Desktop Metal Announces Second Quarter 2021 Financial Results

No Offer or Solicitation:

This press release is not intended to and shall not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Additional Information and Where to Find It:

In connection with the proposed transaction, Desktop Metal intends to file a registration statement on Form S-4 with the Securities and Exchange Commission (the “SEC”), which will include a preliminary proxy statement of ExOne and a prospectus with respect to shares of Desktop Metal’s common stock to be issued in the proposed transaction (the “proxy statement/prospectus”). INVESTORS AND SECURITY HOLDERS OF DESKTOP METAL AND EXONE ARE URGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS THAT ARE OR WILL BE FILED WITH THE SEC, INCLUDING THE PROXY STATEMENT/PROSPECTUS THAT WILL BE PART OF THE REGISTRATION STATEMENT, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED MATTERS. The final proxy statement/prospectus will be mailed to stockholders of ExOne in connection with meeting to be held to request approval of the proposed transaction. Investors and security holders will be able to obtain the documents free of charge at the SEC’s website, www.sec.gov, from Desktop Metal at its website, ir.desktopmetal.com, or from ExOne at its website, investor.exone.com.

Participants in the Solicitation:

Desktop Metal, ExOne and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information concerning Desktop Metal’s participants is set forth in the proxy statement, filed June 17, 2021, for Desktop Metal’s 2021 annual meeting of stockholders as filed with the SEC on Schedule 14A and on certain of its Current Reports on Form 8-K. Information concerning ExOne’s participants is set forth in the proxy statement, filed April 1, 2021, for ExOne’s 2021 annual meeting of stockholders as filed with the SEC on Schedule 14A and on certain of its Current Reports on Form 8-K. Additional information regarding the interests of such participants in the solicitation of proxies, including direct and indirect interests, in respect of the proposed transaction will be included in the registration statement and proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

 

 

2021

 

2020

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

188,199

 

$

483,525

Short‑term investments

 

 

326,318

 

 

111,867

Accounts receivable

 

 

13,441

 

 

6,516

Inventory

 

 

25,407

 

 

9,708

Prepaid expenses and other current assets

 

 

7,078

 

 

976

Total current assets

 

 

560,443

 

 

612,592

Restricted cash

 

 

676

 

 

612

Property and equipment, net

 

 

13,228

 

 

12,160

Capitalized software, net

 

 

226

 

 

312

Goodwill

 

 

251,060

 

 

2,252

Intangible assets, net

 

 

178,860

 

 

9,102

Other noncurrent assets

 

 

12,210

 

 

4,879

Total Assets

 

$

1,016,703

 

$

641,909

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

9,214

 

$

7,591

Customer deposits

 

 

2,829

 

 

1,480

Current portion of lease liability

 

 

1,983

 

 

868

Accrued expenses and other current liabilities

 

 

20,968

 

 

7,565

Deferred revenue

 

 

4,814

 

 

3,004

Current portion of contingent consideration

 

 

1,429

 

 

Current portion of long‑term debt, net of deferred financing costs

 

 

311

 

 

9,991

Total current liabilities

 

 

41,548

 

 

30,499

Warrant liability

 

 

 

 

93,328

Subscription agreement

 

 

474

 

 

Contingent consideration, net of current portion

 

 

4,655

 

 

Lease liability, net of current portion

 

 

3,959

 

 

2,157

Deferred tax liability

 

 

8,723

 

 

Total liabilities

 

 

59,359

 

 

125,984

Commitments and Contingences (Note 15)

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

 

Preferred Stock, $0.0001 par value—authorized, 50,000,000 shares; no shares issued and
outstanding at June 30, 2021 and December 31, 2020, respectively

 

 

 

 

Common Stock, $0.0001 par value—500,000,000 shares authorized; 259,712,899 and
226,756,733 shares issued at June 30, 2021 and December 31, 2020, respectively,
259,545,731 and 224,626,597 shares outstanding at June 30, 2021 and December 31, 2020, respectively

 

 

26

 

 

23

Additional paid‑in capital

 

 

1,387,779

 

 

844,188

Accumulated deficit

 

 

(430,565)

 

 

(328,277)

Accumulated other comprehensive income (loss)

 

 

104

 

 

(9)

Total Stockholders’ Equity

 

 

957,344

 

 

515,925

Total Liabilities and Stockholders’ Equity

 

$

1,016,703

 

$

641,909

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2021

 

2020

 

2021

 

2020

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

17,560

 

