Filed Pursuant to Rule 424(b)(3)​

 Registration No. 333-259564​

MERGER PROPOSED — YOUR VOTE IS VERY IMPORTANT

October 8, 2021​

Dear Fellow Stockholder:

We cordially invite you to attend a special meeting of stockholders of The ExOne Company, a Delaware corporation (“ExOne”), to be held on November 9, 2021, at 10:00 a.m. Eastern Time (the “special meeting”) in a virtual online format. As previously announced, on August 11, 2021, ExOne entered into a merger agreement (the “Merger Agreement”) providing for the combination of ExOne with Desktop Metal, Inc., a Delaware corporation (“Desktop Metal”). At the special meeting, you will be asked to consider and vote on a proposal to adopt the Merger Agreement and certain related matters. The Merger Agreement provides for a business combination in which Texas Merger Sub I, Inc., a Delaware corporation and wholly owned subsidiary of Desktop Metal (“Merger Sub I”), will merge with and into ExOne (the “First Merger”), with ExOne surviving as a wholly owned subsidiary of Desktop Metal, and (ii) immediately thereafter, ExOne, as the surviving corporation of the First Merger, will merge (such merger, the “Second Merger” and, together with the First Merger, the “Mergers”) with and into Texas Merger Sub II, LLC, a Delaware limited liability company and wholly owned subsidiary of Desktop Metal (“Merger Sub II”), with Merger Sub II surviving the Second Merger and continuing as a wholly owned subsidiary of Desktop Metal. A copy of the Merger Agreement is included as Annex A to the accompanying proxy statement/​prospectus.

Under the Merger Agreement, at the effective time of the First Merger (the “Effective Time”) you will be entitled to receive for each share of ExOne common stock an amount equal to $8.50 in cash plus a number of shares of Desktop Metal Class A common stock equal to the exchange ratio set forth in the Merger Agreement (the “exchange ratio”), provided, however that such cash and stock merger consideration is subject to further adjustment as described in the accompanying proxy statement/prospectus. The exchange ratio depends on the average of the daily volume weighted averages of the trading price of Desktop Metal Class A common stock on the New York Stock Exchange (“NYSE”) on each of the 20 consecutive trading days ending on and including the trading day that is three trading days prior to the closing date (the “average stock price”). If the average stock price is greater than or equal to $9.70 per share, then the exchange ratio will be 1.7522. If the average stock price is less than $9.70 and greater than $7.94 per share, the initial exchange ratio of 1.9274 will be modified by multiplying such exchange ratio by the quotient of $8.82, divided by the average stock price. If the average stock price is less than or equal to $7.94, the exchange ratio will be 2.1416. The merger consideration will be subject to adjustment to ensure that (i) the stock consideration in the Mergers is not less than 45% of the total consideration in the Mergers, as determined for U.S. federal income tax purposes, and (ii) the number of shares of Desktop Metal Class A common stock to be issued in the Mergers does not exceed 19.9% of the issued and outstanding shares of Desktop Metal Class A common stock. Desktop Metal Class A common stock is traded on the NYSE under the trading symbol “DM” and we encourage you to obtain quotes for the Desktop Metal Class A common stock, given that part of the merger consideration is payable in shares of Desktop Metal Class A common stock.

The transaction cannot be completed unless ExOne stockholders holding at least a majority of the shares of ExOne common stock outstanding as of the close of business on October 4, 2021, the record date for the special meeting, vote in favor of the adoption of the Merger Agreement at the special meeting.

Your vote is very important, regardless of the number of shares you own. The transaction cannot be completed unless the holders of at least a majority of the outstanding shares of ExOne common stock entitled to vote thereon vote to adopt the Merger Agreement. A failure to vote or an abstention will have the same effect as a vote “AGAINST” the adoption of the Merger Agreement.

Even if you plan to virtually attend the special meeting, ExOne requests that you complete, sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying prepaid reply envelope or submit your proxy by telephone or via the Internet prior to the special meeting to ensure that your shares of ExOne common stock will be represented at the special meeting. If you hold your shares in “street name” through a bank, brokerage firm or other nominee, you should follow the procedures provided by your bank, brokerage firm or other nominee to vote your shares.

The ExOne board of directors recommends that ExOne stockholders vote “FOR” each of the proposals presented at the special meeting.   In considering the recommendation of the board of directors of ExOne, you should be aware that directors and executive officers of ExOne have certain interests in the transaction that may be different from, or in addition to, the interests of ExOne stockholders generally. See the sections titled “Proposal 2: Non-Binding, Advisory Vote on Merger-Related Compensation for ExOne’s Named Executive Officers” beginning on page 137 of the accompanying proxy statement/prospectus and “Interests of ExOne’s Directors and Executive Officers in the Mergers” beginning on page 139 of the accompanying proxy statement/prospectus for a more detailed description of these interests.

In particular, we urge you to read carefully the section titled “Risk Factors” beginning on page 32 of the accompanying proxy statement/prospectus. If you have any questions regarding the accompanying proxy statement/prospectus, you may contact The Proxy Advisory Group, LLC, ExOne’s proxy solicitor, by calling (212) 616-2181.

We urge you to read carefully and in its entirety the accompanying proxy statement/prospectus, including the annexes and the documents incorporated by reference.

On behalf of the board of directors of ExOne, thank you for your consideration and continued support.

Sincerely,

S. Kent Rockwell, Chairman

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved the First Merger or other transactions described in the accompanying proxy statement/prospectus or the securities to be issued pursuant to the First Merger under the accompanying proxy statement/prospectus nor have they determined if the accompanying proxy statement/prospectus is accurate or adequate. Any representation to the contrary is a criminal offense.

The accompanying proxy statement/prospectus is dated October 8, 2021 and is first being mailed to ExOne stockholders on or about October 12, 2021.

 

The ExOne Company

127 Industry Boulevard
North Huntingdon, PA 15642

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

Dear Stockholder:

You are cordially invited to participate in a Special Meeting of Stockholders of The ExOne Company (“ExOne”). The meeting will be held on November 9, 2021 at 10:00 a.m., Eastern Time, in a virtual online format. You will be able to vote and submit your questions at www.virtualshareholdermeeting.com/​XONE2021SM during the meeting (the “special meeting”). At the meeting, holders of ExOne’s issued and outstanding common stock as of the record date will act upon the following matters:

(1)

To adopt the Agreement and Plan of Merger, dated as of August 11, 2021 (the “Merger Agreement”), by and among Desktop Metal, Inc., a Delaware corporation (“Desktop Metal”), Texas Merger Sub I, Inc., a Delaware corporation and a wholly owned subsidiary of Desktop Metal (“Merger Sub I”), Texas Merger Sub II, LLC, a Delaware limited liability company and a wholly owned subsidiary of Desktop Metal (“Merger Sub II”), and ExOne, pursuant to which Merger Sub I will merge with and into ExOne (the “First Merger”), and immediately thereafter ExOne, as the surviving corporation of the First Merger, will merge with and into Merger Sub II (the “Second Merger,” and together with First Merger, the “Mergers”), with Merger Sub II surviving the Second Merger and continuing as a wholly owned subsidiary of Desktop Metal (the “Merger Proposal”);

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(2)

To approve, on a non-binding, advisory basis, the compensation that may be paid or become payable to ExOne’s named executive officers in connection with the Mergers (the “Advisory Executive Compensation Proposal”); and

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(3)

To approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to approve the Merger Proposal at the time of the special meeting (the “Adjournment Proposal”).

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Each of the proposals is more fully described in the accompanying proxy statement/prospectus of Desktop Metal and ExOne, which provides you with information about ExOne, Desktop Metal, the special meeting, the Mergers, the Merger Agreement and other related matters. The accompanying proxy
statement/prospectus also includes, as Annex A, a copy of the Merger Agreement. ExOne encourages you to carefully read the accompanying proxy statement/prospectus in its entirety, including the annexes and the documents incorporated by reference.

The record date for the special meeting is October 4, 2021 (the “Record Date”). Only stockholders of record at the close of business on that date are entitled to receive notice of, participate in and vote at, the special meeting and any postponements or adjournments thereof. To participate in the special meeting, you must go to the meeting website at www.virtualshareholdermeeting.com/XONE2021SM and enter the 16-digit control number found on your proxy card. Once admitted, during the special meeting, you may vote, submit questions and view the list of stockholders entitled to vote at the special meeting by following the instructions available on the meeting website.

YOUR VOTE IS VERY IMPORTANT.   The Mergers cannot be completed and the merger consideration will not be paid unless ExOne stockholders holding at least a majority of the shares of ExOne common stock outstanding as of the close of business on the Record Date vote to approve the Merger Proposal. Whether or not you plan to virtually attend the special meeting, please complete the enclosed proxy card and sign, date and

 

 

return it promptly so that your shares will be represented at the special meeting. You also may vote your shares over the Internet or by telephone by following the instructions included on the proxy card. Submitting your proxy in writing, over the Internet or by telephone will not prevent you from voting electronically at the virtual special meeting.

Approval of the Merger Proposal requires the affirmative vote of a majority of the outstanding shares of ExOne common stock entitled to vote as of the close of business on the Record Date for the special meeting. Approval of each of the Advisory Executive Compensation Proposal and the Adjournment Proposal requires the affirmative vote of a majority of the shares represented at the special meeting and entitled to vote. Because the Advisory Executive Compensation Proposal is advisory, it will not be binding on ExOne, and failure to receive the vote required for approval will not change ExOne’s obligations to pay the compensation contemplated in connection with the Mergers pursuant to the terms of the applicable agreements and arrangements.

The ExOne board of directors recommends that ExOne stockholders vote “FOR” each of the proposals presented at the special meeting.

By Order of the Board of Directors,

LORETTA L. BENEC

Vice President, General Counsel and Corporate Secretary

October 8, 2021

 

 

REFERENCES TO ADDITIONAL INFORMATION

This proxy statement/prospectus incorporates important business and financial information about The ExOne Company (“ExOne”) from other documents that ExOne has filed with the U.S. Securities and Exchange Commission (the “SEC”) and that are contained in or incorporated by reference into this proxy statement/prospectus. For a listing of documents incorporated by reference into this proxy statement/​prospectus, please see the section titled “Where You Can Find More Information.” This information is available through the SEC’s website at www.sec.gov.

You may request copies of this proxy statement/prospectus and any of the documents incorporated by reference into this proxy statement/prospectus or other information concerning ExOne, without charge, by written or telephonic request directed to The ExOne Company, Attention: Corporate Secretary, 127 Industry Boulevard, North Huntingdon, Pennsylvania 15642, Telephone (724) 863-9663, or by written or telephonic request directed to ExOne’s proxy solicitor, The Proxy Advisory Group, LLC, 18 East 41st Street, Suite 2000 New York, New York 10017-6219, Telephone (212) 616-2181; or from the SEC through the SEC website at the address provided above.

You may also request a copy of this proxy statement/prospectus or other information concerning Desktop Metal, Inc. (“Desktop Metal”), without charge, by written or telephonic request directed to Desktop Metal, Inc., Attention: Jay Gentzkow, 63 3rd Avenue, Burlington, Massachusetts 01803, Telephone (781) 730-2110; or from the SEC through the SEC website at the address provided above.

In order for you to receive timely delivery of the documents in advance of the special meeting of ExOne stockholders to be held on November 9, 2021, you must request the information no later than five business days prior to the date of the special meeting, being November 2, 2021.

ABOUT THIS PROXY STATEMENT/PROSPECTUS

This document, which forms part of a registration statement on Form S-4 filed with the SEC by Desktop Metal (File No. 333-259564), constitutes a prospectus of Desktop Metal under the Securities Act of 1933, as amended (the “Securities Act”), with respect to the shares of Class A common stock, par value $0.0001 per share, of Desktop Metal (the “Desktop Metal Class A common stock”), to be issued to ExOne stockholders pursuant to the Agreement and Plan of Merger, dated as of August 11, 2021 (the “Merger Agreement”), by and among ExOne, Desktop Metal, Texas Merger Sub I, Inc. and Texas Merger Sub II, LLC, as it may be amended from time to time. This document also constitutes a proxy statement of ExOne under Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). It also constitutes a notice of meeting with respect to the special meeting, at which ExOne stockholders will be asked to consider and vote on the adoption of the Merger Agreement and certain related matters.

Desktop Metal has supplied all information contained or incorporated by reference into this proxy statement/prospectus relating to Desktop Metal, Texas Merger Sub I, Inc. and Texas Merger Sub II, LLC and ExOne has supplied all such information relating to ExOne.

You should rely only on the information contained in or incorporated by reference into this proxy statement/prospectus. Desktop Metal and ExOne have not authorized anyone to provide you with information that is different from that contained in or incorporated by reference into this proxy statement/​prospectus. This proxy statement/prospectus is dated October 8, 2021, and you should not assume that the information contained in this proxy statement/prospectus is accurate as of any date other than such date. Further, you should not assume that the information incorporated by reference into this proxy statement/​prospectus is accurate as of any date other than the date of the incorporated document. Neither the mailing of this proxy statement/prospectus to ExOne stockholders nor the issuance by Desktop Metal of shares of its Class A common stock pursuant to the Merger Agreement will create any implication to the contrary.

 

 

TABLE OF CONTENTS

 

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QUESTIONS AND ANSWERS ABOUT THE MERGERS AND THE SPECIAL MEETING

The following are answers to some questions that you, as a stockholder of ExOne, may have regarding the proposed merger between ExOne and Desktop Metal and the proposals to be considered at the special meeting. This section does not provide all the information that might be important to you with respect to the proposed merger between ExOne and Desktop Metal. ExOne and Desktop Metal urge you to carefully read the remainder of this proxy statement/prospectus, including the annexes and the documents incorporated by reference in this proxy statement/prospectus. See “Where You Can Find More Information.”

Q:

Why am I receiving this proxy statement/prospectus?

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A:

ExOne and Desktop Metal have entered into an Agreement and Plan of Merger, dated as of August 11, 2021 (the “Merger Agreement”), by and among Desktop Metal, Texas Merger Sub I, Inc., a Delaware corporation and a wholly owned subsidiary of Desktop Metal (“Merger Sub I”), Texas Merger Sub II, LLC, a Delaware limited liability company and a wholly owned subsidiary of Desktop Metal (“Merger Sub II”), and ExOne. The Merger Agreement provides, among other things, that, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub I will merge with and into ExOne, with ExOne surviving the merger as a wholly owned subsidiary of Desktop Metal (the “First Merger”). The Merger Agreement also provides that, immediately following the effective time of the First Merger (the “Effective Time”), ExOne, as the surviving corporation of the First Merger, will merge with and into Merger Sub II (the “Second Merger,” and together with the First Merger, the “Mergers”), with Merger Sub II surviving the Second Merger and continuing as a wholly owned subsidiary of Desktop Metal. A copy of the Merger Agreement is included in this proxy statement/prospectus as Annex A.

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The Mergers cannot be completed unless, among other things, ExOne’s stockholders adopt the Merger Agreement. The approval of Desktop Metal’s stockholders is not required for the Mergers to be completed.

ExOne is using this document as a proxy statement to solicit proxies from ExOne’s stockholders in connection with proposals relating to the Mergers at the special meeting. Desktop Metal is using this document as a prospectus by which Desktop Metal will offer and issue Desktop Metal Class A common stock in connection with the Mergers.

This proxy statement/prospectus contains important information about the Mergers and the other proposals being voted on at the special meeting. You should read it carefully and in its entirety. The enclosed materials allow you to have your shares voted by proxy without attending the virtual special meeting. Your vote is important. We encourage you to submit your proxy as soon as possible.

Q:

What am I being asked to vote on?

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A:

At the special meeting, ExOne stockholders will be asked to consider and vote on the following proposals:

​

1.

To adopt the Merger Agreement (the “Merger Proposal”);

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2.

To approve, on a non-binding, advisory basis, the compensation that may be paid or become payable to ExOne’s named executive officers in connection with the Mergers (the “Advisory Executive Compensation Proposal”); and

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3.

To approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to approve the Merger Proposal at the time of the special meeting (the “Adjournment Proposal”).

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The approval of Desktop Metal’s stockholders is not required for the Mergers to be completed.

 

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Q:

Why are ExOne and Desktop Metal proposing the Mergers?

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A:

The board of directors of Desktop Metal and the ExOne Board believe that the Mergers will provide substantial strategic and financial benefits to the companies, Desktop Metal’s stockholders and ExOne’s stockholders. To review the reasons for the Mergers, see “The Mergers — ExOne’s Reasons for the Mergers; Recommendation of the ExOne Board” for more information.

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Q:

What will I receive in the Mergers?

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A:

Upon completion of the First Merger, each share of ExOne common stock outstanding at that time (other than shares of ExOne common stock owned or held (x) in treasury or otherwise owned by ExOne or any of its subsidiaries, (y) by Desktop Metal or any of its subsidiaries or (z) by any person who has not voted in favor of, or consented to, the Mergers and properly demands appraisal of such shares under Delaware law) will be converted into the right to receive (i) $8.50 in cash and (ii) a number of shares of Desktop Metal Class A common stock equal to the “Exchange Ratio”, provided, however that such cash and stock merger consideration is subject to further adjustment as described herein. At the time of our initial announcement of the Mergers, we estimated the share-based consideration to be $17.00 and the total consideration to be $25.50 for each share of ExOne common stock exchanged in the Mergers, subject to the collar mechanism described herein.

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Q:

What is the exchange ratio and how is it calculated?

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A:

The exchange ratio will be calculated based on two factors: the “average stock price” of Desktop Metal Class A common stock over a twenty day period and a 10% bilateral collar. The “average stock price” is based on the average of the daily volume weighted averages of the trading prices of Desktop Metal Class A common stock on the NYSE on each of the twenty consecutive trading days ending on (and including) the trading day that is three trading days prior to the date of the Effective Time of the Mergers. The exchange ratio is subject to a 10% bilateral collar as follows: (a) if the average stock price of Desktop Metal’s Class A common stock is greater than or equal to $9.70, the exchange ratio will be 1.7522, (b) if the average stock price is less than $9.70 and greater than $7.94 per share, the exchange ratio of 1.9274 will be modified by multiplying such exchange ratio by the quotient of $8.82, divided by the average stock price and (c) if the average stock price is less than or equal to $7.94, the exchange ratio will be 2.1416.

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The merger consideration will also be subject to adjustment to ensure that (a) the stock consideration in the Mergers is not less than 45% of the total consideration in the Mergers, as determined for U.S. federal income tax purposes, and (b) the number of shares of Desktop Metal Class A common stock to be issued in the Mergers does not exceed 19.9% of the issued and outstanding shares of Desktop Metal Class A common stock.

Q:

Are ExOne stockholders guaranteed to receive exactly $8.50 in cash and exactly $17.00 in shares of Desktop Metal Class A common shares for each share of ExOne common stock exchanged in the Mergers?

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A:

No. For the reasons discussed herein, the overall value of the merger consideration you receive and the breakdown between the stock and cash portions of such merger consideration are subject to change, and could vary significantly from these numbers. As a result, you may receive more or less overall value in total merger consideration, and you may receive more or less cash consideration versus stock consideration. See “Risk Factors”.

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The Merger Agreement contains two provisions that may affect the amount of the cash and stock portions of the merger consideration that you will receive for each ExOne common share exchanged in the Mergers.

The first provision is that calculation of the exchange ratio is subject to a 10% bilateral collar. If the average stock price (as defined above) is less than $9.70 and greater than $7.94 per share, the initial exchange ratio of 1.9274 will be modified by multiplying such exchange ratio by the quotient of $8.82, divided by the average stock price. If the average stock price is greater than or equal to $9.70, the exchange ratio will be 1.7522. If the average stock price is less than or equal to $7.94, the exchange ratio will be 2.1416. The average stock price and resultant exchange ratio become fixed three trading

 

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days prior to the Effective Time of the Mergers. As a result, you are not likely to receive $17.00 in shares of Desktop Metal based on the difference between the stock price at the time the Merger Agreement was negotiated, the average stock price and the price of Desktop Metal Class A common shares at the Effective Time of the Mergers. See “Risk Factors.”

The second provision includes two additional conditions which may result in adjustments to both the cash portion and stock portion of the merger consideration. The first possible adjustment ensures that the total number of shares of Desktop Metal Class A common stock to be issued in the Mergers does not exceed 19.9% of the issued and outstanding of shares of Desktop Metal Class A common stock outstanding immediately prior to the Effective Time of the Mergers. In the event that this adjustment is triggered, then the cash portion of the merger consideration of $8.50 per share will be increased and the number of Desktop Metal Class A common shares to be issued in exchange for each ExOne share will be decreased to the extent required to ensure that the total number of Desktop Metal Class A common shares to be issued to ExOne stockholders does not exceed the 19.9% limitation. This adjustment mechanism is necessary to ensure that Desktop Metal satisfies certain regulatory restrictions regarding issuing common shares without stockholder approval imposed by the NYSE with respect to issuance of Desktop Metal Class A common stock. The second possible adjustment permits the exchange ratio and the cash portion of the merger consideration to be adjusted to ensure that the stock consideration in the Mergers is not less than 45% of the total consideration in the Mergers, as determined for U.S. federal income tax purposes. This adjustment mechanism is intended to ensure that the Mergers retain eligibility to be recognized as a “reorganization” within the meaning of Section 368(a) of the Code (as defined below). This adjustment would occur if there is a very significant and sustained decrease in the value per share of Desktop Metal Class A common stock during the twenty day period on which the average stock price is based or during the three trading days after the date when the exchange ratio is fixed until the Effective Time of the Mergers. If that occurs, then the cash portion of the merger consideration would be reduced, and the stock consideration would be increased on a dollar-for-dollar basis with such reduction, to the extent required to ensure that the stock consideration in the Mergers is not less than 45% of the total consideration in the Mergers, as determined for U.S. federal income tax purposes; provided, however, that in no event will the stock consideration be increased if such increase would result in the total number of Desktop Metal Class A common shares exceeding the 19.9% limitation and, in such case, the cash consideration in the Mergers would be reduced as set forth in this paragraph without a corresponding increase in the stock consideration in the Mergers. See the section titled “The Mergers — Merger Consideration”.

Q:

What is the value of the merger consideration? Will I receive merger consideration with a value of $25.50 for each share of ExOne common stock exchanged in the Mergers?

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A:

The value of the merger consideration is subject to change, and could vary significantly from this figure. As a result, you are unlikely to receive exactly $25.50 in value of merger consideration, and the value could be higher or lower than this amount. See “Risk Factors”. The exact value of the merger consideration that ExOne stockholders receive will depend on the price per share of Desktop Metal at the time of the First Merger.

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Because a significant amount of the merger consideration is being paid in Desktop Metal Class A common shares subject to the adjusted exchange ratio as described above, you are likely to receive total merger consideration that is more than or less than $25.50 for each ExOne common share being exchanged in the Mergers.

The trading price of Desktop Metal Class A common shares on NYSE may fluctuate significantly from the date of the Merger Agreement to the Effective Time. Fluctuations in the trading price are particularly important during the twenty consecutive trading day period used to calculate the average share price for the exchange ratio, as described above, and during the three trading days after the date when the exchange ratio is fixed until the Effective Time of the Mergers.

It is impossible to accurately predict the market price of Desktop Metal Class A common stock during the period over which the average stock price is calculated or at the Effective Time, and therefore impossible to accurately predict the value of the shares of Desktop Metal Class A common stock that ExOne stockholders will receive as a result of the Mergers. Those prices will not be known at the time of

 

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the special meeting and may be more or less than the current price or the price at the time of the special meeting. See “Risk Factors.”

Based on the closing stock price of Desktop Metal Class A common stock on the NYSE on October 4, 2021, the latest practicable date before the mailing of this proxy statement/prospectus, of $6.94, and assuming the Mergers closed on October 4, 2021, the applicable exchange ratio would be 2.1308 and the value of the merger consideration would be $23.29 for each share of ExOne common stock. See the section titled “Comparative Per Share Market Price Information”. We urge you to obtain current market quotations of Desktop Metal Class A common stock. See the section titled “Where You Can Find More Information”.

Q:

What equity stake will ExOne stockholders hold in Desktop Metal immediately following the Mergers?

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A:

ExOne stockholders will hold, in the aggregate, between approximately 13.0% and 15.5% of the issued and outstanding shares of Desktop Metal Class A common stock immediately following the closing of the First Merger based on the number of issued and outstanding shares of Desktop Metal Class A common stock and ExOne common stock as of October 4, 2021 and based on the minimum and maximum potential exchange ratios of 1.7522 and 2.1416, respectively. These estimated percentages do not take into account any additional Desktop Metal shares to be issued in exchange for vested but unexercised options for ExOne shares or the ESPP (defined below). The exact number of shares of Desktop Metal Class A common stock that will be issued in the First Merger will not be determined until the Exchange Ratio is established and the number of outstanding ExOne shares of common stock is known. The Merger Agreement contains an adjustment that limits the maximum number of shares of Desktop Metal Class A common stock that may be issued in connection with the Mergers to no more than 19.9% of the total number of shares of Desktop Metal Class A common stock that are issued and outstanding immediately prior to the First Merger.

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Q:

How will the Mergers affect the ExOne equity awards?

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A:

Unvested Stock Options.   Pursuant to the Merger Agreement, at the Effective Time, each unvested option to purchase ExOne Shares granted under ExOne’s 2013 Equity Incentive Plan, as amended (each, an “ExOne Option”), that is outstanding and unexercised immediately prior to the Effective Time will be assumed by Desktop Metal and converted into an option to purchase a number of shares of Desktop Metal Class A common stock (each, a “Desktop Metal Option Award”) (A) equal to the product obtained by multiplying (x) the number of ExOne Shares subject to such ExOne Option immediately prior to the Effective Time by (y) the Exchange Ratio (rounding down to the nearest whole share of ExOne common stock), and (B) at an exercise price per share of Desktop Metal Class A common stock (rounded up to the nearest cent) equal to the quotient obtained by dividing (x) the exercise price per ExOne Share immediately prior to the Effective Time by (y) the Exchange Ratio. Each Desktop Metal Option Award issued pursuant to the Merger Agreement will continue to have, and will be subject to, the same terms and conditions, including vesting and acceleration of vesting terms and conditions, as those that applied to the corresponding ExOne Option immediately prior to the Effective Time, except that each reference to ExOne shall be deemed to be a reference to Desktop Metal.

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Vested Stock Options.   Pursuant to the Merger Agreement, at the Effective Time, each vested ExOne Option (including any ExOne Options that vest at the Effective Time) granted under ExOne’s 2013 Equity Incentive Plan, that is outstanding and unexercised immediately prior to the Effective Time, will be cancelled and the holder of such ExOne Option will be entitled to receive an amount equal to the product of (i) the excess, if any, of (A) the merger consideration over (B) the exercise price of such ExOne Option, multiplied by (ii) the number of ExOne Shares subject to such ExOne Option, less applicable tax withholdings. In the event the per share exercise price payable with respect to any ExOne Option exceeds the merger consideration, then such ExOne Option will be cancelled without payment of any consideration with respect thereto. The consideration payable in respect of ExOne Options will be paid in the same proportion of cash and Desktop Metal Class A common Stock as the proportion of cash and Desktop Metal Class A common stock payable for ExOne Shares, and, if applicable, cash will be paid in lieu of fractional shares of Desktop Metal Class A common stock.

