Ladies and gentlemen thank you for standing by. All participants are present in listen-only mode. Welcome to today's conference call to discuss Nano Dimension's First Quarter 2021 Financial Results. On the call with us today are Yoav Stern, CEO; and Yael Sander, CFO.

Before we begin, may I remind our listeners that certain information provided on this call may contain forward-looking statements. And the safe harbor statement outlined in today's earnings press release also pertains to this call.

If you have not received a copy of the press release, please view it in the investor relations section of the company's website. Yoav will begin the call with a business update, followed by a question-and-answer session, at which time, Yael will answer questions regarding the fourth quarter 2020 financial results.

As a reminder this conference is being recorded, May 20, 2021. I would now like to hand over the call to Mr. Yoav Stern. Mr.

Stern, would you like to begin?.

Yes, thank you very much operator, much appreciated. Hi everybody, welcome to Q1 results conference call. I will start by explaining to you the news release pretty much is worded and if you have read it, you will know what I'm talking about and I'll try to help. Dig a little bit deeper in the details.

And of course, later we'll have questions and you can ask anything regarding what I said, what is written and regarding the results, the financial results between [indiscernible] will try to help you.

So, first of all, while the Investor Relations people that work with us advise me that the description of our business is too complicated, I believe that all our shareholders are intelligent and can understand it, and this is how we work. We work on three different axis nowadays.

And the axis are the terminals to each other integrated spending in a football field. And one axis is going to your front all the way forward; one axis is going to your right, all the way to your right; and one axis goes from where you are upside upstairs back.

So you need to perceive in three axis, each one of them is a terminal to each other, which means there's no influence between one to the other, which means there's no leverage. So, we are really active on all three of them moving forward. So, there's enough movement and enough achievements on all one of these three accesses.

And then eventually they start to merge with each other. Once those three axis start to merge with each other, we start to have influence on one axis on the other, and that's when the leverage is coming and then with the accelerated growth is coming.

So as the axis over time are merging into one business direction, which is coherent than our money, then suddenly you are seeing in Y and X axis that we are today, we have to push forward, so there will be enough critical mass and enough advancement.

We are very well financed, so we will have enough view to go on those and we are going to start the show results as the axis merge, we believe in the next few quarters. So, first axis is the efforts and the sales efforts on our traditional business.

The DragonFly LDM, which is an early bird machines released to the market and moved forward by upgrades, obviously we're affected by all what happened in the world over the last year, but we are pushing forward on the sales. And as part of that, we are building our sales and marketing in the different three locations that we have.

And we just achieved one sale of one machine few days ago. We announced it, but it’s not necessarily so important as much as the importance of the market, starting to slowly wake up and we're starting to see customers in three geographies that are actually discussing and buying more machines with us.

Those are the traditional machines that we are selling since the last 12 months. Obviously during the pandemic, we sold less and now we're looking at accelerated growth in that area. Those machines are going to be upgraded. And that's when we are moving into a second axis. The second axis is where the axis of the R&D and the product development.

On that one, we are investing a lot, much more than just developing the existing machines into the next generation – the next release. We are by now quadrupled our R&D and product development teams.

And over the last two quarters in order to develop in parallel three generations of machines, one generation is the generation of the DragonFly, which are proof of concept and machines for prototyping. And those are going to be followed up by a new DragonFly called DragonFly 4, which will be in better site within the next quarter.

And over the early summer, we expect it to be in the hands of our customers, it’s exciting. Some of our customers depend on their agreement that have with us will be upgraded as part of the existing agreement.

Some f our customers will buy the upgraded DragonFly 4, and the difference between that machine and all the machines is in the performance which I am not going to get into the details, but it is substantial difference.

But more importantly, on the Second axis is we're developing two new generations of machines, which are coming in the next year and a half, and two and a half years, and those machines are going to be the machines that will move us into production machines for fabrication of PCBs and hybrids. The investment in those machines is material.

A lot of the investment is in the development of inks and different materials for the building, the 3D printed parts.

And we expect to do not only the R&D internally, but we are buying companies that will merge into R&D effort because they already have technologies that fit the two new generations of machines that will be coming in the next two months. The third axis, naturally the axis of the M&A efforts.

