6-K
Nano Dimension Ltd. (NNDM)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934
For the month of: October 2020 (Report No. 2)
Commission file number: 001-37600
NANO DIMENSION LTD.
(Translation of registrant’s name into English)
2 Ilan Ramon
Ness Ziona 7403635 Israel
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulations S-T Rule 101(b)(1):_____
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulations S-T Rule 101(b)(7):_____
CONTENTS
This Report of Foreign Private Issuer on Form 6-K consists of the Registrant’s (i) Unaudited Condensed Consolidated Interim Financial Statements as of June 30, 2020, which is attached hereto as Exhibit 99.1; and (ii) Management’s Discussion and Analysis of Financial Condition and Results of Operations for the six months ended June 30, 2020, which is attached hereto as Exhibit 99.2.
This Report on Form 6-K (including exhibits thereto) is incorporated by reference into the registration statements on Form F-3 (File No. 333-217173, 333-233905, 333-237668 and 333-249184) and Form S-8 (File No. 333-214520 and 333-248419) of the Company, filed with the SEC, to be a part thereof from the date on which this report is submitted, to the extent not superseded by documents or reports subsequently filed or furnished.
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Nano Dimension Ltd. | ||
|---|---|---|
| (Registrant) | ||
| Date: October 19, 2020 | By: | /s/ Yael Sandler |
| Name: | Yael Sandler | |
| Title: | Chief Financial Officer |
2
Exhibit 99.1
Nano-DimensionLtd.
UnauditedCondensed Consolidated Interim Financial Statements as of June 30, 2020
Table of Contents
| Page | |
|---|---|
| Unaudited Condensed Consolidated Interim Financial Statements: | |
| Unaudited Condensed Consolidated Interim Statements of Financial Position | F-2 |
| Unaudited Condensed Consolidated Interim Statements of Profit or Loss and Other Comprehensive Income | F-3 |
| Unaudited Condensed Consolidated Interim Statements of Changes in Equity | F-4 |
| Unaudited Condensed Consolidated Interim Statements of Cash Flow | F-5 |
| Notes to the Unaudited Condensed Consolidated Interim Financial Statements | F-6<br> - F-12 |
F-1
Nano Dimension Ltd.
Unaudited Condensed Consolidated Interim Statements of Financial Position as at
(In thousands of USD)
| June 30, | December 31, | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2019 | 2020 | 2019(*) | |||||||
| Assets | |||||||||
| Cash and cash equivalents | 5,290 | 39,665 | 3,894 | ||||||
| Bank deposits | - | 9,800 | - | ||||||
| Restricted deposits | 31 | 60 | 31 | ||||||
| Trade receivables | 1,174 | 541 | 1,816 | ||||||
| Other receivables | 573 | 503 | 570 | ||||||
| Inventory | 3,967 | 3,956 | 3,543 | ||||||
| Total current assets | 11,035 | 54,525 | 9,854 | ||||||
| Restricted deposits | 351 | 376 | 377 | ||||||
| Property plant and equipment, net | 5,350 | 4,391 | 4,743 | ||||||
| Right of use asset | 1,640 | 2,258 | 2,673 | ||||||
| Intangible assets | 5,597 | 4,826 | 5,211 | ||||||
| Total non-current assets | 12,938 | 11,851 | 13,004 | ||||||
| Total assets | 23,973 | 66,376 | 22,858 | ||||||
| Liabilities | |||||||||
| Trade payables | 819 | 669 | 850 | ||||||
| Other payables | 3,153 | 3,678 | 3,575 | ||||||
| Total current liabilities | 3,972 | 4,347 | 4,425 | ||||||
| Liability in respect of government grants | 867 | 892 | 1,044 | ||||||
| Lease liability | 1,273 | 1,699 | 2,089 | ||||||
| Liability in respect of warrants, rights to purchase and convertible notes | 2,804 | 1,834 | 3,698 | ||||||
| Total non-current liabilities | 4,944 | 4,425 | 6,831 | ||||||
| Total liabilities | 8,916 | 8,772 | 11,256 | ||||||
| Equity | |||||||||
| Share capital | 5,559 | 66,236 | 6,441 | ||||||
| Share premium and capital reserves | 63,850 | 61,748 | 65,202 | ||||||
| Treasury shares | (1,509 | ) | (1,509 | ) | (1,509 | ) | |||
| Presentation currency translation reserve | 1,431 | 1,431 | 1,431 | ||||||
| Accumulated loss | (54,274 | ) | (70,302 | ) | (59,963 | ) | |||
| Total equity | 15,057 | 57,604 | 11,602 | ||||||
| Total liabilities and equity | 23,973 | 66,376 | 22,858 | ||||||
| (*) | The<br>December 31, 2019 balances were derived from the Company’s audited annual financial statements. | ||||||||
| --- | --- |
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
F-2
Nano Dimension Ltd.
