Group 1 - Nano Dimension Ltd. is engaged in a contentious M&A transaction to acquire Desktop Metal, Inc. for $5.50 per share, subject to adjustments [1] - Desktop Metal's stock price increased significantly, trading at $4.43 pre-market after a 99% surge the previous day [1] - Bram de Haas, with 15 years of investing experience and a background in managing a Euro hedge fund, is involved in the investment process, leveraging his risk management skills [1]

Core Viewpoint - Nano Dimension Ltd. plans to release its 2024 Annual Report in April 2025, which will include the fourth quarter and full year results for 2024, pending a court decision related to a lawsuit with Desktop Metal [2][3]. Group 1: Annual Report Details - The 2024 Annual Report will be filed later than usual due to the pending lawsuit's potential impact on material disclosures and the company's business outlook [3]. - The report is expected to be released before the required filing date of April 30, 2025 [3]. Group 2: Company Overview - Nano Dimension provides digital manufacturing solutions across various sectors, including aerospace and defense, advanced automotive, high-tech industrial, specialty medical technology, and R&D and academia [4]. - The company offers technologies that enable prototyping and high-mix-low-volume production, emphasizing IP security and sustainable fabrication methods [5].

Financial Performance - For the three months ended September 30, 2024, the company recognized revenues of $36.4 million, while for the nine months, revenues totaled $115.9 million[154]. - The company incurred net losses of $35.4 million for the three months and $191.0 million for the nine months ended September 30, 2024[154]. - Total revenue for the three months ended September 30, 2024, was $36.4 million, a decrease of $6.4 million, or 15%, compared to $42.8 million in the same period of 2023[177]. - Total revenue for the nine months ended September 30, 2024, was $115.9 million, a decrease of $21.4 million, or 16%, compared to $137.4 million in 2023[193]. - Gross profit for the nine months ended September 30, 2024, was a loss of $31.2 million, compared to a profit of $6.6 million in the same period of 2023, reflecting a decrease of $37.8 million[197]. - GAAP net loss for the three months ended September 30, 2024, was $35.4 million, compared to a net loss of $46.4 million for the same period in 2023[226]. - The company incurred a net loss of $191.0 million for the nine months ended September 30, 2024, compared to a net loss of $148.7 million for the same period in 2023[227]. Cost Management and Initiatives - The 2022 Initiative resulted in $20.7 million in cost savings in the second half of 2022 and achieved $100 million in annualized cost savings in 2023[161]. - The company anticipates at least $50 million in aggregate annualized cost savings from the 2024 Initiative, which includes a global workforce reduction of approximately 20%[163]. - Restructuring charges related to the 2024 Initiative were $1.8 million for the three months and $3.9 million for the nine months ended September 30, 2024[164]. - The company expects total pre-tax restructuring charges of $82.1 million to $82.5 million under the Photopolymer Initiative, including $80.3 million in incremental depreciation and amortization[166]. Revenue Breakdown - Products revenue decreased by $5.6 million, or 15%, to $31.9 million, primarily due to a reduction in units shipped driven by macroeconomic conditions[178]. - Services revenue also decreased by $0.8 million, or 15%, to $4.5 million during the same period[178]. - Products revenue for the nine months ended September 30, 2024, decreased by $22.6 million, or 19%, to $98.9 million, while services revenue increased by $1.2 million, or 8%, to $17.0 million[193]. - Revenue from the Americas decreased by 14% to $75.8 million, while EMEA and APAC revenues fell by 22% and 10%, respectively[194]. Operating Expenses - Total cost of sales for the three months ended September 30, 2024, was $33.2 million, a decrease of $7.6 million, or 19%, compared to $40.8 million in 2023[181]. - Total cost of sales increased by 13% to $147.2 million, driven by incremental amortization related to the Photopolymer Initiative[195]. - Research and development expenses decreased by $9.0 million, or 44%, to $11.5 million for the three months ended September 30, 2024, compared to $20.5 million in 2023[186]. - Sales and marketing expenses increased by 57% to $45.0 million, driven by amortization related to the Photopolymer Initiative[201]. - General and administrative expenses increased by $7.8 million, or 82%, to $17.3 million for the three months ended September 30, 2024, compared to $9.5 million in 2023[188]. - General and administrative expenses rose by 18% to $59.7 million, influenced by incremental amortization and depreciation from the Photopolymer Initiative[202]. Cash Flow and Liquidity - Cash used in operating activities during the nine months ended September 30, 2024, was $53.4 million, with cash and cash equivalents at $30.6 million and current liabilities at $61.2 million[154]. - Cash and cash equivalents as of September 30, 2024, totaled $30.6 million, primarily invested in money market funds and fixed income instruments[228]. - The company has lease payment obligations of $26.6 million as of September 30, 2024, with $7.9 million payable within the next 12 months[231]. - A multi-draw term loan credit facility of up to $20.0 million is available to the company starting January 7, 2025, subject to certain conditions[229]. - Net cash used in operating activities was $53.4 million for the nine months ended September 30, 2024, consisting of $191.0 million in net losses, adjusted for non-cash items[238]. Legal Matters - Desktop Metal faced multiple legal challenges, including a dismissed Consolidated Complaint related to alleged securities violations, with the court ruling in favor of the defendants on September 21, 2023[259]. - A new complaint was filed on August 12, 2024, alleging omissions in the Preliminary Proxy Statement regarding the Nano Merger, but was voluntarily dismissed by the plaintiff on August 16, 2024[260]. - Additional complaints were filed in September 2024, alleging negligent misrepresentation and disclosure deficiencies in the Definitive Proxy Statement[260]. - Two stockholders filed actions in Delaware seeking records related to the Nano Merger under Section 220 of the Delaware General Corporations Code[261]. - Desktop Metal believes all complaints are without merit and intends to defend against them vigorously[261].