Only recently, in April, actually after the first quarter, we announced two acquisitions, very successful ones. I'm not going to get into details unless people were asking them about those acquisitions, because we had a conference call about those before.

But the two acquisitions were early birds of many other acquisitions that we expect to come to fruition in the next, while we have explained to you in the past the three types of acquisitions, we're looking at type A, B and C. All three of them are in action.

Now we are negotiating both in Europe and in the United States with probably I can say carefully four, five companies in parallel.

And as I explained in the right up that we are seeing the news release, we are not going to do any acquisition unless we can give the company and through the facilities, which is something that was only now starting to be enabled the open Europe just we can only find a member right for visitors.

We managed to visit Europe before about three, four weeks ago because we got a special permission from the [indiscernible] government.

But in practical terms acquisitions are only being held by us until we are able to visit the companies and see the sites and make sure that we are not neither overpaying, nor going to be encountered with the issues later because of not being able to visit.

Moreover, part of the companies we're acquiring, which our PCB manufacturers have – we have the need to clear up issues of environmental cleanups and make sure there's no contamination of ground. Obviously that means visitation, all this is inaction as we speak. Things are actually opening up and moving forward.

So I'm very excited about it and very excited to tell you about it.

So from the three-axis, the axis that I described now, one may ask me, okay, you also, are you totally happy with advancement on all fronts and only three-axis? Are we getting close to when those axes will be merging with each other and we leverage it and we see the results? So my answer is no. I'm not happy on over three-axes – axes, I'm sorry.

I'm a little bit unhappy about our development on the revenue, marketing itself build up on the existing revenue axis, because I think while we push forward during the end of the corona to build up our marketing and sales organization. We are not fast enough.

I think we should have been faster, even though it was against an instinct, because there was no customers at home. Now the customers are starting to come back to their offices. We are accelerating our sales and marketing efforts, which if it was up to me, I would have been happier a quarter and a half ago.

We would have built up, but we didn't have two, three quarters ago, the amount of money that we have today. And then we know we can spend it. So now we're spending it in efficient manner but without holding back, because we want to be with sales and marketing organization, all set and ready and affecting it within the next quarter.

We hired a new President to the company only two months ago, the less of even and he took over – Mr. Zivi Nedivi, he took over all the sales and marketing and other commercial activities of the company worldwide.

He is an executive that comes with 30 years experience in North America and Europe in running the companies with commercial and activities and distribution channels across the world. And since he joined, we are already seeing things moving forward.

I am more excited or more content I would say about our advancement on the second axis, which is the R&D. We have changed the R&D dramatically. Remember, we could only start to do that in the third quarter of last year when we start to realize that we actually have the money, the fuel to do.

So we started and we changed since then, the total management of the R&D, middle management and top management. We're allocated – the time – senior executive randomly Mr. Ziki Peled to be dedicated full time to the technology side of the business. And we've hired senior people from companies like Orbotech and Verint and others.

And we have a full stack of R&D personnel and researchers that I feel are well positioned to take us forward with the three generations that we are developing the existing one and the two new ones.

Actually on the third axis, I'm happier and more content than the other two, which is the M&A efforts, because while the results of M&A are coming in a binary manner, which means it ain't happening and it ain't happening until overnight, we announced two acquisitions.

So it's difficult for you to follow up how gradually quarter-by-quarter we see results from M&A. What I know is from what we're doing is that there's enough activity in the right direction. And once an M&A effort is manifested as I said binary, suddenly you announce it and you will hear about it coming.

And it's coming based on the variables and limitations as I described to you before, but now things are opening up. So I'm very content with what's happening there. All in all, I always try to speak in front of you now no more than 15, 16 minutes. So I'll give you time for questions. But I'll summarize by saying the following.

It's a very, very unique company, Nano Dimension. It is well-financed. We will perform what we're describing. But we will not if you expect to see a quarterly change, this is not where we are. We are looking in the long term and there will be quarterly changes, but those are not important.

What's important is you look at it more like a – I mentioned it to many of you like in biotech company model, and the investment is there. We don't need to raise more money. We don't need to have more dilution.