Unaudited Condensed Consolidated Interim Statements of Profit or Loss and Other Comprehensive Income
(In thousands of USD, except per share amounts)
| 2020 | |||||
| Revenues | 2,850 | 990 | |||
| Cost of revenues | 1,959 | 589 | |||
| Cost of revenues - amortization of intangible | 386 | 386 | |||
| Total cost of revenues | 2,345 | 975 | |||
| Gross profit | 505 | 15 | |||
| Research and development expenses, net | 4,474 | 3,597 | |||
| Sales and marketing expenses | 2,871 | 1,749 | |||
| General and administrative expenses | 1,590 | 1,943 | |||
| Operating loss | (8,430 | ) | (7,274 | ) | |
| Finance income | 7,317 | 130 | |||
| Finance expense | 1,551 | 3,195 | |||
| Total comprehensive loss | (2,664 | ) | (10,339 | ) | |
| Basic and diluted loss per share () (after 1:50 reverse split effective June 29, 2020- see note 7) | (0.82 | ) | (0.55 | ) |
All values are in US Dollars.
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
F-3
Nano Dimension Ltd.
Unaudited Condensed Consolidated Interim Statements of Changes in Equity
(In thousands of USD)
| Share<br> capital | Share<br><br>premium<br><br>and <br><br>capital<br><br>reserves | Treasury<br><br>shares | Presentation<br><br>currency<br><br>translation<br><br>reserve | Accumulated<br><br>loss | Total<br><br>equity | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| For the six months ended June 30, 2020: | ||||||||||||||||
| Balance as of January 1, 2020 | 6,441 | 65,202 | (1,509 | ) | 1,431 | (59,963 | ) | 11,602 | ||||||||
| Issuance of ordinary shares, net | 55,512 | (9,743 | ) | -- | -- | -- | 45,769 | |||||||||
| Conversion of convertible notes | 2,013 | (78 | ) | -- | -- | -- | 1,935 | |||||||||
| Exercise of warrants and options | 2,270 | 2,883 | -- | -- | -- | 5,153 | ||||||||||
| Share-based payments | -- | 3,484 | -- | -- | -- | 3,484 | ||||||||||
| Net loss | -- | -- | -- | -- | (10,339 | ) | (10,339 | ) | ||||||||
| Balance as of June 30, 2020 | 66,236 | 61,748 | (1,509 | ) | 1,431 | (70,302 | ) | 57,604 | ||||||||
| For the six months ended June 30, 2019: | ||||||||||||||||
| Balance as of January 1, 2019 | 3,291 | 63,969 | (1,509 | ) | 1,431 | (51,610 | ) | 15,572 | ||||||||
| Issuance of ordinary shares, net | 2,216 | (632 | ) | -- | -- | -- | 1,584 | |||||||||
| Exercise of rights to purchase | 52 | 311 | -- | -- | -- | 363 | ||||||||||
| Share-based payments | -- | 202 | -- | -- | -- | 202 | ||||||||||
| Net loss | -- | -- | -- | -- | (2,664 | ) | (2,664 | ) | ||||||||
| Balance as of June 30, 2019 | 5,559 | 63,850 | (1,509 | ) | 1,431 | (54,274 | ) | 15,057 |
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
F-4
Nano Dimension Ltd.
Unaudited Condensed Consolidated Interim Statements of Cash Flow
(In thousands of USD)
| For the six months ended<br><br> June 30, | ||||||
|---|---|---|---|---|---|---|
| 2019 | 2020 | |||||
| Cash flow from operating activities | ||||||
| Net<br> loss | (2,664 | ) | (10,339 | ) | ||
| Adjustments: | ||||||
| Depreciation and amortization | 1,336 | 1,291 | ||||
| Changes in liability in respect of government<br> grants | (2 | ) | (2 | ) | ||
| Revaluation of financial liabilities<br> accounted at fair value | (7,316 | ) | 3,023 | |||
| Issuance expenses recognized as finance<br> expense | 1,224 | - | ||||
| Financing expenses (income) | 268 | (17 | ) | |||
| Loss from disposal and sale of fixed<br> assets | 17 | - | ||||
| Share-based payments | 193 | 945 | ||||
| (4,280 | ) | 5,240 | ||||
| Changes<br> in assets and liabilities: | ||||||
| Increase in inventory | (1,223 | ) | (410 | ) | ||
| Decrease (increase) in other receivables | (3 | ) | 67 | |||
| Decrease in trade receivables | 139 | 1,275 | ||||
| Increase in other payables | 333 | 113 | ||||
| Decrease in trade<br> payables | (599 | ) | (172 | ) | ||
| (1,353 | ) | 873 | ||||
| Net<br> cash used in operating activities | (8,297 | ) | (4,226 | ) | ||
| Cash flow from investing<br> activities | ||||||
| Increase in bank deposits | - | (9,800 | ) | |||
| Increase in restricted deposits | (14 | ) | (28 | ) | ||
| Acquisition of property plant and equipment | (316 | ) | (152 | ) | ||
| Proceeds from<br> sale of fixed assets | - | 2 | ||||
| Net<br> cash used in investing activities | (330 | ) | (9,978 | ) | ||
| Cash flow from financing activities | ||||||
| Proceeds from issuance of ordinary shares,<br> warrants and rights to purchase, net | 10,561 | 48,307 | ||||
| Lease payments | (534 | ) | (528 | ) | ||
| Proceeds from exercise of warrants and<br> rights to purchase | 282 | 2,200 | ||||
| Amounts recognized<br> in respect of government grants liability, net | (96 | ) | (107 | ) | ||
| Net<br> cash provided by financing activities | 10,213 | 49,872 | ||||
| Increase in cash<br> and cash equivalents | 1,586 | 35,668 | ||||
| Cash and cash equivalents<br> at beginning of the period | 3,753 | 3,894 | ||||
| Effect<br> of exchange rate fluctuations on cash | (49 | ) | 103 | |||
| Cash<br> and cash equivalents at end of period | 5,290 | 39,665 | ||||
| Non-cash transactions: | ||||||
| Property plant and equipment acquired<br> on credit | 3 | 5 | ||||
| Conversion of warrants to equity not<br> for cash | 81 | 2,953 |
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
F-5
Nano Dimension Ltd.