Group 1 - Monteverde & Associates PC is investigating Desktop Metal, Inc. regarding its proposed merger with Nano Dimension Ltd, where Desktop Metal shareholders will receive $5.50 in cash per share [1] - The shareholder vote for the merger is scheduled for October 2, 2024 [2] - Monteverde & Associates PC is recognized as a Top 50 Firm in the 2018-2022 ISS Securities Class Action Services Report, indicating its successful track record in recovering money for shareholders [1][2] Group 2 - The firm operates from the Empire State Building in New York City and has a national presence in class action securities litigation [2] - Monteverde & Associates PC emphasizes that no company, director, or officer is above the law, reinforcing its commitment to shareholder rights [3]

Financial Data and Key Metrics Changes - Consolidated revenue for Q2 2024 was $38.9 million, down from $53.3 million in Q2 2023, primarily due to weaker hardware sales [33] - Non-GAAP gross margins decreased to 29.2% in Q2 2024 from 31% in the prior year, reflecting lower revenue and cost absorption [34] - Non-GAAP operating expenses were $27.0 million in Q2 2024, reduced by $1.6 million sequentially and by $7.7 million year-over-year, showing improvements of 5.6% and 22.2% respectively [35] - Adjusted EBITDA for Q2 2024 was negative $13.2 million, an improvement of $1.8 million compared to Q2 2023 [35] - The company closed Q2 with $46.7 million in cash, with elevated outflows due to deal-related expenses [36] Business Line Data and Key Metrics Changes - Weaker hardware sales were the main contributor to the decline in revenue, while consumables and services remained roughly flat year-on-year [33] Market Data and Key Metrics Changes - The additive manufacturing industry has faced significant challenges, with many public companies in the sector experiencing declines in value and profitability [14][15] - Four publicly traded companies in the additive manufacturing space have failed or been delisted in the last two quarters due to deteriorating market conditions [15] Company Strategy and Development Direction - The proposed merger with Nano Dimension is seen as a strategic move to strengthen the company's competitive position and create long-term shareholder value [18] - The merger aims to establish a leader in the additive manufacturing space by combining complementary product portfolios and technologies [19] - The company believes that the merger will accelerate the industry's transition into mass production and create a well-capitalized entity to support customers [21][22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging business environment due to rising interest rates and slowing capital expenditure budgets, which have pressured the financial position [12] - There is a belief that remaining a standalone company with a constrained balance sheet is not a viable long-term strategy [12] - Management expressed confidence that the merger with Nano Dimension represents the best option for stakeholders amid a difficult market [29] Other Important Information - The company has reduced non-GAAP operating expenses by 48% since Q1 2022, while also improving gross margins [10] - The company is no longer providing guidance for the remainder of 2024 due to the pending acquisition [36] Q&A Session Summary Question: Challenges in closing deals - Management noted that customers were hesitant to engage due to the company's financial position, impacting deal closures [38] Question: Cash burn and future focus - Elevated cash burn in Q2 was partly due to deal-related expenses, and there will be an increased focus on managing cash burn in the upcoming quarters [40]

Core Points - Datametrex AI Limited has announced an extension for its non-brokered private placement financing, allowing it to raise up to $1,500,000 through the issuance of 75,000,000 units, with a new deadline of August 29, 2024 [1][2] - Each unit consists of one common share and one warrant, with the warrant allowing the purchase of an additional common share at an exercise price of CAD $0.05 for two years [1] - The company successfully closed the first tranche of the private placement, raising $645,000 by issuing 32,275,000 units, and the second tranche raised $311,409.29 through 15,570,465 units at a price of $0.02 per unit [10][11] Financial Details - The private placement may incur finders' fees of up to 8% in cash and 8% in broker warrants based on total proceeds raised [2] - The net proceeds from the private placement will be allocated for general corporate and working capital purposes [2] Company Overview - Datametrex is recognized as a leader in technology solutions, artificial intelligence, healthcare, and mobile gaming, focusing on enhancing operational efficiencies and business outcomes [4] - The company emphasizes its commitment to innovation and aims to set new standards for business protocols through advanced technology [4]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Presents unaudited condensed consolidated financial statements for Q2 2024 and 2023, covering balance sheets, operations, cash flows, and detailed accounting notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202024%20and%20December%2031%2C%202023) Balance Sheets show significant decreases in total assets and stockholders' equity from December 2023 to June 2024, primarily due to reduced cash and intangible assets Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2024 (in thousands) | December 31, 2023 (in thousands) | Change (in thousands) | Change (%) | | :-------------------------------- | :--------------------------- | :----------------------------- | :-------------------- | :--------- | | Cash and cash equivalents | $45,855 | $83,845 | $(37,990) | -45.3% | | Total current assets | $169,855 | $216,137 | $(46,282) | -21.4% | | Intangible assets, net | $80,390 | $168,259 | $(87,869) | -52.2% | | Total Assets | $306,492 | $458,001 | $(151,509) | -33.1% | | Total current liabilities | $65,451 | $70,104 | $(4,653) | -6.6% | | Total liabilities | $206,651 | $216,349 | $(9,698) | -4.5% | | Total Stockholders' Equity | $99,841 | $241,652 | $(141,811) | -58.7% | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20for%20the%20three%20months%20and%20six%20months%20ended%20June%2030%2C%202024%20and%202023) Statements of Operations show increased net loss for Q2 and H1 2024, due to decreased revenues and higher cost of sales, resulting in negative gross profit Condensed Consolidated Statements of Operations (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Change (3M) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | Change (6M) | | :-------------------- | :------------------------------- | :------------------------------- | :---------- | :----------------------------- | :----------------------------- | :---------- | | Total revenues | $38,932 | $53,286 | -27.0% | $79,532 | $94,602 | -16.0% | | Total cost of sales | $71,121 | $47,197 | +50.7% | $113,927 | $89,877 | +26.8% | | Gross profit (loss) | $(32,189) | $6,089 | -629.0% | $(34,395) | $4,725 | -828.0% | | Loss from operations | $(101,327) | $(48,518) | +108.8% | $(150,716) | $(100,834) | +49.5% | | Net loss | $(103,440) | $(49,728) | +108.0% | $(155,538) | $(102,369) | +52.0% | | Net loss per share | $(3.13) | $(1.55) | +101.9% | $(4.73) | $(3.20) | +47.8% | [Condensed Consolidated Statements of Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202024%20and%202023) Statements of Comprehensive Loss reflect increased total comprehensive loss for Q2 and H1 2024, due to higher net loss and foreign currency translation adjustments Condensed Consolidated Statements of Comprehensive Loss (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(103,440) | $(49,728) | $(155,538) | $(102,369) | | Foreign currency translation adjustment | $(500) | $(1,316) | $(1,267) | $233 | | Total comprehensive loss | $(103,940) | $(50,896) | $(157,256) | $(101,799) | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202024%20and%202023) Statements of Stockholders' Equity show a significant decrease from January 1 to June 30, 2024, primarily due to net loss, partially offset by stock-based compensation and additional paid-in capital Condensed Consolidated Statements of Stockholders' Equity (in thousands) | Metric (in thousands) | January 1, 2024 | June 30, 2024 | | :-------------------- | :-------------- | :------------ | | Total Stockholders' Equity | $241,652 | $99,841 | | Net loss (6 months) | | $(155,538) | | Stock-based compensation expense (6 months) | | $13,830 | | Other comprehensive loss (6 months) | | $(1,718) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20six%20months%20ended%20June%2030%2C%202024%20and%202023) Statements of Cash Flows indicate a net decrease in cash, cash equivalents, and restricted cash for H1 2024, primarily due to cash used in operating activities Condensed Consolidated Statements of Cash Flows (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(37,432) | $(70,494) | | Net