purchasers or any of their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants.

The Company evaluated the Public and Private Warrants under ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity (“ASC 815-40”), and concluded that the Private Warrants do not meet the criteria to be classified in stockholders’ equity. Since the Private Warrants meet the definition of a derivative under ASC 815, the Company recorded these warrants as liabilities on the condensed consolidated balance sheets at fair value, with subsequent changes in their respective fair values recognized in the condensed consolidated statement of operations at each reporting date.

Research and Development Costs

Research and development expenses consist primarily of allocated personnel costs, fees paid to consultants and outside service providers, and allocations for rent and overhead. Research and development costs are expensed as incurred. Advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received. For the three months ended March 31, 2022 and 2021, research and development costs were $2,065 and $1,310, respectively.

Advertising costs are expensed as incurred. For the three months ended March 31, 2022 and 2021, advertising costs were $558 and $144, respectively, which are included in selling, general and administrative expense on the condensed consolidated statements of operations and comprehensive (loss) income.

Income Taxes

The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Where applicable, the Company records a valuation allowance to reduce any deferred tax assets that it determines will not be realizable in the future.

The Company recognizes the benefit of an uncertain tax position that it has taken or expects to take on income tax returns it files if such tax position is more likely than not to be sustained on examination by the taxing authorities, based on the technical merits of the position. These tax benefits are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. Although the Company believes that it has adequately reserved for uncertain tax positions (including interest and penalties), it can provide no assurance that the final tax outcome of these matters will not be materially different. The Company makes adjustments to these reserves in accordance with the income tax accounting guidance when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made, and could have a material impact on the Company’s financial condition and operating results. Carryforward attributes that were generated in tax years prior to those that remain open for examination may still be adjusted by relevant tax authorities upon examination if they either have been, or will be, used in a future period.

In applying the estimated annual effective tax rate approach prescribed under ASC 740, Income Taxes, based on present evidence and conclusions around the realizability of deferred tax assets, we determined that any deferred tax benefits related to the forecasted tax rate and pretax activity during the three months ended March 31, 2022 and 2021 are neither more likely than not to be realized in the current year, nor realizable as a deferred tax asset at the end of the year. Therefore, the appropriate amount of income tax benefit to recognize related to deferred tax assets during the three months ended March 31, 2022 and 2021 is zero. The Company’s effective tax rate of zero for the three months ended March 31, 2022 and 2021 differs from the applicable statutory tax rate primarily due to the fact that the Company maintains a full valuation allowance against its U.S. deferred tax assets as a result of its historical and current period losses.
10

Table of Contents
SHAPEWAYS HOLDINGS, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
(Loss) income per Share

In accordance with the provisions of ASC 260, Earnings Per Share, net (loss) income per common share is computed by dividing net (loss) income by the weighted-average shares of Common Stock outstanding during the period. Basic (loss) income per share is computed by dividing net (loss) income attributable to common stockholders by the weighted average number of shares outstanding during the period. Diluted (loss) income per share gives effect to all dilutive potential common shares outstanding during the period including stock options and warrants, using the treasury stock method, and convertible debt and convertible securities, using the if-converted method. During a loss period, the effect of the potential exercise of stock options and convertible debt are not considered in the diluted loss per common share calculation since the effect would be anti-dilutive. A reconciliation of net (loss) income and number of shares used in computed basic and diluted (loss) income per share was as follows:

 Three Months Ended March 31,
 20222021
Basic and Diluted net (loss) income per share computation:
Net (loss) income$(4,037)$1,708 
Weighted average common shares - basic53,142,447 35,993,403 
Basic and diluted net (loss) income per share$(0.08)$0.05 

The following table presents the outstanding shares of Common Stock equivalents that were excluded from the computation of the diluted net (loss) income per share attributable to Common Stock for the periods in which a net (loss) income is presented because their effect would have been anti-dilutive:

 Three Months Ended March 31,
 20222021
Common stock warrants18,410,000  
Earnout Shares3,510,405  
Unvested RSUs3,268,105  
Included in income (loss) per common share are 4,339,216 and 3,819,748 shares subject to options due to their nominal exercise prices as of March 31, 2022 and 2021, respectively.

Segment Information

The Company has determined that it operates and reports in one segment, which focuses on providing additive manufacturing services to customers. The Company’s operating segment is reported in a manner consistent with the internal reporting provided to the chief operating decision maker (“CODM”). The Company’s CODM has been identified as its Chief Executive Officer.

Recent Accounting Pronouncements

Accounting Pronouncements Recently Adopted

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. The Company has evaluated recently issued accounting
11

Table of Contents
SHAPEWAYS HOLDINGS, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
pronouncements and does not believe any will have a material impact on the Company’s condensed consolidated financial statements or related financial statement disclosures.

Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued ASU No. 2016-13, Accounting for Credit Losses (Topic 326), which requires the use of an “expected loss” model on certain types of financial instruments. The standard also amends the impairment model for available-for-sale debt securities and requires estimated credit losses to be recorded as allowances instead of reductions to amortized cost of the securities. Update No. 2016-13 is effective for annual periods beginning after December 15, 2022, including interim periods within those annual periods. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact the standard will have on its condensed consolidated financial statements.

In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments—Credit Losses (Topic 326)—Troubled Debt Restructurings ("TDRs") and Vintage Disclosures. The amendments in this Update eliminate the accounting guidance for TDRs by creditors while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Update No. 2022-02 is effective for annual periods beginning after December 15, 2022, including interim periods within those annual periods. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact the Update will have on its condensed consolidated financial statements.

Note 3. Revenue Recognition

Under ASC 606, revenue is recognized throughout the life of the executed agreement. The Company measures revenue based on consideration specified in a contract with a customer. Furthermore, the Company recognizes revenue when a performance obligation is satisfied by transferring control of the product or service to the customer which could occur over time or at a point in time.

