DEF 14A: Desktop Metal Seeks Stockholder Approval for Reverse Stock Split to Regain NYSE Compliance

Desktop Metal is asking stockholders to approve a reverse stock split to meet NYSE listing requirements and increase the attractiveness of its stock.

Summary

• Desktop Metal is holding its Annual Meeting of Stockholders on June 7, 2024, to vote on several proposals.
• Key proposals include the election of three Class I directors, ratification of Deloitte & Touche LLP as the independent accounting firm, and an advisory vote on executive compensation.
• A significant proposal is to approve amendments to the company's certificate of incorporation to effect a reverse stock split of Class A Common Stock at a ratio between 1-for-10 and 1-for-15.
• The reverse stock split aims to regain compliance with the NYSE's minimum bid price requirement and potentially facilitate future capital raising.
• Stockholders will also vote on a proposal to adjourn the Annual Meeting, if necessary, to solicit additional proxies for the reverse stock split proposal.
• As of April 10, 2024, there were 330,172,511 shares of Class A common stock outstanding and entitled to vote.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While the company is taking proactive steps to address its stock price and ensure future financial flexibility, the need for a reverse stock split and potential capital raising suggests underlying challenges.

Positives

• Regaining compliance with NYSE listing requirements can enhance investor confidence.
• A higher stock price may attract a broader range of institutional investors.
• The reverse stock split could facilitate future capital raising efforts.
• Maintaining the NYSE listing can help attract, retain, and motivate employees and board members.

Negatives

• There is no guarantee that the reverse stock split will result in a sustained increase in the stock price.
• The reverse stock split may negatively impact the market price of the common stock.
• Delisting from the NYSE could significantly reduce the liquidity of the Class A common stock.
• The reverse stock split may increase the number of stockholders who own odd lots, leading to higher transaction costs.

Risks

• The reverse stock split may not result in a sustained increase in the per share price of the Class A common stock.
• The company may not be able to continue to satisfy the NYSE's additional requirements for continued listing.
• Liquidity could be adversely affected by the reduced number of shares outstanding after the reverse stock split.
• Failure to raise additional capital through equity or debt financing would have a material adverse effect on the company's ability to meet its long-term liquidity needs and achieve its business objectives.

Future Outlook

The company intends to raise capital through equity or debt financing to fund its current operations, but there is no assurance that such financing will be available on acceptable terms.

Industry Context

The document does not explicitly discuss broader industry trends, but the reverse stock split indicates potential challenges in maintaining stock value within the competitive 3D printing market.

Comparison to Industry Standards

• The document mentions peer companies such as 3D Systems Corporation, Markforged Holding Corporation, Stratasys Ltd., and Velo3D, Inc.
• These companies are used for benchmarking executive compensation and represent a mix of relevant industries and business models.
• The document does not provide a detailed comparison of Desktop Metal's financial performance against these companies.

Stakeholder Impact

• The reverse stock split will impact shareholders by reducing the number of outstanding shares and potentially increasing the stock price.
• Employees and directors compensated with equity-based securities may be affected by the reverse stock split and the company's ability to maintain its NYSE listing.
• The company's ability to raise capital will impact its ability to meet its long-term liquidity needs and achieve its business objectives.

Next Steps

• Stockholders will vote on the proposals at the Annual Meeting on June 7, 2024.
• The Board of Directors will determine whether and when to effect the reverse stock split based on market conditions and other factors.
• The company will announce the results of the Annual Meeting in a Current Report on Form 8-K.

Key Dates

Keywords

reverse stock split, annual meeting, proxy statement, NYSE compliance, stockholders, directors, executive compensation, Deloitte & Touche, capital raising, Class A common stock