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
Note 1 - General
| a. | Reporting<br> entity<br><br> <br><br><br> <br>Nano<br> Dimension Ltd. (the “Company”) is an Israeli resident company incorporated in Israel. The address of the Company’s<br> registered office is 2 Ilan Ramon St., Ness Ziona, Israel. The unaudited condensed consolidated interim financial statements<br> of the Company as of June 30, 2020 comprise the Company and its subsidiaries in Israel, in the United States and in Hong<br> Kong (together referred to as the “Group”). The Company engages, by means of the subsidiary Nano Dimension<br> Technologies Ltd. (“Nano–Technologies”), in the development and commercialization of a three-dimensional<br> (3D) printer and nanotechnology based conductive and dielectric inks, which are supplementary products to the 3D printer.<br> Since March 2016, American Depositary Shares (“ADSs”) representing the Company’s ordinary shares have<br> been trading on the Nasdaq Capital Market. |
|---|---|
| b. | Since<br> August 25, 2014, the Company has devoted substantially all of its financial resources to develop its products and has financed<br> its operations primarily through the issuance of equity securities. The amount of the Company’s future net profits or<br> losses will depend, in part, on the rate of its future expenditures, its ability to generate significant revenues from the<br> sale of its products, and its ability to obtain funding through the issuance of securities, strategic collaborations or grants.<br> Starting in the fourth quarter of 2017, the Group began to commercialize its products and has generated revenues, mainly from<br> sales of its 3D printers. The Group’s ability to generate revenue and achieve profitability depends on its ability to<br> successfully commercialize its products. |
| --- | --- |
Note 2 - Basis of Presentation
| a. | Statement<br> of Compliance<br><br> <br><br><br> <br>These<br> unaudited condensed consolidated interim financial statements have been prepared in accordance with International Accounting<br> Standard (“IAS”) 34 Interim Financial Reporting and do not include all of the information required<br> for full annual financial statements. They should be read in conjunction with the financial statements as of and for the<br> year ended December 31, 2019 (the “Annual Financial Statements”).<br><br> <br><br><br> <br>These<br> condensed consolidated interim financial statements as at and for the six months ended June 30, 2020 were authorized for<br> issuance by the Company’s Board of Directors on October 19, 2020. |
|---|
F-6
Nano Dimension Ltd.
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
Note 2 - Basis of Presentation (Cont’d)
| b. | Use<br> of Estimates and Judgments<br><br> <br><br><br> <br>The<br> preparation of financial statements in conformity with International Financial Reporting Standards requires management<br> to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts<br> of assets, liabilities, income and expenses. Actual results may differ from these estimates.<br><br> <br><br><br> <br>The<br> significant judgments made by management in applying the Group’s accounting policies and the principal assumptions<br> used in the estimation of uncertainty were the same as those that applied to the Annual Financial Statements. |
|---|
Note 3 – Material Events During the Reporting Period
| a. | Effective<br> January 2, 2020, Mr. Yoav Stern was appointed as President and Chief Executive Officer (“CEO”) of the Company.<br> He succeeded the co-founder and former CEO, Amit Dror, who took the executive role of Customer Success Officer reporting directly<br> to Mr. Stern. |
|---|---|
| b. | In<br> February 2020, the Company issued, pursuant to a public offering in the United States, an aggregate of 2,333,000 ADSs and<br> 116,650 non-tradable warrants to the underwriters (exercisable into 116,650 ADSs). Also, in February 2020, the underwriters<br> partly exercised their over-allotment option to purchase an additional 255,318 ADSs and 12,766 non-tradable warrants to the<br> underwriters (exercisable into 12,766 ADSs), bringing the total gross proceeds from the offering to approximately $3,882,000,<br> before deducting underwriting discounts and commissions and other offering-related expenses. |
| --- | --- |
| c. | Pursuant<br> to a securities purchase agreement dated August 30, 2019, in September 2019, the Company issued convertible notes, with an<br> aggregate principal amount of approximately $4.3 million and undertook to issue an additional approximately $2.7 million of<br> notes to be received in two subsequent closings. See note 11.B.4 to the Annual Financial Statements. During 2019,<br> approximately $1.8 million of convertible notes were converted into ADSs. During 2020 and prior to February 4, 2020, an<br> aggregate of approximately $0.2 million of convertible notes were converted into ADSs. On February 4, 2020, the Company<br> decreased the conversion price of approximately 85% of the convertible notes to $1.74 per ADS, and in consideration of the<br> reduced conversion price, the holders of such convertible notes agreed to convert such convertible notes into ADSs<br> concurrently with the closing of the offering mentioned in Note 3.b above. Additionally, the Company agreed to amend the<br> exercise price under the warrants issued to such investors to $1.914 per ADS, and the Company and the investors agreed to<br> terminate substantially all remaining obligations, including the two subsequent closings. |
| --- | --- |