A performance obligation is a promise in a contract to transfer a distinct service to the customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation. Customers typically receive the benefit of the Company’s services as (or when) they are performed. Substantially all customer contracts provide that compensation is received for services performed to date. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by us from a customer, are excluded from revenue.

Nature of Products and Services

The following is a description of the Company’s products and services from which the Company generates revenue, as well as the nature, timing of satisfaction of performance obligations, and significant payment terms for each:

Direct sales

The Company provides customers with an additive manufacturing service, allowing for the customer to select the specifications of the model which they wish to have printed. Shapeways prints the 3D model and ships the product directly to the customer.

The Company recognizes the sale of shop owner products through their e-commerce website over time using the output method. Contracts involving the sale of shop owner products through their e-commerce website do not include other performance obligations. As such, allocation of the transaction price was not necessary as the entire contract price is attributed to the sole performance obligation identified.

12

Table of Contents
SHAPEWAYS HOLDINGS, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
Marketplace sales

The Company provides a platform for shop owners to sell their products to customers through Shapeways’ marketplace website. Shapeways receives a 3.5% markup fee from the shop owner upon the sale of any products through the marketplace.

The Company handles the financial transaction, manufacturing, distribution and customer service on behalf of the shop owners. The Company is responsible for billing the customer in this arrangement and transmitting the applicable fees to the shop owner. The Company assessed whether it is responsible for providing the actual product or service as a principal, or for arranging for the product or service to be provided by the third party as an agent. Judgment is applied to determine whether the Company is the principal or the agent by evaluating whether it has control of the product or service prior to it being transferred to the customer. The principal versus agent assessment is performed at the performance obligation level. Indicators that the Company has considered include whether it has the primary responsibility for fulfilling the promise to provide the specified product or service to the customer and whether it has inventory risk prior to transferring the product or service to the customer. The Company has the responsibility to fulfill the promise to provide the specific good or service on behalf of the shop owners to the customer. In addition, the Company has inventory risk before the specific good or service is transferred to a customer. As such, the Company is deemed the principal and shall recognize revenue on a gross basis for the price it charges to the shop owner for each product or service.

The Company recognizes the sale of 3D products to customers at a point in time, specifically upon shipping the goods to the customer (FOB Origin) given the transfer of significant risks and rewards of ownership at that point in time. Contracts involving the manufacturing and delivery of 3D printed products to customers do not include other performance obligations. As such, allocation of the transaction price was not necessary as the entire contract price is attributed to the sole performance obligation identified.

Software revenue

In 2020, Shapeways launched its software under the brand of “Powered by Shapeways” to a limited set of design customers to gain feedback on product market fit. The software enables other manufacturers to leverage Shapeways’ existing end-to-end manufacturing software to scale their businesses and shift to digital manufacturing. Shapeways’ software offers improved customer accessibility, increased productivity, and expanded manufacturing capabilities for its customers. Shapeways launched the first phase of this offering more broadly under the brand Otto in the fourth quarter of 2021. This phase of the software offering provides a limited ordering service for additive manufacturing capabilities fulfilled by Shapeways.

For each of the performance obligations classified as software revenue, the performance obligations are satisfied evenly over the term of the contract. For contracts including performance obligations classified as software revenue, the Company identified that each performance obligation has an explicitly stated standalone selling price. As such, allocation is not necessary as the prices included in the contract are attributed to each separate performance obligation.
13

Table of Contents
SHAPEWAYS HOLDINGS, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

The following table presents the Company's revenues disaggregated by revenue discipline:
Three Months Ended
March 31,
20222021
Major products/service lines:
Direct sales$5,674 $6,420 
Marketplace sales1,825 2,336 
Software71 33 
Total revenue$7,570 $8,789 
Timing of revenue recognition:
Products transferred at a point in time$1,825 $2,336 
Products and services transferred over time5,745 6,453 
Total revenue$7,570 $8,789 

Deferred Revenue

The Company records deferred revenue when cash payments are received in advance of performance.

Deferred revenue activity consisted of the following:
March 31,
2022
December 31,
2021
Balance at beginning of the period $921 $753 
Deferred revenue recognized during period(7,570)(33,623)
Additions to deferred revenue during period7,164 33,791 
Total Deferred Revenue $515 $921 
The Company expects to satisfy its remaining performance obligations within the next twelve months. The $921 of deferred revenue as of January 1, 2022 was recognized during the three months ended March 31, 2022. The opening balance of accounts receivable as of January 1, 2021 was $185.

Practical Expedients and Exemptions

The Company applies the practical expedient related to incremental costs of obtaining a contract. Although certain of its commission costs qualify for capitalization under ASC 340-40, Contracts with customers, their amortization period is less than one year. Therefore, utilizing the practical expedient, the Company expenses these costs as incurred.
Note 4. Inventory
Components of inventory consisted of the following:
March 31,
2022
December 31,
2021
Raw materials$741 $735 
Work-in-process35 28 
Finished goods118 164 
Total$894 $927 
14

Table of Contents
SHAPEWAYS HOLDINGS, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
Note 5. Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following:
March 31,
2022
December 31,
2021
Prepaid operating expenses $3,320 $396 
Prepaid insurance 1,544 2,338 
Prepaid expenses1,092 680 
VAT receivable979 945 
Other current assets 4 1 
Total$6,939 $4,360 
Note 6. Property and Equipment, net
Property and equipment consisted of the following:
March 31,
2022
December 31,
2021
Machinery and equipment$17,630 $9,438 
Computers and IT equipment957 957 
Furniture and fixtures49 49 
Leasehold improvements2,464 2,482 
21,100 12,926 
Less: Accumulated depreciation(8,636)(8,538)
Property and equipment, net$12,464 $4,388 
For the three months ended March 31, 2022 and 2021, depreciation expense totaled $182 and $141, respectively. Of these amounts, depreciation charged to cost of revenue was $150 and $34 for the three months ended March 31, 2022 and 2021, respectively.
Note 7. Accrued Expenses and Other Liabilities
Accrued expenses consisted of the following:
March 31,
2022
December 31,
2021
Accrued selling expenses$665 $522 
Accrued compensation1,079 814 
Taxes payable376 328 
Shapeways credits294 287 
Other1,072 694 
Total$3,486 $2,645 

Note 8. Commitments and Contingencies

Leases

During the three months ended March 31, 2022, the Company maintained three leases of facilities located in the United States and the Netherlands, as well as one lease of office equipment, under operating leases.
15

Table of Contents
SHAPEWAYS HOLDINGS, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
The operating lease expense for the three months ended March 31, 2022 and 2021 was $142 and $320, respectively.

