F-4 1 ny20009515x1_f4.htm F-4

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As filed with the Securities and Exchange Commission on June 20, 2023.
Registration No. 333-    
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM F-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
STRATASYS LTD.
(Exact Name of Registrant as Specified in its Charter)
Israel
(State or other jurisdiction of incorporation or organization)
3577
(Primary Standard
Industrial Classification Code Number)
Not Applicable
(IRS Employer Identification Number)
c/o Stratasys, Inc
7665 Commerce Way
Eden Prairie, Minnesota 55344
(952) 937-3000
1 Holtzman Street, Science Park
P.O. Box 2496
Rehovot, Israel 76124
+972-74-745-4400
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Richard Garrity
c/o Stratasys, Inc.
7665 Commerce Way
Eden Prairie, Minnesota 55344
(952) 937-3000
(Name, address, including zip code, and telephone number, including area code, of agent of service)
With copies to:
J. David Chertok, Adv.
Jonathan M. Nathan, Adv.
Jonathan Atha, Adv.
Meitar | Law Offices
16 Abba Hillel Silver Road
Ramat Gan 52506, Israel
+972-3-610-3100
Adam O. Emmerich, Esq.
Viktor Sapezhnikov, Esq.
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Tel: (212) 403-1000
Ryan J. Maierson, Esq.
Daniel Hoffman, Esq.
Elisabeth M. Martin, Esq.
Latham & Watkins LLP
200 Clarendon Street
Boston, MA 02116
(617) 948-6000
Lior Aviram, Adv.
Maya Koubi Bara-nes, Adv.
Ivor Krumholtz, Adv.
Shibolet & Co.
Tou Towers
Yitzhak Sadeh 4
Tel Aviv-Yafo 6777504
+972-3-307-5000
Approximate date of commencement of proposed sale of the securities to the public:
As soon as practicable after the effectiveness of this registration statement and upon completion of the Merger described in the
enclosed joint proxy statement/prospectus.
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the U.S. Securities Act, check the following box and list the U.S. Securities Act registration statement number of the earlier effective registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the U.S. Securities Act, check the following box and list the U.S. Securities Act registration statement number of the earlier effective registration statement for the same offering.
If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:
U.S. Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)
U.S. Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.
Emerging growth company
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the U.S. Securities Act, or until this registration statement shall become effective on such date as the U.S. Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

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The information in this joint proxy statement/prospectus is not complete and may be changed. A registration statement relating to the securities described in this joint proxy statement/prospectus has been filed with the U.S. Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This joint proxy statement/prospectus does not constitute an offer to sell or the solicitation of an offer to buy these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
PRELIMINARY, SUBJECT TO COMPLETION, DATED JUNE 20, 2023
NOTICE OF MEETING, PROXY STATEMENT AND PROSPECTUS OF STRATASYS LTD.
NOTICE OF MEETING AND PROXY STATEMENT OF DESKTOP METAL, INC.


YOUR VOTE IS VERY IMPORTANT
On May 25, 2023, Stratasys Ltd., an Israeli company (which is referred to as Stratasys), Tetris Sub Inc., a wholly-owned subsidiary of Stratasys (which is referred to as Merger Sub), and Desktop Metal, Inc., a Delaware corporation (which is referred to as Desktop Metal) entered into an Agreement and Plan of Merger (which, as it may be amended from time to time, is referred to as the Merger Agreement) that provides for Merger Sub to merge with and into Desktop Metal, which is referred to as the Merger, with Desktop Metal surviving the Merger as a direct wholly owned subsidiary of Stratasys.
At the effective time of the Merger, each share of Class A common stock, par value $0.0001 per share, of Desktop Metal issued and outstanding immediately prior to the effective time (other than shares of Class A common stock owned or held by (a) Desktop Metal as treasury stock, (b) a direct or indirect wholly-owned subsidiary of Desktop Metal or (c) Stratasys or Merger Sub) will be converted automatically into the right to receive 0.123 (which is referred to as the exchange ratio) ordinary shares, par value 0.01 New Israeli Shekels, or NIS, per share, of Stratasys, which number is referred to as the exchange ratio. The exchange ratio is fixed and will not be adjusted for changes in the market price of either Stratasys ordinary shares or Desktop Metal Class A common stock prior to completion of the Merger. Because the exchange ratio is fixed, the market value of the Merger consideration to Desktop Metal stockholders will fluctuate with the market price of Stratasys ordinary shares and will not be known at the time that Stratasys shareholders vote on the Stratasys Merger-related proposal and Desktop Metal stockholders vote on the Desktop Metal Merger Agreement proposal. Based on the closing price of Stratasys ordinary shares of $14.88 on Nasdaq on May 24, 2023, the last full trading day before the public announcement of the Merger Agreement, the implied value of the Merger consideration to Desktop Metal stockholders was approximately $1.83 per share of Desktop Metal Class A common stock, and after applying the exchange ratio of 0.123, Stratasys and Desktop Metal estimated that, immediately following completion of the Merger, Desktop Metal stockholders as of immediately prior to the completion of the Merger will hold, in the aggregate, approximately 41% of the issued and outstanding shares of the combined company, and Stratasys shareholders as of immediately prior to the completion of the Merger will hold, in the aggregate, approximately 59% of the issued and outstanding ordinary shares of the combined company. On [    ], 2023, the latest practicable trading day before the date of this joint proxy statement/prospectus, the closing price of Stratasys ordinary shares on Nasdaq was $[    ] per share, resulting in an implied value of the Merger consideration to Desktop Metal stockholders of $[    ] per share of Desktop Metal Class A common stock. Stratasys ordinary shares are traded on the Nasdaq Global Select Market (which is referred to as Nasdaq) under the symbol “SSYS” and Desktop Metal Class A common stock is traded on the New York Stock Exchange under the symbol “DM.” The Stratasys ordinary shares issued in connection with the Merger will be listed on Nasdaq. We encourage you to obtain current quotes for the Stratasys ordinary shares and the Desktop Metal Class A common stock.
Stratasys will hold its 2023 annual general meeting and extraordinary general meeting of shareholders in connection with the share issuance and other matters to be effected in connection with the Merger, which is referred to as the Stratasys AGM/EGM. At the Stratasys AGM/EGM, Stratasys’ shareholders will be asked to consider and vote on the following proposals: (1) the approval of certain matters to be effected in connection with the Merger, including: the issuance of Stratasys ordinary shares to Desktop Metal stockholders in exchange for their shares of Desktop Metal Class A common stock pursuant to the Merger Agreement; the adoption of Stratasys’ amended and restated articles of association as the articles of association of Stratasys with effect from immediately prior to the effective time of the Merger, which will include an increase of the authorized share capital of Stratasys from NIS 1,800,000, consisting of 180,000,000 ordinary shares, par value NIS 0.01 per share, to NIS 4,500,000, consisting of 450,000,000 ordinary shares, par value NIS 0.01 per share; and the election of a slate of directors consisting of five designees of Stratasys and five designees of Desktop Metal, as well as the combined company’s chief executive officer, as the members of Stratasys’ board of directors effective upon the effective time of the Merger, to serve until the first annual general meeting of shareholders of the combined company following the one-year anniversary of the effective time of the Merger and until the due election and qualification of their respective successors; (2) the approval of the extension of the expiration date of Stratasys’ existing shareholder rights plan until the earlier of the consummation of the Merger or the valid termination of the Merger Agreement

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in accordance with its terms; (3) the re-appointment of Stratasys’ independent auditors for the year ending December 31, 2023 and for the additional period until Stratasys’ next annual general meeting of shareholders, and authorization of the Stratasys board of directors (upon recommendation of the audit committee of the board of directors) to fix their remuneration; and (4) for purposes of Stratasys’ 2023 annual general meeting, the re-election, for the period until the earlier of (i) the consummation of the Merger or (ii) Stratasys’ 2024 annual general meeting of shareholders, and until the due election and qualification of their respective successors, of each of the eight current members of Stratasys’ board of directors. Proposal 1 to be considered at the Stratasys AGM/EGM is referred to as the Stratasys Merger-related proposal. The Stratasys board of directors unanimously recommends that Stratasys shareholders vote “FOR” each of the proposals to be considered at the Stratasys AGM/EGM.
Desktop Metal will hold a special meeting of its stockholders in connection with the proposed Merger, which is referred to as the Desktop Metal special meeting. At the Desktop Metal special meeting, Desktop Metal stockholders will be asked to consider and vote on (1) the proposal to adopt the Merger Agreement, which is referred to as the Desktop Metal Merger Agreement proposal, (2) the proposal to approve, on a non-binding advisory basis, specific compensatory arrangements between Desktop Metal and its named executive officers relating to the Merger and (3) the proposal to adjourn the Desktop Metal special meeting to solicit additional proxies if there are not sufficient votes to approve the Desktop Metal Merger Agreement proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to Desktop Metal stockholders. The Desktop Metal board of directors unanimously recommends that Desktop Metal stockholders vote “FOR” each of the proposals to be considered at the Desktop Metal special meeting.
We cannot complete the Merger unless the Desktop Metal stockholders approve the Desktop Metal Merger Agreement proposal and the Stratasys shareholders approve the Stratasys Merger-related proposal. Your vote on all of the matters to be considered at the Stratasys AGM/EGM and Desktop Metal special meeting is very important, regardless of the number of shares you own. Whether or not you plan to attend the Stratasys AGM/EGM or the Desktop Metal special meeting, as applicable, please promptly mark, sign and date the applicable accompanying proxy card and return it in the enclosed envelope or authorize the individuals named on your proxy card to vote your shares by calling the toll-free telephone number or by using the Internet as described in the instructions included with your proxy card.
The accompanying joint proxy statement/prospectus provides you with important information about the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the Stratasys AGM/EGM, each of the Stratasys proposals, the Desktop Metal special meeting and each of the Desktop Metal proposals. We encourage you to read the entire document carefully, in particular the “Risk Factors” section beginning on page 40 for a discussion of risks related to the Merger and the combined company after the Merger.
We look forward to the successful completion of the Merger.
Sincerely,
Sincerely,
 
 
Yoav Zeif
Chief Executive Officer
Stratasys Ltd.
Ric Fulop
Co-founder, Chairman and Chief Executive Officer
Desktop Metal, Inc.
Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Merger, the Desktop Metal Merger Agreement proposal or the Stratasys Merger proposals in connection with the Merger or determined if this joint proxy statement/prospectus is accurate or complete. Any representation to the contrary is a criminal offense.
This joint proxy statement/prospectus is not intended to be and is not a prospectus for the purposes of the Israeli Securities Law, 5728-1968, and the Israeli Securities Authority has not approved this joint proxy statement/prospectus.
This joint proxy statement/prospectus is dated [    ], 2023 and is first being mailed to Stratasys shareholders and Desktop Metal stockholders on or about [    ], 2023.

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Stratasys Ltd.
c/o Stratasys, Inc.
7665 Commerce Way
Eden Prairie, Minnesota 55344
(952) 937-3000
1 Holtzman Street, Science Park
P.O. Box 2496
Rehovot, Israel 76124
+972-74-745-4400
NOTICE OF 2023 ANNUAL GENERAL MEETING AND EXTRAORDINARY GENERAL
MEETING OF SHAREHOLDERS
TO BE HELD ON [    ], 2023
To the Shareholders of Stratasys Ltd.:
Notice is hereby given that Stratasys Ltd., or Stratasys, will hold its 2023 annual general meeting and extraordinary general meeting of shareholders, which is referred to as the Stratasys AGM/EGM, on [    ], 2023, at [    ] p.m., Israel time/ [    ] a.m., Eastern time, at the offices of Stratasys’ external legal counsel, Meitar Law Offices, 16 Abba Hillel Road, 10th floor, Ramat Gan 5250608, Israel.
At the Stratasys AGM/EGM, the following proposals will be presented:
(1)
the approval of certain matters to be effected in connection with the Agreement and Plan of Merger (which is referred to as the Merger Agreement), dated May 25, 2023, by and among Stratasys, Tetris Sub Inc., a wholly-owned subsidiary of Stratasys, or Merger Sub, and Desktop Metal, Inc., a Delaware corporation, or Desktop Metal, pursuant to which Merger Sub will merge with and into Desktop Metal (which is referred to as the Merger), with Desktop Metal surviving as a direct, wholly-owned subsidiary of Stratasys, including: (i) the issuance of Stratasys ordinary shares, par value NIS 0.01 per share, or Stratasys ordinary shares, to the stockholders of Desktop Metal, in exchange for the shares of Desktop Metal Class A common stock, par value $0.0001 per share, or Desktop Metal Class A common stock, held by them, at a ratio of 0.123 Stratasys ordinary shares per share of Desktop Metal Class A common stock, as consideration under the Merger Agreement; (ii) the adoption of amended and restated articles of association for Stratasys with effect from immediately prior to the effective time of the Merger under the Merger Agreement, which will include an increase of the authorized share capital of Stratasys from NIS 1,800,000, consisting of 180,000,000 ordinary shares, par value NIS 0.01 per share, to NIS 4,500,000, consisting of 450,000,000 ordinary shares, par value NIS 0.01 per share; and (iii) the election of a slate of five designees of Stratasys and five designees of Desktop Metal, as well as the combined company’s chief executive officer, as the members of Stratasys’ board of directors, each of whose term will commence on the effective time of the Merger and until the first annual general meeting of the combined company following the one-year anniversary of the effective time, and until the due election and qualification of each designee’s respective successor, or until each such designee’s earlier resignation, replacement or removal;
(2)
the approval of the extension of the expiration date of Stratasys’ existing shareholder rights plan until the earlier of the consummation of the Merger or the valid termination of the Merger Agreement in accordance with its terms;
(3)
the re-appointment of Stratasys’ independent auditors for the year ending December 31, 2023 and for the additional period until Stratasys’ next annual general meeting of shareholders, and authorization of the Stratasys board of directors (upon recommendation of the audit committee of the board of directors) to fix their remuneration; and
(4)
for purposes of Stratasys’ 2023 annual general meeting, the re-election of each of the eight current members of Stratasys’ board of directors, for the period until the earlier of (i) the effective time of the Merger or (ii) Stratasys’ 2024 annual general meeting of shareholders, and until the due election and qualification of their respective successors.

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The approval of Proposal 1 to be considered at the Stratasys AGM/EGM, which we refer to as the Stratasys Merger-related proposal, is a condition to the completion of the Merger. None of Proposal 2, Proposal 3 or Proposal 4 is required to be approved as a condition to the completion of the Merger.
The accompanying joint proxy statement/prospectus, including the Merger Agreement attached thereto as Annex A, contains further information with respect to these matters.
Only holders of record of Stratasys ordinary shares at the close of business on [    ], 2023 are entitled to vote at the Stratasys AGM/EGM and any adjournments or postponements thereof.
The Stratasys board of directors has unanimously approved and declared advisable and in the best interests of Stratasys and its shareholders the Merger Agreement and the transactions contemplated by the Merger Agreement on the terms and subject to the conditions set forth in the Merger Agreement. The Stratasys board of directors unanimously recommends that Stratasys shareholders vote “FOR” the Stratasys Merger-related proposal and “FOR” each of the other above-described proposals to be presented at the Stratasys AGM/EGM.
Your vote is very important, regardless of the number of Stratasys ordinary shares you own. We cannot complete the transactions contemplated by the Merger Agreement without the approval of the Stratasys Merger-related proposal. Assuming a quorum is present, the approval of each of the proposals to be presented at the Stratasys AGM/EGM requires the affirmative vote of a majority of the voting power represented at the meeting in person or by proxy and voting on the proposal (which excludes abstentions and broker non-votes).
We urge you to please promptly mark, sign and date the accompanying proxy and return it in the enclosed envelope or authorize the individuals named on the proxy card to vote your shares by calling the toll-free telephone number or by using the Internet as described in the instructions included with the proxy card. If your shares are held in the name of a bank, broker or other nominee, please follow the instructions on the voting instruction form furnished by such bank, broker or other nominee.
If you have any questions about the Merger, please contact Stratasys at 1-800-801-6491 or write to Stratasys Ltd., c/o Stratasys, Inc., 7665 Commerce Way, Eden Prairie, Minnesota 55344, Attention: Investor Relations, or via email to Yonah.Lloyd@stratasys.com.
If you have any questions about how to vote or direct a vote in respect of your Stratasys ordinary shares, you may contact our proxy solicitor, Morrow Sodali, via phone at 1-800-662-5200 (toll-free within the United States) or at 1-203-658-9400 (outside the United States), or via email at SSYS@info.morrowsodali.com.
 
By Order of the Board of Directors,
 
 
 
Dov Ofer
Chairman of the Board
Rehovot, Israel
Dated: [    ], 2023
Your vote is important. Stratasys shareholders are requested to complete, date, sign and return the enclosed proxy or voting instruction form in the envelope provided, or to submit their votes electronically through the Internet or by telephone.

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Desktop Metal, Inc.
63 3rd Avenue
Burlington, MA, 01803
(978) 224-1244
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON [    ], 2023
To the Stockholders of Desktop Metal, Inc.:
Notice is hereby given that Desktop Metal, Inc., which is referred to as Desktop Metal, will hold a special meeting of its stockholders, which is referred to as the Desktop Metal special meeting, at [    ] Eastern Time on [    ], 2023, for the purpose of considering and voting on the following proposals:
1.
to adopt the Agreement and Plan of Merger, dated as of May 25, 2023 (as it may be amended from time to time), which is referred to as the Merger Agreement, by and among Desktop Metal, Stratasys Ltd., an Israeli company, which is referred to as Stratasys, and Tetris Sub Inc., a Delaware corporation and a direct wholly owned subsidiary of Stratasys, which proposal is referred to the Desktop Metal Merger Agreement proposal;
2.
to approve, on an advisory (non-binding) basis, the executive officer compensation that will or may be paid to Desktop Metal’s named executive officers that is based on or otherwise relates to the transactions contemplated by the Merger Agreement, which proposal is referred to as the Desktop Metal advisory compensation proposal; and
3.
to approve the adjournment of the Desktop Metal special meeting to solicit additional proxies if there are not sufficient votes at the time of the Desktop Metal special meeting to approve the Desktop Metal Merger Agreement proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to Desktop Metal stockholders, which proposal is referred to as the Desktop Metal adjournment proposal.
The Desktop Metal special meeting will be a completely virtual meeting, which will be conducted via live webcast. You will be able to attend the Desktop Metal special meeting online and submit your questions during the meeting by visiting [    ] and entering your 16-digit control number on your proxy card or on the instructions that accompanied your proxy materials.
Desktop Metal will transact no other business at the Desktop Metal special meeting except such business as may properly be brought before the Desktop Metal special meeting or any adjournment or postponement thereof. The accompanying joint proxy statement/prospectus, including the Merger Agreement attached thereto as Annex A, contains further information with respect to these matters.
Holders of record of Desktop Metal’s Class A common stock, par value $0.0001 per share, which is referred to as the Desktop Metal Class A common stock, as of the close of business on [    ], 2023 are entitled to notice of and to vote at the Desktop Metal special meeting, or any continuation, postponement or adjournment of the Desktop Metal special meeting.
The Desktop Metal board of directors, after due and careful discussion and consideration, unanimously determined that the Merger Agreement is fair to and in the best interests of Desktop Metal and its stockholders and approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement. The Desktop Metal board of directors accordingly unanimously recommends that Desktop Metal vote “FOR” the Desktop Metal Merger Agreement proposal, “FOR” the Desktop Metal compensation proposal and “FOR” the Desktop Metal adjournment proposal.
Your vote is very important, regardless of the number of shares of Desktop Metal Class A common stock you own. We cannot complete the transactions contemplated by the Merger Agreement without approval of the Desktop Metal Merger Agreement proposal. Assuming a quorum is present, the approval of the Desktop Metal Merger Agreement proposal requires the affirmative vote of a majority of the outstanding shares of Desktop Metal Class A common stock entitled to vote on the Desktop Metal Merger Agreement proposal.

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Whether or not you plan to attend the Desktop Metal special meeting virtually, we urge you to please promptly mark, sign and date the accompanying proxy and return it in the enclosed postage-paid envelope or authorize the individuals named on the proxy card to vote your shares by calling the toll-free telephone number or by using the Internet as described in the instructions included with the proxy card. If your shares are held in the name of a bank, broker or nominee, please follow the instructions on the voting instruction card furnished by such bank, broker or nominee.
If you have any questions about the Merger, please contact Desktop Metal, Inc., Attention: Investor Relations, Jay Gentzkow, telephone (781) 730-2110 or via email to jaygentzkow@desktopmetal.com.
If you have any questions about how to vote or direct a vote in respect of your shares of Desktop Metal Class A common stock, you may contact our proxy solicitor, D.F. King & Co., Inc., via phone at 1-877-478-5045 (toll-free within the United States) or at 1-212-269-5550 (outside the United States), or via email at DM@dfking.com.
By Order of the Board of Directors,
Meg Broderick
General Counsel and Secretary
Burlington, Massachusetts
Dated: [    ], 2023
Your vote is important. Desktop Metal stockholders are requested to complete, date, sign and return the enclosed proxy in the envelope provided, which requires no postage if mailed in the United States, or to submit their votes electronically through the Internet or by telephone.

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REFERENCES TO ADDITIONAL INFORMATION
This joint proxy statement/prospectus incorporates important business and financial information about Stratasys and Desktop Metal from other documents that Stratasys and Desktop Metal have filed with or furnished to the U.S. Securities and Exchange Commission, which is referred to as the SEC, and that are contained in or incorporated by reference into this joint proxy statement/prospectus. For a listing of documents incorporated by reference into this joint proxy statement/prospectus, please see the section entitled “Where You Can Find More Information” beginning on page 217. This information is available for you free of charge to review through the SEC’s website at www.sec.gov.
Any person may request a copy of this joint proxy statement/prospectus and any of the documents incorporated by reference into this joint proxy statement/prospectus or other information concerning Stratasys or Desktop Metal, without charge, by written or telephonic request directed to the appropriate company or its proxy solicitor at the following contacts:
For Stratasys shareholders:
For Desktop Metal stockholders:
 
 
Stratasys Ltd.
c/o Stratasys, Inc.
7665 Commerce Way
Eden Prairie, Minnesota 55344
Attention: Investor Relations
Email: Yonah.Lloyd@stratasys.com
Telephone: 1-800-801-6491
Desktop Metal, Inc.
63 3rd Avenue
Burlington, MA 01803
Attention: Investor Relations
Email: investors@desktopmetal.com
Telephone: (978) 224-1244
 
 
Morrow Sodali LLC
509 Madison Avenue
Suite 1206
New York, NY 10022
1-800-662-5200 (toll-free within the United States)
1-203-658-9400 (outside the United States)
Email: SSYS@info.morrowsodali.com
D.F. King & Co., Inc.
48 Wall Street
New York, New York 10005
Stockholders call toll-free: (877) 478-5045
Banks and Brokers call: (212) 269-5550
Email: DM@dfking.com
In order for you to receive timely delivery of the documents in advance of the Stratasys 2023 annual and extraordinary general meeting to be held on [    ], 2023, which is referred to as the Stratasys AGM/EGM, or the special meeting of Desktop Metal stockholders to be held on [    ], 2023, which is referred to as the Desktop Metal special meeting, as applicable, you must request the information no later than [    ], 2023.
The contents of the websites of the SEC, Stratasys, Desktop Metal or any other entity are not being incorporated into this joint proxy statement/prospectus. The information about how you can obtain certain documents that are incorporated by reference into this joint proxy statement/prospectus at these websites is being provided only for your convenience.

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ABOUT THIS JOINT PROXY STATEMENT/PROSPECTUS
This document, which forms part of a registration statement on Form F-4 filed with the SEC by Stratasys (File No. 333-    ), constitutes a notice of meeting and proxy statement with respect to the Stratasys AGM/EGM and a prospectus of Stratasys under Section 5 of the Securities Act of 1933, as amended, which is referred to as the Securities Act, with respect to the Stratasys ordinary shares to be issued to Desktop Metal stockholders pursuant to the Agreement and Plan of Merger, dated as of May 25, 2023, by and among Stratasys, Merger Sub, and Desktop Metal, as it may be amended from time to time, which is referred to as the Merger Agreement.
This document also constitutes a notice of meeting with respect to the Desktop Metal special meeting and a proxy statement of Desktop Metal under Section 14(a) of the Securities Exchange Act of 1934, as amended, which is referred to as the Exchange Act.
This joint proxy statement/prospectus is not intended to be and is not a prospectus for the purposes of the Israeli Companies Law, 5759-1999, and the Israeli Securities Authority has not approved this joint proxy statement/prospectus.
Stratasys has supplied all information contained or incorporated by reference into this joint proxy statement/prospectus relating to Stratasys, and Desktop Metal has supplied all information contained or incorporated by reference into this joint proxy statement/prospectus relating to Desktop Metal. Stratasys and Desktop Metal have both contributed to the information related to the Merger contained in this joint proxy statement/prospectus.
You should rely only on the information contained in or incorporated by reference into this joint proxy statement/prospectus. Stratasys and Desktop Metal have not authorized anyone to provide you with information that is different from that contained in or incorporated by reference into this joint proxy statement/prospectus. This joint proxy statement/prospectus is dated [    ], 2023, and you should not assume that the information contained in this joint proxy statement/prospectus is accurate as of any date other than such date unless otherwise specifically provided herein.
Further, you should not assume that the information incorporated by reference into this joint proxy statement/prospectus is accurate as of any date other than the date of the incorporated document. Neither the mailing of this joint proxy statement/prospectus to Stratasys shareholders or Desktop Metal stockholders nor the issuance by Stratasys of Stratasys ordinary shares pursuant to the Merger Agreement will create any implication to the contrary.
This joint proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.
When used in this joint proxy statement/prospectus, all references to “Stratasys” refer to Stratasys Ltd., a company organized under the laws of the State of Israel; all references to “Merger Sub” refer to Tetris Sub Inc., a Delaware corporation and wholly owned subsidiary of Stratasys, formed for the purpose of effecting the Merger as described in this joint proxy statement/prospectus; all references to “Desktop Metal” refer to Desktop Metal, Inc., a Delaware corporation; all references to “combined company” refer to the combined company immediately following completion of the Merger and the other transactions contemplated by the Merger Agreement; all references to “Stratasys ordinary shares” refer to the ordinary shares of Stratasys Ltd., par value NIS 0.01 each; and all references to “Desktop Metal Class A common stock” refer to the Class A common stock of Desktop Metal, par value $0.0001 per share.

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Presentation of Financial Information
This joint proxy statement/prospectus contains or incorporates by reference:
the audited consolidated financial statements of Stratasys as of December 31, 2022 and 2021 and for each of the three (3) years in the period ended December 31, 2022, as well as the unaudited, condensed consolidated financial statements of Stratasys as of, and for the quarter ended, March 31, 2023, prepared in conformity with accounting principles generally accepted in the United States, or GAAP, except that, in the case of the unaudited financial statements, certain financial information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted (the foregoing financial statements are collectively referred to in this joint proxy statement/prospectus as the Stratasys consolidated financial statements); and
the audited consolidated financial statements of Desktop Metal as of December 31, 2022 and 2021 and for each of the three (3) years in the period ended December 31, 2022, as well as the unaudited, condensed consolidated financial statements of Desktop Metal as of, and for the quarter ended, March 31, 2023, prepared on the basis of GAAP, except that, in the case of the unaudited financial statements, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC (the foregoing financial statements are collectively referred to in this joint proxy statement/prospectus as the Desktop Metal consolidated financial statements).
Unless indicated otherwise, financial data presented in this joint proxy statement/prospectus has been taken from the Stratasys consolidated financial statements and the Desktop Metal consolidated financial statements incorporated by reference into this joint proxy statement/prospectus.
This joint proxy statement/prospectus also contains the unaudited pro forma condensed combined balance sheet of Stratasys as of March 31, 2023, after giving effect to the Merger as if it occurred on March 31, 2023 and the unaudited pro forma condensed combined statements of operations for the quarter ended, March 31, 2023, and for the year ended December 31, 2022, after giving effect to the Merger as if it occurred on January 1, 2022. That information is referred to in this joint proxy statement/prospectus as the pro forma financial information. See the section of this joint proxy statement/prospectus entitled “Unaudited Pro Forma Condensed Combined Financial Information.”
The pro forma financial information set forth in this joint proxy statement/prospectus has been rounded for ease of presentation. Accordingly, in certain cases, the sum of the numbers in a column in a table may not conform to the total figure given for that column.
For additional information on the presentation of financial information in this joint proxy statement/prospectus, see the Stratasys consolidated financial statements and the Desktop Metal consolidated financial statements, in each case, that are incorporated by reference into this joint proxy statement/prospectus.