COC Restricted Stock Awards.   Pursuant to the Merger Agreement, at the Effective Time, each restricted stock award of ExOne Shares that is subject to the terms of The ExOne Change of Control

 

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Severance Plan (the “ExOne Severance Plan”, and each award, an “ExOne COC Restricted Stock Award”) that is outstanding, will vest as of the Effective Time in accordance with the terms of ExOne’s Severance Plan and (i) any ExOne Shares subject to the vested portion of the ExOne COC Restricted Stock Award will be cancelled, with the holder of such ExOne Restricted Stock Award becoming entitled to receive the merger consideration with respect thereto and (ii) any portion of the ExOne COC Restricted Stock Award that remains subject to any vesting, forfeiture or other lapse restrictions after the Effective Time (after taking account of accelerated vesting granted under the ExOne Severance Plan) will be assumed and converted at the Effective Time into an award of restricted shares of Desktop Metal Class A common stock (each a “Desktop Metal Restricted Stock Award”) consisting of a number of shares of Desktop Metal Class A common stock (rounded to the nearest whole share) equal to the product of (a) the number of remaining unvested ExOne Shares subject to such ExOne COC Restricted Stock Award multiplied by (b) the Exchange Ratio. Each Desktop Metal Restricted Stock Award issued pursuant to Merger Agreement will continue to have, and will be subject to, the same terms and conditions, including vesting and acceleration of vesting terms and conditions, as those that applied to the corresponding ExOne COC Restricted Stock Award immediately prior to the Effective Time, except that each reference to ExOne shall be deemed to be a reference to Desktop Metal.

Non-COC Restricted Stock Awards.   Pursuant to the Merger Agreement, at the Effective Time, each outstanding restricted stock award of ExOne Shares that is not subject to ExOne’s Severance Plan, (each, a “Non-COC ExOne Restricted Stock Award”), that is outstanding, will vest as of the Effective Time and will be cancelled, with the holder of such Non-COC ExOne Restricted Stock Award becoming entitled to receive the merger consideration in respect of each ExOne Share subject to such Non-COC ExOne Restricted Stock Award.

ESPP Awards.   Pursuant to the Merger Agreement, at the Effective Time, each award granted under the 2021 Executive Stock Performance Program (each, an “ESPP Award”) that is outstanding will be converted into ExOne Shares with the number of ExOne Shares determined based on actual performance for the portion of the performance period through the Effective Time as reasonably determined by the compensation committee of ExOne. Such ExOne shares will vest as of the Effective Time in accordance with the terms of ExOne’s Severance Plan and (i) the ExOne Shares subject to the vested portion of the ESPP Award will be cancelled, with the holder of such vested portion of the ESPP Award becoming entitled to receive the merger consideration, and (ii) the unvested portion of the ESPP Award will be subject to the service-based vesting terms provided under the ESPP Award and, to the extent unvested at the Effective Time, will be assumed and converted at the Effective Time into a Desktop Metal Restricted Stock Award. Each Desktop Metal Restricted Stock Award issued pursuant to Merger Agreement in connection with the unvested portion of an ESPP Award will continue to have, and will be subject to, the same terms and conditions, including vesting and acceleration of vesting terms and conditions, as those that applied to the corresponding unvested portion of such ESPP Award immediately prior to the Effective Time, except that each reference to ExOne shall be deemed to be a reference to Desktop Metal.

Q:

When and where is the special meeting?

​

A:

The special meeting will be held on November 9, 2021, at 10.00 a.m. Eastern Time via a live interactive audio webcast on the Internet. You will be able to vote and submit your questions at www.virtualshareholdermeeting.com/XONE2021SM during the meeting.

​

Q:

What do I need to do now?

​

A:

After you have carefully read this proxy statement/prospectus and have decided how you wish to vote your shares, please vote your shares promptly so that your shares are represented and voted at the virtual special meeting, even if you plan on attending. If you hold your shares in your name as a stockholder of record, you must complete, sign, date and mail your proxy card in the enclosed postage-paid return envelope as soon as possible or vote by Internet or phone, following the instructions on your proxy card. If you hold your shares in “street name” through a bank, broker or other nominee, you must direct your bank, broker or other nominee how to vote in accordance with the instructions you have received from your bank, broker or other nominee.

​

 

5

 

Q:

What constitutes a quorum for the special meeting?

​

A:

A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present at the special meeting if the holders of a majority of all outstanding shares of ExOne common stock entitled to vote are present virtually at the special meeting or represented by proxy. At the close of business on October 4, 2021, which is the record date of the special meeting (the “Record Date”), there were 22,361,254 shares of ExOne common stock outstanding and entitled to vote. This means that at least 11,180,628 shares must be represented by stockholders present virtually at the special meeting or represented by proxy to have a quorum. Your shares will be counted towards the quorum if you submit a valid proxy or attend the virtual online special meeting. Abstentions and broker non-votes, if any, will be included in determining the number of shares present at the meeting for the purpose of determining the presence of a quorum.

​

Q:

What is the vote required to approve each proposal?

​

A:

Approval of the Merger Proposal requires the affirmative vote of a majority of the outstanding shares of ExOne common stock entitled to vote on the proposal. If you mark “ABSTAIN” on your proxy card or when voting by Internet or phone, fail to submit a proxy, fail to vote at the special meeting or fail to instruct your bank, broker or other nominee with respect to the Merger Proposal, it will have the same effect as a vote “AGAINST” the proposal. Approval of each of the Adjournment Proposal and the Advisory Executive Compensation Proposal requires the affirmative vote of a majority of the shares represented at the special meeting and entitled to vote such matters.

​

Q:

How does the ExOne Board recommend that I vote at the special meeting?

​

A:

The ExOne board of directors (the “ExOne Board”) recommends that ExOne’s stockholders vote “FOR” the Merger Proposal, “FOR” the Advisory Executive Compensation Proposal and “FOR” the Adjournment Proposal.

​

Q:

Why is my vote important?

​

A:

The Mergers will not be completed unless ExOne stockholders holding at least a majority of the shares of ExOne common stock outstanding as of the close of business on October 4, 2021 vote to approve the Merger Proposal. If you do not return your proxy, it will be more difficult for ExOne to obtain the necessary quorum to hold the special meeting. In addition, your failure to submit a proxy or vote electronically at the special meeting, your failure to instruct your bank, broker or other nominee how to vote, or if you mark “ABSTAIN” on your proxy card or when voting by Internet or phone, it will have the same effect as a vote “AGAINST” the Merger Proposal.

​

The approval of Desktop Metal’s stockholders is not required for the Mergers to be completed.

Q:

Who can vote at the special meeting?

​

A:

Holders of shares of ExOne common stock as of the close of business on the Record Date are eligible to vote at the special meeting.

​

Q:

Am I a stockholder of record or a beneficial owner? Why does this matter?

​

A:

If on October 4, 2021, your shares were registered directly in your name with ExOne’s transfer agent, American Stock Transfer & Trust Company, then you are a stockholder of record with respect to those shares.

​

If on October 4, 2021, your shares were held in an account at a broker, bank or other similar organization as your nominee, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organization. The organization holding your account is considered the stockholder of record for purposes of voting at the special meeting.

The form in which you own your shares affects how you vote your shares and how you can change your vote.

 

6

 

Q:

How do I attend the special meeting and how can I vote my shares?

​

A:

ExOne is conducting a virtual online special meeting so its stockholders can participate from any geographic location with Internet connectivity, which ExOne believes is important in light of the COVID-19 pandemic and to support the health and well-being of ExOne’s stockholders, directors and employees. ExOne has designed the format of the virtual online special meeting to provide stockholders the same ability to participate that they would have at an in-person meeting.

​

To attend, you must go to the meeting website at www.virtualshareholdermeeting.com/XONE2021SM and enter the 16-digit control number found on your proxy card or voting instruction form sent to you by your bank, broker or other nominee. Once admitted, during the special meeting, you may vote, submit questions and view the list of stockholders entitled to vote at the special meeting by following the instructions available on the meeting website.

Access to the meeting platform will begin at 9:45 a.m. Eastern Time on November 9, 2021. If you encounter any difficulties accessing the virtual meeting during check-in or during the meeting, please call the technical support number that will be posted on the meeting website login page at www.virtualshareholdermeeting.com/XONE2021SM. Technical support will be available beginning at 9:45 a.m. Eastern Time on November 9, 2021 and will remain available until the meeting has ended.

Rules for the conduct of the special meeting will be available on the meeting website. To obtain a copy of the rules of conduct for the special meeting in advance of the special meeting, please submit an email to us through our website at www.investor.exone.com/contact-us.

Regardless of whether you plan to participate in the special meeting, it is important that your shares be represented and voted at the special meeting. Accordingly, we encourage you vote in advance of the special meeting.

Q:

How can I vote my shares of ExOne common stock?

​

A:

For each proposal, you may vote “For” or “Against” each proposal, or “Abstain” from voting on such proposal.

​

If you are a stockholder of record, you may vote by proxy via telephone, over the Internet or by returning a proxy card, or you may vote online at the special meeting. Regardless of whether you plan to participate in the special meeting, we urge you to vote by proxy to ensure your vote is counted. You may still participate in the special meeting and vote online during the special meeting if you have already voted by proxy.

•

You may vote your shares by proxy over the Internet, by telephone or by returning your proxy card by mail in the envelope provided. Instructions to vote over the Internet or by telephone are printed on your proxy card. To vote using the proxy card, please complete, sign and date the enclosed proxy card and return it promptly to Broadridge. If you vote by proxy via telephone, over the Internet or by returning your signed proxy card to Broadridge before the special meeting, we will vote your shares as you direct.

​

•

To vote online during the special meeting, you must go to the meeting website at www.virtualshareholdermeeting.com/XONE2021SM. Once admitted, during the special meeting, you may vote by following the instructions available on the meeting website.

​

The deadline for sending in a completed proxy card is 6:00 p.m. Eastern Time on November 8, 2021. The deadline for voting via the Internet or by telephone is 11:59 p.m. Eastern Time on November 8, 2021.

If you sign and return your proxy card but do not mark your card to instruct the proxies how to vote your shares of ExOne common stock on each proposal, your shares of ExOne common stock will be voted as recommended by the ExOne Board.

If you are a beneficial owner, you may vote your shares by directing the broker, bank or other similar organization that holds your shares as your nominee on how to vote the shares in your account, or you may vote online at the special meeting. Please refer to the voting instructions provided by your

 

7

 

broker, bank or other nominee. Many organizations allow beneficial owners to give voting instructions via telephone or the Internet, as well as in writing.

Q:

What if I return a proxy card but do not make specific choices?

​

A:

You will only receive a proxy card if you are the record holder of your ExOne shares. If you return a signed and dated proxy card without marking any voting selections, your shares will be voted “FOR” the Merger Proposal, “FOR” the Advisory Executive Compensation Proposal and “FOR” the Adjournment Proposal. If any other matter is properly presented at the meeting, your proxy (one of the individuals named on your proxy card) will vote your shares using his or her best judgment.

​

Q:

If my shares of common stock are held in “street name” by my bank, broker or other nominee, will my bank, broker or other nominee automatically vote my shares for me?

​

A:

No. If your shares of ExOne common stock are held in “street name,” your bank, broker or other nominee will vote your shares of ExOne common stock only if you provide instructions on how to vote by filling out the voting instruction form sent to you by your bank, broker or other nominee with this proxy statement/prospectus or vote by Internet or telephone, if those options are available to you. Under stock exchange rules, banks, brokers and other nominees who hold shares of ExOne common stock in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, banks, brokers and other nominees are not allowed to exercise their voting discretion with respect to the approval of matters determined to be “non-routine,” without specific instructions from the beneficial owner. Broker non-votes are shares held by a bank, broker or other nominee that are represented at the special meeting, but with respect to which the bank, broker or other nominee is not instructed by the beneficial owner of such shares to vote on the particular proposal and the bank, broker or other nominee does not have discretionary voting power on such proposal. ExOne believes that the Merger Proposal, the Advisory Executive Compensation Proposal and the Adjournment Proposal are “non-routine” proposals and therefore your bank, broker or other nominee cannot vote your shares of ExOne common stock without your specific voting instructions. Because the only proposals for consideration at the special meeting are non-routine proposals, it is not expected that there will be any broker non-votes at the special meeting. However, if there are any broker non-votes, they will have (i) the same effect as a vote “AGAINST” the Merger Proposal and (ii) no effect on the outcome of the Advisory Executive Compensation Proposal or the Adjournment Proposal.

​

Q:

Can I change my vote?

​

A:

Yes. If you are a record holder of ExOne common stock, you can revoke your proxy and change your vote at any time before the final vote at the meeting.

​

•

You may submit another properly completed proxy card with a later date, which must be postmarked no later than 6:00 p.m., Eastern Time on November 8, 2021.

​

•

You may submit another properly completed proxy with a later date via the Internet or by telephone before the closing of those voting facilities at 11:59 p.m., Eastern Time on November 8, 2021.

​

•

You may participate in the virtual online special meeting and vote at the meeting. Simply participating in the virtual online meeting will not, by itself, revoke your proxy.

​

•

You may send a written notice that you are revoking your proxy to our Corporate Secretary at The ExOne Company, 127 Industry Boulevard, North Huntingdon, Pennsylvania 15642.

​

A revocation or later-dated proxy received by ExOne after the vote will not affect the vote.

If you are a beneficial holder (and hold your shares in “street name” through a bank, broker or other nominee), you should contact your bank, broker or other nominee to revoke your proxy or change your vote in accordance with their instructions.

 

8

 

Q:

What happens if I fail to submit a proxy or I abstain from voting?

​

A:

If you fail to submit a proxy or fail to instruct your bank, broker or other nominee to vote, assuming a quorum is present at the special meeting, it will have no effect on the outcome of the Advisory Executive Compensation Proposal or the Adjournment Proposal, but it will have the same effect as a vote “AGAINST” the Merger Proposal. An abstention occurs when an ExOne stockholder returns a proxy with an “abstain” instruction or virtually attends the special meeting and votes to abstain from voting. Abstentions, if any, will have the same effect as votes “AGAINST” the Merger Proposal, the Advisory Executive Compensation Proposal and the Adjournment Proposal.

​

Q:

What are the material U.S. federal income tax consequences of the Mergers to ExOne stockholders?

​

A:

The Mergers, taken together, are intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”). It is a condition to the completion of the Mergers that ExOne receives an opinion from its counsel (or, if ExOne’s counsel is unable or unwilling to issue such opinion, from Desktop Metal’s counsel) dated as of the closing date to the effect that the Mergers, taken together, will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. Such opinion will based on, among other things, certain facts, representations and covenants, each made by officers of Desktop Metal and ExOne, and assumptions, all of which must be consistent with the state of facts existing at the time of the Mergers. If any of these facts, representations, covenants and assumptions are, or become, inaccurate or incomplete, such opinion may be invalid, and the conclusions reached therein could be jeopardized.

​

An opinion of counsel represents counsel’s best legal judgment and is not binding on the Internal Revenue Service (the “IRS”) or the courts, which may not agree with the conclusions set forth in such opinion. Neither Desktop Metal nor ExOne has sought or will seek a ruling from the IRS as to the U.S. federal income tax consequences of the Mergers. Accordingly, this discussion neither binds the IRS nor precludes it from adopting a contrary position, and there can be no assurance that the IRS or a court would not disagree with or challenge any of the conclusions described herein. If the IRS successfully challenges the reorganization status of the Mergers, U.S. holders (as defined under “Material U.S. Federal Income Tax Consequences”) will be treated as if they sold their ExOne common stock in a fully taxable transaction.

Provided that the Mergers, taken together, qualify as a “reorganization” within the meaning of Section 368(a) of the Code, a U.S. holder of ExOne common stock will generally recognize gain (but not loss) in an amount equal to the lesser of (i) the amount of cash received by the U.S. holder (other than cash received in lieu of a fractional share of Desktop Metal Class A common stock) and (ii) the amount by which the sum of the amount of such cash and the fair market value of the Desktop Metal Class A common stock received by the U.S. holder exceeds the U.S. holder’s tax basis in its ExOne common stock (other than the portion of the basis attributable to the cash received in lieu of a fractional share of Desktop Metal Class A common stock). Additionally, a U.S. holder of ExOne common stock will generally recognize gain or loss with respect to cash received in lieu of a fractional share of Desktop Metal Class A common stock equal to the difference, if any, between the amount of cash received and the tax basis in the fractional share.

For further information, see “Material U.S. Federal Income Tax Consequences.”

The U.S. federal income tax consequences described above may not apply to all holders of ExOne common stock. Your tax consequences will depend on your individual situation. Accordingly, we strongly urge you to consult your independent tax advisor for a full understanding of the particular tax consequences of the Mergers to you.

Q:

If the Mergers are completed, what will be my basis in the Desktop Metal Class A common stock I receive in the Mergers?

​

A:

It is the intention of Desktop Metal and ExOne that the Mergers, taken together, will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. Assuming that the Mergers, taken together, qualify as a “reorganization’’ within the meaning of Section 368(a) of the Code, a U.S. holder will have an aggregate tax basis in the shares of Desktop Metal Class A common stock received in the

​

 

9

 

Mergers (including fractional shares of Desktop Metal Class A common stock deemed received and redeemed for cash, as described below) equal to the U.S. holder’s aggregate tax basis in its shares of ExOne common stock surrendered, reduced by the amount of cash received in the Mergers (other than cash received in lieu of a fractional share of Desktop Metal Class A common stock), and increased by the amount of any gain recognized, if any, by the U.S. holder in the Mergers (other than with respect to cash received in lieu of a fractional share of Desktop Metal Class A common stock). You should read “Material U.S. Federal Income Tax Consequences’’ for a more complete discussion of the material U.S. federal income tax consequences relating to the Mergers.

If the Mergers do not qualify as a “reorganization” within the meaning of Section 368(a) of the Code, a U.S. holder of ExOne common stock will have an initial basis in the Desktop Metal Class A common stock received in the Mergers equal to the fair market value of such Desktop Metal Class A common stock as of the Effective Time of the Mergers.

Q:

Are ExOne stockholders entitled to appraisal or dissenters’ rights?

​

A:

Yes. Pursuant to Section 262 of the Delaware General Corporation Law (the “DGCL”), ExOne stockholders who do not vote in favor of adoption of the Merger Agreement, who continuously hold their shares of ExOne common stock through the Effective Time and who otherwise comply in all respects with the applicable requirements of Section 262 of the DGCL have the right to seek appraisal of the fair value of their shares of ExOne common stock, as determined by the Delaware Court of Chancery, if the Mergers are consummated. See “Appraisal Rights of ExOne Stockholders.”

​

Q:

Should I send in my ExOne stock certificates now?

​

A:

No. Please do not send in your ExOne stock certificates with your proxy. After the completion of the Mergers, an exchange agent appointed by Desktop Metal and reasonably acceptable to ExOne will send you instructions for exchanging ExOne stock certificates for the merger consideration.

​

Q:

Whom may I contact if I cannot locate my ExOne stock certificate(s)?

​

A:

If you are unable to locate your original ExOne stock certificate(s), you should contact ExOne’s transfer agent, American Stock Transfer & Trust, at (800) 937-5449 (toll-free) or (718) 921-8124 (international).

​

Q:

What should I do if I hold my shares of ExOne common stock in book-entry form directly with ExOne’s transfer agent, as opposed to a physical stock certificate?

​

A:

You are not required to take any special additional actions if your shares of ExOne common stock are not represented by a certificate, and are instead held in book-entry form with ExOne’s transfer agent. After the completion of the Mergers, an exchange agent appointed by Desktop Metal and reasonably acceptable to ExOne will contact you to provide you with payment details regarding the merger consideration, including cash, shares of Desktop Metal Class A common stock in book-entry form and any cash to be paid instead of fractional shares in the Mergers.

​

Q:

What should I do if I receive more than one set of voting materials?

​

A:

ExOne stockholders may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards. For example, if you hold shares ExOne common stock in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold such shares. If you are a holder of record of ExOne common stock and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card that you receive or otherwise follow the voting instructions set forth in this proxy statement/prospectus to ensure that you vote every share of ExOne common stock that you own.

​

Q:

When do you expect to complete the Mergers?

​

A:

Desktop Metal and ExOne expect to complete the Mergers during the fourth quarter of 2021, subject to any potential regulatory review or approval. However, neither Desktop Metal nor ExOne can

​

 

10

 

assure you of when or if the Mergers will be completed. ExOne must obtain the approval of ExOne’s stockholders for the Merger Proposal and both parties must obtain necessary antitrust and other regulatory approvals and satisfy certain other closing conditions. See “The Merger Agreement —  Conditions to Completion of the Mergers” for more information regarding conditions to the completion of the Mergers.

Q:

What happens if the Mergers are not completed?

​

A:

If the Mergers are not completed, ExOne stockholders will not receive any consideration for their shares of ExOne common stock in connection with the Mergers. Instead, ExOne will remain an independent, public company and ExOne common stock will continue to be traded on the Nasdaq Global Select Market (“Nasdaq”). In addition, if the Merger Agreement is terminated in certain circumstances, Desktop Metal or ExOne may be required to pay a termination fee. See “The Merger Agreement — Termination of the Merger Agreement” for a complete discussion of the circumstances under which a termination fee will be required to be paid.

​

Q:

What will happen if the ExOne Advisory Executive Compensation Proposal is not approved?

​

A:

Certain of ExOne’s executive officers are entitled, pursuant to the terms of their existing compensation arrangements with ExOne, to receive certain payments in connection with the Mergers. ExOne is seeking your approval of these payments on an advisory, non-binding basis in order to comply with Section 14A of the Exchange Act and related rules of the SEC. If the Mergers are completed, Merger Sub II, as successor to ExOne, will be contractually obligated to make these payments to these executives under certain circumstances. Accordingly, even if the ExOne stockholders do not approve the Advisory Executive Compensation Proposal, the compensation will nevertheless be payable, subject to the terms and conditions of the arrangements and the Merger Agreement.

​

Q:

Where can I find the voting results of the special meeting?

​

A:

The preliminary voting results will be announced at the special meeting. In addition, within four business days following the special meeting, ExOne will disclose the preliminary or, if available, final voting results of the special meeting on a Current Report on Form 8-K filed with the SEC. If preliminary voting results are disclosed, ExOne will file an amended Current Report on Form 8-K with the SEC to disclose final voting results within four business days following certification of the final voting results.

​

Q:

Is the completion of the Mergers subject to a financing condition?

​

A:

No. The completion of the Mergers is not subject to any financing condition.

​

Q:

How will I know when the other conditions to completion of the Mergers have been satisfied?

​

A:

As of the date of this proxy statement/prospectus, the parties have not satisfied the closing conditions to the Mergers, including with respect to the waiting period under the HSR Act (as defined herein) and approval under the foreign investment law of Germany. We will provide notice of the satisfaction of the conditions to closing of the Mergers via the filing of a Current Report on Form 8-K. If the parties receive Second Requests (as defined herein) pursuant to the HSR Act, or if the Germany foreign investment law process is prolonged, it is likely that the parties will not have satisfied the closing conditions to the Mergers prior to the date of the special meeting, and closing of the Mergers could occur a significant time after the time of the special meeting. There is also a possibility that the closing conditions to the Merger will not be satisfied prior to the outside date of May 11, 2022, after which date either party may elect to terminate the Merger Agreement, subject to certain caveats. As a result, it is possible that factors outside the control of both companies could result in the Mergers being completed at a different time or not at all.

​

ExOne stockholders will not know the actual exchange ratio or the value of the Desktop Metal Class A common stock to be received as merger consideration until after the date of the special meeting. See “Risk Factors”.

 

11

 

Q:

Are there any risks that I should consider in deciding whether to vote for the adoption of the Merger Agreement?

​

A:

Yes. You should read and carefully consider the risk factors set forth in the “Risk Factors” section. You also should read and carefully consider the risk factors of ExOne contained in the documents that are incorporated by reference into this proxy statement/prospectus. See “Where You Can Find More Information.”

​

Q:

Who can answer any questions I may have about the Mergers or the transactions contemplated by the Merger Agreement?

