Warrant Distribution Q&A

Through the pro-rata distribution of warrants as a dividend (the “Dividend Warrants”) to stockholders and other eligible recipients (as defined below), Danimer may enable deleveraging and/or raise new capital while protecting all stockholders, large and small, from dilution. All our stockholders and other eligible recipients receive the opportunity to either increase their investment in the Company or to sell their Dividend Warrants for cash.

Stockholders of the Company owning three or more shares of the Company’s Common Stock as of the Record Date. Holders of our 3.25% Convertible Senior Notes due 2026 (the “Convertible Notes”) and holders of our pre-funded common stock purchase warrants dated March 25, 2024 (collectively, “other eligible recipients”) also received Dividend Warrants, on terms and conditions as set forth in the agreements governing such securities and the warrant agreement filed with the SEC on the Distribution Date. The warrant agreement is also posted in the Investor Relations section of the Company’s website at www.DanimerScientific.com. You should carefully read the warrant agreement and the other documents filed with the SEC by Danimer.

The Dividend Warrants were distributed to stockholders and other eligible recipients on July 12, 2024 (the “Distribution Date”).

No, the Dividend Warrants were distributed to all stockholders and other eligible recipients at no cost.

Danimer intends to use any cash proceeds from the exercise of the Dividend Warrants for general corporate purposes.  Pursuant to the warrant agreement, Danimer may from time-to-time permit the use of a designated series of its outstanding debt securities (“designated notes”) to pay the exercise price. Exercise of Dividend Warrants in exchange for designated notes will not result in any cash proceeds to Danimer but will reduce the amount of debt Danimer has outstanding.

If all Dividend Warrants are fully exercised in exchange for designated notes, the amount of our outstanding designated notes would be reduced by approximately $234 million.

The Dividend Warrants have been approved to trade on the OTCQX under the symbol DNMRW. Warrant holders can benefit either by increasing their investment in the Company or selling their Dividend Warrants for cash. Stockholders would also benefit from Danimer’s reduced leverage following any exercise of the Dividend Warrants with designated notes.

Each stockholder received one Dividend Warrant for every three shares of Common Stock held as of the Record Date, with fractional Dividend Warrants rounded down. As a result, stockholders who owned fewer than three shares were not entitled to any Dividend Warrants. Other eligible recipients received Dividend Warrants based on the same ratio of shares of Common Stock underlying the Convertible Notes or pre-funded warrants they held in accordance with the terms of the agreements governing such securities and the warrant agreement. 

Yes, we will issue shares of Common Stock, but only upon exercise of Dividend Warrants. Holders who choose to exercise during certain periods specified in the warrant agreement will receive an additional one-half of a share of Common Stock, without any additional cost (the “Bonus Share Fraction”).

No, you did not have to do anything to receive the Dividend Warrants. All holders of record of at least three shares of Common Stock and other eligible recipients as of the Record Date have automatically received the Dividend Warrants in book-entry form on the Distribution Date, subject to Dividend Warrants that are rounded down. If you held your shares, Convertible Notes or pre-funded warrants through a brokerage account, bank or financial institution and were thus a holder in “street name,” contact your broker for further information. If your shares, Convertible Notes or pre-funded warrants were held in a registered account with Danimer’s transfer agent, contact Continental Stock Transfer & Trust Company, 1 State Street, New York, NY 10004, Attention: Compliance Department Email: compliance@continentalstock.com, for further information.

Yes. The Dividend Warrants are transferable and are registered to trade over the counter on the OTCQX market under the symbol “DNMRW”.  However, we cannot provide any assurances that an active trading market for the Dividend Warrants will develop or continue or that there will be liquidity in the trading market for the Dividend Warrants, or the price at which the Dividend Warrants will be able to be resold. You should consult your financial advisor or broker for assistance. 

You can exercise the Dividend Warrants (i) at any time starting on the date of issuance for Dividend Warrants exercised with cash or (ii) at any time starting on July 26, 2024 for Dividend Warrants exercised with designated notes, if any, until the earlier of (x) 5:00 p.m. New York City time on the Expiration Date (as defined below) and (y) 5:00 p.m. New York City time on the Trading Day prior to the Redemption Date, as defined in the warrant agreement to be filed with the SEC on the Distribution Date. Your ability to exercise with designated notes will also terminate on the Bonus Share Expiration Date (as defined below) and in the other circumstances specified in the warrant agreement. The warrant agreement will also be posted in the Investor Relations section of the Company’s website at www.DanimerScientific.com. You should carefully read the warrant agreement and the other documents when they are filed with the SEC by Danimer.

We are offering a Bonus Share program to attract further investment in the Company and to reward Dividend Warrant holders who exercise prior to the Bonus Share Expiration Date. 

Holders may exercise their Dividend Warrants during the defined Bonus Share Fraction period. Those who do so will receive an additional one-half (0.5) of a share of Common Stock per Dividend Warrant as a “bonus” share, without additional cost. Holders who receive a Bonus Share Fraction will have paid an effective price of approximately $3.33 per share of Danimer Common Stock.