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QUESTIONS AND ANSWERS
The following are answers to certain questions you may have regarding the Merger, the Merger Agreement, the Desktop Metal special meeting of stockholders, referred to as the Desktop Metal special meeting, and the Stratasys 2023 annual and extraordinary general meeting of shareholders, which is referred to as the Stratasys AGM/EGM. You are urged to carefully read this joint proxy statement/prospectus and the other documents referred to in this joint proxy statement/prospectus in their entirety because this section may not provide all the information that is important to you regarding these matters. Additional important information is contained in the annexes to, and the documents incorporated by reference into, this joint proxy statement/prospectus. You may obtain the information incorporated by reference in this joint proxy statement/prospectus, without charge, by following the instructions under the section entitled “Where You Can Find More Information” beginning on page 217.
If you are in any doubt about this transaction you should consult an independent financial advisor.
Q:
Why am I receiving this joint proxy statement/prospectus?
A:
On May 25, 2023, Stratasys, Merger Sub and Desktop Metal entered into the Merger Agreement pursuant to which Stratasys agreed to acquire Desktop Metal in a transaction in which Merger Sub, a wholly owned subsidiary of Stratasys, will merge with and into Desktop Metal with Desktop Metal surviving as a wholly owned subsidiary of Stratasys. The Merger Agreement attached to this joint proxy statement/prospectus as Annex A governs the terms of the transaction and requires, among other things, that Stratasys hold an extraordinary general meeting of its shareholders to approve the share issuance comprising the share consideration in the Merger, and that Desktop Metal hold a special meeting of its stockholders to approve the adoption of the Merger Agreement.
Stratasys and Desktop Metal are sending these materials to their respective shareholders and stockholders to help them decide how to vote their Stratasys ordinary shares and shares of Desktop Metal Class A common stock, as the case may be, with respect to the matters to be considered at the Stratasys AGM/EGM and Desktop Metal special meeting, respectively.
Further information about the Desktop Metal special meeting, the Stratasys AGM/EGM, the Merger and the Merger Agreement is contained in this joint proxy statement/prospectus. This joint proxy statement/prospectus constitutes a proxy statement of Desktop Metal and a proxy statement/prospectus of Stratasys. It is a Desktop Metal proxy statement because the Desktop Metal board of directors is soliciting proxies from Desktop Metal stockholders using this joint proxy statement/prospectus. It is a Stratasys proxy statement because the Stratasys board of directors is soliciting proxies from Stratasys shareholders and a Stratasys prospectus because Stratasys is offering Stratasys ordinary shares to Desktop Metal stockholders in exchange for their shares of Desktop Metal Class A common stock as the Merger consideration.
This joint proxy statement/prospectus is not intended to be and is not a prospectus for the purposes of the Israeli Securities Law, 5728-1968, and the Israeli Securities Authority has not approved this joint proxy statement/prospectus.
Q:
When and where will the Desktop Metal special meeting and the Stratasys AGM/EGM take place?
A:
The Desktop Metal special meeting will be held at [    ], at [    ], Eastern time, on [    ], 2023. The Desktop Metal special meeting will be a completely virtual meeting, which will be conducted via live webcast.
You may attend and participate in the Desktop Metal special meeting by visiting the following website: www.virtualshareholdermeeting.com/[    ]. To attend and participate in the Desktop Metal special meeting, you will need the 16-digit control number included on your proxy card or on the instructions that accompanied your proxy materials. If your shares are held in “street name,” you should contact your bank, broker or nominee to obtain your 16-digit control number or otherwise vote through the bank, broker or nominee. If you lose your 16-digit control number, you may join the Desktop special meeting as a “Guest” but you will not be able to vote or ask questions. The meeting webcast will begin promptly at [    ]. Eastern time. We encourage you to access the meeting prior to the start time. Online check-in will begin at [    ] Eastern time, and you should allow ample time for the check-in procedures.
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The Stratasys AGM/EGM will be held at [  ] p.m., Israel time (which is [  ] a.m., Eastern time), on [   ], 2023, at the offices of Stratasys’ external legal counsel, Meitar Law Offices, 16 Abba Hillel Road, 10th floor, Ramat Gan 5250608, Israel.
If you choose to vote your shares in person at the Stratasys AGM/EGM, please bring your enclosed proxy card and means of identification. Even if you plan to attend the Stratasys AGM/EGM in person, Stratasys recommends that you vote your shares in advance as described below so that your vote will be counted if you later decide not to or become unable to attend the meeting. Please refer to the section entitled “The Stratasys 2023 Annual and Extraordinary General Meeting— Attending the Stratasys AGM/EGM” beginning on page 66 for more information.
Shares held in “street name” may be voted in person by you only if you obtain a signed legal proxy from your bank, broker or other nominee giving you the right to vote the shares at the applicable stockholder/ shareholder meeting.
Q:
What matters will be considered at each of the stockholder/shareholder meetings?
A:
At the Desktop Metal special meeting, Desktop Metal stockholders are being asked:
To approve the adoption of the Merger Agreement, which proposal is referred to as the Desktop Metal Merger Agreement proposal;
To approve, on an advisory (non-binding) basis, the Merger-related named executive officer compensation payments that will or may be paid by Desktop Metal to its named executive officers that is based on or otherwise relates to the Merger as disclosed in the section entitled “Interests of Desktop Metal’s Directors and Executive Officers in the Merger” beginning on page 177, which proposal is referred to as the Desktop Metal advisory compensation proposal; and
To approve the adjournment of the Desktop Metal special meeting to another date and place if necessary or appropriate to solicit additional votes in favor of the Desktop Metal Merger Agreement proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to Desktop Metal stockholders, which proposal is referred to as the Desktop Metal adjournment proposal.
The Desktop Metal Merger Agreement proposal, the Desktop Metal advisory compensation proposal, and the Desktop Metal adjournment proposal together are referred to as the Desktop Metal proposals.
At the Stratasys AGM/EGM, Stratasys shareholders will be presented with the following proposals:
Approval of certain matters to be effected in connection with the Merger Agreement and the Merger, including: (i) the issuance of Stratasys ordinary shares to the stockholders of Desktop Metal in exchange for the shares of Desktop Metal Class A common stock held by them, at a ratio of 0.123 Stratasys ordinary shares per share of Desktop Metal Class A common stock, as consideration under the Merger Agreement; (ii) the adoption of amended and restated articles of association for Stratasys with effect from immediately prior to the effective time of the Merger under the Merger Agreement, which will include an increase of the authorized share capital of Stratasys from NIS 1,800,000, consisting of 180,000,000 ordinary shares, par value NIS 0.01 per share, to NIS 4,500,000, consisting of 450,000,000 ordinary shares, par value NIS 0.01 per share; and (iii) the election of a slate of five designees of Stratasys and five designees of Desktop Metal, as well as the combined company’s chief executive officer, as the members of Stratasys’ board of directors, each of whose term will commence on the effective time of the Merger and until the first annual general meeting of the combined company following the one-year anniversary of the effective time of the Merger and upon the due election and qualification of each designee’s respective successor, or until each respective designee’s earlier resignation, replacement or removal (this proposal is referred to as the Stratasys Merger-related proposal);
Approval of the extension of the expiration date of Stratasys’ existing shareholder rights plan until the earlier of the consummation of the Merger or the valid termination of the Merger Agreement in accordance with its terms (this proposal is referred to as the Stratasys rights plan extension proposal);
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Re-appointment of Stratasys’ independent auditors for the year ending December 31, 2023 and for the additional period until Stratasys’ next annual general meeting of shareholders, and authorization of the Stratasys board of directors (upon recommendation of the audit committee of the board) to fix their remuneration (this proposal is referred to as the Stratasys auditor re-appointment proposal); and
For purposes of Stratasys’ 2023 annual general meeting, the re-election, for a term that lasts until the earlier of the effective time of the Merger or Stratasys’ 2024 annual general meeting of shareholders, and until the due election and qualification of their respective successors, of each of the eight current members of Stratasys’ board of directors (this proposal is referred to as the Stratasys annual meeting director re-election proposal).
The foregoing proposals to be presented at the Stratasys AGM/EGM are referred to collectively as the Stratasys proposals.
In addition to the foregoing proposals, at the Stratasys AGM/EGM, the audited, consolidated financial statements of Stratasys for the annual period ended December 31, 2022 will be presented to, and considered by, Stratasys’ shareholders, as required for an annual general meeting of shareholders under the Israeli Companies Law, 5759- 1999, which we refer to as the Israeli Companies Law. There will be no vote required for this additional matter.
Q:
Does my vote matter?
A:
Yes, your vote is very important.
The approval of the Desktop Metal Merger Agreement proposal and the approval of the Stratasys Merger-related proposal are conditions to the completion of the Merger.
The completion of the Merger is not conditioned on the approval of the Desktop Metal adjournment proposal, the Desktop Metal advisory compensation proposal, the Stratasys rights plan extension proposal or the Stratasys auditor re-appointment proposal.
The enclosed proxy materials allow you to grant a proxy or vote your shares by mail, telephone or Internet without attending the Desktop Metal special meeting or the Stratasys AGM/EGM virtually or in person, as applicable.
Q:
What will Desktop Metal stockholders receive if the Merger is completed?
A:
In the Merger, each share of Desktop Metal Class A common stock issued and outstanding immediately prior to the effective time (other than (i) shares of Desktop Metal Class A common stock owned by Desktop Metal as treasury stock (ii) shares of Desktop Metal Class A common stock owned by a direct or indirect wholly-owned subsidiary of Desktop Metal and (iii) shares of Desktop Metal Class A common stock owned by Stratasys or Merger Sub) will be converted into the right to receive, subject to the Merger Agreement, 0.123 Stratasys ordinary shares, referred to as the Merger consideration.
No fractional Stratasys ordinary shares will be issued in connection with the Merger. Each holder of shares of Desktop Metal Class A common stock who would otherwise be entitled to receive a fraction of a Stratasys ordinary share (after aggregating all Stratasys ordinary shares issuable to such stockholder) will, in lieu of such fraction of a share, be paid in cash the dollar amount (rounded to the nearest whole cent), without interest, determined by multiplying such fraction by the closing price of the Stratasys ordinary shares on the last trading day before the Merger becomes effective.
Because Stratasys will issue a fixed number of Stratasys ordinary shares in exchange for each share of Desktop Metal Class A common stock, the value of the Merger consideration that Desktop Metal stockholders will receive in the Merger will depend on the market price of Stratasys ordinary shares at the time the Merger is completed. The market price of Stratasys ordinary shares when Desktop Metal stockholders receive those shares after the Merger is completed could be greater than, less than or the same as the market price of Stratasys ordinary shares on the date of this joint proxy statement/prospectus or at the time of the stockholder/shareholder meetings. Accordingly, you should obtain current stock price quotations for Stratasys ordinary shares and Desktop Metal Class A common stock before deciding how to vote with respect to the approval of the Stratasys Merger-related proposal, in the case of Stratasys shareholders, or the adoption of the Merger Agreement, in the case of Desktop Metal stockholders. Stratasys ordinary shares are traded on the Nasdaq Global Select Market,
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which is referred to as Nasdaq, under the symbol “SSYS.” Desktop Metal Class A common stock is traded on the New York Stock Exchange, referred to as the NYSE, under the symbol “DM”.
For more information regarding the Merger consideration to be provided to Desktop Metal stockholders if the Merger is completed, see the section entitled “The Merger AgreementMerger Consideration” beginning on page 141.
Q:
What will holders of Desktop Metal equity awards receive in the Merger?
A:
Stock Options. At the effective time of the Merger, each option to purchase shares of Desktop Metal Class A common stock, which is referred to as a Desktop Metal Option, outstanding immediately prior to the effective time will be automatically converted into an option to purchase a number of Stratasys ordinary shares on substantially the same terms and conditions (including the same vesting and exercisability terms and conditions) as were applicable under the incentive award plan of Desktop Metal relating to such Desktop Metal Option immediately prior to the effective time (but otherwise subject to the terms and conditions of the Stratasys equity plans), determined by multiplying the number of shares of Desktop Metal Class A common stock subject to such Desktop Metal Option immediately prior to the effective time by the exchange ratio, rounding down to the nearest whole number of shares, at a per share exercise price determined by dividing the per share exercise price of such Desktop Metal Option by the exchange ratio, rounding up to the nearest whole cent.
Restricted Stock Awards. At the effective time of the Merger, each restricted stock award of Desktop Metal, which is referred to as a Desktop Metal RSA, outstanding immediately prior to the effective time will automatically be converted into a grant of a restricted stock award of Stratasys, on substantially the same terms and conditions (including the same vesting terms and conditions) as were applicable under the incentive award plan of Desktop Metal relating to such Desktop Metal RSA immediately prior to the effective time (but otherwise subject to the terms and conditions of the Stratasys equity plans), covering a number of Stratasys ordinary shares determined by multiplying the number of shares of Desktop Metal Class A common stock covered by such Desktop Metal RSA immediately prior to the effective time by the exchange ratio, rounding down to the nearest whole number of shares.
Restricted Stock Unit Awards. At the effective time of the Merger, each restricted stock unit award of Desktop Metal, which is referred to as a Desktop Metal RSU Award, outstanding immediately prior to the effective time will automatically be cancelled in exchange for the grant of a restricted stock unit award to receive, on substantially the same terms and conditions (including the same vesting terms and conditions) as were applicable under the incentive award plan of Desktop Metal relating to such Desktop Metal RSU Award immediately prior to the effective time (but otherwise subject to the terms and conditions of the Stratasys equity plans), a number of Stratasys ordinary shares determined by multiplying the number of shares of Desktop Metal Class A common stock covered by such Desktop Metal RSU Award immediately prior to the effective time by the exchange ratio, rounding down to the nearest whole number of shares.
Q:
What effect will the Merger have on Desktop Metal’s convertible notes?
A:
Under the indenture governing Desktop Metal’s 6.0% Convertible Senior Notes due 2027 (which we refer to as the Convertible Notes), prior to the effective time, Desktop Metal, Stratasys and the trustee of the Convertible Notes will execute a supplemental indenture to, among other things, (i) change each Convertible Note holder’s right to convert Convertible Notes for shares of Desktop Metal into a right to convert Convertible Notes for the Merger consideration based on the exchange ratio on and after the effective date, and (ii) provide for Stratasys’ assumption of certain Desktop Metal’s obligations under the Convertible Notes, including providing a parent guarantee, upon consummation of the Merger, in each case pursuant to the terms of the indenture governing the Convertible Notes. At the effective time, the Convertible Notes will temporarily be exchangeable into, at the combined company’s election, cash or a combination of Stratasys ordinary shares and an amount of cash elected by Stratasys, which will at least be $1,000 per $1,000 principal amount of such Convertible Notes being exchanged.
Q:
Who is entitled to vote at the Desktop Metal special meeting and how many votes do they have?
A:
The Desktop Metal board of directors has fixed the close of business on [    ], 2023 as the record date of the Desktop Metal special meeting. If you were a holder of record of shares of Desktop Metal Class A common stock as of the close of business on the record date you are entitled to receive notice of and to vote at the Desktop Metal special meeting or any adjournments or postponements thereof. You are entitled to one vote
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for each share of Desktop Metal Class A common stock that you owned as of the close of business on the Desktop Metal record date. As of the close of business on the Desktop Metal record date, [    ] shares of Desktop Metal Class A common stock were outstanding and entitled to vote at the Desktop Metal special meeting.
Q:
What are Desktop Metal stockholders being asked to vote on?
A:
At the Desktop Metal special meeting, Desktop Metal stockholders will be asked to vote on the following proposals, which are referred to herein as the Desktop Metal proposals:
1.
Approval of the Desktop Metal Merger Agreement proposal;
2.
Approval of the Desktop Metal advisory compensation proposal; and
3.
Approval of the Desktop Metal adjournment proposal.
Approval of the Desktop Metal Merger Agreement proposal is required for the completion of the Merger. Approval of the Desktop Metal adjournment proposal and the Desktop Metal advisory compensation proposal is not required for the completion of the Merger.
No other matters are intended to be brought before the Desktop Metal special meeting by Desktop Metal.
Q:
What vote is required to approve each proposal at the Desktop Metal special meeting?
A:
Except for the Desktop Metal adjournment proposal, the vote required to approve each of the Desktop Metal proposals listed below assumes the presence of a quorum.
Proposal
Votes Required
Effects of Abstentions and
Broker Non-Votes
Desktop Metal Proposal 1: Desktop Metal Merger
Agreement proposal
The affirmative vote of holders of a majority in voting power of the outstanding Desktop Metal Class A common stock entitled to vote thereon.
Abstentions and broker non-votes will have the same effect as a vote AGAINST the proposal.
 
 
 
Desktop Metal Proposal 2: Desktop Metal Advisory compensation proposal
The affirmative vote of the holders of a majority in voting power of the votes cast.
Abstentions and broker non-votes will have no effect.
 
 
 
