Good day, ladies and gentlemen. Welcome to today's conference call to discuss Nano Dimension's Fourth Quarter 2020 Financial Results. My name is Grant, and I'm your operator for today's call. On the call with us today are Yoav Stern, President and 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. I would now like to turn the conference over to Nano Dimension's President and CEO, Yoav Stern. Yoav, please go ahead.

Thank you very much, and good day, and good morning to everybody. I will talk today a little bit about the 2020 performance, which I have written a letter to the shareholders before. I'll speak about the money we've raised a bit about M&A, our plans moving forward. What's happening in the industry and about the elephant in the room. So our performance in 2020, you have to divide it to revenue and to expenses. The expenses are somewhat deceiving because a lot of the high expenses are noncash expenses, resulting from all kind of GAAP rules regarding stocks and the ease of noncash compensation, as part of restructuring the company. And if you want to know more details about it, you can speak with Yael and ask questions. As much as the top line, as I've mentioned before, I was surprised my estimation in the middle of the year was that revenue will be much lower, resulting due to corona we sold very few machines. But revenue ended up being about $3.4 million, which is about half of our revenue, the year before, 50%, which was structured from a lot of the present customers upgrading their machines, buying the razor blades, buying the consumables, of course, service contracts on an annual basis that we're having, and some revenue from our new NaNo-Services where we actually do services for the people who don't have corona, budget is limited, and they don't have the capital expense to buy machines. Meanwhile, they are paying us for doing with our machines and our fabs, what they will do eventually, hopefully, when they buy the machines. So I was pleasantly surprised entering 2021, we are not seeing a major change, especially not in Europe and United States. The East is starting to wake up,…

[Operator Instructions]. Our first question will come from Jeff Roth [ph], who is a Private Investor.

Yes. I have a few questions. For transparency, please discuss your direct offering strategies you've done for at least the next 6 months. Do you feel that you have enough money to execute your plans on a buyout merger, acquisition, whatever you want to call it? That's my first question.

Yes.

So you're done -- okay. Good. And can you...

The answer is we have enough money to execute our present strategy.

Okay. Could you provide some guidance towards first quarter 2021 financials in that they're almost done.

No.

No guidance.

No.

Any guidance for 2021 in terms of revenue appreciation?

No.

Okay. Any growing interest, contract signed in 3D printing of 5G antennas? Have you been working with any major automotive companies?

Yes. We are working with major players in that field. And when there will be anything to announce, we'll announce. We had contracts with them and work with them before. And when there will be something to announce, it will be announced.

Okay. You recently filed a patent on ceramic integration. Could you talk about that?

Yes. As you know, if you read a presentation on our website as well as listening to part of the past discussions of this kind. We focus on in the development on few bridgeheads. One of them is the materials. We're improving the materials gradually, and we're going to very important stages in order the materials to reach as close to military spec. And before that, industrial spec and the commerce spec. We are seeing some very, very encouraging advancement. Our materials today are much better in their -- withstanding environmental circumstances and specs, including temperature, including strength. And part of what we do to the materials is we have, as you know, two materials, one is the dielectric and one is the conductive. And we are improving the materials by mixing materials. So certain, be it ceramics or others improve both the electrical characteristics of the material, the insulation characteristics of the material, the conductivity. And we file patents when we find solution and we feel that should be protected. Ceramics is part of the materials we add, and that's what you asked is actually happening, yes.

Okay. With coronavirus dissipating in a very large way, when that be a positive in terms of revenue growth and executing on that?

First of all, I'm not a corona expert as much as I'm concerned, you may see coronavirus dissipating or not. What I see is total closures in Europe. We have no customers that are active from our array of customers in Europe at all. It's actually getting -- becoming worse over the last 2, 3 months. In the states, it's steady state. It's not worse, it's not better. So I'm not commenting on the corona virus and the general public. I'm just commenting insomuch as our customers being in the laboratories and the facilities. And we don't see a major change. We did see a change in the East, that being Australia and the Pacific Rim. We actually sold machines there at the end of the quarter. And when there will be a change, then we will announce it or you will see that we are selling more machines.

Our next question will come from Mr. Jackowitz [ph] with John Carroll University.

At your recent AME conference, you spoke about your approval from NASA. And I'm just curious if you could provide some detail on your ability to 3D print in space?

No, we don't do -- we don't 3D print in space. What we do with NASA and Harris -- L3Harris is we do 3D printing on the ground and on very, very unique components, high-performance electronic devices. And those components are -- were taken up to space. And in the process of being taken more and more in this cooperation in order to test them in space and to see how did they perform in an environment of obviously different radiation, like lack of gravity, et cetera. But it's not that we bring up a machine to space to print. We just send them the components to space.

