Business Context and Reporting Period
This Form 6-K filing by Nano Dimension Ltd. (the "Company") covers the month of July 2024. The primary purpose of the filing is to disclose the execution of a definitive Merger Agreement dated July 2, 2024, between the Company, its subsidiary Nano US I, Inc., and Desktop Metal, Inc. ("Desktop Metal"). Under the agreement, Desktop Metal will merge with and into Nano US I, Inc., becoming an indirect wholly owned subsidiary of Nano Dimension. Upon closing, Desktop Metal's common stock will be delisted from the New York Stock Exchange.
Key Financial Metrics and Transaction Terms
The filing details the financial structure of the proposed merger rather than reporting Nano Dimension's operational results for the period.
- Merger Consideration: Desktop Metal shareholders will receive $5.50 per share in cash, subject to downward adjustments.
- Consideration Adjustments: The per-share price may be reduced by up to $0.80 based on the utilization of a Bridge Loan Facility and up to $0.60 based on unpaid transaction expenses. An additional reduction of $0.0325 may apply if certain severance agreements are not signed.
- Debt Repurchase: Following the closing, the Company must repurchase approximately $115.0 million in principal amount of Desktop Metal's outstanding 6.0% Convertible Senior Notes due 2027, plus accrued interest.
- Bridge Loan Facility: The Company agreed to provide a $20.0 million multi-draw term loan facility to Desktop Metal to support working capital. Borrowings will accrue interest at 10% per annum and mature upon the earlier of the Merger closing, March 31, 2025, or termination of the agreement.
- Termination Fees:
- Desktop Metal to pay Nano Dimension up to $6.0 million in expenses if shareholder approval is not obtained.
- Desktop Metal to pay a $7.875 million termination fee if the Board changes its recommendation or if shareholder approval fails under specific conditions.
- Nano Dimension to pay a $5.0 million termination fee if the Merger is prohibited by court order or fails to close by the End Date due to unacceptable conditions.
Note: The filing text does not provide specific revenue, profit, cash flow, or margin figures for Nano Dimension or Desktop Metal for the reporting period.
Material Changes and Equity Treatment
The filing outlines significant changes to the capital structure and governance of Desktop Metal upon the Effective Time of the Merger:
- Stock Options: Vested and unexercised options will be cancelled for cash equal to the Per Share Merger Consideration for each "Net Share." Unvested options will generally be cancelled with no consideration unless they cover Net Shares.
- Restricted Stock Units (RSUs): Unvested RSUs will be cancelled and replaced with Nano Dimension Replacement RSUs vesting pro-rata over three years post-closing. The share count will be determined by a formula involving the merger consideration and Nano Dimension's stock price.
- Performance Stock Units (PSUs): All unvested PSUs will terminate in full with no consideration.
- Board Representation: The Desktop Metal Board of Directors will resign, and the Merger Sub Board will assume control. Existing officers will generally continue in their roles.
Guidance, Outlook, Risks, and Conditions
The transaction is subject to customary closing conditions, including Desktop Metal shareholder approval, regulatory approvals (including CFIUS), and the absence of material adverse effects or bankruptcy events.
- Timeline: The transaction must be consummated by January 31, 2025 ("End Date"), extendable to March 31, 2025 if regulatory approvals are pending.
- Termination Rights: Nano Dimension may terminate the agreement if Desktop Metal's cash burn exceeds $20.0 million in any fiscal quarter starting September 30, 2024, or if an event of default occurs under the Bridge Loan Facility.
- Voting Support: Key Desktop Metal stockholders holding approximately 19% of voting power have entered into Voting and Support Agreements to vote in favor of the merger.
- Risks: Forward-looking statements highlight risks including shareholder rejection, regulatory denial, integration challenges, market demand shifts, and macroeconomic headwinds affecting the 3D printing industry.
Investor Verification Checklist
- Verify the final outcome of the Desktop Metal shareholder vote on the Merger Agreement.
- Monitor the status of regulatory approvals, specifically CFIUS and antitrust clearances.
- Review Desktop Metal's quarterly cash burn to ensure it does not exceed the $20.0 million threshold that could allow Nano Dimension to terminate the deal.
- Assess the utilization of the $20.0 million Bridge Loan Facility, as this will directly reduce the cash consideration paid to shareholders.
- Examine the definitive Proxy Statement for detailed risk factors and the final terms of the transaction.