cash provided by investing activities | $1,013 | $110,883 | | Net cash (used in) provided by financing activities | $(534) | $721 | | Net increase (decrease) in cash, cash equivalents, and restricted cash | $(38,008) | $41,183 | | Cash, cash equivalents, and restricted cash at end of period | $46,682 | $123,096 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes explain significant accounting policies, revenue, debt, and restructuring charges, highlighting the Nano Dimension merger, reverse stock split, and ongoing initiatives - Desktop Metal, Inc., founded in **2015**, focuses on 3D printing solutions for manufacturing, offering hardware, software, materials, and services[20](index=20&type=chunk) - On **July 2, 2024**, the Company entered a Merger Agreement with Nano Dimension Ltd., where Desktop Metal will become an indirect wholly owned subsidiary of Nano, and its Common Stock will be delisted[23](index=23&type=chunk) - On **June 11, 2024**, the Company effected a **1-for-10 reverse stock split** of its common stock, retroactively adjusting all shares and per-share data[26](index=26&type=chunk) - The Company has incurred net losses since inception, with an accumulated deficit of **$1.8 billion** as of **June 30, 2024**, raising substantial doubt about its ability to continue as a going concern[31](index=31&type=chunk)[34](index=34&type=chunk) - The Company initiated the 2024 Initiative, including a **~20% global workforce reduction**, facility consolidation, and product rationalization, anticipating at least **$50 million in annualized cost savings**[129](index=129&type=chunk) - A Photopolymer Initiative, approved **March 14, 2024**, to review strategic alternatives, led to **$68.3 million** and **$80.3 million** in incremental depreciation and amortization as restructuring charges for Q2 and H1 2024[131](index=131&type=chunk) Restructuring Charges (in thousands) | Category | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :----------------------------- | | Cost of sales | $37,852 | $44,613 | | Research and development | $4,497 | $7,003 | | Sales and marketing | $19,132 | $22,508 | | General and administrative | $9,567 | $11,101 | | Total restructuring charges | $71,048 | $85,225 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and results, including business overview, recent developments (Nano Dimension merger, restructuring), key performance factors, financial comparisons, non-GAAP measures, liquidity, and going concern uncertainty [Business Overview](index=31&type=section&id=Business%20Overview) Desktop Metal pioneers Additive Manufacturing 2.0 for volume production of end-use parts, offering comprehensive 3D printing solutions across hardware, software, materials, and services, with continuous R&D investment - Desktop Metal focuses on Additive Manufacturing 2.0 for volume production of end-use parts, offering integrated solutions across hardware, software, materials, and services[136](index=136&type=chunk) - The company has invested significantly in R&D, holding over **800 patents or pending patent applications**, to develop easy-to-use, economic, and scalable additive manufacturing solutions[137](index=137&type=chunk) - Solutions offer advantages like breakthrough print speeds, competitive part costs, accessible workflows, turnkey solutions, and support for an extensive library of qualified materials, generating recurring revenue[138](index=138&type=chunk) [Operating Results](index=32&type=section&id=Operating%20Results) For Q2 and H1 2024, Desktop Metal reported revenues of **$38.9 million** and **$79.5 million**, with net losses of **$103.4 million** and **$155.5 million**, using **$37.4 million** cash from operations and ending with **$46.1 million** in cash, cash equivalents, and short-term investments Operating Results (in millions) | Metric (in millions) | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | | :------------------- | :------------------------------- | :----------------------------- | | Revenues | $38.9 | $79.5 | | Net losses | $103.4 | $155.5 | | Cash used in operating activities (6 months) | | $37.4 | | Cash, cash equivalents, and short-term investments (as of June 30, 2024) | | $46.1 | [Recent Developments](index=32&type=section&id=Recent%20Developments) Recent developments include a proposed merger with Nano Dimension, a **1-for-10 reverse stock split**, ongoing strategic integration and cost optimization initiatives, and the termination of the Stratasys merger in September 2023 - Proposed Merger with Nano Dimension Ltd.: On **July 2, 2024**, Desktop Metal entered an agreement to merge with Nano Dimension, becoming an indirect wholly owned subsidiary, with its stock to be delisted[143](index=143&type=chunk) - Reverse Stock Split: A **1-for-10 reverse stock split** was effected on **June 11, 2024**, retroactively adjusting all share and per-share data[145](index=145&type=chunk) - Strategic Integration and Cost Optimization Initiatives: The 2022 Initiative achieved **$100 million in annualized cost savings** by **December 31, 2023**; the 2024 Initiative includes a **~20% global workforce reduction** aiming for at least **$50 million in annualized cost savings**[148](index=148&type=chunk)[150](index=150&type=chunk) - Photopolymer Initiative: Approved on **March 14, 2024**, this plan reviews strategic alternatives for the photopolymer business, resulting in significant incremental depreciation and amortization charges[152](index=152&type=chunk) - Termination of Merger with Stratasys Ltd.: The merger agreement with Stratasys was terminated on **September 28, 2023**, with Stratasys paying Desktop Metal a **$10.0 million reimbursement fee**[154](index=154&type=chunk) [Key Factors Affecting Operating Results](index=34&type=section&id=Key%20Factors%20Affecting%20Operating%20Results) Operating results are influenced by additive manufacturing adoption, pricing, product costs, innovation investment, and acquisition integration; macroeconomic conditions also impact customer capital investment and purchasing decisions, leading to extended sales cycles and pricing pressure - Performance depends on the adoption of additive manufacturing solutions, with financial results fluctuating as businesses shift from conventional to additive manufacturing[156](index=156&type=chunk) - Pricing, product cost, and margins are critical, with financial performance influenced by product mix and the ability to introduce cost-effective solutions amidst price competition[157](index=157&type=chunk) - Continued investment in R&D and innovation is essential to meet evolving customer requirements and maintain leadership in the additive manufacturing industry, though it may impact near-term profitability[158](index=158&type=chunk) - Macroeconomic conditions, such as inflation and rising interest rates, are causing customers to delay purchase decisions and reduce capital expenditures, negatively impacting revenue[162](index=162&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Details financial performance for Q2 and H1 2024 vs. 2023, showing significant revenue decrease due to macroeconomic conditions, increased cost of sales from Photopolymer Initiative amortization, leading to negative gross profit, and varied operating expense changes [Comparison of the three months ended June 30, 2024, and June 30, 2023](index=35&type=section&id=Comparison%20of%20the%20three%20months%20ended%20June%2030%2C%202024%2C%20and%20June%2030%2C%202023) Q2 2024 saw total revenue decrease by **27%** to **$38.9 million**, product revenue down **34%**, services revenue up **28%**; cost of sales rose **51%** to **$71.1 million** due to Photopolymer Initiative amortization, resulting in **$(32.2) million** negative gross profit and **(83)%** gross margin Revenue Comparison (in thousands) | Metric (in thousands) | Q2 2024 Revenue | Q2 2023 Revenue | Change ($) | Change (%) | | :-------------------- | :-------------- | :-------------- | :--------- | :--------- | | Products Revenue | $31,411 | $47,398 | $(15,987) | (34)% | | Services Revenue | $7,521 | $5,888 | $1,633 | 28% | | Total Revenue | $38,932 | $53,286 | $(14,354) | (27)% | Gross Profit Comparison (in thousands) | Metric (in thousands) | Q2 2024 Gross Profit | Q2 2023 Gross Profit | Change ($) | Change (%) | | :-------------------- | :------------------- | :------------------- | :--------- | :--------- | | Products Gross Profit | $(35,798) | $4,174 | $(39,972) | (958)% | | Services Gross Profit | $3,609 | $1,915 | $1,694 | 88% | | Total Gross Profit | $(32,189) | $6,089 | $(38,278) | (629)% | Operating Expenses Comparison (in thousands) | Metric (in thousands) | Q2 2024 | Q2 2023 | Change ($) | Change (%) | | :-------------------- | :------ | :------ | :--------- | :--------- | | R&D Expenses | $17,143 | $21,223 | $(4,080) | (19)% | | Sales and Marketing | $25,802 | $10,440 | $15,362 | 148% | | G&A Expenses | $26,193 | $22,944 | $3,249 | 14% | [Comparison of the six months ended June 30, 2024 and 