Yes. So those satellite components, those are 3D printed by you guys and taken by NASA up to the ISS?

Yes.

Did any private companies pursued new technologies?

I'm sorry, can you repeat the question?

Any private space companies pursue new technologies?

No, we work with NASA and we work with Harris.

Our next question will come from Tavy Rosner with Barclays.

I have a few, so maybe I throw most of them at once because they're related. So you talked about your net cash position. I was wondering if you have some granularity into roughly how much you're planning on spending on M&A as opposed to how much using for organic growth? And I guess looking at organic growth, last year, you introduced the different stages of development with stage 5 expectedly being reached by 2023, if I'm not mistaken. So does the fact that you have significant cash accelerate the development pipeline?

Okay. So I'll answer it according to the order you asked. And so much as how much we allocate the numbers are pretty much 50% and more percent for M&A and less than that, obviously, for organic growth. That may change based on the M&A we do because part of the companies that we do -- we intend to purchase and we negotiate with have certain very advanced technology, which is the reason why we acquired them. And as we acquire them and we integrate them, we may increase the organic growth budget for R&D and for what's coming after that, which is go-to-market because of the companies we acquire. But right now, it's bit more than 50%, we intend to allocate for M&A. That's as much as the first question. The second question, yes, we are going to stages of development, which we defined as 1, 2, 3, 4, 5. Five, which is the inflection point is somewhere around Stage 4, we believe, where our first machine will come into a stage of a production machine or fabrication machine, which means the machines will move, actually 2, the machines and the materials. The machine will move into yield level and throughput level that it will be used for production and materials will be at the stage, reaching stage 4 and then 5, where they will meet the specs of industrial spec and commercial spec and closer or very close to military spec. For the question, yes, 2023. And the question is, does the amount of cash we have can accelerate it? Potentially, yes, because we are allocating as much as needed by now for increasing R&D in the field of chemistry, physics that's the materials in the field of engineering. We're actually looking even to acquire companies in Central Europe, which are companies that will accelerate the speed of building machines because we're looking at companies in Central Europe with expertise of building machines, the hardware side in a very, very high level, and you can guess yourself in which countries it is. And that will accelerate our time to market on the machine side. We are looking for cooperation on the chemical side, but we are so advanced on that side on the materials. I don't see a lot of people that I can neither cooperate nor acquire that will accelerate what I'm doing. So I don't see that side accelerating. The materials is a process that we are really intensively investing internally in-house. And obviously, by the fact that we don't have cash limitations per se enables us to maximize the speed you can get to develop, to get to the stage 4 and 5. But the question is very, very good.

That's very helpful. And I guess, more of a bigger picture. So I understand the value proposition of your machines as opposed to the traditional analog way of production. What I'm wondering is that, do you ever get kind of pushback from clients saying, yes, it's true, we could produce on-site and get faster time to market, but we don't need that kind of speed. We would rather do it the cheap way, no matter how long it takes. Is that something you've have heard of? Or you just think that with time, the market will educate and understand the value?

No. We actually get the opposite response. We get -- we never got an answer like this. I can tell you this. What we got is answers like, this is great. This is amazing. But we want you to have the materials accelerate forward so we can actually use those immediately not only for prototyping, but into our own products. And b, your machines are great, but if we want to put them into production, which we do because the prototyping is great, but we want the yield and the throughput to be faster. And frankly, they are right. So that's the direction we are taking. I can tell you that the MRD, the marketing requirement document, which is the document that define our product moving forward are totally based on feedback we get from customers. When I joined this company 1 year and a month ago. One of the reasons that I chose to take such a risky "position" when the company was small and the technology was working, but it was embryonic is they had 50 -- 45 customers, which are really impressive. Some of you heard the names. I can't tell them now, but it's the leaders of the defense industry all over United States and Europe, hence all that I can say. It's a leading defense contractor in Germany owned partly by the government, and they allowed us to use their name, and you'll hear more about what we're doing with them soon. So those people built the confidence I had as a person to join and to invest my own money because they told me that the company is really listening to them in so much as where the machine and the technology will go. That was very encouraging, and it's even more emphasized now. Everything we do is based on 35 leading customers, including leading universities in a direction they're giving us. I'm really proud of this company before my time doing it. And now it's even more emphasized that nothing is being done here just because there's -- we are entrepreneurs having good ideas. By now, everything we do is based on information from customers.

