National Research Report Template...estimates for printer sales are conservative, significant deviation from our sales forecast could have negative impact on the company and the share

Please see pages 15-18 for Important Disclosures 1

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Technology

Nano Dimension LTD. November 15, 2016

Ilya Grozovsky

212.417.8219

[email protected]

BUY (NNDM, $6.47)

3D Printing Of PCBs Changes The Whole

Development Process –Initiating With A BUY Rating and $13 PT

Investment Conclusion . We are initiating coverage of Nano Dimension with a BUY rating and $13 PT based on our belief that the company’s disruptive 3D printer and inks

will change the way PCBs are designed and developed. Time to market advantages, intellectual property protection, cost reduction, and innovation should all benefit from

this revolutionary technology. Our DCF analysis yields a value in a range from $12.50 to $13.70 resulting in a price target of $13 for Nano Dimension ADS shares. We believe that Nano Dimension can sell approximately 50 printers in 2017. The company also

plans to sell the ink that the printer uses. We are estimating that in 2017, Nano Dimension generates revenue and adjusted EBITDA of $6 million and a loss of $13

million, respectively. For 2018 we are estimating revenues and adjusted EBITDA of $17 million and a loss of $10 million, respectively. The process of PCB design and prototype manufacturing is slow, expensive, and insecure. The process has changed very little in

the past decades, designs are created in a lab, sent out to a manufacture at great cost (tens of thousands of dollars in cost) and long lead time (it could take weeks), and then

after the actual prototype is returned to the lab if any changes are made (which happens frequently) the process begins again adding cost and more delay. This inefficient system is ripe for change. Rather than take weeks to get a PCB prototype back it takes a few

hours for the printer to produce the PCB in the lab. There is tremendous cost savings by doing it in-house as well as no possible leakage of intellectual property.

Source: Company Reports, National Securities Corporation Estimates

Company Profile

Nano Dimension, headquartered in Israel, develops three dimensional (3D) printers for

Printed Circuit Boards (PCBs), that is electronic circuits, and nano-technology inks. The inks are conductive nano-silver particle inks and insulating nano-polymer inks. Nano Dimension Technologies’ PCB Jet printer system is an inkjet deposition tool for printing

multi-layer circuit boards at home or office. Nano Dimension uses hardware, software, print-head management and nano-chemistry for Research and Development (R&D),

prototyping and custom manufacturing projects.

Ticker NNDM 2015A 2016E 2017E

Latest Price $6.47 1Q -1A -1A NA

Mkt. Cap ($m) $49 2Q -2A -1A NA

Enterprise Value ($m) $63 3Q -2A -1E NA

Fiscal Year End 12/31 4Q -2A -2E NA

Rating BUY Annual ($8) ($5) ($11)

Price Target $13 EV/Adj. EBITDA NM NM NM

Shares Out (mil) 7.6

52-week high $9.99 Revenues $0 $0 $6

52-week low $6.20 EV/Revenues NA 421.3x 11.4x

Avg. Daily Vol (mil) 0.012

*A = Actual

Adjusted EBITDA & Revenues ($M)

$4.00

$4.50

$5.00

$5.50

$6.00

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National Securities Corporation Technology

November 15, 2016 2

The Printed Circuit Board (PCB) is a key component of most electronic devices. With the development of the transistor and the miniaturization of other components manufacturers increasingly used printed circuit boards for many consumer products. Aerospace equipment, flight instrumentation, computers and telecommunication products

as well as defense systems and weapons all began to take advantage of the space saving that a multi-layer circuit board provided. Due to the invention of integrated circuits the

circuit board has continued to shrink in almost every way. Rigid boards and cable applications have given way to flexible circuit boards or combinations of rigid and flexible PCBs. The result of all of these advancements is that the manufacture of printed circuit

boards will be a dynamic and crucial field for many years to come.

Printed Circuit Board prototype manufacturing is ripe for change. The process of design and prototype manufacturing is slow, expensive, and insecure. The process has

changed very little in the past decades, designs are created in a lab, sent out to a manufacture at great cost (tens of thousands of dollars in cost) and long lead time (it

could take weeks), and then after the actual prototype is returned to the lab if any changes are made (which happens frequently) the process begins again adding cost and more delay. This inefficient system is ripe for change.

Nano Dimension 3D printer is a game changer for PCB design labs. The expensive

and slow process to make PCB prototypes is dramatically changed with the advent of the Dragonfly 2020 printer. Rather than take weeks to get a PCB prototype back it takes a

few hours for the printer to produce the PCB in the lab. There is tremendous cost savings by doing it in-house as well as no possible leakage of intellectual property.

