Murchinson letter to Nano Dimension
$NNDM
Dear member of the board of directors of the Company (the “Board”),
Murchinson Ltd. (collectively with funds it advises and/or sub-advises, "Murchinson" or "we"), write to you as follows:
1. As you know well, we are one of the largest shareholders of Nano Dimension Ltd. (the “Company” or “Nano”).
2. Pursuant to the Israeli Companies Law, any shareholder (including, for sake of clarity, ADS holders) holding at least 5% of the voting rights may demand the Company to convene a special general meeting. This letter is to inform you that, earlier today, we have instructed our prime brokers to commence a conversion process of a portion of our ADSs into ordinary shares, such that, together with ordinary shares we already own, we will become holders of ordinary shares, representing more than 5% of your voting rights.
3. While we do not believe that conversion step is necessary for the exercise of our rights as shareholders under applicable law2 , Mr. Stern’s latest actions and statements as well as, among other things, the timeline of the current pending lawsuits coupled with the unprofessional lack of response by the Board, leave us no choice but to take this further action at this time.
4. The costly (and, in our position, unnecessary) conversion of these ADSs is aimed at protecting the interests of shareholders and provide them with much-needed agency in running the matters of the Company. In particular, once the ordinary shares are obtained, we intend to demand that the Company call a special meeting.
5. At the special meeting, we intend to put, among other things, a proposal to adopt a new article in the Company’s Articles of Association, which will require shareholders approval of any acquisition or equity raise of $50,000,000 or greater in size. A similar proposal has already been submitted by us for the special meeting that was called for December 13, 2023, which the Company had promptly cancelled for questionable reasons.
6. We emphasize that approving any large (including outside of the ordinary course of business) transaction without shareholder approval, certainly between the time of this letter and the special meeting we intend to call, will be blatantly shareholder-unfriendly and in bad faith. Moreover, the Annual General Meeting (the “2023 AGM”) held in September brought to the forefront the extent to which the Board will go in order to prevent shareholder-driven change. As you likely know, Murchinson has brought litigation in Israeli Court around the 2023 AGM, and the Board will be held responsible for these actions. As shown in more detail in Exhibit A to this letter, the Board has also made wrongful representations regarding the outcome of the 2023 AGM, which, among other things, put a heavy shadow on the legitimacy of the Board and its authority (certainly if we prevail in the litigation), including, without limitation, authority to enter into any large transaction.
7. In Mr. Stern’s email to our legal counsel on August 29, 2023, he wrote: “We shall raise $300 M and complete a $599 M acquisitions. And blow your client out of the Ontario lack by dilution them to a consistency of a greeze thinner.” Mr. Stern is likely angry with us for challenging his free reign over the Company and questioning many of his actions. However, making a spiteful deal is hardly a punishment aimed at us alone. No action can only dilute us or only waste our portion of the Company. Putting aside the legal authority to enter into such transaction (as pointed out above), you should easily understand why such threats to hurt all shareholders just for the purpose of getting back at us, can cause all Nano shareholders harm and discomfort and puts a heavy shadow on any future transaction that is not approved by shareholders.
8. We urge you to refrain from taking obstructionist (and illegal) steps as well as closely scrutinize the resources management will seek to allocate to stall calling the meeting and later to oppose our proposals. As you may be aware, Nano spent off-the-charts sums of money to enlist shareholder support in the 2023 AGM, including millions of dollars paid to proxy solicitor Innisfree and PR firm FGS Global (which did not change the shareholders support for the proposals put by us or, as pointed out above, the lawful outcome of the 2023 AGM). You may find it helpful to research past proxy fights in gaining perspective for what is common in terms of payment to proxy solicitors in contested proxy fights. Are Nano shareholders really well-served by spending off-the-charts sums of money in an attempt to entrench the Board?
9. As Mr. Stern so eloquently threatened in his August 29, 2023 email to our legal counsel: “We shall spend all $needed.Andwesurehavethenall”−Mindyouthat“we”referstotheCompany,whose“$” are really the shareholders’ “$$$”...
10. This letter is sent without prejudice and shall not be construed to prejudice any of our claims, rights, arguments, demands, grounds and/or remedies under any contract and/or law. It is hereby further clarified that every claim and right of the undersigned, including those in relation to the pending lawsuits between the parties, and any other matter, are fully reserved.
Sincerely,
___________
Moshe Sarfaty
Source:
https://www.sec.gov/Archives/edgar/data/1643303/000092189523002733/ex991to13da1113459002_112823.pdf