BOSTON–(BUSINESS WIRE)–Desktop Metal, Inc. (NYSE: DM) today announced the pricing of its offering of $100,000,000 aggregate principal amount of 6.0% convertible senior notes due 2027 in a private offering to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The issuance and sale of the notes are scheduled to settle on May 13, 2022, subject to customary closing conditions. Desktop Metal also granted the initial purchasers of the notes an option to purchase, for settlement within a period of 13 days from, and including, the date the notes are first issued, up to an additional $15,000,000 principal amount of notes.
The notes will be senior, unsecured obligations of Desktop Metal and will accrue interest at a rate of 6.0% per annum, payable semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2022. The notes will mature on May 15, 2027, unless earlier repurchased, redeemed or converted. Before November 15, 2026, noteholders will have the right to convert their notes in certain circumstances and during specified periods. From and after November 15, 2026, noteholders may convert their notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. Desktop Metal will settle conversions by paying or delivering cash and, if applicable, shares of its Class A common stock, par value $0.0001 per share (“common stock”). The initial conversion rate is 601.5038 shares of common stock per $1,000 principal amount of notes, which represents an initial conversion price of approximately $1.66 per share of common stock. The initial conversion price represents a premium of approximately 25% over the last reported sale price of $1.33 per share of Desktop Metal’s common stock on May 10, 2022. The conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events.
The notes will be redeemable, in whole or in part (subject to certain limitations), for cash at Desktop Metal’s option at any time, and from time to time, on or after May 20, 2025 and on or before the 40th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of Desktop Metal’s common stock exceeds 130% of the conversion price for a specified period of time and certain liquidity conditions have been satisfied. The redemption price will be equal to the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
If a “fundamental change” (as defined in the indenture for the notes) occurs, then, subject to a limited exception, noteholders may require Desktop Metal to repurchase their notes for cash. The repurchase price will be equal to the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date.
Desktop Metal estimates that the net proceeds from the offering will be approximately $96.7 million (or approximately $111.3 million if the initial purchasers fully exercise their option to purchase additional notes), after deducting the initial purchasers’ discounts and commissions and estimated offering expenses. Desktop Metal intends to use the net proceeds from the offering to fund working capital expenditures and for other general corporate purposes.