Nano Dimension has no sales track record. Nano Dimension is a pre-revenue company with no history of sales of the Dragonfly 2020 printer or inks. To date, the

printer is in a few beta sites with customers, though there have yet to be any actual sales. As a result, there can be no guarantee that the printer will have the customer acceptance

that we are anticipating and the commensurate revenues. While we believe that our estimates for printer sales are conservative, significant deviation from our sales forecast

could have negative impact on the company and the share price.

We believe sales of the Dragonfly 2020 3D printer will begin in 2017. We believe that Nano Dimension can sell approximately 50 printers in 2017. The company also plans to sell the ink that the printer uses. We are estimating that in 2017, Nano Dimension

generates revenue and adjusted EBITDA of $6 million and a loss of $13 million, respectively. For 2018 we are estimating revenues and adjusted EBITDA of $17 million

and a loss of $10 million, respectively.

Initiating coverage of Nano Dimension with a BUY rating and $13 PT based on our

belief that the company’s disruptive 3D printer and inks will change the way PCBs are designed and developed. Time to market advantages, intellectual property protection,

cost reduction, and innovation should all benefit from this revolutionary technology. Our DFC analysis yields a value in a range from $12.50 to $13.70 resulting in a price target of

$13 for Nano Dimension ADS shares.


November 15, 2016 3

INDUSTRY HISTORY

In order to understand what a printed circuit board is, it is helpful to understand the history of the PCB. The PCB evolved beginning in the early 20th century. The first PCB patents for "printed wire" were issued in the early 1900's but PCBs more recognizable to

us first came into use after World War II. In 1925, Charles Ducas of the United States submitted a patent application for a method of creating an electrical path directly on an

insulated surface by printing through a stencil with electrically conductive inks. This is where the name "printed wiring" or "printed circuit" originates from.

The earliest PCB's were made from materials like Bakelite, Masonite, layered cardboard and even thin wooden planks. Holes were drilled into the material and then flat brass

"wires" were riveted or bolted onto the board. Connections to components were usually made by pressing the end of the brass trace onto a hollow rivet and the component's

leads were simply pressed into the open end of the rivet. Occasionally small nuts and bolts were used in place of the rivets. These types of PCBs were used in early tube style

radios and gramophones in the 1920's.

By the 50's and early 60's laminates using different types of resins mixed with all sorts of different materials were being introduced but the PCBs were still single sided. The circuitry was on one side of the board and the components on the other. The advantages of the

PCB over bulky wiring and cables made it a prime choice for new products being brought into the market place. But the largest influence on the evolution of the printed wiring

board came from the government agencies responsible for new weapons and communication equipment. Wire ended components were being used in some of the applications. In the beginning the leads of the components were held in place on the

board by using small nickel plates welded to the lead after it was placed through the hole.

Eventually processes were developed that would plate copper onto the walls of the drilled holes. That allowed circuits on both sides of the board to be connected electrically. Copper

had replaced brass as the metal of choice because of its ability to carry electrical current, relatively low cost and ease of manufacturing.

In 1956 the US Patent Office issued a patent for the "Process of Assembling Electrical

Circuits”. The patented process involved using a base material like melamine to which a layer of copper foil had been securely laminated. A drawing was made of the wiring pattern and then photographed onto a zinc plate. The plate was used to create a printing

plate for an offset printing press. An acid resistant ink was printed onto the copper foil side of the board that was etched to remove the exposed copper leaving the "printed

wire" behind. Other methods like using stencils, screening, hand printing and rubber stamping were also proposed to deposit the ink pattern. Holes were then punched in patterns using dies to match the position of the component wire leads or terminals. The

leads were inserted through the non-plated holes in the laminate material and then the card was dipped or floated on a bath of molten solder. The solder would coat the traces as

well as connecting the leads of the components to the traces.


November 15, 2016 4

Once the plating processes was developed that allowed hole walls to be plated came the first double sided boards. Eventually the inks were being screen printed onto the panels before assembling the boards. Areas that were meant to be soldered were blocked out on

the screens. It helped keep the boards clean, reduce corrosion and oxidation but the tin/lead coating used to coat the traces would melt during the soldering process causing

the mask to flake off.

The increased complexities and densities that were driving the evolution of solder mask were also forcing the development of layers of copper traces laminated between layers of dielectric materials. 1961 marked the first use of multi-layer PCBs in the United States.