Right of use assets and lease liabilities for operating leases were recorded in the condensed consolidated balance sheets as follows:
March 31,
2022
December 31,
2021
Assets:
Right-of-use assets, net$703 $842 
Total lease assets$703 $842 
Liabilities:
Current liabilities:
Operating lease liabilities, current$551 $639 
Non-current liabilities:
Operating lease liabilities, net of current portion252 326 
Total lease liability$803 $965 
The Company’s lease agreements do not state an implicit borrowing rate; therefore, an internal incremental borrowing rate was determined based on information available at the lease commencement date for the purposes of determining the present value of lease payments. The incremental borrowing rate reflects the cost to borrow on a securitized basis in each market. The weighted-average remaining lease term for operating leases was 1.51 years and the weighted-average incremental borrowing rate was 5.35% as of March 31, 2022.
Supplemental cash flow information related to the Company’s leases was as follows:
Three Months Ended
March 31,
20222021
Operating cash flows from operating leases$167 $845 
As of March 31, 2022, future minimum lease payments required under operating leases are as follows:
Rest of 2022
$505 
2023207 
2024126 
20251 
Total minimum lease payments839 
Less effects of discounting(36)
Present value of future minimum lease payments$803 

Desktop Metal

On March 26, 2021, the Company entered into a non-binding Memorandum of Understanding (“MOU”) with Desktop Metal, pursuant to which Desktop Metal agreed to invest $20.0 million in the PIPE Investment. Upon consummation of this investment, the Company became obligated to purchase $20.0 million of equipment, materials and services from Desktop Metal. In conjunction with these obligations, the Company and Desktop Metal agreed to develop a strategic partnership. As of March 31, 2022, the Company paid $15.9 million to Desktop Metal for equipment, materials and services received and placed purchase orders for another $4.1 million of equipment, materials and services to be purchased under the MOU by or before December 31, 2022. The Company has no further obligations under the MOU.
16

Table of Contents
SHAPEWAYS HOLDINGS, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

Legal Proceedings

The Company is involved in various legal proceedings which arise from time to time in the normal course of business. While the results of such matters generally cannot be predicted with certainty, management does not expect any such matters to have a material adverse effect on the Company’s condensed consolidated financial position or results of operations as of March 31, 2022 and December 31, 2021 and for the three months ended March 31, 2022 and 2021.
Note 9. Stockholders’ Equity (Deficit)

The consolidated statements of changes in stockholders’ equity (deficit) reflects the Business Combination as defined in Note 1 as of September 29, 2021. As Legacy Shapeways was deemed the accounting acquirer in the Business Combination with Galileo, all periods prior to the Closing date reflect the balances and activity of Legacy Shapeways. The balances as of January 1, 2021 from the consolidated financial statements of Legacy Shapeways as of that date, share activity (convertible preferred stock, common stock, additional paid in capital, accumulated deficit, and accumulated other comprehensive loss) and per share amounts were retroactively adjusted, where applicable, using the recapitalization Conversion Ratio.

Common Stock

Upon closing of the Business Combination, pursuant to the terms of the Certificate of Incorporation, the Company authorized 120,000,000 shares of Common Stock with a par value $0.0001. The holders of Common Stock are entitled to one vote per share on all matters submitted to the stockholders for their vote or approval and are entitled to receive dividends, as and if declared by the Board of Directors out of legally available funds.

The Company has issued and outstanding 48,845,706 and 48,627,739 shares of Common Stock as of March 31, 2022 and December 31, 2021, respectively.

Legacy Shapeways Common Stock Warrants

On December 18, 2013, in connection with executing a loan agreement, the Company issued warrants to purchase 40,000 shares of Legacy Shapeways common stock. The warrants had an exercise price of $1.25 per share and had an expiration date of December 18, 2023.

On February 3, 2014, in connection with executing a lease agreement, the Company issued warrants to purchase 248,000 shares of Legacy Shapeways common stock. The warrants had an exercise price of $1.25 per share and expired upon the latest to occur (i) seven years from the original issuance date or (ii) five years from the effective date of an initial public offering.

On April 22, 2015, in connection to an amended loan agreement, the Company issued warrants to purchase 13,750 shares of Legacy Shapeways common stock. The warrants had an exercise price of $1.70 per share and had an expiration date of April 22, 2025.

Immediately prior to the completion of the Business Combination, all outstanding Legacy Shapeways common stock warrants were exercised into an aggregate of 255,917 shares of Legacy Shapeways common stock (212,234 shares of Common Stock post Business Combination).

Legacy Shapeways Convertible Preferred Stock

Immediately prior to the completion of the Business Combination, all outstanding shares of the Legacy Shapeways Series A-1, Series A-2, Series B, Series B-1, Series C, Series D, and Series E preferred stock converted into an aggregate of 22,579,695 shares of common stock. Each share of Legacy Shapeways convertible preferred stock was converted into one share of Legacy Shapeways common stock.
17

Table of Contents
SHAPEWAYS HOLDINGS, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)

Legacy Shapeways Preferred Stock Warrants

On March 8, 2013, the Company issued warrants to purchase a total of 23,125 shares of Series B-1 preferred stock of Legacy Shapeways. The warrants had an exercise price of $2.5946 per share and were exercisable for ten years from the date of grant. On May 10, 2021, the 23,125 warrants were exercised for 23,125 shares of Series B-1 preferred stock of Legacy Shapeways at an exercise price of $2.5946 per share.

