DM
Desktop Metal, INC
NYSE
DEFA14A: Desktop Metal Urges Stockholders to Vote on Nano Dimension Merger Amidst Financial Concerns
Sentiment:
Proxy Statement
23 September 2024 4:24 PM
Desktop Metal is urging its stockholders to vote in favor of the proposed merger with Nano Dimension, highlighting potential financial risks if the merger is not approved.
Worse than expected
The company warns of potential dilutive financings or bankruptcy if the merger fails.
Desktop Metal expects to run out of cash by the end of the first quarter of 2025 if the merger is not approved.
Summary
- Desktop Metal is urging stockholders to vote in favor of the proposed merger with Nano Dimension at the special meeting on October 2, 2024.
- Institutional Shareholder Services Inc. (ISS) has recommended that stockholders vote in favor of the merger.
- ISS believes the offer is likely the best available, shareholders are receiving a premium, the implied valuation appears fair, and the cash consideration provides liquidity and immediate value.
- If the merger is not approved, Desktop Metal expects to run out of cash by the end of the first quarter of 2025.
- Failure to approve the merger may require the company to undertake financings that may be severely dilutive or result in a risk of bankruptcy.
- The company filed a proxy statement with the SEC on August 15, 2024, and urges investors to read it carefully.
- The communication contains forward-looking statements involving risks and uncertainties that could cause actual results to differ materially.
Sentiment
Score: 4
Explanation: The sentiment is cautiously negative. While the company is pushing for a merger that ISS supports, the underlying reason is a looming cash shortage and potential bankruptcy if the deal falls through. The forward-looking statements also highlight numerous risks.
Positives
- ISS recommends stockholders vote in favor of the merger.
- ISS believes the offer is likely the best available, shareholders are receiving a premium, the implied valuation appears fair, and the cash consideration provides liquidity and immediate value.
Negatives
- Desktop Metal expects to run out of cash by the end of the first quarter of 2025 if the merger is not approved.
- Failure to approve the merger may require the company to undertake financings that may be severely dilutive or result in a risk of bankruptcy.
Risks
- The ultimate outcome of the proposed transaction between Desktop Metal and Nano is uncertain.
- The announcement of the proposed transaction could negatively affect Desktop Metal's ability to operate its business and retain key personnel.
- The timing of the proposed transaction is uncertain.
- The occurrence of any event, change or other circumstance could give rise to the termination of the proposed transaction.
- The ability to satisfy closing conditions to the completion of the proposed transaction is uncertain.
- Reductions in the Per Share Merger Consideration to be paid based on transaction expenses, potential borrowings under the Bridge Loan Facility and agreements relating to severance for certain executive officers and employees of Desktop Metal.
Future Outlook
The company's future is heavily dependent on the approval of the merger with Nano Dimension, as failure to do so could lead to significant financial challenges, including potential bankruptcy.
Management Comments
- Ric Fulop, Co-Founder, Chairman and Chief Executive Officer of Desktop Metal, urges stockholders to vote in favor of the merger.
- Ric Fulop states that voting is a unique opportunity to make a direct impact on your investment.
Industry Context
The document highlights the importance of mergers and acquisitions in the current market, especially for companies facing financial difficulties. The recommendation from ISS underscores the role of proxy advisory firms in influencing shareholder decisions.
Comparison to Industry Standards
- The document references Institutional Shareholder Services Inc. (ISS), a leading independent proxy voting advisory firm, indicating the importance of third-party assessments in such transactions.
- The mention of potential bankruptcy if the merger fails highlights the financial pressures faced by some companies in the competitive 3D printing industry, where achieving profitability and sustainable growth can be challenging.
Stakeholder Impact
- Shareholders face potential dilution or loss of investment if the merger fails and the company pursues alternative financing or bankruptcy.
- Employees' jobs could be at risk if the company faces financial distress.
- The merger could impact the company's relationships with customers and suppliers.
