Desktop Metal Prices $100 Million Convertible Senior Notes Offering
May 10 2022 - 11:12PM
Business Wire
Desktop Metal, Inc. (NYSE: DM) today announced the pricing of
its offering of $100,000,000 aggregate principal amount of 6.0%
convertible senior notes due 2027 (the “notes”) in a private
offering to persons reasonably believed to be qualified
institutional buyers pursuant to Rule 144A under the Securities Act
of 1933, as amended (the “Securities Act”). The issuance and sale
of the notes are scheduled to settle on May 13, 2022, subject to
customary closing conditions. Desktop Metal also granted the
initial purchasers of the notes an option to purchase, for
settlement within a period of 13 days from, and including, the date
the notes are first issued, up to an additional $15,000,000
principal amount of notes.
The notes will be senior, unsecured obligations of Desktop Metal
and will accrue interest at a rate of 6.0% per annum, payable
semi-annually in arrears on May 15 and November 15 of each year,
beginning on November 15, 2022. The notes will mature on May 15,
2027, unless earlier repurchased, redeemed or converted. Before
November 15, 2026, noteholders will have the right to convert their
notes in certain circumstances and during specified periods. From
and after November 15, 2026, noteholders may convert their notes at
any time at their election until the close of business on the
second scheduled trading day immediately before the maturity date.
Desktop Metal will settle conversions by paying or delivering cash
and, if applicable, shares of its Class A common stock, par value
$0.0001 per share (“common stock”). The initial conversion rate is
601.5038 shares of common stock per $1,000 principal amount of
notes, which represents an initial conversion price of
approximately $1.66 per share of common stock. The initial
conversion price represents a premium of approximately 25% over the
last reported sale price of $1.33 per share of Desktop Metal’s
common stock on May 10, 2022. The conversion rate and conversion
price will be subject to adjustment upon the occurrence of certain
events.
The notes will be redeemable, in whole or in part (subject to
certain limitations), for cash at Desktop Metal’s option at any
time, and from time to time, on or after May 20, 2025 and on or
before the 40th scheduled trading day immediately before the
maturity date, but only if the last reported sale price per share
of Desktop Metal’s common stock exceeds 130% of the conversion
price for a specified period of time and certain liquidity
conditions have been satisfied. The redemption price will be equal
to the principal amount of the notes to be redeemed, plus accrued
and unpaid interest, if any, to, but excluding, the redemption
date.
If a “fundamental change” (as defined in the indenture for the
notes) occurs, then, subject to a limited exception, noteholders
may require Desktop Metal to repurchase their notes for cash. The
repurchase price will be equal to the principal amount of the notes
to be repurchased, plus accrued and unpaid interest, if any, to,
but excluding, the applicable repurchase date.
Desktop Metal estimates that the net proceeds from the offering
will be approximately $96.7 million (or approximately $111.3
million if the initial purchasers fully exercise their option to
purchase additional notes), after deducting the initial purchasers’
discounts and commissions and estimated offering expenses. Desktop
Metal intends to use the net proceeds from the offering to fund
working capital expenditures and for other general corporate
purposes.
The notes will be offered only to persons reasonably believed to
be qualified institutional buyers pursuant to Rule 144A under the
Securities Act. The offer and sale of the notes and any shares of
common stock issuable upon conversion of the notes have not been,
and will not be, registered under the Securities Act or any other
securities laws, and the notes and any such shares cannot be
offered or sold absent registration or except pursuant to an
applicable exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and any other
applicable securities laws. This press release does not constitute
an offer to sell, or the solicitation of an offer to buy, the notes
or any shares of common stock issuable upon conversion of the
notes, nor will there be any sale of the notes or any such shares,
in any state or other jurisdiction in which such offer, sale or
solicitation would be unlawful.
Forward-Looking Statements
This press release contains certain forward-looking statements
within the meaning of the federal securities laws, including
statements regarding the persons being offered the notes being
qualified institutional buyers, the intended use of the net
proceeds from the offering and the expected closing date of the
offering. Forward-looking statements generally are identified by
the words “believe,” “project,” “expect,” “anticipate,” “estimate,”
“intend,” “strategy,” “future,” “opportunity,” “plan,” “may,”
“should,” “will,” “would,” “will be,” “will continue,” “will likely
result,” and similar expressions. Forward-looking statements are
predictions, projections and other statements about future events
that are based on current expectations and assumptions and, as a
result, are subject to risks and uncertainties. Many factors could
cause actual future events to differ materially from the
forward-looking statements in this press release, including but not
limited to, the risks and uncertainties set forth in Desktop Metal,
Inc.’s filings with the U.S. Securities and Exchange Commission.
These filings identify and address other important risks and
uncertainties that could cause actual events and results to differ
materially from those contained in the forward-looking statements.
Forward-looking statements speak only as of the date they are made.
Readers are cautioned not to put undue reliance on forward-looking
statements, and Desktop Metal, Inc. assumes no obligation and does
not intend to update or revise these forward-looking statements,
whether as a result of new information, future events, or
otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20220510006526/en/
Investor Relations: Jay Gentzkow
jaygentzkow@desktopmetal.com (781) 730-2110 Media Relations:
Lynda McKinney lyndamckinney@desktopmetal.com (978) 224-1282
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