| d. | In<br> April 2020, the Company issued, pursuant to a public offering in the United States, an aggregate of 17,428,000 ADSs, 430,000<br> pre-funded warrants (exercisable into 430,000 ADSs) and 892,900 non-tradable warrants to the underwriters (exercisable into<br> 892,900 ADSs). Also, in April 2020, the underwriters partly exercised their over-allotment option to purchase an additional<br> 1,204,114 ADSs and 60,206 non-tradable warrants to the underwriters (exercisable into 60,206 ADSs), bringing the total gross<br> proceeds from the offering to approximately $13,343,000, before deducting underwriting discounts and commissions and other<br> offering-related expenses. In May 2020, the pre-funded warrants were exercised. |
| --- | --- |
| e. | In<br> May 2020, the Company issued, pursuant to a public offering in the United States, an aggregate of 17,950,000 ADSs and 897,500<br> non-tradable warrants to the underwriters (exercisable into 897,500 ADSs). The total gross proceeds from the offering were<br> approximately $35,900,000, before deducting underwriting discounts and commissions and other offering-related expenses. |
| --- | --- |
| f. | Following<br> the outbreak of the coronavirus (COVID-19) in China in December 2019, and it reaching<br> many other countries as well at the beginning of 2020, there was a decrease in economic<br> activity in many areas around the world, including Israel, the U.S., Europe and Asia-Pacific.<br> The spread of the virus has led, inter alia, to a decrease in global transportation,<br> restrictions on travel and work that were announced by the State of Israel and other<br> countries around the world. As a result of the COVID-19 pandemic’s global effects,<br> many entities held-off on capital expenses; thus, the Company witnessed a significant<br> decrease in the Group's revenues from the first quarter of 2020.<br><br> <br><br><br> <br>Since<br> this event is not under the control of the Group, the Group is continuing to regularly follow the changes on the markets<br> in Israel and the world and is examining the mid- and long- term effects on the business results of the Group. |
| --- | --- |
F-7
Nano Dimension Ltd.
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
Note 4 - Share-Based Payments
| a. | In<br> March 2020, the Company issued options to purchase 294,828 ADSs to Yoav Stern, the Company’s CEO, with an exercise price<br> of $1.09 per ADS. 99.9% of the options vest at the grant date, and the remaining options will vest 3 years after the grant<br> date. See also note 9.b regarding forfeiting of those options after the reporting date. | ||||||
|---|---|---|---|---|---|---|---|
| b. | In<br> May and June 2020, the Company issued options to purchase 3,247,000 ADSs to employees, consultants and officers of the Company<br> at an exercise price of $0.70 per ADS. In addition, the Company issued 778,000 restricted share units to employees of the<br> Company. The share options and restricted share units vest over a period of three years. | ||||||
| --- | --- | ||||||
| c. | The<br> fair value of the aforesaid share options was estimated on the grant date using the Black-Scholes-Merton option pricing model.<br> The following is the data used in determining the fair value of the share options: | ||||||
| --- | --- | ||||||
| Options-<br> Employees, Officers, Consultants | RSUs-<br> Employees | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- |
| Grant Month | **** | May, June | **** | May, June | |||
| Number of share options<br> granted (ADSs) | 294,828 | 3,247,000 | 778,000 | ||||
| Fair value at the grant date (thousands<br> of ) | 182 | 4,254 | 2,065 | ||||
| Range of share price () | 1.09 | 0.839<br> – 2.67 | 2.12<br> – 2.67 | ||||
| Range of exercise price () | 1.09 | 0.70 | 0 | ||||
| Range of expected share price volatility | 63.43 | % | 67.77%-80.57 | % | NA | ||
| Range of estimated life (years) | 7 | 4.00-7.00 | NA | ||||
| Range of weighted average of risk-free interest rate | 0.36 | % | 0.362%-0.625 | % | NA | ||
| Expected dividend yield | -- | -- | -- |
All values are in US Dollars.
| Expenses<br> in the amount of $945,000 were recognized as a salary expense in the six month period ended June 30, 2020 ($193,000 in the<br> six month period ended June 30, 2019). | |
|---|---|
| d. | Regarding<br> additional share-based payment transactions after the reporting date, see Note 9. |
| --- | --- |
F-8
Nano Dimension Ltd.
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
Note 5 - Financial Instruments
| (1) | Financial<br> instruments measured at fair value for disclosure purposes only |
|---|
The carrying amounts of certain financial assets and liabilities, including cash, trade receivables, other receivables, deposits, trade and other payables are the same as or approximate to their fair value.
| (2) | Fair<br>value hierarchy of financial instruments measured at fair value |
|---|
The table below presents an analysis of financial instruments measured at fair value on a temporal basis, using valuation methodology in accordance with the fair value hierarchy level as defined below.
When determining the fair value of an asset or liability, the Company uses observable market data as much as possible. There are three levels of fair value measurements in the fair value hierarchy that are based on the data used in the measurement, as follows:
| ● | Level<br> 1: quoted prices (unadjusted) in active markets for identical instruments |
|---|---|
| ● | Level<br> 2: inputs other than quoted prices included within Level 1 that are observable, either<br> directly or indirectly |
| --- | --- |
| ● | Level<br> 3: inputs that are not based on observable market data (unobservable inputs) |
| --- | --- |
In February 2020, as a result of changes to the terms of the warrants issued pursuant to a securities purchase agreement dated August 30, 2019 (see note 3.c), the fair value measurement of those warrants has changed from level 3 to level 2.
