Desktop Metal Announces Second Quarter 2021 Financial Results

No Offer or Solicitation:

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

Additional Information and Where to Find It:

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

Participants in the Solicitation:

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

DESKTOP METAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except share and per share amounts)

	June 30,		December 31,
	2021		2020
Assets
Current assets:
Cash and cash equivalents	$	188,199	$	483,525
Short‑term investments		326,318		111,867
Accounts receivable		13,441		6,516
Inventory		25,407		9,708
Prepaid expenses and other current assets		7,078		976
Total current assets		560,443		612,592
Restricted cash		676		612
Property and equipment, net		13,228		12,160
Capitalized software, net		226		312
Goodwill		251,060		2,252
Intangible assets, net		178,860		9,102
Other noncurrent assets		12,210		4,879
Total Assets	$	1,016,703	$	641,909
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	9,214	$	7,591
Customer deposits		2,829		1,480
Current portion of lease liability		1,983		868
Accrued expenses and other current liabilities		20,968		7,565
Deferred revenue		4,814		3,004
Current portion of contingent consideration		1,429		—
Current portion of long‑term debt, net of deferred financing costs		311		9,991
Total current liabilities		41,548		30,499
Warrant liability		—		93,328
Subscription agreement		474		—
Contingent consideration, net of current portion		4,655		—
Lease liability, net of current portion		3,959		2,157
Deferred tax liability		8,723		—
Total liabilities		59,359		125,984
Commitments and Contingences (Note 15)
Stockholders’ Equity
Preferred Stock, $0.0001 par value—authorized, 50,000,000 shares; no shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively		—		—
Common Stock, $0.0001 par value—500,000,000 shares authorized; 259,712,899 and 226,756,733 shares issued at June 30, 2021 and December 31, 2020, respectively, 259,545,731 and 224,626,597 shares outstanding at June 30, 2021 and December 31, 2020, respectively		26		23
Additional paid‑in capital		1,387,779		844,188
Accumulated deficit		(430,565)		(328,277)
Accumulated other comprehensive income (loss)		104		(9)
Total Stockholders’ Equity		957,344		515,925
Total Liabilities and Stockholders’ Equity	$	1,016,703	$	641,909

DESKTOP METAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per share amounts)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Revenues
Products	$	17,560	$	1,531	$	27,871	$	4,225
Services		1,417		658		2,419		1,349
Total revenues		18,977		2,189		30,290		5,574
Cost of sales
Products		15,490		9,372		25,977		14,413
Services		1,115		1,106		2,528		2,269
Total cost of sales		16,605		10,478		28,505		16,682
Gross profit/(loss)		2,372		(8,289)		1,785		(11,108)
Operating expenses
Research and development		15,651		9,827		26,509		22,167
Sales and marketing		10,894		2,958		16,343		7,452
General and administrative		13,142		2,964		26,988		5,589
In-process research and development assets acquired		10,400		—		10,400		—
Total operating expenses		50,087		15,749		80,240		35,208
Loss from operations		(47,715)		(24,038)		(78,455)		(46,316)
Change in fair value of warrant liability		—		—		(56,576)		—
Interest expense		(51)		(51)		(125)		(155)
Interest and other income, net		268		323		630		901
Loss before income taxes		(47,498)		(23,766)		(134,526)		(45,570)
Income tax benefit		4,318		—		32,238		—
Net loss	$	(43,180)	$	(23,766)	$	(102,288)	$	(45,570)
Net loss per share—basic and diluted	$	(0.17)	$	(0.15)	$	(0.41)	$	(0.29)
Weighted average shares outstanding, basic and diluted		255,097,905		158,124,160		246,717,400		157,186,939

DESKTOP METAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) (in thousands)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Net loss		(43,180)		(23,766)	$	(102,288)	$	(45,570)
Other comprehensive (loss) income, net of taxes:
Unrealized gain (loss) on available-for-sale marketable securities, net		(5)		132		(4)		(27)
Foreign currency translation adjustment		130		—		117		—
Total comprehensive loss, net of taxes of $0		(43,055)		(23,634)	$	(102,175)	$	(45,597)

