Ladies and gentlemen, thank you for standing by. All participants are at present in listen-only mode. Welcome to today’s conference call to discuss Nano Dimension’s Third Quarter 2021 Results. On the call with us today are Yoav Stern, Chairman and CEO; and Yael Sandler, 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 second quarter 2021 financial results.

As a reminder, this conference is being recorded, November 24, 2021. I would now like to hand over the call to Mr. Yoav Stern. Mr.

Stern, would you like to begin?.

Sure. Thank you very much. Hi, everybody. Thanks for participating. I will speak as focusing on the subject that are interesting, I think, they are interesting, and of course, let you ask question where you want to direct me to other subjects.

So, first of all, definitely this quarter and these nine months, the best quarter and nine months since at least I came into this company, which was a little bit more than a year and a half ago. But when I came to this company, within two months gone, Corona started. So, yes, we have great advancement, things are moving forward.

But as compared to last year, which was a lousy year. More importantly than that though and that’s where the real movements being seen or can be seen and eager to show you that, like, in many other companies versus it’s specifically ours, you don’t necessarily see everything in the numbers, yet.

We announced DragonFly IV, the half a year delay, but in a very successful release. We participated in a Productronica show in Germany last week, which was and allow for two years because there was no shows and even last week, when all Germany started to struggle with a new wave, half of the people didn’t arrive.

We still had DragonFly IV released and immediately two purchase orders already achieved within few days. Great excitement about the performance of the machine and we were the top of the show and we had relatively very big amount of leads. So we’re very excited about it.

Importantly, a few weeks before the show, we announced and we completed an acquisition of Essemtec, which was on the show as well, with our name combined with theirs.

Essemtec we purchased for $15 million to $19 million, expands on certain performance later can go a little bit higher, but no more than to $4 million higher and it’s a $20 million -- close to $25 million business profitable and growing, which is what we like to pay.

We’re not -- our M&A going to allow ourselves to glide into the, what we believe are overly -- an over payment resulting for many things in the market, which we can discuss if you ask me.

We are picking and choosing, we are buying and building, and we’ll continue to do so and we’re very proud and very fortunate to have Essemtec team from Switzerland joined us.

They’re going to continue to grow we expect and we’re going to merge our technologies with ours, where synergies which will become a major component of breakthrough in printing three dimensional electronic devices with mounting components in the process of printing in a clean non-intrusive way to the environment.

So we continue with M&A along these lines, similar lines, and you will probably hear quite a lot of news in the coming months about this subject.

A few words on issues that I think you would be asking about and I’m going to preempt your questions, so that people who intended to ask those questions can get answer now and/or ask follow on questions, but I’ll try to be helpful as possible.

The price of the share, you can have lots of theories about why the price of the share went down when the news is so good.

But my experience shows that when you have a year when people made money in many investments on the public markets and one of your shares went down, when you get toward the end of the year, people sell the shares that are on the way or were down compared to what they purchased them for, in order to take the tax losses, mounted off against the money they made in ours shares and not paying taxes at the end of the year.

They have to do it in order to evade wash sales, what’s called, they have to sell and wait 30 days at least before the re-buy them. So even people that want to hold our shares and have smaller amount of shares, maybe doing that, which is causing certain price pressure. Based on volumes that I see as the share went down are very low volumes.

So I don’t see or I can’t guess about any other reason other than that. But my guess is as good as anybody else. I’ve seen these things happening before in very similar situations. To people of you and we have very loyal -- many, many loyal shareholders, which we admire and work for.

We have some other shareholders that are obviously a bit frustrated because of the price of the share. As I said earlier and repeating every call and every newsletter are, investment in us is a long-term investment and people who expect quarterly results to have an effect or major effect in the short-term are going to be disappointed.

That’s how I originally had the shareholders that joined us and investing in the company. So for people sending emails all over the place, claiming that there’s buyout options and buyout offers.