As of June 30, 2020, the Company had a long term financial liability in respect to warrants in the amount of $1,834,000, measured in level 2.
Details regarding fair value measurement at Level 2
The fair value of the warrants was measured using the Black-Scholes model. The following inputs were used to determine the fair value:
Expected term of warrant (1) – 3.6 to 4.18 years.
Expected volatility (2) – 103.1% to 110%.
Risk-free rate (3) – 0.25% to 0.3%.
Expected dividend yield – 0%.
| (1) | Based<br> on contractual terms. |
|---|---|
| (2) | Based<br> on the historical volatility of the Company’s ordinary shares and ADSs. |
| --- | --- |
| (3) | Based<br> on traded zero-coupon U.S. treasury bonds with maturity equal to expected terms. |
| --- | --- |
F-9
Nano Dimension Ltd.
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
Note 6 – Revenues
The table below provides information regarding receivables, contract assets and contract liabilities deriving from contracts with customers.
| June 30, | ||
|---|---|---|
| 2019 | 2020 | |
| Thousands | Thousands | |
| Trade receivables | ||
| Contract assets | ||
| Contract liabilities |
All values are in US Dollars.
The contract liabilities primarily relate to the advance consideration received from customers for contracts containing yearly warranty services. The revenue is recognized on a straight line basis over the contract period.
In the following tables, the Group’s revenue is disaggregated by major products, primary geographical market and timing of revenue recognition.
Revenues per major products:
| For the six-month Ended June 30 | ||
|---|---|---|
| 2019 | 2020 | |
| Thousands | Thousands | |
| Consumables | ||
| Printing services | ||
| Sales of printers | ||
| Total | ||
| Printers rental | ||
| Total revenues |
All values are in US Dollars.
F-10
Nano Dimension Ltd.
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
Note 6 – Revenues (Cont’d)
Revenues per geographical locations:
| For the six-month Ended<br>June 30 | ||
|---|---|---|
| 2019 | 2020 | |
| Thousands | Thousands | |
| U.S. | ||
| Asia Pacific | ||
| Europe and Israel | ||
| Total revenues |
All values are in US Dollars.
Revenues per timing of revenue recognition:
| For the six-month Ended<br>June 30 | ||
|---|---|---|
| 2019 | 2020 | |
| Thousands | Thousands | |
| Goods and services transferred over time | ||
| Goods transferred at a point in time | ||
| Total revenues |
All values are in US Dollars.
Note 7 – Capital and Reserves
Sharecapital and share premium
During the period the Group recognized the following amounts within share capital and share premium:
| For the six months ended | |
|---|---|
| June 30,<br>2020 | |
| Thousands | |
| Issued for cash, net of issuance expenses | |
| Conversion of convertible notes into ordinary shares during the period | |
| Exercise of warrants and options into ordinary shares during the period | |
| Total |
All values are in US Dollars.
Issuance expenses of $7,357,000 are presented as a deduction from equity.
Following the approval of its shareholders on April 16, 2020, the Board of Directors of the Company approved a 1-for-50 reverse split of the Company’s share capital. The implementation of the reverse split resulted in a reduction in the issued and outstanding ordinary shares, and the increase of the par value per ordinary share from NIS 0.10 to NIS 5.00 per ordinary share. Concurrently with the reverse split, the Company effected a corresponding change in the ratio of ordinary shares to each of the Company’s ADSs, such that its ratio of ADSs to ordinary shares has changed from one (1) ADS representing fifty (50) ordinary shares to a new ratio of one (1) ADS representing one (1) ordinary share. The effective date of this reverse split was June 29, 2020. All options and warrants of the Company outstanding immediately prior to the reverse split were appropriately adjusted by dividing the number of ordinary shares into which the options and warrants are exercisable by 50 and multiplying the exercise price thereof by 50, as a result of the reverse split. All the figures in these financial statements relating to share capital were appropriately adjusted to reflect the above mentioned reverse split.
Convertiblenotes
In January, February and March 2020, approximately $2.5 million of convertible notes were converted into 1,394,922 ordinary shares of NIS 5.00 par value per share. For more information on the conversion of convertible notes during the reporting period, see note 3.c.
F-11
Nano Dimension Ltd.
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
Note 8 - Related and Interested Parties
A. Transactionswith key management personnel
Benefits to key management personnel
Key management personnel received benefits in the amount of $1,332,000 during the six month period ended June 30, 2020 (in the six month period ended June 30, 2019: $567,000) in the form of short-term employee benefits and share-based payments.
B. Othertransactions with related and interested parties
For transactions with related parties after the reporting date, see note 9 below.