​

A:

If you have any questions about the Mergers or the other transactions contemplated by the Merger Agreement, or if you need additional copies of this proxy statement/prospectus or the documents incorporated by reference, you should contact:

​

The ExOne Company
127 Industry Boulevard
North Huntingdon, Pennsylvania 15642
(724) 863-9663
Attention: Corporate Secretary
or
The Proxy Advisory Group, LLC
18 East 41st Street, Suite 2000
New York, New York 10017-6219
(212) 616-2181

 

12

 

13

 

14

 

15

 

16

 

​

17

 

18

 

19

 

20

 

​

21

 

22

 

​

23

 

24

 

​

​

​

Year Ended December 31,

​

​

Six Months Ended June 30,

​

(in thousands, except per share amounts)

​

​

2020

​

​

2019

​

​

2021

​

​

2020

​

Statement of Operations Data:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total revenues

​

​

​

$

16,470

​

​

​

​

$

26,439

​

​

​

​

$

30,290

​

​

​

​

$

5,574

​

​

Total costs

​

​

​

​

108,525

​

​

​

​

​

135,484

​

​

​

​

​

108,745

​

​

​

​

​

51,890

​

​

Loss from operations

​

​

​

​

(92,055)

​

​

​

​

​

(109,045)

​

​

​

​

​

(78,455)

​

​

​

​

​

(46,316)

​

​

Other income (expense):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Change in fair value of warrant liability

​

​

​

​

56,417

​

​

​

​

​

—

​

​

​

​

​

(56,576)

​

​

​

​

​

—

​

​

Interest expense

​

​

​

​

(328)

​

​

​

​

​

(503)

​

​

​

​

​

(125)

​

​

​

​

​

(155)

​

​

Interest and other income, net

​

​

​

​

1,011

​

​

​

​

​

5,952

​

​

​

​

​

630

​

​

​

​

​

901

​

​

Loss before income taxes

​

​

​

​

(34,955)

​

​

​

​

​

(103,596)

​

​

​

​

​

(134,526)

​

​

​

​

​

(45,570)

​

​

Income tax benefit

​

​

​

​

940

​

​

​

​

​

—

​

​

​

​

​

32,238

​

​

​

​

​

—

​

​

Net loss

​

​

​

$

(34,015)

​

​

​

​

$

(103,596)

​

​

​

​

$

(102,288)

​

​

​

​

$

(45,570)

​

​

Net loss per share – basic and diluted

​

​

​

$

(0.22)

​

​

​

​

$

(0.69)

​

​

​

​

$

(0.41)

​

​

​

​

$

(0.29)

​

​

​

​

​

As of December 31,

​

​

As of June 30, 2021

​

(in thousands)

​

​

2020

​

​

2019

​

Balance Sheet Data:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cash and cash equivalents

​

​

​

$

483,525

​

​

​

​

$

66,161

​

​

​

​

$

188,199

​

​

Short-term investments

​

​

​

​

111,867

​

​

​

​

​

84,754

​

​

​

​

​

326,318

​

​

Working capital, net

​

​

​

​

582,083

​

​

​

​

​

145,089

​

​

​

​

​

518,895

​

​

Total assets

​

​

​

​

641,909

​

​

​

​

​

192,711

​

​

​

​

​

1,016,703

​

​

Total debt

​

​

​

​

9,991

​

​

​

​

​

9,972

​

​

​

​

​

311

​

​

Total stockholders’ equity

​

​

​

​

515,925

​

​

​

​

​

159,071

​

​

​

​

​

957,344

​

​

25

 

​

​

​

Year Ended December 31,

​

​

Six Months Ended June 30,

​

(in thousands, except per share amounts)

​

​

2020

​

​

2019

​

​

2018

​

​

2021

​

​

2020

​

Statement of Consolidated Operations Data:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total revenues

​

​

​

$

59,253

​

​

​

​

$

53,276

​

​

​

​

$

64,644

​

​

​

​

$

31,803

​

​

​

​

$

24,482

​

​

Total costs

​

​

​

​

73,107

​

​

​

​

​

68,324

​

​

​

​

​

77,641

​

​

​

​

​

43,650

​

​

​

​

​

31,797

​

​

Loss from operations

​

​

​

​

(13,854)

​

​

​

​

​

(15,048)

​

​

​

​

​

(12,997)

​

​

​

​

​

(11,847)

​

​

​

​

​

(7,315)

​

​

Other expense (income):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest expense

​

​

​

​

239

​

​

​

​

​

343

​

​

​

​

​

254

​

​

​

​

​

167

​

​

​

​

​

117

​

​

Other expense (income) – net

​

​

​

​

631

​

​

​

​

​

111

​

​

​

​

​

(744)

​

​

​

​

​

111

​

​

​

​

​

5

​

​

Loss before income taxes

​

​

​

​

(14,724)

​

​

​

​

​

(15,502)

​

​

​

​

​

(12,507)

​

​

​

​

​

(12,125)

​

​

​

​

​

(7,437)

​

​

Provision (benefit) for income taxes

​

​

​

​

200

​

​

​

​

​

(407)

​

​

​

​

​

160

​

​

​

​

​

(411)

​

​

​

​

​

234

​

​

Net loss

​

​

​

$

(14,924)

​

​

​

​

$

(15,095)

​

​

​

​

$

(12,667)

​

​

​

​

$

(11,714)

​

​

​

​

$

(7,671)

​

​

Net loss per share – basic and diluted

​

​

​

$

(0.86)

​

​

​

​

$

(0.93)

​

​

​

​

$

(0.78)

​

​

​

​

$

(0.54)

​

​

​

​

$

(0.47)

​

​

​

​

​

Year Ended December 31,

​

​

As of June 30, 2021

​

(in thousands)

​

​

2020

​

​

2019

​

​

2018

​

Balance Sheet Data:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cash and cash equivalents

​

​

​

$

49,668

​

​

​

​

$

5,265

​

​

​

​

$

7,592

​

​

​

​

$

127,931

​

​

Working capital, net

​

​

​

​

53,998

​

​

​

​

​

10,013

​

​

​

​

​

21,291

​

​

​

​

​

135,176

​

​

Total assets

​

​

​

​

107,289

​

​

​

​

​

75,366

​

​

​

​

​

77,682

​

​

​

​

​

193,484

​

​

Total debt

​

​

​

​

3,405

​

​

​

​

​

1,364

​

​

​

​

​

1,508

​

​

​

​

​

2,194

​

​

Total stockholders’ equity

​

​

​

​

76,303

​

​

​

​

​

48,582

​

​

​

​

​

62,775

​

​

​

​

​

161,258

​

​

26

 

(in thousands, except per share amounts)

​

​

Year Ended December 31, 2020

​

​

Six Months Ended June 30, 2021

​

Statement of Operations Data:

​

​

​

​

​

​

​

​

​

​

​

​

​

Total revenues

​

​

​

$

114,600

​

​

​

​

$

65,388

​

​

Total costs

​

​

​

​

260,985

​

​

​

​

​

164,431

​

​

Loss from operations

​

​

​

​

(146,385)

​

​

​

​

​

(99,043)

​

​

Other income (expense):

​

​

​

​

​

​

​

​

​

​

​

​

​

Change in fair value of warrant liability

​

​

​

​

56,417

​

​

​

​

​

(56,576)

​

​

Interest expense

​

​

​

​

(567)

​

​

​

​

​

(292)

​

​

Interest and other income, net

​

​

​

​

1,766

​

​

​

​

​

782

​

​

Other expense, net

​

​

​

​

(631)

​

​

​

​

​

(111)

​

​

Loss before income taxes

​

​

​

​

(89,400)

​

​

​

​

​

(155,240)

​

​

Benefit for income taxes

​

​

​

​

31,408

​

​

​

​

​

1,314

​

​

Net loss

​

​

​

$

(57,992)

​

​

​

​

$

(153,926)

​

​

Net loss per share – basic and diluted

​

​

​

$

(0.28)

​

​

​

​

$

(0.52)

​

​

27

 

(in thousands)	​	​	As of June 30, 2021				​
Balance Sheet Data:	​	​	​	​	​	​	​
Cash and cash equivalents	​	​	​	$	125,715	​	​
Working capital, net	​	​	​	​	447,207	​	​
Total assets	​	​	​	​	1,393,942	​	​
Total debt	​	​	​	​	2,505	​	​
Total stockholders’ equity	​	​	​	​	1,268,110	​	​

28

 

​

​

​

Historical

​

​

Unaudited Pro Forma Combined

​

​

Equivalent Basis Unaudited Pro Forma Combined(1)

​

​

Desktop Metal

​

​

ExOne

​

Loss per Share from Continuing Operations – Basic and Diluted

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Six Months Ended June 30, 2021

​

​

​

$

(0.41)

​

​

​

​

$

(0.54)

​

​

​

​

$

(0.52)

​

​

​

​

$

(1.11)

​

​

Year Ended December 31, 2020

​

​

​

$

(0.22)

​

​

​

​

$

(0.86)

​

​

​

​

$

(0.28)

​

​

​

​

$

(0.59)

​

​

Book Value Per Share(2)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

At June 30, 2021

​

​

​

$

3.69

​

​

​

​

$

7.32

​

​

​

​

$

4.29(3)

​

​

​

​

$

9.14(3)

​

​

​

29

 

Date

​

​

ExOne Closing Price

​

​

Desktop Metal Closing Price

​

​

Exchange Ratio

​

​

Estimated Equivalent Per Share Value(1)

​

August 11, 2021

​

​

​

$

17.28

​

​

​

​

$

8.93

​

​

​

​

​

1.8350

​

​

​

​

$

24.89

​

​

October 4, 2021

​

​

​

$

22.49

​

​

​

​

$

6.94

​

​

​

​

​

2.1308

​

​

​

​

$

23.29

​

​

30

 

31

 

RISK FACTORS

In addition to the other information contained or incorporated by reference into this proxy statement/ prospectus, including the matters addressed in “Cautionary Statement Regarding Forward-Looking Statements,” ExOne stockholders should carefully consider the following risk factors in determining whether to vote for the adoption of the Merger Agreement. You should also read and consider the risk factors associated with each of the businesses of ExOne and Desktop Metal because these risk factors may affect the business operations and financial results of the combined company. Risk factors relating to ExOne’s business may be found under Part I, Item 1A, “Risk Factors”, in ExOne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed on March 11, 2021, which is on file with the SEC and which is incorporated by reference into this proxy statement/prospectus. A description of risk factors relating to the business of Desktop Metal is contained herein.

RISK FACTORS RELATING TO THE MERGERS

The merger consideration to be paid in exchange for each share of ExOne common stock is a combination of cash and a number of Desktop Metal Class A common shares based on an exchange ratio, subject to adjustment as described herein. Fluctuations in the value of Desktop Metal Class A common stock can adversely affect the value of the Desktop Metal Class A common stock portion to be issued in exchange for each ExOne common share as well as the amount of the cash portion of the per-share merger consideration to be paid, and ExOne stockholders may receive merger consideration with a value that, at the time received, is less than $25.50 per share for each share of ExOne common stock exchanged in the Mergers.

Upon completion of the First Merger, each issued and outstanding share of ExOne common stock (other than ExOne Shares owned or held (x) in treasury or otherwise owned by ExOne or any of its subsidiaries, (y) by Desktop Metal or any of its subsidiaries or (z) by any person who has not voted in favor of, or consented to, the Mergers and properly demands appraisal of such shares under Delaware law) will be converted into the right to receive (i) $8.50 in cash per ExOne Share and (ii) a number of shares of Desktop Metal Class A common stock equal to the Exchange Ratio, provided, however that such cash and stock merger consideration is subject to further adjustment as described herein. At the time of our initial announcement of the Mergers, we estimated the share-based consideration to be $17.00 and the total consideration to be $25.50 for each share of ExOne common stock exchanged in the Mergers, subject to the collar mechanism described herein.

The exchange ratio will be calculated based on two factors: the “average stock price” of Desktop Metal Class A common stock over a twenty day period and a 10% bilateral collar. The “average stock price” is based on the average of the daily volume weighted averages of the trading prices of Desktop Metal Class A common stock on the NYSE on each of the twenty consecutive trading days ending on (and including) the trading day that is three trading days prior to the date of the Effective Time of the Mergers. The exchange ratio is subject to a 10% bilateral collar as follows: (a) if the average stock price of Desktop Metal’s Class A common stock is greater than or equal to $9.70, the exchange ratio will be 1.7522, (b) if the average stock price is less than $9.70 and greater than $7.94 per share, the exchange ratio of 1.9274 will be modified by multiplying such exchange ratio by the quotient of $8.82 divided by the average stock price and (c) if the average stock price is less than or equal to $7.94, the exchange ratio will be 2.1416.

The merger consideration will also be subject to adjustment to ensure that (a) the stock consideration in the Mergers is not less than 45% of the total consideration in the Mergers, as determined for U.S. federal income tax purposes, and (b) the number of shares of Desktop Metal Class A common stock to be issued in the Mergers does not exceed 19.9% of the issued and outstanding of shares of Desktop Metal Class A common stock.

A significant and prolonged decrease in the price of Desktop Metal Class A common stock on the NYSE from the date of the Merger Agreement to the Effective Time of the Mergers could affect both the number and value of Desktop Metal Class A shares that you receive as part of the merger consideration, as well as the amount of the cash portion of the merger consideration. The trading price of Desktop Metal Class A common stock on the NYSE has been volatile in 2021, and the market value of Desktop Metal Class A common stock may continue to fluctuate significantly until the Effective Time of the Mergers. You will not know the actual exchange ratio or the final value of the merger consideration when you are being

 

32

 

asked to vote to approve the proposals at the special meeting. Because the exchange ratios are based on a twenty day average, the average stock price on which the final exchange ratio is based could differ substantially from the price per share of Desktop Metal Class common shares on the day on which you vote on the proposals being considered at the special meeting. In addition, the Effective Time will be three trading days after the exchange ratio is fixed and will not take into account any additional fluctuations in the trading price of Desktop Metal Class A common stock on NYSE during that three day period, even if the changes would result in a more favorable result for ExOne stockholders.

In addition, the Merger Agreement includes an adjustment to the number of Desktop Metal Class A common shares that may be issued to ensure that the total number of shares of Desktop Metal Class A common stock to be issued in the Mergers does not exceed 19.9% of the issued and outstanding of shares of Desktop Metal Class A common stock outstanding immediately prior to the Effective Time of the Mergers. This adjustment mechanism is necessary to ensure that Desktop Metal satisfies certain regulatory restrictions regarding issuing common shares without stockholder approval imposed by the NYSE with respect to issuance of Desktop Metal Class A common stock. In the event that this adjustment is triggered, the cash portion of the merger consideration of $8.50 per share will be increased and the number of Desktop Metal Class A common shares to be issued in exchange for each ExOne share will be decreased to the extent required to ensure that the total number of Desktop Metal Class A common shares to be issued to ExOne stockholders does not exceed the 19.9% limitation.

Finally, the cash portion of the merger consideration of $8.50 to be paid for each share of ExOne common stock is also subject to a possible adjustment. The Merger Agreement contains a provision that permits the exchange ratio and the cash portion of the merger consideration to be adjusted to ensure that the stock consideration in the Mergers is not less than 45% of the total consideration in the Mergers, as determined for U.S. federal income tax purposes. This adjustment mechanism is intended to ensure that the Mergers retain eligibility to be recognized as a “reorganization” within the meaning of Section 368(a) of the Code. This adjustment would occur if there is a very significant and sustained decrease in the value per share of Desktop Metal Class A common stock during the twenty day period on which the average stock price is based or during the three trading days leading to the Effective Time of the Mergers. If that occurs, then the cash portion of the merger consideration would be reduced, and the stock consideration would be increased on a dollar-for-dollar basis with such reduction, to the extent required to ensure that the stock consideration in the Mergers is not less than 45% of the total consideration in the Mergers, as determined for U.S. federal income tax purposes; provided, however, that in no event will the stock consideration be increased if such increase would result in the total number of Desktop Metal Class A common shares exceeding the 19.9% limitation and, in such case, the cash consideration in the Mergers would be reduced as set forth in this paragraph without a corresponding increase in the stock consideration in the Mergers.

It is impossible to accurately predict the market price of Desktop Metal Class A common stock at the Effective Time or during the period over which the average stock price is calculated or the effect of the adjustment provisions on the amount of cash to be paid or on the number of shares of Desktop Metal Class A common stock to be delivered as merger consideration. As a result, ExOne stockholders cannot be certain of the amount of cash or the number of shares or value of Desktop Metal Class A common stock to be delivered upon consummation of the Mergers and ExOne stockholders may receive merger consideration with a value that, at the time received, is less than or more than $25.50 per share for each share of ExOne common stock exchanged in the Mergers.

Desktop Metal and ExOne may have difficulty attracting, motivating and retaining executives and other key employees in light of the Mergers.

Desktop Metal’s success after the transaction will depend in part on the ability of Desktop Metal to retain key employees of ExOne. Competition for qualified personnel can be intense. Current and prospective employees of ExOne may experience uncertainty about the effect of the transaction, which may impair Desktop Metal’s and ExOne’s ability to attract, retain and motivate key management, sales, marketing, technical and other personnel prior to and following the Mergers. Employee retention may be particularly challenging during the pendency of the Mergers, as employees of ExOne may experience uncertainty about their future roles with the combined company.

 

33

 

If key employees of ExOne depart, the integration of the companies may be more difficult and/or the combined company’s business following the Mergers may be harmed. Furthermore, Desktop Metal may have to incur significant costs in identifying, hiring and retaining replacements for departing employees and may lose significant expertise and talent relating to the business of ExOne, and Desktop Metal’s ability to realize the anticipated benefits of the transaction may be adversely affected. Accordingly, no assurance can be given that Desktop Metal will be able to attract or retain key employees of ExOne to the same extent that ExOne has been able to attract or retain employees in the past.

Completion of the Mergers is subject to a number of conditions, some of which are outside of the parties’ control, and if any of these conditions are not satisfied or waived, the Mergers will not be completed.

The Merger Agreement contains a number of conditions that must be satisfied (or waived) before the parties are required to consummate the Mergers. Those conditions include, among other conditions:

•

the approval by ExOne’s stockholders of the adoption of the Merger Agreement;

​

•

the approval for listing on the NYSE, subject to official notice of issuance, of the shares of Desktop Metal Class A common stock to be issued to ExOne stockholders in the First Merger;

​

•

the receipt of certain regulatory approvals and clearances, including the expiration or termination of all applicable waiting periods (and any extensions thereof) under the HSR Act and under the laws of certain non-U.S. jurisdictions;

​

•

the absence of any temporary restraining orders, injunctions or other legal restraints that have the effect of preventing or making illegal the consummation of the Mergers;

​

•

the effectiveness under the Securities Act of the registration statement on Form S-4 of which this proxy statement/prospectus forms a part;

​

•

subject to certain materiality exceptions, the accuracy of the representations and warranties of the parties;

​

•

compliance by the parties in all material respects with their respective covenants under the Merger Agreement;

​

•

the absence of a material adverse effect on either party since the date of the Merger Agreement; and

​

•

the receipt by ExOne of a tax opinion from its counsel (or, if ExOne’s counsel is unable or unwilling to issue such opinion, from Desktop Metal’s Counsel), substantially to the effect that, for U.S. federal income tax purposes, the Mergers, taken together, will qualify as a “reorganization” within the meaning of Section 368(a) of the Code, which such opinion shall be dated as of the closing date.

​

The required satisfaction or waiver of the foregoing conditions could delay the completion of the Mergers for a significant period of time or prevent it from occurring at all. Any delay in completing the Mergers could cause the parties not to realize some or all of the benefits that the parties expect to achieve following the completion of the Mergers. There can be no assurance that the conditions to the closing of the Mergers will be satisfied or waived or that the Mergers will be completed. For a more complete summary of the conditions that must be satisfied or waived prior to completion of the Mergers, see “The Merger Agreement — Conditions to Completion of the Mergers.”

In order to complete the Mergers, Desktop Metal and ExOne must make certain governmental filings and obtain certain governmental authorizations, and if such filings and authorizations are not made or granted or are granted with conditions to the parties, the closing of the Mergers may be jeopardized or the anticipated benefits of the Mergers may be reduced.

The closing of the Mergers is conditioned upon the expiration or termination of all applicable waiting periods (and any extensions thereof) under the HSR Act and the receipt of other authorizations, consents clearances or approvals required under certain other laws. The parties’ HSR notifications were filed with the FTC and the DOJ on August 25, 2021. Desktop Metal withdrew its HSR notification on September 24, 2021 and refiled the notification on September 28, 2021 in order to allow additional time for the initial review of the Mergers. The 30 calendar day waiting period under the HSR Act will therefore expire on October 28, 2021 unless Second Requests are issued to the parties.

 

34

 

As of the date of this proxy statement/prospectus, the parties have not satisfied the closing conditions to the Mergers, including with respect to the waiting period under the HSR Act and approval under the foreign investment law of Germany. We will provide notice of the satisfaction of the conditions to closing of the Mergers via the filing of a Current Report on Form 8-K. If the parties receive Second Requests (as defined herein) pursuant to the HSR Act, or if the Germany foreign investment law process is prolonged, it is likely that the parties will not have satisfied the closing conditions to the Mergers prior to the date of the special meeting, and closing of the Mergers could occur a significant time after the time of the special meeting. There is also a possibility that the closing conditions to the Merger will not be satisfied prior to the outside date of May 11, 2022, after which date either party may elect to terminate the Merger Agreement, subject to certain caveats. As a result, it is possible that factors outside the control of both companies could result in the Mergers being completed at a different time or not at all.

ExOne stockholders will not know the actual exchange ratio or the value of the Desktop Metal Class A common stock to be received as merger consideration until after the date of the special meeting.

Although Desktop Metal and ExOne have agreed in the Merger Agreement to use their reasonable best efforts, subject to certain limitations, to make certain other governmental filings or obtain the required governmental clearances and authorizations, as the case may be, there can be no assurance that the relevant waiting periods will expire or be terminated or that the relevant clearances and authorizations will be obtained. In addition, the governmental authorities with or from which these clearances or authorizations are required have broad discretion in administering the governing regulations. Whether and when required governmental clearances or authorizations are granted could be affected by (i) adverse developments in Desktop Metal’s or ExOne’s regulatory standing or any other factors considered by regulators in granting such clearances and authorizations; (ii) governmental, political or community group inquiries, investigations or opposition; or (iii) changes in legislation or the political environment generally. As a condition to clearances or authorization of the Mergers, governmental authorities may impose requirements, limitations or costs or place restrictions on the conduct of Desktop Metal’s business after completion of the Mergers. Such conditions, terms, obligations or restrictions may have the effect of delaying or preventing the closing of the Mergers or imposing additional material costs on or materially limiting the revenues of the combined company following the Mergers, or otherwise adversely affecting Desktop Metal’s businesses and results of operations after completion of the Mergers. In addition, these terms, obligations or restrictions may result in the delay or abandonment of the Mergers.

Desktop Metal’s and ExOne’s existing business relationships with third parties may be disrupted due to uncertainty associated with the Mergers, which could have an adverse effect on the results of operations, cash flows and financial position of Desktop Metal and ExOne.

Parties with which either Desktop Metal or ExOne do business may experience uncertainty associated with the Mergers, including relating to current or future business relationships with Desktop Metal, ExOne or the combined business. Desktop Metal’s and ExOne’s existing business relationships may be disrupted as parties with which Desktop Metal or ExOne do business may attempt to negotiate changes in existing business relationships or instead consider entering into business relationships with parties other than Desktop Metal, ExOne or the combined business. These disruptions could have an adverse effect on the businesses, financial condition, results of operations or prospects of the combined business, including an adverse effect on Desktop Metal’s ability to realize the anticipated benefits of the Mergers. The risk, and adverse effect, of such disruptions could be exacerbated by a delay in completion of the Mergers or termination of the Merger Agreement.

Certain executive officers and directors of ExOne may have interests in the Mergers that differ from your interests as a stockholder of ExOne.

In considering the recommendation of the ExOne Board to vote for the adoption of the Merger Agreement, ExOne stockholders should be aware that the non-employee directors and executive officers of ExOne may have certain interests in the Mergers that are different from or in addition to the interests of ExOne stockholders generally. These interests include, among others, the accelerated vesting of outstanding equity awards pursuant to the Merger Agreement, potential severance benefits and other payments and rights to ongoing indemnification and insurance coverage. The ExOne Board was aware of and considered those

 

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interests, among other matters, when evaluating and negotiating the Merger Agreement and approving the Merger Agreement, and in making its recommendation that the stockholders approve the adoption of the Merger Agreement.

For more information, see “Interests of ExOne’s Directors and Executive Officers in the Mergers.”

Failure to complete the Mergers could negatively impact the stock price and the future business and financial results of each of Desktop Metal and ExOne.

If the Mergers are not completed for any reason, the ongoing businesses of Desktop Metal and ExOne may be adversely affected, and without realizing any benefits of having completed the Mergers, Desktop Metal and ExOne would be subject to a number of risks, including the following:

•

Desktop Metal and ExOne may experience negative reactions from the financial markets, including negative impacts on their respective stock prices;

​

•

Desktop Metal and ExOne may experience negative reactions from their employees;

​

•

Desktop Metal and ExOne may experience adverse impacts on their relationships with customers, vendors and industry contracts which could adversely affect their respective results of operations and financial condition;

​

•

Desktop Metal and ExOne will be required to pay certain costs relating to the Mergers, whether or not the Mergers are completed;

​

•

Desktop Metal and ExOne may have expended substantial commitments of time and resources on matters relating to the Mergers (including integration planning), which would otherwise have been devoted to day-to-day operations and other opportunities that may have been beneficial to either Desktop Metal or ExOne as an independent company; and

​

•

in certain circumstances, Desktop Metal or ExOne may be required to pay a termination fee of $11.5 million to the other party.

​

In addition to the above risks, if the Merger Agreement is terminated and either party’s board of directors instead seeks an alternative transaction, such party’s stockholders cannot be certain that such party will be able to find another party willing to engage in a transaction on more attractive terms than those contemplated by the Merger Agreement.

If the Mergers are not completed, these risks may materialize and may adversely affect Desktop Metal’s and/or ExOne’s businesses, financial condition, results of operations and stock prices.

The Merger Agreement subjects Desktop Metal and ExOne to restrictions on their respective business activities during the period while the Mergers are pending.

The Merger Agreement contains restrictions on the ability of Desktop Metal and ExOne to take certain actions and generally obligates each of Desktop Metal and ExOne to conduct its business and the business of its subsidiaries in all material respects in the ordinary course during the period of time while the Mergers are pending absent the prior written consent of the other party. These restrictions could prevent Desktop Metal and ExOne from pursuing certain business opportunities that arise prior to the consummation of the Mergers or termination of the Merger Agreement and are outside the ordinary course of business. If Desktop Metal or ExOne is unable to take actions it believes are beneficial, such restrictions could have an adverse effect on Desktop Metal’s or ExOne’s, as applicable, business, financial condition and results of operations. See “The Merger Agreement — Conduct of Business Pending the Mergers.”

The Merger Agreement contains provisions that could discourage a potential competing acquirer of ExOne from making a favorable proposal and, in specified circumstances, could require ExOne to make a termination payment to Desktop Metal.

Pursuant to the Merger Agreement, ExOne has agreed, among other things, not to (i) solicit, initiate or knowingly encourage or knowingly induce or facilitate the making, submission or announcement of any inquiries, proposals or offers constituting or that would reasonably be expected to lead to an ExOne acquisition

 

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proposal, (ii) make available any non-public information regarding ExOne to any person (other than Desktop Metal or its representatives) in response to an ExOne acquisition proposal or any proposal, inquiry or offer that would reasonably be expected to lead to an ExOne acquisition proposal, (iii) engage in discussions or negotiations with any Person with respect to any ExOne acquisition proposal (other than to state that they currently are not permitted to have discussions), (iv) approve, endorse or recommend any ExOne acquisition proposal, (v) make or authorize any statement, recommendation or solicitation in support of any ExOne acquisition proposal or any proposal, inquiry or offer that would reasonably be expected to lead to ExOne acquisition proposal, or (vi) enter into any letter of intent or agreement in principle or any contract providing for, relating to or in connection with any ExOne acquisition proposal, in each case subject to certain exceptions to permit members of the ExOne Board to comply with their duties as directors under applicable law. Notwithstanding these “no-shop” restrictions, prior to obtaining ExOne stockholder approval of the adoption of the Merger Agreement, under certain specified circumstances the ExOne Board may change its recommendation to stockholders and ExOne may also terminate the Merger Agreement to accept a superior acquisition proposal upon payment of an $11.5 million termination fee to Desktop Metal. See “The Merger Agreement — ExOne Change in Recommendation; Termination for Superior Proposal” and “The Merger Agreement — Termination of the Merger Agreement.”

These provisions could discourage a potential competing acquirer that might have an interest in acquiring all or a significant part of ExOne from considering or proposing such an acquisition or might result in a potential competing acquirer proposing to pay a lower value than it might otherwise have proposed to pay because of the added expense of the termination fee that may become payable in certain circumstances under the Merger Agreement.

The shares of Desktop Metal Class A common stock to be received by ExOne stockholders upon completion of the Mergers will have different rights from shares of ExOne common stock.

ExOne stockholders, whose rights are currently governed by ExOne’s certificate of incorporation, ExOne’s bylaws and Delaware law, will upon completion of the Mergers become stockholders of Desktop Metal and as such, their rights will be governed by the Desktop Metal charter and the Desktop Metal bylaws, although they will continue to be governed by Delaware law. As a result, ExOne stockholders will have different rights than they currently have as ExOne stockholders, which may be less favorable than their current rights. These differences are described in detail in the section titled “Comparison of Stockholders’ Rights.”

After the Mergers, ExOne stockholders will have lower percentage ownership and voting percentage interests in Desktop Metal than they currently have in ExOne and will exercise less influence over management.

The actual number of shares of Desktop Metal Class A common stock to be issued and reserved for issuance in connection with the Mergers will be determined at completion of the Mergers based on the terms of the Merger Agreement and the number of shares of ExOne common stock outstanding at that time. ExOne stockholders will hold, in the aggregate, between approximately 13.0% and 15.5% of the issued and outstanding shares of Desktop Metal Class A common stock immediately following the closing of the First Merger based on the number of issued and outstanding shares of Desktop Metal Class A common stock and ExOne common stock as of October 4, 2021, and based on the minimum and maximum potential exchange ratios of 1.7522 and 2.1416, respectively. These estimated percentages do not take into account any additional Desktop Metal shares to be issued in exchange for vested but unexercised ExOne Options or the ESPP. The Merger Agreement contains an adjustment that limits the maximum number of shares of Desktop Metal Class A common stock that may be issued in connection with the Mergers to no more than 19.9% of the total number of shares of Desktop Metal Class A common stock that are issued and outstanding immediately prior to the First Merger. Consequently, current ExOne stockholders will have less influence over the management and policies of Desktop Metal after the Mergers than they currently have over the management and policies of ExOne.