2023](index=38&type=section&id=Comparison%20of%20the%20six%20months%20ended%20June%2030%2C%202024%20and%202023) H1 2024 saw total revenue decrease by **16%** to **$79.5 million**, product revenue down **20%**, services revenue up **19%**; cost of sales rose **27%** to **$113.9 million** due to Photopolymer Initiative amortization, resulting in **$(34.4) million** negative gross profit and **(43)%** gross margin Revenue Comparison (in thousands) | Metric (in thousands) | H1 2024 Revenue | H1 2023 Revenue | Change ($) | Change (%) | | :-------------------- | :-------------- | :-------------- | :--------- | :--------- | | Products Revenue | $67,042 | $84,095 | $(17,053) | (20)% | | Services Revenue | $12,490 | $10,507 | $1,983 | 19% | | Total Revenue | $79,532 | $94,602 | $(15,070) | (16)% | Gross Profit Comparison (in thousands) | Metric (in thousands) | H1 2024 Gross Profit | H1 2023 Gross Profit | Change ($) | Change (%) | | :-------------------- | :------------------- | :------------------- | :--------- | :--------- | | Products Gross Profit | $(39,186) | $1,980 | $(41,166) | (2,079)% | | Services Gross Profit | $4,791 | $2,745 | $2,046 | 75% | | Total Gross Profit | $(34,395) | $4,725 | $(39,120) | (828)% | Operating Expenses Comparison (in thousands) | Metric (in thousands) | H1 2024 | H1 2023 | Change ($) | Change (%) | | :-------------------- | :------ | :------ | :--------- | :--------- | | R&D Expenses | $36,956 | $44,367 | $(7,411) | (17)% | | Sales and Marketing | $36,955 | $20,047 | $16,908 | 85% | | G&A Expenses | $42,410 | $41,145 | $1,265 | 3% | [Non-GAAP Financial Information](index=40&type=section&id=Non-GAAP%20Financial%20Information) Desktop Metal uses non-GAAP measures (gross margin, operating loss, EBITDA) to evaluate operational performance, excluding non-cash and non-recurring items like stock-based compensation and restructuring expenses, for a clearer view of core results and industry comparisons - Non-GAAP measures exclude stock-based compensation, amortization of acquired intangible assets, restructuring expenses, acquisition-related charges, inventory step-up, R&D assets acquired, goodwill impairment, and changes in fair value of investments and warrant liability[197](index=197&type=chunk) Non-GAAP Gross Margin (in thousands) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP gross margin | $(32,189) | $6,089 | $(34,395) | $4,725 | | Adjustments | $43,549 | $10,340 | $95,973 | $16,043 | | Non-GAAP gross margin | $11,361 | $16,529 | $61,578 | $23,968 | Adjusted EBITDA (in thousands) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(103,440) | $(49,728) | $(155,538) | $(102,369) | | EBITDA | $(29,547) | $(35,066) | $(56,167) | $(74,018) | | Adjusted EBITDA | $(13,208) | $(15,047) | $(26,826) | $(39,482) | [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) Desktop Metal has an accumulated deficit of **$1,787.8 million** as of **June 30, 2024**, with **$46.1 million** in liquidity, expecting continued losses and negative cash flows; a **$20.0 million** Nano Dimension Bridge Loan is proposed, but substantial doubt exists about going concern without additional financing - As of **June 30, 2024**, Desktop Metal had an accumulated deficit of **$1,787.8 million** and **$46.1 million** in cash, cash equivalents, and short-term investments[214](index=214&type=chunk)[216](index=216&type=chunk) - The company expects to incur additional losses and negative cash flows from operations in the near term[214](index=214&type=chunk) - Nano Dimension agreed to provide a multi-draw term loan credit facility (Bridge Loan Facility) of up to **$20.0 million**, available after **January 7, 2025**, to supplement working capital if the merger closes[217](index=217&type=chunk) - Existing capital resources are expected to support operations until **Q2 2025**, but substantial doubt exists about the company's ability to continue as a going concern without additional financing[221](index=221&type=chunk) [Cash Flows](index=47&type=section&id=Cash%20Flows) For H1 2024, net cash used in operating activities was **$37.4 million** (improved from **$70.5 million**), investing activities provided **$1.0 million** (down from **$110.9 million**), and financing activities used **$0.5 million** for tax payments and loan repayments Cash Flow Activity (in thousands) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(37,432) | $(70,494) | | Net cash provided by investing activities | $1,013 | $110,883 | | Net cash (used in) provided by financing activities | $(534) | $721 | | Net change in cash, cash equivalents, and restricted cash | $(38,008) | $41,183 | - Operating activities used **$37.4 million**, primarily due to net losses, offset by non-cash items like **$96.0 million** in depreciation and amortization and **$14.3 million** in stock-based compensation[227](index=227&type=chunk) - Investing activities provided **$1.0 million**, mainly from property and equipment sales (**$1.7 million**) offsetting purchases (**$0.7 million**)[229](index=229&type=chunk) - Financing activities used **$0.5 million**, primarily for tax payments related to restricted stock units (**$0.4 million**) and loan repayments (**$0.2 million**)[232](index=232&type=chunk) [Critical Accounting Policies and Significant Estimates](index=48&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Estimates) No material changes occurred to critical accounting policies and estimates during Q1 2024, as previously disclosed in the Annual Report on Form 10-K for 2023 - No material changes to critical accounting policies and estimates in **Q1 2024**[234](index=234&type=chunk) [Off-Balance Sheet Arrangements](index=48&type=section&id=Off-Balance%20Sheet%20Arrangements) ExOne GmbH has **$0.1 million** in short-term financial guarantees and letters of credit as of **June 30, 2024**; Desktop Metal uses no other off-balance sheet arrangements or structured debt - ExOne GmbH has **$0.1 million** in outstanding financial guarantees and letters of credit as of **June 30, 2024**[235](index=235&type=chunk) - The company does not utilize other off-balance sheet arrangements or structured debt[236](index=236&type=chunk) [Recent Accounting Pronouncements](index=48&type=section&id=Recent%20Accounting%20Pronouncements) Recent accounting pronouncements are detailed in Note 2, Summary of Significant Accounting Policies, within the condensed consolidated financial statements - Recent accounting pronouncements are detailed in **Note 2** of the financial statements[237](index=237&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Desktop Metal faces market risks from interest rate and foreign currency fluctuations; interest rate risk is managed with cash and investments (10% change immaterial), while foreign currency risk from European/Asian operations is not hedged as it is not material - Exposure to market risks includes interest rate fluctuations and foreign currency translation[238](index=238&type=chunk) - Interest rate risk is managed through cash, cash equivalents, and short-term investments; a **10% change** in interest rates would have an immaterial impact[239](index=239&type=chunk) - Foreign currency risk, primarily from European and Asian operations, is not currently hedged as it is not material[240](index=240&type=chunk)[241](index=241&type=chunk) [Item 4. Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were not effective as of **June 30, 2024**, due to material weaknesses in internal control over financial reporting, though financial statements are deemed fair; no material changes occurred in H1 2024, but inherent control limitations exist - Disclosure controls and procedures were deemed not effective as of **June 30, 2024**, due to material weaknesses in internal control over financial reporting[242](index=242&type=chunk) - Despite material weaknesses, financial statements are concluded to present fairly the financial position, results of operations, and cash flows[243](index=243&type=chunk) - No material changes to internal control over financial reporting occurred during the six months ended **June 30, 2024**[244](index=244&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) Desktop Metal is involved in legal proceedings, including a class action related to the ExOne Merger and securities class actions regarding EnvisionTEC; the company believes these are without merit and expects no material adverse financial impact - The company faces a class action complaint (Campanella v. Rockwell, et al.) alleging breach of fiduciary duty related to the ExOne Merger, with a hearing scheduled for **October 16, 2024**[248](index=248&type=chunk)[249](index=249&type=chunk) - Securities class action complaints allege violations of the Securities and Exchange Act regarding EnvisionTEC's manufacturing and product compliance, with an appeal hearing scheduled for **September 10, 2024**[250](index=250&type=chunk) - Management believes all complaints are without merit and intends to defend vigorously, not expecting a material adverse