Note 9 - Events after the Reporting Date
| a. | On<br> July 7, 2020, following approval of the general meeting of the Company’s shareholders, the Company granted options to<br> purchase 1,440,000 ADSs to officers and directors of the Company at an exercise price of $0.70 per ADS. |
|---|---|
| b. | Following<br> approval of the general meeting of the Company’s shareholders from July 7, 2020, the Company issued 6,880,402 warrants<br> to purchase 6,880,402 ADSs to the Company’s CEO and President, Mr. Yoav Stern, for consideration of $150,000. The<br> warrants have an exercise price of $0.75 per ADS, will vest over a period of two and a half years and will expire after 7<br> years. Simultaneously with the issuance of the warrants, Mr. Stern forfeited options to purchase 581,000 ADSs, previously<br> granted to him. In addition, as long as Mr. Stern is employed by the Company or is a member of the Company’s board of<br> directors, Mr. Stern may invest an additional amount up to $50,000 to buy Series B Warrants, in an amount equal to 10% of the<br> Company’s fully diluted capital. The exercise price per ADS under the Series B Warrants will be the average of the<br> daily volume weighted average price of the ADSs for the 10 consecutive trading days ending on the trading day that is<br> immediately prior to the date of the applicable notice to purchase the Series B Warrants. The Company is examining the<br> accounting treatment for the above mentioned warrants, and it currently estimates that the grant of the warrants will be<br> treated as a modification of the terms of equity instruments under International Financial Reporting Standard No. 2. Based on<br> a preliminary estimation, the fair value of the grant that will be recorded as share-based<br>compensation expenses is expected to be in the range of $15 million to $20 million and is subject to further accounting examination.<br>In the same general meeting, the Company’s shareholders approved the terms of compensation of the Company’s CEO and<br>President. |
| --- | --- |
| c. | On<br> August 12, 2020, the Company issued options to purchase 93,000 ADSs to employees of the Company at an exercise price of $0.70<br> per ADS. In addition, the Company issued 481,000 restricted share units to employees of the Company. |
| --- | --- |
| d. | On<br> September 6, 2020, the Company issued 1,500,000 warrants to purchase 1,500,000 ADSs to the Company’s director, Mr. Yaron<br> Eitan, in consideration of $150,000. The warrants have an exercise price of $2.25 per ADS, will vest over a period of three<br> years and will expire after 7 years. |
| --- | --- |
| e. | On<br> September 29, 2020, the Company issued options to purchase 1,000,000 ADSs to employees and officers of the Company at an exercise<br> price of $1.58 per ADS. In addition, the Company issued 100,000 restricted share units to employees of the Company. |
| --- | --- |
| f. | In<br> October 2020, the Company issued, pursuant to a public offering in the United States, an aggregate of 7,356,521 ADSs and 367,826<br> non-tradable warrants to the underwriters (exercisable into 367,826 ADSs). The total gross proceeds from the offering were<br> approximately $16,900,000, before deducting underwriting discounts and commissions and other offering-related expenses. |
| --- | --- |
F-12
Exhibit99.2
MANAGEMENT’SDISCUSSION AND ANALYSIS OF
FINANCIALCONDITION AND RESULTS OF OPERATIONS
Forthe Six Months Ended June 30, 2020
CautionaryStatement Regarding Forward-Looking Statements
Certain information included herein may be deemed to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Forward-looking statements are often characterized by the use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “estimate,” “continue,” “believe,” “should,” “intend,” “project” or other similar words, but are not the only way these statements are identified. These forward-looking statements may include, but are not limited to, statements relating to our objectives, plans and strategies, expansion of marketing and channel activities, converting prospects to customers, statements that contain projections of expected market size, results of operations or of financial condition, expected capital needs and expenses, statements relating to the research, development, completion and use of our products, and all statements (other than statements of historical facts) that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. We have based these forward-looking statements on assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate.
Important factors that could cause actual results, developments and business decisions to differ materially from those anticipated in these forward-looking statements include, among other things:
| ● | the<br> overall global economic environment; |
|---|---|
| ● | the<br> impact of competition and new technologies; |
| ● | general<br> market, political and economic conditions in the countries in which we operate; |
| ● | projected<br> capital expenditures and liquidity; |
| ● | changes<br> in our strategy; |
| ● | the<br> impact of the COVID-19 pandemic on our business and operating results; and |
| ● | litigation. |
The foregoing list is intended to identify only certain of the principal factors that could cause actual results to differ. For a more detailed description of the risks and uncertainties affecting our company, reference is made to our Annual Report on Form 20-F for the year ended December 31, 2019, or our Annual Report, which is on file with the Securities and Exchangel Commission, or the SEC, and the other risk factors discussed from time to time by our company in reports filed or furnished to the SEC.
Except as otherwise required by law, we undertake no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
General
Introduction
Unless indicated otherwise by the context, all references in this report to “Nano Dimension”, the “Company”,“we”, “us” or “our” are to Nano Dimension Ltd. and its subsidiaries. When the following terms and abbreviations appear in the text of this report, they have the meanings indicated below:
| ● | “dollars” or “$” means United States dollars; and |
|---|---|
| ● | “NIS” means<br> New Israeli Shekels. |
Youshould read the following discussion and analysis in conjunction with our unaudited consolidated financial statements for thesix months ended June 30, 2020 and notes thereto, and together with our audited consolidated financial statements for the yearended December 31, 2019 and notes thereto filed with the SEC as part of our Annual Report.
Overview
We are a leading additive electronics provider. We believe our flagship proprietary DragonFly system is the first and only precision system that produces professional multilayer circuit-boards (PCB), RF antennas, sensors, conductive geometries, and molded connected devices for rapid prototyping through custom additive manufacturing. We have been actively developing our additive manufacturing technology since 2014, and since that time we have listed our securities on the Tel Aviv Stock Exchange and Nasdaq, and have spent approximately $80 million to build our additive electronics company. With our unique additive manufacturing technology for 3D printed electronics, we are targeting the growing market for smart electronic devices that rely on printed circuit boards, connected devices, RF components and antennas, sensors, and smart products, including IoT.
