Nano Dimension Ltd. — FY2020 Form 20-F
Reporting period: Fiscal year ended December 31, 2020. This is an annual report, not a standalone fourth-quarter filing. Financial statements are prepared under IFRS in U.S. dollars.
Business context
Nano Dimension develops and sells the DragonFly LDM additive electronics printer, proprietary conductive and dielectric inks, and related software and services. Its system is intended for in-house prototyping and low-volume production of multilayer printed circuit boards and other electronic components. The company remains development-stage and has not achieved profitability.
Key financial metrics
| Metric (USD millions, except per-share data) | 2020 | 2019 |
|---|---|---|
| Revenue | $3.399 | $7.070 |
| Cost of revenue, including intangible amortization | $2.334 | $5.084 |
| Gross profit | $1.065 | $1.986 |
| Gross margin | 31.3% | 28.1% |
| Research and development expense, net | $9.878 | $8.082 |
| Sales and marketing expense | $6.597 | $5.469 |
| General and administrative expense | $20.287 | $3.270 |
| Operating loss | $(35.697) | $(14.835) |
| Net loss / total comprehensive loss | $(48.494) | $(8.353) |
| Basic and diluted loss per share | $(1.13) | $(2.38) |
| Cash used in operating activities | $(9.646) | $(12.684) |
Revenue fell 52%, primarily reflecting COVID-19-related delays in customer capital spending and a decline in printer sales: four systems sold in 2020 versus 27 in 2019. Gross margin improved despite lower gross profit.
General and administrative expense rose sharply, mainly due to share-based compensation associated with warrants issued to the CEO. The filing reports $16.837 million of share-based payment expense in G&A; total 2020 share-based payments in the cash-flow reconciliation were $20.501 million. Net finance expense was $12.797 million, compared with net finance income of $6.482 million in 2019, primarily due to fair-value remeasurement of warrant-related financial liabilities as the ADS price increased.
Cash, liquidity and obligations
- At December 31, 2020, cash was $585.338 million and bank deposits were $85.596 million, or $670.934 million combined; current assets were $676.149 million.
- Total assets were $689.256 million, total liabilities $22.140 million, and equity $667.116 million. Current liabilities were $6.686 million.
- Liabilities included $11.986 million related to warrants, $2.618 million of lease liabilities, and $1.076 million related to government grants. The filing does not report material conventional borrowings.
- Operating cash outflow was $9.646 million. Financing activities provided $677.726 million, mainly through share issuance; investing outflow of $86.763 million largely reflected transfers into bank deposits, not solely operating investment.
- Non-IFRS EBITDA was $(46.084) million and adjusted EBITDA was $(12.566) million. Adjusted EBITDA excludes, among other items, warrant revaluation and share-based payments.
Material changes, outlook and risks
- During 2020, the company raised approximately $710.0 million gross ($650.1 million net) through U.S. public offerings. It reported 172,063,020 ordinary shares outstanding at year-end on the cover; the financial statements report 172.052 million issued and paid-up shares. The ADS-to-share ratio changed to one ADS per ordinary share following a 1-for-50 reverse split in June 2020.
- After year-end, public offerings in January and February 2021 generated approximately $833 million gross. These subsequent proceeds are not included in 2020 year-end cash.
- Management said existing resources were expected to fund business needs for at least 12 months and support commercial infrastructure, R&D, working capital and potential M&A. No specific revenue, profit or margin guidance was provided.
- COVID-19 materially reduced 2020 revenue through deferred customer capital expenditures and caused sales, travel and supply-chain disruptions. Management said long-term effects remained uncertain.
- Key risks include limited commercialization and customer adoption, continued losses, competition and rapid technology change, reliance on DragonFly systems and inks, supplier and single-site production concentration, intellectual-property protection, Israeli political and security conditions, currency exposure, and conditions attached to Israeli Innovation Authority grants.
- The company reported no material off-balance-sheet arrangements and no significant pending legal proceedings expected to affect financial position or profitability. It does not anticipate paying dividends in the foreseeable future.
Most important facts for investors to verify
- Whether system sales and recurring ink, service and maintenance revenue recover after the 2020 decline, and how many systems are shipped and installed.
- The nature, valuation and potential dilution from CEO and other warrants, options, and underwriter warrants; also reconcile reported share counts across the filing.
- How much of the large post-year-end fundraising remains available, its deployment, and the resulting fully diluted share count.
- Whether the reported cash and deposits, together with the stated 12-month outlook, adequately support planned operating spending and acquisition activity.
- Potential royalty, approval or repayment obligations tied to government grants, including the uncertainty associated with the LIBOR transition.