impact on financial statements[247](index=247&type=chunk)[251](index=251&type=chunk) [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) Outlines numerous risks to Desktop Metal's business, including going concern doubt, product commercialization delays, slow market adoption, intense competition, acquisition integration challenges, Nano Dimension merger risks, macroeconomic conditions, supply chain disruptions, and regulatory compliance [Summary of Risk Factors](index=50&type=section&id=Summary%20of%20Risk%20Factors) Principal risk factors include negative cash flows and going concern doubt, product launch delays, slow additive manufacturing adoption, rapid technological change, uncertain restructuring benefits, acquisition integration difficulties, historical unprofitability, and potential stock price decline - Negative cash flows and current lack of financial resources raise substantial doubt about the company's ability to continue as a going concern[253](index=253&type=chunk) - Significant delays in the design, production, and launch of additive manufacturing solutions may occur[253](index=253&type=chunk) - Demand for products may stagnate or decline if market adoption of additive manufacturing does not grow as expected[253](index=253&type=chunk) - The additive manufacturing industry is characterized by rapid technological change, requiring continuous product development[253](index=253&type=chunk) - Restructuring activities and cost savings measures are not guaranteed to achieve intended results[253](index=253&type=chunk) - Difficulties in integrating acquired businesses may adversely affect future results[253](index=253&type=chunk) - The company has a history of losses and may not achieve or maintain profitability[253](index=253&type=chunk) - Future sales, or the perception of future sales, of Class A common stock could cause the market price to decline[253](index=253&type=chunk) [Risks Related to Our Financial Position and Need for Additional Capital](index=51&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Need%20for%20Additional%20Capital) Desktop Metal faces substantial doubt about its going concern ability due to negative cash flows and an accumulated deficit of **$1.8 billion**; historical losses necessitate additional capital, which may lead to dilution or operational limitations, with bank failures also posing a liquidity risk - Substantial doubt exists about the company's ability to continue as a going concern due to negative cash flows and an accumulated deficit of **$1,787.8 million** as of **June 30, 2024**[255](index=255&type=chunk) - The company has a history of net losses since inception and expects to continue incurring operating losses and negative cash flow in the near-term[257](index=257&type=chunk) - Additional capital may be required for business growth, but there is no assurance it will be available on acceptable terms, potentially leading to significant dilution for existing stockholders or restrictive debt covenants[268](index=268&type=chunk)[269](index=269&type=chunk) [Risks Related to the Proposed Merger with Nano](index=54&type=section&id=Risks%20Related%20to%20the%20Proposed%20Merger%20with%20Nano) The proposed Nano Dimension merger may not be completed, potentially impacting stock price, business, and incurring termination fees; the Per Share Merger Consideration is uncertain due to potential downward adjustments from bridge loans and transaction expenses, and merger provisions could discourage competing acquirers - The merger with Nano Dimension may not be completed due to unfulfilled conditions or termination, which could adversely affect the stock price and business operations[271](index=271&type=chunk)[275](index=275&type=chunk) - Stockholders cannot be certain of the exact Per Share Merger Consideration (**$5.50** initially) as it is subject to downward adjustment based on bridge loan amounts and unpaid transaction expenses, potentially reducing it to **$4.07 per share**[273](index=273&type=chunk)[274](index=274&type=chunk) - The Merger Agreement contains 'no shop' provisions and potential termination fees (**$7.875 million**) that could discourage competing acquirers[272](index=272&type=chunk)[277](index=277&type=chunk) [Risks Related to Our Business and Industry](index=56&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) Business risks include product design delays, produced parts challenges, COVID-19 disruptions, uncertain restructuring benefits, product mix impact on margins, slow additive manufacturing adoption, price competition, and reliance on consumables; global operations face currency, regulatory, and geopolitical risks, while rapid technological change and intense competition demand continuous innovation - Significant delays in the design, production, and launch of additive manufacturing solutions or produced parts offerings could materially damage the business[279](index=279&type=chunk)[281](index=281&type=chunk) - Restructuring activities and cost savings measures may not achieve intended results, and changes in product mix could negatively impact gross margins[285](index=285&type=chunk)[287](index=287&type=chunk) - Slow market adoption of additive manufacturing, price competition, and failure to grow recurring revenue from consumables could adversely affect financial results[289](index=289&type=chunk)[290](index=290&type=chunk)[292](index=292&type=chunk) - Global operations expose the company to volatility in currency exchange rates, regulatory changes, and geopolitical conditions, which could adversely impact business and operating results[303](index=303&type=chunk)[304](index=304&type=chunk)[310](index=310&type=chunk) - The additive manufacturing industry's rapid technological change and intense competition require continuous innovation, with risks of products becoming obsolete or uneconomical[329](index=329&type=chunk)[331](index=331&type=chunk) [Risks Related to Acquisitions](index=66&type=section&id=Risks%20Related%20to%20Acquisitions) Acquisitions (EnvisionTEC, ExOne) pose risks like integration difficulties, loss of key employees, business disruption, and failure to realize benefits; future acquisitions may divert management, incur costs, dilute shareholders, and introduce unknown liabilities, harming financial results - Difficulties in integrating acquired companies (e.g., EnvisionTEC, ExOne) could lead to loss of key employees, business disruption, and failure to realize anticipated benefits or cost synergies[335](index=335&type=chunk)[336](index=336&type=chunk) - Future acquisitions may divert management's attention, incur significant costs, dilute existing shareholders, and introduce unknown liabilities or impairment charges[339](index=339&type=chunk)[341](index=341&type=chunk) [Risks Related to Third Parties](index=68&type=section&id=Risks%20Related%20to%20Third%20Parties) Desktop Metal faces risks from product liability claims, misuse of additive manufacturing solutions, and dependence on limited resellers and third-party manufacturers; disruptions from these parties or natural disasters could severely impact operations, customer relationships, and financial performance - Potential for product liability claims from defective products and liability if additive manufacturing solutions are used to print dangerous objects (e.g., weapons)[344](index=344&type=chunk)[348](index=348&type=chunk) - Heavy reliance on a global network of resellers for sales, installation, and support services; underperformance or termination of these relationships could adversely affect sales and reputation[346](index=346&type=chunk) - Dependence on a limited number of third-party contract manufacturers and suppliers for production and materials, posing risks of delays, disruptions, quality control problems, and increased costs[349](index=349&type=chunk)[354](index=354&type=chunk) - Facilities and those of third-party partners are vulnerable to disruption from natural disasters, climate-related events, strikes, and other uncontrollable events, impacting production and revenue recognition[355](index=355&type=chunk) [Risks Related to Our Class A Common Stock](index=70&type=section&id=Risks%20Related%20to%20Our%20Class%20A%20Common%20Stock) Issuance of additional Class A common stock or convertible securities could dilute equity and affect stock price; future sales by stockholders or their perception could cause decline; significant control by insiders, anti-takeover provisions, and no foreseeable dividends are also risks - Issuance of additional Class A common stock or convertible securities may dilute investors' equity interest and adversely affect the stock price[356](index=356&type=chunk)[357](index=357&type=chunk) - Future sales, or the perception of future sales, of Class A common stock by the company or existing stockholders could cause the market price to decline[358](index=358&type=chunk)[359](index=359&type=chunk) - Directors, executive officers, and affiliated stockholders own a significant