Desktop Metal Proposal 3: Desktop Metal adjournment proposal
The affirmative vote of the holders of a majority in voting power of the votes cast.
Abstentions and broker non-votes will have no effect.
Q:
How does the Desktop Metal board of directors recommend Desktop Metal stockholders vote?
A:
The Desktop Metal board of directors unanimously recommends that you vote “FOR” the Desktop Metal Merger Agreement proposal, “FOR” the Desktop Metal advisory compensation proposal and “FOR” the Desktop Metal adjournment proposal.
In considering the recommendations of the Desktop Metal board of directors, Desktop Metal stockholders should be aware that Desktop Metal directors and executive officers have interests in the Merger that are different from, or in addition to, their interests as Desktop Metal stockholders. For a more complete description of these interests, see the information provided in the section entitled “Interests of Desktop Metal’s Directors and Executive Officers in the Merger” beginning on page 177.
Q:
Why are Desktop Metal stockholders being asked to approve on a non-binding basis the Desktop Metal advisory compensation proposal?
A:
Desktop Metal is seeking a non-binding, advisory vote to approve the compensation that may be paid or become payable to Desktop Metal’s named executive officers in connection with the Merger in accordance with SEC Rules. For more information regarding such payments, see the information provided in the section entitled “Interests of Desktop Metal’s Directors and Executive Officers in the Merger” beginning on page 177.
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Q:
What happens if Desktop Metal stockholders do not approve on a non-binding basis the Desktop Metal advisory compensation proposal?
A:
Approval of the Desktop Metal advisory compensation proposal is not a condition to completion of the Merger and is a vote separate and apart from the vote on the Desktop Metal Merger Agreement proposal. Accordingly, Desktop Metal stockholders may vote in favor of the Desktop Metal Merger Agreement proposal and not in favor of the Desktop Metal advisory compensation proposal, or vice versa. Approval of the Desktop Metal advisory compensation proposal is not a condition to completion of the Merger, and it is advisory in nature only, meaning it will not be binding on Desktop Metal or Stratasys. Accordingly, if the Merger is completed, the compensation will be payable, subject only to the conditions applicable thereto, regardless of the outcome of the non-binding, advisory vote of Desktop Metal stockholders. However, Desktop Metal seeks the support of its stockholders and believes that stockholder support is appropriate as the executive compensation programs are designed to incentivize executives to successfully execute a transaction such as that contemplated by the Desktop Metal Merger Agreement proposal from its early stages until consummation.
Q:
Are there any risks relating to the Merger or the combined company that Desktop Metal stockholders should consider in deciding whether to vote on the Desktop Metal proposals?
A:
Yes. Before making any decision on whether and how to vote, Desktop Metal stockholders are urged to read carefully and in its entirety the information contained in the section entitled “Risk Factors” beginning on page 40. Desktop Metal stockholders should also read and carefully consider the risk factors of each of Desktop Metal and Stratasys that are incorporated by reference into this joint proxy statement/prospectus.
Q:
What are Stratasys shareholders being asked to vote on?
A:
At the Stratasys AGM/EGM, Stratasys shareholders will be asked to vote on the approval of the following proposals, which are referred to as the Stratasys proposals:
1.
The Stratasys Merger-related proposal;
2.
The Stratasys rights plan extension proposal;
3.
The Stratasys auditor re-appointment proposal; and
4.
The Stratasys 2023 annual meeting director re-election proposal.
The above-listed Proposals 1 through 4 are referred to collectively as the Stratasys proposals. Only Proposal 1 must be approved in order for the Merger to be completed.
In addition to the foregoing proposals, at the Stratasys AGM/EGM, the audited, consolidated financial statements of Stratasys for the annual period ended December 31, 2022 will be presented to, and considered by, Stratasys’ shareholders, as required for an annual general meeting of shareholders under the Israeli Companies Law. There will be no vote required for this additional matter.
Q:
Why is shareholder approval being sought for each of the Stratasys proposals?
A:
Stratasys Proposal 1Stratasys Merger-related proposal:
The Stratasys Merger-related proposal encompasses the following matters, each of which is provided for under the Merger Agreement and requires Stratasys’ shareholders’ approval pursuant to applicable law:
(i)
Share issuance pursuant to Merger Agreement— Under the Nasdaq Listing Rules, to which Stratasys is subject, shareholder approval is required prior to the issuance of any shares by Stratasys as part of the acquisition of another company if the number of shares or voting power of the shares to be issued equals or exceeds 20% of the number of shares or voting power (as applicable) of outstanding shares prior to the issuance. It is expected that the number and voting power of the Stratasys ordinary shares to be issued by Stratasys pursuant to the Merger Agreement will exceed 20% of the number and voting power of the Stratasys ordinary shares outstanding prior to such issuance. Accordingly, Stratasys shareholders are being asked to consider and approve the issuance of Stratasys ordinary shares pursuant to the Merger Agreement as part of the Merger-related proposal.
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(ii)
Stratasys articles restatement— Under the Israeli Companies Law, any amendment to a company’s articles of association requires the approval of a company’s shareholders. Stratasys and Desktop Metal have agreed within the context of the Merger to make certain changes to Stratasys’ existing articles of association, in order to, among other matters, reflect certain arrangements agreed upon concerning the governance of the combined company during the first two years following the completion of the Merger. The amended and restated articles being proposed for adoption furthermore reflect certain updates to Israeli law that have been made since Stratasys’ existing articles of association were initially adopted, including, for example, the right of a U.S.-traded company such as Stratasys that lacks a controlling shareholder (as defined under the Israeli Companies Law) to comply with certain U.S. stock exchange requirements concerning board independence, and audit and compensation committee composition, in lieu of corresponding Israeli requirements, including the obligation to appoint two external directors in certain circumstances.
The amended and restated articles being proposed for adoption under the Stratasys Merger-related proposal also include an increase to the authorized share capital of Stratasys, which requires shareholder approval under the Israeli Companies Law, just as any other change to a public company’s articles of association. The increase is needed in order to consummate the Merger, since the issuance of Stratasys ordinary shares to Desktop Metal stockholders as the Merger consideration will utilize more than the remainder of Stratasys’ existing authorized share capital. In addition, under the Stratasys shareholder rights plan, which is currently in effect until the Stratasys AGM/EGM, and for which an extension until the completion of the Merger (or the earlier valid termination of the Merger Agreement in accordance with its terms) is being presented for a vote pursuant to Stratasys Proposal 2, Stratasys may potentially issue up to 68,538,475 Stratasys ordinary shares (based on outstanding Stratasys ordinary share data as of May 31, 2023). Those shares could be issued prior to the closing of the Merger even in a scenario in which the Merger is nevertheless completed. Furthermore, the increase in the number of authorized ordinary shares is needed to make available to the combined company a sufficient reserve of shares that can be utilized for ordinary course issuances, such as under the combined company’s share incentive plans and employee share purchase plan. The combined company may also require additional shares available for issuance pursuant to its contemplated growth plans from time to time, for example in order to pursue potential future strategic transactions, such as acquisitions or joint ventures, for which the company may desire to issue equity consideration to contractual counter-parties. As a leading company in the 3D printing industry, the combined company will need to have at its disposal a sufficient reserve of authorized, unissued shares, which will provide it the requisite flexibility to act quickly, subject to potential shareholder approval when required under the Israeli Companies Law, the Nasdaq Listing Rules or other applicable law.
(iii)
Election of Post-Merger Board Slate— The Merger Agreement requires the election of a newly comprised board of directors for the combined company, which will begin to serve on the effective time of the Merger and until the first annual general meeting of shareholders of the combined company to be held after the one-year anniversary of, the effective time of the Merger, and the due election and qualification of each designee’s respective successor, or until such respective designee’s earlier resignation, replacement or removal. In order to implement the joint, strategic vision of Stratasys and Desktop Metal, the parties have agreed upon the ideal make-up of the post-Merger board of directors, which will consist of five members designated by each of Desktop Metal (including Ric Fulop, as Chairman) and Stratasys (including Dov Ofer, as Lead Independent Director), as well as Dr. Yoav Zeif, the chief executive officer of the combined company. Under the Israeli Companies Law, the election of a public company’s board of directors is carried out by the shareholders, and the election of the proposed post-Merger board, as a single slate, is therefore being included in the Stratasys Merger-related proposal. The election of the post-Merger board pursuant to this proposal will also enable the combined company board to begin to work right away upon completion of the Merger to effect value creation on behalf of the combined company’s shareholders.
The Stratasys Merger-related proposal does not include the approval of the Merger or adoption of the Merger Agreement, since Stratasys shareholders are not required to provide those approvals under Israeli law, as Stratasys itself will not be merging. Accordingly, Stratasys shareholders are not being asked to vote on the Merger or the adoption of the Merger Agreement.
Stratasys Proposal 2Stratasys rights plan extension proposal:
Stratasys’ existing shareholder rights plan was initially adopted by the Stratasys board of directors in July 2022, exercising its authority under applicable law. The rights plan was recently amended by the board to extend the
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expiration date until the date of the Stratasys AGM/EGM. The Stratasys board of directors seeks to have Stratasys shareholders’ approval to the rights plan extension proposal (though such approval is not legally mandatory) for the extension of the duration of the rights plan until the earlier of the effective time of the Merger or the valid termination of the Merger Agreement in accordance with its terms. Although not legally required to do so, Stratasys is nevertheless including this proposal in the agenda for the Stratasys AGM/EGM as a means to obtain from Stratasys’ shareholders their approval for the further extension of the rights plan, in support of the Stratasys board of directors. Any person could seek to opportunistically benefit from coercive or otherwise unfair takeover tactics to the detriment of the vast majority of Stratasys’ public shareholders, and that possibility may continue until the Merger is completed. The proposed extension of Stratasys’ shareholder rights plan until the effective time of the Merger (or until termination of the Merger Agreement, if sooner) is intended to prevent that from happening even after the Stratasys AGM/EGM, during the mandatory 30-day subsequent period until completion of the Merger.
Stratasys Proposal 3Stratasys auditor re-appointment proposal:
One of the required approvals at an annual general meeting of a public company such as Stratasys under the Israeli Companies Law is the appointment, by the shareholders, of auditors for the audit of the financial statements of the company. Stratasys desires that the Stratasys AGM/EGM serve as Stratasys’ annual general meeting for 2023. Consequently, Stratasys is including in the agenda for the EGM the re-appointment, for the year ending December 31, 2023 and the additional period until Stratasys’ next annual general meeting of shareholders, of Kesselman & Kesselman, a member firm of PricewaterhouseCoopers International Limited, as Stratasys’ independent auditors.
Stratasys Proposal 4Stratasys 2023 annual meeting director re-election proposal:
The Stratasys AGM/EGM will serve as Stratasys’ annual general meeting of shareholders for 2023. Under the Israeli Companies Law and Stratasys’ existing articles of association, the election or re-election of directors occurs at the annual general meeting of shareholders. The Merger is expected to be completed in the fourth quarter of 2023, at which time the slate of directors of the combined company being proposed for election pursuant to the Stratasys Merger-related proposal will begin to serve. Nevertheless, because it is not certain when and whether the Merger will actually be completed, Stratasys is proposing that in the interim, each of its eight current board members be re-elected for a term lasting until the earlier of (i) the effective time of the Merger or (ii) Stratasys’ 2024 annual general meeting of shareholders, and (in either case) until the due election and qualification of his or her successor.
No other matters are intended to be brought for approval before the Stratasys AGM/EGM by Stratasys.
Q:
Is the approval of each of the proposals to be presented at the Stratasys AGM/EGM required for completion of the Merger?
A:
No. Only the approval of the Stratasys Merger-related proposal at the Stratasys AGM/EGM is required for completion of the Merger. The approval of the remaining proposals— the Stratasys rights plan extension proposal, Stratasys auditor re-appointment proposal and Stratasys 2023 annual meeting director re-election proposal— is not a condition to completion of the Merger.
Q:
What vote is required to approve each proposal at the Stratasys AGM/EGM?
A:
The affirmative vote of a majority of the voting power represented at the Stratasys AGM/EGM in person or by proxy and voting on any particular proposal is required to approve that proposal.
Because the vote required to approve each of the Stratasys proposals is based on votes properly cast at the Stratasys AGM/EGM, abstentions, broker non-votes and other failures to vote, will have no effect on the outcome of the vote on any such proposals.
Q:
How does the Stratasys board of directors recommend Stratasys shareholders vote?
A:
The Stratasys board of directors unanimously recommends that you vote “FOR” each of the Stratasys Merger-related proposal, the Stratasys rights plan extension proposal, the Stratasys auditor re-appointment proposal, and the Stratasys 2023 annual meeting director re-election proposal.
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In considering the recommendations of the Stratasys board of directors, Stratasys shareholders should be aware that Stratasys directors and executive officers may be deemed to have interests in the Merger that are different from, or in addition to, their interests as Stratasys shareholders. For a more complete description of these interests, see the information provided in the section entitled “Interests of Stratasys’ Directors and Executive Officers in the Merger” beginning on page 176.
Q:
How does the pending partial tender offer by Nano Dimension Ltd. impact my decision as to how to vote on the Stratasys proposals at the Stratasys AGM/EGM?
A:
If you were to tender your Stratasys ordinary shares in acceptance of the unsolicited partial tender offer by Nano Dimension Ltd., which is referred to as Nano Dimension or Nano, to purchase Stratasys ordinary shares that was launched on May 25, 2023, which is referred to as the Nano Tender Offer, and the Nano Tender Offer is successfully or even partially completed prior to the record date for the Stratasys AGM/EGM, you would lose your ability to vote on the Merger in respect of such shares, as you would no longer own such Stratasys ordinary shares as of the record date for the Stratasys AGM/EGM. Stratasys’ board of directors believes the Nano Tender Offer is inadequate and substantially undervalues Stratasys because it does not reflect the underlying value of Stratasys’ business, assets, operations and prospects, including its industry-leading position and growth opportunities, including those expected to result from the Merger. The Stratasys board of directors therefore strongly encourages you not to tender your shares and to file a Notice of Objection pursuant to Israeli law in response to the Nano Tender Offer in order to enable yourself to vote in favor of each of the Stratasys proposals to be presented at the Stratasys AGM/EGM, and to thereby enable the value-adding Merger with Desktop Metal.
Q:
Are there any risks relating to the Stratasys Merger-related proposal or the combined company that Stratasys shareholders should consider in deciding how to vote on the Stratasys proposals?
A:
Yes. Before making any decision on whether and how to vote, Stratasys shareholders are urged to read carefully and in its entirety the information contained in the section entitled “Risk Factors” beginning on page 40. Stratasys shareholders should also read and carefully consider the risk factors of each of Desktop Metal and Stratasys that are incorporated by reference into this joint proxy statement/prospectus.
Q:
How do I vote my Desktop Metal Class A common stock?
A:
If you are a stockholder of record of Desktop Metal as of the Desktop Metal record date, you may vote by granting a proxy. Specifically, you may vote:
By Internet—You can vote over the Internet at www.proxyvote.com by following the instructions on the proxy card;
by Telephone—You can vote by telephone by calling [    ] and following the instructions on the proxy card;
by Mail—You can vote by mail by signing, dating and mailing the proxy card, which you may have received by mail; or
Electronically at the Meeting—If you attend the meeting online, you will need the 16-digit control number included on your proxy card or on the instructions that accompanied your proxy materials to vote electronically during the meeting.
Internet and telephone voting facilities for stockholders of record will be available 24 hours a day and will close at 11:59 p.m. Eastern time, on [    ], 2023. To participate in the Desktop Metal special meeting, including to vote via the Internet or telephone, you will need the 16-digit control number included on your proxy card or on the instructions that accompanied your proxy materials.
Whether or not you expect to attend the Desktop Metal special meeting online, we urge you to vote your shares as promptly as possible to ensure your representation and the presence of a quorum at the Desktop Metal special meeting. If you submit your proxy, you may still decide to attend the Desktop Metal special meeting and vote your shares electronically.
Beneficial Owners of Shares Held in “Street Name.” If your shares are held in “street name” through a bank, broker or other nominee, you will receive instructions on how to vote from the bank, broker or other nominee. You must follow their instructions in order for your shares to be voted. Internet and telephone voting also may
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be offered to stockholders owning shares through certain banks, brokers and other nominees. If your shares are not registered in your own name and you would like to vote your shares online at the Desktop Metal special meeting, you should contact your bank, broker or other nominee to obtain your 16-digit control number or otherwise vote through the bank, broker or other nominee. If you lose your 16-digit control number, you may join the Desktop Metal special meeting as a “Guest” but you will not be able to vote, ask questions or access the list of stockholders as of the Desktop Metal Record Date.
You will need to obtain your own Internet access if you choose to attend the Desktop Metal special meeting online and/or vote over the Internet.
Additional information on attending the Desktop Metal special meeting can be found under the section entitled “The Desktop Metal Special Meeting” beginning on page 82.
Q:
How do I vote my Stratasys ordinary shares?
A:
Record Shareholders:
If you are a shareholder of record of Stratasys as of the Stratasys record date, you may submit your proxy before the Stratasys AGM/EGM in one of the following ways:
1.
visit the website www.proxyvote.com to submit your proxy via the Internet;
2.
call the toll-free number for telephone proxy submission shown on your proxy card; or
3.
complete, sign, date and return the enclosed proxy card in the enclosed envelope.
To be effective for Stratasys voting, the proxy card duly completed and executed, together with any authority under which it is executed, or a copy thereof certified, must be received by our agent tallying the votes for the Stratasys AGM/EGM by 11:59 p.m., Eastern time, on [  ], 2023 (the day before the Stratasys AGM/EGM) in order to be counted towards the tally of votes at the Meeting. In the alternative, the proxy card may be deposited at the Israeli headquarters of Stratasys, so as to be received no later than four hours before the start of the Stratasys AGM/EGM, i.e., by [  ] a.m. Israel time/ [] a.m., Eastern Time, on [  ], 2023. If the Stratasys AGM/EGM is adjourned, the corresponding deadlines for submitting your proxy card will apply prior to the start of the adjourned meeting.
Alternatively, if you are submitting your proxy electronically, via the Internet (at www.proxyvote.com) (subject to the applicable terms and conditions), you may do so until 11:59 p.m., Eastern time, on [  ], 2023, or if the Stratasys AGM/EGM is adjourned, by 11:59 p.m., Eastern time, on the day that falls more than 24 hours before the time appointed for the adjourned meeting,.
You may also cast your vote in person at Stratasys AGM/EGM. Even if you plan to attend the Stratasys AGM/EGM, Stratasys recommends that you vote your shares in advance as described above so that your vote will be counted if you later decide not to or become unable to attend the Stratasys AGM/EGM.
“Street Name” Shareholders:
If your shares are held in “street name,” through a broker, bank or other nominee, that institution will send you separate instructions describing the procedure for voting your shares, whether online, via telephone or through a physical voting instruction form. Generally, you may submit your vote by going to www.proxyvote.com and by following the instructions on how to complete an electronic voting instruction form. Voting instructions must be received from a “street name” shareholder by 11:59 p.m., Eastern time, on [____], 2023 (the day before the Stratasys AGM/EGM) in order to be counted towards the tally of votes at the Meeting.
“Street name” shareholders who wish to vote in person at the meeting will need to obtain a proxy from their broker, bank or other nominee that authorizes them to vote their shares and shows how many shares they hold (and must bring appropriate identification to the Stratasys AGM/EGM).
Additional information on attending the Stratasys AGM/EGM can be found under the section entitled “The Stratasys 2023 Annual and Extraordinary General Meeting” beginning on page 62.
Q:
What if I sell my shares of Desktop Metal Class A common stock before the Desktop Metal special meeting, or I sell my Stratasys ordinary shares before the Stratasys AGM/EGM?
A:
If you transfer your shares of Desktop Metal Class A common stock after the Desktop Metal Record Date but
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before the Desktop Metal special meeting, you will, unless you provide the transferee of your shares with a proxy, retain your right to vote at the Desktop Metal special meeting, but will have transferred the right to receive the Merger Consideration. In order to receive the Merger Consideration as a result of the Merger, you must hold your shares through the effective time of the Merger, which is referred to as the effective time.
If you transfer your Stratasys ordinary shares after the Stratasys record date but before the Stratasys AGM/EGM, you will, unless you provide the transferee of your shares with a proxy, retain your right to vote at the Stratasys AGM/EGM.
Q:
Who will solicit and pay the cost of soliciting proxies?
A:
Stratasys has engaged Morrow Sodali LLC, referred to as Morrow Sodali, to assist in the solicitation of proxies for the Stratasys AGM/EGM. Stratasys estimates that Stratasys will pay Morrow Sodali a fee of approximately [    ], plus costs and expenses. Stratasys has agreed to indemnify Morrow Sodali against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions).
Desktop Metal has engaged D.F. King & Co., Inc. which is referred to as DF King, to assist in the solicitation of proxies for the Desktop Metal special meeting. Desktop Metal estimates that it will pay DF King a fee of approximately $25,000, plus reimbursement for certain fees and expenses. Desktop Metal has agreed to indemnify DF King against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions).
Stratasys and Desktop Metal also may be required to reimburse banks, brokers and other custodians, nominees and fiduciaries or their respective agents for their expenses in forwarding proxy materials to beneficial owners of Stratasys ordinary shares and Desktop Metal Class A common stock, respectively.
Stratasys’ directors, officers and employees and Desktop Metal’s directors, officers and employees also may solicit proxies by telephone, by electronic means or in person. They will not be paid any additional amounts for soliciting proxies.
Q:
Should I send in my Desktop Metal stock certificates or otherwise attempt to surrender my Desktop Metal book-entry shares now?
A:
No. To the extent Desktop Metal stockholders have certificated shares, such Desktop Metal stockholders should keep their existing stock certificates at this time. Similarly, holders of Desktop Metal stock that is held in book-entry form should not go about trying to surrender their shares currently. After the Merger is completed, Desktop Metal stockholders will receive from the exchange agent a letter of transmittal and written instructions for exchanging their stock certificates, or instructions as to how the share exchange process will work for receipt of the Merger consideration for shares held in book-entry form or in “street name” (by a bank, broker or other nominee).
Q:
What constitutes a quorum for the Desktop Metal special meeting?
A:
The holders of record of a majority of the voting power of the issued and outstanding shares of capital stock entitled to vote must be present in person or virtually or represented by proxy to constitute a quorum for the Desktop Metal special meeting. Abstentions are counted as present and entitled to vote for purposes of determining a quorum. Shares represented by “broker non-votes” (as described below) are counted as present and entitled to vote for purposes of determining a quorum. The proposals for consideration at the Desktop Metal special meeting are considered “non-routine” matters under the rules of the NYSE, and, therefore, shares of Desktop Metal special meeting held in “street name” through a bank, broker or other nominee will not be counted as present for the purpose of determining the existence of a quorum if no instructions have been provided to such entity on how to vote on any such proposals.
Q:
What constitutes a quorum for the Stratasys AGM/EGM?
A:
The presence of two (2) or more shareholders (present by proxy or in person) holding at least 25% of the voting rights (equivalent to 25% of the outstanding number of ordinary shares) in Stratasys as of the record date for the Stratasys AGM/EGM is necessary to constitute a quorum. A person holding a proxy may be deemed to be two or more Stratasys shareholders for purposes of determining a quorum if such person holds the proxy of more than one shareholder. Abstentions and shares represented by “broker non-votes” (as described below) are counted as present and entitled to vote for purposes of determining a quorum.
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If within one-half hour after the time appointed for the Meeting, a quorum is not present, the Stratasys AGM/EGM will be adjourned to the same day, in the following week, at the same hour and at the same place. At such adjourned meeting, any two or more Stratasys shareholders present in person or by proxy will constitute a quorum, regardless of the number of Stratasys ordinary shares held by them.
Q:
What is the difference between holding shares as a stockholder of record and as a beneficial owner of shares held in “street name”?
A:
If your shares are registered directly in your name with the issuer’s transfer agent, you are considered the stockholder of record with respect to those shares. As the stockholder of record, you have the right to vote, or to grant a proxy for your vote to a third party to vote. If your shares are held by a bank, broker or other nominee, you are considered the beneficial owner of shares held in “street name,” and your bank, broker or other nominee is considered the stockholder of record with respect to those shares. Your bank, broker or other nominee will send you, as the beneficial owner, a package describing the procedure for voting your shares. You should follow the instructions provided by them to vote your shares.
Q:
What is a “broker non-vote”?
A:
A broker non-vote occurs if you hold your shares in street name, do not provide voting instructions to your broker on a proposal, and your broker does not have discretionary authority to vote on such proposal. In such circumstances, the organization that holds your shares may generally vote on “routine” matters, but cannot vote on “non-routine” matters. All of the proposals currently scheduled for consideration at the Desktop Metal special meeting and the Stratasys AGM/EGM, other than Proposal 3 at the Stratasys AGM/EGM—the Stratasys auditor re-appointment proposal—are “non-routine” matters and a broker will lack the authority to vote shares at its discretion on such proposals.
Q:
If my shares are held in “street name” by a broker, bank or other nominee, will my broker, bank or other nominee vote my shares for me?
A:
If your shares are held in “street name” in a stock brokerage account or by a broker, bank or other nominee, you must provide the record holder of your shares with instructions on how to vote your shares. Please follow the voting instructions provided by your broker, bank or other nominee. Please note that you may not vote shares held in “street name” by returning a proxy card directly to Desktop Metal or Stratasys or by voting in person at your respective company’s stockholder or shareholder meeting unless you obtain a “legal proxy,” which you must obtain from your broker, bank or other nominee.
Under the rules of Nasdaq and the NYSE, brokers who hold shares in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, brokers are not allowed to exercise their voting discretion with respect to the approval of matters listed in Nasdaq Rule 2251 or NYSE Rule 452, as applicable, without specific instructions from the beneficial owner. It is expected that all proposals to be voted on at the Desktop Metal special meeting and the Stratasys AGM/EGM (other than Proposal 3 at the Stratasys AGM/EGM— the Stratasys auditor re-appointment proposal) will be “non-routine” matters.
If you are a Desktop Metal stockholder and you do not instruct your broker, bank or other nominee on how to vote your shares your broker, bank or other nominee may not vote your shares on any Desktop Metal proposal.
If you are a Stratasys shareholder and you do not instruct your broker, bank or other nominee on how to vote your shares:
1.
your broker, bank or other nominee may not vote your shares on either of Stratasys Proposals 1 or 2 (i.e., the Stratasys Merger-related proposal or the Stratasys rights plan extension proposal), which will have no effect on any of those proposals (and your shares will not be counted towards determining whether a quorum is present); and
2.
your broker, bank or other nominee may vote your shares on Stratasys Proposal 3 (the Stratasys auditor re-appointment proposal).
Q:
What if a Desktop Metal stockholder or Stratasys shareholder does not vote or returns a proxy or voting instruction form with an “abstain” vote?
A:
Desktop Metal: If you are a Desktop Metal stockholder and you fail to vote, fail to submit a proxy or fail to return a voting instruction form instructing your bank, broker or other nominee how to vote on the Desktop
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Metal Merger Agreement proposal, this will have the same effect as a vote cast against the Desktop Metal Merger Agreement proposal and will not count towards determining whether a quorum is present. If you are a Desktop Metal stockholder and you fail to vote, fail to submit a proxy or fail to return a voting instruction form instructing your bank, broker or other nominee how to vote on the Desktop Metal adjournment proposal or the Desktop Metal advisory compensation proposal, this will have no effect on the vote count for such proposal, and will not count towards determining whether a quorum is present. If you respond with an “abstain” vote on the Desktop Metal Merger Agreement proposal, this will have the same effect as a vote cast against the Desktop Metal Merger Agreement proposal, but will count towards determining whether a quorum is present. If you respond with an “abstain” vote on the Desktop Metal adjournment proposal or the Desktop Metal advisory compensation proposal, this will have no effect on the vote count for such proposal, but will count towards determining whether a quorum is present.
Stratasys: If you are a Stratasys shareholder and you fail to vote, fail to submit a proxy or fail to return a voting instruction form instructing your broker, bank or other nominee how to vote on any of Stratasys Proposals 1, 2 or 4 (i.e., the Stratasys Merger-related proposal, the Stratasys rights plan extension proposal or the Stratasys 2023 annual meeting director re-election proposal), this will have no effect on the vote count for those proposals, and will furthermore not count towards determining whether a quorum is present. In the case of Stratasys Proposal 3 (the Stratasys auditor re-appointment proposal), to the extent the broker does vote your shares despite you not providing instructions, that will impact the vote and will furthermore count towards determining whether a quorum is present. If you respond with an “abstain” vote on any of the Stratasys proposals, that will have no effect on the vote count for any such proposal, but will count towards determining whether a quorum is present.
Q:
What will happen if I sign and return my proxy card without indicating how to vote?
A:
If you sign and return your proxy card without indicating how to vote on any particular proposal (and you do not change your vote after delivering your proxy card), the shares of Desktop Metal Class A common stock represented by your proxy card will be voted for each Desktop Metal proposal in accordance with the recommendation of the Desktop Metal board of directors, or the Stratasys ordinary shares represented by your proxy card will be voted for each Stratasys proposal in accordance with the recommendation of the Stratasys board of directors.
Q:
If I am a stockholder or shareholder of record, may I change my vote after I have delivered my proxy?
A:
Desktop Metal: Yes. If you are a Desktop Metal stockholder of record, you may revoke your proxy and change your vote:
by submitting a duly executed proxy bearing a later date;
by granting a subsequent proxy through the Internet or telephone;
by giving written notice of revocation to the Secretary of Desktop Metal prior to or at the Desktop Metal special meeting; or
by voting online at the Desktop Metal special meeting
Your most recent proxy card or Internet or telephone proxy is the one that is counted. Your attendance at the Desktop Metal special meeting by itself will not revoke your proxy unless you give written notice of revocation to the Secretary before your proxy is voted or you vote online at the Desktop Metal special meeting.
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Stratasys: If you are a Stratasys shareholder of record, you may change your vote or revoke a proxy before the Stratasys AGM/EGM by:
delivering written notice to the Chief Legal Officer of Stratasys, to the below address, that is received at least four hours prior to the commencement of the Stratasys AGM/EGM stating that you have revoked your proxy:
Stratasys Ltd.
1 Holtzman Street, Science Park
P.O. Box 2496
Rehovot, Israel 76124
Attention: Vered Ben Jacob, Chief Legal Officer
signing and returning by mail a proxy card with a later date so that it is received by Stratasys prior to the commencement of the Stratasys AGM/EGM; or
attending the Stratasys AGM/EGM and voting in person.
Q:
If I hold my shares in “street name,” can I change my voting instructions after I have submitted voting instructions to my bank, broker or other nominee?
A:
If your shares are held in “street name”, i.e., held of record by a bank, broker or other nominee, and you previously provided voting instructions to your bank, broker or other nominee, you should follow the instructions provided by your bank, broker or other nominee to revoke or change your voting instructions. You may also change your vote or revoke your proxy in person at the Desktop Metal special meeting or Stratasys AGM/EGM if you obtain a signed proxy from the record holder (broker, bank or other nominee) giving you the right to vote the shares.
Q:
What should I do if I receive more than one set of voting materials?
A:
Desktop Metal stockholders and Stratasys shareholders may receive more than one set of voting materials, including multiple copies of this joint proxy statement/prospectus and multiple proxy cards or voting instruction forms. For example, if you hold Desktop Metal Class A common stock, or Stratasys ordinary shares, in more than one brokerage account, you will receive a separate voting instruction form for each brokerage account in which you hold such shares. If you are a holder of record of Desktop Metal Class A common stock, or Stratasys ordinary shares, and your shares are registered in more than one name, you will receive more than one proxy card. In addition, if you are a holder of both Desktop Metal Class A common stock, and Stratasys ordinary shares, you will receive one or more separate proxy cards or voting instruction forms for each company. Please complete, sign, date and return each proxy card and voting instruction form that you receive or otherwise follow the voting instructions set forth in this joint proxy statement/prospectus to ensure that you vote every share of Desktop Metal Class A common stock and/or every Stratasys ordinary share that you own.
Q:
What if I hold shares in both Desktop Metal and Stratasys?
A:
If you are both a stockholder of Desktop Metal and a shareholder of Stratasys, you will receive two separate packages of proxy materials. A vote cast as a Desktop Metal stockholder will not count as a vote cast as a Stratasys shareholder, and a vote cast as a Stratasys shareholder will not count as a vote cast as a Desktop Metal stockholder. Therefore, please separately submit a proxy or voting instruction form for each of your shares of Desktop Metal Class A common stock and your Stratasys ordinary shares.
Q:
Where can I find the voting results of the Desktop Metal special meeting and the Stratasys AGM/EGM?
A:
Preliminary voting results will be announced at the Desktop Metal special meeting and the Stratasys AGM/EGM and will be set forth in press releases that Desktop Metal and Stratasys intend to issue after the Desktop Metal special meeting and the Stratasys AGM/EGM, respectively. Final voting results for the Desktop Metal special meeting and the Stratasys AGM/EGM are expected to be filed by Desktop Metal and Stratasys with the SEC within four (4) business days after the Desktop Metal special meeting and the Stratasys AGM/EGM, as applicable.
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Q:
Are Desktop Metal stockholders or Stratasys shareholders entitled to seek appraisal rights if they do not vote in favor of the adoption of the Merger Agreement?
A:
No. In accordance with the DGCL, which governs the Merger, no appraisal rights are available to Desktop Metal stockholders in connection with the Merger. Stratasys shareholders are also not entitled to appraisal rights under Israeli law in connection with the Merger or the other transactions contemplated by the Merger Agreement.
Q:
What are the U.S. federal income tax consequences of the Merger to the Desktop Metal stockholders?
A:
Subject to the limitations and qualifications described in the section entitled “Material U.S. Federal Income Tax Considerations of the Merger” below, it is intended that the Merger shall qualify as a “reorganization” within the meaning of Section 368(a) of the Code and the Treasury Regulations promulgated thereunder, which we refer to as the Intended U.S. Tax Treatment. However, the closing of the Merger is not conditioned upon the receipt of an opinion of counsel or a ruling from the Internal Revenue Service (the “IRS”) regarding the U.S. federal income tax treatment of the Merger, and no opinion of counsel or ruling from the IRS will be requested regarding such treatment. Accordingly, there can be no assurance that the IRS will not challenge the qualification of the Merger for the Intended U.S. Tax Treatment or that a court will not sustain such a challenge by the IRS.
Assuming that the Merger qualifies for the Intended U.S. Tax Treatment, a U.S. holder (as defined below under the section entitled “Material U.S. Federal Income Tax Considerations of the Merger—U.S. Holders”) that exchanges shares of Desktop Metal Class A common stock in the Merger for Stratasys ordinary shares generally should not recognize any gain or loss on such exchange, except with respect to cash received in lieu of fractional shares of Stratasys ordinary shares (as discussed below), subject to Section 367(a) of the Code discussed below.
If the Merger does not qualify for the Intended U.S. Tax Treatment (and does not otherwise qualify for tax-deferred treatment under another section of the Code), the Merger would be a taxable transaction in which a U.S. holder of Desktop Metal Class A common stock generally would recognize gain or loss in an amount equal to the difference, if any, between the fair market value as of the effective time of the Merger of the Stratasys ordinary shares received by such U.S. holder, and such U.S. holder’s adjusted tax basis in the Desktop Metal Class A common stock exchanged therefor.