Next Steps
- Stockholders need to vote on the proposed merger by the special meeting on October 2, 2024.
- Desktop Metal will continue to pursue the completion of the merger with Nano Dimension.
Key Dates
- August 15, 2024: Desktop Metal filed a proxy statement with the SEC regarding the proposed transaction.
- September 23, 2024: Date of the communication sent to Desktop Metal stockholders.
- October 2, 2024: Date of the special meeting of stockholders of Desktop Metal, Inc.
- End of Q1 2025: Desktop Metal expects to run out of cash if the merger is not approved.
Keywords
merger, Desktop Metal, Nano Dimension, stockholders, proxy statement, vote, cash, bankruptcy, financing
DM
Desktop Metal, INC
NYSE
Sector: TBD
Filings with Classifications
Worse than expected
26 March 2025 5:20 PM
8-K Filing
- Revenue decreased from $189.7 million to $148.8 million year-over-year.
Worse than expected
31 October 2024 7:00 AM
Quarterly Report
- The company's revenue decreased by 15% year-over-year.
- The company reported a net loss of $35.4 million for the quarter and $191.0 million for the first nine months.
- The company's gross margin, while improved, is still relatively low at 9%.
Capital raise
31 October 2024 7:00 AM
Quarterly Report
- The company may need to raise additional capital through arrangements with Nano or from other sources, including equity and debt financings.
- The company has a multi-draw term loan credit facility with Nano for up to $20 million, available after January 7, 2025.
- The company may need to issue additional shares of capital stock or offer debt or other equity securities if the merger is not completed.
Worse than expected
23 September 2024 4:24 PM
Proxy Statement
- The company warns of potential dilutive financings or bankruptcy if the merger fails.
- Desktop Metal expects to run out of cash by the end of the first quarter of 2025 if the merger is not approved.
Worse than expected
13 September 2024 4:02 PM
Proxy Statement
- The company expects to run out of cash by the end of the first quarter 2025 if the merger is not approved.
- The company may need to undertake financings that may be severely dilutive to stockholders if the merger is not approved.
- There is a risk of bankruptcy if the merger is not approved.
Capital raise
13 September 2024 4:02 PM
Proxy Statement
- The document mentions that if the merger is not approved, Desktop Metal may need to undertake financings.
- These financings may be severely dilutive to stockholders.
Worse than expected
6 September 2024 4:38 PM
Proxy Statement
- Desktop Metal expects to run out of cash by the end of the first quarter of 2025 if the merger is not approved.
Capital raise
15 August 2024 7:00 AM
Definitive Proxy Statement
- The merger agreement includes a provision for a multi-draw term loan credit facility (Bridge Loan Facility) from Nano to Desktop Metal, up to $20 million, to provide working capital and liquidity.
Worse than expected
31 July 2024 4:15 PM
Earnings Conference Call Transcript
- The company's Q2 2024 revenue was down compared to the previous year.
- The company's non-GAAP gross margins were down compared to the previous year.
- The company's adjusted EBITDA was negative.
Worse than expected
30 July 2024 4:53 PM
Quarterly Report
- The company's revenue decreased by 27% compared to the same quarter last year.
- The company's gross margin was -83%, indicating significant losses on sales.
- The company's net loss increased significantly compared to the same quarter last year.
Capital raise
30 July 2024 4:53 PM
Quarterly Report
- The company plans to raise additional capital through a combination of potential options, including equity and debt financings.
- Nano Dimension agreed to provide a multi-draw term loan credit facility in an aggregate principal amount not to exceed $20.0 million, subject to certain conditions.
Worse than expected
30 July 2024 4:36 PM
Quarterly Report
- Revenue decreased from $53.3 million to $38.9 million compared to the same quarter last year.
- The company reported a net loss of $(103.4) million.
Worse than expected
30 July 2024 4:35 PM
Quarterly Report
- The company's revenue decreased significantly year-over-year.