On June 30, 2017, in connection with executing a loan agreement, the Company issued warrants to purchase a total of 57,051 shares of Series D preferred stock of Legacy Shapeways. The warrants had an exercise price of $5.2584 per share and were exercisable for ten years from the date of grant. Immediately prior to the completion of the Business Combination, the 57,051 warrants were exercised for 107,580 shares of Legacy Shapeways common stock.

Public Warrants

Prior to the Merger, the Company had outstanding 13,800,000 Public Warrants. Each Public Warrant entitles the holder to purchase one share of Common Stock of the Company at an exercise price of $11.50 per share. The Public Warrants become exercisable 30 days after the Closing Date, and expire five years after the Closing Date or earlier upon redemption or liquidation.

The Company may redeem the Public Warrants as follows: in whole and not in part; at a price of $0.01 per warrant; at any time while the Public Warrants are exercisable, upon not less than 30 days’ prior written notice of redemption to each Public Warrant holder; if, and only if, the reported last sale price of the Company’s ordinary shares equals or exceeds $18.00 per share, for any 20 trading days within a 30-trading day period ending on the third business day prior to the notice of redemption to the warrant holders; and if, and only if, there is a current registration statement in effect with respect to the ordinary shares underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption. Certain of these conditions have not been met to redeem the Public Warrants. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.

As of March 31, 2022 and December 31, 2021 there were 16,150,816 and 15,295,612 Public Warrants outstanding, respectively.

Note 10. Stock-Based Compensation

2010 Stock Plan

Prior to the Business Combination, Legacy Shapeways maintained its 2010 Stock Plan (the “2010 Plan”), under which Legacy Shapeways granted statutory and non-statutory stock to employees, outside directors and consultants. The maximum number of shares of common stock that was issuable under the 2010 Plan was 16,942,546 shares.

In connection with the Business Combination, each Legacy Shapeways stock option that was outstanding immediately prior to Closing, whether vested or unvested, was converted into an option to acquire a number of shares of common stock (each such option, an “Exchanged Option”) equal to the product of (i) the number of shares of Legacy Shapeways common stock subject to such Legacy Shapeways option immediately prior to the Business Combination and (ii) 90% of the Conversion Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of such Legacy Shapeways option immediately prior to the consummation of the Business Combination, divided by (B) 90% of the Conversion Ratio. Except as specifically provided in the Business Combination Agreement, following the Business Combination, each Exchanged Option will continue to be governed by the same terms and conditions (including vesting and exercisability terms) as were applicable to the corresponding former Legacy Shapeways option immediately prior to the consummation of the Business Combination. All stock option activity was retroactively restated to reflect the Exchanged Options.

18

Table of Contents
SHAPEWAYS HOLDINGS, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
In addition, each holder of an in-the-money Legacy Shapeways option held by individuals remaining in continuous service to the Company through the Closing, was granted a right to receive an award of restricted stock units denominated in shares of common stock granted under the 2021 Plan (each, an “Earnout RSU”) equal to the product of (A) the number of shares of Legacy Shapeways common stock that were subject to the option immediately prior to Closing, multiplied by (B) ten percent (10%) of the Conversion Ratio. The Earnout RSUs are subject to substantially the same service-based vesting conditions and acceleration provisions as applied to the Legacy Shapeways option provided that, in addition to such service-based vesting conditions, Earnout RSUs will be subject to vesting and forfeiture conditions based upon the dollar volume-weighted price of the Company’s Common Stock reaching certain targets (the “RSU Performance Milestones”). The Company records stock compensation expense for Earn-Out RSUs based upon an assessment of the grant date fair value using the Monte Carlo valuation model in accordance with FASB ASC Topic 718. The Company did not grant any additional Earn-Out RSUs during the three months ended March 31, 2022.

Upon the Closing of the Business Combination, the outstanding and unexercised Legacy Shapeways options became options to purchase an aggregate of 4,901,207 shares of the Company’s Common Stock under the 2010 Plan at an average exercise price of $0.62 per share.

2021 Equity Incentive Plan

Upon the closing of the Business Combination, the Company adopted the 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan permits the granting of incentive stock options, restricted stock awards, other share-based awards or other cash-based awards to employees, consultants, and non-employee directors. As of March 31, 2022, 10,052,787 shares of Common Stock are authorized for issuance pursuant to awards under the 2021 Plan. As of March 31, 2022, 3,679,267 shares have been awarded and 6,373,520 shares remain available for issuance under the 2021 Plan.

Option Awards

The Company accounts for share-based payments pursuant to ASC 718, Stock Compensation and, accordingly, the Company records stock compensation expense for share-based awards based upon an assessment of the grant date fair value for stock options using the Black-Scholes option pricing model. The Company is a public company and lacks company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies. Due to the lack of historical exercise history, the expected term of the Company’s stock options for employees has been determined utilizing the “simplified” method for awards. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve. Expected dividend yield is zero based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.
The fair value of stock options under the Black-Scholes model requires management to make assumptions regarding projected employee stock option exercise behaviors, risk-free interest rates, volatility of the Company’s stock price and expected dividends. The Company generally recognizes stock compensation expense on the grant date and over the period of vesting or period that services will be provided. The assumptions used to estimate the fair value of stock options granted
19

Table of Contents
SHAPEWAYS HOLDINGS, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
during the periods presented were as follows:
Three Months Ended March 31,
20222021
Strike price$0.17 $0.17 
Expected term (in years)
5.55 - 6.05
5.55 - 6.05
Expected volatility
57.09% - 57.81%
57.09% - 57.81%
Risk-free interest rate
0.50% - 0.57%
0.50% - 0.57%
Dividend yield  
The following table summarizes the Company’s stock option plan and the activity during the period presented:
 Shares
Underlying
Options
Weighted
Average Exercise
Price
Weighted
Average
Remaining
Contractual
Term (in years)
Outstanding as of January 1, 20224,806,387 0.63 6.57
Granted  — 
Forfeited(20,814)0.49 — 
Exercised(217,967)0.49 — 
Outstanding at March 31, 20224,567,606 $0.63 6.35
Exercisable at March 31, 2022
4,339,216 $0.64 6.28
The aggregate intrinsic value in the above table is calculated as the difference between fair value of the Company’s Common Stock price and the exercise price of the stock options. There were no stock options granted during the three months ended March 31, 2022. The weighted-average grant-date fair value per stock option granted during the three months ended March 31, 2021 was $0.17. As of March 31, 2022, approximately $51 of unrecognized compensation expense related to non-vested awards is expected to be recognized over the weighted average period of 1.67 years.