In addition, Section 367(a) of the Code generally requires a U.S. holder of securities in a U.S. corporation to recognize gain (but not loss) when such securities are exchanged for stock or securities of a non-U.S. corporation in an exchange that would otherwise qualify for tax-deferred treatment unless certain conditions are met. At this time, there is significant uncertainty as to whether all of these conditions will be met with respect to the Merger. The application of Section 367(a) of the Code to the Merger is complex and depends on factors that cannot be determined until following the closing of the Merger, as well as the interpretation of legal authorities which are not entirely clear and are subject to change. Accordingly, there can be no assurance that the IRS will not take the position that Section 367(a) of the Code applies to cause U.S. holders to recognize gain (but not loss) as a result of the Merger or that a court will not agree with such a position of the IRS in the event of litigation.
Non-U.S. holders (as defined below under the section entitled “Material U.S. Federal Income Tax Considerations of the Merger—Non-U.S. Holders”) generally will not be subject to U.S. federal income tax or withholding tax on any gain realized upon the exchange of Desktop Metal Class A common stock for Stratasys ordinary shares, subject to the discussions and exceptions discussed below under the section entitled “Material U.S. Federal Income Tax Considerations of the Merger—Non-U.S. Holders—The Merger” and the section entitled “Material U.S. Federal Income Tax Considerations of the Merger—Information Reporting and Backup Withholding.
For a more complete discussion of the U.S. federal income tax considerations of the Merger, including the application of Section 367(a) of the Code, see the section entitled “Material U.S. Federal Income Tax Considerations of the Merger” below.
Q:
When is the Merger expected to be completed?
A:
Subject to receipt of required regulatory approvals and satisfaction or waiver of the other conditions to completion of the Merger, Stratasys and Desktop Metal expect that the Merger will be completed in the fourth quarter of 2023. Neither Desktop Metal nor Stratasys can predict the actual date on which the Merger will be completed, or if the Merger will be completed at all, because completion is subject to conditions and factors
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outside the control of both companies. See the sections entitled “The Merger—Reasonable Best Efforts and Regulatory Approvals” beginning on page 135 and “Risk FactorsRisks Relating to the MergerThere is no assurance when or if the Merger will be completed” beginning on page 41.
Q:
What are the conditions to the completion of the Merger?
A:
In addition to approval of the Desktop Metal Merger Agreement proposal by Desktop Metal stockholders and approval of the Stratasys Merger proposals by Stratasys shareholders, completion of the Merger is subject to the satisfaction or waiver of a number of other conditions, including the receipt of certain regulatory clearances. See the section entitled “The Merger AgreementConditions to the Closing of the Merger” beginning on page 156.
Q:
What effect will the Merger have on Desktop Metal and Stratasys?
A:
The Merger is structured as a “reverse triangular Merger,” in which Merger Sub, a wholly owned subsidiary of Stratasys, will merge with and into Desktop Metal, with Desktop Metal surviving the Merger as a wholly owned subsidiary of Stratasys. Upon consummation of the Merger, Desktop Metal will no longer be a public company and its shares will be delisted from the NYSE, deregistered under the Exchange Act and cease to be publicly traded. Desktop Metal stockholders will receive Merger consideration consisting of Stratasys ordinary shares in the Merger. Stratasys ordinary shares will continue to be listed on Nasdaq and trade under the symbol “SSYS”, will continue to be registered under the Exchange Act, and Stratasys will continue to be subject to its reporting obligations under the Exchange Act.
Q:
What happens if the Merger is not completed?
A:
If the Merger is not completed, Desktop Metal stockholders will not receive any consideration for their shares of Desktop Metal Class A common stock. Instead, Desktop Metal and Stratasys will remain independent public companies and their shares of Class A common stock or ordinary shares, as applicable, will continue to be listed and traded separately on the NYSE and Nasdaq, respectively. If the Merger Agreement is terminated under specified circumstances, Desktop Metal may be required to pay Stratasys and Merger Sub a termination fee of $18.6 million or an expense reimbursement in an amount not to exceed $10 million, or Stratasys and Merger Sub may be required to pay Desktop Metal a termination fee of $32.5 million or $19 million or an expense reimbursement not to exceed $10 million. See the section entitled “The Merger AgreementTermination Fees and Expense Reimbursement” beginning on page 160 for a more detailed discussion of the termination fees.
Q:
What respective equity stakes will Stratasys shareholders and Desktop Metal stockholders hold in the combined company immediately following the Merger?
A:
Based on the number of Stratasys ordinary shares and shares of Desktop Metal Class A common stock outstanding on May 25, 2023, and the exchange ratio of 0.123 Stratasys ordinary shares per one share of Desktop Metal Class A common stock issuable in the Merger, Stratasys and Desktop Metal estimate that, immediately following completion of the Merger, former Desktop Metal stockholders and existing Stratasys shareholders will hold, in the aggregate, approximately 41% and 59%, respectively, of the shares of Stratasys on a fully-diluted basis. The exact equity stake of current Stratasys shareholders and former Desktop Metal stockholders in the combined company immediately following the Merger will depend on the number of Stratasys ordinary shares and Desktop Metal Class A common stock issued and outstanding immediately prior to the Merger.
Q:
What do I need to do now?
A:
You should read this joint proxy statement/prospectus carefully and in its entirety, including the annexes, and return your completed, signed and dated proxy card(s) by mail in the enclosed envelope or submit your voting instructions by telephone or over the Internet as soon as possible so that your shares will be voted in accordance with your instructions.
Please do not submit your Desktop Metal stock certificates at this time. If the Merger is completed, you will receive instructions for surrendering your Desktop Metal stock certificates in exchange for Stratasys ordinary shares from the exchange agent. More information may be found in the sections entitled “The Merger—Exchange of Shares” beginning on page 140 and “The Merger Agreement—Exchange of Shares” beginning on page 142.
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Q:
Who should I contact if I have any questions about the proxy materials or voting?
A:
If you have any questions about the proxy materials or if you need assistance submitting your proxy or voting your shares or need additional copies of this joint proxy statement/prospectus or the enclosed proxy card or voting instruction form, you should contact the proxy solicitation agent for the company in which you hold shares.
Desktop Metal stockholders should contact DF King, the proxy solicitation agent for Desktop Metal, at 48 Wall Street, New York, New York 10005. Desktop Metal stockholders may call DF King collect at 1-212-269-5550 or toll-free at 1-877-478-5045, or email DM@dfking.com.
Stratasys shareholders should contact Morrow Sodali LLC, the proxy solicitation agent for Stratasys, at 509 Madison Avenue, Suite 1206, New York, NY 10022. Stratasys shareholders may call Morrow Sodali at 1-800-662-5200 (toll-free within the United States) or at 1-203-658-9400 (outside the United States) or email Morrow Sodali at: SSYS@info.morrowsodali.com.
Q:
Where can I find more information about Desktop Metal and Stratasys?
A:
You can find more information about Desktop Metal and Stratasys from the various sources described under the section entitled “Where You Can Find More Information” beginning on page 217.
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SUMMARY
For your convenience, provided below is a brief summary of certain information contained in this joint proxy statement/prospectus. This summary highlights selected information from this joint proxy statement/prospectus and does not contain all of the information that may be important to you as a Stratasys shareholder or a Desktop Metal stockholder. To understand the Merger fully and for a more complete description of the terms of the Merger Agreement, you should read carefully this entire joint proxy statement/prospectus, the annexes hereto and the other documents incorporated herein by reference. Items in this summary include a page reference directing you to a more complete description of those items. You may obtain the information incorporated by reference into this joint proxy statement/prospectus without charge by following the instructions under the section entitled “Where You Can Find More Informationbeginning on page 217.
The Parties to the Merger (Page 61)
Stratasys Ltd.
Stratasys is a global leader in polymer-based 3D printing solutions, which it provides at every stage of the product life cycle, with multiple technologies and complete solutions for superior application fit, across industrial, healthcare and consumer fields. Stratasys focuses, in particular, on polymer 3D printing solutions that address the fastest-growing manufacturing solutions, which it views as the biggest potential growth opportunity in the 3D printing industry. Leveraging distinct competitive advantages that include a broad set of best-in-class 3D printing platforms, software, materials and technology partner ecosystems, innovative leadership, and a global GTM infrastructure, Stratasys is positioned to further expand its leadership in this significant and growing global marketplace Stratasys is a public company incorporated in Israel and operates under the Israeli Companies Law. Stratasys has dual headquarters. Its registered office and one of its two principal places of business is located at 1 Holtzman Street, Science Park, P.O. Box 2496, Rehovot 76124, Israel, and its telephone number at that office is (+972)-74-745-4314. Stratasys’ other principal place of business is located at 7665 Commerce Way, Eden Prairie, Minnesota 55344, and its telephone number there is (952) 937-3000.
Tetris Sub Inc.
Tetris Sub Inc., a Delaware corporation and a wholly owned subsidiary of Stratasys, was formed solely for the purpose of facilitating the Merger. Merger Sub has not carried on any activities or operations to date, except for those activities incidental to its formation and undertaken in connection with the Merger and the other transactions contemplated by the Merger Agreement. By operation of the Merger, Merger Sub will be merged with and into Desktop Metal, with Desktop Metal surviving the Merger as a wholly owned subsidiary of Stratasys. Merger Sub’s principal executive office is located at c/o Stratasys Ltd., 7665 Commerce Way, Eden Prairie, Minnesota, 55344, and its telephone number is (952) 937-3000.
Desktop Metal, Inc.
Desktop Metal, Inc. is pioneering a new generation of additive manufacturing technologies focused on Additive Manufacturing 2.0, the volume production of end-use parts. Founded in 2015, Desktop Metal offers a comprehensive portfolio of integrated additive manufacturing solutions comprised of hardware, software, materials and services with support for metals, polymers, elastomers, ceramics, sands, composites, wood and biocompatible materials. Desktop Metal’s solutions span use cases across the product life cycle, from product development to mass production and aftermarket operations, and they address an array of industries, including automotive, healthcare and dental, consumer products, heavy industry, aerospace, machine design and research and development.
Desktop Metal’s principal executive offices are located at 63 Third Avenue, Burlington, Massachusetts, 01803 and its telephone number is +1-978-224-1244.
The Merger and the Merger Agreement (Page 91 and 141)
The terms and conditions of the Merger are contained in the Merger Agreement, a copy of which is attached as Annex A to this joint proxy statement/prospectus. You are encouraged to read the Merger Agreement carefully and in its entirety, as it is the primary legal document that governs the Merger.
Pursuant to the Merger Agreement, Merger Sub will merge with and into Desktop Metal. At the effective time, the separate existence of Merger Sub will cease, and Desktop Metal will be the surviving corporation and a wholly owned subsidiary of Stratasys. Following the Merger, Desktop Metal Class A common stock will be delisted from the NYSE, deregistered under the Exchange Act and will cease to be publicly traded.
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Merger Consideration (Page 91)
In the Merger, each share of Desktop Metal Class A common stock (other than excluded shares, as defined in the section entitled “The Merger—Merger Consideration” beginning on page 91) will be converted automatically into the right to receive 0.123 Stratasys ordinary shares, which number is referred to as the exchange ratio. The exchange ratio is fixed and will not be adjusted for changes in the market price of either Stratasys ordinary shares or Desktop Metal Class A common stock prior to completion of the Merger. No fractional Stratasys ordinary shares will be issued upon the conversion of shares of Desktop Metal Class A common stock pursuant to the Merger Agreement. Each Desktop Metal stockholder that otherwise would have been entitled to receive a fraction of a Stratasys ordinary share will be entitled to receive cash in lieu of a fractional share. At the effective time of the Merger, all excluded shares will be cancelled and will cease to exist, and no payment will be made in respect of such shares.
Stratasys shareholders will continue to own the Stratasys ordinary shares held by them immediately prior to the Merger, and such shares will not be affected by the Merger.
For more information on the exchange ratio and the Merger consideration, see the sections entitled “The MergerMerger Consideration” beginning on page 91 and “The Merger Agreement—Merger Consideration” beginning on page 141.
Treatment of Desktop Metal Equity Awards (Page 177)
Desktop Metal Stock Options
At the effective time of the Merger, each option to purchase Desktop Metal Class A common stock, which is referred to as a Desktop Metal Option, outstanding immediately prior to the effective time will automatically be converted into an option to purchase a number of Stratasys ordinary shares on substantially the same terms and conditions (including the same vesting and exercisability terms and conditions) as were applicable under the incentive award plan of Desktop Metal relating to such Desktop Metal Option immediately prior to the effective time (but otherwise subject to the terms and conditions of the Stratasys equity plans), determined by multiplying the number of shares of Desktop Metal Class A common stock subject to such Desktop Metal Option immediately prior to the effective time by the exchange ratio, rounding down to the nearest whole number of shares, at a per share exercise price determined by dividing the per share exercise price of such Desktop Metal Option by the exchange ratio, rounding up to the nearest whole cent.
Desktop Metal Restricted Stock Awards
At the effective time of the Merger, each restricted stock award of Desktop Metal, which is referred to as a Desktop Metal RSA, outstanding immediately prior to the effective time will automatically be converted into a grant of a restricted stock award of Stratasys, on substantially the same terms and conditions (including the same vesting terms and conditions) as were applicable to the Desktop Metal RSA immediately prior to the effective time, covering a number of Stratasys ordinary shares determined by multiplying the number of shares of Desktop Metal Class A common stock covered by such Desktop Metal RSA immediately prior to the effective time by the exchange ratio, rounding down to the nearest whole number of shares.
Desktop Metal Restricted Stock Unit Awards
At the effective time of the Merger, each restricted stock unit award of Desktop Metal, which is referred to as a Desktop Metal RSU Award, outstanding immediately prior to the effective time will automatically be cancelled in exchange for the grant of a restricted stock unit award to receive, on substantially the same terms and conditions (including the same vesting terms and conditions) as were applicable under the incentive award plan of Desktop Metal relating to such Desktop Metal RSU immediately prior to the effective time (but otherwise subject to the terms and conditions of the Stratasys equity plans), a number of Stratasys ordinary shares determined by multiplying the number of shares of Desktop Metal Class A common stock covered by that Desktop Metal RSU Award immediately prior to the effective time by the exchange ratio, rounding down to the nearest whole number of shares.
Stratasys’ Reasons for the Merger (Page 107)
The Stratasys board of directors unanimously approved and declared advisable the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger and the Stratasys share issuance. Stratasys is engaging in the Merger because Stratasys’ management and board of directors believe that the Merger will provide
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significant strategic opportunities for Stratasys. There can be no assurance that any anticipated strategic opportunities will be realized. Stratasys shareholders are not required to approve the adoption of the Merger Agreement under Israeli law. Accordingly, Stratasys shareholders are not being asked to vote on the Merger or the adoption of the Merger Agreement. See the section titled “The Merger—Recommendation of the Stratasys Board of Directors and Reasons for the Merger” beginning on page 107.
Desktop Metal’s Reasons for the Merger (Page 107)
Desktop Metal’s board of directors unanimously recommends that Desktop Metal stockholders vote “FOR” the Desktop Metal Merger Agreement proposal (Desktop Metal Proposal 1).
The Desktop Metal board of directors, after due and careful discussion and consideration, unanimously determined that the Merger Agreement is fair to and in the best interests of Desktop Metal and its stockholders and approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement. In reaching its decision to approve the Merger Agreement, the Merger and the other transactions contemplated thereby and to recommend the adoption of the Merger Agreement to Desktop Metal stockholders, the Desktop Metal board of directors consulted with Desktop Metal’s senior management, as well as outside legal and financial advisors, and considered a number of factors it believed supported its decision to enter into the Merger Agreement, including without limitation those listed in the section entitled “The Merger—Recommendation of the Desktop Metal Board of Directors and Reasons for the Merger” beginning on page 107.
Opinion of Stratasys’ Financial Advisor (Page 115, Annex C)
Stratasys retained J.P. Morgan Securities LLC, which is referred to in this joint proxy statement/prospectus as J.P. Morgan, as financial advisor to the Stratasys board of directors in connection with the proposed Merger. On May 24, 2023, J.P. Morgan rendered its oral opinion to the Stratasys board of directors, subsequently confirmed by delivery to the Stratasys board of directors of a written opinion dated May 25, 2023, that, as of such date, and based upon and subject to the various assumptions qualifications, limitations and other matters described in its written opinion, the exchange ratio in the proposed Merger was fair, from a financial point of view, to Stratasys.
The full text of J.P. Morgan’s written opinion, dated May 25, 2023, which sets forth, among other things, the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by J.P. Morgan in preparing its opinion, is attached to this joint proxy statement/prospectus as Annex C and is incorporated herein by reference. The summary of J.P. Morgan’s opinion contained in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of the written opinion. Stratasys’ shareholders are urged to read the opinion in its entirety. J.P. Morgan provided financial advisory services and its opinion for the information and assistance of the Stratasys board of directors (for its members’ capacity as directors and not in any other capacity) in connection with and for purposes of their consideration of the proposed Merger. J.P. Morgan did not express any opinion as to the fairness of the exchange ratio in the Merger to the holders of any class of securities, creditors or other constituencies of Stratasys or as to the underlying decision by Stratasys to engage in the proposed Merger. The issuance of J.P. Morgan’s opinion was approved by a fairness committee of J.P. Morgan. J.P. Morgan’s opinion is not a recommendation as to how any Stratasys shareholder should vote with respect to the proposed Merger or any other matter.
For additional information, see the section entitled “The MergerOpinion of Stratasys’ Financial Advisor” and the full text of the written opinion of J.P. Morgan attached as Annex C to this joint proxy statement/prospectus.
Opinion of Desktop Metal’s Financial Advisor (Page 122, Annex D)
On May 24, 2023, at a meeting of the Desktop Metal board of directors held to evaluate the Merger, Stifel, Nicolaus & Company, Incorporated, or Stifel, Desktop Metal’s financial advisor, delivered to the Desktop Metal board of directors Stifel’s oral opinion, which was confirmed by delivery to the Desktop Metal board of directors of a written opinion dated May 24, 2023, which is referred to as the Stifel Opinion, to the effect that, as of the date of the opinion and based on and subject to various assumptions and limitations described in Stifel’s written opinion, the Merger consideration to be received in the Merger by Desktop Metal stockholders was fair, from a financial point of view, to such holders.
The full text of the Stifel Opinion, dated May 24, 2023, is attached as Annex D to this joint proxy statement/prospectus and is incorporated herein by reference. This summary of the Stifel Opinion contained
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in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of the Stifel Opinion. Desktop Metal stockholders are urged to read the Stifel Opinion carefully and in its entirety for a discussion of the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by Stifel in connection with its opinion. Stifel’s opinion speaks only as of the date of the Stifel Opinion. The Stifel Opinion was for the information of, and was directed to, the board of directors of Desktop Metal (in its capacity as such) in connection with its consideration of the financial terms of the Merger. The Stifel Opinion addressed only the fairness, from a financial point of view, to the holders of Desktop Metal Class A common stock of the exchange ratio. It did not address the underlying business decision of Desktop Metal to engage in the Merger or enter into the Merger Agreement or constitute a recommendation to the board of directors of Desktop Metal in connection with the Merger or any other matter, and it does not constitute a recommendation to any holder of Desktop Metal Class A common stock or any stockholder of any other entity as to how to vote or otherwise act in connection with the Merger or any other matter, nor does it constitute a recommendation as to whether or not any such stockholder should enter into a voting, stockholders’, affiliates’ or other agreement with respect to the Merger.
For additional information, see the section entitled “The Merger—Opinion of Desktop Metal’s Financial Advisor” beginning on page 114 and the full text of the written opinion of Stifel attached as Annex D to this joint proxy statement/prospectus.
Proxy Solicitation Costs (Page 65 and 66)
Stratasys and Desktop Metal are soliciting proxies to provide an opportunity to all Stratasys shareholders and Desktop Metal stockholders to vote on agenda items at the Stratasys AGM/EGM or Desktop Metal special meeting, respectively, whether or not they are able to attend their respective EGM or stockholders meeting or an adjournment or postponement thereof. Stratasys’ and Desktop Metal’s directors, officers and other employees may solicit proxies in person, by telephone, electronically, by mail or other means, but they will not be specifically compensated for doing this. Stratasys and Desktop Metal may be required to reimburse banks, brokers and other persons for expenses they incur in forwarding proxy materials to obtain voting instructions from beneficial shareholders and stockholders, respectively. Stratasys has hired Morrow Sodali LLC to assist in the solicitation of proxies, and Desktop Metal has hired DF King & Co., Inc. to assist in the solicitation of proxies. The total cost of solicitation of proxies will be borne by Stratasys and Desktop Metal. For a description of the costs and expenses to Stratasys and Desktop Metal of soliciting proxies, see “The Stratasys AGM/EGM—Proxy Solicitation Costs” beginning on page 65 and “The Desktop Metal Special Meeting—Proxy Solicitation Costs” beginning on page 85.
The Stratasys AGM/EGM (Page 62)
The Stratasys AGM/EGM will be held on [   ], 2023, beginning at [  ] p.m., Israel time, at Stratasys’ Israeli external legal counsel’s offices, Meitar Law Offices, 16 Abba Hillel Road, 10th Floor, Ramat Gan, Israel 5250608.
The proposals to be presented at the Stratasys AGM/EGM are as follows:
Stratasys Proposal 1 (Stratasys Merger-related proposal): Approval of certain matters to be effected in connection with the Merger Agreement and the Merger, including: (i) the issuance of Stratasys ordinary shares to the stockholders of Desktop Metal in exchange for the shares of Desktop Metal Class A common stock held by them, at a ratio of 0.123 Stratasys ordinary shares per share of Desktop Metal Class A common stock, as consideration under the Merger Agreement; (ii) the adoption of amended and restated articles of association for Stratasys with effect from immediately prior to the effective time of the Merger under the Merger Agreement, which will include an increase of the authorized share capital of Stratasys from NIS 1,800,000, consisting of 180,000,000 ordinary shares, par value NIS 0.01 per share, to NIS 4,500,000, consisting of 450,000,000 ordinary shares, par value NIS 0.01 per share; and (iii) the election of a slate of five designees of Stratasys and five designees of Desktop Metal, as well as the combined company’s chief executive officer, as the members of Stratasys’ board of directors, each of whose term will commence on the effective time of the Merger and until the first annual general meeting of the combined company following the one-year anniversary of the effective time and due election and qualification of each designee’s respective successor, or until each respective designee’s earlier resignation, replacement or removal;
Stratasys Proposal 2 (Stratasys rights plan extension proposal): Approval of the extension of the expiration date of Stratasys’ existing shareholder rights plan until the earlier of the effective time of the Merger or the valid termination of the Merger Agreement in accordance with its terms;
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Stratasys Proposal 3 (Stratasys auditor re-appointment proposal): Re-appointment of Stratasys’ independent auditors for the year ending December 31, 2023 and for the additional period until Stratasys’ next annual general meeting of shareholders, and authorization of the Stratasys board of directors (upon recommendation of the audit committee of the board of directors) to fix their remuneration; and
Stratasys Proposal 4 (Stratasys 2023 annual meeting director re-election proposal): For purposes of Stratasys’ 2023 annual general meeting, the re-election of each of the eight current members of Stratasys’ board of directors, for a term that lasts until the earlier of: (i) the effective time of the Merger or (ii) Stratasys’ 2024 annual general meeting of shareholders, and until the due election and qualification of their respective successors.
The foregoing proposals to be presented at the Stratasys AGM/EGM are referred to collectively as the Stratasys proposals.
Completion of the Merger is conditioned on the approval of the Stratasys Merger-related proposal by the required Stratasys shareholder vote.
In addition to the foregoing proposals, at the Stratasys AGM/EGM, the audited, consolidated financial statements of Stratasys for the annual period ended December 31, 2022 will be presented to, and considered by, Stratasys’ shareholders, as required for an annual general meeting of shareholders under the Israeli Companies Law. There will be no vote required for this additional matter.
Stratasys board of directors unanimously recommends that Stratasys’ shareholders vote “FOR” all Stratasys proposals.
Only holders of record of issued and outstanding Stratasys ordinary shares as of the close of business on [ ], 2023, the record date for the Stratasys AGM/EGM, are entitled to vote at the Stratasys AGM/EGM or any adjournment or postponement of the Stratasys AGM/EGM. Stratasys shareholders may cast one vote for each Stratasys ordinary share owned as of the record date.
Assuming a quorum is present at the Stratasys AGM/EGM, approval of each of the Stratasys proposals requires the affirmative vote of a majority of the voting power represented at the Stratasys AGM/EGM in person or by proxy and voting on the proposal. A shareholder’s abstention from voting, a broker non-vote or other failure to vote (including a failure to instruct a bank, broker or other nominee to vote) will have no effect on the outcome of the vote on any proposal.
The Desktop Metal Special Meeting (Page 82)
The Desktop Metal special meeting will be held virtually via live audio-only webcast at www.virtualshareholdermeeting.com/[    ] on [  ] 2023 at [  ] a.m. Eastern Time. The Desktop Metal special meeting will be held online only and you will not be able to attend in person. Online check-in will begin at 10:15 a.m. Eastern Time and you should allow ample time for the check-in procedures. You will be able to vote your shares electronically by Internet and submit questions online during the Desktop Metal special meeting by logging in to the website listed above using the 16-digit control number included in your proxy card.
The purposes of the Desktop Metal special meeting are as follows:
Desktop Metal Proposal 1: The Desktop Metal Merger Agreement Proposal. To approve the adoption of the Merger Agreement, a copy of which is attached as Annex A to this joint proxy statement/prospectus;
Desktop Metal Proposal 2: The Desktop Metal Advisory Compensation Proposal: To approve, on an advisory (non-binding) basis, the Merger-related named executive officer compensation payments that will or may be paid by Desktop Metal to its named executive officers that are based on or otherwise relate to the Merger; and
Desktop Metal Proposal 3: The Desktop Metal Adjournment Proposal: To approve the adjournment of the Desktop Metal special meeting to another date and place if necessary or appropriate to solicit additional votes in favor of the Desktop Metal Merger Agreement proposal or to ensure that any supplement or amendment to the accompanying joint proxy statement/prospectus is timely provided to Desktop Metal stockholders.
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Completion of the Merger is conditioned on adoption of the Merger Agreement by Desktop Metal’s stockholders. Approval of the advisory proposal concerning the Merger-related compensation arrangements for Desktop Metal’s named executive officers is not a condition to the obligation of either Desktop Metal or Stratasys to complete the Merger.
Only holders of record of issued and outstanding shares of Desktop Metal Class A common stock as of the close of business on [   ], 2023, the record date for the Desktop Metal special meeting, are entitled to notice of, and to vote at, the Desktop Metal special meeting or any adjournment or postponement of the Desktop Metal special meeting. Desktop Metal stockholders may cast one vote for each share of Desktop Metal Class A common stock that Desktop Metal stockholders owned as of that record date.
Assuming a quorum is present at the Desktop Metal special meeting, approval of the Desktop Metal Merger Agreement proposal requires the affirmative vote of holders of a majority in voting power of the outstanding Desktop Metal Class A common stock entitled to vote thereon. Abstentions and broker non-votes will have the same effect as a vote AGAINST the proposal.
Assuming a quorum is present at the Desktop Metal special meeting, approval of the Desktop Metal advisory compensation proposal requires the affirmative vote of the holders of a majority in voting power of the votes cast. Abstentions and broker non-votes will have no effect on the outcome of the Desktop Metal advisory compensation proposal.
Whether or not there is a quorum, approval of the Desktop Metal adjournment proposal requires the affirmative vote of the holders of a majority in voting power of the votes cast. Abstentions and broker non-votes will have no effect on the outcome of the Desktop Metal adjournment proposal.
Interests of Stratasys’ Directors and Executive Officers in the Merger (Page 176)
In considering the recommendation of the Stratasys board of directors to vote for the Stratasys Merger-related proposal, Stratasys shareholders should be aware that Stratasys’ directors and executive officers may be deemed to have interests in the Merger that are different from, or in addition to, the interests of Stratasys shareholders generally and that may create potential conflicts of interest. These interests include, following the closing of the Merger, that certain of Stratasys’ directors and executive officers will continue to serve as directors or executive officers, as applicable, of the combined company. The members of the Stratasys board of directors were aware of and considered these interests, among other matters, when evaluating the Merger Agreement and the Merger and when ultimately approving the Merger Agreement and the Merger. These interests are described in more detail in the section entitled “Interests of Stratasys’ Directors and Executive Officers in the Merger” beginning on page 176.
At the close of business on May 24, 2023, directors and executive officers of Stratasys beneficially owned and were entitled to vote approximately 543,962 Stratasys ordinary shares, collectively representing 0.79% of the Stratasys ordinary shares outstanding on May 24, 2023. The affirmative vote of Stratasys shareholders representing more than 50% of the voting power of votes cast at the Stratasys AGM/EGM, either in person or by proxy, is required for approval of each of the Stratasys proposals. Although none of Stratasys’ directors and executive officers has entered into any agreement obligating them to do so, Stratasys currently expects that all of its directors and executive officers will vote their shares “FOR” the Stratasys Merger-related proposal and “FOR” each of the other Stratasys proposals.
Interests of Desktop Metal’s Directors and Executive Officers in the Merger (Page 177)
In considering the recommendation of the Desktop Metal board with respect to the Merger proposal and the non-binding advisory compensation proposal, Desktop Metal stockholders should be aware that the directors and executive officers of Desktop Metal have interests in the Merger that may be different from, or in addition to, the interests of Desktop Metal stockholders generally. These interests include the continued employment of certain executive officers by the combined company, the appointment of certain Desktop Metal directors as directors of the combined company, the treatment in the Merger of outstanding equity, equity-based and incentive awards, severance arrangements, other compensation and benefit arrangements and the right to continued indemnification of former Desktop Metal directors and officers by the combined company. The members of the Desktop Metal board were aware of and considered these interests, among other matters, in evaluating and negotiating the Merger Agreement, in approving the Merger Agreement and in determining to recommend that Desktop Metal stockholders approve the Merger Agreement proposal. These interests are described in more detail in the section entitled “Interests of Desktop Metal’s Directors and Executive Officers in the Merger” beginning on page 177.
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Certain Beneficial Owners of Desktop Metal Class A Common Stock (Page 215)
At the close of business on May 24, 2023, directors and executive officers of Desktop Metal beneficially owned and were entitled to vote approximately 44.5 million shares of Desktop Metal Class A common stock, collectively representing approximately 13.9% of the shares of Desktop Metal Class A common stock outstanding on May 24, 2023. The affirmative vote of Desktop Metal stockholders representing a majority in voting power of the outstanding shares of Desktop Metal Class A common stock, present either in person or by proxy, is required for approval of the Desktop Metal Merger Agreement proposal. Desktop Metal currently expects that all of its directors and executive officers will vote their shares “FOR” the Desktop Metal Merger Agreement proposal, “FOR” the Desktop Metal compensation proposal, and “FOR” the Desktop Metal adjournment proposal. For more information regarding the security ownership of Desktop Metal directors and executive officers, see the information provided in the section entitled “Certain Beneficial Owners of Desktop Metal Class A Common Stock” beginning on page 215.
Reasonable Best Efforts and Regulatory Approvals (Page 153)
Stratasys and Desktop Metal have agreed to each use, and cause their respective subsidiaries to use, their respective reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, and to assist and cooperate with the other parties in doing all things necessary, proper or advisable under applicable law to obtain required regulatory approvals.
The completion of the Merger is subject to the receipt of antitrust clearance in the United States and may be subject to such clearance in the United Kingdom, if requested by the antitrust authority. The completion of the Merger also requires approval under the foreign direct investment regulators in Germany and may also require approval of the foreign direct investment regulators in Italy. Notice filings to the Committee on Foreign Investment in the United States, or CFIUS, and pursuant to the U.S. International Traffic in Arms Regulations, or ITAR, are furthermore required for the Merger to be consummated.
In the United States, Stratasys and Desktop Metal each filed a notification and report form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or HSR Act, which is referred to as an HSR notification, with the Federal Trade Commission, or FTC, and the Department of Justice, or DOJ, on June 16, 2023. The waiting period under the HSR Act with respect to the filed notifications expires on July 17, 2023. A transaction notifiable under the HSR Act may not be completed until the expiration or termination of a 30-calendar-day waiting period following the parties’ filings of their respective HSR notifications or the termination of that waiting period. The waiting period may be extended, including in the event the parties “pull and re-file” their HSR notification or the DOJ or FTC issues a request for additional information (“second request”) regarding the proposed transaction. Stratasys and Desktop Metal intend to submit notice filings to CFIUS and pursuant to ITAR in the United States in accordance with the terms of the Merger Agreement. The parties intend to make a request for approval by the foreign direct investment regulator in Germany in accordance with the terms of the Merger Agreement.
Subject to receipt of required regulatory approvals and satisfaction or waiver of the other conditions to completion of the Merger, Stratasys and Desktop Metal expect the Merger to close in the fourth quarter of 2023.
Ownership of the Combined Company after the Merger (Page 136)
Based on the number of Stratasys ordinary shares and shares of Desktop Metal Class A common stock outstanding on May 24, 2023, and the exchange ratio of 0.123, Stratasys and Desktop Metal estimate that, immediately following completion of the Merger, former Desktop Metal security holders will hold, in the aggregate, approximately 41% of the ordinary shares of the combined company, and Stratasys security holders as of immediately prior to the completion of the Merger will hold, in the aggregate, approximately 59% of the ordinary shares of the combined company, in each case on a fully diluted basis.
Governance of the Combined Company after the Merger (Page 137)
The combined company will continue to maintain Stratasys’ current dual headquarters, in Eden Prairie, Minnesota and Rehovot, Israel. Pursuant to the Merger Agreement, following the closing of the transaction, the board of directors of the combined company will consist of 11 members, five of whom will be selected by current directors of Stratasys and five of whom will be selected by current directors of Desktop Metal, as well as Dr. Yoav Zeif, who will continue to serve as Stratasys’ Chief Executive Officer. Ric Fulop, the Chairman of the Board and Chief Executive Officer of Desktop Metal, will serve as Chairman of the Board of the combined company and Stratasys Chairman of the Board, Dov Ofer, will serve as Lead Independent Director of the board of directors of the combined company.
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The articles of association of Stratasys, which will be proposed for amendment and restatement pursuant to the Stratasys Merger-related proposal at the Stratasys AGM/EGM, will be the articles of association of the combined company after the Merger. That amendment and restatement will reflect certain arrangements agreed upon concerning the governance of the combined company during the first two years following the completion of the Merger. Such arrangements include the requirement of the approval by at least two-thirds of the directors then in office for the following actions:
the dismissal or replacement of the combined company’s Chief Executive Officer as of the effective time of the Merger,
the dismissal or replacement of the Chairman of the Board of Directors of the combined company as of the effective time of the Merger;
a change in the number of members serving on the board of directors of the combined company; or
an election by the board of directors of the combined company to once again be subject to the Israeli Companies Law requirement to appoint external directors.
Amendment of any of the foregoing arrangements under the amended and restated articles of association of the combined company would require the affirmative approval of shareholders holding at least two-thirds of the voting power of the combined company.
The amendment and restatement of the articles will also capture certain updates to Israeli law that have been made since Stratasys’ existing articles of association were initially adopted, including, for example, the right of a U.S.-traded company such as Stratasys to comply with certain U.S. stock exchange board independence and board committee composition requirements in lieu of the corresponding Israeli requirements, including the obligation to appoint two external directors.
