TORONTO–(BUSINESS WIRE<\/a>)– \n***\n<\/p>\n \nFellow Shareholders,\n<\/p>\n \nMurchinson is the largest shareholder of Nano Dimension. After months of disappointing engagement with Chairman and Chief Executive Officer Yoav Stern, we sent a letter to Nano Dimension\u2019s Board on January 22, 2023 to demand that it promptly convene a special meeting to provide shareholders the opportunity to vote on proposed resolutions that include the removal of four current directors (including Mr. Stern) and the appointment of two new independent directors. We took this step because shareholders deserve the right to vote on a reconstitution of the Board following a decline of more than 77% in the Company\u2019s share price during Mr. Stern\u2019s chairmanship. We worked with a leading U.S. law firm and a leading Israeli law firm to ensure that all aspects of our demand and related materials complied with all legal requirements, even though we suspected the Stern-controlled Board would react by employing entrenchment maneuvers to avoid being held accountable by shareholders.\n<\/p>\n \nAs predicted, instead of respecting our clear right under local law to convene a special meeting or trying to collaborate with us on Board refreshment, Mr. Stern and his allies have rejected our demand and immediately embarked on a scorched earth campaign to entrench themselves at all costs. The Stern-controlled Board appears to have abandoned any semblance of appropriate corporate etiquette and sound governance by issuing a series of false and misleading press releases that attack us and misrepresent our intentions. It is clear to us that Mr. Stern is causing the Company to make these unsubstantiated claims in order to distract from his record of presiding over massive value destruction throughout his tenure.\n<\/p>\n \nWith this context in mind, the urgent need for change at Nano Dimension is as much about future risks as past underperformance. We believe that Mr. Stern, who has a dubious history as a capital allocator, and his seemingly hand-picked Board cannot be trusted to steward the approximately $1 billion in cash on the Company\u2019s balance sheet. We fear Mr. Stern could continue his value-destructive acquisition spree and continue burning excessive cash on cronyism and questionable initiatives. In light of investor unrest, we also fear Mr. Stern may try to dilute shareholders in order to place shares in friendly hands.\n<\/p>\n \nDespite the roadblocks being put in place by Nano Dimension, we will take all necessary steps to provide shareholders the opportunity to vote on our proposals to reconstitute the Board at a special meeting. We firmly believe that a meaningfully refreshed Board with a responsible capital allocation philosophy will be able to optimize Nano Dimension\u2019s overcapitalized balance sheet and explore a full range of strategic options to unlock tremendous value for all of the Company\u2019s shareholders.\n<\/p>\n WHY CHANGE IS NEEDED NOW<\/span><\/b><\/p>\n \nMost of the Company\u2019s staggered Board, including Mr. Stern, were appointed and have never stood for election due to apparent manipulations of the director class system. It is equally troubling that Mr. Stern\u2019s service agreement includes a highly unusual provision that gives him authority to approve directors or receive compensation from the Company. Unfortunately for shareholders, Mr. Stern\u2019s chairmanship has been defined by significant share price declines, poor capital allocation and terrible corporate governance. We believe it is time to reshape the Board by removing interconnected directors who have seemingly been beholden to Mr. Stern at the expense of shareholders. In our view, it is time to add truly independent directors who are committed to maximizing value for all shareholders.\n<\/p>\n \nSince Mr. Stern was appointed to the Board and named Chairman nearly two years ago, Nano Dimension\u2019s shares are down 77.7%.1<\/sup> Over the same period, the Company\u2019s share price has lagged its only self-reported peer, Stratasys (Nasdaq: SSYS), by 27%.2<\/sup> Perhaps most concerning, the Company\u2019s shares trade at a substantial discount to its more than $1 billion cash position. In our view, this disconnect reflects the market\u2019s fear that Mr. Stern will continue to destroy value.