Litigation challenging the Mergers may increase costs and prevent the Mergers from being completed within the expected timeframe, or from being completed at all.

Desktop Metal, ExOne and members of ExOne’s board of directors have been, and Desktop Metal, ExOne and members of their respective boards of directors may in the future be parties to various claims

 

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and litigation related to the Merger Agreement or the Mergers. See “Proposal 1: Adoption of the Merger Agreement — The Mergers — Litigation Related to the Merger.” One of the conditions to completion of the Mergers is the absence of any judgment, order or injunction that has the effect of prohibiting completion of the Mergers. Accordingly, if litigation is filed challenging the Mergers and a plaintiff is successful in obtaining an order enjoining completion of the Mergers, then such order may prevent the Mergers from being completed, or from being completed within the expected time frame. Moreover, litigation could be time consuming and expensive, could divert the attention of Desktop Metal’s and ExOne’s management away from their regular businesses, and, if adversely resolved against either Desktop Metal or ExOne or their respective directors, could have a material adverse effect on Desktop Metal’s and ExOne’s respective financial condition.

Desktop Metal and ExOne will incur significant transaction costs in connection with the Mergers.

Desktop Metal and ExOne expect to incur a number of non-recurring costs associated with the Mergers and combining the operations of the two companies. The significant, non-recurring costs associated with the Mergers include, among others, fees and expenses of financial, legal and other advisors and representatives, filing fees due in connection with filings required by governmental agencies and filing fees and printing and mailing costs for this proxy statement/prospectus. Some of these costs have already been incurred or may be incurred regardless of whether the Mergers are completed, including a portion of the fees and expenses of financial advisors, legal advisors and other advisors and representatives and filing fees for this proxy statement/prospectus. Desktop Metal also will incur significant transaction fees and costs in connection with its formulating and implementing integration plans with respect to the two companies. Desktop Metal continues to assess the magnitude of these costs, and additional unanticipated costs may be incurred in the Mergers and the integration of the two companies’ businesses. Although Desktop Metal expects that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, should allow Desktop Metal to offset integration-related costs over time, this net benefit may not be achieved in the near term, or at all.

Each of Desktop Metal and ExOne are required, under certain circumstances, to pay a termination fee that if paid, may materially and adversely affect such party’s financial results.

Desktop Metal may be required, under certain circumstances in connection with a termination of the Merger Agreement, to pay ExOne a termination fee of $11.5 million, which could materially and adversely affect Desktop Metal’s financial condition and results of operations. Alternatively, ExOne may be required, under certain circumstances in connection with a termination of the Merger Agreement, to pay Desktop Metal a termination fee of $11.5 million, which may materially and adversely affect ExOne’s financial results.

If the Mergers, taken together, do not qualify as a “reorganization” within the meaning of Section 368(a) of the Code, there may be adverse tax consequences to U.S. holders of ExOne common stock.

For U.S. federal income tax purposes, the Mergers, taken together, are intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code. The closing of the Mergers is conditioned on the receipt by ExOne of an opinion of counsel substantially to the effect that, for U.S. federal income tax purposes, the Mergers will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. However, this opinion will not be binding on the IRS or on the courts. Neither Desktop Metal nor ExOne has sought or will seek a ruling from the IRS regarding the U.S. federal income tax consequences of the Mergers. If, for any reason, the Mergers, taken together, were to fail to qualify as a “reorganization” within the meaning of Section 368(a), then a U.S. holder of ExOne common stock generally would recognize gain or loss, as applicable, equal to the difference between the sum of the amount of cash and the fair market value of Desktop Metal Class A common stock received by the U.S. holder in the Mergers and the U.S. holder’s tax basis in its shares of ExOne common stock surrendered, and the U.S. holder’s holding period of the shares of Desktop Metal Class A common stock received in the Mergers would begin on the day after the date of the Mergers.

 

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RISK FACTORS RELATING TO DESKTOP METAL FOLLOWING THE MERGERS

The failure to successfully integrate the businesses and operations of Desktop Metal and ExOne in the expected time frame may adversely affect the combined company’s future results.

Desktop Metal and ExOne have operated and, until the completion of the Mergers, will continue to operate independently. There can be no assurances that their businesses can be integrated successfully. It is possible that the integration process could result in the loss of key Desktop Metal or ExOne employees, the loss of customers, the disruption of either company’s or both companies’ ongoing businesses, inconsistencies in standards, controls, procedures and policies, unexpected integration issues, higher than expected integration costs and an overall post-completion integration process that takes longer than originally anticipated. Specifically, the following issues, among others, must be addressed in integrating the operations of Desktop Metal and ExOne in order to realize the anticipated benefits of the Mergers so the combined company performs as expected:

•

combining the companies’ operations and corporate functions;

​

•

combining the businesses of Desktop Metal and ExOne and meeting the capital requirements of the combined company, in a manner that permits the combined company to achieve any cost savings or other synergies anticipated to result from the Mergers, the failure of which would result in the anticipated benefits of the Mergers not being realized in the time frame currently anticipated or at all;

​

•

integrating personnel from the two companies, especially in the COVID-19 environment which has required many Desktop Metal employees and a portion of ExOne employees to work remotely in many locations;

​

•

integrating and unifying the offerings and services available to customers;

​

•

identifying and eliminating redundant and underperforming functions and assets;

​

•

harmonizing the companies’ operating practices, employee development and compensation programs, internal controls and other policies, procedures and processes;

​

•

maintaining existing agreements with customers, suppliers, distributors and vendors, avoiding delays in entering into new agreements with prospective customers, suppliers, distributors and vendors, and leveraging relationships with such third parties for the benefit of the combined company;

​

•

addressing possible differences in business backgrounds, corporate cultures and management philosophies;

​

•

consolidating the companies’ administrative and information technology infrastructure;

​

•

coordinating distribution and marketing efforts;

​

•

coordinating geographically dispersed organizations; and

​

•

effecting actions that may be required in connection with obtaining regulatory or other governmental approvals.

​

In addition, at times the attention of certain members of either company’s or both companies’ management and resources may be focused on completion of the Mergers and the integration of the businesses of the two companies and diverted from day-to-day business operations or other opportunities that may have been beneficial to such company, which may disrupt each company’s ongoing business and the business of the combined company.

The combined company may not be able to retain customers, suppliers or distributors, or customers, suppliers or distributors may seek to modify contractual relationships with the combined company, which could have an adverse effect on the combined company’s business and operations. Third parties may terminate or alter existing contracts or relationships with Desktop Metal or ExOne.

As a result of the Mergers, the combined company may experience impacts on relationships with customers, suppliers and distributors that may harm the combined company’s business and results of operations. Certain customers, suppliers or distributors may seek to terminate or modify contractual

 

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obligations following the Mergers whether or not contractual rights are triggered as a result of the Mergers. There can be no guarantee that customers, suppliers and distributors will remain with or continue to have a relationship with the combined company or do so on the same or similar contractual terms following the Mergers. If any customers, suppliers or distributors seek to terminate or modify contractual obligations or discontinue the relationship with the combined company, then the combined company’s business and results of operations may be harmed. Furthermore, the combined company will not have long-term arrangements with many of its significant suppliers. If the combined company’s suppliers were to seek to terminate or modify an arrangement with the combined company, then the combined company may be unable to procure necessary supplies from other suppliers in a timely and efficient manner and on acceptable terms, or at all.

Desktop Metal and ExOne also have contracts with vendors, landlords, licensors and other business partners which may require Desktop Metal or ExOne, as applicable, to obtain consent from these other parties in connection with the Mergers, or which may otherwise contain limitations applicable to such contracts following the Mergers. If these consents cannot be obtained, the combined company may suffer a loss of potential future revenue, incur costs and lose rights that may be material to the combined company’s business. In addition, third parties with whom Desktop Metal or ExOne currently have relationships may terminate or otherwise reduce the scope of their relationship with either party in anticipation of the Mergers. Any such disruptions could limit the combined company’s ability to achieve the anticipated benefits of the Mergers. The adverse effect of any such disruptions could also be exacerbated by a delay in the completion of the Mergers or by a termination of the Merger Agreement.

The market price of Desktop Metal Class A common stock after completion of the Mergers will continue to fluctuate, and may be affected by factors different from those affecting shares of ExOne common stock currently.

Upon completion of the First Merger, holders of ExOne common stock will become holders of shares of Desktop Metal Class A common stock. The market price of Desktop Metal Class A common stock may fluctuate significantly following consummation of the transaction and holders of ExOne common stock could lose the value of their investment in Desktop Metal Class A common stock. The issuance of shares of Desktop Metal Class A common stock in the First Merger could on its own have the effect of depressing the market price for Desktop Metal Class A common stock. In addition, many ExOne stockholders may decide not to hold the shares of Desktop Metal Class A common stock they receive as a result of the First Merger. Other ExOne stockholders, such as funds with limitations on their permitted holdings of stock in individual issuers, may be required to sell the shares of Desktop Metal Class A common stock they receive as a result of the First Merger. Such sales of Desktop Metal Class A common stock may take place shortly following the completion of the transaction and could have the effect of depressing the market price for Desktop Metal Class A common stock.

Moreover, general fluctuations in stock markets, any decline of Desktop Metal Class A common stock in connection with fluctuations or pullback in the market related to post-acquisition special purpose acquisition companies, as well as fluctuations in the stock price of ExOne and Desktop Metal’s publicly traded competitors in the 3D printing or additive manufacturing businesses could have a material adverse effect on the market for, or liquidity of, the Desktop Metal Class A common stock, regardless of Desktop Metal’s actual operating performance.

The businesses of Desktop Metal differ from those of ExOne in important respects, and, accordingly, the results of operations of Desktop Metal after the transaction, as well as the market price of Desktop Metal Class A common stock, may be affected by factors different from those currently affecting the results of operations of ExOne. Following the closing of the Mergers, ExOne will be part of a larger company with other lines of business, so decisions affecting ExOne may be made based on considerations relating to the larger combined business as a whole rather than the ExOne business individually. For further information on the businesses of Desktop Metal and ExOne and certain factors to consider in connection with those businesses, see the documents incorporated by reference into this proxy statement/prospectus and referred to under “Where You Can Find More Information” and the section titled “Information About Desktop Metal.”

The Mergers may not be accretive, and may be dilutive, to Desktop Metal’s earnings per share, which may negatively affect the market price of Desktop Metal Class A common stock.

Desktop Metal currently anticipates that the Mergers will be initially dilutive to its forecasted earnings per share on a standalone basis. This expectation is based on preliminary estimates, which may materially

 

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change. Desktop Metal may also have additional transaction-related costs, may fail to realize all of the benefits anticipated in the Mergers or may be subject to other factors that affect preliminary estimates or its ability to realize operational efficiencies or other anticipated synergies. Any of these factors could cause a decrease in Desktop Metal’s earnings per share or decrease or delay the expected effect of the Merger and contribute to a decrease in the price of Desktop Metal common stock.

While no assurances can be given as to future financial performance, Desktop Metal currently believes that in the long term the acquisition of ExOne will be accretive to its earnings per share. This expectation is based on preliminary estimates that may materially change. Furthermore, unplanned future events and conditions could reduce or delay the accretion that is currently projected or result in the Mergers being dilutive to Desktop Metal’s earnings per share, including adverse changes in market conditions, additional transaction and integration related costs and other factors such as the failure to realize some or all of the benefits anticipated in the Mergers. Any dilution of, reduction in or delay of any accretion to, Desktop Metal’s earnings per share could cause the price of shares of Desktop Metal Class A common stock to decline or grow at a reduced rate.

The unaudited pro forma condensed combined financial data included in this proxy statement/prospectus is presented for illustrative purposes only and the actual financial condition and results of operations of the combined company following the Mergers may differ materially.

The unaudited pro forma condensed combined financial data contained in this proxy statement/​prospectus is presented for illustrative purposes only, is based on various adjustments, assumptions and preliminary estimates and may not be an indication of the combined company’s financial condition or results of operations following the Mergers for several reasons. The actual financial condition and results of operations of Desktop Metal following the transaction may not be consistent with, or evident from, these unaudited pro forma condensed combined financial data. In addition, the assumptions used in preparing the unaudited pro forma financial information may not prove to be accurate, and other factors may affect Desktop Metal’s financial condition or results of operations following the transaction. Any potential decline in Desktop Metal’s financial condition or results of operations may cause significant variations in the stock price of Desktop Metal. For more information, see the section titled “Unaudited Pro Forma Condensed Combined Financial Data of Desktop Metal and ExOne.”

The future results of the combined company may be adversely impacted if Desktop Metal does not effectively manage its expanded operations following completion of the Mergers.

Following completion of the Mergers, the size of the combined company’s business will be significantly larger than the current size of either Desktop Metal’s or ExOne’s respective businesses. Desktop Metal’s ability to successfully manage this expanded business will depend, in part, upon management’s ability to implement an effective integration of the two companies and its ability to manage a combined business with significantly larger size and scope with the associated increased costs and complexity. Desktop Metal’s management may not be successful and Desktop Metal may not realize the expected operating efficiencies, cost savings and other benefits currently anticipated from the Mergers.

Declaration, payment and amounts of dividends, if any, distributed to stockholders of the combined company will be uncertain.

Desktop Metal has not historically paid cash dividends on its capital stock. Whether any dividends are declared or paid to stockholders of the combined company, and the amounts of any such dividends that are declared or paid, are uncertain and depend on a number of factors. If dividends are paid to stockholders of the combined company, they may not be of the same amount as may have been paid by ExOne to its stockholders prior to the Mergers. The Desktop Metal board of directors will have the discretion to determine the dividend policy of the combined company, including the amount and timing of dividends, if any, that the combined company may declare from time to time, which may be impacted by any of the following factors:

•

the combined company may not have enough cash to pay such dividends or to repurchase shares due to its cash requirements, capital spending plans, cash flow or financial position;

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•

decisions on whether, when and in which amounts to make any future distributions will remain at all times entirely at the discretion of the Desktop Metal board of directors, which could change its dividend practices at any time and for any reason;

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•

the combined company’s desire to maintain or improve the credit ratings on its debt;

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•

the amount of dividends that the combined company may distribute to its stockholders is subject to restrictions under Delaware law; and

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•

certain limitations on the amount of dividends subsidiaries of the combined company can distribute to the combined company, as imposed by state law, regulators or agreements.

​

Stockholders should be aware that they have no contractual or other legal right to dividends that have not been declared.

The combined company is subject to risks arising from the ongoing COVID-19 pandemic.

The outbreak of COVID-19, which the World Health Organization declared a pandemic in March 2020, has spread across the globe and disrupted the global economy. Governmental actions to reduce the spread of COVID-19 have negatively impacted the macroeconomic environment in many ways, while the pandemic itself has significantly increased economic uncertainty and, for a time, abruptly reduced economic activity.

The extent to which the ongoing COVID-19 pandemic will impact the combined company is highly uncertain and is difficult to predict. The pandemic’s effects and their extent will depend on various factors, including, but not limited to, the duration, scope and impact of the pandemic, restrictions on business and social distancing guidelines that may be requested or mandated by governmental authorities and how quickly and to what extent normal economic and operating conditions can resume. Relevant adverse consequences of the pandemic could include reduced liquidity, increased volatility of the Desktop Metal’s stock price, operational disruption or failure due to spread of disease within the combined company or due to restrictions on business and social distancing guidelines imposed or requested by governmental authorities, unavailability of raw materials, disruption in the supply chain and increased cybersecurity and fraud risks due to increased online and remote activity, as well as the adverse consequences of a macroeconomic slowdown, recession or depression.

ExOne manufactures its 3D printing machines at facilities in Gersthofen, Germany and North Huntingdon, Pennsylvania and maintains other operations facilities for the United States and Japan. If the operations of one or more of these facilities are materially disrupted as a result of COVID-19, the combined company may be unable to fulfill certain customer orders for the period of the disruption, may not be able to recognize revenue on certain orders and might need to modify our standard sales terms to secure commitments of customers during the period of the disruption and perhaps longer. Depending on the cause of the disruption, we could incur significant costs to remedy the disruption. COVID-19 may also have an adverse effect on the future capital expenditure decisions of customers outside of their normal spending cycles, which may impact the timing and extent of such decisions.

Even after the COVID-19 pandemic has subsided, the combined company may continue to experience adverse impacts to its business as a result of the global economic impact of the COVID-19 pandemic, including reduced availability of credit, adverse impacts on liquidity and the negative financial effects from any recession, depression or period of heightened inflation that may occur.

Any impairment of the combined company’s tangible, definite-lived intangible or indefinite-lived intangible assets, including goodwill, may adversely impact the combined company’s financial position and results of operations.

The Mergers will be accounted for using the acquisition method of accounting under the provisions of ASC 805, Business Combinations, with Desktop Metal representing the accounting acquirer under this guidance. Desktop Metal will record assets acquired, including identifiable intangible assets, and liabilities assumed from ExOne at their respective fair values at the date of completion of the Mergers. Any excess of the purchase price over the net fair value of such assets and liabilities will be recorded as goodwill. In connection with the Mergers, the combined company is expected to record significant goodwill and other intangible

 

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assets on its consolidated balance sheet. See “Unaudited Pro Forma Condensed Combined Financial Data of Desktop Metal and ExOne.”

Indefinite-lived intangible assets, including goodwill, will be tested for impairment at least annually, and all tangible and intangible assets including goodwill will be tested for impairment when certain indicators are present. If, in the future, the combined company determines that tangible or intangible assets, including goodwill, are impaired, the combined company would record an impairment charge at that time. Impairment testing of goodwill and intangible assets requires significant use of judgment and assumptions, particularly as it relates to the determination of fair value. A decrease in the long- term economic outlook and future cash flows of the combined company’s business could significantly impact asset values and potentially result in the impairment of intangible assets, including goodwill, which may have a material adverse impact on the combined company’s financial position and results of operations.

 

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RISK FACTORS RELATING TO DESKTOP METAL’S BUSINESS

References in this subsection to “we,” “us” and “our” refer to Desktop Metal and its consolidated subsidiaries.

Risks Related to Our Financial Position and Need for Additional Capital

We are an early-stage company with a history of losses. We have not been profitable historically and may not achieve or maintain profitability in the future.

We experienced net losses in each year from our inception, including net losses of $34.0 million and $103.6 million for the years ended December 31, 2020 and 2019, respectively. We believe we will continue to incur operating losses and negative cash flow in the near-term as we continue to invest significantly in our business, in particular across our research and development efforts and sales and marketing programs. These investments may not result in increased revenue or growth in our business.

In addition, as a public company, we incur significant additional legal, accounting and other expenses that we did not incur as a private company. As we acquire and integrate other companies, we will also incur additional legal, accounting and other expenses. These increased expenditures may make it harder for us to achieve and maintain future profitability. Revenue growth and growth in our customer base may not be sustainable, and we may not achieve sufficient revenue to achieve or maintain profitability. While we have generated revenue in the past, we have only recently begun commercial shipments of several of our announced additive manufacturing solutions, some of which are expected to generate a substantial portion of our revenue going forward, and it is difficult for us to predict our future operating results. We may incur significant losses in the future for a number of reasons, including due to the other risks described in this proxy statement/prospectus, and we may encounter unforeseen expenses, difficulties, complications and delays and other unknown events. As a result, our losses may be larger than anticipated, we may incur significant losses for the foreseeable future, and we may not achieve profitability when expected, or at all, and even if we do, we may not be able to maintain or increase profitability. Furthermore, if our future growth and operating performance fail to meet investor or analyst expectations, or if we have future negative cash flow or losses resulting from our investment in acquiring customers or expanding our operations, this could have a material adverse effect on our business, financial condition and results of operations.

Our limited operating history and rapid growth makes evaluating our current business and future prospects difficult and may increase the risk of your investment.

Much of our growth has occurred in recent periods. Our limited operating history may make it difficult for you to evaluate our current business and our future prospects, as we continue to grow our business. Our ability to forecast our future operating results is subject to a number of uncertainties, including our ability to plan for and model future growth. We have encountered, and will continue to encounter, risks and uncertainties frequently experienced by growing companies in rapidly evolving industries, as we continue to grow our business. If our assumptions regarding these uncertainties, which we use to plan our business, are incorrect or change in reaction to changes in our markets, or if we do not address these risks successfully, our operating and financial results could differ materially from our expectations, our business could suffer, and the trading price of our stock may decline. We intend to derive a substantial portion of our revenues from the sales of a number of products which began commercial shipments in late 2020, and we continue to develop additional products which are in the late stages of development and scheduled to begin commercial shipments in the second half of 2021. There are no assurances that we will be able to secure future business with customers or that such products will begin commercial shipments on our planned timelines.

It is difficult to predict our future revenues and appropriately budget for our expenses, and we have limited insight into trends that may emerge and affect our business. If actual results differ from our estimates or we adjust our estimates in future periods, our operating results and financial position could be materially affected.

Our operating results and financial condition may fluctuate from period to period.

Our operating results and financial condition fluctuate from quarter-to-quarter and year-to-year and are likely to continue to vary due to a number of factors, many of which will not be within our control.

 

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Both our business and the additive manufacturing industry are changing and evolving rapidly, and our historical operating results may not be useful in predicting our future operating results. If our operating results do not meet the guidance that we provide to the marketplace or the expectations of securities analysts or investors, the market price of our Class A common stock will likely decline. Fluctuations in our operating results and financial condition may be due to a number of factors, including:

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the degree of market acceptance of our products and services;

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our ability to compete with competitors and new entrants into our markets;

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•

the mix of products and services that we sell during any period;

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•

the timing of our sales and deliveries of our products to customers;

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•

the geographic distribution of our sales;

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•

changes in our pricing policies or those of our competitors, including our response to price competition;

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changes in the amount that we spend to develop and manufacture new products or technologies;

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changes in the amounts that we spend to promote our products and services;

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•

changes in the cost of satisfying our warranty obligations and servicing our installed customer base;

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expenses and/or liabilities resulting from litigation;

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delays between our expenditures to develop and market new or enhanced solutions and the generation of revenue from those solutions;

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unforeseen liabilities or difficulties in integrating our acquisitions or newly acquired businesses;

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•

disruptions to our information technology systems or our third-party contract manufacturers;

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•

general economic and industry conditions that effect customer demand;

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the impact of the COVID-19 pandemic on our customers, suppliers, manufacturers and operations; and

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changes in accounting rules and tax laws.

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In addition, our revenues and operating results may fluctuate from quarter-to-quarter and year-to-year due to our sales cycle and seasonality among our customers. Generally, our additive manufacturing solutions are subject to the adoption and capital expenditure cycles of our customers. As a result, we typically conduct a larger portion of our business during the fourth quarter of our fiscal year relative to the other quarters. Additionally, for our more complex solutions, which may require additional facilities investment, potential customers may spend a substantial amount of time performing internal assessments prior to making a purchase decision. This may cause us to devote significant effort in advance of a potential sale without any guarantee of receiving any related revenues. As a result, revenues and operating results for future periods are difficult to predict with any significant degree of certainty, which could lead to adverse effects on our inventory levels and overall financial condition.

Due to the foregoing factors, and the other risks discussed in this proxy statement/prospectus, you should not rely on quarter-over-quarter and year-over-year comparisons of our operating results as an indicator of our future performance.

We may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.

We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges and opportunities, including the need to develop new features or enhance our products, improve our operating infrastructure or acquire complementary businesses and technologies. Accordingly, we may need to engage in equity or debt financings to secure additional funds if our existing sources of cash and any funds generated from operations do not provide us with sufficient capital. If we raise additional funds through future issuances of equity or convertible debt securities, our existing

 

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stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our Class A common stock. Any debt financing that we may secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges and opportunities could be significantly impaired, and our business may be adversely affected.

Risks Related to Acquisitions

As part of our growth strategy, we intend to continue to acquire or make investments in other businesses, patents, technologies, products or services. Our efforts to do so, or our failure to do so successfully, could disrupt our business and have an adverse impact on our financial condition.

As part of our business strategy, we are acquiring and investing in other companies, patents, technologies, products and/or services. To the extent we seek to grow our business through acquisitions, we may not be able to successfully identify attractive acquisition opportunities or consummate any such acquisitions if we cannot reach an agreement on commercially favorable terms, if we lack sufficient resources to finance the transaction on our own and cannot obtain financing at a reasonable cost or if regulatory authorities prevent such transaction from being consummated. The identification of potential targets, negotiation with targets and due diligence may divert management’s attention from their day-to-day responsibilities and require the incurrence of related costs. In addition, competition for acquisitions in the markets in which we operate during recent years has increased, and may continue to increase, which may result in an increase in the costs of acquisitions or cause us to refrain from making certain acquisitions. We may not be able to complete future acquisitions on favorable terms, if at all.

If we do complete future acquisitions, we cannot assure you that they will ultimately strengthen our competitive position or that they will be viewed positively by customers, financial markets or investors. Furthermore, future acquisitions could pose numerous additional risks to our operations, including:

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diversion of management’s attention from their day-to-day responsibilities;

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unanticipated costs or liabilities associated with the acquisition;

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incurrence of acquisition-related costs, which would be recognized as a current period expense;

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problems integrating the purchased business, products or technologies;

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challenges in achieving strategic objectives, cost savings and other anticipated benefits;

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inability to maintain relationships with key customers, suppliers, vendors and other third parties on which the purchased business relies;

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the difficulty of incorporating acquired technology and rights into our platform and of maintaining quality and security standards consistent with our brand;

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difficulty in maintaining controls, procedures and policies during the transition and integration;

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challenges in integrating the new workforce and the potential loss of key employees, particularly those of the acquired business; and

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use of substantial portions of our available cash or the incurrence of debt to consummate the acquisition.

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If we proceed with a particular acquisition, we may have to use cash, issue new equity securities with dilutive effects on existing shareholders, incur indebtedness, assume contingent liabilities or amortize assets or expenses in a manner that might have a material adverse effect on our financial condition and results of operations. Acquisitions will also require us to record certain acquisition-related costs and other items as current period expenses, which would have the effect of reducing our reported earnings in the period in which an acquisition is consummated. In addition, we could also face unknown liabilities or write-offs due

 

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to our acquisitions, which could result in a significant charge to our earnings in the period in which they occur. We will also be required to record goodwill or other long-lived asset impairment charges (if any) in the periods in which they occur, which could result in a significant charge to our earnings in any such period.

Achieving the expected returns and synergies from future acquisitions will depend, in part, upon our ability to integrate the products and services, technology, administrative functions and personnel of these businesses into our product lines in an efficient and effective manner. We cannot assure you that we will be able to do so, that our acquired businesses will perform at levels and on the timelines anticipated by our management or that we will be able to obtain these synergies. In addition, acquired technologies and intellectual property may be rendered obsolete or uneconomical by our own or our competitors’ technological advances. Management resources may also be diverted from operating our existing businesses to certain acquisition integration challenges. If we are unable to successfully integrate acquired businesses, our anticipated revenues and profits may be lower. Our profit margins may also be lower, or diluted, following the acquisition of companies whose profit margins are less than those of our existing businesses.