Stratasys is a foreign private issuer and, as such, is eligible for exemption from certain Nasdaq corporate governance requirements that apply to issuers that are not foreign private issuers.
Conditions to the Closing of the Merger (Page 156)
The respective obligations of each party to effect the Merger is subject to the satisfaction or waiver on or prior to the closing date of the Merger, which we refer to as the Closing Date, of the following conditions:
the approval of the Stratasys Merger-related proposal by Stratasys shareholders and the approval of the Desktop Metal Merger Agreement proposal by Desktop Metal stockholders;
the authorization for listing on Nasdaq of the Stratasys ordinary shares to be issued pursuant to the Merger Agreement, subject to official notice of issuance;
(i) the termination or expiration of any waiting period (and any extension thereof) applicable to the Merger under the HSR Act; (ii) the expiration or termination of any agreement with the DOJ or the FTC not to consummate the Merger to which Desktop Metal and Stratasys are a party; (iii) obtaining the CFIUS Approval; and (iv) all other required regulatory approvals and certain conditions listed in Stratasys’ disclosure schedules to the Merger Agreement having been obtained or satisfied and remaining in full force and effect, or the expiration of the applicable waiting period (and any extension thereof) applicable in respect of such required regulatory approval;
the effectiveness of the Registration Statement of which this joint proxy statement/prospectus forms a part under the Securities Act and the absence of any stop order or proceedings seeking a stop order; and
the absence of any order, injunction (temporary or permanent) or decree or other similar legal restraint issued by any court or governmental entity of competent jurisdiction enjoining or preventing the consummation of the Merger being in effect and no law, order, injunction or decree having been enacted, entered, promulgated or enforced by any governmental entity of competent jurisdiction which prohibits or makes illegal consummation of the Merger.
The obligation of each of Stratasys and Merger Sub to consummate the Merger is further subject to the following conditions:
the representation of Desktop Metal that there has not occurred any fact, circumstance, effect, change, event or development that, individually or in the aggregate, has had or would reasonably be expected to have a
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material adverse effect with respect to Desktop Metal or its subsidiaries being true and correct in all respects at and as of the Closing Date as if made at and as of such time or such fact, circumstance, effect, change, event or development giving rise to the breach of such representation and warranty shall not be continuing as of the Closing Date;
certain of the representations and warranties of Desktop Metal related to its capitalization being true and correct (other than such failures to be true and correct as are de minimis), in each case at and as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date);
certain of the representations and warranties of Desktop Metal related to organization, standing and power and brokers’ fees and expenses being true and correct in all material respects at and as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date);
certain other representations and warranties of Desktop Metal set forth in the Merger Agreement being true and correct (without giving effect to any limitation as to “materiality” or “material adverse effect” qualifiers set forth therein) at and as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except where the failure of such representations and warranties to be true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have an material adverse effect on Desktop Metal, and the receipt by Stratasys of a certificate signed on behalf of the Chief Executive Officer or the Chief Financial Officer of Desktop Metal to such effect;
the performance or compliance of Desktop Metal in all material respects with the obligations and covenants required to be performed or complied with by it under the Merger Agreement at or prior to the Closing Date, and the receipt by Stratasys of a certificate signed on behalf of the Chief Executive Officer or the Chief Financial Officer of Desktop Metal to such effect;
the absence of any material adverse effect with respect to Desktop Metal after the date of the Merger Agreement that is continuing; and
the amendment, modification or termination of certain identified agreements set forth in the Desktop Metal disclosure schedules (which are referred to as the Identified Agreements) shall have been amended, modified or terminated as provided in such disclosure schedules.
The obligations of Desktop Metal to consummate the Merger is further subject to the following conditions:
the representation of Stratasys that there has not occurred any fact, circumstance, effect, change, event or development that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect with respect to Stratasys or its subsidiaries being true and correct in all respects at and as of the Closing Date as if made at and as of such time or such fact, circumstance, effect, change, event or development giving rise to the breach of such representation and warranty shall not be continuing as of the Closing Date;
certain of the representations and warranties of Stratasys related to its subsidiaries and capitalization (in each case only with respect to Stratasys and not its subsidiaries) being true and correct (other than such failures to be true and correct as are de minimis), in each case at and as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date);
certain of the representations and warranties of Stratasys related to organization, standing and power and brokers’ fees and expenses being true and correct in all material respects at and as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date);
certain other representations and warranties of Stratasys set forth in the Merger Agreement being true and correct (without giving effect to any limitation as to “materiality” or “material adverse effect” qualifiers set forth therein) at and as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except where the failure of such
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representations and warranties to be true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have an material adverse effect on Stratasys, and the receipt by Desktop Metal of a certificate signed on behalf of the Chief Executive Officer or the Chief Financial Officer of Stratasys to such effect;
the performance or compliance of Stratasys and Merger Sub in all material respects with the obligations and covenants required to be performed or complied with by it under the Merger Agreement at or prior to the Closing Date, and the receipt by Desktop Metal of a certificate signed on behalf of the Chief Executive Officer or the Chief Financial Officer of Stratasys to such effect; and
the absence of any material adverse effect with respect to Stratasys or its subsidiaries after the date of the Merger Agreement that is continuing.
For a more complete summary of the conditions that must be satisfied or waived prior to completion of the Merger, see the section entitled “The Merger Agreement—Conditions to the Closing of the Merger” beginning on page 156.
No Solicitation; No Change of Recommendation (Page 148)
No Solicitation
Under the terms of the Merger Agreement, each of Stratasys and Desktop Metal has agreed that it will not, and will cause its affiliates not to, and will not authorize or permit its representatives to, directly or indirectly, and except as expressly permitted under the Merger Agreement:
solicit, initiate, induce, facilitate, or knowingly encourage any Acquisition Proposal (as defined in the section entitled “The Merger Agreement—No Solicitation; No Change of Recommendation”) or any inquiry or proposal that may reasonably be expected to lead to an Acquisition Proposal;
take any action to make the provisions of any takeover statute (including, with respect to Desktop Metal, any transaction under, or a third party becoming an “interested stockholder” under, Section 203 of the Delaware General Corporation Law), or any restrictive provision of any applicable anti-takeover provision in the applicable party’s governing documents, inapplicable to any transactions contemplated by an Acquisition Proposal;
make any third party acquirer exempt from the definition of an acquiring person in the applicable party’s rights plan or redeem or waive any provision in such rights plan;
enter into, participate in, maintain or continue any communications or negotiations regarding, or make available any non-public information with respect to, or take any other action regarding, any actual or potential Acquisition Proposal;
resolve, propose or agree to do any of the foregoing.
Each of Stratasys and Desktop Metal agreed that promptly upon execution of the Merger Agreement, it would, and would cause its subsidiaries to, and would cause its and their respective directors and officers to immediately cease and cause to be terminated all existing discussions or negotiations with any person conducted before the date of the Merger Agreement with respect to any Acquisition Proposal, or any inquiry or proposal that may reasonably be expected to lead to an Acquisition Proposal with respect to Stratasys or Desktop Metal, respectively, use reasonable best efforts to request the prompt return or destruction of all confidential information furnished with respect to discussions prior to the date of the Merger Agreement in respect of an Acquisition Proposal with respect to Stratasys or Desktop Metal, respectively, to the extent that it is entitled to have such documents returned or destroyed, and promptly terminate all physical and electronic dataroom access previously granted to any such person or its representatives.
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Notwithstanding the foregoing restrictions, each of Stratasys and Desktop Metal is permitted, prior to obtaining the approval of Stratasys’ shareholders of the Stratasys Merger-related proposal or the approval of Desktop Metal’s stockholders of the Desktop Metal Merger Agreement proposal, respectively, to furnish information regarding itself to, or enter into discussions and negotiations with, any person if:
it has received from such person a bona fide written Acquisition Proposal that, after consultation with its financial advisor and outside legal counsel, its board of directors determines in good faith is, or would reasonably be expected to result in, a Superior Proposal (as defined in the section entitled “The Merger Agreement—No Solicitation; No Change of Recommendation”) (and such proposal has not been withdrawn);
such Acquisition Proposal was not solicited, initiated, induced, facilitated or knowingly encouraged in violation of the terms of the Merger Agreement;
its board of directors determines in good faith, after having consulted with its outside legal counsel, that failure to take such action would reasonably be expected to constitute a breach of its duties under applicable law;
prior to furnishing any such information or entering into such negotiations or discussions, it obtains from such person an executed confidentiality agreement containing provisions at least as favorable to Stratasys or Desktop Metal, respectively, as the provisions of the Mutual Confidentiality, Non-Disclosure and Standstill Agreement between Stratasys and Desktop Metal, dated as of November 5, 2022, as amended on December 12, 2022, as in effect immediately prior to the execution of the Merger Agreement, and provides a copy of the same to the other party; and
concurrently with furnishing any information to such person, it provides such information to or makes such information available in an electronic data room to the other party, to the extent such information has not been previously furnished by it to the other party or made available to the other party.
No Change in the Board of Directors’ Recommendation
The Merger Agreement provides that neither the board of directors of each of Stratasys or Desktop Metal, nor any committee thereof, will do any of the following, directly or indirectly:
withhold or withdraw or qualify, modify or amend in a manner adverse to the other party (or publicly propose to do so) its board recommendation;
fail to reaffirm or re-publish its board recommendation, within ten business days after the other party so requests in writing that such action be taken (or, if earlier, at least five Business Days prior to such party’s shareholder or stockholder meeting, as applicable);
fail to publicly announce, within ten business days after a tender offer or exchange offer relating to the Stratasys ordinary shares (in the case or Stratasys) or Desktop Metal Class A common stock (in the case of Desktop Metal) has been formally commenced or after any change in the consideration being offered thereunder, a statement disclosing that it recommends rejection of such tender or exchange offer; or
publicly announce that it has recommended, adopted or approved any Acquisition Proposal with respect to such party.
Acquisition Proposal; Intervening Event
The Merger Agreement provides that neither the board of directors of each of Stratasys or Desktop Metal, nor any committee thereof, will do any of the following, directly or indirectly:
withhold or withdraw or qualify, modify or amend in a manner adverse to the other party (or publicly propose to do so) its board recommendation;
fail to reaffirm or re-publish its board recommendation, within ten business days after the other party so requests in writing that such action be taken (or, if earlier, at least five Business Days prior to such party’s shareholder or stockholder meeting, as applicable);
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fail to publicly announce, within ten business days after a tender offer or exchange offer relating to the Stratasys ordinary shares (in the case or Stratasys) or Desktop Metal Class A common stock (in the case of Desktop Metal) has been formally commenced or after any change in the consideration being offered thereunder, a statement disclosing that it recommends rejection of such tender or exchange offer; or
publicly announce that it has recommended, adopted or approved any Acquisition Proposal with respect to such party.
Notwithstanding the foregoing restrictions or anything else in the Merger Agreement, each of the board of directors of Stratasys and Desktop Metal may, prior to obtaining the approval by such party’s shareholders or stockholders, respectively, of the transactions contemplated by the Merger Agreement, effect, or cause such party to effect, as the case may be, a change in recommendation if:
such party has not breached its obligations under the Merger Agreement in connection with the Acquisition Proposal where, after the date of the Merger Agreement, such unsolicited, bona fide, written Acquisition Proposal is made to such party and is not withdrawn;
the board of directors of such party determines in its good faith judgment, after consulting with its outside financial advisor and outside legal counsel, that such Acquisition Proposal constitutes a Superior Proposal;
such party has provided the other party with five business days’ prior written notice advising that it intends to effect a change of recommendation and specifying, in reasonable detail, the reasons therefor, and which written notice shall include copies of all documents pertaining to such Superior Proposal;
such party, during such five business-day period, if requested by the other party, engages in good faith negotiations to amend the Merger Agreement in such a manner that such Acquisition Proposal that was determined to constitute a Superior Proposal no longer constitutes a Superior Proposal;
at the end of that five business-day period, such Acquisition Proposal has not been withdrawn and in the good faith reasonable judgment of such party’s board continues to constitute a Superior Proposal (taking into account any changes to the terms of the Merger Agreement proposed by the other party as a result of the negotiations required by the prior bullet point or otherwise); and
at the end of that five business-day period, the applicable board of directors determines in good faith, after having consulted with its outside legal counsel, that, in light of such Superior Proposal, a failure to change its recommendation would reasonably be expected to constitute a breach of its duties under applicable law; provided that, in the event of any material revisions to the applicable Acquisition Proposal (including any change in price or exchange ratio), such party is required to deliver a new written notice to the other party and to again comply with the foregoing requirements of the Merger Agreement with respect to such new written notice (including the five business day period referenced above).
In addition, each of the board of directors Stratasys and Desktop Metal may, prior to obtaining the approval by such party’s shareholders or stockholders, as applicable, of the transactions contemplated by the Merger Agreement, effect, or cause such party to effect, as the case may be, a change in recommendation if, in connection with an Intervening Event (as defined below) relating to such party, such board determines at any time prior to approval by such party’s shareholders or stockholders, as applicable, of the transactions contemplated by the Merger Agreement, after having consulted with its outside legal counsel, in light of such Intervening Event, a failure to make a change in recommendation would reasonably be expected to constitute a breach of its duties under applicable law, provided that:
such party has provided the other party with five business days’ prior written notice advising the other party that it intends to effect a change in recommendation and specifying, in reasonable detail, the reasons therefor;
such party, during such five business day period, if requested by the other party, must negotiate in good faith with respect to any changes or modifications to the Merger Agreement which would allow the board of such party not to make such change in recommendation; and
at the end of such five business day period, the board of such party determines in good faith, after having consulted with its outside legal counsel, that, taking into account any changes to the terms of the Merger Agreement proposed by the other party as a result of the negotiations required by the prior bullet or otherwise, a failure to make a change in recommendation would reasonably be expected to constitute a breach of the duties of such board under applicable law.
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Under the Merger Agreement, Intervening Event means a material event or development, or material change in circumstances first occurring, arising or coming to the attention of the board of directors of Stratasys or Desktop Metal, as applicable, after the date of the Merger Agreement to the extent that such event, development or change in circumstances:
was neither known by the applicable board, nor reasonably foreseeable by the applicable board, as of or prior to the date of the Merger Agreement; and
does not relate to an Acquisition Proposal or a Superior Proposal or any inquiry or communications relating thereto.
Notice Regarding Acquisition Proposals
Each of Stratasys and Desktop Metal must immediately, and in any event within 24 hours of the receipt thereof (unless received on a day that is not a business day, in which case within 48 hours of the receipt thereof) advise the other party orally and in writing of any:
Acquisition Proposal with respect to Stratasys or Desktop Metal, respectively;
any inquiry, expression of interest, proposal, communication, request for access to non-public information relating to Stratasys or its subsidiaries, or Desktop Metal or its subsidiaries, respectively, or offer that constitutes, or would reasonably be expected to lead to, an Acquisition Proposal; and
any other communication or notice that any person is considering making an Acquisition Proposal with respect to Stratasys or Desktop Metal, respectively.
Any such notification by Stratasys or Desktop Metal to the other party is required to include the material terms and conditions of any such Acquisition Proposal, inquiry, expression of interest, proposal, offer, notice or request (including any changes to such material terms and conditions) and a copy of, and the identity of the person making, any such Acquisition Proposal, inquiry, expression of interest, proposal, offer, notice or request. Each of Stratasys and Desktop Metal, as applicable, will:
keep the other party informed in all material respects and on a reasonably current basis of the status and details (including any material change to the terms and conditions thereof (including any change in price or exchange ratio)) of any Acquisition Proposal, inquiry, expression of interest, proposal, offer, notice or request;
provide to the other party as soon as practicable after receipt or delivery thereof (but in no event more than 24 hours) (unless received on a day that is not a business day, in which case within 48 hours of the receipt thereof) copies of all material correspondence and other written material exchanged between Stratasys or Desktop Metal, respectively, or any of their representatives, on the one hand, and any person or any of their representatives that has made an Acquisition Proposal with respect to such party, inquiry, expression of interest, proposal, offer, notice or request, on the other hand, which describes any of the terms or conditions of such Acquisition Proposal; and
after the date of the Merger Agreement, not enter into any agreement which prohibits it from complying with its non-solicitation provisions of the Merger Agreement.
Termination of the Merger Agreement
The Merger Agreement may be terminated at any time prior to the effective time, whether before or after receipt of the approval of Stratasys’ shareholders of the Stratasys Merger-related proposal or the approval of Desktop Metal’s stockholders of the Desktop Metal Merger Agreement proposal, except as specifically provided below:
by mutual written consent of Desktop Metal and Stratasys;
by either Desktop Metal or Stratasys, upon written notice to the other party if:
the Merger is not consummated on or before February 25, 2024 (which is referred to as the End Date), provided that each of Desktop Metal and Stratasys will be entitled to extend the End Date for up to two additional three-month periods if any of the required regulatory approvals have not been obtained at the applicable End Date but all of the other specified conditions to the closing of the Merger have been satisfied at such time (or are capable of being satisfied at the closing of the Merger);
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(i) any governmental entity that must grant certain agreed-upon regulatory approval has denied approval of the Merger and such denial has become final and non-appealable; or (ii) any court or governmental Entity of competent jurisdiction shall have issued a final and non-appealable order, injunction or decree or other legal restraint or prohibition permanently enjoining or preventing the consummation of the Merger, provided, however, that this termination right is not available to any party if a breach by such party of its obligations under the Merger Agreement has been the principal cause of, or principally resulted in, such failure to obtain such required regulatory approval or the issuance of such order, injunction, decree or other legal restraint, as applicable; or
(i) the approval of Stratasys’ shareholders of the Stratasys Merger-related proposal has not been obtained following a vote taken thereon at a meeting of Stratasys shareholders (subject to valid adjournment and postponement of any such meeting) or (ii) the approval of Desktop Metal’s stockholders of the Desktop Metal Merger Agreement proposal has not been obtained following a vote taken thereon at a meeting of the Desktop Metal stockholders (subject to valid adjournment and postponement of any such meeting).
by Desktop Metal if:
Stratasys or Merger Sub breaches or fails to perform any of its covenants or agreements contained in the Merger Agreement, or if any of the representations or warranties of Stratasys or Merger Sub, as applicable, contained in the Merger Agreement fails to be true and correct, which breach or failure (A) either individually or in the aggregate with all other breaches by Stratasys or Merger Sub or failure of Stratasys’ and Merger Sub’s representations and warranties to be true, would give rise to the failure of certain closing conditions in the Merger Agreement; and (B) if reasonably capable of being cured, has not been cured prior to the earlier of 30 days (or such fewer days as remain until the End Date) after Stratasys’ receipt of written notice of such breach from Desktop Metal, and provided that Desktop Metal is not then in breach of any covenant or agreement contained in the Merger Agreement and no representation or warranty of Desktop Metal contained in the Merger Agreement then fails to be true and correct such that certain closing conditions to the Merger Agreement could not then be satisfied;
a change of control transaction occurs with respect to Stratasys; or
prior to the approval of Stratasys’ shareholders of the Stratasys Merger-related proposal, if the board of directors of Stratasys or any committee thereof has made a change in recommendation;
by Stratasys if:
Desktop Metal breaches or fails to perform any of its covenants or agreements contained in the Merger Agreement, or if any of the representations or warranties of Desktop Metal contained in the Merger Agreement fails to be true and correct, which breach or failure (A) either individually or in the aggregate with all other breaches by Desktop Metal or failure of Desktop Metal’s representations and warranties to be true, would give rise to the failure of certain closing conditions in the Merger Agreement; and (B) if reasonably capable of being cured, has not been cured prior to the earlier of 30 days (or such fewer days as remain until the End Date) after Desktop Metal’s receipt of written notice of such breach from Stratasys, and provided that Stratasys is not then in breach of any covenant or agreement contained in the Merger Agreement and no representation or warranty of Stratasys contained in the Merger Agreement then fails to be true and correct such that the closing conditions to the Merger Agreement could not then be satisfied;
a change of control transaction occurs with respect to Desktop Metal;
prior to the approval of Desktop Metal’s stockholders of the Desktop Metal Merger Agreement proposal, the board of directors of Desktop Metal or any committee thereof has made a change in recommendation; or
Desktop Metal has received a written communication from or on behalf of the counterparty to any Identified Agreement (which may be made electronically) that it will not amend or terminate such agreement such that the relevant closing condition to the Merger Agreement would be satisfied on commercially reasonable terms, or the passage of 30 calendar days after the date Desktop Metal has requested in writing that such counterparty amend or terminate the Identified Agreement such that the relevant closing condition in the Merger Agreement would be satisfied on commercially reasonable terms without the counterparty’s engagement in substantive discussions relating to such request (which is referred
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to as a Rejection), provided that if Stratasys has failed to terminate the Merger Agreement under this termination right within 20 business days after Stratasys’ receipt of written notice that Desktop Metal has received such Rejection, such termination right, together with the closing condition relating to the Identified Agreements, will each be deemed to have been irrevocably waived.
Termination Fees and Expense Reimbursement (Page 160)
Subject to the terms and conditions of the Merger Agreement, Desktop Metal will be required to pay Stratasys a termination fee of $18.6 million (less, in the case of the first bullet, any Termination Expenses (as defined in the Merger Agreement) previously paid by Desktop Metal to Stratasys) if:
following the date of the Merger Agreement and prior to the Desktop Metal special meeting, an Acquisition Proposal (provided, that, for the purposes of this bullet, the references to fifteen percent (15%) in the definition of Acquisition Proposal will instead refer to fifty percent (50%)) for Desktop Metal has been publicly proposed or disclosed and not withdrawn at least two business days prior to the Desktop Metal stockholder meeting, the Merger Agreement is terminated by either Desktop Metal or Stratasys as a result of the failure to obtain approval of Desktop Metal’s stockholders of the Desktop Metal Merger Agreement proposal following a vote taken thereon at a meeting of the Desktop Metal stockholders (subject to valid adjournment and postponement of any such meeting) and within twelve months of such termination, Desktop Metal enters into a definitive agreement with respect to an Acquisition Proposal or otherwise consummates an Acquisition Proposal; or
if Stratasys terminates the Merger Agreement as a result of a change in recommendation by Desktop Metal’s board of directors or either Stratasys or Desktop Metal terminates the Merger Agreement as a result of the failure to obtain the approval of Desktop Metal stockholders of the Desktop Metal Merger Agreement proposal following a vote taken thereon at a meeting of Desktop Metal’s stockholders (subject to valid adjournment and postponement of any such meeting) and, at the time of such termination, Stratasys was entitled to terminate the Merger Agreement as a result of a change in recommendation by Desktop Metal’s board of directors.
Additionally, Desktop Metal will be required to reimburse Stratasys for Stratasys’ Termination Expenses (in an amount not to exceed $10.0 million) if the Merger Agreement is terminated by either party as a result of the failure to obtain the approval of Desktop Metal stockholders of the Desktop Metal Merger Agreement proposal following a vote taken thereon at a meeting of Desktop Metal’s stockholders (subject to valid adjournment and postponement of any such meeting) and, at the time of the termination, Desktop Metal’s board of directors has not made a change in recommendation (unless the approval of Stratasys’ shareholders of the Stratasys Merger-related proposal has not been obtained following a vote thereon, subject to valid adjournment and postponement of any meeting therefore, at the time of the termination of the Merger Agreement).
Subject to the terms and conditions of the Merger Agreement, Stratasys will be required to pay Desktop Metal a termination fee of $32.5 million (less, in the case of the first bullet, any Termination Expenses previously paid by Stratasys to Desktop Metal) if:
following the date of the Merger Agreement but prior to the Stratasys shareholders’ meeting, an Acquisition Proposal (provided, that, for the purposes of this bullet, the references to fifteen percent (15%) in the definition of Acquisition Proposal will instead refer to fifty percent (50%)) for Stratasys has been publicly proposed or disclosed and not withdrawn at least two business days prior to the Stratasys shareholder meeting, the Merger Agreement is terminated by either Desktop Metal or Stratasys as a result of the failure to obtain the approval of Stratasys’ shareholders of the Stratasys Merger-related proposal following a vote taken thereon at a meeting of Stratasys’ shareholders (subject to valid adjournment and postponement of any such meeting) and within twelve months of such termination, Stratasys enters into a definitive agreement with respect to an Acquisition Proposal or otherwise consummates an Acquisition Proposal; or
if Desktop Metal terminates the Merger Agreement as a result of a change in recommendation by Stratasys’ board of directors or either party terminates the Merger Agreement as a result of the failure to obtain the approval of Stratasys’ shareholders of the Stratasys Merger-related proposal following a vote taken thereon at a meeting of Stratasys’ shareholders (subject to valid adjournment and postponement of any such meeting) and, at the time of such termination, Desktop Metal was entitled to terminate the Merger Agreement as a result of a change in recommendation by Stratasys’ board of directors.
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Additionally, Stratasys will be required to pay Desktop Metal a termination fee of $19.0 million in the event that Stratasys validly terminates the Merger Agreement in connection with a Rejection relating to the Identified Agreements, but all other specified conditions to the closing of the Merger have been satisfied or waived (or are capable of being satisfied at the closing of the Merger).
Stratasys will also be required to reimburse Desktop Metal for Desktop Metal’s Termination Expenses (in an amount not to exceed $10.0 million) if the Merger Agreement is terminated by either party as a result of the failure to obtain the approval of Stratasys’ shareholders of the Stratasys Merger-related proposal following a vote taken thereon at a meeting of Stratasys’ shareholders (subject to valid adjournment and postponement of any such meeting) and, at the time of the termination, Stratasys’ board of directors has not made a change in recommendation (unless the approval of Desktop Metal’s stockholders of the Desktop Metal Merger Agreement proposal has not been obtained following a vote thereon, subject to valid adjournment and postponement of any meeting therefore, at the time of the termination of the Merger Agreement).
Accounting Treatment of the Merger (Page 138)
Stratasys and Desktop Metal each prepare their respective financial statements in accordance with accounting principles generally accepted in the United States, which are referred to as GAAP. The Merger will be accounted for using the acquisition method of accounting, and Stratasys will be treated as the accounting acquirer.
Certain Tax Considerations (Page 181 and Page 193)
Desktop Metal stockholders should read the section entitled “Material U.S. Federal Income Tax Considerations of the Merger” beginning on page 181 for a discussion of the U.S. federal income tax considerations related to the Merger, and the section entitled “Israeli Tax Considerations” beginning on page 193 for a discussion of Israeli tax considerations related to the Merger and holding Stratasys ordinary shares. Because individual circumstances may differ, each Desktop Metal stockholder should consult its own tax advisor as to the tax consequences of the Merger and of holding Stratasys ordinary shares.
Litigation Relating to the Merger (Page 139)
Each of Stratasys and Desktop Metal faces certain litigation related to the Merger.
Stratasys has been named as defendant in an action filed by Nano Dimension, in the Tel-Aviv District Court in which Nano Dimension seeks declaratory relief declaring that Stratasys’ shareholder rights plan is both illegal and void, and has also requested a court order enjoining Stratasys and its directors from intervening with, or hindering in any way, the Nano Tender Offer that it has launched to acquire Stratasys shares.
Desktop Metal, the Desktop Metal board of directors, Stratasys and Merger Sub have been named as defendants in a purported class action filed by Building Trades Pension Fund of Western Pennsylvania in the Court of Chancery of the State of Delaware in which the plaintiff alleges, among other things, that the Desktop Metal board of directors breached its fiduciary duties in connection with its decision to adopt a limited duration stockholder rights plan, seeking to enjoin enforcement of certain provisions of the Desktop Metal rights plan and other unspecified relief.
Comparison of Stockholders’/Shareholders’ Rights (Page 197)
Upon completion of the Merger, Desktop Metal stockholders immediately prior to the effective time of the Merger will receive Stratasys ordinary shares and become Stratasys shareholders, and their rights will be governed by applicable Israeli law, including the Israeli Companies Law, and by the Stratasys articles of association. Desktop Metal stockholders will have different rights once they become shareholders of the combined company due to differences between Delaware law and the governing documents of Desktop Metal, on the one hand, and Israeli law and the governing documents of Stratasys, on the other hand. These differences are described in more detail under the section entitled “Comparison of Stockholders’/Shareholders’ Rights” beginning on page 197.
Listing of Stratasys Ordinary Shares; Delisting and Deregistration of Desktop Metal Class A Common Stock (Page 140)
If the Merger is completed, the Stratasys ordinary shares issued as share consideration in the Merger will be listed for trading on Nasdaq. In addition, if the Merger is completed, Desktop Metal Class A common stock will be delisted from the NYSE and deregistered under the Exchange Act.
Summary of Risk Factors (Page 40)
In evaluating the Merger Agreement, the Merger or the issuance of Stratasys ordinary shares in the Merger, you should carefully read this joint proxy statement/prospectus and give special consideration to the factors discussed in the section entitled “Risk Factors” beginning on page 40.
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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL
INFORMATION
The following tables show a summary of the unaudited pro forma condensed combined financial information that reflects the financial condition and results of operations of the combined company, after giving effect to the Merger, which were prepared using the acquisition method of accounting with Stratasys as the accounting acquirer of Desktop Metal. See the section entitled “Accounting Treatment of the Merger” beginning on page 138 for a description of the expected accounting treatment of the Merger. The unaudited pro forma condensed combined balance sheet information as of March 31, 2023 is based on the individual historical consolidated balance sheets of Stratasys and Desktop Metal, and has been prepared to reflect the Merger as if it had occurred on March 31, 2023. The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2022 and the three months ended March 31, 2023 combine the historical results of operations of Stratasys and Desktop Metal and have been prepared to reflect the Merger as if it had occurred on January 1, 2022, the beginning of the earliest period presented.
The following selected unaudited pro forma condensed combined financial information has been prepared for illustrative purposes only and is not necessarily indicative of what the combined company’s operating results or financial position would actually have been had the Merger been completed as of the dates indicated. In addition, the selected unaudited pro forma condensed combined financial information includes adjustments which are preliminary and may be revised. The selected unaudited pro forma condensed combined financial information does not purport to project the future financial position or operating results of the combined company. Future results may vary significantly from the results reflected because of various factors, including those discussed in the section entitled “Risk Factors” beginning on page 40. The following selected unaudited pro forma condensed combined financial information has been developed from and should be read in conjunction with the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” and the notes related thereto beginning on page 162 and with the historical consolidated financial statements of Stratasys and Desktop Metal and related notes that have been filed with the SEC, certain of which are incorporated by reference into this joint proxy statement/prospectus. See the section entitled “Where You Can Find More Information” beginning on page 217.
Unaudited Pro Forma Condensed Combined Statement of Operations
(in $ thousands other than per share amounts)
For the
Three
Months
Ended
March 31,
2023
For the
Year Ended
December 31,
2022
Revenue
$190,693
$860,506
Loss from operations
$(67,616)
$(832,035)
Net loss attributable to the combined company
$(71,231)
$(807,445)
Basic loss per share ($)
$(0.66)
$(7.61)
Basic weighted average number of ordinary shares outstanding
107,203
106,111
Unaudited Pro Forma Condensed Combined Balance Sheet
(in $ thousands)
As of
March 31,
2023
Current assets
$997,200
Total assets
$2,273,940
Current liabilities
$470,626
Total liabilities
$664,088
Total equity
$1,609,852
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COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA
The following table presents selected historical and pro forma per share data of Stratasys and selected historical and equivalent per share data of Desktop Metal. You should read this information in conjunction with, and the information is qualified in its entirety by (i) the consolidated financial statements of Stratasys and notes thereto incorporated by reference into this joint proxy statement/prospectus, (ii) the consolidated financial statements of Desktop Metal and notes thereto incorporated by reference into this joint proxy statement/prospectus, and (iii) the pro forma financial information and notes thereto in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” beginning on page 162. For information about the filings incorporated by reference in this joint proxy statement/prospectus, see the section entitled “Where You Can Find Additional Information” beginning on page 217. The unaudited pro forma per share data is presented for illustrative purposes only and is not necessarily indicative of actual or future financial condition or results of operations that would have been realized if the Merger had been completed as of the dates indicated or will be realized upon the completion of the Merger.
The following table assumes the issuance of 39,620,008 Stratasys ordinary shares in connection with the Merger, which is the number of shares issuable by Stratasys in connection with the transaction based on the closing price of Stratasys ordinary shares on June 16, 2023, and based on the number of outstanding shares of Desktop Metal common stock on May 25, 2023. See note   . to the “Unaudited Pro Forma Condensed Combined Financial Information” on page 162 for more information. As discussed in this joint proxy statement/prospectus, the actual number of Stratasys ordinary shares issuable in the Merger will be adjusted based on the number of shares of Desktop Metal common stock outstanding at the completion of the Merger. The unaudited pro forma data in the table below assume that the transaction occurred on January 1, 2022 for income statement purposes and on March 31, 2023 for balance sheet purposes. The unaudited equivalent pro forma per share data of Desktop Metal shows the effect of the transaction from the perspective of a Desktop Metal stockholder. The information was calculated by multiplying the unaudited combined pro forma per share data by 0.123, the exchange ratio at which each Desktop Metal share will be converted into a Stratasys share at closing.
 