$

1,531

 

$

27,871

 

$

4,225

Services

 

 

1,417

 

 

658

 

 

2,419

 

 

1,349

Total revenues

 

 

18,977

 

 

2,189

 

 

30,290

 

 

5,574

Cost of sales

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

 

15,490

 

 

9,372

 

 

25,977

 

 

14,413

Services

 

 

1,115

 

 

1,106

 

 

2,528

 

 

2,269

Total cost of sales

 

 

16,605

 

 

10,478

 

 

28,505

 

 

16,682

Gross profit/(loss)

 

 

2,372

 

 

(8,289)

 

 

1,785

 

 

(11,108)

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

15,651

 

 

9,827

 

 

26,509

 

 

22,167

Sales and marketing

 

 

10,894

 

 

2,958

 

 

16,343

 

 

7,452

General and administrative

 

 

13,142

 

 

2,964

 

 

26,988

 

 

5,589

In-process research and development assets acquired

 

 

10,400

 

 

 

 

10,400

 

 

Total operating expenses

 

 

50,087

 

 

15,749

 

 

80,240

 

 

35,208

Loss from operations

 

 

(47,715)

 

 

(24,038)

 

 

(78,455)

 

 

(46,316)

Change in fair value of warrant liability

 

 

 

 

 

 

(56,576)

 

 

Interest expense

 

 

(51)

 

 

(51)

 

 

(125)

 

 

(155)

Interest and other income, net

 

 

268

 

 

323

 

 

630

 

 

901

Loss before income taxes

 

 

(47,498)

 

 

(23,766)

 

 

(134,526)

 

 

(45,570)

Income tax benefit

 

 

4,318

 

 

 

 

32,238

 

 

Net loss

 

$

(43,180)

 

$

(23,766)

 

$

(102,288)

 

$

(45,570)

Net loss per share—basic and diluted

 

$

(0.17)

 

$

(0.15)

 

$

(0.41)

 

$

(0.29)

Weighted average shares outstanding, basic and diluted

 

 

255,097,905

 

 

158,124,160

 

 

246,717,400

 

 

157,186,939

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2021

 

2020

 

2021

 

2020

 

Net loss

 

 

(43,180)

 

 

(23,766)

 

$

(102,288)

 

$

(45,570)

 

Other comprehensive (loss) income, net of taxes:

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on available-for-sale marketable securities, net

 

 

(5)

 

 

132

 

 

(4)

 

 

(27)

 

Foreign currency translation adjustment

 

 

130

 

 

 

 

117

 

 

 

Total comprehensive loss, net of taxes of $0

 

 

(43,055)

 

 

(23,634)

 

$

(102,175)

 

$

(45,597)

 

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

(in thousands, except share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

Common Stock

 

Additional

 

 

 

 

Comprehensive

 

Total

 

 

Voting

 

Paid‑in

 

Accumulated

 

(Loss)

 

Stockholders’

 

 

Shares

 

Amount

 

Capital

 

Deficit

 

Income

 

Equity

BALANCE—April 1, 2021

 

252,436,919

 

$

25

 

$

1,326,945

 

$

(387,385)

 

$

(21)

 

$

939,564

Exercise of Common Stock options

 

2,683,506

 

 

 

 

3,485

 

 

 

 

 

 

3,485

Vesting of restricted Common Stock

 

56,015

 

 

 

 

 

 

 

 

 

 

Vesting of restricted stock units

 

28,656

 

 

 

 

 

 

 

 

 

 

Repurchase of shares for employee tax withholdings

 

(6,931)

 

 

 

 

(91)

 

 

 

 

 

 

(91)

Issuance of Common Stock for acquisitions

 

4,347,566

 

 

1

 

 

53,441

 

 

 

 

 

 

53,442

Stock‑based compensation expense

 

 

 

 

 

3,999

 

 

 

 

 

 

3,999

Net loss

 

 

 

 

 

 

 

(43,180)

 

 

 

 

(43,180)

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

125

 

 

125

BALANCE—June 30, 2021

 

259,545,731

 

$

26

 

$

1,387,779

 

$

(430,565)

 

$

104

 

$

957,344

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

Common Stock

 

Additional

 

 

 

 

Comprehensive

 

Total

 

 

Voting

 

Paid‑in

 

Accumulated

 

(Loss)

 

Stockholders’

 

 

Shares

 

Amount

 

Capital

 

Deficit

 

Income

 

Equity

BALANCE—January 1, 2021

 