There’s no buyout offer for the company by any company and we’re not going to buy shares from the market with money that was invested in a company by shareholders, who I met personally, who invested in order for us as a team to perform the outside -- the upside, which will be 3 times or 4 times their investment, but over a few years, not over a few quarters.

So we don’t intend to buy shares from the market with the money given to us by investors. When we’ll be profitable in the future and we’ll be accumulating profit. From the profit, we may choose to buy shares in a company, but it’s not going to happen soon, anytime soon. So if there were going to be questions about it, I answered them.

And other than that, I will -- I’m going to refer to you guys to ask us questions that will be directing us to interest -- to your specific interest, please..

Thank you, sir. [Operator Instructions] The first question is from Puneet Maheshwari of Xenca Capital [ph]. Please go ahead..

Hi, Mr. CEO. I have a question regarding the sale of current DragonFly IV and in one of the WebEx one of the executive who joined from Amazon. He mentioned one of the top four players are interested in buying the machines and they visited a machine couple of years back and the tech was not up to the speed.

And I believe in two years we have made great strides and let us launch, how are we with the one of those customers, do they -- did they show the interest and how we -- and if you can elaborate further more on how was the reception of the machine in the recent launch? Thank you..

I didn’t meet any customer that didn’t want the machine in two years ago and wants it now. So the answer to your first question is I don’t know. The people that I meet and we meet that are interested in the machine now are very excited about it. There are two better sides, which were with customers that had machines.

The previous machines were very successful and the customers are very happy with the performance of the new machines..

Okay. Thank you..

Thank you..

That’s it for me. Yeah..

The next question is from Jeff Rice of SmallCap Investments [ph]. Please go ahead..

Good day, Mr. Stern. Great results on this ER [ph]. From what I’m seeing, it looks like Nano Dimension is ranking out to be more of an AI company and a robotics company versus just a [Technical Difficulty] company.

I was wondering to elaborate on that, especially with the robotic arm, you mentioned that? And then my second question, just to touch on what you said earlier, I know that you said, no buyout on the table now, which I agree with the current share price doesn’t make any sense.

Also I know that you previously said, if the price someone offered the price that made sense then, obviously, that’s a different story. But what about if someone like Hensoldt or L3Harris wanted to take minority ownership, would that be a possibility? I appreciate the insight. Thank you, sir..

What was the second question? What was the question? Can you repeat that, sorry, the line was not so good.

Can you repeat it?.

Yes, sir. Yes, sir.

I was wondering, let’s say, one of our partners L3Harris or Hensoldt or SEMICON, if they wanted to take minority ownership to put some money into Nano Dimension’s to have a small stake in the company, would you be open to that?.

Okay. I’ll take your two questions. Thank you very much. The second question, I don’t know when they will offer me, I will consider it and I’ll bring it to the Board and we’ll decide, but nobody offered this to me until now.

On the first question, yes, you’re absolutely right, we are very, very much tilting into becoming a deep learning artificial intelligence lead industrial machine, three dimensional machine company.

We believe that the whole additive manufacturing both electronics and AME manufacturing industry, while developing better and better machines, and more accurate machines with the higher yield, et cetera, et cetera, which the holy grail of moving seriously into production without adding an artificial robotic brand or if you want to call it machine learning brand that will be able to overcome the inherent conflict and problem of production.

Production is an analog process. It’s not digital process ever. At the end of the day, something cuts something or something drops something or something melt something that adds to something and all these are analog processes, which by definition are not being an area of digital cannot be totally accurate, like, zero or 1.

So being non-accurate, having deviations, having statistical formulas and statistical combinations of some things are within the limitations and something are without the limited -- without the limitations, the yield is being affected by a statistical process.

In order to overcome that you need to have a brand that is analyzing in real time the statistics and able to decide in real time what to do with deviations, either it can correct them or it’s deviations that are too wild and it has to stop the process and restart a new part.