We may experience difficulties in integrating the operations of acquired companies into our business and in realizing the expected benefits of these acquisitions.

Acquisition involve numerous risks, any of which could harm our business and negatively affect our financial condition and results of operations. The success of recent acquisitions will depend in part on our ability to realize the anticipated business opportunities from combining the operations of acquired companies with our business in an efficient and effective manner. These integration processes could take longer than anticipated and could result in the loss of key employees, the disruption of each company’s ongoing businesses, tax costs or inefficiencies, or inconsistencies in standards, controls, information technology systems, procedures and policies, any of which could adversely affect our ability to maintain relationships with customers, employees or other third parties, or our ability to achieve the anticipated benefits of the acquisitions, and could harm our financial performance. If we are unable to successfully or timely integrate the operations of acquired companies with our business, we may incur unanticipated liabilities and be unable to realize the revenue growth, synergies and other anticipated benefits resulting from the acquisitions, and our business, results of operations and financial condition could be materially and adversely affected.

We have incurred significant costs in connection with the recent acquisitions. The substantial majority of these costs are non-recurring acquisition expenses. These non-recurring costs and expenses are reflected in the unaudited pro forma condensed combined financial information included in this proxy statement/​prospectus. We may incur additional costs in the integration of acquired companies, and may not achieve cost synergies and other benefits sufficient to offset the incremental costs of these acquisitions.

Risks Related to Our Business and Industry

We may experience significant delays in the design, production and launch of our additive manufacturing solutions, and we may be unable to successfully commercialize products on our planned timelines.

Several of our announced additive manufacturing solutions are yet to be commercially released. There are often delays in the design, testing, manufacture and commercial release of new products, and any delay in the launch of our products could materially damage our brand, business, growth prospects, financial condition and operating results. Even if we successfully complete the design, testing and manufacture for one or all of our products under development, we may fail to develop a commercially successful product on the timeline we expect for a number of reasons, including:

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misalignment between the products and customer needs;

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lack of innovation of the product;

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failure of the product to perform in accordance with the customer’s industry standards;

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ineffective distribution and marketing;

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delay in obtaining any required regulatory approvals;

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•

unexpected production costs; or

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release of competitive products.

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Our success in the market for the products we develop will depend largely on our ability to prove our products’ capabilities in a timely manner. Upon demonstration, our customers may not believe that our products and/or technology have the capabilities they were designed to have or that we believe they have. Furthermore, even if we do successfully demonstrate our products’ capabilities, potential customers may be more comfortable doing business with another larger and more established company or may take longer than expected to make the decision to order our products. Significant revenue from new product investments may not be achieved for a number of years, if at all. If the timing of our launch of new products and/or of our customers’ acceptance of such products is different than our assumptions, our revenue and results of operations may be adversely affected.

Additionally, we are building out parts-as-a-service offering for customers, which may present similar challenges to those outlined above with respect to the design, production, and launch of new additive manufacturing solutions. In particular, we may fail to develop a commercially successful offering if we are unable to meet customer needs or industry standards, if we fail to meet customer price expectations, or if our marketing and distribution strategy proves ineffective. If we are unsuccessful in establishing such an offering, sales of our additive manufacturing solutions and our overall operating results could suffer. To date we have not recognized any material revenues from the parts-as-a-service business model.

Our business activities may be disrupted due to the ongoing impact of the COVID-19 pandemic.

We face various risks and uncertainties related to the ongoing impact of the of COVID-19 pandemic. Over the past year, the continued spread of COVID-19 has led to disruption and volatility in the global economy and capital markets, which increases the cost of capital and adversely impacts access to capital. Government-enforced travel bans and business closures around the world have significantly impacted our ability to sell, install and service our additive manufacturing systems at customers around the world. It has, and may continue to, disrupt our third-party contract manufacturers and supply chain. We currently anticipate customer payment delays for our products which could negatively impact our results of operations. We also expect some delays in installation of our products at customers’ facilities, which could lead to postponed revenue recognition for those transactions. In addition, installation delays could prevent us from achieving anticipated consumable revenues due to systems being put into operation later than expected. Furthermore, if significant portions of our workforce are unable to work effectively, including because of illness, quarantines, government actions, facility closures, remote working or other restrictions in connection with the COVID-19 pandemic, our operations will likely be adversely impacted.

If the COVID-19 pandemic continues for a prolonged duration, we or our customers may be unable to perform fully on our contracts, which will likely result in increases in costs and reduction in revenue. These cost increases may not be fully recoverable or adequately covered by insurance. The long-term effects of COVID-19 to the global economy and to us are difficult to assess or predict and may include a further decline in the market prices of our products, risks to employee health and safety, risks for the deployment of our products and services and reduced sales in geographic locations impacted. Any prolonged restrictive measures put in place in order to control COVID-19 or other adverse public health developments in any of our targeted markets may have a material and adverse effect on our business operations and results of operations.

Changes in our product mix may impact our gross margins and financial performance.

Our financial performance may be affected by the mix of products and services we sell during a given period. Our products are sold, and will continue to be sold, at different price points. Sales of certain of our products have, or are expected to have, higher gross margins than others. If our product mix shifts too far into lower gross margin products, and we are not able to sufficiently reduce the engineering, production and other costs associated with those products or substantially increase the sales of our higher gross margin products, our profitability could be reduced. Additionally, the introduction of new products or services may further heighten quarterly fluctuations in gross profit and gross profit margins due to manufacturing ramp-up and start-up costs. We may experience significant quarterly fluctuations in gross profit margins or

 

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operating income or loss due to the impact of the mix of products, channels or geographic areas in which we sell our products from period to period.

If we fail to meet our customers’ price expectations, demand for our products and product lines could be negatively impacted and our business and results of operations could suffer.

Demand for our product lines is sensitive to price. We believe our competitive pricing has been an important factor in our results to date. Therefore, changes in our pricing strategies can have a significant impact on our business and ability to generate revenue. Many factors, including our production and personnel costs and our competitors’ pricing and marketing strategies, can significantly impact our pricing strategies. If we fail to meet our customers’ price expectations in any given period, demand for our products and product lines could be negatively impacted and our business and results of operations could suffer.

We use, and plan to continue using, different pricing models for different products. For example, we plan to use a hardware-as-a-service annual subscription pricing model for certain new products. Such pricing models are still relatively new to some of our customers and may not be attractive to them, especially in regions where they are less common. If customers resist such pricing models, our revenue may be adversely affected, and we may need to restructure the way in which we charge customers for our products. To date, while we have accepted orders for our Fiber solution with hardware-as-a-service annual subscription pricing, we have not recognized material revenue from such orders, or associated with our hardware-as-a-service annual subscription model in general.

Declines in the prices of our products and services, or in our volume of sales, together with our relatively inflexible cost structure, may adversely affect our financial results.

Our business is subject to price competition. Such price competition may adversely affect our results of operation, especially during periods of decreased demand. Decreased demand also adversely impacts the volume of our systems sales. If our business is not able to offset price reductions resulting from these pressures, or decreased volume of sales due to contractions in the market, by improved operating efficiencies and reduced expenditures, then our operating results will be adversely affected.

Certain of our operating costs are fixed and cannot readily be reduced, which diminishes the positive impact of our restructuring programs on our operating results. To the extent the demand for our products slows, or the additive manufacturing market contracts, we may be faced with excess manufacturing capacity and related costs that cannot readily be reduced, which will adversely impact our financial condition and results of operations.

Our business model is predicated, in part, on building a customer base that will generate a recurring stream of revenues through the sale of our consumables and service contracts. If that recurring stream of revenues does not develop as expected, or if our business model changes as the industry evolves, our operating results may be adversely affected.

Our business model is dependent, in part, on our ability to maintain and increase sales of our proprietary consumables and service contracts as they generate recurring revenues. Existing and future customers of our systems may not purchase our consumables or related service contracts at the rate we expect for certain product lines or at the same rate at which customers currently purchase those consumables and services. In addition, our entry-level systems focused on low-volume production generally use a lower volume of consumables relative to our volume throughput systems focused on high-volume production. If our current and future customers purchase a lower volume of our consumable materials or service contracts, or if our entry-level systems represent an increasing percentage of our future installed customer base, resulting overall in lower purchases of consumables and service contracts on average than our current installed customer base or than we expect, our recurring revenue stream relative to our total revenues would be reduced and our operating results would be adversely affected.

If demand for our products does not grow as expected, or if market adoption of additive manufacturing does not continue to develop, or develops more slowly than expected, our revenues may stagnate or decline, and our business may be adversely affected.

We believe that the industrial manufacturing market, which today is dominated by conventional manufacturing processes that do not involve 3D printing technology, is undergoing a shift towards additive manufacturing.

 

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We may not be able to develop effective strategies to raise awareness among potential customers of the benefits of additive manufacturing technologies or our products may not address the specific needs or provide the level of functionality or economics required by potential customers to encourage the continuation of this shift towards additive manufacturing. If additive manufacturing technology does not continue to gain broader market acceptance as an alternative to conventional manufacturing processes, or does so more slowly than anticipated, or if the marketplace adopts additive manufacturing technologies that differ from our technologies, we may not be able to increase or sustain the level of sales of our products, and our operating results would be adversely affected as a result.

Reservations for our Production System P-50 solution may not convert to purchase orders.

Our Production System P-50 solution is in the late stages of development, and while select early customers are operational with initial versions of this solution, commercial shipments are not scheduled to begin until the second half of 2021 and may occur later or not at all. As a result, we have accepted reservations for the Production System P-50, most of which are accompanied by a financial deposit. Given the anticipated lead times between reservations and the date of delivery of the Production System P-50s, there is a risk that customers who have placed reservations may ultimately decide not to convert such reservations into purchase orders and take delivery of their reserved Production System P-50 due to potential changes in customer preferences, competitive developments or other factors. As a result, no assurance can be made that reservations will result in the purchase of our Production System P-50s, and any such failure to convert these reservations could harm our business, prospects, financial condition and operating results.

Defects in new products or in enhancements to our existing products that give rise to product returns or warranty or other claims could result in material expenses, diversion of management time and attention and damage to our reputation.

Our additive manufacturing solutions are complex and may contain undetected defects or errors when first introduced or as enhancements are released that, despite testing, are not discovered until after a machine has been used. This could result in delayed market acceptance of those products or claims from resellers, customers or others, which may result in litigation, increased end user warranty, support and repair or replacement costs, damage to our reputation and business, or significant costs and diversion of support and engineering personnel to correct the defect or error. We may from time to time become subject to warranty or product liability claims related to product quality issues that could lead us to incur significant expenses.

We attempt to include provisions in our agreements with customers that are designed to limit our exposure to potential liability for damages arising from defects or errors in our products. However, it is possible that these limitations may not be effective as a result of unfavorable judicial decisions or laws enacted in the future.

The sale and support of our products entails the risk of product liability claims. Any product liability claim brought against us, regardless of its merit, could result in material expense, diversion of management time and attention, damage to our business and reputation and brand, and cause us to fail to retain existing customers or to fail to attract new customers.

Our operations could suffer if we are unable to attract and retain key management or other key employees.

We believe our success has depended, and continues to depend, on the efforts and talents of our senior management and other key personnel, including, in particular, our Co-Founder, Chief Executive Officer, and Chairman, Ric Fulop. Our executive team is critical to the management of our business and operations, as well as to the development of our strategy. Members of our senior management team may resign at any time. The loss of the services of any members of our senior management team, especially Mr. Fulop, could delay or prevent the successful implementation of our strategy or our commercialization of new applications for our systems or other products, or could otherwise adversely affect our ability to manage our company effectively and carry out our business plan. There is no assurance that if any senior executive leaves in the future, we will be able to rapidly replace him or her and transition smoothly towards his or her successor, without any adverse impact on our operations.

 

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To support the continued growth of our business, we must also effectively recruit, hire, integrate, develop, motivate and retain additional new employees. High demand exists for senior management and other key personnel (including scientific, technical, engineering, financial and sales personnel) in the additive manufacturing industry, and there can be no assurance that we will be able to retain our current key personnel. We experience intense competition for qualified personnel. While we intend to continue to provide competitive compensation packages to attract and retain key personnel, some of our competitors for these employees have greater resources and more experience, making it difficult for us to compete successfully for key personnel. Moreover, new employees may not become as productive as we expect since we may face challenges in adequately integrating them into our workforce and culture. If we cannot attract and retain sufficiently qualified technical employees for our research product development activities, as well as experienced sales and marketing personnel, we may be unable to develop and commercialize new products or new applications for existing products. Furthermore, possible shortages of key personnel, including engineers, in the regions surrounding our Boston facility could require us to pay more to hire and retain key personnel, thereby increasing our costs. Since March 2020, we have had many employees working remotely to protect the health and safety of our employees, contractors, customers and visitors. We also shifted customer, industry and other stakeholder events to virtual-only experiences, and may similarly alter, postpone or cancel other events in the future. Given our limited history with remote operations, the long-term impacts are uncertain.

All of our U.S. employees are at-will employees, meaning that they may terminate their employment relationship with us at any time, and their knowledge of our business and industry would be extremely difficult to replace. We generally enter into non-competition agreements with our employees. These agreements prohibit our employees from competing directly with us or working for our competitors or clients while they work for us, and in some cases, for a limited period after they cease working for us. We may be unable to enforce these agreements under the laws of the jurisdictions in which our employees work, and it may be difficult for us to restrict our competitors from benefiting from the expertise that our former employees or consultants developed while working for us. If we cannot demonstrate that our legally protectable interests will be harmed, we may be unable to prevent our competitors from benefiting from the expertise of our former employees or consultants and our ability to remain competitive may be diminished.

If we fail to grow our business as anticipated, our net sales, gross margin and operating margin will be adversely affected. If we grow as anticipated but fail to manage our growth and expand our operations accordingly, our business may be harmed and our results of operation may suffer.

Over the past several years, we have experienced rapid growth, and we are attempting to continue to grow our business substantially. To this end, we have made, and expect to continue to make, significant investments in our business, including investments in our infrastructure, technology, marketing and sales efforts. These investments include dedicated facilities expansion and increased staffing, both domestic and international. If our business does not generate the level of revenue required to support our investment, our net sales and profitability will be adversely affected.

Our ability to effectively manage our anticipated growth and expansion of our operations will also require us to enhance our operational, financial and management controls and infrastructure, human resources policies and reporting systems. These enhancements and improvements will require significant capital expenditures, investments in additional headcount and other operating expenditures and allocation of valuable management and employee resources. Our future financial performance and our ability to execute on our business plan will depend, in part, on our ability to effectively manage any future growth and expansion. There are no guarantees we will be able to do so in an efficient or timely manner, or at all.

We may experience significant delays or obstacles to realizing the success of our newly-launched Desktop Health business line.

In March 2021, we launched our Desktop Health business, which aims to leverage our proprietary additive manufacturing technologies and materials to grow the market for existing applications in the healthcare and dental markets and identify, develop and/or commercialize future solutions for personalized patient care spanning dentistry, orthodontics, dermatology, orthopedics, cardiology, plastic surgery and printed regenerative tissues and grafts. This business operates in a highly competitive space which may make

 

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it difficult for us to implement business plans and expectations and identify and realize opportunities. In addition, this business and its technology, products, materials and applications may be subject to strict regulatory requirements in the United States and other countries. The regulatory approval or clearance process may be lengthy and costly, and regulatory requirement may impact the timing of, or our ability to, commercialize the regulated technology, products, materials and applications. The success of this business will also depend on our ability to attract, hire and retain qualified personnel, establish sales, marketing and distribution infrastructure, and establish and maintain supply and manufacturing relationships.

Our existing and planned global operations subject us to a variety of risks and uncertainties that could adversely affect our business and operating results. Our business is subject to risks associated with selling machines and other products in non-United States locations.

Our products and services are distributed in more than 65 countries around the world, and we derive a substantial percentage of our sales from these international markets. In 2020, we derived approximately 60% of our revenues from countries outside the United States. Accordingly, we face significant operational risks from doing business internationally.

Our operating results may be affected by volatility in currency exchange rates and our ability to effectively manage our currency transaction risks. We incur currency transaction risks if we were to enter into either a purchase or a sale transaction using a different currency from the currency in which we report revenues. In such cases we may suffer an exchange loss because we do not currently engage in currency swaps or other currency hedging strategies to address this risk. As we realize our strategy to expand internationally, our exposure to currency risks may increase. Given the volatility of exchange rates, we can give no assurance that we will be able to effectively manage our currency transaction risks or that any volatility in currency exchange rates will not have an adverse effect on our results of operations.

Other risks and uncertainties we face from our global operations include:

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difficulties in staffing and managing foreign operations;

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limited protection for the enforcement of contract and intellectual property rights in certain countries where we may sell our products or work with suppliers or other third parties;

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potentially longer sales and payment cycles and potentially greater difficulties in collecting accounts receivable;

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costs and difficulties of customizing products for foreign countries;

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challenges in providing solutions across a significant distance, in different languages and among different cultures;

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laws and business practices favoring local competition;

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being subject to a wide variety of complex foreign laws, treaties and regulations and adjusting to any unexpected changes in such laws, treaties and regulations;

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specific and significant regulations, including the European Union’s General Data Protection Regulation, or GDPR, which imposes compliance obligations on companies who possess and use data of EU residents;

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uncertainty and resultant political, financial and market instability arising from the United Kingdom’s exit from the European Union;

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compliance with U.S. laws affecting activities of U.S. companies abroad, including the U.S. Foreign Corrupt Practices Act;

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tariffs, trade barriers and other regulatory or contractual limitations on our ability to sell or develop our products in certain foreign markets;

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operating in countries with a higher incidence of corruption and fraudulent business practices;

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changes in regulatory requirements, including export controls, tariffs and embargoes, other trade restrictions, competition, corporate practices and data privacy concerns;

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•

potential adverse tax consequences arising from global operations;

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seasonal reductions in business activity in certain parts of the world, particularly during the summer months in Europe and at year end globally;

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rapid changes in government, economic and political policies and conditions; and

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political or civil unrest or instability, terrorism or epidemics and other similar outbreaks or events.

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In addition, additive manufacturing has been identified by the U.S. government as an emerging technology and is currently being further evaluated for national security impacts. We expect additional regulatory changes to be implemented that will result in increased and/or new export controls related to 3D printing technologies, components and related materials and software. These changes, if implemented, may result in our being required to obtain additional approvals and/or licenses to sell 3D printers in the global market.

Our failure to effectively manage the risks and uncertainties associated with our global operations could limit the future growth of our business and adversely affect our business and operating results.

In the future, some of our arrangements for additive manufacturing solutions may contain customer-specific provisions that may impact the period in which we recognize the related revenues under GAAP.

Some customers that purchase additive manufacturing solutions from us may require specific, customized factors relating to their intended use of the solution or the installation of the product in the customers’ facilities. These specific, customized factors are occasionally required by the customers to be included in our commercial agreements relating to the purchases. As a result, our responsiveness to our customers’ specific requirements has the potential to impact the period in which we recognize the revenue relating to that additive manufacturing system sale.

Similarly, some of our customers must build or prepare facilities to install a subset of our additive manufacturing solutions, and the completion of such projects can be unpredictable, which can impact the period in which we recognize the revenue relating to that additive manufacturing solution sale.

We rely on our information technology systems to manage numerous aspects of our business and a disruption of these systems could adversely affect our business.

We rely on our information technology systems to manage numerous aspects of our business, including to efficiently purchase products from our suppliers, provide procurement and logistic services, ship products to our customers, manage our accounting and financial functions, including our internal controls, and maintain our research and development data. Our information technology systems are an essential component of our business and any disruption could significantly limit our ability to manage and operate our business efficiently. A failure of our information technology systems to perform properly could disrupt our supply chain, product development and customer experience, which may lead to increased overhead costs and decreased sales and have an adverse effect on our reputation and our financial condition. In addition, during the COVID-19 pandemic, a substantial portion of our employees have conducted work remotely, making us more dependent on potentially vulnerable communications systems and making us more vulnerable to cyberattacks.

Although we take steps and incur significant costs to secure our information technology systems, including our computer systems, intranet and internet sites, email and other telecommunications and data networks, our security measures may not be effective and our systems may be vulnerable to damage or interruption. Disruption to our information technology systems could result from power outages, computer and telecommunications failures, computer viruses, cyber-attack or other security breaches, catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes, acts of war, terrorism and usage errors by our employees.

Our reputation and financial condition could be adversely affected if, as a result of a significant cyber- event or otherwise:

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our operations are disrupted or shut down;

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our confidential, proprietary information is stolen or disclosed;

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we incur costs or are required to pay fines in connection with stolen customer, employee or other confidential information;

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we must dedicate significant resources to system repairs or increase cyber security protection; or

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we otherwise incur significant litigation or other costs.

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If our computer systems are damaged or cease to function properly, or, if we do not replace or upgrade certain systems, we may incur substantial costs to repair or replace them and may experience an interruption of our normal business activities or loss of critical data. Any such disruption could adversely affect our reputation and financial condition.

Additionally, some of the companies we acquire may not have the same level of information technology systems which may require that we invest significant resources to get those systems to the level of security we require.

We also rely on information technology systems maintained by third parties, including third-party cloud computing services and the computer systems of our suppliers for both our internal operations and our customer-facing infrastructure related to our additive manufacturing solutions. These systems are also vulnerable to the types of interruption and damage described above but we have less ability to take measures to protect against such disruptions or to resolve them if they were to occur. Information technology problems faced by third parties on which we rely could adversely impact our business and financial condition as well as negatively impact our brand reputation.

Our current levels of insurance may not be adequate for our potential liabilities.

We maintain insurance to cover our potential exposure for most claims and losses, including potential product and non-product related claims, lawsuits and administrative proceedings seeking damages or other remedies arising out of our commercial operations. However, our insurance coverage is subject to various exclusions, self-retentions and deductibles. We may be faced with types of liabilities that are not covered under our insurance policies, such as environmental contamination or terrorist attacks, or that exceed our policy limits. Even a partially uninsured claim of significant size, if successful, could have an adverse effect on our financial condition.

In addition, we may not be able to continue to obtain insurance coverage on commercially reasonable terms, or at all, our existing policies may be cancelled or otherwise terminated by the insurer, and/or the companies that we acquire may not be eligible for certain types or limits of insurance. Maintaining adequate insurance and successfully accessing insurance coverage that may be due for a claim can require a significant amount of our management’s time, and we may be forced to spend a substantial amount of money in that process.

Global economic, political and social conditions and uncertainties in the markets that we serve may adversely impact our business.

Our performance depends on the financial health and strength of our customers, which in turn is dependent on the economic conditions of the markets in which we and our customers operate. A decline in the global economy, difficulties in the financial services sector and credit markets, continuing geopolitical uncertainties and other macroeconomic factors all affect the spending behavior of potential customers. The economic uncertainty in Europe, the United States, India, China and other countries arising out of the COVID-19 pandemic and increased monetary inflation may cause end-users to further delay or reduce technology purchases.

We also face risks from financial difficulties or other uncertainties experienced by our suppliers, distributors or other third parties on which we rely. If third parties are unable to supply us with required materials or components or otherwise assist us in operating our business, our business could be harmed.

For example, the possibility of an ongoing trade war between the United States and China may impact the cost of raw materials, finished products or components used in our products and our ability to

 

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sell our products in China. Other changes in U.S. social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment could also adversely affect our business. In addition, the United Kingdom’s exit from the European Union on January 31, 2020 may result in the imposition of tariffs or other trade barriers that could have an adverse impact on our results of operation. Additionally, uncertainty surrounding this transition may have an effect on global economic conditions and the stability of global financial markets, which in turn could have a material adverse effect on our business, financial condition and results of operations. In extreme cases, we could experience interruptions in production due to the processing of customs formalities or reduced customer spending in the wake of weaker economic performance. If global economic conditions remain volatile for a prolonged period or if European economies experience further disruptions, our results of operations could be adversely affected.

We identified material weaknesses in our internal controls over financial reporting. Our internal controls over financial reporting currently do not meet all of the standards contemplated by Section 404 of Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, and failure to achieve and maintain effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes- Oxley Act could impair our ability to produce timely and accurate financial statements or comply with applicable regulations and have a material adverse effect on our business.

As a public company, our management has significant requirements for enhanced financial reporting and internal controls as a public company. The process of designing and implementing effective internal controls is a continuous effort that will require us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company. If we are unable to establish or maintain appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations on a timely basis or result in material misstatements in our consolidated financial statements, which could harm our operating results. In addition, we will be required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. The rules governing the standards that must be met for our management to assess our internal control over financial reporting are complex and require significant documentation, testing, and possible remediation. Testing and maintaining internal controls may divert management’s attention from other matters that are important to our business. Our independent registered public accounting firm will be required to attest to the effectiveness of our internal control over financial reporting on an annual basis.

However, while we remain an emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. If we are not able to complete our initial assessment of our internal controls and otherwise implement the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner or with adequate compliance, our independent registered public accounting firm may not be able to certify as to the adequacy of our internal controls over financial reporting.

In addition to our results determined in accordance with GAAP, we believe certain non-GAAP measures may be useful in evaluating our operating performance. We present certain non-GAAP financial measures in this proxy statement/prospectus and intend to continue to present certain non-GAAP financial measures in future filings with the SEC and other public statements. Any failure to accurately report and present our non-GAAP financial measures could cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of our Class A common stock.

Matters impacting our internal controls may cause us to be unable to report our financial information on a timely basis and thereby subject us to adverse regulatory consequences, including sanctions by the SEC or violations of applicable NYSE listing rules, which may result in a breach of the covenants under existing or future financing arrangements. There also could be a negative reaction in the financial markets due to a loss of investor confidence in us and the reliability of our financial statements. Confidence in the reliability of our financial statements also could suffer if we or our independent registered public accounting

 

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firm continue to report a material weakness in our internal controls over financial reporting. This could materially adversely affect us and lead to a decline in the market price of our Class A common stock.

In connection with the Business Combination with Trine Acquisition Corp. (the “Trine Business Combination”), our management and auditors determined that material weaknesses existed in our internal control over financial reporting due to the fact that we had not completed an annual or quarterly close under a timeline that would be compatible with public company filing deadlines, and with our limited accounting department personnel, this may not be achievable. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis. While we have instituted plans to remediate the issue described above and continue to take remediation steps, including hiring additional personnel, including a vice president of accounting with public company experience, we continued to have a limited number of personnel with the level of GAAP accounting knowledge, specifically related to complex accounting transactions, commensurate with our financial reporting requirements.

Although we believe the hiring of additional accounting resources, implementation of additional reviews and processes requiring timely account reconciliations and analysis and implementation of processes and controls to better identify and manage segregation of duties will remediate the material weakness with respect to insufficient personnel, there can be no assurance that the material weakness will be remediated on a timely basis or at all, or that additional material weaknesses will not be identified in the future. If we are unable to remediate the material weakness, our ability to record, process, and report financial information accurately, and to prepare financial statements within the time periods specified by the rules and forms of the SEC, could be adversely affected which, in turn, to may adversely affect our reputation and business and the market price of our Class A common stock.

The additive manufacturing industry in which we operate is characterized by rapid technological change, which requires us to continue to develop new products and innovations to meet constantly evolving customer demands and which could adversely affect market adoption of our products.