percentage (**13.9%** as of **Dec 31, 2023**) of Class A common stock, enabling them to exert significant control over shareholder approval matters[360](index=360&type=chunk) - Anti-takeover provisions in governing documents and Delaware law could make an acquisition more difficult, limit attempts to replace management, and affect the market price of Class A common stock[361](index=361&type=chunk)[362](index=362&type=chunk)[363](index=363&type=chunk) - The company does not intend to pay dividends on its Class A common stock for the foreseeable future, retaining funds for business development and growth[418](index=418&type=chunk) [Risks Related to Our Indebtedness](index=72&type=section&id=Risks%20Related%20to%20Our%20Indebtedness) Desktop Metal's **$115.0 million** in **6.0% Convertible Senior Notes due 2027** and future indebtedness could limit cash flow, increase vulnerability to adverse conditions, and restrict financing; the company may struggle to repurchase notes or pay cash upon conversion, and indenture provisions could delay takeovers - Indebtedness, including **$115.0 million** in **6.0% Convertible Senior Notes due 2027**, could limit cash flow, increase vulnerability to adverse conditions, and restrict additional financing[366](index=366&type=chunk) - The company may be unable to raise funds to repurchase the 2027 Notes or pay cash upon conversion following a fundamental change, potentially leading to default[369](index=369&type=chunk) - Provisions in the indenture governing the 2027 Notes could delay or prevent an otherwise beneficial takeover[370](index=370&type=chunk) [Risks Related to Compliance Matters](index=73&type=section&id=Risks%20Related%20to%20Compliance%20Matters) Global operations expose Desktop Metal to risks of non-compliance with anti-corruption laws and trade restrictions, potentially leading to fines and reputational damage; environmental, health, and safety laws also pose liabilities, while increasing ESG attention and evolving data privacy regulations could raise costs and harm business - Failure to comply with anti-corruption laws (e.g., U.S. FCPA, U.K. Bribery Act) and trade restrictions (e.g., sanctions, export controls) could result in substantial fines, sanctions, and reputational damage[371](index=371&type=chunk)[372](index=372&type=chunk) - Subject to environmental, health, and safety laws, with potential for significant compliance costs, liabilities for improper disposal of chemicals, and fines for non-compliance[374](index=374&type=chunk)[375](index=375&type=chunk) - Increasing attention to ESG initiatives could raise costs, harm reputation, and impact access to capital or insurance[377](index=377&type=chunk)[378](index=378&type=chunk) - Evolving data privacy, use, and security regulations (GDPR, UK GDPR, CCPA) increase compliance costs and risks, with potential for significant fines and reputational damage for non-compliance[379](index=379&type=chunk)[380](index=380&type=chunk)[381](index=381&type=chunk)[382](index=382&type=chunk)[383](index=383&type=chunk) [Risks Related to Intellectual Property](index=76&type=section&id=Risks%20Related%20to%20Intellectual%20Property) Desktop Metal faces risks from third-party IP infringement lawsuits, leading to substantial costs and operational disruptions; inadequate protection or enforcement of its own IP could allow competitors to use similar technologies or develop compatible consumables, reducing revenue and profitability - Third-party lawsuits alleging infringement of patents, trade secrets, or other intellectual property rights could have a significant adverse effect on financial condition[387](index=387&type=chunk) - Substantial costs may be incurred in enforcing and defending intellectual property rights, with disputes being costly and disruptive to business operations[388](index=388&type=chunk)[393](index=393&type=chunk) - Inadequate protection or enforcement of intellectual property rights could allow competitors to use similar technologies or develop compatible consumables, reducing revenue and profitability[389](index=389&type=chunk)[391](index=391&type=chunk)[392](index=392&type=chunk) [General Risk Factors](index=78&type=section&id=General%20Risk%20Factors) Class A common stock price may be volatile and decline due to market conditions and company announcements; failure to meet NYSE listing requirements could lead to delisting; public company compliance requires significant resources, with identified material weaknesses in internal control; ongoing litigation and no foreseeable dividends are also risks - The Class A common stock price is likely to be volatile and may decline regardless of operating performance due to various market and industry factors[400](index=400&type=chunk)[403](index=403&type=chunk) - Failure to meet NYSE continued listing requirements (e.g., minimum price) could lead to delisting, adversely impacting trading, liquidity, and market price of common stock[397](index=397&type=chunk)[399](index=399&type=chunk) - Being a public company involves significant expenses and requires substantial resources and management attention for compliance, potentially diverting from business operations[406](index=406&type=chunk)[407](index=407&type=chunk) - Material weaknesses in internal control over financial reporting have been identified, which could impair the ability to produce timely and accurate financial statements and lead to adverse regulatory consequences[411](index=411&type=chunk)[415](index=415&type=chunk)[416](index=416&type=chunk) - The company is subject to ongoing litigation, which can be costly and divert management resources, and does not intend to pay dividends on its Class A common stock for the foreseeable future[417](index=417&type=chunk)[418](index=418&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds, and Issuer Purchases of Equity Securities](index=79&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) All unregistered equity sales for Q2 2024 were reported in a Form 8-K; the company also purchased **6,099 shares** of common stock, primarily withheld from employees for tax obligations related to restricted stock unit vesting - All unregistered sales of equity securities for **Q2 2024** were previously reported in a **Form 8-K**[420](index=420&type=chunk) Issuer Purchases of Equity Securities (Three Months Ended June 30, 2024) | Period | Total number of shares purchased | Average price paid per share | | :-------------------------------- | :------------------------------- | :--------------------------- | | April 1, 2024 through April 30, 2024 | 570 | $8.52 | | May 1, 2024 through May 31, 2024 | 5,467 | $6.51 | | June 1, 2024 through June 30, 2024 | 62 | $5.81 | | Total | 6,099 | | - Shares purchased were withheld from employees for minimum tax withholding obligations related to Class A common stock issuance[421](index=421&type=chunk) [Item 3. Defaults Upon Senior Securities](index=79&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the reporting period - No defaults upon senior securities[422](index=422&type=chunk) [Item 4. Mine Safety Disclosures](index=79&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable[423](index=423&type=chunk) [Item 5. Other Information](index=79&type=section&id=Item%205.%20Other%20Information) No other information was reported under this item - No other information was reported[423](index=423&type=chunk) [Item 6. Exhibits](index=79&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with the Form 10-Q, including the Nano Dimension Merger Agreement, Loan Term Sheet, CEO/CFO certifications, and Inline XBRL documents; certain exhibits and schedules are omitted but available upon request - Exhibits include the Agreement and Plan of Merger with Nano Dimension (**Exhibit 2.1**) and the Loan Term Sheet (**Exhibit 10.1**), both filed on **July 3, 2024**[427](index=427&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer (**Exhibits 31.1, 31.2, 32.1**) are filed with this report[427](index=427&type=chunk) - Inline XBRL documents (**Exhibits 101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104**) are included[427](index=427&type=chunk) [Signatures](index=81&type=section&id=Signatures) The report is signed by Ric Fulop, CEO, and Jason Cole, CFO, on **July 30, 2024**, certifying its submission pursuant to the Securities Exchange Act of 1934 - The report is signed by Ric Fulop, Chief Executive Officer, and Jason Cole, Chief Financial Officer, on **July 30, 2024**[433](index=433&type=chunk)