224,626,597

 

$

23

 

$

844,188

 

$

(328,277)

 

$

(9)

 

$

515,925

Exercise of Common Stock options

 

2,846,734

 

 

 

 

3,665

 

 

 

 

 

 

3,665

Vesting of restricted Common Stock

 

112,030

 

 

 

 

 

 

 

 

 

 

Vesting of restricted stock units

 

43,921

 

 

 

 

 

 

 

 

 

 

Repurchase of shares for employee tax withholdings

 

(9,172)

 

 

 

 

(145)

 

 

 

 

 

 

(145)

Issuance of Common Stock for acquisitions

 

9,383,708

 

 

1

 

 

213,288

 

 

 

 

 

 

213,289

Stock‑based compensation expense

 

 

 

 

 

6,216

 

 

 

 

 

 

6,216

Vesting of Trine Founder shares

 

1,850,938

 

 

 

 

 

 

 

 

 

 

Exercise of warrants

 

20,690,975

 

 

2

 

 

320,567

 

 

 

 

 

 

320,569

Net loss

 

 

 

 

 

 

 

(102,288)

 

 

 

 

(102,288)

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

113

 

 

113

BALANCE—June 30, 2021

 

259,545,731

 

$

26

 

$

1,387,779

 

$

(430,565)

 

$

104

 

$

957,344

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

Legacy Convertible

 

 

Common Stock

 

Additional

 

 

 

 

Comprehensive

 

Total

 

 

Preferred Stock

 

 

Voting

 

Paid‑in

 

Accumulated

 

(Loss)

 

Stockholders’

 

 

Shares

 

Amount

 

 

Shares

 

Amount

 

Capital

 

Deficit

 

Income

 

Equity

BALANCE—April 1, 2020

 

100,038,109

 

$

436,533

 

 

26,813,113

 

$

3

 

$

16,722

 

$

(316,066)

 

$

(84)

 

$

(299,425)

Retroactive
application of
recapitalization (Note 1)

 

(100,038,109)

 

 

(436,533)

 

 

130,138,012

 

 

13

 

 

438,037

 

 

 

 

 

 

438,050

Adjusted balance,
beginning of period

 

 

 

 

 

156,951,125

 

 

16

 

 

454,759

 

 

(316,066)

 

 

(84)

 

 

138,625

Exercise of Common
Stock options

 

 

 

 

 

28,173

 

 

 

 

4

 

 

 

 

 

 

4

Vesting of restricted
Common Stock

 

 

 

 

 

1,750,360

 

 

 

 

2

 

 

 

 

 

 

2

Stock‑based
compensation expense

 

 

 

 

 

 

 

 

 

1,074

 

 

 

 

 

 

1,074

Common Stock
warrants issued

 

 

 

 

 

 

 

 

 

87

 

 

 

 

 

 

87

Net loss

 

 

 

 

 

 

 

 

 

 

 

(23,766)

 

 

 

 

(23,766)

Other comprehensive
income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

132

 

 

132

BALANCE—
June 30, 2020

 

 

$

 

 

158,729,658

 

$

16

 

$

455,926

 

$

(339,832)

 

$

48

 

$

116,158

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

Legacy Convertible

 

 

Common Stock

 

Additional

 

 

 

 

Comprehensive

 

Total

 

 

Preferred Stock

 

 

Voting

 

Paid‑in

 

Accumulated

 

(Loss)

 

Stockholders’

 

 

Shares

 

Amount

 

 

Shares

 

Amount

 

Capital

 

Deficit

 

Income

 

Equity

BALANCE—January 1, 2020

 

100,038,109

 

$

436,533

 

 

26,813,113

 

$

3

 

$

16,722

 

$

(294,262)

 

$

75

 

$

(277,462)

Retroactive
application of
recapitalization (Note 1)

 

(100,038,109)

 

 

(436,533)

 

 

128,100,821

 

 

13

 

 

436,520

 

 

 

 

 

 

436,533

Adjusted balance,
beginning of period

 

 

 

 

 

154,913,934

 

 

16

 

 

453,242

 

 

(294,262)

 

 

75

 

 

159,071

Exercise of Common
Stock options

 

 

 

 

 

314,809

 

 

 

 

136

 

 

 

 

 

 

136

Vesting of restricted
Common Stock

 

 

 

 

 

3,500,915

 

 

 

 

4

 

 

 

 

 

 

4

Stock‑based
compensation expense

 

 