For the Three
Months Ended
March 31, 2023
For the year
Ended
December 31,
2022
Stratasys historical per ordinary share data:
 
 
Net income (loss) from continuing operations - basic
$(0.33)
$(0.44)
Net income (loss) from continuing operations - diluted
$(0.33)
$(0.44)
Book Value
$13.87
$14.30
 
 
 
Desktop Metal historical per common share data:
 
 
Net income (loss) from continuing operations - basic
$(0.16)
$(2.35)
Net income (loss) from continuing operations - diluted
$(0.16)
$(2.35)
Book Value
$1.52
$1.66
 
 
 
Combined company unaudited combined pro forma per ordinary share data:
 
 
Net income (loss) from continuing operations - basic
$(0.66)
$(7.61)
Net income (loss) from continuing operations - diluted
$(0.66)
$(7.61)
Book Value
$14.97
 
 
 
 
Desktop Metal unaudited equivalent pro forma per share data:
 
 
Net income (loss) from continuing operations - basic
$(0.08)
$(0.93)
Net income (loss) from continuing operations - diluted
$(0.08)
$(0.93)
Book Value
$1.84
 
Neither Stratasys nor Desktop Metal has declared or paid dividends during the periods presented. Following the completion of the Merger, the declaration of dividends will be at the discretion of Stratasys’ board of directors. The Stratasys board of directors does not expect the combined company to pay any cash dividends for the foreseeable future.
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COMPARATIVE PER SHARE MARKET PRICE INFORMATION
Stratasys ordinary shares trade on Nasdaq under the symbol “SSYS” and Desktop Metal Class A common stock trades on the NYSE under the symbol “DM”.
The table below sets forth the closing price per Stratasys ordinary share on Nasdaq and per share of Desktop Metal Class A common stock on NYSE on May 24, 2023, the date preceding public announcement of the Merger, and on June 16, 2023, the latest practicable date before the date of this joint proxy statement/prospectus, and the equivalent price per share of Desktop Metal Class A common stock (as determined by multiplying the closing price per share of Stratasys ordinary shares by the exchange ratio of 0.123) on each such date.
Date
Stratasys
ordinary
shares
closing price
per share
Desktop Metal
Class A common
stock
closing price per
share
Equivalent value of
Merger consideration
per
share of Desktop Metal
Class A common stock
May 24, 2023
$14.88
$1.75
$1.83
June 16, 2023
$17.39
$2.07
$2.14
The market prices of Stratasys ordinary shares and Desktop Metal Class A common stock have fluctuated since the date of the announcement of the Merger Agreement and will continue to fluctuate from the date of this joint proxy statement/prospectus to the date of the Stratasys AGM/EGM and the Desktop Metal special meeting and the date the Merger is completed and thereafter. See “Risk Factors—Because the exchange ratio is fixed and will not be adjusted in the event of any change in either Stratasys’ or Desktop Metal’s stock price, the value of the share consideration that Desktop Metal stockholders will receive in the Merger is uncertain”. We encourage you to obtain current quotes for the Stratasys ordinary shares and the Desktop Metal Class A common stock.
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This registration statement on Form F-4, of which this joint proxy statement/prospectus forms a part, and the documents to which Stratasys and Desktop Metal refer you to in this registration statement, as well as oral statements made or to be made by Stratasys and Desktop Metal, include certain “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 27A of the Securities Act, Section 21E of the Exchange Act and the Private Securities Litigation Reform Act of 1995, which are referred to as the safe harbor provisions. These forward-looking statements generally include statements regarding the potential transaction between Stratasys and Desktop Metal, including any statements regarding the expected timetable for completing the potential transaction, the ability to complete the potential transaction, the expected benefits of the potential transaction (including anticipated synergies, projected financial information and future opportunities) and any other statements regarding Stratasys’ and Desktop Metal’s future expectations, beliefs, plans, objectives, results of operations, financial condition and cash flows, or future events or performance. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “intend,” “plan,” “believe,” “project,” “estimate,” “expect,” “may,” “should,” “will” and similar expressions. All such forward-looking statements are based on current expectations of Stratasys’ and Desktop Metal’s management and therefore involve estimates and assumptions that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the results expressed in the statements. Statements included in or incorporated by reference into this registration statement, of which this joint proxy statement/prospectus forms a part, that are not historical facts are forward-looking statements. Stratasys and Desktop Metal caution investors that any forward-looking statements are subject to risks and uncertainties that may cause actual results and future trends to differ materially from those matters expressed in, or implied or projected by, such forward-looking statements, which speak only as of the date of this joint proxy statement/prospectus. Investors are cautioned not to place undue reliance on these forward-looking statements. Key factors that could cause actual results to differ materially from those projected in the forward-looking statements include, among other things:
the market price for Stratasys ordinary shares and Desktop Metal Class A common stock could change before the completion of the Merger, including as a result of uncertainty as to the long-term value of Stratasys ordinary shares following the Merger or as a result of broader stock market movements;
certain restrictions during the pendency of the proposed Merger that may impact the ability of Stratasys and Desktop Metal to pursue certain business opportunities or strategic transactions;
the failure, or unexpected delays, of Desktop Metal stockholders to adopt the Merger Agreement or of Stratasys shareholders to approve the Stratasys Merger-related proposal, or the failure of Desktop Metal or Stratasys to satisfy other conditions to the completion of the Merger;
uncertainties related to the timing of the receipt of required regulatory approvals for the Merger and the possibility that Stratasys and Desktop Metal may be required to accept conditions that could reduce or eliminate the anticipated benefits of the Merger as a condition to obtaining regulatory approvals, or that the required regulatory approvals might not be obtained at all;
the risk that the proposed Merger and any announcement relating to the proposed Merger could have an adverse effect on the ability of Stratasys and Desktop Metal to retain and hire key personnel or maintain relationships with customers, clients, suppliers or strategic partners, or on Stratasys’ or Desktop Metal’s operating results and businesses generally;
factors relating to the recent unsolicited partial tender offer of Nano Dimension Ltd., or Nano, including actions taken by Nano in connection with the tender offer for Stratasys ordinary shares, actions taken by Stratasys or its shareholders in respect of the tender offer and the effects of the tender offer, the completion of or failure to complete the tender offer, actions by Nano as a shareholder of Stratasys or otherwise; and the effect of such actions on Stratasys’ businesses;
risks that the Merger and the transactions contemplated by the Merger Agreement could disrupt current plans and operations that may harm Stratasys’ and/or Desktop Metal’s businesses;
the occurrence of any change, event, series of events or circumstances that could give rise to the termination of the Merger Agreement, including a termination of the Merger Agreement under circumstances that could require Desktop Metal to pay a termination fee to Stratasys or require Stratasys to pay a termination fee to Desktop Metal;
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the amount of any costs, fees, expenses, impairments and charges related to the Merger;
litigation relating to the proposed Merger that has been or could be instituted against Stratasys, Desktop Metal or their respective directors, including litigation involving Nano;
delays in closing, or the failure to close, the Merger for any reason could negatively impact Stratasys or Desktop Metal;
difficulties and delays in integrating the businesses, systems and processes of Stratasys and Desktop Metal following completion of the Merger or fully realizing the anticipated synergies and other benefits expected from the Merger;
risks related to the diversion of the attention and time of Stratasys’ and Desktop Metal’s respective management teams from ongoing business concerns;
unknown liabilities;
changes in laws and regulations applicable to Stratasys and/or Desktop Metal;
the extent of Stratasys’ and Desktop Metal’s success at introducing new or improved products and solutions that gain market share;
the extent of growth of the 3D printing market generally;
the global macro-economic environment, including headwinds caused by inflation, rising interest rates, unfavorable currency exchange rates and potential recessionary conditions;
the effects of industry, market, economic, political or regulatory conditions outside of Stratasys’ or Desktop Metal’s control;
the potential adverse impact that global interruptions and delays involving freight carriers and other third parties may have on Stratasys’ supply chain and distribution network and consequently, Stratasys’ and Desktop Metal’s abilities to successfully sell both Stratasys’ and Desktop Metal’s existing and newly-launched 3D printing products;
infringement of Stratasys’ or Desktop Metal’s intellectual property rights by others (including for replication and sale of consumables for use in Stratasys’ systems), or infringement of others’ intellectual property rights by Stratasys or Desktop Metal;
potential cyber attacks against, or other breaches to, Stratasys’ or Desktop Metal’s information technologies systems;
impact of tax regulations on Stratasys’ or Desktop Metal’s results of operations and financial condition; and
the factors set forth under the heading “Risk Factors” of (i) Stratasys’ Annual Report on Form 20-F for the year ended December 31, 2022, filed with the SEC on March 3, 2023, which is referred to herein as the Stratasys 2022 Form 20-F, and (ii) Desktop Metal’s Annual Report on Form 10-K, filed with the SEC on March 1, 2023, which is referred to herein as the Desktop Metal 2022 Form 10-K, and in subsequent filings by both companies with the SEC.
Stratasys and Desktop Metal caution that the foregoing list of important factors is not exhaustive and other factors could also adversely affect the completion of the Merger and related transactions and the future results of Stratasys, Desktop Metal and the combined company. The forward-looking statements speak only as of the date of this joint proxy statement/prospectus, in the case of forward-looking statements contained in this joint proxy statement/prospectus, or the dates of the documents incorporated by reference into this joint proxy statement/prospectus, in the case of forward-looking statements made in those incorporated documents. Readers are cautioned not to place undue reliance on forward-looking statements. Nothing in this joint proxy statement/prospectus should be construed as a profit forecast.
For further discussion of these and other risks, contingencies and uncertainties applicable to Stratasys and Desktop Metal, see the section entitled “Risk Factors” beginning on page 40 of this joint proxy statement/prospectus
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and in Stratasys’ and Desktop Metal’s other filings with the SEC incorporated by reference into this joint proxy statement/prospectus. See also the section entitled “Where You Can Find More Information” beginning on page 217 for more information about the SEC filings incorporated by reference into this joint proxy statement/prospectus.
All subsequent written or oral forward-looking statements concerning the Merger or other matters addressed in this joint proxy statement/prospectus and attributable to Stratasys or Desktop Metal or any person acting on its or their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Neither Stratasys nor Desktop Metal is under any obligation, and each expressly disclaims any obligation, to update, alter, or otherwise revise any forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events, or otherwise, except as may be required by law. Stratasys and Desktop Metal and their respective directors, employees, agents and advisers do not accept or assume responsibility to any other person to whom this joint proxy statement/prospectus is shown or into whose hands it may come and any such responsibility or liability is expressly disclaimed.
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RISK FACTORS
Summary of Risk Factors
The following constitutes a summary of the material risks relevant to the Merger, the combined company after the Merger, and each of Stratasys’ and Desktop Metal’s respective businesses:
Risks Relating to the Merger
Due to the fixed exchange ratio, Desktop Metal stockholders cannot be certain of the precise value of the Stratasys ordinary share consideration that they may receive in the Merger.
The Merger may not be completed or completion may be delayed, and if the Merger Agreement is terminated, there may be a required payment of a significant termination fee by either side.
Failure to complete the Merger could have material adverse effects on the business of either Stratasys and/or Desktop Metal.
Stratasys and Desktop Metal are targets of shareholder lawsuits (including in respect of their respective shareholder/stockholder rights plans) which could result in substantial costs and may delay or prevent the Merger from being completed.
If Nano’s legal challenge to Stratasys’ shareholder rights plan is successful, the Nano Tender Offer is completed or Nano’s proposal to remove and replace seven out of eight Stratasys incumbent directors succeeds, that could (or would, in the final scenario) result in a change of control of Stratasys which could prevent the Merger and could also have a material adverse impact on shareholders’ investment in Stratasys or the combined company.
The Merger Agreement contains provisions that could discourage a potential competing acquirer that might be willing to pay more to acquire or merge with either company.
The unaudited financial forecasts included in this joint proxy statement/prospectus may not accurately project the actual results of operations of the constituent companies to the Merger.
The unaudited pro forma condensed combined financial information should not be considered an accurate indication of the results of operations or financial condition had Stratasys and Desktop Metal operated as a combined entity or of the combined company following completion of the Merger.
The Stratasys ordinary shares, as shares of an Israeli company, to be received by Desktop Metal stockholders as a result of the Merger will have rights different from the Desktop Metal Class A common stock.
Certain Desktop Metal stockholders have agreed to vote in favor of the adoption of the Merger Agreement, regardless of how Desktop Metal’s public stockholders vote, which could lead to approval of the Merger by Desktop Metal’s stockholders despite public stockholder opposition to it.
The directors and executive officers of each company have interests and arrangements that may be different from, or in addition to, the interests of Stratasys shareholders and Desktop Metal stockholders generally.
The Merger may be a taxable transaction for U.S. federal income tax purposes to U.S. holders (as defined below under the section entitled “Material U.S. Federal Income Tax Considerations of the Merger—U.S. Holders”) of Desktop Metal Class A common stock.
Risks Relating to the Combined Company after Completion of the Merger
Combining the businesses of Stratasys and Desktop Metal may be more difficult, costly or time-consuming than expected and the combined company may fail to realize the anticipated benefits of the Merger, which may negatively affect the market price of the combined company ordinary shares following the Merger.
Stratasys may be unable to realize anticipated cost and tax synergies of the Merger, and expects to incur substantial expenses related to the Merger.
The combined company may not be able to retain customers or suppliers, or attract new customers, or existing customers or suppliers may seek to modify contractual obligations with the combined company, which could have an adverse effect on the combined company’s business and operations.
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If the Nano Tender Offer is successfully completed and the Merger is also completed, Nano will hold a substantial interest in the combined company’s voting equity, and will have substantial influence over it, and the interests of Nano, as a competitor of the combined company, may not be aligned with those of combined company or its other shareholders.
Current Stratasys shareholders and Desktop Metal stockholders will each have a reduced ownership and voting interest after the Merger and will exercise less influence over the management of the combined company.
The market price of Stratasys ordinary shares may decline as a result of the transaction or from resales of ordinary shares following the Merger.
There may be less publicly available information concerning, and alternate governance practices for, Stratasys, as a foreign private issuer, than there are for issuers that are not foreign private issuers (such as Desktop Metal).
It may be difficult to enforce a U.S. judgment against the combined company and its officers and directors in Israel or the United States, or to serve process on its officers and directors.
Provisions of Israeli law may delay, prevent or otherwise impede a merger with, or an acquisition of, the combined company, which could prevent a change of control, even when the terms of such a transaction are favorable to the combined company and its shareholders.
If a U.S. holder (as defined below under the section entitled “Material U.S. Federal Income Tax Considerations of the Merger—U.S. Holders”) is treated as owning at least 10% of the stock of Stratasys, such holder may be subject to adverse U.S. federal income tax consequences.
If Stratasys or any of its subsidiaries is characterized as a passive foreign investment company, referred to as a PFIC, for U.S. federal income tax purposes, U.S. holders (as defined below under the section entitled “Material U.S. Federal Income Tax Considerations of the Merger—U.S. Holders”) may suffer adverse tax consequences.
Risks relating to the respective businesses of Stratasys and Desktop Metal are described in their respective annual reports, as specifically incorporated by reference in this joint proxy statement/prospectus.
In deciding whether to vote for the adoption of the Merger Agreement, in the case of Desktop Metal stockholders, or the approval of the Stratasys Merger-related proposal, in the case of Stratasys shareholders, you are urged to carefully read and consider all of the information included in this joint proxy statement/prospectus, including the matters addressed in the section entitled “Cautionary Statements Regarding Forward-Looking Statements,” all of the information incorporated herein by reference as described in the section entitled “Where You Can Find More Information,” including the risks associated with the respective businesses of Stratasys and Desktop Metal, and the following material risks relating to the Merger and the business of the combined company.
Risks Relating to the Merger
Because the exchange ratio is fixed and will not be adjusted in the event of any change in either Stratasys’ share price or Desktop Metal’s stock price, Desktop Metal stockholders cannot be certain of the precise value of the consideration that they may receive in the Merger.
At the effective time of the Merger of the Merger, each share of Desktop Metal Class A common stock outstanding immediately prior to the Merger, other than excluded shares (as defined in the section entitled “The Merger Consideration” beginning on page 91), will be converted automatically into the right to receive 0.123 Stratasys ordinary shares. This exchange ratio is fixed in the Merger Agreement and will not be adjusted for changes in the market price of either Stratasys ordinary shares or Desktop Metal Class A common stock. The market price of Stratasys ordinary shares and, as a result, the value of the consideration that Desktop Metal stockholders may receive pursuant to the Merger Agreement, has been fluctuating since the date that the Merger Agreement was executed and publicly announced and may continue to fluctuate through the date of the completion of the Merger. Accordingly, upon the completion of the Merger and the issuance of the Stratasys ordinary shares to the Desktop Metal stockholders, the market price of the Stratasys ordinary shares that will be issued to the Desktop Metal stockholders as the Merger consideration could be greater than, less than or the same as the market price of Stratasys ordinary shares on the date the Merger Agreement was executed, on the date of this joint proxy statement/prospectus or on the date of the stockholder/shareholder meetings. Share price changes may result from a variety of factors,
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including, among others, changes in Stratasys’ or Desktop Metal’s respective businesses, operations or prospects; legislative, regulatory and legal developments in the 3D printing and additive manufacturing industries; general market, industry and economic conditions; shareholder litigation relating to the Merger or otherwise relating to Stratasys or to Desktop Metal; and market assessments of the likelihood that the Merger will be completed. Because the value of the consideration will depend on the market price of Stratasys ordinary shares at the time the Merger is completed, Desktop Metal stockholders will not know or be able to determine at the time of the Desktop Metal stockholder meeting the market value of the Merger consideration they may receive upon completion of the Merger. Similarly, Stratasys shareholders will not know or be able to determine at the time of the Stratasys AGM/EGM the market value of the consideration to be paid to the Desktop Metal stockholders in the form of issuance of Stratasys ordinary shares pursuant to the Merger Agreement compared to the market value of the shares of Desktop Metal Class A common stock that are being exchanged. You are urged to obtain current market quotations for Stratasys ordinary shares and Desktop Metal Class A common stock in determining whether to vote for approval of the Stratasys Merger-related proposal, including the share issuance, in the case of Stratasys shareholders or for the adoption of the Merger Agreement in the case of Desktop Metal stockholders. In addition, see the section entitled “Comparative Per Share Market Price Information” beginning on page 36.
The Merger may not be completed and the Merger Agreement may be terminated in accordance with its terms.
The Merger is subject to a number of conditions that must be satisfied or waived, in each case, prior to the completion of the Merger, as specified in the Merger Agreement. These conditions are described in the section entitled “The Merger Agreement—Conditions to the Closing of the Merger” beginning on page 25. These conditions to the completion of the Merger, some of which are beyond the control of Stratasys and Desktop Metal, may not be satisfied or waived in a timely manner or at all, and, accordingly, the Merger may be delayed or not completed.
Additionally, either Stratasys or Desktop Metal may terminate the Merger Agreement under certain circumstances, including, among other reasons, if the Merger is not completed by February 25, 2024 (subject, under certain circumstances, to extension to May 25, 2024 or August 25, 2024). Among other possible scenarios, the successful completion by Nano of the Nano Tender Offer prior to the consummation of the Merger would be deemed a “Change of Control” under the Merger Agreement with respect to Stratasys and would entitle Desktop Metal to terminate the Merger Agreement.
If the Merger Agreement is terminated under certain circumstances specified in the Merger Agreement, Desktop Metal may be required to pay Stratasys a termination fee of $18,600,000 or an expense reimbursement in an amount not to exceed $10,000,000, including certain circumstances in which the Desktop Metal board of directors effects a change of recommendation (as described in the section entitled “The Merger Agreement—Changes in Recommendation of the Board of Directors of Stratasys or Desktop Metal” beginning on page 150) or Desktop Metal enters into an agreement with respect to an Acquisition Proposal (as defined in the section entitled “The Merger Agreement—No Solicitation” beginning on page 148) following the termination of the Merger Agreement. In addition, if the Merger Agreement is terminated under certain circumstances specified in the Merger Agreement, Stratasys may be required to pay Desktop Metal a termination fee of $19,000,000 or $32,500,000 or an expense reimbursement in an amount not to exceed $10,000,000, including certain circumstances in which the Stratasys board of directors effects a change of recommendation or Stratasys enters into an agreement with respect to an Acquisition Proposal following the termination of the Merger Agreement. See the section entitled “The Merger Agreement—Termination of the Merger Agreement” beginning on page 158 and the section entitled “The Merger Agreement—Termination Fees and Expense Reimbursement” beginning on page 160 for a more complete discussion of the circumstances under which the Merger Agreement could be terminated and when a termination fee may be payable by Stratasys or Desktop Metal.
Obtaining required approvals and satisfying closing conditions may prevent or delay completion of the Merger.
The Merger is subject to a number of conditions to closing as specified in the Merger Agreement. These closing conditions include, among others, receipt of the approval of Desktop Metal stockholders of the Desktop Metal Merger Agreement proposal and the approval of Stratasys shareholders of the Stratasys Merger-related proposal; the expiration or termination of the waiting periods applicable to the Merger under the HSR Act; obtaining all required approvals under antitrust (including, if required, from the Competition and Markets Authority of the United Kingdom) and foreign direct investment laws of certain jurisdictions (including, to the extent required, Germany and Italy); making certain additional regulatory filings, including with the Committee on Foreign Investment in the
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United States, or CFIUS, and pursuant to 22 C.F.R. Section 122.4(b) of the International Traffic in Arms Regulations; approval for listing on Nasdaq the Stratasys ordinary shares to be issued pursuant to the Merger Agreement; the effectiveness of the registration statement on Form F-4 of which this joint proxy statement/prospectus forms a part and the absence of a stop order or proceedings seeking a stop order; absence of any order, injunction (temporary or permanent) or decree or other similar legal restraint issued by any court or governmental entity of competent jurisdiction enjoining, preventing, prohibiting or making illegal the consummation of the Merger; the truth and correctness of the representations and warranties of the parties to the Merger Agreement (subject to certain materiality qualifiers); the performance or compliance in all material respects by each party with the obligations and covenants required to be performed or complied with by it under the Merger Agreement at or prior to the closing date; and the receipt by each party of a certificate signed on behalf of the Chief Executive Officer or the Chief Financial Officer of the other party certifying as to certain matters. There can be no assurance as to when these conditions will be satisfied or waived, if at all, or that other events will not intervene to delay or result in the failure to complete the transaction. No assurance can be given that the required stockholder, shareholder, governmental and regulatory consents and approvals will be obtained or that the required conditions to closing will be satisfied, and, even if all such consents and approvals are obtained and the conditions are satisfied, no assurance can be given as to the terms, conditions and timing of such consents, orders and approvals. In addition, no assurance can be given regarding the Nano Tender Offer and the effect that the Nano Tender Offer could have on the Merger or on the ability to satisfy the conditions to closing the Merger in a timely manner or at all. For example, these consents, orders and approvals may impose burdensome conditions on or require divestitures relating to the divisions, operations or assets of Stratasys or Desktop Metal or may impose requirements, limitations or costs or place restrictions on the conduct of Stratasys’ or Desktop Metal’s businesses. Any delay in completing the Merger could cause the combined company not to realize, or to be delayed in realizing, some or all of the benefits that Stratasys and Desktop Metal expect to achieve if the Merger is successfully completed within its expected time frame. For more information, see the sections entitled “The Merger Agreement—Reasonable Best Efforts and Regulatory Approvals” and “The Merger Agreement—Conditions to Completion of the Merger.
The Merger is subject to U.S. foreign investment regulations, which may result in conditions that are not presently anticipated or cannot be met or prevent or delay the consummation of the Merger. Such conditions or limitations could also potentially make Stratasys ordinary shares less attractive to investors or cause the combined company’s future investments to be subject to U.S. foreign investment regulations.
Investments that involve the acquisition of, or investment in, a U.S. business by a non-U.S. investor may be subject to U.S. laws that regulate foreign investments in U.S. businesses and access by foreign persons to technology developed and produced in the United States. These laws include Section 721 of the Defense Production Act of 1950, as amended by the Foreign Investment Risk Review Modernization Act of 2018, and the regulations at 31 C.F.R. Parts 800 and 802, as amended, administered by CFIUS.
Whether CFIUS has jurisdiction to review an acquisition or investment transaction depends on, among other factors, the nature and structure of the transaction, including the level of beneficial ownership interest and the nature of any information or governance rights involved. For example, investments that result in “control” of a “U.S. business” by a “foreign person” (in each case, as such terms are defined in 31 C.F.R. Part 800) always are subject to CFIUS jurisdiction. Significant CFIUS reform legislation, which was fully implemented through regulations that became effective in 2020, expanded the scope of CFIUS’ jurisdiction to investments that do not result in control of a U.S. business by a foreign person, but afford certain foreign investors certain information or governance rights in a U.S. business that has a nexus to “critical technologies,” “covered investment critical infrastructure”, and/or “sensitive personal data” (in each case, as such terms are defined in 31 C.F.R. Part 800).
CFIUS will review the Merger and could choose to review past or proposed transactions involving new or existing foreign investors in Stratasys or Desktop Metal. Any review and approval of an investment or transaction by CFIUS may have outsized impacts on transaction certainty, timing, feasibility, and cost, among other things. CFIUS policies and agency practices are rapidly evolving, and there can be no assurances that conditions imposed by CFIUS will be acceptable to the parties to the Merger or their respective investors. Among other things, CFIUS could seek to impose limitations or restrictions on, or prohibit, investments by foreign investors (including, but not limited to, limits on purchasing ordinary shares issued in the Merger, limits on information sharing with such investors, requiring a voting trust, governance modifications, or forced divestiture).
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Failure to complete the Merger could have material and adverse effects on Stratasys and Desktop Metal.
If the Merger is not completed on a timely basis, or at all, for any reason, including as a result of Stratasys shareholders failing to approve the Stratasys Merger-related proposal, including the share issuance, or Desktop Metal stockholders failing to adopt the Merger Agreement, Stratasys’ and Desktop Metal’s respective share and stock prices could be adversely effected, their respective ongoing businesses may be adversely affected and, without realizing any of the benefits of having completed the Merger, Stratasys and Desktop Metal would be subject to a number of risks, including the following:
Each of Stratasys and Desktop Metal will be required to pay its respective expenses relating to the Merger, such as certain legal, accounting, financial advisory and printing fees, whether or not the Merger is completed;
time and resources committed by Stratasys’ and Desktop Metal’s respective management teams to matters relating to the Merger (including integration planning) could otherwise have been devoted to their existing businesses and the pursuit of other opportunities that may have been beneficial to Stratasys or Desktop Metal, as applicable;
the market prices of Stratasys ordinary shares or Desktop Metal Class A common stock could decline to the extent that the current market price reflects a market assumption that the Merger will be completed;
Stratasys may face renewed hostile takeover pressure from Nano Dimension Ltd., which is referred to as Nano Dimension or Nano, whether or not Nano’s present tender offer for 27,925,689 ordinary shares not already owned by Nano, which, together with the Stratasys ordinary shares already owned by Nano, represent approximately 53-55% of the outstanding Stratasys ordinary shares, referred to as the Nano Tender Offer, is successful, and may face protracted litigation in relation thereto;
each company may experience negative reactions from its suppliers, customers, distribution channels, business partners, industry contacts and other third parties, which in turn could affect each company’s marketing and sales operations or their ability to compete for new business or obtain renewals in the marketplace more broadly;
Stratasys and Desktop Metal may experience negative reactions from employees;
Stratasys and/or Desktop Metal and/or their respective management teams could be subject to litigation related to any failure to complete the Merger or any enforcement proceeding commenced against Stratasys or Desktop Metal to perform their respective obligations under the Merger Agreement;
Desktop Metal may be required, in certain circumstances, to pay a termination fee of $18.6 million or an expense reimbursement in an amount not to exceed $10.0 million to Stratasys and Merger Sub (see the section entitled “The Merger Agreement—Termination Fees and Expense Reimbursement” beginning on page 160); and
Stratasys may be required, in certain circumstances, to pay a termination fee of $32.5 million (or $19 million in certain circumstances) or an expense reimbursement in an amount not to exceed $10.0 million to Desktop Metal (see the section entitled “The Merger Agreement—Termination Fees and Expense Reimbursement” beginning on page 160).
In addition to the above risks, if the Merger Agreement is terminated and either party’s board of directors seeks an alternative transaction, such party’s shareholder or stockholders, as applicable, cannot be certain that such party will be able to find a party willing to engage in a transaction on more attractive terms than the Merger.
If Nano’s legal challenge to Stratasys’ shareholder rights plan is successful, the Nano Tender Offer is completed, or Nano’s proposal to remove and replace Stratasys’ directors succeeds, that could (or would, in the last scenario) result in a change of control of Stratasys which could prevent the Merger from being completed and could also have a material adverse impact on shareholders’ investment in Stratasys or the combined company.
Stratasys is currently subject to litigation in Israel initiated by Nano in which Nano is challenging the validity, under Israeli law, of Stratasys’ shareholder rights plan. The Israeli courts have not previously ruled on the legality of a shareholder rights plan or so-called “poison pill” under the Israeli Companies Law. While Stratasys believes that
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its shareholder rights plan is a valid corporate governance measure intended to protect shareholder value in the face of a potential hostile takeover, there can be no assurance that the Israeli court will concur or that the Israeli court will not limit or impose certain restrictions on the rights plan and the terms thereof.
Together with its legal challenge to Stratasys’ shareholder rights plan, Nano also launched, on May 25, 2023, the Nano Tender Offer pursuant to which it seeks to acquire Stratasys ordinary shares which, together with the Stratasys ordinary shares already owned by Nano, representing at least 53% and no more than 55% of the outstanding Stratasys ordinary shares, for $18.00 per share in cash, less any required withholding taxes and without interest.
Stratasys has also received what purports to be a demand made pursuant to the provisions of the Israeli Companies Law from Nano, as a greater-than 5% shareholder, to call an extraordinary general meeting of shareholders in the near future at which proposals for the removal of seven out of Stratasys’ current eight directors and the election of Nano’s nominees in their stead would be on the agenda. The relevant majority for approval of each of these proposals is an ordinary majority of shares represented in person or by proxy and voting at the general meeting, without excluding the shares of interested shareholders. Given its substantial holdings of Stratasys shares, Nano’s votes in favor of these proposals will give it an advantage in having them approved.
To the extent that the Israeli court invalidates Stratasys’ shareholder rights plan, declares or provides any further remedies to Nano that facilitate, and thereby lead to the success of, the Nano Tender Offer, that may result in Nano’s becoming a majority shareholder of Stratasys. Nano would then have significant ability to impact Stratasys and its operations. Similarly, if Nano succeeds in replacing seven out of eight of Stratasys’ current directors, that would also give it significant influence over the management and policies of Stratasys. Either or both of those outcomes would enable Nano to influence the operations of Stratasys for its own interests, which may be to the detriment of Stratasys’ public/minority shareholders. Nano could use its voting power, whether as a substantial (or even controlling) shareholder or on the Stratasys board, to vote against or otherwise prevent the completion of the Merger. Even if Nano enables the Merger to proceed, it could exert significant voting power within the combined company in a manner that benefits Nano and adversely impacts the combined company and its results of operations in a material way. Nano’s possession of a substantial or controlling interest in Stratasys or the combined company could also adversely impact trading in Stratasys’ or the combined company’s ordinary shares and liquidity for Stratasys’ or the combined company’s public/minority shareholders, potentially causing a decline in the value of public shareholders’ investment in Stratasys and/or the combined company (in case the Merger is completed).
Until the completion of the Merger or the termination of the Merger Agreement in accordance with its terms, Stratasys and Desktop Metal are each prohibited from entering into certain transactions and taking certain actions that might otherwise be beneficial to Stratasys or Desktop Metal and their respective shareholders or stockholders.
After the date of the Merger Agreement and prior to the effective time, the Merger Agreement restricts Stratasys and Desktop Metal from taking specified actions without the consent of the other party (which consent may not be unreasonably withheld or delayed) and requires that the business of each company and its respective subsidiaries be conducted in the ordinary course consistent with past practice in all material respects. These restrictions may prevent Stratasys or Desktop Metal from making appropriate changes to their respective businesses or organizational structures or from pursuing attractive business opportunities that may arise prior to the completion of the Merger and could have the effect of delaying or preventing other strategic transactions. Adverse effects arising from the pendency of the Merger could be exacerbated by any delays in consummation of the Merger or termination of the Merger Agreement. See the section entitled “The Merger Agreement—Conduct of Business Prior to the Effective Time” beginning on page 145.
The Merger, and uncertainty regarding the Merger, may cause customers, suppliers or strategic partners to delay or defer decisions concerning Stratasys and/or Desktop Metal, which could adversely affect each company’s ability to effectively manage its respective businesses.
The Merger will happen only if certain conditions are met including, among other conditions, the approval of the Merger Agreement proposal by Desktop Metal stockholders, the approval of the Stratasys Merger-related proposal by Stratasys shareholders and the receipt of regulatory approvals. Many of the conditions are outside the control of Stratasys and/or Desktop Metal, and both parties also have certain rights to terminate the Merger Agreement. Accordingly, there may be uncertainty regarding the completion of the Merger. This uncertainty may cause customers, suppliers, vendors, strategic partners or others that deal with Stratasys and/or Desktop Metal to delay or defer entering into contracts with Stratasys and/or Desktop Metal or making other decisions concerning
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Stratasys and/or Desktop Metal or seek to change or cancel existing business relationships with Stratasys and/or Desktop Metal, which could negatively affect Stratasys’ and Desktop Metal’s respective businesses. Any delay or deferral of those decisions or changes in existing agreements could have a material adverse effect on the respective businesses of Stratasys and Desktop Metal, regardless of whether the Merger is ultimately completed.
Failure to attract, motivate and retain executives and other key employees could diminish the anticipated benefits of the Merger.
The success of the Merger will depend in part on the retention of personnel critical to the business and operations of the combined company due to, for example, their technical skills or management expertise. Competition for qualified personnel can be intense.
Current and prospective employees of Stratasys and Desktop Metal may experience uncertainty about their future role with Stratasys and Desktop Metal until strategies with regard to these employees are announced or executed, which may impair Stratasys’ and Desktop Metal’s ability to attract, retain and motivate key management, technical, business development, operational and customer-facing employees and other personnel prior to and following the Merger. If Stratasys and Desktop Metal are unable to retain personnel, Stratasys and Desktop Metal could face disruptions in their operations, loss of existing customers, loss of key information, expertise or know-how, and unanticipated additional recruitment and training costs. In addition, the loss of key personnel could diminish the anticipated benefits of the Merger.
If key employees of Stratasys or Desktop Metal depart, the integration of the companies may be more difficult and the combined company’s business following the Merger may be harmed. Furthermore, the combined company may have to incur significant costs in identifying, hiring and retaining replacements for departing employees and may lose significant expertise and talent relating to the business of each of Stratasys or Desktop Metal, and the combined company’s ability to realize the anticipated benefits of the Merger may be adversely affected. In addition, there could be disruptions to or distractions for the workforce and management associated with activities of labor unions or integrating employees into the combined company. Accordingly, no assurance can be given that the combined company will be able to attract or retain key employees of Stratasys and Desktop Metal to the same extent that those companies have been able to attract or retain their own employees in the past.
The directors and executive officers of Stratasys and Desktop Metal have interests and arrangements that may be different from, or in addition to, the interests of Stratasys shareholders and Desktop Metal stockholders generally.
When considering the recommendations of the boards of directors of Stratasys or Desktop Metal, as applicable, with respect to the proposals described in this joint proxy statement/prospectus, Stratasys shareholders and Desktop Metal stockholders should be aware that certain of the directors and executive officers of each of Stratasys and Desktop Metal may have interests in the Merger and have arrangements that are different from, or in addition to, those of Stratasys shareholders and Desktop Metal stockholders generally. These interests and arrangements may create potential conflicts of interest.
With respect to certain directors and executive officers of Stratasys, these interests and arrangements include the continued employment of such executive officers by Stratasys after the Merger and the continued service of certain of such directors on the board of directors of Stratasys after the Merger. The Stratasys board of directors was aware of these interests and considered these interests, among other matters, when it approved and declared advisable the Merger Agreement and the transactions contemplated thereby on the terms and subject to the conditions set forth in the Merger Agreement and recommended that Stratasys shareholders approve the issuance of the Stratasys ordinary shares to the shareholders of Desktop Metal stockholders as consideration in the Merger pursuant to the terms of the Merger Agreement. The interests of certain of Stratasys’ directors and executive officers are described in more detail in the section entitled “Interests of Stratasys’ Directors and Executive Officers in the Merger” beginning on page 176.
With respect to directors and executive directors of Desktop Metal, these interests and arrangements include the continued employment of certain executive officers by the combined company, the appointment of certain Desktop Metal directors as directors of the combined company, the treatment in the Merger of outstanding equity, equity-based and incentive awards, severance arrangements, other compensation and benefit arrangements and the right to continued indemnification of former Desktop Metal directors and officers by the combined company. The Desktop Metal board of directors was aware of these interests and considered these interests, among other matters, when it approved and declared advisable the Merger Agreement, the Merger and the transactions contemplated thereby on the terms and subject to the conditions set forth in the Merger Agreement, determined that the Merger Agreement, the
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Merger and the transactions contemplated by the Merger Agreement were fair to, and in the best interests of, Desktop Metal and Desktop Metal stockholders and recommended that Desktop Metal stockholders adopt the Merger Agreement. The interests of Desktop Metal directors and executive officers are described in more detail in the section entitled “Interests of Desktop Metal’s Directors and Executive Officers in the Merger” beginning on page 177.
Stratasys or Desktop Metal may waive one or more of the closing conditions without re-soliciting shareholder/stockholder approval.
Stratasys or Desktop Metal may determine to waive, in whole or part, one or more of the conditions of its obligations to consummate the Merger. Stratasys and Desktop Metal currently expect to evaluate the materiality of any waiver and its effect on Stratasys shareholders or Desktop Metal stockholders, as applicable, in light of the facts and circumstances at the time to determine whether any amendment of this joint proxy statement/prospectus or any re-solicitation of proxies or voting instruction forms is required in light of such waiver. Any determination whether to waive any condition to the Merger or as to re-soliciting stockholder approval or amending this joint proxy statement/prospectus as a result of a waiver will be made by Stratasys or Desktop Metal, as applicable, at the time of such waiver based on the facts and circumstances as they exist at that time.
The Merger Agreement contains provisions that could discourage a potential competing acquirer that might be willing to pay more to acquire or merge with either Desktop Metal or Stratasys.
The Merger Agreement contains “no shop” provisions that restrict Desktop Metal’s or Stratasys’ ability to, among other things (each as described under the section entitled “The Merger Agreement—No Solicitation” beginning on page 148):
solicit, initiate, induce, facilitate or knowingly encourage any Acquisition Proposal or any inquiry or proposal that may be reasonably be expected to lead to an Acquisition Proposal;
enter into, participate in, maintain or continue any communications or negotiations regarding, or deliver or make available any non-public information with respect to, or take any other action regarding, any actual or potential Acquisition Proposal;
take any action to make the provisions of any takeover statute (including, with respect to Desktop Metal, any transaction under, or a third party becoming an “interested stockholder” under, Section 203 of the Delaware General Corporation Law), or any restrictive provision of any applicable anti-takeover provision in the applicable party’s governing documents, inapplicable to any transactions contemplated by an Acquisition Proposal;
make any third party acquirer exempt from the definition of an acquiring person in the applicable party’s rights plan or redeem or waive any provision in such rights plan;
agree to, accept, approve, endorse or recommend (or publicly propose or announce any intention or desire to agree to, accept, approve, endorse or recommend) any Acquisition Proposal; or
enter into any letter of intent or any other contract, agreement, commitment or other written arrangement contemplating or otherwise relating to any Acquisition Proposal; or
resolve, propose or agree to do any of the foregoing.
Furthermore, there are only limited exceptions to the requirement under the Merger Agreement that neither Desktop Metal’s or Stratasys’ board of directors effect a change in recommendation (as defined in the section entitled “The Merger Agreement—Representations and Warranties” beginning on page 143). Although each party’s board of directors is permitted to effect a change of recommendation, after complying with certain procedures set forth in the Merger Agreement, in response to an Acquisition Proposal if it determines in good faith judgment, after consulting with its outside financial advisor and outside legal counsel, that such Acquisition Proposal constitutes a Superior Proposal, its doing so would entitle the other party to terminate the Merger Agreement and collect a termination fee. For more information, see the sections titled “The Merger Agreement—Termination of the Merger Agreement” beginning on page 158 and “The Merger Agreement—Termination Fees and Expense Reimbursement” beginning on page 160.
These provisions could discourage a potential competing acquirer from considering or proposing an acquisition or Merger, even if it were prepared to pay consideration with a higher value than that implied by the Merger consideration, or might result in a potential competing acquirer proposing to pay a lower per share price than it might otherwise have proposed to pay because of the added expense of the termination fee.
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Stratasys and Desktop Metal will each incur significant transaction and Merger-related costs in connection with the Merger.
Stratasys and Desktop Metal have incurred and expect to incur a number of non-recurring costs associated with the Merger. These costs and expenses include fees paid to financial, legal and accounting advisors, systems consolidation costs, severance and other potential employment-related costs, including payments that may be made to certain Stratasys executives and certain Desktop Metal executives, filing fees, printing expenses and other related charges. Some of these costs are payable by Stratasys and Desktop Metal regardless of whether the Merger is completed. There are also a large number of processes, policies, procedures, operations, technologies and systems that must be integrated in connection with the Merger and the integration of the two companies’ businesses. While both Stratasys and Desktop Metal have assumed that a certain level of expenses would be incurred in connection with the Merger and the other transactions contemplated by the Merger Agreement, there are many factors beyond their control that could affect the total amount or the timing of the integration and implementation expenses.
There may also be additional unanticipated significant costs in connection with the Merger that the combined company may not recoup. These costs and expenses could reduce the realization of efficiencies, strategic benefits and additional income Stratasys and Desktop Metal expect to achieve from the Merger. Although Stratasys and Desktop Metal expect that these benefits will offset the transaction expenses and implementation costs over time, this net benefit may not be achieved in the near term or at all.
The opinions rendered to Stratasys and Desktop Metal by their respective financial advisors will not reflect changes in circumstances between the dates of such opinions and the completion of the Merger.
Stratasys and Desktop Metal have received opinions from their respective financial advisors in connection with the signing of the Merger Agreement but have not obtained, nor will obtain, from their respective financial advisors updated opinions regarding the fairness, from a financial point of view, of the Merger consideration as of the date of this joint proxy statement/prospectus or prior to the completion of the Merger. Changes in the operations and prospects of Desktop Metal or Stratasys, general market and economic conditions and other factors that may be beyond the control of Desktop Metal and Stratasys, and on which Desktop Metal’s and Stratasys’ financial advisors’ opinions were based, may significantly alter the value of Desktop Metal or Stratasys or the prices of the shares of Desktop Metal Class A common stock or the prices of the Stratasys ordinary shares by the time the Merger is completed. The financial advisors’ opinions do not speak as of any date other than the respective dates of such opinions. Because Stratasys and Desktop Metal do not currently anticipate asking their respective financial advisors to update their opinions, the opinions will not address the fairness of the Merger consideration or the exchange ratio, as applicable, from a financial point of view at the time the Merger is completed. The Stratasys board of directors’ recommendation that Stratasys shareholders vote “FOR” the Stratasys Merger-related proposal and each of the other Stratasys proposals and the Desktop Metal board of directors’ recommendation that the Desktop Metal stockholders vote “FOR” the Desktop Metal Merger Agreement proposal, the Desktop Metal compensation proposal and the Desktop Metal adjournment proposal, however, is made as of the date of this joint proxy statement/prospectus.
For a more complete description of the above-described opinions, please refer to “The MergerOpinion of Stratasys’ Financial Advisor” beginning on page 115 and “The Merger—Opinion of Desktop Metal’s Financial Advisor” beginning on page 122. A copy of the opinion of Stifel, Desktop Metal’s financial advisor, is attached as Annex D to this joint proxy statement/prospectus, and a copy of the opinion of J.P. Morgan, Stratasys’ financial advisor, is attached as Annex C to this joint proxy statement/prospectus, and each is incorporated by reference herein in its entirety.
The unaudited financial forecasts included in this joint proxy statement/prospectus were prepared based on various assumptions that may not be realized in full, at all, or within projected timeframes, and the combined company’s actual results of operations after the Merger may differ materially and adversely from the unaudited financial forecasts.
The unaudited financial forecasts included in this joint proxy statement/prospectus were provided by Stratasys and/or Desktop Metal to their respective boards of directors and financial advisors in connection with each party’s consideration of the Merger Agreement. Such unaudited financial forecasts were prepared based on assumptions regarding future revenues, operating cash flows, expenditures, income and other variables that may not be realized in full, at all, or within projected timeframes and the combined company’s actual results may differ materially and adversely from the unaudited financial forecasts. The unaudited financial forecasts were not prepared with a view toward public disclosure. Neither Stratasys nor Desktop Metal undertakes any obligation to update any unaudited
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prospective financial information included in this joint proxy statement/prospectus except as may be required by applicable law. For more information, see the sections entitled “ Stratasys Unaudited Financial Forecasts” beginning on page 129 and “Desktop Metal Unaudited Financial Forecasts” beginning on page 132.
The unaudited pro forma condensed combined financial information included in this document is presented for illustrative purposes only and should not be considered to be an indication of the results of operations or financial condition had Stratasys and Desktop Metal operated as a combined entity during the periods presented or of the combined company following completion of the Merger.
The unaudited pro forma condensed combined financial information included in this joint proxy statement/prospectus has been prepared using the consolidated historical financial statements of Stratasys and Desktop Metal, is presented for illustrative purposes only, and should not be considered to be an indication of the results of operations or financial condition of the combined company following the Merger and the other transactions contemplated by the Merger Agreement (which, together with the Merger, are referred to collectively as the transactions). In addition, the pro forma financial information included in this joint proxy statement/prospectus is based in part on certain assumptions regarding the transactions. These assumptions may not prove to be accurate, and other factors may affect the combined company’s results of operations or financial condition following the completion of the transactions. Accordingly, the historical and pro forma financial information included in this joint proxy statement/prospectus does not necessarily represent the combined company’s results of operations and financial condition had Stratasys and Desktop Metal operated as a combined entity during the periods presented, or of the combined company’s results of operations and financial condition following completion of the transactions. The combined company’s potential for future business success and operating profitability must be considered in light of the risks, uncertainties, expenses and difficulties typically encountered by recently combined companies. For more information, see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” beginning on page 162.
Third parties may terminate or alter existing contracts or relationships with Desktop Metal.
Desktop Metal has contracts with customers, suppliers, vendors, landlords, licensors and other business partners which may require Desktop Metal to obtain consent from such counterparties in connection with the Merger. If these consents cannot be obtained, the combined company may suffer a loss of potential future revenue and may lose rights that are material to its business and the business of the combined company. In addition, third parties with whom Desktop Metal currently has relationships may terminate or otherwise reduce the scope of their relationship with Desktop Metal in anticipation of the Merger. Any such disruptions could limit the combined company’s ability to achieve the anticipated benefits of the Merger. The adverse effect of such disruptions could also be exacerbated by a delay in the completion of the Merger or the termination of the Merger Agreement.
Stratasys and Desktop Metal are targets of shareholder lawsuits which could result in substantial costs and may delay or prevent the Merger from being completed.
Shareholder lawsuits are often brought against public companies that have entered into merger agreements, and each of Stratasys and Desktop Metal has been named in shareholder lawsuits in connection with the Merger and their respective shareholder rights plans. In addition, Stratasys has been subject to and may be exposed to additional litigation filed or to be filed, by Nano Dimension related to the Nano Tender Offer and the validity of Stratasys’ existing shareholder rights plan. As the validity of shareholders’ rights plans is a matter of first impression in Israeli courts, it is difficult to predict the Israeli courts’ ruling in response to a challenge of the plan’s validity, and there is therefore no assurance that Stratasys’ existing shareholder rights plan will be triggered following a full or partial consummation of the Nano Tender Offer. Even if any of the lawsuits are without merit, defending against these claims can result in substantial costs and divert management time and resources. Additional lawsuits filed in connection with the Merger against Stratasys, Desktop Metal, Merger Sub and/or their respective directors and officers could prevent or delay the consummation of the Merger, including through an injunction, and result in additional costs to Stratasys and Desktop Metal. In addition, the costs of defending against the litigation, even if resolved in Stratasys’ or Desktop Metal’s favor, could be substantial, and such litigation could distract Stratasys or Desktop Metal from its focus on consummation of the Merger. An adverse ruling in any such litigation may cause the Merger to be delayed or not to be completed, which could cause Stratasys and Desktop Metal not to realize some or all of the anticipated benefits of the Merger. The results, defense or settlement of any lawsuit or claim that remains unresolved at the time the Merger is consummated may cause financial and other damage and may adversely affect the combined company’s business, financial condition, results of operations and cash flows. Stratasys and Desktop Metal cannot currently predict the outcome of or reasonably estimate the possible loss or range of loss from any lawsuits or claims.
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For information with respect to the foregoing lawsuits and any other existing lawsuits relating to the Merger and Nano Tender Offer, see the section entitled “The Merger—Litigation Relating to the Merger” beginning on page 139. Additional lawsuits may be filed in connection with the Merger and the Nano Tender Offer in the future.
The Stratasys ordinary shares to be received by Desktop Metal stockholders as a result of the Merger will have rights different from the Desktop Metal Class A common stock.
Upon consummation of the Merger, the rights of Desktop Metal stockholders, who will become shareholders of Stratasys, will be governed by Stratasys’ amended and restated articles of association. The rights associated with Desktop Metal Class A common stock are different from the rights associated with Stratasys ordinary shares. See the section entitled “Comparison of Stockholders’/Shareholders’ Rights” beginning on page 197 for a discussion of these differences.
Certain Desktop Metal stockholders have agreed to vote in favor of the adoption of the Merger Agreement, regardless of how Desktop Metal’s public stockholders vote. As a result, approximately 19% of the Desktop Metal voting securities outstanding will be contractually obligated to vote in favor of the Merger, subject to the terms and conditions of each person’s respective voting and support agreement.
As an inducement to Stratasys entering into the Merger Agreement, on May 25, 2023, (a) Ric Fulop, Desktop Metal’s Chief Executive Officer, (b) KPCB Holdings, Inc., as nominee, Kleiner Perkins Caufield & Byers XVI, LLC, KPCB XVI Founders Fund, LLC, Kleiner Perkins Caufield & Byers XVII, LLC and KPCB XVII Founders Fund, LLC (collectively, “KPCB”), (c) Khaki Campbell Trust, (d) Bluebird Trust, (e) Jonah Myerberg, (f) Audra Myerberg, (g) Wen Hsieh and (h) Red Tailed Hawk Trust, who collectively beneficially own shares representing approximately 19% of the voting power of Desktop Metal, entered into voting and support agreements pursuant to which each has agreed to vote its shares in favor of the Merger. Accordingly, there is a higher likelihood that the necessary Desktop Metal stockholder approval of the Merger will be received regardless of how the remaining stockholders cast their votes, which could cause the Desktop Metal proposals to be approved even if they are not in the best interest of Desktop Metal’s public stockholders.
Attempts for a hostile takeover, including the Nano Tender Offer, or other shareholder activism, may negatively affect Stratasys’ business.
In recent years, shareholder activism has increased across public companies. Specifically, shareholder activists have proposed changes in the governance, strategic direction and operations of different public companies. While shareholders’ activism might be, in certain cases, an efficient course of action taken by financial investors in order to enhance market efficiency and financial performance, other shareholders might have hostile intentions towards a company and may provoke actions which are intended to damage its business and reputation.