The development of the transistor and the miniaturization of other components drew more and more manufacturers into using printed circuit boards for an increasing number of

consumer products. Aerospace equipment, flight instrumentation, computers and telecommunication products as well as defense systems and weapons all began to take advantage of the space saving that a multi-layer circuit board provided.

With the invention of integrated circuits the circuit board has continued to shrink in almost every way. Rigid boards and cable applications have given way to flexible circuit boards or combinations of rigid and flexible PCBs. The result of all of these advancements is that

the manufacture of printed circuit boards will be a dynamic field for many years to come.

Figure 1.

The Printed Circuit Board


November 15, 2016 5

MARKET OPPORTUNITY

PCB market is ripe for a new way of doing business. Today, the research and development process of creating a new PCB is done as such: a R&D lab in the United States designs a PCB on computer aided design/manufacturing software. Once the design

is final, the file is sent to the PCB manufacturers, which are almost all in Asia. These manufacturers need to set up a run for create the PCB; the run will in all likelihood be of a

limited quantity since this is still a prototype. Once manufactured, which can take days or weeks, the prototype PCBs are shipped back to the R&D lab in the United States. This process takes several weeks and costs hundreds of thousands of dollars. Since there are

usually several revisions in the PCB design after the prototype is delivered the process begins again and once again takes several more weeks for revisions and wastes more

time and money. This is the inefficiency that Nano Dimension solves.

This way of producing PCB prototypes (outside of the R&D facility) creates several problems for the developers. The first is the cost which results in less innovation due to

less ability to try different designs, the second, the opportunity for intellectual property (the design of the PCB) to be stolen, the third , the length of time the whole process takes.

The global PCB industry is relatively mature, with a comparatively low annual growth rate

in market size of below 5%. The global market size of PCBs kept increasing from 2009 to 2011. In terms of sales value, the global PCB market size increased from approximately

US$44.7 billion in 2009 to US$63.8 billion in 2013, representing a CAGR of 9.3%. It is estimated that the sales value of the global PCB market will increase from US$66.3 billion in 2014 to US$77.2 billion in 2018, representing a CAGR of 3.9%.

The chart below illustrates the global PCB market size in terms of sales value for the

period indicated.

Figure 2.


November 15, 2016 6

According to CRI Report, the global PCB market is primarily driven by a robust development in the PCB downstream sectors, which in turn drives the PCB market demand. The PCB downstream sectors, including communication and consumer electronics

sectors, have undergone technological advancement combined with an influx of new generation of products. In particular, since new products are introduced with sophisticated

and complex design and technologies in the consumer electronics, communications and automobile sectors, the consumption of PCBs increases in a single unit of products. For example, cloud technology has set up a stage for the development of multi-layered PCBs,

especially of 18 layers, which are applied in servers and network devices. The smart phone market in the emerging countries is another factor to drive the global PCB market.

The developments in the medical equipment market also contributed to the continuously increased demand of PCBs.

Nano Dimension Products

Dragonfly 2020 3D Printer

The Dragonfly 2020 3D printer uses 3D mechanics, advanced inkjet technology,

proprietary nano inks and proprietary software in order to make in-house 3D printed multi-layer PCB prototypes a reality.

The printer deposits two materials, one conductive and one dielectric, in order to build a

complete PCB. The printer uses advanced inkjet print heads that contain hundreds of small nozzles that allow for very exact pico-liter deposition of nanotech inks. Each pass of the print heads deposits a two micron-thick layer of material (dielectric or conductive) at

the exact locations specified by the design file. An additional process cures the material to ensure a durable end product.

Starting with the underside conductive traces, the materials build up to finish with the

topside conductors. The gradual and precise deposition of the two different inks at exact coordinates means that vias and through holes are able to be built up, drop-by-drop,

either as blind, open or complete vias. Through-holes are also created by repeatedly leaving a space at a particular XY coordinate, thereby building surrounding materials up around a void. The dielectric material ends up as a solid piece within which the conductive

traces are positioned at the precise XYZ coordinate specified.

Nano Dimension’s proprietary software, called ‘Switch’ enables the preparation of production files by converting standard PCB Gerber design files, along with drills and

routes, into a 3D printable file. The software also accepts STEP, JPG and Tiff file formats.


November 15, 2016 7

Figure 3.