Great. And last one for me, if I may. So obviously, corona had an impact on you guys in 2020, you talked about it for several quarters. I'm just interested in a way several companies that we follow also in the 3D printing actually, saw corona as a boost because people realize disruptions of supply chains and so on. And by you, it was kind of the opposite with budgets being down or at least investment decisions being delayed. How do you think about that with regards to your potential addressable market?

The reason the phenomenon you're describing, you have to separate between machines or technologies that are mature and are acceptable into production lines. And when the disruption in the supply chain were imminent because of the trade wars with China and because of corona, and it's still happening, then people buy machines that they either bought before, but they buy more machines in order to compensate for the supply chain disruption. In our case, since I came to the company, our machines are early adopters, I should say, not the machines. The customer that bought our machines, the 45 -- by now, 45 or so customers. And the leading names I told you of the blue chips are early adopters. Those are machines for proof-of-concept and early prototyping. And when you have supply chain disruption, the supply chain disruption is of production. The processes of R&D, product development, which are being -- are using our machines, those are not on the supply chain curve, and therefore, those are not -- on the contrary, they may -- our customers slowed down their R&D and reduced their R&D and product development expenses because they were not doing it while the corona is and where it is. So it's a different way of responding when you're dealing with machines like ours, which are in the early stage or when you're dealing with machines in the 3D printing in general, which is a much older industry, it's a 15, 18 years old industry even more. Our industry, the AME just started 5 years ago. And the earlier ones started before, but this was really not AME. It was, call it, toys. So our industry, the AME, additive manufacturing and electronics, it's really much earlier stage and specifically, Nano Dimension we're the only company that actually manufactures PCBs in layers and in 3 dimension. The behavior of the people who allocate budget for that is the behavior of people are saying, okay, these are really breakthrough machines. We can hold back and buy them half year or year when things will clear up with the corona. It doesn't help them with supply chain in an immediate way.

Our next question will come from Stuart Taylor with Atlantic Capital [ph].

I want to have one. Warren Buffett recently discussed how costly it is to buy out a quality company. Does your M&A strategy include taking large stakes in several quality companies where the partnerships can be made? Or are you generally focused on overtaking just one company?

No. First of all, we are focusing on taking 100% of companies. We're not investment companies. We're not going to invest and take a partial stake in the company. We are interested to buy them in order to integrate them and to get the benefits of the integration either is the integration of technology or it's integration of their distribution channels and go-to-market methodologies. So we are looking at the 3 types of companies. I mentioned it before, to acquire Type A, Type B, Type C. Each 1 of those types, we are interested to buy the whole company. The Type A, are much bigger companies in the PCB field. And the last response to your question is, we will acquire few companies, as I mentioned earlier, I am in negotiations. I don't want to say with how many, but it's many more than 1 in parallel, and in due diligence in parallel, but we are not going to buy 20 companies. We are not going to do a roll up. Each company that we will buy. First of all, we will negotiate until we get it to the right price and the right price is not necessarily going to be the lowest price possible. We're not going to necessary to do bargain buying because what we buy is a value for us. We're not looking for what the value of the company and the market is, what the value for us. And we will buy a few in order to leverage both our technology and our go-to-market efforts in preparation for the inflection point in the industry, which we believe will happen as we discussed before.

[Operator Instructions]. Well, there being no further questions. This will conclude our question-and-answer session. I would like to turn the conference back to Yoav. It looks like we have a couple dialed in. One moment, please. Our next question will come from Puneet Maheshwari [ph], who is a Private Investor.

My question is regarding your margin and acquisition. In the quarter like quarter past, last quarter, like two quarters back, you said you're very close to acquiring some companies. And is the delay because of the valuation of the company due to market behavior right now? Or you find some other more competitive companies or more advanced technology companies for which you are targeting?