Restricted Stock Units

The following table summarizes the Company’s restricted stock unit activity during the period presented:

Restricted Stock Units
Weighted Average Grant Fair Value per Share
Outstanding as of January 1, 2022660,448 $3.80
Granted2,608,455 2.86
Forfeited(798)1.06
Exercised 
Outstanding at March 31, 20223,268,105 2.96
Exercisable at March 31, 2022
1,125 2.86

The total fair value of restricted stock unit awards vested during the period ended March 31, 2022 was $1,903.

Total unrecognized compensation expense related to outstanding restricted stock unit awards was approximately $4,283 as of March 31, 2022 and is expected to be recognized over the weighted average period of 3.63 years.

20

Table of Contents
SHAPEWAYS HOLDINGS, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
2021 Employee Stock Purchase Plan

Upon the closing of the Business Combination, the Company adopted the 2021 Employee Stock Purchase Plan (the “ESPP”). The purpose of the ESPP is to provide eligible employees with an opportunity to increase their proprietary interest in the success of the Company by purchasing Common Stock from the Company on favorable terms and to pay for such purchases through payroll deductions or other approved contributions. As of March 31, 2022, 1,381,998 shares of Common Stock are available for purchase under the ESPP. As of March 31, 2022, no shares have been purchased under the ESPP.

Note 11. Fair Value Measurements

Fair value measurements discussed herein are based upon certain market assumptions and pertinent information available to management as of March 31, 2022 and December 31, 2021. The carrying amounts of accounts receivable, inventory, prepaid expenses and other current assets, accounts payable, accrued expenses and other liabilities, and deferred revenue approximated fair value as they are short term in nature. The fair value of warrants issued for settlement and services are estimated based on the Black-Scholes model. The carrying value of the Company’s debt and operating lease liabilities approximated its fair value, as the obligation bears interest at rates currently available for debt with similar maturities and collateral requirements.

Fair Value on a Recurring Basis

The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. The estimated fair value of the warrant liabilities represents Level 3 measurements. The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis at March 31, 2022 and December 31, 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
DescriptionLevelMarch 31,
2022
December 31,
2021
Liabilities: 
Warrant liabilities$1,130 $2,274 

Warrant Liabilities

The Company had outstanding 4,110,000 warrants (the “Private Warrant”) that were issued upon the consummation of the initial public offering of Galileo. Additionally, at the Closing, a lender holding a convertible note issued by the Company with an aggregate principal amount of $500 converted the note into 500,000 warrants (the “Sponsor Warrants”) exercisable for Common Stock at a purchase price of $1.00 per warrant.

The Private Warrants and Sponsor Warrants are identical to the Public Warrants except that the Private and Sponsor Warrants (i) are not redeemable by the Company and (ii) may be exercised for cash or on a cashless basis, so long as they are held by the initial purchaser or any of its permitted transferees. If the Private Warrants or Sponsor Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants or Sponsor Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. Upon the transfer of a Private Warrant or Sponsor Warrant to a party other than an initial purchaser or any of its permitted transferees, the Private Warrants or Sponsor Warrants become Public Warrants and the fair market value of the Private Warrants at the date of the transfer is reclassified to equity.
The Private Warrants and Sponsor Warrants are not indexed to the Company’s common shares in the manner contemplated by ASC 815-40-15 because the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares. The Company classifies the Private Warrants and Sponsor Warrants as derivative liabilities in its unaudited condensed consolidated balance sheet as of March 31, 2022.
21

Table of Contents
SHAPEWAYS HOLDINGS, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
The Company utilizes a Binomial Lattice model approach to value the Private Warrants and Sponsor Warrants at each reporting period with changes in fair value recognized in the statement of operations. The estimated fair value of the warrant liabilities is determined using Level 3 inputs. Inherent in a binomial options pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its Common Stock based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero.
The significant unobservable inputs used in the Binomial Lattice Model to measure the warrant liabilities that are categorized within Level 3 of the fair value hierarchy are as follows:
March 31,
2022
December 31,
2021
Stock price on valuation date$2.86 $3.71 
Exercise price per share$11.50 $11.50 
Expected life4.5 years4.75 years
Volatility
56.4%
56.4%
Risk-free rate
2.4%
1.2%
Dividend yield % %
Fair value per warrant$0.50 $0.73 
The following table provides a summary of changes in fair value of the Company’s Level 3 financial instruments that are measured at fair value on a recurring basis:
Warrant
Liabilities
Balance at December 31, 2021
$2,274 
Transfer of Private Warrants to Public Warrants
(382)
Change in fair value(762)
Balance at March 31, 2022
$1,130 

For the three months ended March 31, 2022 the Company recognized income resulting from a change in the fair value of warrant liabilities of $762. There was no change in fair value for the three months ended March 31, 2021 as there were no warrant liabilities outstanding as of March 31, 2021.

As of March 31, 2022 and December 31, 2021, there were 2,259,184 and 3,114,388 Private Warrants outstanding, respectively.