\n<\/p>\n \nAt Mr. Stern\u2019s direction, Nano Dimension has made a series of acquisitions.3<\/sup> With the exception of one (DeepCube Ltd.), each of these targets were revenue generating companies. We believe that Mr. Stern has used these acquisitions to mask the underperformance of the Company. Tellingly, on January 24, 2023, Nano Dimension reported preliminary and unaudited 2022 revenue of $43.6 million, which Mr. Stern labeled the highest annual revenue in the Company\u2019s history. However, based on our analysis, the unaudited 2022 revenue number actually represents a loss of value. If these companies had never been bought by Nano Dimension, their combined pre-acquisition revenue added to the Company\u2019s organic revenue would have been roughly $10 million higher.4<\/sup>It appears Mr. Stern has spent shareholder capital on businesses that have cumulatively actually lost revenue once part of the Company<\/span><\/i>.\n<\/p>\n \nUnfortunately, the Board\u2019s apparent failure to properly oversee management is simply one symptom of the Company\u2019s deficient corporate governance. Instead of listing the myriad ways in which Nano Dimension\u2019s governance has failed shareholders, it is worth simply considering that since the submission of our letter to convene a special meeting, the Board has, in a matter of days, responded by:\n<\/p>\n \nWe fear that Mr. Stern will persuade his allies on the Board to approve other extreme measures in the near-term to try to entrench himself and maintain his Stern-controlled Board at the expense of shareholders. These actions could take the form of wasteful or dilutive M&A, anti-shareholder governance changes or other desperate actions that further erode the Company\u2019s value. That is why we have exercised our right to call a special meeting and proposed constructive solutions.\n<\/p>\n OUR PROPOSED RESOLUTIONS<\/span><\/b><\/p>\n \nContrary to what Mr. Stern has claimed, Murchinson has no current plans to try to acquire or pursue control of the Company. If those were among our goals, we would have nominated a majority slate of director candidates for election at a special meeting.\n<\/p>\n \nWe are focusing on actions that benefit all of the Company\u2019s shareholders. In connection with our demand to convene a special meeting, we have proposed giving shareholders the opportunity to vote on resolutions pertaining to the composition of the Board by:\n<\/p>\n \nIn light of the aforementioned issues, we believe that substantial Board change is urgently required to improve corporate governance and oversight of management. We believe this will result in better capital allocation, corporate stewardship and value creation for shareholders. We also believe that reducing the Board size from nine directors to seven directors is more in-line with best practices for a small cap entity like Nano Dimension and would allow for more efficient governance.\n<\/p>\n \nWorking with our outside legal advisors, we served the Company with a special meeting demand letter on January 22nd<\/sup>, thereby starting a 21-day window by the end of which the Company, under Israeli law, is required to call the special meeting. The Company responded by rejecting our demand outright over baseless and irrelevant technicalities. Thankfully, Israeli law provides remedies for a shareholder whose demand to call a special meeting is improperly denied, including a court order or by having the meeting convened independent of a company.\n<\/p>\n \nAs we have seen time and again, the Stern-controlled Board does not value the input of shareholders and seems more focused on manipulating the corporate machinery to prevent investors from being heard. Now, however, a shareholder has chosen to stand up to Mr. Stern and do whatever is necessary to challenge any manipulations.\n<\/p>\n NEXT STEPS<\/span><\/b><\/p>\n \nDespite Nano Dimension\u2019s initial responses to our demand, we will continue to make good faith attempts to resolve outstanding issues and have the special meeting held as soon as possible. With that said, we are ready to pursue all available legal paths if the Stern-controlled Board continues hindering our rights. We are prepared to invest whatever resources and time it will take to catalyze boardroom change for the benefit of all Nano Dimension\u2019s shareholders and stakeholders. Murchinson will not be deterred.