We began commercializing our first professional grade DragonFly 3D printer during the fourth quarter of 2017. The first of its kind 3D printer uses our proprietary inks and integrated software to quickly create functional electronics such as multilayered printed circuit boards (PCBs), sensors, conductive geometries, antennas, molded connected devices and other devices for rapid prototyping and custom additive manufacturing of smart products.
FinancialHighlights
| ● | Total<br> revenues for the six months ended June 30, 2020 were $990,000, compared to $2,850,000 in the six months ended June 30, 2019.<br> The decrease is attributed to less sales of DragonFly systems in the first half of 2020, which the Company primarily attributes<br> to the impact of Covid-19, which caused many entities to hold-off on capital expenditures. |
|---|---|
| ● | Net<br> loss for the six months ended June 30, 2020 was $10,339,000, or $0.55 per share, compared to $2,664,000, or $0.82 per<br> share, in the six months ended June 30, 2019. The increase is mainly attributed to finance expenses of approximately $3,023,000<br> that were recognized in the first half of 2020 as a result of the change in the fair value of warrants and convertible notes,<br> compared to finance income of approximately $7,316,000 in the first half of 2019 as a result of the change in the fair value<br> of warrants and rights to purchase ADSs. The decrease in the loss per share is attributed to an increase in issued share capital<br> as a result of the offerings during the first half of 2020. |
| ● | Cash<br> and cash equivalents, together with short-term bank deposits totaled $49,525,000 as of June 30, 2020, compared to $3,925,000<br> as of December 31, 2019. The increase compared to December 31, 2019, mainly reflects proceeds received from the sale of ADSs<br> representing the Company’s ordinary shares in the first half of 2020, less cash used in operations during the six months<br> ended June 30, 2020. |
| ● | Shareholders’<br> equity totaled $57,604,000 as of June 30, 2020, compared to $11,602,000 as of December 31, 2019. |
CriticalAccounting Policies
The preparation of financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. A comprehensive discussion of our critical accounting policies is included in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section in our Annual Report.
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Resultsof Operations
The following discussion of our unaudited results of operations for the six month periods ended June 30, 2020 and 2019, included in the following table, which presents selected financial information data, is based upon our unaudited statements of operations contained in our financial statements for those periods, and the related notes.
| 2020 | ||||
| Revenues | 990 | |||
| Cost of revenues | 589 | |||
| Cost of revenues - amortization of intangible | 386 | |||
| Total cost of revenues | 975 | |||
| Gross profit | 15 | |||
| Research and development expenses, net | 3,597 | |||
| Sales and marketing expenses | 1,749 | |||
| General and administrative expenses | 1,943 | |||
| Operating loss | ) | (7,274 | ) | |
| Finance income | 130 | |||
| Finance expense | 3,195 | |||
| Total comprehensive loss | ) | (10,339 | ) | |
| Basic and diluted loss per share () (after 1:50 reverse split effective June 29, 2020) | ) | (0.55 | ) |
All values are in US Dollars.
SixMonths Ended June 30, 2020 Compared with Six Months Ended June 30, 2019
Revenues. Our revenues are derived primarily from sales of printers to customers, warranty and service contracts, and sale of ink and other consumables to those customers. Total revenues for the six months ended June 30, 2020 were $990,000, compared to $2,850,000 in the six months ended June 30, 2019. The decrease is attributed to less sales of DragonFly systems in the first half of 2020, which the Company primarily attributes to the impact of Covid-19, which caused many entities to hold-off on capital expenditures.
Costof Revenues. Cost of revenues consists mainly of cost of printers sold, cost of maintenance, and ink and other consumables costs, as well as amortization of intangible assets. Our cost of revenues for the six months ended June 30, 2020, were $975,000, compared to $2,345,000 in the six months ended June 30, 2019. Cost of revenues for the six months ended June 30, 2020, consists of $234,000 in respect of cost of printers and LDM system upgrades sold, $255,000 in respect of warranty cost, $84,000 for ink and other consumables, $16,000 in respect of printing services, and an additional $386,000 in respect of amortization of intangible assets. The decrease for the six months ended June 30, 2020 resulted primarily from the above-mentioned decrease in revenues.
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Research and Development. Research and Development, or R&D, expenses consist primarily of salaries of employees engaged in on-going R&D activities, materials, depreciation, rent, and other related costs. R&D expenses for the six months ended June 30, 2020 were $3,597,000, compared to $4,474,000 in the six months ended June 30, 2019. The decrease resulted primarily from a decrease in payroll and related expenses as a result of the Company’s decision to allocate less resources to R&D, as well as a decrease in materials expenses.
Salesand marketing. Sales and marketing expenses consist primarily of salaries of sales and marketing employees, marketing and advertising expenses, travel and related expenses, and other sales and marketing costs. Sales and marketing expenses for the six months ended June 30, 2020, were $1,749,000, compared to $2,871,000 in the six months ended June 30, 2019. The decrease is mainly attributed to a decrease in payroll and related expenses and marketing and advertising expenses, as a result of fewer sales and marketing employees.
Generaland administrative. General and administrative, or G&A, expenses consist primarily of professional services expenses, salaries and share based payments expenses for general and administrative employees, and other administrative costs. G&A expenses for the six months ended June 30, 2020 were $1,943,000, compared to $1,590,000 in the six months ended June 30, 2019. The increase is mainly attributed to an increase in share-based payments expenses.