Fair Value on a Non-Recurring Basis

At the Closing, there were 3,510,405 shares of Common Stock issued as part of the Merger consideration (the “Earnout Shares”) subject to vesting and forfeiture conditions (the “Earnout Terms”) based upon the volume-weighted average trading price of Common Stock reaching targets of $14.00 and $16.00, respectively (with 50% released at each target) for a period of 30 consecutive trading days during the three-year period after the Closing, with the portion of such shares that would otherwise be deliverable to Legacy Shapeways shareholders at the Closing being withheld and deposited into escrow. The fair value of the Earnout Shares was estimated using the trading price of the Common Stock at Closing ($7.70), discounted based on the probability of the Earnout Terms being met as determined at Closing, and thus represents a Level 2 fair value measurement as defined in ASC 820. The Earnout Shares, if achieved, would be issued to Legacy Shapeways shareholders. The Earnout Shares are a fixed number of shares to be issued to such shareholders on a pro rata basis. The fair value of the Earnout Shares was recognized as a deemed dividend. Upon closing of the Merger, the estimated fair value of the Earnout Shares was $18,132 with such amount recognized as a deemed dividend. As the Company was in an accumulated deficit position as of the measurement date, the resulting deemed dividend was recorded
22

Table of Contents
SHAPEWAYS HOLDINGS, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
as a reduction of additional paid-in capital with a corresponding offset recorded to additional paid-in capital. As of March 31, 2022, there were 3,510,405 Earnout Shares unvested and remaining subject to the Earnout Terms.

Note 12. Significant Concentrations

One customer accounted for approximately 22% and 21% of revenue for the three months ended March 31, 2022 and 2021, respectively. No other customers represented more than 10% of revenue for the three months ended March 31, 2022 and 2021.

One vendor accounted for approximately 63% and 13% of purchases for the three months ended March 31, 2022 and 2021. No other vendors represented more than 10% of purchases for the three months ended March 31, 2022 and 2021.

As of March 31, 2022, two customers accounted for approximately 62% and 32% of accounts receivable. As of December 31, 2021, two customers accounted for approximately 32% and 25% of accounts receivable. No other customers represented more than 10% of outstanding accounts receivable as of March 31, 2022 and December 31, 2021.

As of March 31, 2022, two vendors accounted for approximately 16%, and 11% of accounts payable. As of December 31, 2021, two vendors accounted for approximately 18% and 11% of accounts payable. No other vendors represented more than 10% of outstanding accounts payable balance as of March 31, 2022 and December 31, 2021.

Note 13. Subsequent Events

The Company has evaluated all known subsequent events through May 16, 2022, which is the date these condensed consolidated financial statements were issued. Subsequent to quarter end, the Company completed three strategic acquisitions of MFG.com, a custom manufacturing online marketplace; MakerOS, an operating software for manufacturers and service providers; and Linear AMS, an additive manufacturer focused on plastics molding, tooling, and production, predominantly in the automotive industry.

Based on an evaluation of these transactions, the Company has determined that no further recognition or disclosure is required within these condensed consolidated financial statements.
23

Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following management’s discussion and analysis of financial condition and results of operations provides information that management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition and changes in financial condition. You should read the following discussion and analysis of financial condition and results of operations together with the accompanying unaudited condensed consolidated financial statements and the related notes to those statements of Shapeways included in this Report and the audited financial statements and notes thereto as of and for the year ended December 31, 2021 which is contained in our Annual Report on Form 10-K/A filed with the Securities and Exchange Commission (“SEC”) on April 1, 2022 . Some of the information contained in this discussion and analysis or set forth elsewhere in this Report, including information with respect to our plans and strategy for our business and related financing contains forward-looking statements that involve risks and uncertainties. See “Special Note Regarding Forward-Looking Statements” and “Risk Factors” for a discussion of forward-looking statements and important factors that could cause actual results to differ materially from those anticipated in these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by law, we do not intend to update any of these forward-looking statements after the date hereof or to conform these statements to actual results or revised expectations.
Company Overview

Shapeways is a leading digital manufacturer combining high quality, flexible, on-demand manufacturing with purpose-built proprietary software to offer customers an end-to-end digital manufacturing platform on which they can rapidly transform digital designs into physical products. Our manufacturing platform offers customers access to high quality manufacturing from start to finish through automation, innovation, and digitization. Our proprietary software, wide selection of materials and technologies, and global supply chain lower manufacturing barriers and accelerate delivery of manufactured parts from prototypes to finished end parts. We combine deep digital manufacturing know-how and software expertise to deliver high quality, flexible on-demand digital manufacturing to a range of customers, from project-focused engineers to large enterprises. Digital manufacturing is the complete digitization of the end-to-end manufacturing process that enables the transition of a digital file to a physical product.
Recent Developments

Subsequent to quarter end, we completed three strategic acquisitions which advance our objectives of accelerating our Otto software go-to-market plan, adding complementary manufacturing capabilities, and deepening reach into key target verticals. These acquisitions include:

MFG.com: Helps custom part manufacturers grow their business by making it easy for them to be discovered on its cloud-based Request for Quote management platform and helps buyers to find the best possible manufacturer that fits their needs through a set of supplier and buyer marketplaces mainly for traditional manufacturing. MFG.com fits well into Shapeways software strategy, adds immediate features with its marketplace products and is expected to accelerate Otto’s phased rollout.

MakerOS: Offers a SaaS service to facilitate design, prototype and production process for manufacturers and service providers. MakerOS brings features to Otto’s product vision, particularly enhanced quoting and project management, as well as adding several key employees.

Linear AMS: an expert in plastics molding, tooling, and production, predominantly in the automotive industry. Headquartered in Michigan, Linear AMS has blue chip automotive customers and access to their respective suppliers.

Key Factors Affecting Operating Results

We believe that our performance and future success depend on many factors that present significant opportunities for us but also pose risks and challenges, including the following:

Commercial Launch of New Offerings

24

Table of Contents
We plan to launch several new manufacturing technologies, materials, and finishes. Prior to commercialization, we must complete testing and manufacturing ramp-up either in house or through our network of third-party manufacturing partners. Any delays in the successful completion of these steps or the results of testing may impact our ability or the pace at which we will generate revenue from these offerings. Even if we successfully introduce these new offerings, there is no assurance that they will be accepted by the broader market.