\n<\/p>\n \nThank you for your support.\n<\/p>\n \nMoshe Sarfaty APPENDIX: MURCHINSON\u2019S DIRECTOR CANDIDATES<\/span><\/b><\/p>\n Kenneth H. Traub has a three-decade track record of driving strategic, operational, capital allocation and governance improvements to enhance shareholder value as a senior executive and public company director.<\/b><\/p>\n Dr. Joshua Rosensweig has more than four decades of experience as a legal professional, with significant experience in corporate governance and enhancing shareholder value as an executive and director at Israel-based public companies.<\/b><\/p>\n \n***\n<\/p>\n About Murchinson<\/span><\/b><\/p>\n \nFounded in 2012 and based in Toronto, Canada, Murchinson is an alternative asset management firm that serves institutional investors, family offices and qualified clients. The firm has extensive experience capturing the best returning opportunities across global markets. Murchinson\u2019s multi-strategy approach allows it to execute investments at all points in the market cycle with fluid allocation between strategies. Our team targets corporate action, distressed investing, private equity and structured finance situations, leveraging its broad market experience with a variety of specialized products and sophisticated hedging techniques to deliver alpha within a risk-averse mandate. Learn more at www.murchinsonltd.com<\/a>.\n<\/p>\n \n______________________________________ View source version on businesswire.com: <\/span>https:\/\/www.businesswire.com\/news\/home\/20230202005888\/en\/<\/a><\/span><\/p>\n \nLongacre Square Partners KEYWORDS:<\/b> North America Canada<\/p>\n INDUSTRY KEYWORDS:<\/b> Banking Professional Services Finance<\/p>\n MEDIA:<\/b><\/p>\n Murchinson Issues Letter to Fellow Shareholders Regarding the Urgent Need for Boardroom Change at Nano Dimension Believes the Stern-Controlled Board\u2019s Decision to Challenge Our Special Meeting Demand \u2013 Without Any Valid Justification \u2013 Reinforces the Need for Objective and Independent Perspectives in the Boardroom Contends the Company is Making Misleading Claims About Murchinson to Distract from Mr. Stern Having Presided Over a More Than 77% Share Price Decline Since Becoming Chairman Puts Forward Proposals to Remove Four Incumbents and Appoint Two Highly Qualified, Independent Director Candidates with Sorely Needed Capital Allocation Acumen and Corporate Governance Expertise Sees a Clear Opportunity to Optimize Nano Dimension\u2019s Overcapitalized Balance Sheet, Explore Strategic Options to Maximize Value for Shareholders and Prevent Misuse of the … <\/p>\n
\nMurchinson Ltd. (collectively with its affiliates and funds it advises and\/or sub-advises, \u201cMurchinson\u201d or \u201cwe\u201d), which holds approximately 5.1% of the outstanding shares of Nano Dimension Ltd. (NASDAQ: NNDM) (\u201cNano Dimension\u201d or the \u201cCompany\u201d), today issued the below open letter to its fellow shareholders following its unsuccessful attempts to engage with the Company\u2019s Board of Directors (the \u201cBoard\u201d) and management.\n<\/p>\n\n
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Murchinson Ltd.\n<\/p>\n\n
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1<\/sup> From March 11, 2021 to January 22, 2023 when Murchinson sent the Company the special meeting demand.
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2<\/sup> CEO and Chairman Yoav Stern on the Nano Dimension 3Q2022 Earnings Call, December 1, 2022.
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3<\/sup> Most prominent of them were NanoFabrica, Global Inkjet Systems, Essemtec, Admatec\/Formatec and DeepCube.
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4<\/sup> In 2021 and 2022, Nano acquired NanoFabrica, Essemtec, Global Inkjet Systems and Admatec\/Formatec. The revenues of those 4 companies in 2021 were, respectively: $10.5 million, $29.7 million, $10 million and $5.3 million.
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5<\/sup> S-8 filed with the U.S. Securities and Exchange Commission on January 27, 2023.\n<\/p>\n<\/p>\n
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Greg Marose \/ Dan Zacchei, 646-386-0091
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gmarose@longacresquare.com<\/a> \/ dzacchei@longacresquare.com<\/a><\/p>\n\n","protected":false},"excerpt":{"rendered":"