The Bonus Share Fraction period begins on July 12, 2024.

The right to receive the Bonus Share Fraction will expire at 5:00 p.m. New York City time on the first trading day (“Bonus Share Expiration Date”) following the date on which the VWAP of the shares of Common Stock has been at least equal to a specified price, initially $2.00 per share, for at least twenty trading days each falling on or after August 1, 2024 (whether or not consecutive) out of thirty consecutive trading days (“Bonus Share Expiration Price Condition”). The full details of the Bonus Share feature will be set forth in the warrant agreement filed with the SEC on the Distribution Date. The warrant agreement will also be posted in the Investor Relations section of the Company’s website at www.DanimerScientific.com. You should carefully read the warrant agreement and the other documents filed with the SEC by Danimer.

Fractional Dividend Warrants were not issued or distributed. If any fractional Dividend Warrant would have otherwise been required to be issued or distributed, Danimer rounded down the total number of Dividend Warrants issued to the nearest whole number. For example, stockholders who own 2, 220 or 440 shares of Common Stock would have received zero, 73 and 146 Dividend Warrants, respectively.

The Dividend Warrants are redeemable by the Company upon twenty calendar days’ notice, from and after the first trading day following the date on which the daily volume weighted average price (“VWAP”) of the shares of Common Stock has been at least equal to a specified price, initially equal to the Exercise Price, for at least twenty trading days each falling on or after August 1, 2024 (whether or not consecutive) out of thirty consecutive trading days. The Company may redeem the Dividend Warrants at its sole option at any time after the Redemption Price Condition has been met, even if the trading price of the Common Stock subsequently declines. 

The Dividend Warrants will expire at 5:00 p.m. on July 15, 2025 (“Expiration Date”). The Dividend Warrants may also be redeemed earlier if elected by Danimer, subject to the Redemption Price Condition (as defined above) and a 20-calendar day notice period, as set forth in the warrant agreement filed with the SEC on the Distribution Date. The warrant agreement will also be posted in the Investor Relations section of the Company’s website at www.DanimerScientific.com. You should carefully read the warrant agreement and the other documents filed with the SEC by Danimer.

After the expiration date, you will no longer be entitled to exercise the Dividend Warrants for shares of Danimer Common Stock.

No. The Dividend Warrants are a separate security from any shares of Danimer Common Stock that you own. However, to the extent you do not exercise your Dividend Warrants, your proportional share investment in Danimer may be diluted to the extent other warrant holders exercise their Dividend Warrants for shares of Danimer Common Stock.

If you exercise Dividend Warrants before the Bonus Share Expiration Date, you will receive 1.5 shares for each Dividend Warrant exercised. Therefore, you will receive 1.5 shares for $5.00, which is an effective purchase price of $3.33 per share.

If you exercise Dividend Warrants after the Bonus Share Expiration Date, you will receive 1.0 shares for each Dividend Warrant exercised. Therefore, you will receive 1.0 shares for $5.00, which is an effective purchase price of $5.00 per share.

The exercise price of the Dividend Warrants is $5.00 per Dividend Warrant and may be paid with any notes that are designated notes as of the exercise date at their $1,000 par value. For purposes of payment of the Exercise Price, the $1,000 principal amount of designated notes is to be equal to the aggregate Exercise Price of 200 Dividend Warrants.

A Dividend Warrant holder who surrenders designated notes will be credited the $1,000 face value of those notes against the exercise price of the Dividend Warrants, regardless of the notes’ trading price. If you exercise 200 Dividend Warrants with one note with a principal amount of $1,000 before the Bonus Share Expiration Date, you will receive 300 shares. 

A Dividend Warrant holder who surrenders designated notes will be credited the $1,000 face value of those notes against the exercise price of the Dividend Warrants, regardless of the notes’ trading price. If you exercise 200 Dividend Warrants with one note with a principal amount of $1,000 after the Bonus Share Expiration Date, you will receive 200 shares.

No. Accrued interest will be forfeited upon exercise, unless exercise occurs after a record date for the payment of interest and before the corresponding scheduled payment date. In such event, note holders will receive the scheduled interest payment.

Continental Stock Transfer & Trust Company must receive a Dividend Warrant holder’s completed and duly executed “Election to Purchase Warrant Shares” form by 5:00 pm New York City time on the exercise date.  The deadlines of brokers, banks, financial institutions, the Depository Trust Company or the Warrant Agent may be earlier than the stated deadlines set forth in the warrant agreement, so you should confirm any earlier deadlines with such entities.

If you hold the Dividend Warrants through a brokerage account, bank or financial institution and are thus a holder in street name, you should contact your broker, bank or other financial institution intermediary for information on how to exercise warrants. You may also contact Continental Stock Transfer & Trust Company, the Warrant Agent, at 1 State Street, New York, NY 10004, Attention: Compliance Department, Email: compliance@continentalstock.com, if you have additional questions about the exercise process. 