In 2020, we launched our software under the brand Powered by Shapeways to a limited set of design customers, and launched the first phase of this offering under the brand Otto in the fourth quarter of 2021, to third-party manufacturers. This phase of the rollout involves activities such as creating awareness of the new offering and ensuring the software can interoperate with systems used by potential customers. We plan to roll out further phases of this software over the next two years. We believe that offering this software to other manufacturers will enable us to generate future revenue. However, we have not derived significant revenue from sales of its software to date, and may never be successful in doing so. We expect to further commercialize our software, which we expect will provide software customers with an end-to-end software for their manufacturing operations and to expand the manufacturing capabilities that they offer to their customers.
Adoption of Our Digital Manufacturing Solutions

We believe that the market is shifting toward digitization of manufacturing and approaching an inflection point in the overall adoption of digital manufacturing solutions. We believe that we are well-positioned to take advantage of this market opportunity across an array of industries due to our platform that combines high-quality, flexible, on-demand manufacturing with purpose-built proprietary software. We expect that our results of operations, including revenue and gross margins, will fluctuate for the foreseeable future as businesses continue to shift away from traditional manufacturing processes towards digital manufacturing. The degree to which current and potential customers recognize the benefits of the digitization of manufacturing, and then use our solutions in particular will affect our financial results.

Pricing, Product Cost and Margins

To date, the majority of our revenue has been generated by the manufacturing and sales of additively-manufactured end parts.

Software and manufacturing pricing may vary due to market-specific supply and demand dynamics, customer size, and other factors. Sales of certain products, such as software, have, or are expected to have, higher gross margins than others. As a result, our financial performance depends, in part, on the mix of offerings we sell during a given period. In addition, we are subject to price competition, and our ability to compete in key markets will depend on the success of our investments in our offerings, and on cost improvements as well as on our ability to efficiently and reliably introduce cost-effective digital manufacturing solutions for our customers.

Continued Investment and Innovation

We believe that we are a leader in digital manufacturing solutions, offering high-quality, flexible, on-demand manufacturing coupled with purpose-built proprietary software. Our performance is significantly dependent on the investment we make in our software development efforts and in new digital manufacturing technologies. It is essential that we continually identify and respond to rapidly evolving customer requirements, develop and introduce innovative new offerings, enhance existing solutions and generate customer demand for our offerings. We believe that investment in our digital manufacturing solutions will contribute to long-term revenue growth, but may adversely affect near-term profitability.

Raw Material, Inflation, and Supply Chain Trends

Inflationary factors such as increases in the costs of raw materials, packaging materials, purchased product, shipping costs and labor costs affect our operating results and financial condition. Although we do not believe that inflationary factors have had a material impact on our financial condition or results of operations for the three months ended March 31, 2022 and 2021, the ongoing impact of the COVID-19 pandemic, the Russian invasion of Ukraine and other supply and labor disruptions could have an material impact on our future costs and a high rate of inflation in the future could have a material adverse effect on our financial condition and results of operations in the future. Although we make efforts to minimize the impact of inflationary factors which may include raising prices to our customers in the future, a high rate of pricing volatility associated with raw materials used in our products may have an adverse effect on our
25

Table of Contents
operating results. We will continue to work closely with our suppliers and customers, leveraging our global capabilities and expertise to work through supply and other resulting issues.
Components of Results of Operations

Revenue

The majority of our revenue results from the sales of products that we manufacture for customers, which is designated as “Direct Sales”. This revenue is recognized upon shipment of the manufactured product to the customer.
During the three months ended March 31, 2022 and 2021, approximately 24% and 27% of our revenue was designated as “Marketplace Sales”. This revenue is from our customers who sell products that we manufacture for them through our e-commerce website. Sales through this channel are subject to our regular manufacturing fees and also a 3.5% fee on any price markup the customer includes on their product.

We also expect to increase software revenue over time. Software revenue is recognized (i) upon implementation for implementation fees, (ii) ratably over the term of the agreement for licensing fees, and (iii) upon order processing for the revenue-sharing component of our arrangements. To date, we have not recognized a material amount of revenue from software since this product offering has been limited to only design partners as we developed the complete product offering. In October 2021, we publicly launched a limited version of the software to expand our customer base.

Cost of Revenue

Our cost of revenue consists of the cost to produce manufactured products and related services. Cost of revenue includes machine costs, material costs, rent costs, personnel costs, and other costs directly associated with manufacturing operations in our factories as well as amounts paid to our third-party contract manufacturers and suppliers. Our cost of revenue also includes depreciation and amortization of equipment, cost of spare or replacement machine parts, machine service costs, shipping and handling costs, and some overhead costs. We expect cost of revenue to increase in absolute dollars in the future.

We intend to further commercialize our software offering and if we generate material revenue from sales of our software offering, we will separately recognize the related cost of revenue.

Gross Profit and Gross Margin

Our gross profit and gross margin are, or may be, influenced by a number of factors, including:
Market conditions that may impact our pricing;
Product mix changes between established manufacturing product offerings and new manufacturing product offerings;
Mix changes between products we manufacture in house and through outsourced manufacturers;
Our cost structure, including rent, materials costs, machine costs, labor rates, and other manufacturing operations costs; and
Our level of investment in new technologies.

Selling, General and Administrative

Selling, general and administrative expenses consist primarily of employee-related costs for individuals working in our sales and marketing departments, third party consultants, marketing costs such as search engine marketing and search engine optimization and other advertising costs, as well as personnel-related expenses associated with our executive, finance and accounting, legal, human resources, and supply chain functions, as well as professional fees for legal, audit, accounting and other consulting services along with administrative costs of doing business which include, but are not limited to, rent, utilities, and insurance.

We expect our sales and marketing costs will increase on an absolute-dollar basis as we expand our headcount, initiate new marketing campaigns, and continue to roll out future phases of our software offering.