[Executive Summary](index=1&type=section&id=Executive%20Summary) [CEO Statement and Strategic Outlook](index=1&type=section&id=CEO%20Statement%20and%20Strategic%20Outlook) CEO highlighted consistent expense reductions and proposed Nano Dimension merger as a strategic response to macroeconomic challenges - Desktop Metal has achieved **nine consecutive quarters of non-GAAP operating expense reduction** and significantly lowered its cash burn since the beginning of 2022[3](index=3&type=chunk) - The company is navigating an increasingly challenging business environment characterized by rising interest rates, slowing capital expenditure budgets, and other macroeconomic pressures, resulting in **customer hesitancy to finalize deals**[4](index=4&type=chunk) - A definitive merger agreement with Nano Dimension has been announced, which is considered the **best strategic direction to enhance competitive standing and safeguard shareholder value**[5](index=5&type=chunk)[6](index=6&type=chunk) [About Desktop Metal](index=3&type=section&id=About%20Desktop%20Metal) Desktop Metal leads Additive Manufacturing 2.0, enabling digital mass production with innovative 3D printers and materials - Desktop Metal is a global leader in Additive Manufacturing 2.0, specializing in on-demand, digital mass production for industrial, medical, and consumer products[11](index=11&type=chunk) - The company's technology leverages binder jetting and digital light processing to print with diverse materials such as metal, polymer, sand, ceramics, foam, and recycled wood[11](index=11&type=chunk) [Second Quarter 2024 Business and Financial Highlights](index=1&type=section&id=Second%20Quarter%202024%20Business%20and%20Financial%20Highlights) [Corporate Highlights](index=1&type=section&id=Corporate%20Highlights) Desktop Metal continued cost reduction efforts and announced a definitive merger agreement with Nano Dimension - The company continued to execute cost reduction plans to align its business structure with the current 3D printing market conditions[5](index=5&type=chunk) - A definitive merger agreement for a proposed business combination with Nano Dimension was announced[6](index=6&type=chunk) [Product Performance](index=2&type=section&id=Product%20Performance) Q2 2024 saw the launch of PureSinter™ Furnace, platinum qualification on DM Production System, and Flexcera® Smile Ultra+ validation - Launched and began selling the all-new PureSinter™ Furnace for high-purity debinding and sintering of metal parts, with the first unit sold to AmPd Labs[10](index=10&type=chunk) - Platinum is now customer-qualified on the DM Production System binder jet 3D printing platform by Legor for jewelry and fashion markets[10](index=10&type=chunk) - Installed the fourth Figur G-15 Digital Sheet Forming system to Wisconsin-Based Evology Manufacturing[10](index=10&type=chunk) - Desktop Health® announced Flexcera® Smile Ultra+ Dental Resin is validated for 3D printing strong and lifelike teeth restorations for All-on-X implant provisionals[10](index=10&type=chunk) [Key Financial Highlights (GAAP & Non-GAAP)](index=1&type=section&id=Key%20Financial%20Highlights%20(GAAP%20%26%20Non-GAAP)) Q2 2024 revenue decreased 27% to $38.9 million, GAAP net loss widened, Adjusted EBITDA improved 12% Key Financial Highlights | Metric | Q2 2024 (Millions) | Q2 2023 (Millions) | Change (YoY) | | :----- | :----------------- | :----------------- | :----------- | | Revenue | $38.9 | $53.3 | (27.0%) | | Net Loss (GAAP) | $(103.4) | $(49.7) | (108.0%) | | Adjusted EBITDA | $(13.2) | $(15.0) | 12.0% improvement | | Services Revenue | $7.5 | $5.9 | 27.1% | | GAAP Operating Expenses | $69.1 | $54.6 | 26.6% | | Non-GAAP Operating Expenses | $27.0 | $34.7 | (22.3%) | | GAAP Gross Margin | (83)% | 11.4% | N/A | | Non-GAAP Gross Margin | 29.2% | 31.0% | (1.8%) | - The Q2 2024 net loss of **$(103.4) million** was significantly impacted by one-time noncash charges related to accelerated amortization and depreciation on certain intangible and fixed assets[6](index=6&type=chunk)[10](index=10&type=chunk) - Cash, cash equivalents, and short-term investments totaled **$46.7 million** at the end of Q1 2024, with the rate of operating cash consumption decreasing by **40%** compared to the prior year's quarter[10](index=10&type=chunk) - Financial guidance for the remainder of the year has been removed due to the pending acquisition by Nano Dimension[10](index=10&type=chunk) [Condensed Consolidated Financial Statements](index=5&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $306.5 million by June 30, 2024, driven by reductions in cash and intangible assets, leading to a significant decline in stockholders' equity Condensed Consolidated Balance Sheets | Metric | June 30, 2024 (Thousands) | December 31, 2023 (Thousands) | Change (Thousands) | | :----- | :------------------------ | :-------------------------- | :----------------- | | Total Assets | $306,492 | $458,001 | $(151,509) | | Cash and cash equivalents | $45,855 | $83,845 | $(37,990) | | Intangible assets, net | $80,390 | $168,259 | $(87,869) | | Total Liabilities | $206,651 | $216,349 | $(9,698) | | Total Stockholders' Equity | $99,841 | $241,652 | $(141,811) | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2024 total revenues were $38.9 million, resulting in a gross loss of $(32.2) million and a net loss of $(103.4) million Condensed Consolidated Statements of Operations | Metric | Three Months Ended June 30, 2024 (Thousands) | Three Months Ended June 30, 2023 (Thousands) | Change (Thousands) | | :----- | :------------------------------------------- | :------------------------------------------- | :----------------- | | Total Revenues | $38,932 | $53,286 | $(14,354) | | Products Revenue | $31,411 | $47,398 | $(15,987) | | Services Revenue | $7,521 | $5,888 | $1,633 | | Gross profit (loss) | $(32,189) | $6,089 | $(38,278) | | Total operating expenses | $69,138 | $54,607 | $14,531 | | Loss from operations | $(101,327) | $(48,518) | $(52,809) | | Net loss | $(103,440) | $(49,728) | $(53,712) | | Net loss per share—basic and diluted | $(3.13) | $(1.55) | $(1.58) | - The significant increase in cost of products from **$43.2 million** in Q2 2023 to **$67.2 million** in Q2 2024 was a primary contributor to the reported gross loss[20](index=20&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Total comprehensive loss for Q2 2024 increased to $(103.9) million, primarily due to the net loss and foreign currency adjustments Condensed Consolidated Statements of Comprehensive Loss | Metric | Three Months Ended June 30, 2024 (Thousands) | Three Months Ended June 30, 2023 (Thousands) | Change (Thousands) | | :----- | :------------------------------------------- | :------------------------------------------- | :----------------- | | Net loss | $(103,440) | $(49,728) | $(53,712) | | Foreign currency translation adjustment | $(500) | $(1,316) | $816 | | Total comprehensive loss | $(103,940) | $(50,896) | $(53,044) | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Total stockholders' equity significantly declined to $99.8 million by June 30, 2024, primarily due to the net loss Condensed Consolidated Statements of Stockholders' Equity | Metric | June 30, 2024 (Thousands) | January 1, 2024 (Thousands) | Change (Thousands) | | :----- | :------------------------ | :-------------------------- | :----------------- | | Total Stockholders' Equity | $99,841 | $241,652 | $(141,811) | | Accumulated Deficit | $(1,787,763) | $(1,632,225) | $(155,538) | | Additional Paid-in Capital | $1,923,978 | $1,908,533 | $15,445 | - The accumulated deficit increased by **$155.5 million** for the six months ended June 30, 2024, directly reflecting the net loss incurred during this period[22](index=22&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities decreased to $(37.4) million for the six months ended June 30, 2024, while overall cash decreased by $(38.0) million Condensed Consolidated Statements of Cash Flows | Metric | Six Months Ended June 30, 2024 (Thousands) | Six Months Ended June 30, 2023 (Thousands) | Change (Thousands) | | :----- | :--------------------------------------- | :--------------------------------------- | :----------------- | | Net cash used in operating activities | $(37,432) | $(70,494) | $33,062 | | Net cash provided by investing activities | $1,013 | $110,883 | $(109,870) | | Net cash (used in) provided by financing activities | $(534) | $721 | $(1,255) | | Net increase (decrease) in cash, cash equivalents, and restricted cash | $(38,008) | $41,183 | $(79,191) | | Cash, cash equivalents, and restricted cash at end of period | $46,682 | $123,096 | $(76,414) | - Depreciation and amortization significantly increased to **$96.0 million** for the six months ended June 30, 2024, from **$27.0 million** in the prior year, contributing to the reduction in net cash used in operating activities[24](index=24&type=chunk) [Non-GAAP Financial Information](index=12&type=section&id=Non-GAAP%20Financial%20Information) [Non-GAAP Measures Definitions and Rationale](index=12&type=section&id=Non-GAAP%20Measures%20Definitions%20and%20Rationale) Desktop Metal uses non-GAAP measures to provide a clearer view of ongoing operations, excluding specific non-cash and non-recurring items - Desktop Metal's management uses non-GAAP financial measures (including gross margin, operating loss, net loss, operating expense, EBITDA, and Adjusted EBITDA) to evaluate ongoing operations and for internal planning and