We have enough money to go through all the stages and to hit the inflection point, where are we actually going to affect the industry of electronic publication by changing it and building the digital network of industry 4.0.

Neural network of machines of three kinds, owned by us and from the acquisitions we are now planning, there'll be more machines of different kinds, serving the same market, being part of the same neural network. And then it's by artificial intelligence and deep learning with machine learning, brains sitting both on the machines and on the cloud.

And we're going to see based on that valuation of us or the value of what we're doing, multiplying by order of magnitude. The changes are going to happen on a quarter-by-quarter basis, but not necessarily going to be, if you're going to be impatient, as much as the revenue, the revenue will grow as well.

A lot of it will come from acquisition, a lot of it will come from internally. But what I would be looking at is how the value of the company is growing over those quarters and over those next one to two years.

And that is where we are aiming as the managers – and as managers, I think I mentioned in the last call, all of us, shareholder in the company and all of us and all of our upsides is connected to the value we're creating.

So we are long-term players and long-term learners, and we expect – and we see the signs today, where the three axes are going to merge and leverage each activity that they're doing R&D, product development, marketing and sales, and M&A merging together and leveraging. The industry is bound to change dramatically.

I know that some of you follow what's happening in the semiconductors industry. Worst things are going to happen as much as shortage in pricing on the PCB and general device – electronic device industry.

And we are positioned to solve those problems as we move forward and to transform an industry from total analog inefficient in a way dependent in the far east into analog industry that is on demand digital as other industries operate today, industries that went to similar transformation, give you an example.

The traditional printing industry, before it was digital, it was analog. And over the years came the depth of publishing. And since then, we're now in an industry where inventory is digital. You don't print, unless you need a machine to send, you send a PDF file. The industry of printing turns into the digital industry.

That's exactly what we are envisioning in the fabrication, printing, printed circuit boards and electronic device industry converting them into digital industry and its evolution. So I'll stop here. Its 20 minutes and operator I will be happy to hear questions if there are..

Thank you, sir. [Operator Instructions] The first question is from Jeff Rice of SmallCap Limited [ph]. Please go ahead..

Hello sir, Mr. Stern. Great update. I appreciate that. We're very excited for the future and the growth of Nano Dimension. We're big supporters and shareholders in the company. I wanted to ask you little more detailed questions on the Type A acquisitions. I know previously you talked about both Europe and United States.

I was wondering if you are looking for both – to acquire both a company in Europe and United States, or could it be possible that these companies have locations both in Europe in U.S.? And then my second question is, can you explain how these companies, once acquirable expand growth for Nano Dimension, is it for their supply chain infrastructure? Is it to turn their existing clients into the new technology to transition? And my final question is, is the eventual goal for Nano Dimension to be bought out, I'm personally hearing KLA is on your radar.

So I just wanted to share that with you. Thank you..

Okay. Let's start from the third question. No, bullshit. Second question, the supply chain will be used. The existing clients will be used by populating those with our machines. So we have developed our relationship with existing clients through these companies. And yes, your question and right, and the answer is yes.

Regarding the first question, Europe or United States or combination of both, the answer is yes and yes.

Next question, please?.

Thank you. [Operator Instructions] There are no further questions at this time. The next question is from Mr. Byron Mayo [ph]. Please go ahead..

Hi. I noticed there's a certain amount of funding for R&D and for administrative expenses.

Is it too early to project profitability out into the future, or breakeven status?.

Sorry. I'm sorry, sir. Can you repeat the question? I didn't exactly understand it..

Is it too early to project breakeven status at this point?.

Breakeven you mean as much as profits?.

I'm actually looking at cash flow..

Just in terms of operating cash flow, so that we're not going to be a breakeven for a couple of years. We're not going to be breakeven on cash flow in the next two years..

Okay. Thank you..

Thank you.

And just to add to this answer, since we have $1.4 billion pushing this company to be breakeven in cash flow, which I can do by the way, and we can will be the biggest mistake I believe as much as shareholders are concerned, because you did not give us the money and I relate to the money you gave us as we raise it very, very seriously, almost as a loan, it’s a loan, it’s equity.