26

Table of Contents
We expect our general and administrative expenses will continue to increase on an absolute-dollar basis in the near term as a result of operating as a public company, including expenses necessary to comply with the rules and regulations applicable to companies listed on a national securities exchange and related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, as well as increased expenses for insurance (including director and officer insurance), investor relations, and other administrative and professional services. In addition, we expect to incur additional costs as we hire additional personnel and enhance our infrastructure to support the anticipated growth of the business.

Research and Development

Our research and development expenses consist primarily of employee-related personnel expenses, consulting and contractor costs, and SaaS, data center, and other technology costs. We expect research and development costs will increase on an absolute dollar basis over time as we continue to invest in our software offering.

Change in Fair Value of Warrant Liabilities

Change in fair value of warrant liability is a non-cash gain or loss impacted by the fair value of the Private Warrants assumed pursuant to the Merger.

Interest Expense

Interest expense consists primarily of interest expense associated with our term loan and our bridge loan. At the Closing of the Business Combination, we repaid and terminated the term loan in full. Immediately prior to the completion of the Business Combination, the bridge loan was converted into shares of common stock of Legacy Shapeways. We had no interest-bearing debt outstanding as of March 31, 2022 and December 31, 2021.

Income Tax Benefit (Expense)

We file consolidated income tax returns in the United States and in various state jurisdictions. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Where applicable, we record a valuation allowance to reduce any deferred tax assets that it determines will not be realizable in the future.

Due to our cumulative losses, we maintain a valuation allowance against our U.S. and state deferred tax assets.
Results of Operations
Comparison of the Three Months Ended March 31, 2022 and 2021
Revenue
Three Months Ended March 31,Change
(Dollars in thousands)20222021$ %
Revenue$7,570 $8,789 $(1,219)(14)%

Revenue for the three months ended March 31, 2022 and 2021 was $7.6 million and $8.8 million, respectively, representing a decrease of $1.2 million, or 14% from the prior year period. The decrease in revenue was attributable to a 7% decrease in products shipped in addition to a 7% decrease in average price per product sold due to a change in product and material mix.
27

Table of Contents
Cost of Revenue
Three Months Ended March 31,Change
(Dollars in thousands)20222021$ %
Cost of Revenue$4,161 $4,660 $(499)(11)%

Cost of revenue for the three months ended March 31, 2022 and 2021 was $4.2 million and $4.7 million, respectively, representing a decrease of $0.5 million, or 11%. The decrease in cost of revenue was driven primarily by a 7% decrease in part production in addition to a 4% decrease in cost per item produced.

Gross Profit and Gross Margin
Three Months Ended March 31,Change
(Dollars in thousands)20222021$ %
Gross Profit 3,409 4,129 $(720)(17)%
Gross profit for the three months ended March 31, 2022 and 2021 was $3.4 million and $4.1 million, respectively, representing a decrease of $0.7 million or 17%. The decrease in gross profit was primarily driven by a 6% decrease in product shipped and 7% decrease in average price per product sold and a 4% decrease in cost per item produced.

Three Months Ended March 31,Change
20222021Points%
Gross Margin 45 %47 %(4)%

Selling, General and Administrative
Selling, general, and administrative (“SG&A”) expenses for the three months ended March 31, 2022 and 2021 were $6.1 million and $3.0 million, respectively, representing an increase of $3.1 million, or 103%. The increase in selling, general and administrative expenses primarily resulted from increases to personnel cost, audit and other spending related to becoming a public company, office expenses, marketing spend such as branding and search engine marketing to drive growth.

Research and Development
Research and development expenses for the three months ended March 31, 2022 and 2021 were $2.1 million and $1.3 million, respectively, representing an increase of $0.8 million, or 58%. The increase in research and development expenses was primarily due to an increase in personnel cost.
Debt Forgiveness
We had no debt forgiveness during the three months ended March 31, 2022. Debt forgiveness for the three months ended March 31, 2021 was $2.0 million, relating to our Payroll Protection Program (“PPP”) loan.

Interest Expense
There was no interest expense for the three months ended March 31, 2022. Interest expense for the three months ended March 31, 2021 was $0.2 million.
Change in Fair Value of Warrant Liabilities
Change in fair value of warrant liabilities increased by $0.8 million and resulted in a gain for the three months ended March 31, 2022. The increase related to the decrease in fair value of the Private Warrants and Sponsor Warrants assumed pursuant to the Merger.
28

Table of Contents
Income Taxes
We did not record an income tax benefit (expense) for the three months ended March 31, 2022. Income tax benefit for the three months ended March 31, 2021 was $0.1 million.
Non-GAAP Financial Information

In addition to our results determined in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), we believe that Adjusted EBITDA, a non-GAAP financial measure, is useful in evaluating our operational performance. We use this non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that this non-GAAP financial information, when reviewed collectively with our U.S. GAAP results, may be helpful to investors in assessing our operating performance.

We define Adjusted EBITDA as net income (loss) excluding debt forgiveness, interest expense, net of interest income, income tax benefit, depreciation and amortization, stock-based compensation, change in fair value of warrant liabilities, and other (which includes other income and non-operating gains and losses).

We believe that the use of Adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends because it eliminates the effect of financing and capital expenditures and provides investors with a means to compare our financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors. However, you should be aware that when evaluating Adjusted EBITDA we may incur future expenses similar to those excluded when calculating this measure. In addition, our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

Because of these limitations, Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with U.S. GAAP. We compensate for these limitations by relying primarily on our U.S. GAAP results and using Adjusted EBITDA on a supplemental basis. You should review the reconciliation of net income (loss) to Adjusted EBITDA below and not rely on any single financial measure to evaluate our business.
The following table reconciles net income (loss) to Adjusted EBITDA for the three months ended March 31, 2022 and 2021:
Three Months Ended March 31,
(Dollars in thousands)20222021
Net income (loss)$(4,037)$1,708 
Debt forgiveness— (2,000)
Interest expense, net— 151 
Depreciation and amortization182 141 
Stock based compensation 312 174 
Change in fair value of warrant liabilities(762)— 
Income tax benefit— (73)
Other
Adjusted EBITDA