forecasting[26](index=26&type=chunk) - These non-GAAP measures exclude the effects of stock-based compensation, amortization of acquired intangible assets, restructuring, and acquisition-related and integration costs[26](index=26&type=chunk) - The company cautions that non-GAAP measures should be considered supplemental to GAAP results and not as substitutes, acknowledging potential future expenses similar to those excluded[29](index=29&type=chunk) [Non-GAAP Reconciliation Tables](index=14&type=section&id=Non-GAAP%20Reconciliation%20Tables) [Non-GAAP Gross Margin, Operating Loss, and Net Loss Reconciliation](index=14&type=section&id=Non-GAAP%20Gross%20Margin,%20Operating%20Loss,%20and%20Net%20Loss%20Reconciliation) Non-GAAP gross margin was $11.4 million (29.2%) in Q2 2024, with non-GAAP operating and net losses showing improvement Non-GAAP Gross Margin, Operating Loss, and Net Loss Reconciliation | Metric | Three Months Ended June 30, 2024 (Thousands) | Three Months Ended June 30, 2023 (Thousands) | Change (Thousands) | | :----- | :------------------------------------------- | :------------------------------------------- | :----------------- | | GAAP gross margin | $(32,189) | $6,089 | $(38,278) | | Non-GAAP gross margin | $11,361 | $16,529 | $(5,168) | | GAAP operating loss | $(101,327) | $(48,518) | $(52,809) | | Non-GAAP operating loss | $(15,638) | $(18,149) | $2,511 | | GAAP net loss | $(103,440) | $(49,728) | $(53,712) | | Non-GAAP net loss | $(17,254) | $(19,252) | $1,998 | - Key adjustments reconciling GAAP to non-GAAP figures included **$65.9 million** for amortization of acquired intangible assets and **$11.2 million** for restructuring expense in Q2 2024[32](index=32&type=chunk) [Non-GAAP Operating Expense Reconciliation](index=15&type=section&id=Non-GAAP%20Operating%20Expense%20Reconciliation) Non-GAAP operating expenses for Q2 2024 were $27.0 million, representing a 22.3% year-over-year improvement Non-GAAP Operating Expense Reconciliation | Metric | Three Months Ended June 30, 2024 (Thousands) | Three Months Ended June 30, 2023 (Thousands) | Change (Thousands) | | :----- | :------------------------------------------- | :------------------------------------------- | :----------------- | | GAAP operating expenses | $69,138 | $54,607 | $14,531 | | Non-GAAP operating expenses | $26,999 | $34,678 | $(7,679) | - Non-GAAP operating expenses showed a **22% year-over-year improvement**, reflecting the company's ongoing cost reduction efforts[6](index=6&type=chunk)[35](index=35&type=chunk) [Non-GAAP Adjusted EBITDA Reconciliation](index=16&type=section&id=Non-GAAP%20Adjusted%20EBITDA%20Reconciliation) Adjusted EBITDA for Q2 2024 improved to $(13.2) million, a 12% year-over-year improvement, driven by significant adjustments Non-GAAP Adjusted EBITDA Reconciliation | Metric | Three Months Ended June 30, 2024 (Thousands) | Three Months Ended June 30, 2023 (Thousands) | Change (Thousands) | | :----- | :------------------------------------------- | :------------------------------------------- | :----------------- | | Net loss attributable to common stockholders | $(103,440) | $(49,728) | $(53,712) | | EBITDA | $(29,547) | $(35,066) | $5,519 | | Adjusted EBITDA | $(13,208) | $(15,047) | $1,839 | - Adjusted EBITDA improved by **12% year-over-year**, reflecting the impact of cost reduction plans and adjustments for non-cash charges[6](index=6&type=chunk)[37](index=37&type=chunk) - In Q2 2024, incremental depreciation of **$3.9 million** and amortization of **$59.9 million** were recorded as restructuring charges due to the Photopolymer Initiative[37](index=37&type=chunk) [Other Information](index=2&type=section&id=Other%20Information) [Conference Call Details](index=2&type=section&id=Conference%20Call%20Details) Desktop Metal hosted a conference call on July 31, 2024, to discuss its second quarter 2024 financial results - A conference call was held on July 31, 2024, at 8:30 am ET to discuss the second quarter 2024 financial results[9](index=9&type=chunk) - Access to the simultaneous webcast and replay is available through the Events & Presentations section of ir.desktopmetal.com/[9](index=9&type=chunk) [Forward-looking Statements](index=3&type=section&id=Forward-looking%20Statements) This press release contains forward-looking statements subject to various risks and uncertainties, with no obligation for updates - The press release includes forward-looking statements regarding future results, financial position, business strategy, and the expected benefits of the proposed transaction with Nano Dimension[12](index=12&type=chunk) - These statements are subject to risks and uncertainties such as global macroeconomic conditions, technological changes in additive manufacturing, and supply and logistics disruptions[12](index=12&type=chunk) - Readers are cautioned not to place undue reliance on forward-looking statements, and Desktop Metal does not intend to update or revise them[12](index=12&type=chunk) [No Offer or Solicitation](index=3&type=section&id=No%20Offer%20or%20Solicitation) This press release does not constitute an offer to buy or sell securities or a solicitation of any vote or approval - The press release is not an offer to buy or sell securities, nor a solicitation of any vote or approval[13](index=13&type=chunk)[14](index=14&type=chunk) - Any offering of securities will be made exclusively through a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended[14](index=14&type=chunk) [Additional Information about the Transaction](index=4&type=section&id=Additional%20Information%20about%20the%20Transaction) Desktop Metal will file a proxy statement and other relevant documents with the SEC regarding the proposed transaction - Desktop Metal intends to file a proxy statement and other relevant documents with the SEC regarding the proposed transaction[15](index=15&type=chunk) - Investors are urged to read these documents for important information, which will be available on the SEC's website (http://www.sec.gov) and Desktop Metal's investor relations website (https://ir.desktopmetal.com/sec-filings/all-sec-filings)[15](index=15&type=chunk) [Participants in the Solicitation](index=4&type=section&id=Participants%20in%20the%20Solicitation) Desktop Metal, Nano Dimension, and their respective directors and executive officers may be considered participants in the proxy solicitation - Desktop Metal, Nano Dimension, and their respective directors and executive officers may be deemed participants in the solicitation of proxies for the proposed transaction[16](index=16&type=chunk) - Information about Desktop Metal's directors and executive officers is available in its 2024 Annual Meeting proxy statement, and Nano Dimension's in its Form 20-F[16](index=16&type=chunk) [Investor and Media Relations](index=4&type=section&id=Investor%20and%20Media%20Relations) Contact information is provided for investor relations and media inquiries - Investor Relations contact: (857) 504-1084 or DesktopMetalIR@icrinc.com[17](index=17&type=chunk) - Media Relations contact: Sarah Webster at (313) 715-6988 or sarahwebster@desktopmetal.com[17](index=17&type=chunk)

Group 1: Inseego (INSG) - Inseego specializes in mobile and Internet-of-Things (IoT) solutions, including 5G and LTE wireless modems, routers, and gateways, with a market capitalization of less than $118 million [3] - Analysts project Inseego's revenue could reach $203.75 million by the end of the year, indicating a growth rate of 4.1%, with a high-side estimate of $211.65 million [4] - The stock is currently valued at approximately 0.6X trailing-year sales, significantly lower than the industry median of 1.55x [14] Group 2: Vuzix (VUZI) - Vuzix is a leading developer of augmented reality (AR) and virtual reality (VR) technologies, potentially benefiting from pro-USA policies under a Trump administration [16] - The stock trades at 8.47x trailing-year revenue, down from 15.27x in the past year, indicating potential for recovery if the company regains momentum [17] - The most optimistic revenue estimate for Vuzix in 2024 is $13.73 million, although this projection carries risk [18] Group 3: Desktop Metal (DM) - Desktop Metal specializes in 3D printing and industrial additive manufacturing, with analysts forecasting a revenue decline to $186.03 million in fiscal 2024, a decrease of nearly 2% [9][10] - A recovery is anticipated in the following year, with revenue projected to rise to $207.8 million, reflecting an 11.7% increase [10] - The stock currently trades at 0.92x trailing-year sales, down from 2.24x in the past year, suggesting it may be undervalued [19]

Shares of Desktop Metal, Inc. (DM) have gained 2.7% over the past four weeks to close the last trading session at $5.03, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $23.67 indicates a potential upside of 370.6%. While the consensus price target is a much-coveted metric for investors, solely banking on this metric to make an investment decision may not be wise at all. That's ...