The companies that we -- no, I don't remember saying close, we are very advanced in discussions with companies in the fourth quarter. I dropped about 2 or 3 of them, I don't remember exactly, because their ideas about their value was totally out of whack. And those were -- one of them was a company in the PCB field, a small company, relatively small company in the Silicon Valley, which thought that their value is close to 7 -- 6x revenue for PCB company. So after due diligence and after realizing that's what I think we dropped them. Another company, similar -- in similar fields, smaller, spoke about 20x revenue. So we say thanks, but not thanks, and we continue to do with other companies, we're negotiating. By now, we are in advanced stages, and we believe, since I mentioned, we have LOIs. And LOIs which are signed. By definition, you have agreed, while it's not -- it's conditional on the final due diligence and nonbinding, but we agreed on a price. So by now, on the LOIs that I'm signed, there's no issues of pricing. But do I tell you that there's a guarantee that those will be closed? Of course, not. The due diligence is due diligence. But I've done in my career, grew company through maybe 20 different acquisitions. So I've done it. I've seen it, and it's going to happen. And we are the patient one, because those who want to sell, want to sell now because they feel that this whole SPAC campaign enables them to raise prices, and I'm saying, okay, you can raise prices. I'm still interested, but I would drag along until the prices will be right. And my investors including you I assume, that gave me this money, it's a lot of money, and I need to make out of this money value -- to return value to you, which is 3 to 4x is money. I intend to do that, and I'm not going to do it by overpaying. And I can tell you one thing else for you and for everybody else on this call. We did not increase salaries to anybody in this company. We did not pay bonuses other than 1 or 2 exceptions, which are very small, less than few thousand dollars per person to people which really performed. We did not pay bonuses for myself because this is your money, and we're not going to do it. We're neither going to increase salaries, no, we're going to pay bonuses. We are going to work until the performance of the company will be more than just raising your money. And the performance of the company and ourselves as executive is going to be by increasing value for your money. So that's our commitment, and that's what we're doing and rushing into M&A and paying quickly is not going to make it.

Our next question will come from Tim Eckwall [ph] who is a stockholder.

I'm trying to understand. How you control your supply chain for your raw materials. Do you all own companies that you get your supplies from? Or do you just have supply agreements with them?

We have no issue with supply chains because we -- from the beginning, when I came in, we were going to actually move production to the Far East, including China, which would have increased our gross margins dramatically. I stopped that for 2 reasons. One, the corona was already in China in January. And I just was here 2 weeks. I said, I'm not taking any risk on that. And b, we are ITAR approved company in the United States. We are selling to the defense community, close to 50% of our revenue. So I was not going to play games with that. And frankly, I don't think that the change of administration in the United States are going to change this policy. I think we are going to see issues with that. So all our supply chains are from the West. And most of what we built, we built here in the R&D facility or the manufacturing facility that we have in Israel and now in the States. So we didn't have any disruption.

Well, I guess maybe I'll make sure I understand. I'm talking about the actual raw materials used to produce your product.

That's what I'm talking about.

Okay. Okay.

Our next question will come from Joseph Albo with Shalom Enterprises [ph].

Yes. Just a quick question. Should we anticipate any dividend announcements this year?

Absolutely not.

Our next question will come from Byron Mayo with M31 [ph].

I read earlier, and I understand why with the COVID-19 that sales would be sluggish currently, but it would be like a slingshot when things would bounce back. I just wondered what was the time lag between when people plan the order and when it actually occurs?

Well, the process of selling a machine, which are now selling -- prices are up actually, we're charging more for our machines and it's not an issue. It doesn't hold up, but there's no sensitivity of price because there's no competition. So we figure out that we'll just make more money. So the issue of our machine is not the price. And the time lag, as you asked, is about 6 to 9 months between the first time we speak with the prospect until the budget is allocated. It's on average. So let's put it this way. If it's a defense or government, it's probably 9 months. If it's non-defense and if it's commercial or university is probably less than 6 months. And obviously, we don't start today. We have a pipeline of -- starts with hundreds and scan down in a very organized fashion to dozens, and we have by now, many in the process of these six months into that process, one month in the process, two months in the process, four months in the process, pre purchase order. But if you analyze it statistically, on a per case basis, it's -- this is the time lag between introduction until somebody buys. I hope I answered your question.

Our next question will come from Ram Raghavan with Retail [ph].

Thank you for your -- for the conference. Your business strategy sounds very strong, and thank you for providing details as transparently as you can. My question is, you're in a particular niche right now in the PCB industry. Do you have -- do you foresee going into any other industries and expanding your presence in the future?