Our revenues are derived from the sale of additive manufacturing systems and related consumables and services. We have encountered and will continue to encounter challenges experienced by growing companies in a market subject to rapid innovation and technological change. While we intend to invest substantial resources to remain on the forefront of technological development, continuing advances in additive manufacturing technology, changes in customer requirements and preferences and the emergence of new standards, regulations and certifications could adversely affect adoption of our products either generally or for particular applications. Our ability to compete in the additive manufacturing market depends, in large part, on our success in developing and introducing new additive manufacturing systems and technology, in improving our existing products and technology and qualifying new materials which our systems can support. We believe that we must continuously enhance and expand the functionality and features of our products and technologies in order to remain competitive. However, we may not be able to:

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develop cost effective new products and technologies that address the increasingly complex needs of prospective customers;

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enhance our existing products and technologies;

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respond to technological advances and emerging industry standards and certifications on a cost-effective and timely basis;

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adequately protect our intellectual property as we develop new products and technologies;

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identify the appropriate technology or product to which to devote our resources; or

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ensure the availability of cash resources to fund research and development.

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Even if we successfully introduce new additive manufacturing products and technologies and enhance our existing products and technologies, it is possible that these will eventually supplant our existing products or that our competitors will develop new products and technologies that will replace our own. As a result,

 

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any of our products may be rendered obsolete or uneconomical by our or our competitors’ technological advances, leading to a loss in market share, decline in revenue and adverse effects to our business and prospects.

The additive manufacturing industry is competitive. We expect to face increasing competition in many aspects of our business, which could cause our operating results to suffer.

The additive manufacturing industry in which we operate is fragmented and competitive. We compete for customers with a wide variety of producers of additive manufacturing and/or 3D printing equipment that creates 3D objects and end-use parts, as well as with providers of materials and services for this equipment.

Some of our existing and potential competitors are researching, designing, developing and marketing other types of products and services that may render our existing or future products obsolete, uneconomical or less competitive. Existing and potential competitors may also have substantially greater financial, technical, marketing and sales, manufacturing, distribution and other resources than we do, including name recognition, as well as experience and expertise in intellectual property rights and operating within certain international markets, any of which may enable them to compete effectively against us. For example, a number of companies that have substantial resources have announced that they are beginning production of 3D printing systems, which will further enhance the competition we face.

Future competition may arise from the development of allied or related techniques for equipment, materials and services that are not encompassed by our patents, from the issuance of patents to other companies that may inhibit our ability to develop certain products and from improvements to existing technologies.

We intend to continue to follow a strategy of continuing product development and distribution network expansion to enhance our competitive position to the extent practicable. But we cannot assure you that we will be able to maintain our current position or continue to compete successfully against current and future sources of competition. If we do not keep pace with technological change and introduce new products and technologies, demand for our products may decline, and our operating results may suffer.

Because the additive manufacturing market is rapidly evolving, forecasts of market growth in this proxy statement/prospectus may not be accurate.

Market opportunity estimates and growth forecasts included in this proxy statement/prospectus are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. The forecasts and estimates in this proxy statement/prospectus relating to the expected size and growth of the markets for additive manufacturing technology and other markets in which we participate may prove to be inaccurate. Even if these markets experience the forecasted growth described in this proxy statement/prospectus, we may not grow our business at similar rates, or at all. Our future growth is subject to many factors, including market adoption of our products, which is subject to many risks and uncertainties. Accordingly, the forecasts and estimates of market size and growth described in this proxy statement/​prospectus, including our estimates that the size of the total addressable market is expected to be approximately $146 billion in 2030, should not be taken as indicative of our future growth. In addition, these forecasts do not consider the impact of the current global COVID-19 pandemic, and we cannot assure you that these forecasts will not be materially and adversely affected as a result.

Risks Related to Third Parties

We could be subject to personal injury, property damage, product liability, warranty and other claims involving allegedly defective products that we supply.

The products we supply are sometimes used in potentially hazardous or critical applications, such as the assembled parts of an aircraft, medical device or automobile, that could result in death, personal injury, property damage, loss of production, punitive damages and consequential damages. While we have not experienced any such claims to date, actual or claimed defects in the products we supply could result in our being named as a defendant in lawsuits asserting potentially large claims.

 

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We attempt to include legal provisions in our agreements with customers that are designed to limit our exposure to potential liability for damages arising from defects or errors in our products. However, it is possible that these limitations may not be effective as a result of unfavorable judicial decisions or laws enacted in the future. Any such lawsuit, regardless of merit, could result in material expense, diversion of management time and efforts and damage to our reputation, and could cause us to fail to retain or attract customers, which could adversely affect our results of operations.

We could face liability if our additive manufacturing solutions are used by our customers to print dangerous objects.

Customers may use our additive manufacturing systems to print parts that could be used in a harmful way or could otherwise be dangerous. For example, there have been news reports that 3D printers were used to print guns or other weapons. We have little, if any, control over what objects our customers print using our products, and it may be difficult, if not impossible, for us to monitor and prevent customers from printing weapons with our products. While we have never printed weapons on any printers in our offices, there can be no assurance that we will not be held liable if someone were injured or killed by a weapon printed by a customer using one of our products.

We depend on our network of resellers and our business could be adversely affected if they do not perform as expected.

We rely heavily on our global network of resellers to sell our products and to provide installation and support services to customers in their respective geographic regions. These resellers may not be as effective in selling our products or installing and supporting our customers as we expect. Further, our contracts with our resellers provide for termination for convenience, and if our contracts with a significant number of resellers, or with the most effective resellers, were to terminate or if they would otherwise fail or refuse to sell certain of our products, we may not be able to find replacements that are as qualified or as successful in a timely manner, if at all. In addition, if our resellers do not perform as anticipated, or if we are unable to secure qualified and successful resellers, our sales will suffer, which would have an adverse effect on our revenues and operating results. Because we also depend upon our resellers to provide installation and support services for products, if our reseller relationship were terminated or limited to certain products, we may face disruption in providing support for our customers, which would adversely affect our reputation and our results of operations. Any failure to offer high-quality technical support services may adversely affect our relationships with our customers and adversely affect our financial results.

Additionally, a default by one or more resellers that have a significant receivables balance could have an adverse financial impact on our financial results. We have reviewed our policies that govern credit and collections and will continue to monitor them in light of current payment status and economic conditions. In addition, we try to reduce the credit exposures of our accounts receivable by instituting credit limits and having credit insurance. However, there can be no assurance that our efforts to identify potential credit risks will be successful. Our inability to timely identify resellers that are credit risks could result in defaults at a time when such resellers have high accounts receivable balances with us. Any such default would result in a significant charge against our earnings and adversely affect our results of operations and financial condition.

We depend on a limited number of third-party contract manufacturers for substantially all of our manufacturing needs. If these third-party manufacturers experience any delay, disruption or quality control problems in their operations, including due to the COVID-19 pandemic, we could lose market share and our brand may suffer.

We depend on third-party contract manufacturers for the production of several of our additive manufacturing systems. While there are several potential manufacturers for most of these products, several of our products are manufactured, assembled, tested and generally packaged by a limited number of third-party manufacturers. In most cases, we rely on these manufacturers to procure components and, in some cases, subcontract engineering work. Our reliance on a limited number of contract manufacturers involves a number of risks, including:

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unexpected increases in manufacturing and repair costs;

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inability to control the quality and reliability of finished products;

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inability to control delivery schedules;

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potential liability for expenses incurred by third-party contract manufacturers in reliance on our forecasts that later prove to be inaccurate;

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potential lack of adequate capacity to manufacture all or a part of the products we require; and

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potential labor unrest affecting the ability of the third-party manufacturers to produce our products.

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If any of our third-party contract manufacturers experience a delay, disruption or quality control problems in their operations, including due to the COVID-19 pandemic, or if a primary third-party contract manufacturer does not renew its agreement with us, our operations could be significantly disrupted, and our product shipments could be delayed. Qualifying a new manufacturer and commencing volume production is expensive and time consuming.

Ensuring that a contract manufacturer is qualified to manufacture our products to our standards is time consuming. In addition, there is no assurance that a contract manufacturer can scale its production of our products at the volumes and in the quality that we require. If a contract manufacturer is unable to do these things, we may have to move production for the products to a new or existing third-party manufacturer, which would take significant effort and our business, results of operations and financial condition could be materially adversely affected.

As we contemplate moving manufacturing into different jurisdictions, we may be subject to additional significant challenges in ensuring that quality, processes, and costs, among other issues, are consistent with our expectations. For example, while we expect our third-party contract manufacturers to be responsible for penalties assessed on us because of excessive failures of the products, there is no assurance that we will be able to collect such reimbursements from these manufacturers, which causes us to take on additional risk for potential failures of our products.

In addition, because we use a limited number of third-party contract manufacturers, increases in the prices charged may have an adverse effect on our results of operations, as we may be unable to find a contract manufacturer who can supply us at a lower price. As a result, the loss of a limited source supplier could adversely affect our relationships with our customers and our results of operations and financial condition.

All of our products must satisfy safety and regulatory standards and some of our products must also receive government certifications. Our third-party contract manufacturers are primarily responsible for conducting the tests that support our applications for most regulatory approvals for our products. If our third-party contract manufacturers fail to timely and accurately conduct these tests, we may be unable to obtain the necessary domestic or foreign regulatory approvals or certifications to sell our products in certain jurisdictions. As a result, we would be unable to sell our products and our sales and profitability could be reduced, our relationships with our sales channel could be harmed and our reputation and brand would suffer.

If our suppliers become unavailable or inadequate, our customer relationships, results of operations and financial condition may be adversely affected.

We acquire certain of our materials, which are critical to the ongoing operation and future growth of our business, from several third parties. Generally, our third-party contract manufacturers contract directly with component suppliers and we rely on our contract manufacturers to manage their supply chains. If one of our contract manufacturers has a supply chain disruption, or our relationship with our contract manufacturer terminates, we could experience delays. We also source some materials directly from suppliers. While most manufacturing equipment and materials for our products are available from multiple suppliers, certain of those items are only available from limited sources. Should any of these suppliers become unavailable or inadequate, or impose terms unacceptable to us, such as increased pricing terms, we could be required to spend a significant amount of time and expense to develop alternate sources of supply, and we may not be successful in doing so on terms acceptable to us, or at all. As a result, the loss of a limited source supplier could adversely affect our relationship with our customers as well as our results of operations and financial condition.

 

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Our third-party contract manufacturers’ facilities, and our suppliers’ and our customers’ facilities, are vulnerable to disruption due to natural or other disasters, strikes and other events beyond our control.

A major earthquake, fire, tsunami, hurricane, cyclone or other disaster, such as a pandemic, major flood, seasonal storms, nuclear event or terrorist attack affecting our facilities or the areas in which they are located, or affecting those of our customers or third-party manufacturers or suppliers, could significantly disrupt our or their operations and delay or prevent product shipment or installation during the time required to repair, rebuild or replace our or their damaged manufacturing facilities. These delays could be lengthy and costly. If any of our third-party contract manufacturers’, suppliers’ or customers’ facilities are negatively impacted by such a disaster, production, shipment and installation of our 3D printing machines could be delayed, which can impact the period in which we recognize the revenue related to that 3D printing machine sale. Additionally, customers may delay purchases of our products until operations return to normal. Even if we are able to respond quickly to a disaster, the continued effects of the disaster could create uncertainty in our business operations. In addition, concerns about terrorism, the effects of a terrorist attack, political turmoil, labor strikes, war or the outbreak of epidemic diseases (including the outbreak of COVID-19) could have a negative effect on our operations and sales.

Risks Related to Compliance Matters

Failure of our global operations to comply with anti-corruption laws and various trade restrictions, such as sanctions and export controls, could have an adverse effect on our business.

We operate in a number of countries throughout the world, including countries known to have a reputation for corruption. Doing business on a global basis requires us to comply with anti-corruption laws and regulations imposed by governments around the world with jurisdiction over our operations, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010, as well as the laws of the countries where we do business. We are also subject to various trade restrictions, including trade and economic sanctions and export controls, imposed by governments around the world with jurisdiction over our operations. For example, in accordance with trade sanctions administered by the Office of Foreign Assets Control and the U.S. Department of Commerce, we are prohibited from engaging in transactions involving certain persons and certain designated countries or territories, including Cuba, Iran, Syria, North Korea and the Crimea Region of Ukraine. In addition, our products are subject to export regulations that can involve significant compliance time and may add additional overhead cost to our products. In recent years the U.S. government has had a renewed focus on export matters. For example, the Export Control Reform Act of 2018 and regulatory guidance have imposed additional controls, and may result in the imposition of further additional controls, on the export of certain “emerging and foundational technologies.” Our current and future products may be subject to these heightened regulations, which could increase our compliance costs.

We are committed to doing business in accordance with applicable anti-corruption laws and regulations and with applicable trade restrictions. We are subject, however, to the risk that our affiliated entities or our and our affiliates’ respective officers, directors, employees and agents (including distributors of our products) may take action determined to be in violation of such laws and regulations. Any violation by any of these persons could result in substantial fines, sanctions, civil and/or criminal penalties, or curtailment of operations in certain jurisdictions, and might adversely affect our operating results. In addition, actual or alleged violations could damage our reputation and ability to do business.

We are subject to environmental, health and safety laws and regulations related to our operations and the use of our additive manufacturing systems and consumable materials, which could subject us to compliance costs and/or potential liability in the event of non-compliance.

We are subject to domestic and foreign environmental laws and regulations governing our operations, including, but not limited to, emissions into the air and water and the use, handling, disposal and remediation of hazardous substances. A certain risk of environmental liability is inherent in our production activities.

These laws and regulations govern, among other things, the generation, use, storage, registration, handling and disposal of chemicals and waste materials, the presence of specified substances in electrical products, the emission and discharge of hazardous materials into the ground, air or water, the cleanup of contaminated sites, including any contamination that results from spills due to our failure to properly dispose

 

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of chemicals and other waste materials and the health and safety of our employees. Under these laws, regulations and requirements, we could also be subject to liability for improper disposal of chemicals and waste materials, including those resulting from the use of our systems and accompanying materials by end-users. Accidents or other incidents that occur at our facilities or involve our personnel or operations could result in claims for damages against us. In the event we are found to be financially responsible, as a result of environmental or other laws or by court order, for environmental damages alleged to have been caused by us or occurring on our premises, we could be required to pay substantial monetary damages or undertake expensive remedial obligations. If our operations fail to comply with such laws or regulations, we may be subject to fines and other civil, administrative or criminal sanctions, including the revocation of permits and licenses necessary to continue our business activities. In addition, we may be required to pay damages or civil judgments in respect of third-party claims, including those relating to personal injury (including exposure to hazardous substances that we generate, use, store, handle, transport, manufacture or dispose of), property damage or contribution claims. Some environmental laws allow for strict, joint and several liabilities for remediation costs, regardless of fault. We may be identified as a potentially responsible party under such laws. The amount of any costs, including fines or damages payments that we might incur under such circumstances could substantially exceed any insurance we have to cover such losses. Any of these events, alone or in combination, could have a material adverse effect on our business, financial condition and results of operations and could adversely affect our reputation.

The export of our products internationally from our production facilities subjects us to environmental laws and regulations concerning the import and export of chemicals and hazardous substances such as the United States Toxic Substances Control Act and the Registration, Evaluation, Authorization and Restriction of Chemical Substances. These laws and regulations require the testing and registration of some chemicals that we ship along with, or that form a part of, our systems and other products. If we fail to comply with these or similar laws and regulations, we may be required to make significant expenditures to reformulate the chemicals that we use in our products and materials or incur costs to register such chemicals to gain and/or regain compliance. Additionally, we could be subject to significant fines or other civil and criminal penalties should we not achieve such compliance.

The cost of complying with current and future environmental, health and safety laws applicable to our operations, or the liabilities arising from past releases of, or exposure to, hazardous substances, may result in future expenditures. Any of these developments, alone or in combination, could have an adverse effect on our business, financial condition and results of operations.

Aspects of our business are subject to privacy, data use and data security regulations, which could increase our costs.

We collect personally identifiable information from our employees, prospects, and our customers. Privacy and security laws and regulations may limit the use and disclosure of certain information and require us to adopt certain cybersecurity and data handling practices that may affect our ability to effectively market our services to current, past or prospective customers. We must comply with privacy laws in the United States, Europe and elsewhere, including GDPR in the European Union, which became effective May 25, 2018, and the California Consumer Privacy Act of 2018, which was enacted on June 28, 2018 and became effective on January 1, 2020. These laws create new individual privacy rights and impose increased obligations, including disclosure obligations, on companies handling personal data. In many jurisdictions, consumers must be notified in the event of a data security breach, and such notification requirements continue to increase in scope and cost. Privacy and security laws and regulations may limit the use and disclosure of certain information and require us to adopt certain cybersecurity and data handling practices that may affect our ability to effectively market our services to current, past or prospective customers. While we have invested in, and intend to continue to invest in, resources to comply with these standards, we may not be successful in doing so, and any such failure could have an adverse effect on our business, results of operations and reputation.

As privacy, data use and data security laws are interpreted and applied, compliance costs may increase, particularly in the context of ensuring that adequate data protection and data transfer mechanisms are in place. In recent years, there has been increasing regulatory enforcement and litigation activity in this area in the United States, Germany and in various other countries in which we operate.

 

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Compliance with regulations for medical devices and solutions is expensive and time-consuming, and failure to obtain or maintain approvals, clearance, or compliance could impact financial projections and/or subject us to penalties or liabilities.

Our Desktop Health products and services, and its healthcare provider customers and distributors, are and will be subject to extensive federal, state, local and foreign regulations, including, without limitation, regulations with respect to approvals and clearances for products, design, manufacturing and testing, labeling, marketing, sales, quality control, and privacy. Unless an exemption applies, we must obtain clearance or approval from the Food and Drug Administration (or comparable foreign regulatory body) before a medical device or solution can be marketed or sold; this process involves significant time, effort and expense. The healthcare market overall is highly regulated and subject to frequent and sudden change. Our failure to secure clearances or approvals or comply with regulations could have an adverse impact on our business and reputation and subject us to lost research and development costs, withdrawal of clearance/approval, operating restrictions, liabilities, fines, penalties and/or litigation.

Risks Related to Intellectual Property

Third-party lawsuits and assertions alleging our infringement of patents, trade secrets or other intellectual property rights may have a significant adverse effect on our financial condition.

Third parties may own issued patents and pending patent applications that exist in fields relevant to additive manufacturing. Some of these third parties may assert that we are employing their proprietary technology without authorization. There may be third-party patents or patent applications with claims related to additive manufacturing. Because patent applications can take many years to issue, there may be currently pending patent applications which may later result in issued patents that our additive technologies may infringe. In addition, third parties may obtain patents in the future and claim that our technologies infringe upon these patents. Any third-party lawsuits or other assertion to which we are subject alleging our infringement of patents, trade secrets or other intellectual property rights may have a significant adverse effect on our financial condition.

We may incur substantial costs enforcing and defending our intellectual property rights.

We may incur substantial expense and costs in protecting, enforcing and defending our intellectual property rights against third parties. Intellectual property disputes may be costly and can be disruptive to our business operations by diverting attention and energies of management and key technical personnel and by increasing our costs of doing business. Third-party intellectual property claims asserted against us could subject us to significant liabilities, require us to enter into royalty and licensing arrangements on unfavorable terms, prevent us from assembling or licensing certain of our products, subject us to injunctions restricting our sale of products, cause severe disruptions to our operations or the marketplaces in which we compete or require us to satisfy indemnification commitments with our customers, including contractual provisions under various license arrangements. In addition, we may incur significant costs in acquiring the necessary third-party intellectual property rights for use in our products. Any of these could have an adverse effect on our business and financial condition.

If we are unable to adequately protect or enforce our intellectual property rights, such information may be used by others to compete against us, in particular in developing consumables that could be used with our printing systems in place of our proprietary consumables.

We have devoted substantial resources to the development of our technology and related intellectual property rights. Our success and future revenue growth will depend, in part, on our ability to protect our intellectual property. We rely on a combination of registered and unregistered intellectual property and protect our rights using patents, licenses, trademarks, trade secrets, confidentiality and assignment of invention agreements and other methods.

Despite our efforts to protect our proprietary rights, it is possible that competitors or other unauthorized third parties may obtain, copy, use or disclose our technologies, inventions, processes or improvements. We cannot assure you that any of our existing or future patents or other intellectual property rights will not be challenged, invalidated or circumvented, or will otherwise provide us with meaningful protection. Our

 

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pending patent applications may not be granted, and we may not be able to obtain foreign patents or pending applications corresponding to our U.S. patents. Even if foreign patents are granted, effective enforcement in foreign countries may not be available.

Our trade secrets, know-how and other unregistered proprietary rights are a key aspect of our intellectual property portfolio. While we take reasonable steps to protect our trade secrets and confidential information and enter into confidentiality and invention assignment agreements intended to protect such rights, such agreements can be difficult and costly to enforce or may not provide adequate remedies if violated, and we may not have entered into such agreements with all relevant parties. Such agreements may be breached, and trade secrets or confidential information may be willfully or unintentionally disclosed, including by employees who may leave our company and join our competitors, or our competitors or other parties may learn of the information in some other way. The disclosure to, or independent development by, a competitor of any of our trade secrets, know-how or other technology not protected by a patent or other intellectual property system could materially reduce or eliminate any competitive advantage that we may have over such competitor. This concern could manifest itself in particular with respect to our proprietary consumables that are used with our systems. Portions of our proprietary consumables may not be afforded patent protection. Chemical companies or other producers of raw materials used in our consumables may be able to develop consumables that are compatible to a large extent with our products, whether independently or in contravention of our trade secret rights and related proprietary and contractual rights. If such consumables are made available to owners of our systems, and are purchased in place of our proprietary consumables, our revenues and profitability would be reduced, and we could be forced to reduce prices for our proprietary consumables.

If our patents and other intellectual property do not adequately protect our technology, our competitors may be able to offer products similar to ours. Our competitors may also be able to develop similar technology independently or design around our patents and other intellectual property. Any of the foregoing events would lead to increased competition and reduce our revenue or gross margin, which would adversely affect our operating results.

If we attempt enforcement of our intellectual property rights, we may be, and have been in the past, subject or party to claims, negotiations or complex, protracted litigation. Intellectual property disputes and litigation, regardless of merit, can be costly and disruptive to our business operations by diverting attention and energies of management and key technical personnel and by increasing our costs of doing business. Any of the foregoing could adversely affect our business and financial condition.

As part of any settlement or other compromise to avoid complex, protracted litigation, we may agree not to pursue future claims against a third party, including related to alleged infringement of our intellectual property rights. Part of any settlement or other compromise with another party may resolve a potentially costly dispute but may also have future repercussions on our ability to defend and protect our intellectual property rights, which in turn could adversely affect our business.

Our additive manufacturing software contains third-party open-source software components, and failure to comply with the terms of the underlying open-source software licenses could restrict our ability to sell our products.

Our additive manufacturing software contains components that are licensed under so-called “open source,” “free” or other similar licenses. Open source software is made available to the general public on an “as-is” basis under the terms of a non-negotiable license. We currently combine our proprietary software with open source software, but not in a manner that we believe requires the release of the source code of our proprietary software to the public. We do not plan to integrate our proprietary software with open source software in ways that would require the release of the source code of our proprietary software to the public; however, our use and distribution of open source software may entail greater risks than use of third-party commercial software. Open source licensors generally do not provide warranties or other contractual protections regarding infringement claims or the quality of the code. In addition, if we combine our proprietary software with open source software in a certain manner, we could, under certain open source licenses, be required to release to the public or remove the source code of our proprietary software. We may also face claims alleging noncompliance with open source license terms or infringement or misappropriation of proprietary software. These claims could result in litigation, require us to purchase a

 

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costly license or remove the software. In addition, if the license terms for open source software that we use change, we may be forced to re-engineer our solutions, incur additional costs or discontinue the sale of our offerings if re-engineering could not be accomplished on a timely basis. Although we monitor our use of open source software to avoid subjecting our offerings to unintended conditions, there is a risk that these licenses could be construed in a way that could impose unanticipated conditions or restrictions on our ability to commercialize our offerings. We cannot guarantee that we have incorporated open source software in our software in a manner that will not subject us to liability or in a manner that is consistent with our current policies and procedures.

Risks Related to Our Class A Common Stock

Our issuance of additional shares of Class A common stock or convertible securities may dilute your ownership of us and could adversely affect our stock price.

From time to time, we have issued, and we expect in the future to issue, additional shares of our Class A common stock or securities convertible into our Class A common stock pursuant to a variety of transactions, including acquisitions. Additional shares of our Class A common stock may also be issued upon exercise of outstanding stock options to purchase our Class A common stock. The issuance by us of additional shares of our Class A common stock or securities convertible into our Class A common stock would dilute your ownership of us and the sale of a significant amount of such shares in the public market could adversely affect prevailing market prices of our Class A common stock. Subject to the satisfaction of vesting conditions and the expiration of lockup agreements, shares issuable upon exercise of options will be available for resale immediately in the public market without restriction.

In the future, we expect to obtain financing or to further increase our capital resources by issuing additional shares of our capital stock or offering debt or other equity securities, including senior or subordinated notes, debt securities convertible into equity, or shares of preferred stock. Issuing additional shares of our capital stock, other equity securities, or securities convertible into equity may dilute the economic and voting rights of our existing stockholders, reduce the market price of our Class A common stock, or both. Debt securities convertible into equity could be subject to adjustments in the conversion ratio pursuant to which certain events may increase the number of equity securities issuable upon conversion. Preferred stock, if issued, could have a preference with respect to liquidating distributions or a preference with respect to dividend payments that could limit our ability to pay dividends to holders of our Class A common stock. Our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, which may adversely affect the amount, timing or nature of our future offerings. As a result, holders of our Class A common stock bear the risk that our future offerings may reduce the market price of our Class A common stock and dilute their percentage ownership.

Future sales, or the perception of future sales, of our Class A common stock by us or our existing stockholders in the public market could cause the market price for our Class A common stock to decline.

The sale of substantial amounts of shares of our Class A common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares of our Class A common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

In addition, pursuant to our amended and restated registration rights agreement with certain of our stockholders, we are obligated to register such resale by these stockholders of shares of our Class A common stock or other rights to acquire our Class A common stock. The resale of those shares of Class A common stock has been registered pursuant to a Registration Statement on Form S-1 declared effective by the SEC on February 4, 2021 and such shares are available for resale without restriction, subject to any lock-up agreement.

In addition, shares of our Class A common stock issuable upon exercise or vesting of incentive awards under our incentive plans are, once issued, eligible for sale in the public market, subject to any lock-up agreements and, in some cases, limitations on volume and manner of sale applicable to affiliates under Rule 144. Furthermore, shares of our Class A common stock reserved for future issuance under our 2020 Incentive Award Plan, or the 2020 Plan, including pursuant to the evergreen provision that allows our board

 

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of directors to reserve additional shares of Class A common stock for future issuance under the 2020 Plan each calendar year, may become available for sale in future.

The market price of shares of our Class A common stock could drop significantly if the holders of the shares described above sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of shares of our Class A common stock or other securities.