DESKTOP METAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) (in thousands, except share amounts)

	Three Months Ended June 30, 2021
								Accumulated
								Other
	Common Stock			Additional				Comprehensive		Total
	Voting			Paid‑in		Accumulated		(Loss)		Stockholders’
	Shares	Amount		Capital		Deficit		Income		Equity
BALANCE—April 1, 2021	252,436,919	$	25	$	1,326,945	$	(387,385)	$	(21)	$	939,564
Exercise of Common Stock options	2,683,506		—		3,485		—		—		3,485
Vesting of restricted Common Stock	56,015		—		—		—		—		—
Vesting of restricted stock units	28,656		—		—		—		—		—
Repurchase of shares for employee tax withholdings	(6,931)		—		(91)		—		—		(91)
Issuance of Common Stock for acquisitions	4,347,566		1		53,441		—		—		53,442
Stock‑based compensation expense	—		—		3,999		—		—		3,999
Net loss	—		—		—		(43,180)		—		(43,180)
Other comprehensive income (loss)	—		—		—		—		125		125
BALANCE—June 30, 2021	259,545,731	$	26	$	1,387,779	$	(430,565)	$	104	$	957,344


	Six Months Ended June 30, 2021
								Accumulated
								Other
	Common Stock			Additional				Comprehensive		Total
	Voting			Paid‑in		Accumulated		(Loss)		Stockholders’
	Shares	Amount		Capital		Deficit		Income		Equity
BALANCE—January 1, 2021	224,626,597	$	23	$	844,188	$	(328,277)	$	(9)	$	515,925
Exercise of Common Stock options	2,846,734		—		3,665		—		—		3,665
Vesting of restricted Common Stock	112,030		—		—		—		—		—
Vesting of restricted stock units	43,921		—		—		—		—		—
Repurchase of shares for employee tax withholdings	(9,172)		—		(145)		—		—		(145)
Issuance of Common Stock for acquisitions	9,383,708		1		213,288		—		—		213,289
Stock‑based compensation expense	—		—		6,216		—		—		6,216
Vesting of Trine Founder shares	1,850,938		—		—		—		—		—
Exercise of warrants	20,690,975		2		320,567		—		—		320,569
Net loss	—		—		—		(102,288)		—		(102,288)
Other comprehensive income (loss)	—		—		—		—		113		113
BALANCE—June 30, 2021	259,545,731	$	26	$	1,387,779	$	(430,565)	$	104	$	957,344


	Three Months Ended June 30, 2020
											Accumulated
											Other
	Legacy Convertible			Common Stock			Additional				Comprehensive		Total
	Preferred Stock			Voting			Paid‑in		Accumulated		(Loss)		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Deficit		Income		Equity
BALANCE—April 1, 2020	100,038,109	$	436,533	26,813,113	$	3	$	16,722	$	(316,066)	$	(84)	$	(299,425)
Retroactive application of recapitalization (Note 1)	(100,038,109)		(436,533)	130,138,012		13		438,037		—		—		438,050
Adjusted balance, beginning of period	—		—	156,951,125		16		454,759		(316,066)		(84)		138,625
Exercise of Common Stock options	—		—	28,173		—		4		—		—		4
Vesting of restricted Common Stock	—		—	1,750,360		—		2		—		—		2
Stock‑based compensation expense	—		—	—		—		1,074		—		—		1,074
Common Stock warrants issued	—		—	—		—		87		—		—		87
Net loss	—		—	—		—		—		(23,766)		—		(23,766)
Other comprehensive income (loss)	—		—	—		—		—		—		132		132
BALANCE— June 30, 2020	—	$	—	158,729,658	$	16	$	455,926	$	(339,832)	$	48	$	116,158