So, we believe that the holy grail of manufacturing through additive processes three dimensional, minimum ecological effect, reducing cost of material, reducing time to market, can be achieved not only by machines, but by machines that will be led with deep learning -- machine learning and not even artificial intelligence in the regular manner.

But the more advanced artificial intelligence where processes and algorithms are self learning and self correcting.

That’s the reason we purchased DeepCube by now half a year ago, we are very advanced in the last six months and starting to integrating in and there are many aspects of our machines and acquisitions -- machines for acquisitions and we’re very, very excited about it. Thank you very much for the question..

The next question is from Rich Brun [ph]. Please go ahead..

Hello. Hi. Good morning and congratulations on the progress you have on leadership at Nano Dimension.

Based on your observations today, what do you think is the single greatest challenge for Nano Dimension? Is it the quality of the materials, the consistency, the production capabilities, the software development or do we still have the COVID lingering on that hindering our progress and what is Nano Dimension doing about it?.

The last item you mentioned COVID. It is there. It is lingering. It is challenging. But it is not as a big challenge. It’s not a long-term. If you look at the history of pandemics in the world and I’m not an expert on that, I’m just reading a lot. An average pandemic is three years to five years.

So everybody that thought including myself, by the way that the pandemic will disappear within a year. Reality is our -- is in our face. But it’s also changing. I wouldn’t even define it as a challenge. It’s a challenge -- it’s a quarterly challenge, semi-yearly challenge. We’ll get through it.

So we’ll sell a little bit different ways or sell a little bit slower. That’s not the point. Other challenges -- technological challenges is material development, which I’ve said for a long time. We have great advantage in material development.

We believe -- I believe that the secret sauce in this whole industry, let’s call, additive manufacturing is materials and so much as people try to be proud which they should be proud in the very sophisticated machines developing because that’s what you see.

You see a machine that’s moving and doing, making miracles and robotic and automated without people involvement. It’s true. But that’s not the major challenge. The major challenges are materials.

In all the additive manufacturing industry, the challenge between having materials that are easily adjustable or easily deposited and fit the deposition process of additive manufacturing, are not necessarily the materials that after being manufacture, fit the end product with the type of performance that the end product is needed.

In many ways and many times, there’s a conflict between materials that are easy to use when you create the product and the materials you need to use when the product is actually performing -- and the performance in the -- performing in the field. That is true for all additive manufacturing and in specifically for additive manufacturer electronics.

But we are even since I came here a year and a half ago, just to give you an example, the materials were only working within zero degree Celsius to 45 degrees Celsius, by now we have between zero degree Celsius to 100 degree Celsius and soon we are going below zero degree Celsius and above 100 degree Celsius.

And we’re moving ahead very, very nicely, so I’m very, very encouraged about that. And in parallel, we’re doing M&A, which is balancing that risk as well, because for instance, the purchase of Essemtec, which is now generating beautiful revenue and great gross margin is complementary to what we’re doing, but it has no dependency in materials at all.

Actually, I shouldn’t say at all, they have a little bit of dependency on soldiering materials and glues. But it’s a minor comparing because it’s not involved in building parts for materials, involving assembling parts and using glues or soldering paste. So this balances the rest of the materials in other part of the business.

Thank you for the question..

Okay.

So what the -- what that challenge on materials? Is it something that can be solved through aggressive research and development or through acquisition?.

Yes. Both..

Both. Okay. And just one thing, I see that you added on the -- for the acquisition strategy, a Type NG. And I don’t know if that’s specific to DeepCube or are we also seeking opportunities in that direction, when it comes to the Type NG acquisition..

What types, sorry?.

Type NG, I noticed on your presentation, there’s a Type NG acquisition strategy..

Yeah..

I’m not too sure if it’s specific to DeepCube or….

No. No. No. We don’t have. Yeah. Well, if you want to call it Type NG. We’re looking for -- NG is really used for new generation. We’re looking for companies today. Yes, you’re right, that are in additive manufacturing, which is adjacent to the additive manufacturing electronics like, Deep -- like Fabrica, which we purchased and like Essemtec.