- The company reported a substantial net loss, primarily due to one-time non-cash charges.
- The company's GAAP gross margin was negative, indicating poor profitability.
Worse than expected
3 July 2024 4:24 PM
Merger Announcement
- The combined company expects negative cash flow for the next six to eight quarters.
Delay expected
3 July 2024 4:24 PM
Merger Announcement
- The transaction is expected to close at the end of the year, but based on delays, maybe a few months later.
Worse than expected
3 July 2024 7:32 AM
Merger Announcement
- The final purchase price is subject to downward adjustments based on transaction expenses and potential draws on a loan facility, which could reduce the value of the deal for Desktop Metal shareholders.
Delay expected
3 July 2024 7:32 AM
Merger Announcement
- The closing of the transaction is expected in the fourth quarter of 2024, but is subject to customary closing conditions, including regulatory approvals, which could cause delays.
Capital raise
3 July 2024 7:32 AM
Merger Announcement
- Nano Dimension has committed to providing Desktop Metal with a $20 million secured loan facility if the closing of the transaction extends into 2025.
- The purchase price may be adjusted based on the amount drawn from the loan facility prior to closing.
Worse than expected
9 May 2024 6:02 AM
Quarterly Report
- The company's revenue decreased by 2% year-over-year, indicating worse than expected sales performance.
- The company reported a gross loss of $2.2 million, indicating worse than expected profitability.
- The company's net loss of $52.1 million was significant, indicating worse than expected financial results.
Capital raise
9 May 2024 6:02 AM
Quarterly Report
- The company entered into an Open Market Sale Agreement with Cantor Fitzgerald & Co. to sell shares of common stock for an aggregate offering price of up to $75.0 million.
- The company may need to further increase its capital resources by issuing additional shares of its capital stock or offering debt or other equity securities.
Better than expected
9 May 2024 6:00 AM
Quarterly Report
- The company's adjusted EBITDA improved by 44% year-over-year, indicating better than expected cost management.
- Non-GAAP operating expenses decreased for nine consecutive quarters, showing better than expected cost control.
- Cash consumption decreased by 47% year-over-year, demonstrating better than expected cash management.
Capital raise
23 April 2024 7:15 AM
Proxy Statement
- The company may offer common and preferred stock, debt securities, warrants, and units of up to $250.0 million in the aggregate under a shelf registration statement.
- The company may sell shares of its Class A common stock having aggregate sales proceeds of up to $75.0 million pursuant to an at the market offering program.
- The company intends to raise capital through equity or debt financing to fund its current operations.
Worse than expected
23 April 2024 7:15 AM
Proxy Statement
- The company needs to implement a reverse stock split to regain compliance with the NYSE minimum bid price requirement, indicating that the share price has fallen below acceptable levels.
Capital raise
15 March 2024 4:12 PM
Annual Results
- The company may need to further increase its capital resources by issuing additional shares of its capital stock or offering debt or other equity securities.
- The company may not be able to obtain additional financing on terms favorable to it, if at all.
Worse than expected
15 March 2024 4:12 PM
Annual Results
- The company experienced a net loss of $323.3 million in 2023, which is worse than the previous year.
- The company's revenue decreased by 9% in 2023 compared to 2022.
- The company's gross profit decreased by $25.2 million in 2023 compared to 2022.
Better than expected
15 March 2024 7:00 AM
Quarterly Report
- The company's net loss significantly decreased year-over-year, indicating improved financial performance.
- Adjusted EBITDA showed a substantial improvement, reaching the company's strongest quarterly performance to date.
- Non-GAAP gross margins improved significantly year-over-year.
Worse than expected
24 January 2024 8:05 AM
Strategic Business Review
- The company is implementing a significant workforce reduction and restructuring plan, indicating that the current financial performance is worse than expected.
- The company is facing a downturn in the additive manufacturing industry and a softer demand environment, which are contributing to the need for these cost-cutting measures.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.