The Dragonfly 2020 Printer

Source: Company reports

To date, the Dragonfly 2020 printer has shipped to 2 beta customers, one a defense company in Israel and the other is Fathom, based in Oakland, California. Fathom is a

beta customer as well as a go to market partner for Nano Dimension, as it is provides equipment, services and support for 3D printing. We believe that if the beta test

concludes successfully with Fathom it could become a reseller of Nano Dimension’s Dragonfly 2020 printer. We also expect Nano Dimension to add beta testers over the next few quarters and begin commercial sales in the second half of 2017.

Nanoparticle Conductive and Dielectric Inks

Along with the 3D printer, Nano Dimension, manufactures specialty inks that are used by the Dragonfly 2020 3D printer to create the PCB. This proprietary ink, which contains a dispersion of silver nano particles, (nanoparticles are particles between 1 and 100

nanometers in size) is highly complex and assures that it is conductive, controllable and totally customized for the printer and substrate. The complexity revolves around the fact

that for electronic circuits to function properly, properties relating to interference, adhesion, thermal dissipation and flammability have to be engineered into the ink. The company’s ink can be used for both rigid and flexible circuits.

The company also provides conductive inks specifically tailored for use in antennas,

including radio-frequency identification (RFID) technology for a variety of devices including smart cards, various ID products, arrays, etc.

Nano Dimension licenses the ink intellectual property from the Hebrew University of

Jerusalem, which holds 3 patents on the ink. The company’s license agreement is valid


November 15, 2016 8

through April 2029, where Nano Dimension pays royalties of 3% of ink revenues to the Hebrew University as part of the agreement.

Figure 4.

Nano Dimension Inks

Source: Company reports

We believe that users of the Dragonfly 2020 printer will require additional ink beyond the small amount that is included with the initial sale of the printer. We are estimating that

each printer will require approximately $9,000 per ink per quarter.

CUSTOMERS

Nano Dimension current customers are beta testing the printer. We believe that these

beta tests and the corresponding feedback should allow the company to make any necessary tweaks in the printer and ready it for full scale production and sales in the second half of 2017. We are anticipating that the company will ship approximately 25

printers for beta tests prior to commercial availability. We believe that beta testers will be located in both Israel and the United States and last between 6 and 18 months. Upon

completion of the beta tests, we believe that some of the testers will convert to purchases.

In general, we believe that the Dragonfly 2020 printer will be applicable to customers in

the areas of defense, automotive, consumer electronics and many other verticals which

would benefit from in-house PCB production for research and development purposes. Nano Dimension management has indicated that it currently has 2,500 companies on the waiting list with interest in purchasing a Dragonfly 2020. While we do not believe that all

2,500 will be converted to sales, some portion will be and all of this is prior to the product even being commercially available and the corresponding publicity that will bring.


November 15, 2016 9

COMPETITION

We believe that Nano Dimension does not have any direct competitors in the 3D printing space, in that there are no other companies developing 3D printers for in-house PCB printing using nano-conductive and dielectric inks. There are companies that provide 3D

printing services for prototypes using resin polymers or other plastics. Much of the challenge for Nano Dimension will be to convince in-house research and development

groups that changing the normal way they operate (sending out the PCB design to the manufacturer for a small scale run and waiting for the prototype to be returned in a few weeks) is an outdated way of working and costly and to move to the Dragonfly 2020

going forward.

RISKS

Nano Dimension has no sales track record. Nano Dimension is a pre-revenue company with no history of sales of the Dragonfly 2020 printer or inks. To date, the

printer is in a few beta sites with customers though there have yet to be any actual sales. As a result, there can be no guarantee that the printer will have the customer acceptance

that we are anticipating and the commensurate revenues. While we believe that our estimates for printer sales are conservative, significant deviation from our sales forecast could have negative impact on the company and the share price.

Sales of ink could be overstated. We do not have any historical reference for the amount of ink that a Dragonfly 2020 user will need. Since there is no frame of reference for how much a user of the Dragonfly 2020 would require, our estimates for ink revenues

could be overstated. Since we believe that Nano Dimension sales model is heavily reliant on ink sales (the razor blade in the razor and razor blade business model) our revenue

estimates could be overstated if the amount of in required by users is less than we anticipate.

Convincing potential customers could be a challenge. Convincing potential customers to purchase a Dragonfly 2020 could be more of a challenge than we anticipate.

The current way of doing business is to design a PCB in-house and then have the production of the prototype created outside and sent back to the lab. This process is

time-consuming and has other potential drawbacks but convincing customers to change the way they have been working for decades could be more difficult than we anticipate. Any difficulty beyond our expectation could have negative impact on our revenue

estimates.