Except Essemtec is within electronics, Fabrica is adjacent to electronics. But those companies are selling their machines through our distribution channels. They are similar to ours.

But more importantly, the application of machine learning, deep learning machines is very, very similar manner, that we’re using it for the AME machines without additional investments.

So we’ll be able to leverage the knowledge and the systems of machine learning we have by applying them to companies in additive manufacturing that we are looking to purchase, which was not the case before we had the DeepCube Group.

Once we had it and we -- in the due diligence, that’s the reason we actually purchased it, we realized that we can expand our market segment and not stay only in additive manufacturing electronics, but we also in additive manufacturing in areas that are like additive manufacturing of micromechanical products, et cetera, et cetera.

So that are the additional and you’re right to identify that..

All right. Thank you. And I just want to encourage investors that I was on the tourists, right, not fast and trust the process. Thank you..

Thank you..

The next question is from Eric Marcus [ph]. Please go ahead..

Good morning, Mr. Stern, or I guess, good afternoon in Israel right now. Thank you for your opening comments. I’m going to address my questions to some of those early comments. And with all due respect, I may -- I’m a long-term shareholder and a long time senior tech exec.

And my concern stems from the fact that right now, Nano’s market cap is about $1.1 million, but the cash on hand is $1.3 billion. So the logical extension there is that the market is not valuing the company above zero dollars. That’s very concerning as a shareholder. I want to really understand how the company is going to protect shareholder interest.

And I understand your comment, reasoning that shareholders are selling to take tax losses at year end. But that really does not address the 50% loss in share value that we’ve seen in just the last five months. I think there are things that in fact could be being done beyond what is being done today.

For example, what about a joint venture with a large PCB client, forward integrating into a fab plant, what about supporting the new global marketing VP, which I think is a wonderful acquisition, with a well thought out $100 million marketing strategy instead of the $25 million a year that’s currently being put into marketing? What about looking at a significant acquisition, not just a $25 million to $40 million acquisition, but something very significant over $100 million in the AI or robotics or additive manufacturing business? I don’t understand why senior management is allowing the share price to simply go into freefall, when there are aggressive things that could be done to address shareholder value.

I would appreciate your comments, Mr. Stern..

What is the question please?.

Do you want me to repeat it again, sir?.

No.

You gave me a lot of good ideas, but asking, what are you asking me?.

I want to know what you’re willing to do to stop the freefall of the stock shares. I want to know what aggressive proactive action instead of sitting on $1.3 billion, while you’re -- while the market is evaluating your company at negative value? What are you prepared to do to protect shareholder interests? I’ve given you three ideas.

I’d like to know what your ideas are? What are you going to do to protect shareholders?.

We are going to use part of your ideas and we have more ideas to develop the business of the company and we’re going to continue to do so. And I’m not going to describe more ideas because of competitive reasons and competition and M&A. But your ideas, the three that you mentioned, actually very good ideas, all of them are in the works..

I’m just very concerned about management appearing to sit on the sidelines for the last six months while the stock price is in freefall?.

Okay, sir. I don’t know where you’re sitting. But I’m getting morning everyday 8 and I’m going back to sleep at 7, out of that hours, I’m working probably 95%. I traveled within the Corona within 10 countries around the world and you can buy more stock, the stock will go up. Next question, please..

The next question is from Byron Meo of 1031 Private Exchange Group. Please go ahead..

Hi. Thank you. I’d like to know roughly about how much money went into the production of the DragonFly IV. What is it -- these are three part question.

And then what is it sell for? And what is the lifespan before it’s replaced by a next-generation type in your expectations?.

You asking what is the price to manufacture a DragonFly IV and what is the -- what you call it the sell price?.