	Six Months Ended June 30, 2020
											Accumulated
											Other
	Legacy Convertible			Common Stock			Additional				Comprehensive		Total
	Preferred Stock			Voting			Paid‑in		Accumulated		(Loss)		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Deficit		Income		Equity
BALANCE—January 1, 2020	100,038,109	$	436,533	26,813,113	$	3	$	16,722	$	(294,262)	$	75	$	(277,462)
Retroactive application of recapitalization (Note 1)	(100,038,109)		(436,533)	128,100,821		13		436,520		—		—		436,533
Adjusted balance, beginning of period	—		—	154,913,934		16		453,242		(294,262)		75		159,071
Exercise of Common Stock options	—		—	314,809		—		136		—		—		136
Vesting of restricted Common Stock	—		—	3,500,915		—		4		—		—		4
Stock‑based compensation expense	—		—	—		—		2,333		—		—		2,333
Common Stock warrants issued	—		—	—		—		211		—		—		211
Net loss	—		—	—		—		—		(45,570)		—		(45,570)
Other comprehensive income (loss)	—		—	—		—		—		—		(27)		(27)
BALANCE—June 30, 2020	—	$	—	158,729,658	$	16	$	455,926	$	(339,832)	$	48	$	116,158

DESKTOP METAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands)

	Six Months Ended June 30,
	2021		2020
Cash flows from operating activities:
Net loss	$	(102,288)	$	(45,570)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		9,524		4,475
Stock‑based compensation		6,216		2,333
Change in fair value of warrant liability		56,576		—
Change in fair value of subscription agreement		474		—
Expense related to Common Stock warrants issued		—		43
Amortization (accretion) of discount on investments		1,304		—
Amortization of debt financing cost		9		10
Provision for bad debt		164		285
Acquired in-process research and development		10,400		—
(Gain) loss on disposal of property and equipment		(7)		10
Gain on investment, related to Make Composites, Inc.		—		120
Net increase in accrued interest related to marketable securities		(1,062)		—
Net unrealized (gain) on marketable securities		32		—
Deferred tax benefit		(32,354)		—
Changes in operating assets and liabilities:
Accounts receivable		(3,584)		1,562
Inventory		(6,635)		(1,378)
Prepaid expenses and other current assets		(3,692)		1,033
Other assets		(719)		—
Accounts payable		(278)		(1,178)
Accrued expenses and other current liabilities		(5,362)		(1,074)
Customer deposits		(1,372)		(57)
Deferred revenue		693		(756)
Change in right of use assets and lease liabilities, net		(92)		(162)
Net cash used in operating activities		(72,053)		(40,304)
Cash flows from investing activities:
Purchases of property and equipment		(1,266)		(1,819)
Purchase of other investments		(3,710)		—
Purchase of marketable securities		(281,438)		(24,142)
Proceeds from sales and maturities of marketable securities		66,741		74,616
Cash paid to acquire in-process research and development		(6,050)		—
Cash paid for acquisitions, net of cash acquired		(161,837)		—
Net cash (used in) provided by investing activities		(387,560)		48,655
Cash flows from financing activities:
Proceeds from the exercise of stock options		3,665		135
Proceeds from the exercise of stock warrants		170,665		—
Proceeds from PPP loan		—		5,379
Repayment of PPP loan		—		(5,379)
Repayment of term loan		(10,000)		—
Net cash provided by financing activities		164,330		135
Net (decrease) increase in cash, cash equivalents, and restricted cash		(295,283)		8,486
Effect of exchange rate changes		21		—
Cash and cash equivalents at beginning of period		483,525		66,161
Restricted cash at beginning of period		612		612
Cash and cash equivalents at end of period	$	188,199	$	74,647
Restricted cash at end of period	$	676	$	612

Supplemental cash flow information:
Interest paid	$	125		182
Taxes paid	$	150		—

Non‑cash investing and financing activities:
Net unrealized loss on investments	$	4	$	—
Exercise of private placement warrants	$	149,904	$	—
Common Stock issued for acquisitions	$	213,289	$	—
Cash held back in acquisitions	$	50	$	—
Additions to right of use assets and lease liabilities	$	852	$	—
Purchase of property and equipment included in accounts payable	$	—	$	—
Purchase of property and equipment included in accrued expense	$	33	$	139
Tax liabilities related to withholdings on Common Stock	$	145	$	—
Contingent consideration in connection with acquisitions	$	6	$	—

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