OperatingLoss. Based on the foregoing, we recorded an operating loss of $7,274,000 for the six months ended June 30, 2020, compared to $8,430,000 in the six months ended June 30, 2019.
Financeincome and expenses. Finance income and expenses consist of finance expense or income as a result of the change in the fair value of warrants and convertible notes that were issued in our 2019 offerings, bank fees, revaluation of liability in respect of government grants and lease liability, and exchange rate differences. Finance expenses, net, for the six months ended June 30, 2020, were $3,065,000, compared to finance income, net, of $5,766,000 in the six months ended June 30, 2019. The increase in expenses resulted primarily from finance expenses as a result of the change in the fair value of warrants and convertible notes, mainly due to changes in the share price.
NetLoss. Net loss for the six months ended June 30, 2020, was $10,339,000, or $0.55 per share, compared to $2,664,000, or $0.82 per share, in the six months ended June 30, 2019.
Liquidityand Capital Resources
From August 2014 through June 30, 2020, we have funded our operations principally with $117,319,000 from the issuance of ordinary shares (including ADSs), warrants and convertible notes. As of June 30, 2020, we had $39,665,000 in cash and cash equivalents and $9,860,000 in short-term bank deposits.
The table below presents our cash flows:
| Six Month Periods Ended<br> June 30, | ||||||
|---|---|---|---|---|---|---|
| (in thousands of U.S. dollars) | 2019 | 2020 | ||||
| Operating activities | (8,297 | ) | (4,226 | ) | ||
| Investing activities | (330 | ) | (9,978 | ) | ||
| Financing activities | 10,213 | 49,872 | ||||
| Net increase in cash | 1,586 | 35,668 |
OperatingActivities
Net cash used in operating activities of approximately $4,226,000 during the six months ended June 30, 2020 consists primarily of net loss, less adjustments for depreciation and amortization expenses, revaluation of liability in respect of warrants and rights of purchase and share-based payments, as well as a decrease in trade receivables.
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Net cash used in operating activities of approximately $8,297,000 during the six months ended June 30, 2019 consists primarily of net loss, less adjustments for depreciation and amortization expenses, revaluation of liability in respect of warrants and rights of purchase, issuance expenses and share-based payments, as well as an increase in inventory.
The decrease is mainly as a result of a smaller increase in inventory, a decrease in trade receivables, and a decrease in net loss less adjustments to net loss.
InvestingActivities
Net cash used in investing activities of approximately $9,978,000 during the six months ended June 30, 2020 was primarily used for investment in bank deposits.
Net cash used in investing activities of approximately $330,000 during the six months ended June 30, 2019 was primarily used for purchases of fixed assets.
FinancingActivities
Net cash provided by financing activities of approximately $49,872,000 in the six months ended June 30, 2020 consisted primarily of net proceeds from the issuance of ordinary shares (including ADSs) and exercise of warrants.
Net cash provided by financing activities of approximately $10,213,000 in the six months ended June 30, 2019 consisted primarily from net proceeds from the issuance of ordinary shares (including ADSs), warrants and rights to purchase ADSs.
In February 2020, pursuant to a public offering in the United States, we issued an aggregate of 2,333,000 ADSs. Also, in February 2020, the underwriters partly exercised their over-allotment option to purchase an additional 255,318 ADSs, bringing the total gross proceeds from the offering to approximately $3,882,000, before deducting underwriting discounts and commissions and other offering-related expenses. The net proceeds to us were approximately $3,347,000.
In April 2020, pursuant to a public offering in the United States, we issued an aggregate of 17,428,000 ADSs and 430,000 pre-funded warrants exercisable into 430,000 ADSs. Also, in April 2020, the underwriters partly exercised their over-allotment option to purchase an additional 1,204,114 ADSs, bringing the total gross proceeds from the offering to approximately $13,343,000, before deducting underwriting discounts and commissions and other offering-related expenses. The net proceeds to us were approximately $11,508,000.
In May 2020, pursuant to a public offering in the United States, we issued an aggregate of 17,950,000 ADSs. The total gross proceeds from the offering were approximately $35,900,000, before deducting underwriting discounts and commissions and other offering-related expenses. The net proceeds to us were approximately $30,913,000.
Outlook
To date, we have not achieved profitability and have sustained net losses in every fiscal year since our inception, and we have financed our operations primarily through proceeds from issuance of our ordinary shares (including ADSs) and other convertible securities.
Until we can generate significant recurring revenues and achieve profitability, we will need to seek additional sources of funds through the sale of additional equity securities, debt or other securities. Any required additional capital, whether forecasted or not, may not be available on reasonable terms, or at all. If we are unable to obtain additional financing or are unsuccessful in commercializing our products and securing sufficient funding, we may be required to reduce activities, curtail or even cease operations.
In addition, our operating plans may change as a result of many factors that may currently be unknown to us, and we may need to seek additional funds sooner than planned. Our future capital requirements will depend on many factors, including:
| ● | the<br> progress and costs of our research and development activities; |
|---|---|
| ● | the<br> progress in the launch of the commercial DragonFly LDM system; |
| ● | the<br> costs of manufacturing our DragonFly LDM system and ink products; |
| ● | the<br> costs of filing, prosecuting, enforcing and defending patent claims and other intellectual property rights; |
| ● | the<br> potential costs of contracting with third parties to provide marketing and distribution services for us or for building such<br> capacities internally; and |
| ● | the<br> magnitude of our general and administrative expenses. |
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