Desktop Metal, a once pioneering 3-D printer maker, filed for bankruptcy this week with plans to sell off what remains of the company at an upcoming auction.
The bankruptcy filing followed a decision by Israeli 3-D printing company Nano Dimension, which acquired Desktop Metal for $183 million in April, to stop funding its new subsidiary. “We are safeguarding our financial strength and preserving our position as the best capitalized company in our ecosystem,” Ofir Baharav, Nano Dimension’s chief executive, said in a statement.
Burlington-based Desktop Metal has total debt of more than $138 million and last month missed a required interest payment on convertible notes it issued in 2022, according to the bankruptcy filing in the Southern District of Texas. It also owes $29 million to lawyers who worked on completing the Nano sale after Nano tried to back out of the deal.
Desktop Metal has 780 employees, according to the filing.
The company also said it planned to sell its German, Italian, and Japanese subsidiaries to investment firm Anzu Partners for $10 million. The money would provide funds for bankruptcy lawyers and for an auction of the remains of the company. If the bankruptcy court does not approve the sale to Anzu, Desktop Metal will “commence liquidation,” the filing said.
The bizarre decision by Nano to cut off funding for its own unit is just the latest challenge for Desktop Metal, which was founded in 2015 with a focus on printing metal parts using technology developed at MIT. The company has been on a financial roller coaster since it went public by merging with a blank check company in December 2020.
The 2020 deal allowed Desktop Metal to use its stock to acquire numerous smaller rivals and expand its 3-D printing line into materials such as plastic and ceramics. But continued losses and rising interest rates spooked investors, and the company’s stock price plummeted more than 90 percent by mid-2023.
Two years ago, Desktop Metal agreed to merge with larger peer Stratasys, based in Minnesota, but Stratasys shareholders rejected the proposal.
Then, last July, Nano Dimension agreed to buy Desktop Metal for $183 million. But a proxy battle among Nano shareholders led to a change in management and Nano tried to back out of the deal. Desktop Metal sued Nano to complete the deal and won a ruling in its favor in March.
Former Desktop Metal chief executive Ric Fulop, who left in May, started the company 10 years ago with MIT professors Ely Sachs, who invented a core 3-D printing technique called binder jetting technology, and John Hart, an expert in 3-D printing for manufacturing. (A serial entrepreneur and venture capital investor, Fulop helped found several other Boston-area tech companies including battery developer A123 Systems.)
Desktop Metal attracted hundreds of millions of dollars in backing before going public, as investors hoped 3-D printing would revolutionize manufacturing. But the technology never lived up to the hype and Desktop Metal has never turned a profit, according to a bankruptcy filing by Andrew Hinkelman, a financial consultant working as chief restructuring officer for Desktop Metal.
“The company is, in sum and substance, a research and development company, which — although it has generated significant revenue — has historically struggled to generate a profit or positive operating cash flow,” Hinkelman wrote.
Aaron Pressman can be reached at aaron.pressman@globe.com. Follow him @ampressman.