Okay. Let's define the niche. And you're right. The industry -- the PCB industry is estimated by 2 -- you have to measure it in 2 ways. One is the PCB itself, the fabrication when you people build the board and then they amount on the board, a lot of semiconductors and other components. So just the building of the board is about $70 billion industry. By the way, 85% of it is the Far East. And if you speak about PCB A, A is for assembly, that becomes about $250 billion industry. We are focusing on the upper 10%, 12% of this industry. That's the niche you spoke about, which can be measured at about $25 billion to $30 billion if we include all the components, and we do because soon, we're going to have components mounted in our machines. And so that niche, which is 10% of the much larger industry is very large because it doesn't have a solution right now, anything closer to a digital solution like ours, and it's an analog industry, and I spoke about it a lot in the past. I don't want to repeat with all the issues of analog and the very large production runs that without it, you can justify the price, et cetera, et cetera, not to speak about prototyping. Specifically to your question, yes, we are looking to move to adjacent industries, very exciting, because there are industries that are selling -- we're not going to move out of 3D printing, but we are moving -- we may move to adjacent industry niches, which are 3D printing of micromechanical, not only microelectromechanical pieces. It's very exciting because it is selling to the same verticals. We are selling it is selling to the defense industry, to the aerospace industry, to the novation industry to the very high end auto industry to the very, very high end medical industry. And those kind of technologies are -- first of all, can be integrated with electronics, but also can be sold as micromechanical devices, Nano devices, which are not only with electronics. And we are looking to expand into that. So the answer is yes.

Excellent. It's very encouraging to see prospects of expansion.

Our next question will come from Richard Anderson with IDA.

My question is more hypothetical. It seems to me that the -- that for the company to really grow leaps and bounds, the physics of mass production are going to be a key question. So do you -- does your R&D team think that creating machines of mass production capability will be capable in the next year or so?

Okay. First of all, let's define exactly, mass production is too general. And let's start by saying where we're not going. It's easier. We are not going to compete with mass production of 20 million pieces or 5 million pieces that are done in China in the production line, which is analog and very capital-intensive and very labor-intensive and for $5 apiece. That's the mass production. We will never intend, we never intended to go into. So I'm saying, we are going into production. And the production segment that we are looking and very encouraged about, it's called high mix, low volume, which means it's the production of very high mix of designs and very low volume per design, give an example, aerospace. There's now 500,000 micro satellites that are being produced by whoever produce them, and we are selling them. There's very few thousand. They don't need 500,000 pieces. That's an industry that has a lot of variation, a lot of designs, a lot of prototyping and a lot of production of very special high-performance electronic devices that we are definitely intending to -- we cater to today by -- on a prototyping level and we will cater in the production level. Is it called mass production? Yes, because it's mass, 5,000 pieces, but it's not 500,000 pieces. Those industries we estimated, as I mentioned to you, to be in total, at least $10 billion on the fabrication side, and the fabrication and assembly going up to $25 billion. So that's where we're aiming. And no, it's not going to be within a year. Having said that, it's going to be within 2 years. Having to say -- having said that, we already have our machine today that are built for prototyping and proof of concept, but are already working 24/7. Some people have already started to use them to our surprise for early production ramps. That's very encouraging, which means machines that we didn't build originally for productions -- production are being used. Because if you have a short run of 500 pieces, people say, we prefer to do it with your machine. So that's encouraging. But it's the next machine and the 1 after that we're in the process of development that's going to be built for production where yield, repeatability and throughput is our focus.

Great. Could you -- on a follow-up to that, at your last video that you spoke mainly about M&A, you did mention that there's going to be a next-generation DragonFly coming this summer with limited production capability. Can you add a little more flavor to what you think that will entail?

Yes. Yes, yes. It's coming this summer or very early, but this summer, if my people will submit to my pressure on them. It will be early, early this summer. It's going to be the -- I wouldn't -- I don't want to say the name of it yet, but it will be the most advanced DragonFly machine. It will have a better performance of the -- sorry, of the materials, both the dielectric and conducting material. The conductivity of the conducting material will be 3 to 4x better. The strengths and the temperature spec of the materials will be much, much better. The stability and the repeatability of the machine will be better, the efficiency of using ink will be better in a funny way, it's not so good for us, but the people will be able to build the products with less ink than they used to in the previous DragonFly, which, of course, makes our customers very happy and looking forward for this machine very much. And there's a few more that are going to be few more advantage -- sorry, a few more features that are going to be released, including very, very important features in the software, which will enable, and that is going to be even before the summer, somewhere between now and June. We are releasing software that you will understand that it enables the designers to use the utmost capabilities of our machines by having design rules library in the typical industry software that is being used for designing printed circuit boards. So that is going to be released very, very soon within weeks or a couple of 1.5 months. And that's another new feature in the DragonFly. So kind of try to cover it all for you.

This will conclude our question-and-answer session. I would like to turn the conference back over to Yoav Stern for any closing remarks.

Okay. Thank you very much, sir. Thank you very much. We had hundreds and hundreds of participants on this call. At point of time, it was 550. I'm very proud of it. I'm very proud of you, everybody that is patient enough with me and Yael and us in general and supporting us. And I promise you that we mean every word we say and we say everything we mean. And it will stay this way. Thank you very much.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.