Yeah. Obviously, it took a lot of money and research and development that goes in and gets capitalized and the expensive machine, and obviously, there’s a spell for those. So I’m trying to figure out what kind of profit you can generate from machines. Obviously, you have to keep advancing the technology to stay ahead of the game.

So I’m just -- I think one of the reasons why the stock is selling below the cash buyers because people are questioning cash burn and profitability, you’re not the only company to sell it that, a lot of the biotechs are selling it that way.

So I’d like to kind of analyze the cash burn and the profitability from the development of the DragonFly IV?.

Well, you can analyze it from the development of the DragonFly, because we invest much more in R&D than needed for development of the DragonFly IV. Regarding DragonFly IV was the machine that’s -- the time of development was about a year and money that invested in that is very low amount of millions of dollars.

We invest much more than we invested in DragonFly, because we’re developing a set of generation of products moving forward that are beyond the DragonFly IV except it’ll take them between a year to three years to be brought into market.

And therefore, back to your question, the DragonFly IV is sold for gross margin that’s above 60%, which is beautiful and very, very attractive for a machine like that. And it will return the investment easily. The issue is that the amount of money was spent in R&D is not based on the DragonFly IV revenue, it is based on a long-term plan.

And as the reason, as I explained before, more similar, your right to what you said about the biotech companies, we have enough money to develop the long term product strategy, including new products and we are not in a position to be under any cash flow pressure or cash flow that is depending on profitability of machine learning.

Eventually, the businessman….

Okay..

… will get the company as a whole to a profitable return investment position. But it’s not going to happen in the next year. I can tell you that..

No. I understood that all along to be at 2023 type or 2024 the inflection points and all that..

Yeah..

But I think the cash burn, you’ve hired a lot of people, you’ve hired a lot of researchers and I think what is the cash burn on a yearly basis where you are presently outside of your cost of goods..

$70 million..

Okay..

There is a follow up question from Jeff Rice of SmallCap Investments. Please go ahead..

Hi. Thank you, again, Mr. Stern. I wanted to interject here. I understand everyone’s question on the share price. No one I imagine is happier right now. We’ve personally participated in the $12.80 offering [ph] for the $500 million, okay. So that’s over down 65% from before.

Now, on the long-term vision, I expect us to at least double or triple our investment and profit. So while we’re down about $300,000 or $400,000 personally, I expect us to come out on the other side, making about $400,000 to $500,000.

Now, one thing that we could do is maybe get some insider buys for management, some form force to show confidence that, hey, we back you guys, we’re going to buy in, we’re going to stop the bleeding and we’re going to reverse this.

Now, none of the things that that we can do is also have more conference calls and get everyone on the same page, because there’s a lot of anger and hostility and return on these other things are all getting to worse?.

What, sorry, I didn’t understand the last sentence?.

That when -- we all need to get on the same page and maybe communicate better instead of arguing with each other.

I know everyone is frustrated right now?.

Who is arguing? I had a conference call just 10 days ago.

How long do you -- every how long do you want to have a conference call?.

All right. Okay. I’m trying to be respectful..

How -- every how long do you want to have a conference call..

It’s not an automatic interval..

So, I’m asking, you want me to answer you or you want me? What do you want me to do?.

What I want you to do is just stock back over that.

That’s what I want you to do?.

What? I can’t hear you. Your line is not so clear. It was not clear before either..

I want you to get the stock back to double digits..

I’m not getting this stock anywhere, sir. I am a CEO of the company. I am running the business. I am meeting with investors. I’m communicating with investors and with shareholders. And the stock is being bought and sold and project the value or project the price. So with all due respect, sir..

It’s negative right now..

That’s going to continue to happen. My money is invested here. My time is invested here. And the company is successfully moving forward and the market will follow on..

Okay.

So what about, is there any protection against the hostile takeover since the company’s worth negative dollars right now?.

There is no protection against hostile takeover, because the amount of shares and the volume that’s being traded, if somebody who are going to start to buy aggressively to get to a certain amount of shares, that will give him control, all of you will gain a lot, because the stock price will go back to 2020.

