Rodman & Renshaw: Nano Dimension Software Final Up; Highly Rewarding Venture East; Full Production Capability

A recent report by Rodman & Renshaw highlighted Nano Dimension (TASE:NNDM, NASDAQ:NNDM) and the DragonFly 2020 3D printer, which is designed to print multi-layer professional printed circuit boards (PCBs), and advanced nanotechnology-based conductive and dielectric inks.
As quoted in the report:

Software announcement yesterday. Nano Dimension issued a statement early yesterday discussing the release of its initial version of the software used to control its Dragonfly 2020 3D circuit board printer, named Switch. This software release enables the control of various printing parameters, including most importantly, the ultimate conversion of Gerber files, VIA and DRILL files to operable electronic circuit boards while controlling dielectric thickness, conductor width, and optimization of the printing process by maximizing the use of the printing surface. Given the number of control parameters, complicated by the number of nozzles on each print head, the evaporation and drying coefficients for the “ink” solutions, control software is a critical element of the overall printing solution, and yesterday’s announcement also highlights the progress Nano is making toward the distribution of its printer to key early development partners later this summer and early fall.
Ya gotta kick the tires. Late in May and concurrent with an investment event in Tel Aviv, we had our first opportunity to visit Nano Dimension’s Ness Ziona headquarters some 15-20 minutes south of Tel Aviv. The visit was critically important for a number of reasons, perhaps the most important of which is just as simple as kicking the tires of used car in evaluating a potential purchase. Yes, there are real assets at Nano Dimension, and we’ve seen them—leaf through the pictures at the conclusion of this report, and you may see them too. The company is hustling to bring its printers to its first key customers and appears on track to do that later this summer. Ink production, though in apparent small batches, is proceeding in house under the direct supervision of Chief Chemist, Hila Elimelech. Various studies, also in house, continue in developing proper trace printing on different dielectric substrates and modifying printing software to control as many as 278 nozzles in each print head. These adjustments and refinements require time, but as we understand the situation, the company remains on track to deliver sales during the September quarter.
Bio option evolves, but is not expected to present a distraction. Coincident with our visit at the end of May, Nano issued a press release about its collaboration with a privately held stem cell company Accellta to enable the “printing” of human stem cells in the creation of full human tissue. Subsequent press statements signaled the filing for patents around the process that is far more complicated compared to traditional laser or even 3D printing given stem cells must stay alive through the operation—the closest analogy we dredged up comes in Paul Venhoeven’s 1997 sci-fi action thriller, “Starship Troopers,” where an embattled soldier has regenerative tissue “printed” into his gaping wounds. A viewing of same may serve to help wrap your head around the possibilities here if not providing entertainment outside the deluge of current summer thrillers.
Share count adjustment. Review of our financial model raised some questions regarding an accurate count of the company’s outstanding ADRs, which we had previously reflected at a 1.4M lower figure for March. That correction has the effect of reducing the forecast loss per share, which is now properly illustrated in our projections. We imagine the point is moot in regards to the eventual outcome over the foreseeable future as we argue the stock’s performance should be more tightly correlated to Nano’s initial sales growth and the corresponding Street expectations vs. the bottom line figure.

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