Shareholder activism in general, and hostile takeover attempts in particular, including proxy contests and tender offers, divert management’s and the Board’s attention and resources from the business and may (1) give rise to perceived uncertainties as to Stratasys’ future direction, (2) result in the loss of potential business opportunities, (3) limit its ability to raise funds, (4) make it more difficult to attract and retain qualified personnel for positions, and (5) impair Stratasys’ brand and reputation, any of which may materially and adversely affect its business, financial condition and results of operations.
Stratasys may also be required to incur significant expenses, including legal fees, related to such hostile takeovers, or shareholder activism matters. Further, Stratasys’ share price could be subject to significant fluctuations or otherwise be adversely affected by the events, risks and uncertainties associated with any shareholder activism in general, and hostile takeover attempts, in particular.
For additional information on the Nano Tender Offer and certain other actions taken by Nano with respect to Stratasys, see the section entitled “The Merger Agreement—Background of the Merger” beginning on page 91.
If the Merger does not close and the Nano Tender Offer is successfully completed, Stratasys will be a “controlled company” within the meaning of the Nasdaq Listing Rules and, as a result, may rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies.
If the parties are unable to complete the Merger but Nano successfully consummates the Nano Tender Offer, Stratasys will be a “controlled company” as defined under the Nasdaq Listing Rules because Nano will own more than 50% of Stratasys’ total voting power. For so long as Stratasys remains a controlled company under that
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definition, it will be permitted to elect to rely, and may rely, on certain exemptions from the Nasdaq corporate governance rules, including an exemption from the rule that a majority of its board of directors must be independent directors or that its nominating committee and compensation committee need to be composed entirely of independent directors (in each case under the Nasdaq definition for “independent directors”). As a result, Stratasys’ minority shareholders will not have the same protection afforded to shareholders of companies that are subject to these Nasdaq corporate governance requirements.
The Merger may be a taxable transaction for U.S. federal income tax purposes to U.S. holders of Desktop Metal Class A Common Stock.
Subject to the limitations and qualifications described in the section entitled “Material U.S. Federal Income Tax Considerations of the Merger” below, it is intended that the Merger shall qualify for the Intended U.S. Tax Treatment. However, if the Merger does not qualify for the Intended U.S. Tax Treatment (and does not otherwise qualify for tax-deferred treatment under another Section of the Code), the Merger would be a taxable transaction to U.S. holders (as defined below under the section entitled “Material U.S. Federal Income Tax Considerations of the Merger—U.S. Holders”) of Desktop Metal Class a common stock. The closing of the Merger is not conditioned upon the receipt of an opinion of counsel or a ruling from the IRS regarding the U.S. federal income tax treatment of the Merger, and no opinion of counsel or ruling from the IRS will be requested regarding such treatment. Accordingly, there can be no assurance that the IRS will not challenge the qualification of the Merger for the Intended U.S. Tax Treatment or that a court will not sustain such a challenge by the IRS.
In addition, Section 367(a) of the Code generally requires a U.S. holder of securities in a U.S. corporation to recognize gain (but not loss) when such securities are exchanged for stock or securities of a non-U.S. corporation in an exchange that would otherwise qualify for tax-deferred treatment unless certain conditions are met. One such condition is that the fair market value of Stratasys equals or exceeds the fair market value of Desktop Metal, as specifically determined for purposes of Section 367(a) of the Code, as of the closing of the Merger (the “fair market value requirement”). Determining the value of Stratasys and Desktop Metal for purposes of the fair market value requirement may require certain adjustments to be made on account of transactions occurring at, before or in connection with the Merger. For example, acquisitions by Stratasys made outside of the ordinary course of business during the 36 months preceding the Merger will be disregarded for purposes of the fair market value requirement unless such acquisitions either (i) consist of interests in certain foreign corporations or partnerships or (ii) do not consist of assets (or, as applicable, the proceeds thereof) that at the time of the Merger produce, or are held for the production of, passive income (as defined in the Treasury Regulations) and are not undertaken with a principal purpose of satisfying the fair market value requirement. In addition, under Treasury Regulations, for purposes of determining the fair market value of Desktop Metal, certain distributions made by (or deemed to be made by) Desktop Metal during the 36 months preceding the Merger (including certain repurchases of Desktop Metal shares, in connection with the Merger or otherwise, that are considered to be made prior to the relevant calculation time), would generally be added back to the value of Desktop Metal. At this time, there is significant uncertainty as to whether all of the conditions required to qualify for an exception to Section 367(a) of the Code will be met, in particular the fair market value requirement. In addition, whether the fair market value requirement is met cannot be known until following the closing of the Merger. U.S. holders are cautioned that the application of Section 367(a) of the Code to the Merger is complex and depends on factors that cannot be determined until following the closing of the Merger, as well as the interpretation of legal authorities which are not entirely clear and subject to change. Additionally, there is limited guidance regarding the application of these requirements to facts similar to the Merger. Accordingly, there can be no assurance that the IRS will not take the position that Section 367(a) of the Code applies to cause U.S. holders to recognize gain (but not loss) as a result of the Merger or that a court will not agree with such a position of the IRS in the event of litigation.
The requirements for U.S. federal income tax deferral under the Intended U.S. Tax Treatment, and the consequences of Section 367(a) of the Code, for U.S. holders are discussed in more detail under the section entitled “Material U.S. Federal Income Tax Considerations of the Merger—U.S. Holders—The Merger.” Such requirements are highly complex and subject to uncertainty. If you are a U.S. holder exchanging Desktop Metal Class a common stock in the Merger, you are urged to consult your tax advisor to determine the tax consequences thereof.
The IRS may not agree that Stratasys (i) should be treated as a non-U.S. corporation for U.S. federal income tax purposes or (ii) should not be treated as a “surrogate foreign corporation.”
A corporation is generally considered for U.S. federal income tax purposes to be a tax resident in the jurisdiction of its organization or incorporation. Accordingly, under the generally applicable U.S. federal income tax rules,
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Stratasys, which is incorporated under the laws of Israel, would be classified as a non-U.S. corporation (and, therefore, not a U.S. tax resident) for U.S. federal income tax purposes. Section 7874 of the Code provides an exception to this general rule under which a non-U.S. incorporated entity may, in certain circumstances, be treated as a U.S. corporation for U.S. federal income tax purposes. If Stratasys were to be treated as a U.S. corporation for U.S. federal income tax purposes, it would be liable for U.S. federal income tax on its income in the same manner as any other U.S. corporation, and the gross amount of any dividend payments to its non-U.S. holders (as defined in the section entitled “Material U.S. Federal Income Tax Considerations of the Merger—Non-U.S. Holders”) could be subject to U.S. withholding tax, depending on the application of any applicable income tax treaty that may apply to reduce such withholding taxes.
As more fully described in the section entitled “Material U.S. Federal Income Tax Considerations of the Merger—U.S. Federal Income Tax Treatment of Stratasys—Tax Residence of Stratasys for U.S. Federal Income Tax Purposes,” Stratasys does not currently expect to be treated as a U.S. corporation for U.S. federal income tax purposes. However, the rules for determining ownership under Section 7874 of the Code are complex and subject to detailed rules and regulations (the application of which is uncertain in various respects and could be impacted by changes to applicable rules and regulations under U.S. federal income tax laws, with possible retroactive effect). In addition, whether the requirements for such treatment have been satisfied must be finally determined at the completion of the Merger, by which time there could be adverse changes to the relevant facts and circumstances. Accordingly, there can be no assurance that the IRS would not assert that Stratasys should be treated as a U.S. corporation for U.S. federal income tax purposes or that such an assertion would not be sustained by a court in the event of litigation.
If the IRS were to successfully challenge under Section 7874 of the Code Stratasys’ status as a non-U.S. corporation for U.S. federal income tax purposes, Stratasys and certain Stratasys shareholders may be subject to significant adverse tax consequences, including a higher effective corporate income tax rate on Stratasys and future withholding taxes on certain Stratasys shareholders, depending on the application of any applicable income tax treaty that may apply to reduce such withholding taxes.
In addition, even if Stratasys is not treated as a U.S. corporation pursuant to Section 7874 of the Code, Stratasys and certain of Stratasys’ affiliates and shareholders may be subject to unfavorable treatment as a “surrogate foreign corporation” in the event that ownership attributable to former Desktop Metal shareholders exceeds a threshold amount. If it were determined that Stratasys is treated as a surrogate foreign corporation for U.S. federal income tax purposes under Section 7874 of the Code, Stratasys and certain of Stratasys’ affiliates and shareholders may be subject to adverse tax consequences including, but not limited to, restrictions on the use of tax attributes with respect to “inversion gain” recognized over a 10-year period following the transaction, disqualification of dividends paid by Stratasys from preferential “qualified dividend income” rates, and the requirement that any U.S. corporation owned by Stratasys (including Desktop Metal and its subsidiaries) include as “base erosion payments” that may be subject to a minimum U.S. federal income tax any amounts that are treated as reductions in gross income if paid to certain related foreign persons. Furthermore, certain “disqualified individuals” (including officers and directors of Desktop Metal) may be subject to an excise tax on certain stock-based compensation, currently at a rate of 20%.
Section 7874 of the Code and the Treasury Regulations promulgated thereunder are highly complex and subject to uncertainty and change. All holders are urged to consult their tax advisors regarding the application of Section 7874 of the Code and the Treasury Regulations promulgated thereunder to the Merger.
Risks Relating to the Combined Company after Completion of the Merger
Combining the businesses of Stratasys and Desktop Metal may be more difficult, costly or time-consuming than expected and the combined company may fail to realize the anticipated benefits of the Merger, which may adversely affect the combined company’s business results and negatively affect the market price of the combined company ordinary shares following the Merger.
The success of the Merger will depend on, among other things, the ability of Stratasys and Desktop Metal to combine their businesses in a manner that facilitates growth opportunities and realizes cost savings. Stratasys and Desktop Metal have entered into the Merger Agreement because each believes that the Merger and the other transactions contemplated by the Merger Agreement are fair to and in the best interests of its shareholders or stockholders, respectively, and that combining the businesses of Stratasys and Desktop Metal will produce benefits and cost savings.
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If the combined company is not able to successfully achieve these objectives, the anticipated benefits of the Merger may not be realized fully, or at all, or may take longer to realize than expected.
Inability to realize the full extent of the anticipated benefits of the Merger and the other transactions contemplated by the Merger Agreement, as well as any delays encountered in the integration process, could have an adverse effect upon the revenues, level of expenses and operating results of the combined company, which may adversely affect the value of the ordinary shares of the combined company after the completion of the Merger.
In addition, the actual integration may result in additional and unforeseen expenses, and the anticipated benefits of the integration plan may not be realized. Actual growth and cost savings, if achieved, may be lower than what Stratasys and Desktop Metal expect and may take longer to achieve than anticipated. If Stratasys and Desktop Metal are not able to adequately address integration challenges, they may be unable to successfully integrate their operations or realize the anticipated benefits of the integration of the two companies.
The failure to integrate successfully the businesses and operations of Stratasys and Desktop Metal in the expected time frame may adversely affect the combined company’s future results.
Stratasys and Desktop Metal have operated and, until the completion of the Merger, will continue to operate independently. There can be no assurances that their businesses can be integrated successfully. It is possible that the integration process could result in the loss of key Stratasys employees or key Desktop Metal employees, the loss of customers, the disruption of either company’s or both companies’ ongoing businesses, inconsistencies in standards, controls, procedures and policies, unexpected integration issues, higher than expected integration costs and an overall post-completion integration process that takes longer than originally anticipated. In addition, due to the integration process, customers may be slow to award new business to the combined company or may not award new business to the combined company at all. Specifically, the following issues, among others, must be addressed in integrating the operations of Stratasys and Desktop Metal in order to realize the anticipated benefits of the Merger so the combined company performs as expected:
combining the companies’ operations and corporate functions;
combining the businesses of Stratasys and Desktop Metal and meeting the capital requirements of the combined company, in a manner that permits the combined company to achieve the synergies and other benefits anticipated to result from the Merger;
integrating personnel from the two companies;
integrating the companies’ technologies, systems and processes;
integrating and unifying the offerings and services available to customers;
identifying and eliminating redundant and underperforming functions and assets;
harmonizing the companies’ operating practices, employee development and compensation programs, internal controls and other policies, procedures and processes;
maintaining existing agreements with customers, distributors, providers and vendors and avoiding delays in entering into new agreements with prospective customers, distributors, providers and vendors;
addressing possible differences in business backgrounds, corporate cultures and management philosophies;
consolidating the companies’ administrative and information technology infrastructure;
coordinating distribution and sales and marketing efforts;
coordinating geographically dispersed organizations; and
effecting actions that may be required in connection with obtaining regulatory approvals.
In addition, at times the attention of certain members of either company’s or both companies’ management and resources may be focused on completion of the Merger and the integration of the businesses of the two companies and diverted from day-to-day business operations, which may disrupt each company’s ongoing business and the business of the combined company.
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Furthermore, the board of directors and executive leadership of the combined company will consist of former directors and executive officers from each of Stratasys and Desktop Metal. Combining the boards of directors and management teams of each company into a single board of directors and a single management team could require the reconciliation of differing priorities and philosophies.
Stratasys may be unable to realize anticipated cost and tax synergies and expects to incur substantial expenses related to the Merger.
Stratasys’ ability to achieve estimated cost and tax synergies in the expected timeframe, or at all, is subject to various assumptions by Stratasys’ management, which may or may not prove to be accurate, as well as the incurrence of costs in Stratasys’ operations that offset all or a portion of such cost synergies. As a consequence, Stratasys may not be able to realize all of these cost and tax synergies within the timeframe expected or at all. In addition, Stratasys may incur additional or unexpected costs in order to realize these cost and tax synergies. Stratasys’ ability to realize tax synergies is subject to uncertainties. See “—The IRS may not agree that Stratasys (i) should be treated as a non-U.S. corporation for U.S. federal income tax purposes or (ii) should not be treated as a “surrogate foreign corporation.” Failure to achieve the expected cost and tax synergies could significantly reduce the expected benefits associated with the Merger. In addition, Stratasys has incurred and will incur substantial expenses in connection with completion of the Merger, including the costs and expenses of preparing and filing the Registration Statement on Form F-4 that contains this joint proxy statement/prospectus with the SEC. Stratasys expects to continue to incur non-recurring costs associated with consummating the Merger, combining the operations of the two companies and achieving the desired cost synergies. These fees and costs have been, and will continue to be, substantial. The substantial majority of nonrecurring expenses will consist of transaction costs related to the Merger and include, among others, fees paid to financial, legal and accounting advisors, employee benefit costs and filing fees. Such costs, as well as other unanticipated costs and expenses, could have a material adverse effect on the financial condition and operating results of Stratasys following the completion of the Merger and many of these costs will be borne by Stratasys even if the Merger is not completed.
The combined company may not be able to retain customers or suppliers, or attract new customers, or existing customers or suppliers may seek to modify contractual obligations with the combined company, which could have an adverse effect on the combined company’s business and operations.
As a result of the Merger, the combined company may experience strain in relationships with customers and suppliers that may harm the combined company’s business and results of operations. Certain customers or suppliers may seek to terminate or modify contractual obligations following the Merger (whether or not contractual rights are triggered as a result of the Merger) or may decline to award new business to, or renew existing contracts or enter into new long-term agreements with, the combined company. There can be no guarantee that customers and suppliers will remain with or continue to have a relationship with the combined company or do so on the same or similar contractual terms following the Merger or that the combined company will be able to attract new customers. If any of the customers or suppliers seek to terminate or modify contractual obligations or discontinue the relationship with the combined company, or if the combined company is unable to attract new customers, then the combined company’s business and results of operations may be harmed.
Current Stratasys shareholders and Desktop Metal stockholders will each have a reduced ownership and voting interest after the Merger and will exercise less influence over the management of the combined company.
Desktop Metal stockholders currently have the right to vote in the election of the Desktop Metal board of directors and on other matters affecting Desktop Metal, and Stratasys shareholders have the right to vote in the election of the Stratasys board of directors and on other matters affecting Stratasys. Upon completion of the Merger, each Stratasys shareholder and each Desktop Metal stockholder will become a shareholder of the combined company with a percentage ownership of the combined company that is smaller than such shareholder’s or stockholder’s percentage ownership of Stratasys or Desktop Metal, as applicable, immediately prior to the Merger. As of the date of this joint proxy statement/prospectus, based on the exchange ratio of 0.123 and the estimated number of shares of Desktop Metal Class A common stock and Stratasys ordinary shares that will be outstanding immediately prior to the completion of the Merger, it is expected that, immediately after completion of the transaction, holders of Desktop Metal Class A common stock as of immediately prior to the completion of the Merger, will own, in the aggregate, approximately 41% of the issued and outstanding ordinary shares of the combined company and holders of Stratasys ordinary shares as of immediately prior to the completion of the Merger, will own, in the aggregate, approximately 59% of the issued and outstanding ordinary shares of the combined company. Consequently, current Stratasys
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shareholders in the aggregate will have less influence over the management and policies of the combined company than they currently have over the management and policies of Stratasys, and Desktop Metal stockholders in the aggregate will have significantly less influence over the management and policies of the combined company than they currently have over the management and policies of Desktop Metal.
If the Nano Tender Offer is successfully completed and the Merger is also completed, Nano will hold a substantial interest in the combined company’s voting equity, and will have substantial influence over it, and the interests of Nano, as a competitor of the combined company, may not be aligned with those of combined company or its other shareholders.
If the Nano Tender Offer is successfully completed and the Merger is subsequently completed, Nano will hold a substantial interest in the combined company’s voting equity. As such, Nano will have significant influence over the combined company’s business, including decisions regarding mergers, consolidations, the sale of all or substantially all of the combined company’s assets, election of directors, declaration of dividends and other significant corporate actions. As a holder of a substantial portion of the combined company’s ordinary shares, Nano may have influence over actions that are not in the best interests of the combined company or its other shareholders, particularly due to Nano’s status as a competitor of the combined company. The interests of Nano and any of its representatives that may be nominated and elected to the combined company’s board of directors may not be aligned with those of the combined company or its shareholders. Prior to the Merger, Stratasys’ board of directors, after consultation with its independent financial and legal advisors, unanimously determined that the Nano Tender Offer is not in the best interests of Stratasys’ shareholders. In reaching its conclusion, the Stratasys board and its advisors reviewed and cited the terms of the tender offer, which they believe are opportunistic, coercive, and highly conditional.
After the Merger is completed, Nano may seek to maximize its own economic well-being at the potential expense of the combined company and its minority shareholders. Because Nano operates in the same field as the combined company and is perceived as a competitor of Stratasys currently, there may be corporate opportunities presented to Nano’s representatives on the combined company’s board of directors for which those directors have competing loyalties. If those directors do not prioritize their duty of loyalty to the combined company over their competing loyalties to Nano, the combined company may lose out on key opportunities. If any of the combined company’s public shareholders objects to any improper handling of corporate opportunities by Nano’s representatives on the combined company’s board of directors and brings a class action against the combined company to recover any profits unrightfully usurped by Nano or its representatives, such a lawsuit may distract the combined company’s board and management team, detract from the combined company’s business, and have a material adverse effect on the combined company’s results of operations and financial condition.
Further, Nano is presently embroiled in an internal litigation between Nano’s current management and certain of Nano’s shareholders who have called into question the legitimacy of the current composition of Nano’s board of directors and management team, and consequently, Nano’s authority to make and consummate the Nano Tender Offer. Such dispute remains subject to adjudication in the Israeli courts. If Nano proceeds to complete the Nano Tender Offer before resolving such internal dispute, and the Merger is also completed, then the outcome of that litigation may result in a change in Nano’s board of directors and/or management team that could impact the manner in which Nano treats its investment in the combined company. That, in turn, could lead to volatile shifts in the market price of the combined company’s ordinary shares, which may cause losses for the combined company’s public shareholders’ investments in the combined company.
If the Nano Tender Offer is successfully completed and the Merger is also completed, Nano may make additional purchases of the combined company’s ordinary shares on the open market, increasing its control of the combined company and leaving non-tendering shareholders with limited liquidity options.
If Nano is successful in completing the Nano Tender Offer and the Merger is also completed, Nano may continue to accumulate additional ordinary shares of the combined company on the open market at depressed market prices that do not reflect a control premium, thereby taking advantage of decreasing liquidity options for the combined company’s other public shareholders as the combined company’s public float shrinks.
The reduced public float and weaker market for the combined company’s ordinary shares could also hurt the combined company’s ability to conduct future financings and Nano’s significant interest in the combined company may make it difficult for the combined company to lure attractive investors to finance or acquire the combined
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company. Even if the combined company manages to raise money in the public capital markers, the terms of any such financings may be less favorable to the combined company, given the substantial holdings of a competitor of the company.
The successful completion of the Nano Tender offer, regardless of whether the Merger is completed, may render the combined company a public company with a “controlling shareholder,” which, in turn, would eliminate the combined company’s ability to opt out from the external director and certain other requirements under the Israeli Companies Law, thereby leading to extra compliance costs for the combined company.
Under the Israeli Companies Law, if Nano successfully completes the Nano Tender Offer, then, regardless of whether the Merger is completed, Nano may be deemed a “controlling shareholder” (to the extent that Nano’s interest in the combined company remains above 25%). As a result of Nano’s status as a “controlling shareholder”, among other consequences, the combined company would not be eligible for the exemption from the requirement to appoint “external directors” under the Israeli Companies Law, and would become subject to  the Israeli law requirements related to the composition of the audit and compensation committees of its board of directors.
Compliance with additional mandatory requirements would expose the combined company to increased costs and inefficiencies related to the complexity in compliance with dual corporate governance regimes of Nasdaq and Israeli law with respect to the same governance matters. Those increased costs and inefficiencies could affect the combined company’s operating margins and results, as well as the ability of the combined company’s board of director’s ability to function effectively.
The combined company may be exposed to additional or increased litigation or continued shareholder activism, which could have an adverse effect on the combined company’s business and operations.
The combined company may be exposed to continued and or additional litigation from shareholders, customers, suppliers, consumers and other third parties due to the combination of Stratasys’ business and Desktop Metal’s business as a result of, and following, the Merger, including from Nano, as described above. Shareholder activism, which could take many forms or arise in a variety of situations, including in the event that Nano remains a substantial shareholder in the combined company (whether or not the Tender Offer is successfully completed) has been increasing recently and may continue to be carried out with respect to the combined company. Such litigation, or shareholder activism, including but not limited to potential proxy contests and unsolicited tender offers, monetary and other law suits may have an adverse impact on the combined company’s business and results of operations or may cause disruptions to the combined company’s ordinary course of business. Stratasys and/or Desktop Metal may also be targets of securities class actions and derivative lawsuits in the future. Securities class action lawsuits and derivative lawsuits are often brought against companies that have entered into merger agreements in an effort to enjoin the merger or seek monetary relief from such companies. Even if such lawsuits are without merit, defending against these claims can result in substantial costs and divert management time and resources.
The market price for Stratasys ordinary shares may be affected by factors different from those that historically have affected the market price of shares of Desktop Metal Class A common stock.
Upon completion of the Merger, Desktop Metal stockholders who receive merger consideration will become Stratasys shareholders. Stratasys’ and Desktop Metal’s businesses differ and, accordingly, the financial position or results of operations and/or cash flows of Stratasys after the Merger, as well as the market price of Stratasys ordinary shares, may be affected by factors that are different from those currently affecting the financial position or results of operations and/or cash flows of Desktop Metal. Following the completion of the Merger, Desktop Metal will be part of a larger company, so decisions affecting Desktop Metal may be made in respect of the larger combined business as a whole rather than the Desktop Metal businesses individually. For a discussion of the businesses of Stratasys and Desktop Metal and of some important factors to consider in connection with those businesses, see the documents incorporated by reference in this joint proxy statement/prospectus and referred to in the section entitled “Where You Can Find Additional Information” beginning on page 217.
Resales of Stratasys ordinary shares following the Merger may cause the market price of Stratasys ordinary shares to decline.
Based on the number of shares of Desktop Metal Class A common stock outstanding as of May 24, 2023 and the number of outstanding Desktop Metal equity awards estimated to be payable in Stratasys ordinary shares following the Merger, Stratasys expects to issue up to approximately 43,195,329 Stratasys ordinary shares (including
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shares underlying Desktop Metal RSAs, Desktop Metal RSU Awards and Desktop Metal Options that have not yet vested or that have that not yet been exercised, as applicable) in connection with the Merger. Following their receipt of Stratasys ordinary shares in the Merger, former Desktop Metal stockholders may seek to sell the Stratasys ordinary shares delivered to them, and the Merger Agreement contains no restriction on the ability of former Desktop Metal stockholders to sell such Stratasys ordinary shares following completion of the Merger. Other Stratasys shareholders may also seek to sell Stratasys ordinary shares held by them following, or in anticipation of, completion of the Merger. These sales (or the perception that these sales may occur), coupled with the increase in the outstanding number of Stratasys ordinary shares, may adversely affect the market for, and the market price of, Stratasys ordinary shares.
The market price of Stratasys ordinary shares may decline as a result of the transaction.
The market price of Stratasys ordinary shares may decline as a result of the transaction if, among other things, the combined company is unable to achieve its business and financial targets, or if the cost savings estimates in connection with the integration of Stratasys’ and Desktop Metal’s businesses are not realized or if the transaction costs related to the transaction are greater than expected. The market price also may decline if the combined company does not achieve the perceived benefits of the transaction as rapidly or to the extent anticipated by the market or if the effect of the transaction on the combined company’s financial position, results of operations or cash flows is not consistent with the expectations of financial or industry analysts.
Stratasys does not expect to pay any cash dividends for the foreseeable future. Therefore, if its share price does not appreciate, Stratasys shareholders may not recognize a return, and could potentially suffer a loss, on their investment in Stratasys ordinary shares.
Stratasys intends to retain all available funds and any future earnings to fund the development and growth of the combined company. Therefore, Stratasys currently does not expect to declare dividends on Stratasys ordinary shares and has not done so in the past. Any determination to declare or pay dividends in the future will be at the discretion of the Stratasys board of directors, subject to relevant laws and dependent on a number of factors, including Stratasys’ earnings, capital requirements and overall financial condition. Therefore, for the foreseeable future, the only opportunity for Desktop Metal stockholders, or Stratasys shareholders, to achieve a return on the Stratasys ordinary shares, including ordinary shares received as Merger consideration, may be if the market price of Stratasys ordinary shares appreciates and shares, including those received as Merger consideration, are sold at a price higher than the implied value of the Merger consideration. The market price for Stratasys ordinary shares may not appreciate and may fall below the implied value of the share consideration.
There may be less publicly available information concerning Stratasys than there is for issuers that are not foreign private issuers (such as Desktop Metal) because Stratasys, as a foreign private issuer, is exempt from a number of rules under the Exchange Act, is permitted to file less information with the SEC than issuers that are not foreign private issuers and is permitted to follow home country practice in lieu of the listing requirements of Nasdaq, subject to certain exceptions.
As a foreign private issuer under the Exchange Act, Stratasys is exempt from certain rules under the Exchange Act, and is not required to file periodic reports and financial statements with the SEC as frequently or as promptly as companies whose securities are registered under the Exchange Act but are not foreign private issuers, or to comply with Regulation FD, which restricts the selective disclosure of material non-public information. In addition, Stratasys is exempt from certain disclosure and procedural requirements applicable to proxy solicitations under Section 14 of the Exchange Act. The members of Stratasys board of directors and Stratasys’ officers and principal shareholders are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act. Accordingly, there may be less publicly available information concerning Stratasys than there is for companies whose securities are registered under the Exchange Act but are not foreign private issuers, and such information may not be provided as promptly as it is provided by such companies. In addition, certain information may be provided by Stratasys in accordance with Israeli law, which may differ in scope, substance or timing from such disclosure requirements under the Exchange Act.
Furthermore, as a foreign private issuer, Stratasys is also permitted, and intends to continue, to follow certain home country corporate governance practices instead of those otherwise required under the Listing Rules of the Nasdaq Stock Market for domestic U.S. issuers. Stratasys has informed Nasdaq that it follows home country practice in Israel with regard to, among other things, the quorum requirements for shareholder meetings (allowing for a 25%
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instead of a 33 and 1/3% quorum level for shareholder meetings). Following its home country governance practices as opposed to the requirements that would otherwise apply to a United States company listed on The Nasdaq Global Select Market may provide shareholders in the combined company with less protection than they would have as stockholders of Desktop Metal, as a domestic U.S. company.
Stratasys’ status as a foreign private issuer is subject to an annual review and test, and will be tested again as of June 30, 2023 (the last business day of its second fiscal quarter of 2023). If it loses its status as a foreign private issuer, Stratasys will no longer be exempt from such rules. Among other things, beginning on January 1, 2024, it would be required to file periodic reports and financial statements on a periodic basis (including both an annual report in respect of 2023 and quarterly reports in respect of each of the quarters of 2024) as if we were a company incorporated in the U.S., which, among other things, would result in increased compliance and reporting costs to the combined company.
Accordingly, if Stratasys remains a foreign private issuer after the Merger, you may not have the same protections afforded to shareholders of companies that are required to comply with all of the Nasdaq corporate governance requirements. See the section entitled “Governance of the Combined Company after the Merger—Certain exemptions from Nasdaq corporate governance requirements” beginning on page 138 for a discussion of Stratasys’ corporate governance practices that differ from those followed by issuers that are not foreign private issuers under Nasdaq listing standards.
It may be difficult to enforce a U.S. judgment against the combined company and its officers and directors in Israel or the United States, or to serve process on our officers and directors.
The combined company will be organized in Israel. A substantial portion of its officers and directors reside outside of the United States, and a substantial portion of its assets is located outside of the United States. Therefore, a judgment obtained against the combined company or any of its executive officers and directors in the United States, including one based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United States and may be difficult to enforce (if at all) by an Israeli court. It also may be difficult for you to effect service of process on these persons in the United States or to assert U.S. securities law claims in original actions instituted in Israel. See “Enforceability of Civil Liabilities” on page 212 of this joint proxy statement/prospectus.
Your rights and responsibilities as a shareholder will be governed by Israeli law, which may differ in some respects from the rights and responsibilities of stockholders of U.S. companies.
Stratasys is organized under Israeli law. The rights and responsibilities of the holders of its ordinary shares are governed by its amended and restated articles of association and Israeli law. These rights and responsibilities differ in some respects from the rights and responsibilities of stockholders in typical U.S.-based corporations like Desktop Metal. In particular, a shareholder of an Israeli company has a duty to act in good faith toward the company and other shareholders and to refrain from abusing its power in the company, including, among other things, in voting at the general meeting of shareholders on matters such as amendments to a company’s articles of association, increases in a company’s authorized share capital, mergers and acquisitions and interested party transactions requiring shareholder approval. In addition, a shareholder who knows that it possesses the power to determine the outcome of a shareholder vote or to appoint or prevent the appointment of a director or executive officer in the company has a duty of fairness toward the company. There is limited case law available to assist us in understanding the implications of these provisions that govern shareholders’ actions. These provisions may be interpreted to impose additional obligations and liabilities on holders of our ordinary shares that are not typically imposed on shareholders of U.S. corporations. See also the section entitled “Comparison of Stockholders’/Shareholders’ Rights” beginning on page 197 for a discussion of these differences.
Provisions of Israeli law may delay, prevent or otherwise impede a merger with, or an acquisition of, the combined company, which could prevent a change of control, even when the terms of such a transaction are favorable to us and our shareholders.
Israeli corporate law regulates mergers, requires tender offers for acquisitions of shares above specified thresholds, requires special approvals for transactions involving directors, officers or significant shareholders and regulates other matters that may be relevant to such types of transactions. For example, a merger may not be consummated unless at least 50 days have passed from the date on which a merger proposal is filed by each merging company with the Israel Registrar of Companies and at least 30 days have passed from the date on which the shareholders of both merging companies have approved the merger. In addition, a majority of each class of securities
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of the target company must approve a merger. Moreover, a tender offer for all of a company’s issued and outstanding shares can only be completed if the acquirer receives positive responses from the holders of at least 95% of the issued share capital. Completion of the tender offer also requires approval of a majority of the offerees that do not have a personal interest in the tender offer, unless, following consummation of the tender offer, the acquirer would hold at least 98% of the company’s outstanding shares. Furthermore, the shareholders, including those who indicated their acceptance of the tender offer, may, at any time within six months following the completion of the tender offer, petition an Israeli court to alter the consideration for the acquisition, unless the acquirer stipulated in its tender offer that a shareholder that accepts the offer may not seek such appraisal rights.
Furthermore, Israeli tax considerations may make potential transactions unappealing to the combined company or to its shareholders whose country of residence does not have a tax treaty with Israel exempting such shareholders from Israeli tax. For example, Israeli tax law does not recognize tax-free share exchanges to the same extent as U.S. tax law. With respect to mergers, Israeli tax law allows for tax deferral in certain circumstances but makes the deferral contingent on the fulfillment of a number of conditions, including a holding period of two years from the date of the transaction during which sales and dispositions of shares of the participating companies are subject to certain restrictions.
Moreover, with respect to certain share swap transactions, the tax deferral is limited in time, and when such time expires, the tax becomes payable even if no disposition of the shares has occurred.
These and other similar provisions could delay, prevent or impede an acquisition of the combined company or its merger with another company, even if such an acquisition or merger would be beneficial to the combined company or to its shareholders.
If a U.S. holder is treated as owning at least 10% of the stock of Stratasys, such holder may be subject to adverse U.S. federal income tax consequences.
If a U.S. holder (as defined under the section entitled “Material U.S. Federal Income Tax Considerations of the Merger” below) is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of the stock of Stratasys, such holder may be treated as a “United States shareholder” (as defined in Section 951 of the Code) with respect to each of Stratasys and its direct and indirect subsidiaries (the “Stratasys Group”) that is a “controlled foreign corporation” (a “CFC”), for U.S. federal income tax purposes. Stratasys’ non-U.S. subsidiaries could be treated as CFCs regardless of whether Stratasys is treated as a CFC.
Certain United States shareholders of a CFC may be required to report annually and include in their U.S. federal taxable income their pro rata share of the CFC’s “Subpart F income” and, in computing their “global intangible low-taxed income,” take into account their pro rata share of the CFC’s “tested income”, and include in their U.S. federal taxable income their pro rata share of the CFC’s earnings and profits invested in certain U.S. property (including certain stock in U.S. corporations and certain tangible assets located in the United States) held by the CFC regardless of whether such CFC makes any distributions.
No assurance can be provided that Stratasys will assist holders in determining whether it or any of its non-U.S. subsidiaries is treated as a CFC or whether any holder is treated as a United States shareholder with respect to any of such CFCs or furnish to any holder information that may be necessary to comply with reporting and tax payment obligations with respect to such CFCs. U.S. holders of Stratasys ordinary shares are strongly encouraged to consult their tax advisors regarding the potential application of these rules to them.
If Stratasys or any of its subsidiaries is characterized as a passive foreign investment company, referred to as a “PFIC”, for U.S. federal income tax purposes, U.S. holders may suffer adverse tax consequences.
A non-U.S. corporation generally will be treated as a PFIC, for U.S. federal income tax purposes, in any taxable year if either (1) at least 75% of its gross income for such year is passive income or (2) at least 50% of the value of its assets (generally based on an average of the quarterly values of the assets) during such year is attributable to assets that produce or are held for the production of passive income. Based on the current and projected composition of Stratasys’ income and assets and the expected value of Stratasys’ assets, Stratasys does not expect to be treated as a PFIC for its taxable year that includes the date of the completion of the Merger.
However, the tests for determining PFIC status are fundamentally factual in nature, depend on the application of complex U.S. federal income tax rules that are subject to differing interpretations and generally cannot be determined until after the close of the taxable year in question, and it is difficult to predict accurately future income
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and assets relevant to this determination. Such determination depends on, among other things, the composition of Stratasys’ income and assets, and the market value of its and its subsidiaries’ shares and/or assets (as applicable). Changes in the composition of Stratasys’ income or composition of Stratasys’ or any of its subsidiaries’ assets may cause Stratasys to be or become a PFIC for the taxable year that includes the Merger or in any subsequent taxable years. Moreover, the application of the PFIC rules is subject to uncertainty in several respects, and there can be no assurance that the IRS will not take a contrary position or that a court will not sustain such a challenge by the IRS. Therefore, no assurances can be provided that Stratasys will not be a PFIC in the taxable year that includes the Merger or for any taxable year.
If Stratasys is a PFIC for any taxable year, a U.S. holder (as defined under the section entitled “Material U.S. Federal Income Tax Considerations of the Merger”) of Stratasys ordinary shares may be subject to adverse tax consequences and may incur certain information reporting obligations. For a further discussion, see the section entitled “Material U.S. Federal Income Tax Considerations of the Merger—U.S. Holders—Ownership of Stratasys Ordinary Shares—Passive Foreign Investment Company Rules.” U.S. holders of Stratasys ordinary shares are strongly encouraged to consult their tax advisors regarding the potential application of these rules to Stratasys and the ownership of Stratasys ordinary shares.
Risks Relating to Stratasys’ Business
Stratasys’ business is and will continue to be subject to the risks described in the sections entitled “Risk Factors” in the Stratasys 2022 Form 20-F and in other documents incorporated by reference into this joint proxy statement/prospectus. See the section entitled “Where You Can Find More Information” beginning on page 217 for the location of information incorporated by reference into this joint proxy statement/prospectus.
Risks Relating to Desktop Metal’s Business
Desktop Metal’s business is and will continue to be subject to the risks described in the sections entitled “Risk Factors” in Desktop Metal’s Annual Report on Form 10-K for the year ended December 31, 2022, and in other documents incorporated by reference into this joint proxy statement/prospectus. See the section entitled “Where You Can Find More Information” beginning on page 217 for the location of information incorporated by reference into this joint proxy statement/prospectus.
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THE PARTIES TO THE MERGER
Stratasys Ltd.
Stratasys is a global leader in polymer-based 3D printing solutions, which it provides at every stage of the product life cycle, with multiple technologies and complete solutions for superior application fit, across industrial, healthcare and consumer fields. Stratasys focuses, in particular, on polymer 3D printing solutions that address the fastest-growing manufacturing solutions, which it views as the biggest potential growth opportunity in the 3D printing industry. Leveraging distinct competitive advantages that include a broad set of best-in-class 3D printing platforms, software, materials and technology partner ecosystems, innovative leadership, and a global GTM infrastructure, Stratasys is positioned to further expand its leadership in this significant and growing global marketplace Stratasys is a public company incorporated in Israel and operates under the Israeli Companies Law. Stratasys has dual headquarters. Its registered office and one of its two principal places of business is located at 1 Holtzman Street, Science Park, P.O. Box 2496, Rehovot 76124, Israel, and its telephone number at that office is (+972)-74-745-4314. Stratasys’ other principal place of business is located at 7665 Commerce Way, Eden Prairie, Minnesota 55344, and its telephone number there is (952) 937-3000.
Stratasys ordinary shares are listed on Nasdaq under the ticker symbol “SSYS.”
For more information about Stratasys, please visit Stratasys’ Internet website at https://Stratasys.com. Stratasys’ Internet website address is provided as an inactive textual reference only. The information contained on Stratasys’ Internet website or accessible through it (other than the documents incorporated by reference herein) does not constitute a part of this joint proxy statement/prospectus or any other report or document on file with or furnished to the SEC. Additional information about Stratasys is included in the documents incorporated by reference into this joint proxy statement/prospectus. See the section entitled “Where You Can Find More Information” beginning on page 217.
Tetris Sub, Inc.
Tetris Sub Inc., referred to as Merger Sub, a Delaware corporation and a wholly owned subsidiary of Stratasys, was formed solely for the purpose of facilitating the Merger. Merger Sub has not carried on any activities or operations to date, except for those activities incidental to its formation and undertaken in connection with the Merger and the other transactions contemplated by the Merger Agreement. By operation of the Merger, Merger Sub will be merged with and into Desktop Metal, with Desktop Metal surviving the Merger as a wholly owned subsidiary of Stratasys. Merger Sub’s principal executive office is located at c/o Stratasys Ltd., 7665 Commerce Way, Eden Prairie, Minnesota, 55344, and its telephone number is (952) 937-3000.
Desktop Metal, Inc.
Desktop Metal, Inc. is pioneering a new generation of additive manufacturing technologies focused on Additive Manufacturing 2.0, the volume production of end-use parts. Founded in 2015, Desktop Metal offers a comprehensive portfolio of integrated additive manufacturing solutions comprised of hardware, software, materials and services with support for metals, polymers, elastomers, ceramics, sands, composites, wood and biocompatible materials. Desktop Metal’s solutions span use cases across the product life cycle, from product development to mass production and aftermarket operations, and they address an array of industries, including automotive, healthcare and dental, consumer products, heavy industry, aerospace, machine design and research and development. Desktop Metal’s headquarters is 63 Third Avenue, Burlington, Massachusetts, 01803, and its telephone number is +1 (978) 224-1244.
Desktop Metal’s common stock is listed on the New York Stock Exchange under the trading symbol “DM.”
For more information about Desktop Metal, please visit Desktop Metal’s Internet website at http://www.desktopmetal.com. Desktop Metal’s internet website address is provided as an inactive textual reference only. The information contained on Desktop Metal’s internet website or accessible through it (other than the documents incorporated by reference herein) do not constitute a part of this joint proxy statement/prospectus or any other report or document on file with or furnished to the SEC. Additional information about Desktop Metal is included in the documents incorporated by reference into this joint proxy statement/prospectus. See the section entitled “Where You Can Find More Information” beginning on page 217.
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THE STRATASYS 2023 ANNUAL AND EXTRAORDINARY GENERAL MEETING
This joint proxy statement/prospectus is being mailed on or about [   ], 2023, to holders of record of Stratasys ordinary shares as of the close of business on [   ], 2023, and constitutes notice of the Stratasys 2023 Annual and Extraordinary General Meeting, or the Stratasys AGM/EGM, in conformity with the requirements of the Israeli Companies Law and Stratasys’ articles of association.
This joint proxy statement/prospectus is being provided to Stratasys shareholders as part of a solicitation of proxies by the Stratasys board of directors for use at the Stratasys AGM/EGM, and at any adjournments or postponements of the Stratasys AGM/EGM. Stratasys shareholders are encouraged to read the entire document carefully, including the annexes to and documents incorporated by reference into this document, for more detailed information regarding the Merger Agreement and the transactions contemplated by the Merger Agreement.
Date, Time and Place of the Stratasys AGM/EGM
The Stratasys AGM/EGM will be held on [   ], 2023, beginning at [   ] p.m., Israel time, at Stratasys’ Israeli external legal counsel, Meitar Law Offices at 16 Abba Hillel Road, 10th Floor, Ramat Gan, 5250608, Israel.
Matters to be Considered at the Stratasys AGM/EGM
The agenda items to be presented at the Stratasys AGM/EGM are as follows, each as further described in this joint proxy statement/prospectus:
Stratasys Proposal 1 (Stratasys Merger-related proposal): Approval of certain matters to be effected in connection with the Merger Agreement and the Merger, including: (i) the issuance of Stratasys ordinary shares to the stockholders of Desktop Metal in exchange for the shares of Desktop Metal Class A common stock held by them, at a ratio of 0.123 Stratasys ordinary shares per share of Desktop Metal Class A common stock, as consideration under the Merger Agreement; (ii) the adoption of amended and restated articles of association for Stratasys with effect from immediately prior to the effective time of the Merger under the Merger Agreement, which will include an increase of the authorized share capital of Stratasys from NIS 1,800,000, consisting of 180,000,000 ordinary shares, par value NIS 0.01 per share, to NIS 4,500,000, consisting of 450,000,000 ordinary shares, par value NIS 0.01 per share; and (iii) the election of a slate of five designees of Stratasys and five designees of Desktop Metal, as well as the combined company chief’s executive officer, as the members of Stratasys’ board of directors, each of whose term will commence upon the effective time of the Merger and expire upon the first annual general meeting of shareholders of the combined company following the one-year anniversary of, and upon the due election and qualification of each designee’s respective successor, or until each respective designee’s earlier resignation, replacement or removal;
Stratasys Proposal 2 (Stratasys rights plan extension proposal): Approval of the extension of the expiration date of Stratasys’ existing shareholder rights plan to the earlier of the effective time of the Merger or the valid termination of the Merger Agreement in accordance with its terms;
Stratasys Proposal 3 (Stratasys auditor re-appointment proposal): Re-appointment of Stratasys’ independent auditors for the year ending December 31, 2023 and for the additional period until Stratasys’ next annual general meeting of shareholders, and authorization of the Stratasys board of directors (upon recommendation of the audit committee of the board of directors) to fix their remuneration; and
Stratasys Proposal 4 (Stratasys 2023 annual meeting director re-election proposal): For purposes of Stratasys’ 2023 annual general meeting, the re-election of each of the eight current members of Stratasys’ board of directors, for a term that lasts until the earlier of (i) the effective time of the Merger or (ii) Stratasys’ 2024 annual general meeting of shareholders, and until the due election and qualification of their respective successors.
The foregoing proposals to be presented at the Stratasys AGM/EGM are referred to collectively as the Stratasys proposals.
In addition to the foregoing proposals, at the Stratasys AGM/EGM, the audited, consolidated financial statements of Stratasys for the annual period ended December 31, 2022 will be presented to, and considered by, Stratasys’ shareholders, as required for an annual general meeting of shareholders under the Israeli Companies Law. There will be no vote required for this additional matter.
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Recommendation of the Stratasys Board of Directors
After careful consideration, the Stratasys board of directors, unanimously (i) determined that the Merger Agreement and the transactions contemplated thereby are fair to, and in the best interests of, Stratasys and its shareholders, and (ii) directed that the Stratasys Merger-related proposal and other Stratasys proposals be submitted to Stratasys shareholders for their approval.
The Stratasys board of directors furthermore unanimously recommends that Stratasys shareholders vote as follows in respect of the Stratasys Merger-related proposal and the other Stratasys proposals:
Stratasys Proposal 1 (Stratasys Merger-related proposal): “FOR” the Stratasys Merger-related proposal;
Stratasys Proposal 2 (Stratasys rights plan extension proposal): “FOR” the Stratasys rights plan extension proposal;
Stratasys Proposal 3 (Stratasys auditor re-appointment proposal): “FOR” the Stratasys auditor re-appointment proposal; and
Stratasys Proposal 4 (Stratasys 2023 annual meeting director re-election proposal): “FOR” the re-election of each of the director nominees named in the Stratasys 2023 annual meeting director re-election proposal.
See also the section entitled “The Merger—Recommendation of the Stratasys Board of Directors and Reasons for the Merger” beginning on page 111.
Record Date for the Stratasys AGM/EGM and Voting Rights
The Stratasys board of directors has fixed the close of business on [   ], 2023 as the record date of the Stratasys AGM/EGM. If you were a holder of record of Stratasys ordinary shares as of the close of business on the record date you are entitled to receive notice of and to vote at the Stratasys AGM/EGM or any adjournments or postponements thereof. You are entitled to one vote for each Stratasys ordinary share that you owned as of the close of business on the Stratasys record date. As of the close of business on the Stratasys record date, [   ] Stratasys ordinary shares were outstanding and entitled to vote at the Stratasys AGM/EGM.
Quorum; Abstentions and Broker Non-Votes
A quorum of shareholders is necessary to conduct the Stratasys AGM/EGM. The presence of two (2) or more shareholders (present by proxy or in person), who together possess at least 25% of the voting rights in Stratasys is necessary to constitute a quorum. Abstentions and broker non-votes will be counted as present for purposes of determining whether there is a quorum. If a quorum is not present, the Stratasys AGM/EGM will be adjourned. At the adjourned meeting, the presence of two or more shareholders, regardless of the voting power of the ordinary shares held by them, will constitute a quorum.
Under Nasdaq rules, banks, brokers and other nominees may use their discretion to vote “uninstructed” shares (i.e., shares of record held by banks, brokers or other nominees, but with respect to which the beneficial owner of such shares has not provided instructions on how to vote on a particular proposal) with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. A “broker non-vote” occurs on an item when (i) a bank, broker or other nominee has discretionary authority to vote on one or more proposals to be voted on at a meeting of shareholders, but is not permitted to vote on other proposals without instructions from the beneficial owner of the shares and (ii) the beneficial owner fails to provide the bank, broker or other nominee with such instructions. All of the proposals currently scheduled for consideration at the Stratasys AGM/EGM, other than, possibly, the Stratasys auditor re-appointment proposal, are “non-routine” matters. Because only possibly one of the proposals currently scheduled to be voted on at the Stratasys AGM/EGM is a routine matter for which brokers may have discretionary authority to vote, Stratasys expects that there may be only a minor number of broker non-votes at the Stratasys AGM/EGM. As a result, if you hold your Stratasys ordinary shares in “street name,” your shares will likely not be represented and will not be voted on any matter (other than, possibly, the Stratasys auditor re-appointment proposal) unless you affirmatively instruct your bank, broker or other nominee how to vote your shares in one of the ways indicated by your bank, broker or other nominee. It is therefore critical that you cast your vote by instructing your bank, broker or other nominee on how to vote.
If you fail to vote, fail to submit a proxy or fail to return a voting instruction form instructing your broker, bank or other nominee how to vote on any of the Stratasys proposals, that will have no effect on the vote count for such proposal but, in the case of broker non votes only, will count towards determining whether a quorum is present.
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If you respond with an “abstain” vote on any of the Stratasys proposals, that will have no effect on the vote count for any such proposal, but will count towards determining whether a quorum is present. Executed but unvoted proxies will be voted in accordance with the recommendations of the Stratasys board of directors. If additional votes must be solicited to approve the share issuance or the other Stratasys Merger proposals that must be approved for the Merger to be completed , it is expected that the Stratasys AGM/EGM will be adjourned to solicit additional proxies.
Required Votes; Vote of Stratasys’ Directors and Executive Officers
Approval of the Stratasys proposals requires the affirmative vote of a majority of the voting power of Stratasys ordinary shares that are voted, either in person or by proxy, by shareholders entitled to vote on the Stratasys proposals at the Stratasys AGM/EGM. Because the vote required to approve each of the Stratasys proposals is based on votes properly cast at the Stratasys AGM/EGM, abstentions, along with failures to vote, will have no effect on whether such proposals are approved. The foregoing is summarized in the below table:
Stratasys Proposal
Vote Required
Effects of Abstentions and
Broker Non-Votes
Stratasys Proposal 1: Stratasys Merger-related proposal
The affirmative vote of holders of a majority in voting power of the outstanding Stratasys ordinary shares that are voted.
Abstentions and broker non-votes will have no effect.
 