And by the way, if it will be hostile and they will want to replace management, including myself, then on the way there, the stock will go to 2020 and all of you will make money. I am the last one that will hold in.

I mean, I am a shareholder of a public company and the purpose of me, my purpose is to make sure beyond running the company and making sure the constituencies are happy, including customers and employees is first and foremost, that the shareholders will make money that includes myself.

So I’m not here to oppose any takeover, people can offer to buy the company or can buy shares in the market before offering the price will go back to 2020. That’s all..

Okay. Thank you, sir. I appreciate it..

There is another follow up question from Byron Meo of 1031 Private Exchange Group. Please go ahead..

Yeah.

I’d like to just comment that in sympathy with what’s going on with this particular company, I follow all the 3D companies and if you look at triple D, if you look at desktop metal, even though they print different things, the whole growth industry has taken a huge hit, desktop came public at 2010 went to 34 or something like that and it’s now $7 or $8 or $7 or $6.5.

So I mean, what’s going on between the growth phase and the macro environment stuff. He doesn’t have any control over and but what he does have control over is the use of the cash, the cash burn and the move towards profitability and acquisitions as the countries get squeezed.

One question I did have was, as we just went into a lockdown, Germany contemplating going into another lockdown.

Do you forecast at least another six months of tumultuousness because of this or do you think this is not going to be as severe as the last one?.

My guess -- thanks for the question. My guess is as good as yours. I just came back from Germany and Austria, while they were on it or on a way to lockdown. It did not prevent me from traveling there and being where I need to be. We are in the process of opening a subsidiary in and R&D and commercial center in Munich soon.

We just purchased as you know a company in Central Europe, Switzerland, which is very close to Germany and Austria. We are in negotiation within Australia, sorry, Austrian company. We have visitors from Germany and Austria. They’re supposed to be here in next. Yes, all this can be affected and hold things back.

But as I said to one of the questions earlier, it’s not a strategic hold back. It’s a local hold break. I think in the long-term, when I speak long-term, I’m not talking five years. I’m talking about half a year or year. Things are on the direction to be better.

But as I read the news, the way you read them about what’s happening in the countries, we just came back from a day ago and came back healthy. Thank you. Yes, it has an effect. But we are looking at it as the environment and we are looking to find solutions for every effect like that.

I believe it’s not going to have a, call it, major effects on our business. It will have certain effects..

Thank you..

The next question is from Bob Sagrino [ph]. Please go ahead..

Yes. My question is about developing technology competition. How are you faring right now with all the competition, I heard, you mentioned, a company called IO Tech that can handle different types of materials. I haven’t really found much of anything else on that particular company.

But I was wondering if there’s, what companies are nipping at your heels and are you still at least a year ahead of everybody?.

IO Tech is a company with a revenue of less than $200,000 a year, maybe less than $100 million. We know them very well. They were trying to sell themselves to us, wanted above $100 million. We said no. They have an interesting laser deposition technology, which we may license from them.

They don’t have a machine or any competition that is materially affecting us. As you may remember, we have already more than 65 machines, full machine sold with customers around the world. So that’s not the -- they have a very interesting technology, but we’re actually working with them.

Other than them, we do not see mature competition, as mature as what we have and it was verified in the Productronica Show, which was two weeks ago, 10 days ago. We see a lot of small companies startups that are trying to get there, but not in a material way..

Okay. Thank you..

Thank you..

There are no further questions at this time. Mr. Stern, would you like to make your concluding statement..

Yeah. Thank you very, very much for participating. Market is by now I think open. So I’m sure all of you is to go to work and I will follow up as much as one request it was here that I’ll do more conference calls as much as I’m concerned, the more the better. I just don’t want to take too much of your time.

So we’ll find opportunities to have as many conference calls, so we’ll be in touch. Thank you very much..

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