Our directors, executive officers and stockholders affiliated with our directors and executive officers own a significant percentage of our Class A common stock and, if they choose to act together, will be able to exert significant control over matters subject to shareholder approval.

Our directors, executive officers, and stockholders affiliated with our directors and executive officers exert significant influence on us. As of December 31, 2020, these holders owned approximately 60.9% of our outstanding Class A common stock. As a result, these holders, acting together, have significant control over all matters that require approval of our stockholders, including the election of directors, amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate transactions. The interests of these holders may not always coincide with our corporate interests or the interests of other stockholders, and they may act in a manner with which you may not agree or that may not be in the best interests of our other stockholders.

Anti-takeover provisions in our governing documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our Class A common stock.

Our certificate of incorporation, bylaws, and Delaware law contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by our board of directors. Among other things, our certificate of incorporation and bylaws include the following provisions:

•

a staggered board, which means that our board of directors is classified into three classes of directors with staggered three-year terms and directors are only able to be removed from office for cause;

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limitations on convening special stockholder meetings, which could make it difficult for our stockholders to adopt desired governance changes;

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•

a prohibition on stockholder action by written consent, which means that our stockholders will only be able to take action at a meeting of stockholders and will not be able to take action by written consent for any matter;

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•

a forum selection clause, which means certain litigation against us can only be brought in Delaware;

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•

the authorization of undesignated preferred stock, the terms of which may be established and shares of which may be issued without further action by our stockholders; and

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•

advance notice procedures, which apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.

​

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management. As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the DGCL, which prevents interested stockholders, such as certain stockholders holding more than 15% of our outstanding Class A common stock, from engaging in certain business combinations unless (i) prior to the time such stockholder became an interested stockholder, our board of directors approved the transaction that resulted in such stockholder becoming an interested stockholder, upon consummation of the transaction that resulted in such stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of our Class A common stock, or (iii) following board approval, such business combination receives the approval of the holders of at least two-thirds of our outstanding Class A common stock not held by such interested stockholder at an annual or special meeting of stockholders.

 

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Any provision of our certificate of incorporation, our bylaws or Delaware law that has the effect of delaying, preventing or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our Class A common stock and could also affect the price that some investors are willing to pay for our Class A common stock.

We are an “emerging growth company” and the reduced disclosure requirements applicable to emerging growth companies may make our Class A common stock less attractive to investors.

We are an “emerging growth company,” as defined in the Jumpstart our Business Startups Act of 2012, as amended, or JOBS Act, through December 31, 2021. As an emerging growth company, we may follow reduced disclosure requirements and do not have to make all of the disclosures that public companies that are not emerging growth companies do. We will remain an emerging growth company until the earlier of (a) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more; (b) the last day of the fiscal year following the fifth anniversary of the date of the completion of the initial public offering of Trine; the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (d) the date on which we are deemed to be a large accelerated filer under the rules of the SEC, which means the market value of our Class A common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th. For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include:

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not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act;

​

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not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);

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•

reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements; and

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exemptions from the requirements of holding a nonbinding advisory vote of stockholders on executive compensation, stockholder approval of any golden parachute payments not previously approved and having to disclose the ratio of the compensation of our chief executive officer to the median compensation of our employees.

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In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period for complying with new or revised accounting standards; and as a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

We may choose to take advantage of some, but not all, of the available exemptions for emerging growth companies. We cannot predict whether investors will find our Class A common stock less attractive if we rely on these exemptions. If some investors find our Class A common stock less attractive as a result, there may be a less active trading market for our Class A common stock and our share price may be more volatile.

As of December 31, 2021, we will no longer be able to rely on these exemptions, which could increase the costs and demands placed on our management.

Our certificate of incorporation and bylaws provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

Our certificate of incorporation and bylaws provide that, unless we consent in writing to the selection of an alternative forum, the (a) Court of Chancery of the State of Delaware (or, in the event that the Chancery Court does not have jurisdiction, the federal district court for the District of Delaware or other state

 

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courts of the State of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive forum for: (i) any derivative action, suit or proceeding brought on our behalf; (ii) any action, suit or proceeding asserting a claim of breach of fiduciary duty owed by any of our directors, officers, or stockholders to us or to our stockholders; (iii) any action, suit or proceeding asserting a claim arising pursuant to the DGCL, our certificate of incorporation or bylaws; or (iv) any action, suit or proceeding asserting a claim governed by the internal affairs doctrine; and (b) subject to the foregoing, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Notwithstanding the foregoing, such forum selection provisions shall not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal courts of the United States have exclusive jurisdiction. The choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage such lawsuits against us and our directors, officers, and other employees. Alternatively, if a court were to find the choice of forum provision contained in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition.

Additionally, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. As noted above, our certificate of incorporation and bylaws provide that the federal district courts of the United States of America shall have jurisdiction over any action arising under the Securities Act. Accordingly, there is uncertainty as to whether a court would enforce such provision. Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.

General Risk Factors

Our Class A common stock price may be volatile or may decline regardless of our operating performance. You may lose some or all of your investment.

The trading price of our Class A common stock is likely to be volatile. The stock market recently has experienced extreme volatility. This volatility often has been unrelated or disproportionate to the operating performance of particular companies. You may not be able to resell your shares at an attractive price due to a number of factors such as those listed in this section and the following:

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the impact of the COVID-19 pandemic on our financial condition and the results of operations;

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•

our operating and financial performance and prospects;

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•

our quarterly or annual earnings or those of other companies in our industry compared to market expectations;

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•

conditions that impact demand for our products;

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•

future announcements concerning our business, our customers’ businesses or our competitors’ businesses;

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•

the public’s reaction to our press releases, other public announcements and filings with the SEC;

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•

the market’s reaction to our reduced disclosure and other requirements as a result of being an “emerging growth company” under the JOBS Act;

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•

the size of our public float;

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•

coverage by or changes in financial estimates by securities analysts or failure to meet their expectations;

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•

market and industry perception of our success, or lack thereof, in pursuing our growth strategy;

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•

strategic actions by us or our competitors, such as acquisitions or restructurings;

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•

changes in laws or regulations which adversely affect our industry or us;

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•

changes in accounting standards, policies, guidance, interpretations or principles;

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•

changes in senior management or key personnel;

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•

issuances, exchanges or sales, or expected issuances, exchanges or sales of our capital stock;

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•

changes in our dividend policy;

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•

adverse resolution of new or pending litigation against us; and

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•

changes in general market, economic and political conditions in the United States and global economies or financial markets, including those resulting from natural disasters, terrorist attacks, acts of war and responses to such events.

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These broad market and industry factors may materially reduce the market price of our Class A common stock, regardless of our operating performance. In addition, price volatility may be greater if the public float and trading volume of our Class A common stock is low. As a result, you may suffer a loss on your investment.

In the past, following periods of market volatility, stockholders have instituted securities class action litigation. If we were involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation.

If securities analysts do not publish research or reports about us, or if they issue unfavorable commentary about us or our industry or downgrade our Class A common stock, the price of our Class A common stock could decline.

The trading market for our Class A common stock depends, in part, on the research and reports that third-party securities analysts publish about us and the industries in which we operate. We may be unable or slow to attract research coverage and if one or more analysts cease coverage of us, the price and trading volume of our securities would likely be negatively impacted. If any of the analysts that may cover us change their recommendation regarding our Class A common stock adversely, or provide more favorable relative recommendations about our competitors, the price of our Class A common stock would likely decline. If any analyst that may cover us ceases covering us or fails to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price or trading volume of our Class A common stock to decline. Moreover, if one or more of the analysts who cover us downgrades our Class A common stock, or if our reporting results do not meet their expectations, the market price of our Class A common stock could decline.

The obligations associated with being a public company, particularly once we cease to be an “emerging growth company”, involve significant expenses and require significant resources and management attention, which may divert from our business operations.

We are subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective internal control over financial reporting. Once we cease to be an “emerging growth company”, an attestation report on internal control over financial reporting will be required to be issued by our independent registered public accounting firm. As a result, we will incur increased legal, accounting and other expenses that we did not previously incur. Our entire management team and many of our other employees will need to devote substantial time to compliance and may not effectively or efficiently manage our transition into a public company.

In addition, the need to establish the corporate infrastructure demanded of a public company may also divert management’s attention from implementing our business strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make, changes to our internal control over financial reporting, including IT controls, and procedures for financial reporting and accounting systems to meet our reporting obligations as a public company.

However, the measures we take may not be sufficient to satisfy our obligations as a public company. If we do not continue to develop and implement the right processes and tools to manage our changing enterprise and maintain our culture, our ability to compete successfully and achieve our business objectives could be

 

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impaired, which could negatively impact our business, financial condition and results of operations. In addition, we cannot predict or estimate the amount of additional costs we may incur to comply with these requirements. We anticipate that these costs will materially increase our general and administrative expenses.

These rules and regulations result in our incurring legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified people to serve on our board of directors, our board committees or as executive officers.

We are, and have been in the recent past, subject to litigation.

We are currently, and have been in the recent past, subject to litigation, and we could be subject to further litigation in the future. In 2018, we brought a claim in Massachusetts federal court against Markforged, Inc., or Markforged, a competitor in the additive manufacturing industry, regarding patent infringement and trade secret misappropriation. Markforged counterclaimed for trade secret misappropriation. We and Markforged entered into a confidential settlement agreement covering such matters in October 2018. In July 2019, Markforged brought a claim against us in Massachusetts federal court alleging false and misleading statements about their products in violation of the settlement agreement, which includes mutual non-disparagement and confidentiality obligations. The hearing was held in December 2020 and the arbitrator has ruled that we do not owe Markforged any damages associated with the claim. Although we vigorously pursue favorable outcomes we can provide no assurance as to the outcome of any current or future lawsuits or allegations, and any such actions may result in judgments against us for significant damages. Resolution of any such matters can be prolonged and costly, and the ultimate results or judgments are uncertain due to the inherent uncertainty in litigation and other proceedings. In addition, the additive manufacturing industry has been, and may continue to be, litigious, particularly with respect to intellectual property claims. Moreover, our potential liabilities are subject to change over time due to new developments, changes in settlement strategy or the impact of evidentiary requirements. Regardless of the outcome, litigation has resulted in the past, and may result in the future, in significant legal expenses and require significant attention and resources of management. As a result, any present or future litigation that may be brought against us by any third party could result in losses, damages and expenses that have a significant adverse effect on our financial condition.

We do not intend to pay dividends on our Class A common stock for the foreseeable future.

We currently intend to retain all available funds and any future earnings to fund the development and growth of our business. As a result, we do not anticipate declaring or paying any cash dividends on our Class A common stock in the foreseeable future. Any decision to declare and pay dividends in the future will be made at the discretion of our board of directors and will depend on, among other things, our business prospects, results of operations, financial condition, cash requirements and availability, certain restrictions related to our indebtedness, industry trends and other factors that our board of directors may deem relevant. Any such decision will also be subject to compliance with contractual restrictions and covenants in the agreements governing our current and future indebtedness. In addition, we may incur additional indebtedness, the terms of which may further restrict or prevent us from paying dividends on our Class A common stock. As a result, you may have to sell some or all of your Class A common stock after price appreciation in order to generate cash flow from your investment, which you may not be able to do. Our inability or decision not to pay dividends, particularly when others in our industry have elected to do so, could also adversely affect the market price of our Class A common stock.

 

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OTHER RISKS

Additional Risks Relating to Desktop Metal and ExOne

Desktop Metal and ExOne are, and following completion of the Mergers Desktop Metal will continue to be, subject to the risks described in (i) Part II, Item 1A in Desktop Metal’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 and (ii) Part I, Item 1A in ExOne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020. See the section titled “Where You Can Find More Information.”

 

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INFORMATION ABOUT THE SPECIAL MEETING

This proxy statement/prospectus is being provided to ExOne stockholders as part of a solicitation of proxies by the ExOne Board for use at the special meeting. This proxy statement/prospectus contains important information regarding the special meeting, the proposals on which ExOne stockholders are being asked to vote, considerations that ExOne stockholders may find useful in determining how to vote and voting procedures.

 

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PROPOSAL 1: ADOPTION OF THE MERGER AGREEMENT

THE PARTIES TO THE MERGERS

The ExOne Company (“ExOne”)

127 Industry Boulevard
North Huntingdon, Pennsylvania 15642
(877) 773-9663

ExOne is a global provider of 3D printing machines and 3D printed and other products, materials and services to industrial customers. ExOne’s business primarily consists of manufacturing and selling 3D printing machines and printing products to specification for its customers using its global installed base of 3D printing machines. ExOne’s machines serve direct and indirect applications. Direct printing produces a component; indirect printing makes a tool to produce a component. ExOne offer its pre-production collaboration and print products for customers through its network of ExOne Adoption Centers. ExOne also supplies the associated materials, including consumables and replacement parts, and other services, including training and technical support, that are necessary for purchasers of its 3D printing machines to print products.

ExOne’s common stock is listed on the Nasdaq under the symbol “XONE.”

For more information about ExOne, please visit ExOne’s Internet website at www.exone.com. ExOne’s Internet website address is provided as an inactive textual reference only. The information contained on ExOne’s Internet website is not incorporated into, and does not form a part of, this proxy statement/​prospectus or any other report or document on file with or furnished to the SEC. Additional information about ExOne is included in the documents incorporated by reference into this proxy statement/prospectus. See the section titled “Where You Can Find More Information” beginning on page 242 of this proxy statement/​prospectus.

Desktop Metal, Inc. (“Desktop Metal”)

63 3rd Avenue
Burlington, Massachusetts 01803
(978) 224-1244

Desktop Metal is pioneering a new generation of additive manufacturing technologies focused on Additive Manufacturing 2.0, the volume production of end-use parts. We offer a comprehensive portfolio of integrated additive manufacturing solutions comprised of hardware, software, materials and services, with support for metals, composites, polymers, ceramics, sands, biocompatible materials, wood and elastomers. Our solutions span use cases across the product life cycle, from product development to mass production and aftermarket operations, and they address an array of industries, including automotive, healthcare and dental, consumer products, heavy industry, aerospace, machine design and research and development.

Desktop Metal Class A common stock is listed on the NYSE under the symbol “DM.”

For more information about Desktop Metal, please visit Desktop Metal’s Internet website at www.desktopmetal.com. Desktop Metal’s Internet website address is provided as an inactive textual reference only. The information contained on Desktop Metal’s Internet website is not incorporated into, and does not form a part of, this proxy statement/prospectus or any other report or document on file with or furnished to the SEC. Additional information about Desktop Metal is included in the documents incorporated by reference into this proxy statement/prospectus. See the section titled “Where You Can Find More Information” beginning on page 242 of this proxy statement/prospectus.

Texas Merger Sub I, Inc. (“Merger Sub I”)

c/o Desktop Metal, Inc.
63 3rd Avenue
Burlington, Massachusetts 01803
(978) 224-1244

Texas Merger Sub I, Inc., a Delaware corporation and a wholly owned subsidiary of Desktop Metal, was formed solely for the purpose of facilitating the First Merger. Merger Sub I has not carried on any

 

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activities or operations to date, except for those activities incidental to its formation and undertaken in connection with the transactions contemplated by the Merger Agreement. By operation of the First Merger, Merger Sub I will be merged with and into ExOne, with ExOne surviving the First Merger as a wholly owned subsidiary of Desktop Metal.

Texas Merger Sub II, LLC (“Merger Sub II”)

c/o Desktop Metal, Inc.
63 3rd Avenue
Burlington, Massachusetts 01803
(978) 224-1244

Texas Merger Sub II, LLC, a Delaware limited liability company and a wholly owned subsidiary of Desktop Metal, was formed solely for the purpose of facilitating the Second Merger. Merger Sub II has not carried on any activities or operations to date, except for those activities incidental to its formation and undertaken in connection with the transactions contemplated by the Merger Agreement. By operation of the Second Merger, ExOne (as the surviving entity in the First Merger) will be merged with and into Merger Sub II, with Merger Sub II surviving the Second Merger as a wholly owned subsidiary of Desktop Metal.

 

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THE MERGERS

This section describes the Mergers. The description in this section and elsewhere in this proxy statement/​prospectus is qualified in its entirety by reference to the complete text of the Merger Agreement, a copy of which is attached as Annex A and is incorporated by reference into this proxy statement/prospectus. This summary does not purport to be complete and may not contain all the information about the Mergers that is important to you. You are encouraged to read the Merger Agreement carefully and in its entirety. This section is not intended to provide you any factual information about ExOne or Desktop Metal. Such information can be found elsewhere in this proxy statement/prospectus and in the public filings ExOne and Desktop Metal make with the SEC, as described in the section titled “Where You Can Find More Information.”

Merger Consideration

The Merger Agreement provides that at the Effective Time, each share of ExOne common stock issued and outstanding immediately prior to the Effective Time (other than shares owned or held by (x) Desktop Metal or any of its subsidiaries, (y) in treasury or otherwise held by ExOne or any of its subsidiaries and (z) any person who has not voted in favor of, or consented to, the Mergers and properly demands appraisal of such shares under Delaware law) will automatically be cancelled and converted into the right to receive (i) $8.50 in cash (subject to adjustment as described below), without interest, and (ii) a number of shares of Desktop Metal Class A common stock determined by application of an Exchange Ratio (subject to adjustment as described below).

The “Exchange Ratio” means:

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if the Average Stock Price (as defined below) is greater than or equal to $9.70, then the Exchange Ratio will be 1.7522;

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•

if the Average Stock Price is less than $9.70 and greater than $7.94 per share, the initial exchange ratio of 1.9274 will be modified by multiplying such exchange ratio by the quotient of $8.82 divided by the Average Stock Price; or

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•

if the Average Stock Price is less than or equal to $7.94, then the Exchange Ratio will be 2.1416.

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“Average Stock Price” means the average of the daily volume weighted averages of the trading prices of Desktop Metal Class A common stock on the NYSE on each of the twenty consecutive trading days ending on (and including) the trading day that is three trading days prior to the date of the Effective Time of the Mergers.

Notwithstanding anything in the Merger Agreement to the contrary, to the extent that the sum of:

(A)

the aggregate number of shares of Desktop Metal Class A common stock to be issued in exchange for converted shares of ExOne common stock as of the Effective Time, plus

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(B)

the aggregate number of shares of Desktop Metal Class A common stock for which the ExOne Options to be assumed pursuant to “— Treatment of ExOne Equity Awards — Unvested ExOne Options” below are exercisable as of the Effective Time, plus

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(C)

the aggregate number of shares of Desktop Metal Class A common stock to be issued in connection with the cancellation of ExOne Options pursuant to “— Treatment of ExOne Equity Awards —  Vested ExOne Options” at the Effective Time, plus

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(D)

the aggregate number of shares of Desktop Metal Class A common stock subject to the Desktop Metal RSAs to be issued pursuant to “— Treatment of ExOne Equity Awards — COC Restricted Stock Awards” and “— Treatment of ExOne Equity Awards — ESPP Awards” below at of the Effective Time,

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would exceed 19.9% of Desktop Metal’s issued and outstanding shares of Class A common stock immediately prior to the Effective Time (19.9% of such issued and outstanding shares rounded down to the nearest whole share, the “Maximum Share Number”), then (x) the Exchange Ratio will be reduced (the amount of such reduction, the “Exchange Ratio Reduction Number”) to the minimum extent necessary such that the sum of the aggregate number of shares of Desktop Metal Class A common stock to be issued under

 

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(A) through (D) above, equals the Maximum Share Number and (y) subject to the limitations set forth on the following paragraph, the per share cash consideration will be increased by the amount in cash equal to the Exchange Ratio Reduction Number multiplied by the per share cash consideration).

Furthermore, if the quotient, expressed as a percentage, obtained by dividing (A) the per share stock consideration by (B) the sum of the per-share stock consideration plus the per-share cash consideration (for this purpose, including any other amounts treated as consideration other than Desktop Metal Class A common stock, as determined pursuant to Treasury Regulations Section 1.368-1(e)) (the “Threshold Percentage”) (determined without regard to this sentence) is less than 45%, then the per-share cash consideration will be reduced, and the per-share stock consideration will be increased on a dollar-for-dollar basis with such reduction, by an amount that would be necessary to cause the recomputed Threshold Percentage to equal 45%; provided, however, that this will not cause the aggregate number of shares of Desktop Metal Class A common stock to be issued as per-share stock consideration as of the Effective Time to exceed the Maximum Share Number. To the extent the adjustment described in this paragraph would otherwise cause the aggregate number of shares of Desktop Metal Class A common stock to be issued as per-share stock consideration as of the Effective Time to exceed the Maximum Share Number, then, notwithstanding the preceding paragraph, the per-share cash consideration will be reduced as set forth in this paragraph without a corresponding increase in the per-share stock consideration.

Background of the Mergers

The following chronology summarizes certain key events and contacts that led to the signing of the Merger Agreement. It does not purport to identify every conversation among the ExOne Board, members of ExOne’s management or ExOne’s representatives and other parties.

As part of its oversight function, the ExOne Board, together with senior management, regularly reviews and assesses, among other things, ExOne’s long-term strategic plans and opportunities, competitive environments, and short-and long-term performance, with the primary goal of enhancing stockholder value. The ExOne Board has long been focused on growth, customer adoption of its technology in target markets and obtaining the necessary size and economies of scale to compete with traditional manufacturing processes, believing that the emerging technology of additive manufacturing is poised to displace such traditional subtractive manufacturing methodologies in industrial applications.

Desktop Metal, as part of its business strategy, seeks to identify companies, patents, technologies, products and services to acquire to develop its businesses and enhance value for its stockholders. The board of directors of Desktop Metal, in consultation with members of its management team, periodically reviews such acquisition opportunities and seeks to consummate such acquisitions on favorable terms. As part of this process, Desktop Metal’s management team periodically reviewed and evaluated ExOne as a potential acquisition target.

Following a meeting in May of 2020, Ric Fulop, the co-founder and CEO of Desktop Metal, called John Hartner, the CEO of ExOne, on June 25, 2020 to set up a meeting to discuss potential business opportunities. Subsequently, on July 5 and 22, 2020, Mr. Fulop and Mr. Hartner met and had preliminary conversations regarding a possible business combination, but no material terms were discussed. At that time, Desktop Metal was privately held.

On August 26, 2020, Desktop Metal announced that it had entered into an agreement and plan of merger with Trine Acquisition Corp. (“Trine”), a special purpose acquisition company with shares of common stock traded on the NYSE. The merger of Desktop Metal with Trine would result in Desktop Metal’s stockholders receiving shares of Trine common stock and the newly combined operating company would be named Desktop Metal, Inc., would continue to be listed on the NYSE, and would trade under the ticker symbol “DM.”

On August 27, 2020, Mr. Fulop contacted Mr. Hartner and reiterated Desktop Metal’s interest in a potential business combination with ExOne after the Trine-Desktop Metal merger closing. ExOne’s common stock closed trading on August 27, 2020 at $10.05.

On September 12, 2020, Mr. Fulop and Mr. Hartner exchanged email correspondence regarding a potential transaction. In that email exchange, Mr. Hartner provided a proposed non-disclosure agreement

 

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with a customary mutual standstill agreement, which was executed on September 22, 2020, with the confidentiality provisions effective as of May 1, 2020.

On September 10, 2020, Mr. Fulop and Mr. Hartner agreed to meet for further discussions on September 22, 2020. The meeting was held at Desktop Metal’s offices in Burlington, Massachusetts and included Stephen Nigro, a current director of Desktop Metal, and ExOne’s Chairman, S. Kent Rockwell. The purpose of the meeting was to learn more about each other’s respective businesses to determine if there were any potential synergies regarding a combination. No material terms of a possible business combination were discussed at the meeting.

From October of 2020 through February 2021, ExOne explored a number of strategic investments and acquisitions aimed at increasing scale.

On December 9, 2020, Desktop Metal closed the merger with Trine and the combined entity continued as a company with common shares listed for trading on the NYSE under the symbol DM. Pursuant to subscription agreements entered into in connection with the Trine merger agreement, certain investors agreed to subscribe for an aggregate of 27,497,500 newly-issued shares of Class A common stock of Desktop Metal at a purchase price of $10.00 per share for an aggregate purchase price of $274,975,000.

On December 10, 2020, Desktop Metal’s Class A common stock closed at $18.88 per share.

On December 11, 2020, Mr. Rockwell received a call from the CEO of Company X, a potential strategic counterparty, with which ExOne was also exploring another commercial business opportunity. During that conversation, the CEO of Company X suggested that the parties explore a possible combination of the companies. No terms of a business combination were discussed, and Mr. Rockwell stated that he would advise the management and the ExOne Board of Company X’s potential interest and any follow-up if there was interest on ExOne’s part. Mr. Rockwell advised Mr. Hartner and certain members of the ExOne Board of the call on December 11, 2020 and discussed the matter in executive session at the regularly scheduled board meeting held on December 15, 2020.

At the December 15, 2020 ExOne Board meeting, Messrs. Rockwell and Hartner updated the ExOne Board on the recent expressions of interest without any material terms by Company X and Desktop Metal. Representatives of ExOne’s outside counsel, McGuireWoods LLP (“McGuireWoods”), reviewed and discussed the ExOne Board’s fiduciary duties under Delaware law and related matters should the ExOne Board receive an unsolicited acquisition proposal from Company X, Desktop Metal or any other party. As the ExOne Board does routinely, it discussed strategic alternatives, including a potential business combination. Given the lack of detail, management determined that it would respond to inquiries and determine synergies for a potential business combination, at the time they are presented.

In response to the CEO of Company’s X’s invitation during the call of December 11, 2020, on January 21, 2021, Messrs. Rockwell and Hartner met with the CEO of Company X at Company X’s headquarters to learn more about each other’s respective businesses to determine if there were any potential synergies regarding a combination. No terms of a possible business combination were discussed at that meeting.

At the regularly scheduled ExOne Board meeting on February 3, 2021, Messrs. Rockwell and Hartner reported on the January 21, 2021 meeting with the CEO of Company X, and the ExOne Board authorized management to proceed with a number of potential strategic transactions, including, among others, an unrelated transaction with Company X and a strategic partnership with Rapidia, Inc. On February 3, 2021, the ExOne Board also authorized management to pursue a confidentially marketed public offering given the favorable capital market conditions and ExOne’s February 2, 2021 closing stock price of $33.18.

On February 5, 2021, Mr. Hartner called the CEO of Company X to discuss the unrelated commercial matter that the parties had been pursuing. During that call, the CEO of Company X indicated that Company X would be interested in discussing a future possible combination of their companies.

On February 8, 2021, ExOne issued a pre-earnings press release that also included an announcement of a strategic partnership with Rapidia, Inc. and the trading price of ExOne common stock increased from its February 5, 2021 closing price of $40.14 to a closing price on February 8, 2021 of $54.54.

 

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On February 10, 2021, ExOne entered into an underwriting agreement pursuant to which it agreed to issue and sell up to 1,666,667 shares of its common stock at a public offering price of $54.00 per share. In addition, ExOne granted the underwriters a 30-day option to purchase up to an additional 205,907 shares of its common stock at the public offering price (less underwriting discounts and commissions), which option was exercised on February 11, 2021. As a result of this common stock offering, during February 2021, ExOne sold 1,872,574 shares of its common stock and received aggregate net proceeds of approximately $95,000,000 after underwriting discounts, commissions, legal and accounting fees, and other offering expenses were paid. ExOne undertook the offering intending to use the net proceeds for working capital and general corporate purposes, including strategic investments.