 

 

 

 

 

 

 

2,333

 

 

 

 

 

 

2,333

Common Stock
warrants issued

 

 

 

 

 

 

 

 

 

211

 

 

 

 

 

 

211

Net loss

 

 

 

 

 

 

 

 

 

 

 

(45,570)

 

 

 

 

(45,570)

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

(27)

 

 

(27)

BALANCE—June 30, 2020

 

 

$

 

 

158,729,658

 

$

16

 

$

455,926

 

$

(339,832)

 

$

48

 

$

116,158

DESKTOP METAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

 

 

 

 

 

 

 

 

 

Six Months Ended June 30,

 

 

2021

 

2020

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(102,288)

 

$

(45,570)

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

 

 

 

 

 

 

Depreciation and amortization

 

 

9,524

 

 

4,475

Stock‑based compensation

 

 

6,216

 

 

2,333

Change in fair value of warrant liability

 

 

56,576

 

 

Change in fair value of subscription agreement

 

 

474

 

 

Expense related to Common Stock warrants issued

 

 

 

 

43

Amortization (accretion) of discount on investments

 

 

1,304

 

 

Amortization of debt financing cost

 

 

9

 

 

10

Provision for bad debt

 

 

164

 

 

285

Acquired in-process research and development

 

 

10,400

 

 

(Gain) loss on disposal of property and equipment

 

 

(7)

 

 

10

Gain on investment, related to Make Composites, Inc.

 

 

 

 

120

Net increase in accrued interest related to marketable securities

 

 

(1,062)

 

 

Net unrealized (gain) on marketable securities

 

 

32

 

 

Deferred tax benefit

 

 

(32,354)

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(3,584)

 

 

1,562

Inventory

 

 

(6,635)

 

 

(1,378)

Prepaid expenses and other current assets

 

 

(3,692)

 

 

1,033

Other assets

 

 

(719)

 

 

Accounts payable

 

 

(278)

 

 

(1,178)

Accrued expenses and other current liabilities

 

 

(5,362)

 

 

(1,074)

Customer deposits

 

 

(1,372)

 

 

(57)

Deferred revenue

 

 

693

 

 

(756)

Change in right of use assets and lease liabilities, net

 

 

(92)

 

 

(162)

Net cash used in operating activities

 

 

(72,053)

 

 

(40,304)

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(1,266)

 

 

(1,819)

Purchase of other investments

 

 

(3,710)

 

 

Purchase of marketable securities

 

 

(281,438)

 

 

(24,142)

Proceeds from sales and maturities of marketable securities

 

 

66,741

 

 

74,616

Cash paid to acquire in-process research and development

 

 

(6,050)

 

 

Cash paid for acquisitions, net of cash acquired

 

 

(161,837)

 

 

Net cash (used in) provided by investing activities

 

 

(387,560)

 

 

48,655

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from the exercise of stock options

 

 

3,665

 

 

135

Proceeds from the exercise of stock warrants

 

 

170,665

 

 

Proceeds from PPP loan

 

 

 

 

5,379

Repayment of PPP loan

 

 

 

 

(5,379)

Repayment of term loan

 

 

(10,000)

 

 

Net cash provided by financing activities

 

 

164,330

 

 

135

Net (decrease) increase in cash, cash equivalents, and restricted cash

 

 

(295,283)

 

 

8,486

Effect of exchange rate changes

 

 

21

 

 

Cash and cash equivalents at beginning of period

 

 

483,525

 

 

66,161

Restricted cash at beginning of period

 

 

612

 

 

612

Cash and cash equivalents at end of period

 

$

188,199

 

$

74,647

Restricted cash at end of period

 

$

676

 

$

612

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

Interest paid

 

$

125

 

 

182

Taxes paid

 

$

150

 

 

 

 

 

 

 

 

 

Non‑cash investing and financing activities:

 

 

 

 

 

 

Net unrealized loss on investments

 

$

4

 

$

Exercise of private placement warrants

 

$

149,904

 

$

Common Stock issued for acquisitions

 

$

213,289

 

$

Cash held back in acquisitions

 

$

50

 

$

Additions to right of use assets and lease liabilities

 

$

852

 

$

Purchase of property and equipment included in accounts payable

 

$

 

$

Purchase of property and equipment included in accrued expense

 

$

33

 

$

139

Tax liabilities related to withholdings on Common Stock

 

$

145

 

$

Contingent consideration in connection with acquisitions

 

$

6

 

$


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