 
 
Stratasys Proposal 2: Stratasys rights plan extension proposal
The affirmative vote of holders of a majority in voting power of the outstanding Stratasys ordinary shares that are voted.
Abstentions and broker non-votes will have no effect.
 
 
 
Stratasys Proposal 3: Stratasys auditor re-appointment proposal
The affirmative vote of holders of a majority in voting power of the outstanding Stratasys ordinary shares that are voted.
Abstentions and broker non-votes will have no effect.
 
 
 
Stratasys Proposal 4: Stratasys 2023 annual meeting director re-election proposal
The affirmative vote of holders of a majority in voting power of the outstanding Stratasys ordinary shares that are voted.
Abstentions and broker non-votes will have no effect.
As of the record date, Stratasys directors and executive officers, and their affiliates, as a group, owned and were entitled to vote [    ] Stratasys ordinary shares, or approximately []% of the total outstanding Stratasys ordinary shares. Although none of them has entered into any agreement obligating them to do so, Stratasys currently expects that all of its directors and executive officers will vote their shares “FOR” the Stratasys Merger-related proposal and “FOR” the remaining Stratasys proposals. See also the section entitled “Interests of Stratasys’ Directors and Executive Officers in the Merger” beginning on page 176.
Methods of Voting for Shareholders of Record
By Internet: Through the Internet by logging onto www.proxyvote.com and following the prompts using the control number located on the proxy card.
By Telephone: By calling using the toll-free (from the United States, Puerto Rico and Canada) telephone number listed on the enclosed proxy card.
By Mail: By completing, signing, dating and returning the enclosed proxy card in the envelope provided.
You may also cast your vote in person at Stratasys AGM/EGM. Even if you plan to attend the Stratasys AGM/EGM, Stratasys recommends that you vote your shares in advance as described above so that your vote will be counted if you later decide not to or become unable to attend the Stratasys AGM/EGM.
To be effective for Stratasys voting, the proxy card duly completed and executed, together with any authority under which it is executed, or a copy thereof certified, must be received by our agent tallying the votes for the
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Stratasys AGM/EGM by 11:59 p.m., Eastern time, on [  ], 2023 (the day before the Stratasys AGM/EGM) in order to be counted towards the tally of votes at the Meeting. In the alternative, you may send in your proxy card directly to the registered Israeli office of Stratasys (together with any authority under which the proxy card is executed, or a copy thereof certified), so as to be received no later than four hours prior to the Stratasys AGM/EGM on [   ], 2023. If the Stratasys AGM/EGM is adjourned, your proxy card must be received by the corresponding deadlines prior to the time designated for the adjourned meeting.
Alternatively, if you are voting via Internet or telephone, and provided it is received by 11:59 p.m., Eastern time, on [   ], 2023, or if the Stratasys AGM/EGM is adjourned, by 11:59 p.m., Eastern time, on the day that falls more than 24 hours before the time appointed for the adjourned meeting, the appointment of a proxy may be submitted electronically or telephonically, subject to any applicable terms and conditions specified on your proxy card.
Voting of Shares Held in “Street Name”
Beneficial owners who hold ordinary shares in “street name” can instruct their brokers, trustees or nominees how to vote by completing the enclosed voting instruction form and mailing it in the accompanying pre-addressed, postage paid envelope.
In the alternative, a beneficial owner can vote online (at www.proxyvote.com) or via telephone, by dialing the number provided to you in the enclosed voting instruction form and following the instructions over the phone. Please have the control number that appears on your physical voting instruction form ready for inputting when you vote online or via telephone.
To be effective for the voting at the Stratasys AGM/EGM, voting instructions (whether electronic, telephonic or physical) must be received by our agent tallying the votes for the Stratasys AGM/EGM by 11:59 p.m., Eastern time, on [  ], 2023 (the day before the Stratasys AGM/EGM) in order for the related Stratasys ordinary shares to be voted at the Stratasys AGM/EGM.
Revocability of Proxies or Voting Instructions
If you are a shareholder of record and have submitted a proxy card, you can change your vote at any time before it is voted by sending a written and dated notice of revocation or by submitting a signed proxy bearing a later date, in either case, to Stratasys Ltd., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717 or to Stratasys’ Chief Communications Officer and Vice President, Investor Relations at Yonah.Lloyd@stratasys.com. Any such revocation or later proxy must be received by 11:59 p.m., U.S. Eastern time, on [    ], 2023, for it to be effective. If you initially voted online or via telephone, you can follow the same instructions as you did initially in order to submit your revised vote. You may also revoke your proxy by attending the Stratasys AGM/EGM and voting in person. Attendance at the Stratasys AGM/EGM will not cause your previously granted proxy to be revoked, unless you vote again.
If your shares are held in street name or by a broker, trustee or nominee, you may change your vote by following the instructions provided to you by your broker, trustee or nominee. If you have obtained a legal proxy from your broker, trustee or nominee giving you the right to vote your shares, you can change your vote by attending the Stratasys AGM/EGM and voting in person.
Unless revoked, all proxies representing shares entitled to vote that are delivered pursuant to this solicitation will be voted at the Stratasys AGM/EGM and, where a choice has been specified on the proxy card, will be voted in accordance with such specification. If a Stratasys shareholder executes and returns a proxy card but makes no specification on the proxy card as to how such Stratasys shareholder should want his, her or its Stratasys ordinary shares voted, such proxy will be voted as recommended by the Stratasys board of directors as stated in this joint proxy statement/prospectus, specifically “FOR” the Stratasys Merger-related proposal, and “FOR” the remaining Stratasys proposals.
Proxy Solicitation Costs
Stratasys is soliciting proxies to provide an opportunity to all Stratasys shareholders to vote on agenda items, whether or not the shareholders are able to attend the Stratasys AGM/EGM or an adjournment or postponement thereof. Stratasys will bear the entire cost of soliciting proxies from its shareholders. In addition to the solicitation of proxies by mail, Stratasys will ask banks, brokers and other custodians, nominees and fiduciaries to forward the
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proxy solicitation materials to the beneficial owners of Stratasys ordinary shares held of record by such nominee holders. Stratasys may be required to reimburse these nominee holders for their customary clerical and mailing expenses incurred in forwarding the proxy solicitation materials to the beneficial owners.
Stratasys has retained Morrow Sodali LLC, or Morrow Sodali, to assist in the solicitation process. Stratasys will pay Morrow Sodali a fee of approximately $[    ], plus costs and expenses. Stratasys also has agreed to indemnify Morrow Sodali against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions). In addition to solicitation by mail, Stratasys’ directors, officers and other employees may solicit proxies in person, by telephone, electronically, by mail or other means. These persons will not be specifically compensated for doing this.
Attending the Stratasys AGM/EGM
You are entitled to attend the Stratasys AGM/EGM only if you are a shareholder of record of Stratasys at the close of business on [    ] (the record date for the Stratasys AGM/EGM) or hold a proxy for such a shareholder. Shares held in “street name” may be voted in person by you only if you obtain a signed legal proxy from your bank, broker or other nominee giving you the right to vote the shares at the Stratasys AGM/EGM.
Results of the Stratasys AGM/EGM
The preliminary voting results will be announced at the Stratasys AGM/EGM. In addition, within four (4) business days following the Stratasys AGM/EGM, Stratasys intends to furnish the final voting results to the SEC in a Report of Foreign Private Issuer on Form 6-K, or Form 6-K. If the final voting results have not been certified within that four-business-day period, Stratasys will report the preliminary voting results on a Form 6-K at that time and will furnish an amendment to the Form 6-K to report the final voting results within four business days of the date on which the final results are certified.
Adjournments
If a quorum is present at the Stratasys AGM/EGM but there are not sufficient votes at the time of the Stratasys AGM/EGM to approve the Stratasys Merger-related proposal or any other Stratasys proposal, the chairman of the Stratasys AGM/EGM may adjourn the meeting. Unless otherwise determined by the chairman, the Stratasys AGM/EGM will be adjourned in such case to the same day in the following week, at the same time and at the same place as the original Stratasys AGM/EGM.
Stratasys will not provide notice in regard to the adjournment of the Stratasys AGM/EGM unless the adjourned meeting is to be held more than 30 days after the date of the original meeting, in which case a new notice will be required from Stratasys.
At any subsequent reconvening of the Stratasys AGM/EGM at which a quorum is present, any business may be transacted that might have been transacted at the original meeting and all proxies will be voted in the same manner as they would have been voted at the original convening of the Stratasys AGM/EGM, except for any proxies that have been effectively revoked or withdrawn prior to the time the proxy is voted at the reconvened meeting.
Assistance
If you need assistance voting or in completing your proxy card or have questions regarding the Stratasys AGM/EGM, please contact Morrow Sodali LLC, the proxy solicitation agent for Stratasys:
Morrow Sodali LLC
509 Madison Avenue
Suite 1206
New York, NY 10022
1-800-662-5200 (toll-free within the United States)
1-203-658-9400 (outside the United States)
Email: SSYS@info.morrowsodali.com
STRATASYS SHAREHOLDERS SHOULD CAREFULLY READ THIS JOINT PROXY STATEMENT/PROSPECTUS IN ITS ENTIRETY FOR MORE DETAILED INFORMATION CONCERNING THE MERGER AGREEMENT AND THE MERGER. IN PARTICULAR, STRATASYS SHAREHOLDERS ARE DIRECTED TO THE MERGER AGREEMENT, WHICH IS ATTACHED AS ANNEX A HERETO.
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TABLE OF CONTENTS

STRATASYS PROPOSAL 1
STRATASYS MERGER-RELATED PROPOSAL
Background
This joint proxy statement/prospectus is being furnished to you as a shareholder of Stratasys as part of the solicitation of proxies by the Stratasys board of directors for use at the Stratasys AGM/EGM, at which those matters that require approval in connection with the prospective Merger with Desktop Metal, along with certain other proposals, will be presented. A copy of the Merger Agreement is attached as Annex A to this joint proxy statement/prospectus.
The first of the approvals being sought from Stratasys shareholders at the Stratasys AGM/EGM, which we refer to as the Stratasys Merger-related proposal, is the approval of the various matters that are required to be effected pursuant to the Merger Agreement and that require shareholder approval under applicable law. Approval of this proposal is a condition to the completion of the Merger. Therefore, Stratasys and Desktop Metal will not complete the Merger unless this proposal is approved at the Stratasys AGM/EGM.
The various matters for which Stratasys shareholder approval will be sought pursuant to the Stratasys Merger-related proposal consist of the following:
(i)
Stratasys Share Issuance:
Pursuant to the Merger Agreement, Stratasys will issue Stratasys ordinary shares to the stockholders of Desktop Metal in exchange for the shares of Desktop Metal Class A common stock held by them, at a ratio of 0.123 Stratasys ordinary shares per share of Desktop Metal Class A common stock, as the consideration in the Merger.
Under Israeli law, the board of directors of a public company may issue new shares without shareholder approval unless the transaction pursuant to which the shares are being issued is one of a number of specific transactions enumerated in the Israeli Companies Law. The issuance of Stratasys ordinary shares to Desktop Metal stockholders in a public merger transaction, in which Stratasys itself is not merging at all (instead, Merger Sub, a wholly-owned subsidiary of Stratasys, will be merging with and into Desktop Metal), does not constitute such a transaction and does not otherwise require shareholder approval from an Israeli law perspective. However, und