If you are a direct registration holder, to exercise your Dividend Warrants, you must provide payment either (i) to Continental Stock Transfer & Trust Company in United States dollars by certified or official bank check or wire transfer of immediately available funds to an account designated by Danimer or (ii) after July 26, 2024, if there are then any designated notes, pursuant to Exhibit B of the warrant agreement, by the surrender of designated notes having a face value, in each case, equal to the exercise price ($5.00) times the number of Dividend Warrants exercised, provided that surrendered designated notes must be in minimum denominations of $1,000 or any whole multiple thereof. Such payment must specify the name of the holder and the number of Dividend Warrants exercised. You also are required to present the election to purchase warrant shares attached to the Dividend Warrants. Payment in the form of (i) cash to Continental Stock Transfer & Trust Company or (ii) delivery of designated notes to the indenture trustee via DWAC must be received on the exercise date. Questions regarding the DWAC process for the designated notes should be directed to U.S. Bank National Association, the indenture trustee, at 634 Wast 5th Street, 35th Floor, Los Angeles, CA 90071, Attention: Bradley Scarbrough, Email: bradley.scarbrough@usbank.com. If you have any questions or cannot locate your warrant statement, please contact Continental Stock Transfer & Trust Company, as Warrant Agent.

The deadlines of brokers, banks, financial institutions, the Depository Trust Company or the Warrant Agent may be earlier than the stated deadlines set forth in the warrant agreement, so you should confirm any earlier deadlines with such entities.

The right to receive the Dividend Warrants was established by holding shares of Common Stock on the Record Date. You do not need to remain a holder of Common Stock in order to hold or exercise the Dividend Warrants received.

The shares issuable upon exercise of the Dividend Warrants are expected to be freely transferable, unless held by our officers, directors or affiliates, who are subject to our inside trading policies and may be subject to volume or other limitations on resale under Rule 144.

The Dividend Warrants are registered to trade on the over-the-counter market under the symbol “DNMRW”, but we cannot assure you at what prices the Dividend Warrants will trade, if any. We encourage stockholders and other eligible recipients to consult their financial advisors for more information.

All stockholders of record as of the Record Date (May 13, 2024) are eligible to receive this distribution, including members of management. 

We encourage you to read the prospectus supplement that Danimer will file on the SEC’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system on or about the Distribution Date, a copy of which will then be available on the “SEC Filings” tab of the investor relations page of Danimer’s website at www.DanimerScientific.com. All public notices relating to the Dividend Warrants will also be published on this website.

As of May 13, 2024, the Company had approximately 116.4 million shares outstanding.  In addition, the Company issued pre-funded warrants to purchase Common Stock that were eligible to receive Dividend Warrants; there are approximately 1.6 million pre-funded warrants remaining. As mentioned in FAQ #2 above, holders of the Convertible Notes were also eligible to receive Dividend Warrants on an “as converted” basis of approximately 22.3 million shares.  Summing these items and then dividing by three to account for one Dividend Warrant being issued for every three shares (or equivalent) would imply approximately 46.8 million Dividend Warrants.

As described in FAQ #14 and #15 above, from the date of issuance until the Bonus Share Expiration Date, each Dividend Warrant holder will receive 1.5 shares of stock at exercise. Assuming all Dividend Warrants are exercised prior to the Bonus Share Expiration Date, there would be approximately 70.1 million shares issued.  

As provided in FAQ #34 above, the Company issued approximately 46.8 million Dividend Warrants, at an exercise price of $5.00 per Dividend Warrant. If all of the Dividend Warrants were exercised for cash, the total proceeds would be approximately $234 million.  

Similarly, as provided in FAQ #34 above, if all of the Dividend Warrants were exercised using Convertible Notes, the total debt reduction would be approximately $234 million. As provided in FAQ #13, the Convertible Notes can be used to fund the exercise of Dividend Warrants at each note’s $1,000 principal value.

The par (or face) value of each Convertible Note is $1,000. While the Convertible Notes may be bought and sold in a bond market, trading activity for the Convertible Notes has been infrequent. The most recent trade of Convertible Notes that we identified occurred on May 13, 2024 at an equivalent price of approximately $150.00 or 15.00% of par.

As provided in FAQ #15, the first trading day following the last day of such 20 day period is the Bonus Share Expiration Date. Dividend Warrants must be exercised no later than 5:00p.m. on the Bonus Share Expiration Date in order to receive the Bonus Share Fraction. Further, as outlined in FAQ #15, after the occurrence of the Bonus Share Expiration Date, the designated notes will be automatically removed from being designated for exercise. 

Danimer intended to structure this warrant distribution as a non-taxable distribution under section 305(a) of the U.S. Internal Revenue Code. Tax law and accounting rules are complex and can vary from state to state and person-to-person. Danimer does not provide, and does not offer, any advice regarding the tax or accounting treatment of our warrant distribution or its impact on your personal finances. The sale or exercise of Dividend Warrants is a separate transaction from the warrant distribution and may be a taxable event. This Q&A is for informational purposes only, and is not intended, and should not be relied upon, for tax, legal or accounting advice. You should consult with and rely only on your tax, legal and accounting advisors prior to engaging in any transaction related to this warrant distribution.