You gave us the money in order to triple – between triple to quadruple up to eight times return on your money hopefully over the next three to five years. So the worst thing we can do is keep the money on the balance sheet and make the company breakeven in cash flow and generate cash.

That's not why you give us the money and it behooves me to spend the money smartly on what I described to you we're spending it. So we create value that is the multiples on the money we receive. So no, we don't plan to be cash flow breakeven because if we did, then we basically betrayed the trust and the intention of our investors, which are you.

Thank you.

Next question?.

The next question is from Gill Greenwald [ph]. Please go ahead..

Thank you, Yoav. Thank you for your update an guidance [indiscernible] company. I would like to just ask – last time you were asked about Sigma Lab. Did you – did this come up on your radar since? If you look into the company, because you said you don't know anything about it and….

I'm sorry sir. Your line is a little bit fuzzy.

Can you speak slow? You said the last time I was asked about whom?.

Sigma Lab, Sigma lab..

I don't remember. And I don't know about any company that name and I don't remember being asked about it..

Okay. Thank you..

Thank you. There are no further questions at this time. Mr.

Stern, would you like to make your concluding statement?.

No, let’s wait thirty seconds, people may have something comes up so 30, 40 seconds, and then. Very interesting actually, I don't want to tell you 30 or 45 or 60 days, I can check it out. And if you want to know this specifically you deserve an answer, please write up to our CFO, which is on the line.

And remind please on your name and the question, and we will send you the answer. And if other people are interested, we will partnership them. I'm really sorry. I just don't remember the exact time and I don't want to be misleading..

Okay that sounds good..

Any more questions in queue?.

The next question is from Jordan Star [ph]. Please go ahead..

Hi.

With the recent announcements, multi-billion-dollar investments Intel company released on Israel and obviously other companies throughout the world, management mentioned in being engaged or interested in working with these companies at all and helping shift the paradigm in high price in PCB manufacturing?.

No..

All right..

Any further questions?.

There are no further questions.

Would you like me to read the instructions or a concluding statement?.

No, I can go on to a concluding statement, please..

Okay..

So, ladies and gentlemen, thank you again very much for participating. It's now 30 minutes. The market is operating in a minute and I'm sure all of you are now focused on your day of work ahead. I wish you success today and the days moving forward..

There is now another question.

Would you like to answer it or conclude the conference?.

Yes sure. Sure, of course..

The next question is from Rakesh Jammula of AMFM [ph]. Please go ahead..

So, you last time when you said like, we have a breakthrough with the insight, so did we get any new or material links with the new machine?.

Breakthrough with what I'm sorry?.

With the inks, conductive inks, right now, we only use silver, right? You said like we have different material breakthroughs..

Yes. Yes, we do. And we're not publishing it because of competitive issues. But the major breakthroughs that we are looking at investing in is actually not necessarily on the conductive ink is much more on dielectric ink.

The dielectric ink is the challenge because dielectric – conductive ink, which is a silver, and we are now looking at other conductive inks, the conductivity is good. And the ability of it to deliver the specific session that we need for it, the specification, we need to deliver are pretty good.

The real efforts on dielectric inks and there we have breakthroughs and we have combination of dielectric and we are now adding more than just polymers, ceramics and other supporting materials that are both improving the electrical characteristics of the dielectric, as well as the strength.

So, it gets closer and closer to the industrial space, commercial space and eventually medical space. And we can’t obviously disclose what kind of materials for competitive reasons, but yes, we are moving forward with this. And our investment in R&D, I would say, if the sale of it is a material..

Thank you. Thanks for the answer..

Thank you for the question. It's a very good question..

There are no further questions..

Okay, so I'll continue with my conclusion operator?.

Yes, please..

Okay. So again, guys, please have a good day of work. I thank you very much for participating, and listening and supporting us. And I promise you that we are moving forward and you will hear from me on an ongoing basis in between this quarterly news releases if anything interesting that is happening.

And I expect interesting things to happen in the next short while. So, I'm looking forward to that..

Thank you. .

Thank you very much..

Thank you. This concludes the Nano Dimension’s first quarter 2021 financial results call. Thank you for your participation. You may go ahead and disconnect..