On February 27, 2021 and March 3, 2021, Mr. Hartner and Mr. Fulop discussed an unrelated personnel matter relating to Desktop Metal’s recent hire of an ExOne employee. On the February 27th conversation, they briefly discussed the possibility of a business combination and Mr. Fulop noted that given ExOne’s current trading price, the market capitalization would make the deal problematic. ExOne’s common stock closed trading on February 26, 2021 at $34.10.

On March 5, 2021, with ExOne’s trading price closing at $28.47 per share (and Desktop Metal at $15.70 per share), Mr. Fulop contacted Mr. Hartner to revisit discussions of a business combination including a possible stock/cash mix with potentially up to an aggregate of $150 million in cash. They continued discussions on March 8, 9, 15 and 16, 2021, discussing potential prices, deal structure and integration matters. Mr. Fulop noted that Desktop Metal was currently working on an unrelated business combination with another company but would contact certain representatives of the Desktop Metal transaction committee and its investment banker, Credit Suisse Securities (USA) LLC (“Credit Suisse”) to put together a proposal.

Following ExOne’s Board meeting on March 9 and 10, 2021, Mr. Hartner, together with other members of ExOne senior management, interviewed three investment banks to determine their qualifications and experience and any potential conflicts of interest, and reviewed each investment bank’s fee proposals to represent ExOne in connection with any unsolicited acquisition proposal. Stifel was selected by management to be recommended to the Board given Stifel’s knowledge of the 3D printing industry, its pre-existing relationship with ExOne, and its fee proposal. Stifel confirmed that it would not have any conflicts of interest in representing ExOne in connection with a transaction with Desktop Metal or Company X.

On March 10, 2021, the CEO of Company X informed Mr. Hartner that Company X was not interested at that time in engaging in any further discussions about a possible combination.

On May 5, 2021, Mr. Fulop contacted Messrs. Rockwell and Hartner to inform them that Desktop Metal would be providing them with terms of a non-binding proposal. The initial non-binding proposal of $27.50 per share with two alternatives: (i) 100% of Desktop Metal Class A common stock in a cash-free transaction or (ii) 16% cash / 84% stock with a cash portion of $4.45 per share and fixed exchange ratio of 1.883x was received by Mr. Hartner via encrypted email. The per share price proposed represented a premium of approximately 30% over ExOne’s closing share price on May 5, 2021.

Following further discussions and diligence, on May 6, 2021, Mr. Fulop emailed Messrs. Rockwell and Hartner a revised proposal of $27.50 per share with two alternative proposed structures: (i) 100% of Desktop Metal Class A common stock in a cash-free transaction or (ii) $143 million in the aggregate of cash and a 1.725x exchange ratio. Messrs. Hartner and Rockwell discussed the proposal with certain members of the ExOne Board over the following days.

On May 12, 2021, Mr. Hartner reviewed the terms of Desktop Metal’s non-binding proposal with the entire ExOne Board in special session after the ExOne Board’s annual meeting. Representatives of Stifel joined the meeting and reviewed Desktop Metal’s offer against a variety of benchmarks. The ExOne Board engaged in a discussion regarding the merits of a potential transaction, including pricing, process and timing. The ExOne Board discussed the premium that the $27.50 per share price represented to ExOne’s recent trading prices, as well as potential strategic alternatives for ExOne, including its prospects as a standalone business. Representatives of Stifel and ExOne’s management team responded to questions from the ExOne Board. Mr. Hartner reminded the ExOne Board of its fiduciary duties with respect to any unsolicited acquisition proposal. Mr. Hartner presented his and Mr. Rockwell’s recommendation that Stifel be engaged

 

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to serve as financial advisor with respect to a potential acquisition of ExOne and reviewed the terms of such engagement, including the lack of any conflicts with representing ExOne. Following discussion, the ExOne Board (i) approved the engagement of Stifel as financial advisor to ExOne with respect to any acquisition proposal, (ii) authorized the Chief Executive Officer, the Chief Financial Officer and the General Counsel of ExOne to conduct negotiations with representatives of Desktop Metal regarding a potential transaction, and (iii) the ExOne Board established a transaction committee consisting of S. Kent Rockwell, John Irvin and William Strome to oversee and advise management with respect to the negotiations with representatives of Desktop Metal or one or more other possible strategic transactions with third parties. Following the ExOne Board meeting, the ExOne transaction committee met with representatives of Stifel to further review the terms of Desktop Metal’s May 6, 2021 proposal. Mr. Hartner was authorized to contact Mr. Fulop with a verbal response to (i) refuse the request for exclusivity and (ii) inform Desktop Metal that the committee was willing to present a proposal to the full ExOne Board of $33.00 per share with a 50/50 mix of cash and stock. Mr. Hartner provided the committee’s response to Mr. Fulop later that same day.

Later that day, ExOne and Stifel executed an engagement letter to formally engage Stifel as ExOne’s financial advisor in connection with the ExOne Board’s consideration of potential strategic transactions.

On May 21, 2021, Mr. Fulop called Mr. Hartner and declined to increase the price set forth in Desktop Metal’s May 6, 2021 non-binding proposal and requested that ExOne respond regarding its willingness to undertake a potential transaction with a price of $27.50 per share (subject to due diligence and Desktop and ExOne Board approval) with a cash component of $143 million in the aggregate. Mr. Fulop indicated that Desktop Metal believed it could enter into such agreement by the second week of August of 2021. On that day, ExOne’s stock closed at $20.50 per share and Desktop Metal’s stock closed at $13.17. The $27.50 per share price proposed represented a premium of approximately 34% over ExOne’s closing share price on May 21, 2021.

On May 22, 2021, Mr. Hartner notified the members of the ExOne transaction committee of the terms of Desktop Metal’s May 21, 2021 proposal, and on May 24, 2021, the ExOne transaction committee as well as representatives of Stifel met to discuss the terms and relative valuation of Desktop Metal’s May 21, 2021 proposal and discussed potential tactics in the process moving forward. Representatives of Stifel also discussed options to expand the process as well as discussing other potential buyers who could undertake a transaction on potentially more favorable terms and within the timeframe proposed by Desktop Metal. The ExOne Board instructed Mr. Hartner to reach out to Company X to see if they had any interest in participating in the process.

On May 25, 2021, Mr. Hartner called Mr. Fulop to inform him that Desktop Metal would need to contribute more cash to make a deal viable but that ExOne was willing to engage in mutual financial due diligence based on the May 21, 2021 proposal.

On May 28, 2021, a representative of Company X contacted Mr. Hartner leaving a message that it was interested in restarting discussions regarding Company X’s interest in acquiring ExOne, and a call was scheduled for June 3, 2021.

On June 3, 2021, Mr. Hartner spoke with the CEO of Company X. During that call, the CEO indicated that he would be interested in resuming discussions of possible synergies of a possible combination.

On June 4, 2021, Company X entered into a non-disclosure agreement with ExOne. Later that day, and again on June 7, 2021, Mr. Hartner and the CEO of Company X had conversations with a representative of Company X regarding a potential acquisition of ExOne. They agreed to engage in preliminary due diligence to explore the possible synergies of the transaction and no material terms of a possible transaction were discussed.

On June 9, 2021, Mr. Fulop informed representatives of Stifel that Desktop Metal was not willing to increase the per share price but may be willing to increase the cash component and adjust the exchange ratio.

From June 9 to June 16, 2021, representatives of Stifel engaged in a number of conversations with Mr. Fulop and representatives of Credit Suisse regarding the price, cash and stock mix and the inclusion of

 

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an exchange ratio collar related to the stock component of Desktop Metal’s proposal, and also engaged in discussions with the financial advisor of Company X.

On June 12, 2021, senior management of ExOne and representatives of Stifel met via video conference with representatives of Company X regarding financial diligence.

On June 16, 2021, a representative of Stifel was contacted by representatives of Company X and expressed their intent to issue a non-binding proposal.

Representatives of Stifel had multiple conversations between June 16 and June 21, 2021 with Company X’s financial advisor to discuss terms and conditions, including areas for future diligence, which could be expected in a forthcoming non-binding offer.

On June 17, 2021, the ExOne transaction committee met with representatives of Stifel and certain members of ExOne’s management to discuss the terms of Desktop Metal’s proposal and the expectations regarding a non-binding offer from Company X.

On June 18, 2021, Desktop Metal submitted a revised proposal with $177 million in the aggregate in cash and a 1.5627x exchange ratio. Later that same day, representatives of Stifel contacted Credit Suisse to discuss the potential use of a floating exchange ratio with a collar to mitigate volatility associated with the stock consideration, settling on a floating exchange ratio with a 10% bilateral collar that both parties believed was acceptable and market.

On June 19, 2021, Mr. Hartner discussed the terms of a potential non-binding offer with the CEO of Company X.

On June 20, 2021, Mr. Fulop provided Messrs. Rockwell and Hartner with a letter, dated as of June 18, 2021, containing the written non-binding indication of Desktop Metal’s interest in acquiring all outstanding shares of ExOne at an aggregate per share purchase price of $27.50, comprised of a cash/stock mix of 29% and 71%, respectively, or $7.83 per share cash component. The non-binding indication of interest assumed a fixed-exchange ratio mechanism but noted that Desktop Metal was willing to consider a +/- 10% collar on the exchange ratio, so that the exchange ratio would fluctuate between 1.4206x and 1.7363x shares of Desktop Metal Class A common stock for each share of ExOne common stock. On June 18, 2021, ExOne’s stock closed at $20.02 per share and Desktop Metal’s stock closed at $12.57.

On June 21, 2021, representatives of Stifel and Mr. Hartner, respectively, had follow up phone calls to clarify the operation of the collar and cash component of the Desktop Metal proposal.

On June 23, 2021, Mr. Hartner contacted the ExOne transaction committee to inform them that Company X was expected to provide a non-binding proposal in writing and that they should expect the offer to be contingent on due diligence with respect to ExOne’s supply chain and revenue growth.

On June 24, 2021, the ExOne transaction committee met to discuss the terms of the Desktop Metal proposal, the expected letter from Company X and other potential strategic alternatives.

Desktop Metal and ExOne amended the May 1, 2021, non-disclosure agreement on June 29, 2021 to include customary standstill provisions.

On June 30, 2021, Company X provided a non-binding proposal to the ExOne Board representing an ‘at-market’ valuation of ExOne, comprised of shares of Company X’s common stock using an exchange ratio to be fixed at time of signing based on the undisturbed trading prices of the two companies during a mutually acceptable, recent period and $70.0 million of cash. Company X’s June 30 proposal also included a request to enter into an exclusivity agreement.

On July 1, 2021, Mr. Hartner texted Mr. Fulop regarding undertaking further due diligence while ExOne reviewed the Desktop Metal proposal. Later that day, representatives of ExOne met via video conference with representatives of Desktop Metal, Stifel and Credit Suisse to present business overviews and hold a preliminary due diligence session. The same parties then met again on July 26, 2021 for another due diligence session.

 

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On July 2, 2021, representatives of Stifel confirmed via phone call with representatives of Company X that its proposal did not include a premium over the current trading price of ExOne common stock. Later that day, the ExOne transaction committee met with representatives of Stifel to discuss the terms of the Company X proposal. The committee determined that the Company X proposal was insufficient to present to the ExOne Board. On the same day, representatives of Stifel and ExOne conducted a diligence/​reverse diligence video conference with representatives of Desktop Metal. The ExOne transaction committee met later that same day and discussed the status of the Desktop Metal proposal, the Company X proposal and the potential to conduct a market check with other parties and the likelihood of another party coming into the process. Representatives of Stifel were authorized by the ExOne transaction committee to reach out to Company X’s financial advisor, which they did on July 2, 2021 and again on July 6, 2021, to discuss terms and conditions found in Company X’s June 30, 2021 non-binding proposal including the need to improve the overall implied transaction price through increases in both the cash and stock components.

On July 3, 2021, Mr. Hartner and Mr. Fulop met in person to discuss status of diligence, the process and timing to undertake a transaction, as well as synergies. No material terms of the transaction were discussed.

On July 5, 2021, Mr. Hartner updated certain members of the ExOne transaction committee on status. Later that day, representatives of Stifel (i) reached out to contacts at Company Y via phone call to inquire of any potential interest in acquiring ExOne and (ii) reached out to contacts at Company X regarding the terms of its proposal and encouraged Company X to make its best offer.

On July 7, 2021, a representative of Company Y informed Stifel via email that Company Y was not interested in moving forward and would not be making a proposal.

On July 8, 2021, Company X provided ExOne with a revised letter of intent reflecting its proposal for $5.96 per share in cash and a fixed exchange ratio with an estimated then current value of $23.84 (consisting of $5.96 cash and $17.88 in stock) based on the closing price of Company X’s closing stock on July 8, 2021, which represented a premium of approximately 26% over ExOne’s closing share price on July 7, 2021.

On July 9, 2021, representatives of Desktop Metal provided a due diligence request list to ExOne and representatives of Stifel provided Desktop Metal with access to the ExOne virtual data room. Company X was not provided with data room access but certain files and other information from the ExOne data room were provided to representatives of Company X that same day.

On July 12, 2021, the ExOne transaction committee met and discussed with representatives of Stifel and certain members of ExOne’s management to consider the Company X revised proposal as compared to the Desktop Metal proposal as well as the potential timing of a transaction, including undertaking due diligence of Desktop Metal. Material terms of the draft merger agreement were also presented and reviewed with the transaction committee. Later that day, ExOne provided its due diligence list to Desktop Metal with respect to ExOne’s reverse due diligence of Desktop Metal and representatives of Stifel informed Company X that its revised offer was rejected (including the request for exclusivity) but that the ExOne Board would be willing to engage further if Company X were to provide a meaningfully higher indication of value.

On July 14, 2021, representatives of McGuireWoods, counsel for ExOne, sent an initial draft of the Merger Agreement to representatives of Latham & Watkins, LLP (“Latham & Watkins”), counsel for Desktop Metal. The initial draft of the Merger Agreement provided for, among other things, customary standstill and termination provisions, including a termination fee in an amount equal to 2.0% of the equity value of ExOne using the value of the consideration at signing and a reverse termination fee equal to 2.5x the company termination fee.

From July 9, 2021 through August 10, 2021, representatives of ExOne and Desktop Metal held numerous telephone and video conferences to discuss various due diligence processes and matters regarding finance, accounting, legal, contracts, regulatory and compliance, operations, intellectual property, information technology and human resources.

Representatives of Stifel had multiple conversations between July 12 and July 15, 2021 with Company X’s financial advisor to discuss terms and conditions found in Company X’s July 8, 2021 non-binding proposal.

 

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On July 15, 2021, representatives of each of McGuireWoods, ExOne, Desktop Metal and Latham & Watkins held a telephone conference to discuss the initial draft Merger Agreement.

On July 16, 2021, representatives of each of Stifel and the financial advisor to Company X met to discuss diligence and other matters relating to valuation.

On July 18, 2021, the CEO of Company X informed Mr. Hartner that Company X was withdrawing from the process.

On July 19, 2021, representatives of Latham & Watkins sent a material issues list to representatives of McGuireWoods for discussion. Later that day, Mr. Hartner and Mr. Fulop discussed details regarding Desktop Metal’s site visit to ExOne’s facility and on July 20, 2021, representatives of ExOne (including the CEO and CFO) and representatives of Desktop Metal (including Mr. Fulop) met for further discussions and then toured the ExOne facility in Pennsylvania later that evening.

On July 22, 2021, Mr. Hartner updated the ExOne transaction committee on the current status of the potential transaction with Desktop Metal, including the site visit, the status of due diligence, as well as the material terms of the proposed transaction and issues raised by Desktop Metal’s counsel.

On July 25 and 29, 2021, and August 5, 8, 9, 10 and 11, 2021, representatives of each of Latham & Watkins and McGuireWoods exchanged revised drafts of the Merger Agreement. During this time, the parties held numerous telephone conferences to discuss the drafts of the Merger Agreement and negotiate, among other things, the circumstances under which ExOne could entertain third-party acquisition offers prior to the closing of the Mergers, the circumstances under which the ExOne Board could change its recommendations to stockholders, the amounts and triggers of the termination fee payable by ExOne and the reverse termination fee payable by Desktop Metal if the Merger Agreement is terminated under certain circumstances, ExOne’s ability to issue new equity awards prior to the closing of the Mergers and the treatment of such equity awards in the Mergers, ExOne’s ability to pay retention awards to personnel of ExOne and its subsidiaries and the aggregate amount of such awards, the circumstances under which Desktop Metal could be required to make divestitures in order to obtain antitrust regulatory approval for the Mergers and the scope of the operating covenants that would be applicable to each of ExOne and Desktop Metal prior to the closing of the Mergers, including the ability of Desktop Metal to continue to pursue certain acquisitions and use its share capital in connection with any such acquisitions.

On July 28, 2021, Mr. Fulop called Mr. Hartner in the evening to discuss the general status of diligence and the timing of negotiations. Material terms of the transaction were not discussed.

Between July 28, 2021 and August 10, 2021, representatives of each of ExOne, Desktop Metal, Latham & Watkins, McGuireWoods, KPMG, Stifel and Credit Suisse met for targeted due diligence sessions to discuss matters relating to finance, information technology, human resources, tax and data privacy. In addition, representatives of Desktop Metal and Latham & Watkins met telephonically during this period to discuss due diligence findings and progress.

On July 29, 2021, Desktop Metal and ExOne entered into a supplement to their May 1, 2020 non-disclosure agreement so that their respective legal and financial advisors could review diligence material without having to disclose competitively sensitive information to their respective business teams.

On July 29, 2021, representatives of Stifel requested that Credit Suisse confirm that the $27.50 per share valuation was still in place.

On August 2, 2021, Mr. Fulop called Mr. Hartner to inform him that with the price of Desktop Metal’s stock having declined nearly 30% since its June 18, 2021 proposal and the price of ExOne’s stock having declined nearly 18% in such period, Desktop Metal could not confirm its commitment to the $27.50 valuation. Mr. Fulop stated that Desktop Metal would present a revised proposal to the ExOne Board. Mr. Hartner explained that the ExOne Board and transaction committee had only authorized proceeding to diligence and negotiations based upon the $27.50 price and that he would instruct Stifel and McGuireWoods to stop working on a transaction with Desktop Metal, which he promptly did after the call.

On August 3, 2021, Mr. Hartner received (via email) from Mr. Fulop a revised offer of a fixed exchange ratio of 1.9981x and $175 million in aggregate cash (approximately $7.82 per share) and a 10% bilateral collar

 

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based upon a $8.82 per share of Desktop Metal Class A common stock. The proposed $25.50 per share price (assuming the closing stock price of Desktop Metal Class A common stock falls within the $7.94 and $9.70 collar) represented a premium of approximately 55% over ExOne’s $16.49 closing share price on August 3, 2021.

On August 4, 2021, the ExOne transaction committee met with representatives of Stifel and members of ExOne’s management team to review Desktop Metal’s updated proposal. At the meeting, ExOne management reported on the status of reverse due diligence efforts on Desktop Metal. Later that same day, representatives of Stifel delivered to Desktop Metal a counter proposal of $8.50 per share in cash (approximately $190 million in aggregate cash), an exchange ratio of 1.9274x per share with a 10% bilateral collar based upon the same $8.82 per share of Desktop Metal Class A common stock so that the exchange ratio would fluctuate between 1.7522x and 2.1416x shares of Desktop Metal Class A common stock based on the average stock price of Desktop Metal Class A common stock at closing, and a termination fee and reverse termination fee each at 2.0% of the equity value of ExOne. The counter proposal increased the cash component by 8.7%. The ExOne transaction committee instructed representatives of each of Stifel and McGuireWoods to negotiate for favorable terms in the definitive transaction agreement. Later that day, Mr. Hartner updated the full ExOne Board.

On August 5, 2021, Mr. Fulop through Credit Suisse agreed to move forward on the terms of ExOne’s August 4, 2021 counterproposal. Later that day and again on August 6, 2021, representatives of each of ExOne, Stifel and McGuireWoods met via video conference with representatives of Desktop Metal, Credit Suisse and Latham &Watkins, and McGuireWoods and Latham & Watkins met separately as well, to negotiate the remaining material terms of the Merger Agreement. Representatives of Stifel indicated that ExOne would be willing to move forward on the revised merger consideration so long as the parties could agree to “middle-of-the-road” deal protections, a low market termination fee, a reverse termination fee triggered by the breach of certain interim covenants relating to antitrust risk and dilution (issuance of share capital), an agreement on retention bonuses and the treatment of certain rollover equity.

On August 6, 2021, at a special meeting of the ExOne Board at which members of senior management and representatives of Stifel were present, the ExOne Board received an update on the status of the proposed transaction with Desktop Metal. Representatives of Stifel discussed Stifel’s preliminary financial analyses of the revised proposal. Management of ExOne provided an update on the status of the draft Merger Agreement and summarized the material terms of the draft Merger Agreement.

On August 6, 2021, KPMG provided Desktop Metal with a final due diligence report on finance, tax, human resources, information technology and trade and customs matters, and on August 11, 2021, Latham & Watkins provided Desktop Metal with a final legal due diligence report. Both reports were reviewed and discussed among representatives of Desktop Metal, KPMG and Latham & Watkins. On August 6, 2021, the Desktop Metal Board held a meeting at which members of Desktop Metal’s management team and representatives of Credit Suisse and Latham & Watkins provided an update on the status of the proposed transaction with ExOne and summarized the material terms of the draft Merger Agreement.

Mr. Fulop and Mr. Hartner conducted phone calls on August 9 and 10, 2021 to resolve outstanding issues relating to the vesting of restricted stock awards, the interim covenants of ExOne relating to contract matters, the interim covenants of Desktop Metal relating to certain acquisitions and use of Desktop Metal’s common stock between signing and closing, and the setting of the outside date at nine months, the terms of which were all reflected in the drafts exchanged by McGuireWoods and Latham & Watkins.

The ExOne Board met for its regularly scheduled quarterly meeting on August 9 and 10, 2021. Prior to the meeting, the ExOne Board was provided with a summary of the material terms of the proposed merger agreement. At the meeting on August 10, 2021, representatives of Stifel reviewed Stifel’s preliminary financial analyses of ExOne and Desktop Metal and the $25.50 per share proposal. At the same meeting, representatives of McGuireWoods reviewed the material terms of the proposed Merger Agreement, with a particular focus on the terms relating to each party’s interim operating covenants, the “no-shop” and “fiduciary out” provisions, efforts to secure antitrust approvals, closing conditions, termination fees and termination rights, and the negotiations over those terms, and reviewed the ExOne Board’s fiduciary duties. ExOne management updated the ExOne Board on the due diligence efforts on Desktop Metal. The ExOne Board was also updated regarding the voting and support agreements that were being negotiated

 

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and would be entered into with Messrs. Rockwell and Hartner relating to the proposed Merger Agreement. The ExOne Board then discussed the strategic rationale for the merger transaction, the anticipated market reaction to a potential deal and the proposed timing of the signing day. Representatives of each of Stifel and McGuireWoods and members of ExOne’s management team responded to questions from the ExOne Board at the meeting.

On August 11, 2021, at a special meeting of the ExOne Board at which members of ExOne’s senior management team and representatives of each of Stifel and McGuireWoods were present, representatives of Stifel reviewed Stifel’s financial analyses of ExOne and Desktop Metal and Desktop Metal’s $25.50 per share proposal. At the request of the ExOne Board, representatives of Stifel rendered its oral opinion, confirmed by delivery of a written opinion dated August 11, 2021, to the effect that, as of such date and based on and subject to various assumptions made, procedures followed, matters considered, and limitations and qualifications on the review undertaken in such opinion, the per share merger consideration to be received by the holders of ExOne common stock (other than treasury shares and shares held by Desktop Metal or the Merger Subs) pursuant to the Merger Agreement was fair, from a financial point of view, to such holders. The opinion of Stifel is more fully described in the section titled “The Mergers —  Opinion of ExOne’s Financial Advisor.” Representatives of McGuireWoods updated the ExOne Board on changes to the Merger Agreement since the August 10, 2021 meeting and representatives of each of Stifel and McGuireWoods and members of ExOne’s management team responded to questions from the ExOne Board. For further information concerning the factors considered by the ExOne Board in reaching its decision to approve the Merger Agreement, the Mergers and the other transactions contemplated by the Merger Agreement, see “The Mergers — ExOne’s Reasons for the Mergers; Recommendation of the ExOne Board.”

Following consideration of the matters discussed during the course of the August 11, 2021 ExOne Board meeting, the ExOne Board (i) determined that it was fair to, advisable for and in the best interests of ExOne and its stockholders for ExOne to enter into the Merger Agreement and effect the Mergers and other transactions contemplated thereby, (ii) authorized, approved and adopted the execution, delivery and performance of the Merger Agreement and the transactions contemplated thereby on behalf of ExOne, and (iii) directed that the ExOne Merger Proposal be submitted to the ExOne stockholders for consideration, (iv) recommended that the ExOne stockholders vote in favor of the ExOne Merger Proposal and (v)  approved an amendment to the exclusive forum provision of the ExOne bylaws.

On August 11, 2021, the Desktop Metal Board held a meeting at which members of Desktop Metal’s management team and representatives of Credit Suisse and Latham & Watkins were present to authorize and approve the final terms of the Merger Agreement.

Later that day, following their respective board meetings, Desktop Metal and ExOne executed the Merger Agreement. Later that afternoon, following the close of market trading at 4:00 p.m. Eastern Time, Desktop Metal and ExOne issued a joint press release announcing the parties’ execution of the Merger Agreement. The closing price of ExOne common stock was $17.28 per share on August 11, 2021.

ExOne’s Reasons for the Mergers; Recommendation of the ExOne Board

The ExOne Board has (i) determined that it is fair to, advisable and in the best interests of ExOne and its stockholders for ExOne to enter into the Merger Agreement and effect the Mergers and other transactions contemplated thereby, (ii) authorized, approved and adopted the execution, delivery and performance of the Merger Agreement and the transactions contemplated thereby (including the Mergers) on behalf of ExOne, (iii) directed that the Merger Proposal, the Advisory Executive Compensation Proposal and the Adjournment Proposal be submitted to the ExOne stockholders for consideration and (iv) recommended that ExOne stockholders vote in favor of such proposals.

Accordingly, the ExOne Board recommends that ExOne stockholders vote “FOR” the Merger Proposal, “FOR” the Advisory Executive Compensation Proposal and “FOR” the Adjournment Proposal.

As further described above in the section titled “— Background of the Mergers,” in evaluating the Mergers, the ExOne Board consulted with ExOne’s management, as well as with ExOne’s outside legal and financial advisors, and in reaching its decision, the ExOne Board considered various factors, including, among other things, the following (not necessarily in order of relative importance):

 

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Fractured 3D Printing and Additive Manufacturing market requires scale to compete.   The ExOne Board considered the fact that scale of business and operations is and would be required for future success in the 3D printing and additive manufacturing market, and that ExOne either undertaking significant acquisition(s) or being acquired would be needed to optimize stockholder value.

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The ExOne Board further believes that:

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the combined entity’s increased scale will improve access to global capital markets to assist the combined entity’s future growth efforts; and

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the additional scale may also be leveraged to drive down costs across systems and materials as well as drive fixed overhead absorption to support further growth.

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