November 15, 2016 10

MANAGEMENT

Amit Dror is a Co-Founder and has been CEO of Nano Dimension since inception in 2014. Prior to Nano, Amit was co-founded Eternegy Ltd. in 2010 and served as its CEO from 2010-2013. Amit was also co-founded the Milk & Honey Distillery Ltd. in 2012. Prior to

ECI Telecom Ltd., Comverse Technology, Inc., and Eternegy Ltd. Amit has a background that covers technology management, software, business development, fundraising and

complex project execution. Amit is a Merage Institute Graduate.

Sharon Fima, CTO, has been with Nano Dimension since August 2014. Sharon has many years in advanced R&D management positions, and has developed expertise in digital printing technology over nearly 15 years spent in management at HP Indigo as the

Integration Team Manager from 1999 to 2008, and in Xjet as the Production Manager from 2008 to 2009 and as an Integration R&D Manager from 2009 to 2013.

Yael Sandler, CFO, has been with Nano Dimension since June 2015. Prior to working at

Nano Dimension, From 2014 until 2015, Ms. Sandler served as the Group Controller of RealMatch Ltd. From 2011 through 2014, Yael held various positions at Somekh-Chaikin

(KPMG Israel), working with public companies and companies pursuing initial public offerings. Yael earned a B.A. with honors in Accounting and Economics from the Hebrew University of Jerusalem.

FINANCIALS

Nano Dimension revenues are driven by sales of the Dragonfly 2020 printer and ink. The

company will lease its printer to customers during the beta testing period but we anticipate that starting in the second half of 2017 Nano Dimension will sell its printers

outright. We believe that each printer will be sold for $200,000 with reseller partners taking approximately 30% commission. We believe that Nano Dimension can sell approximately 50 printers in 2017. The company also plans to sell the ink that the printer

uses. We believe that each printer will use approximately $9,000 of ink per quarter for the life of the printer. As a result, as illustrated in Figure 5, we believe that the ink

revenues should outweigh the printers revenue over the life of an individual printer (it takes 14 months of ink usage for Nano Dimension to bring in more revenue from ink thank the initial printer). Importantly, we see the crossover, larger portion of company

revenues coming from ink rather than printer sales, happening in approximately 2022.

Nano Dimension operating expenses are currently approximately $3 million per quarter,

we believe that there will be a gradual incremental ramp in these expenses but given the

fact that the company will outsource the manufacture of the printer to Flextronics we don’t not believe that there are significant unanticipated capital expenditures in the near future for Nano Dimension. We are estimating that in 2017, Nano Dimension generates

revenue and adjusted EBITDA of $6 million and a loss of $13 million, respectively. For 2018 we are estimating revenues and adjusted EBITDA of $17 million and a loss of $10

million, respectively.



Figure 5.


VALUATION

Nano Dimension does not currently have any revenues and we do not anticipate the

company generating significant revenues until the second half of 2017 when the product becomes commercially available (after the beat customers are done). Prior to the second

half of 2017, we believe that company will receive some small lease payments from the beta test customers at discounted rates but we do not believe this will be significant. As a result of the early stage of Nano Dimension in its company life cycle, we believe that a

discounted cash flow (DCF) is the most appropriate analysis for valuation (see Figure 6). We believe that our revenue projections in the DCF analysis are sufficiently conservative

as we dramatically decelerate revenue growth starting in 2021. We use a discount rate of 30% which we believe is sufficiently conservative to reflect the early stage nature of Nano Dimension and the road that the company has ahead of it. Our DCF analysis yields a

value in a range from $12.50 to $13.70 resulting in a price target of $13 for Nano Dimension ADS shares.

$-

$20

$40

$60

$80

$100

$120

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Printer & Ink Revenues



Figure 6.

Initiating coverage with a BUY rating and a $13 price target

We are initiating coverage of Nano Dimension with a BUY rating based on our belief that

the company’s disruptive 3D printer and inks will change the way PCBs are designed and

developed. Time to market advantages, intellectual property protection, cost reduction, and innovation should all benefit from this revolutionary technology. We also appreciate the razor/ razor blade relationship with the printer and ink and the predictability and

visibility that that business model gives us going forward.

The stock currently trades at a 50% discount what we believe is its fair market value

based on our DCF analysis, as a result, we are establishing a 12 month price target of $13 per share based on our belief that as Nano Dimension progresses and begins the

commercial sale of the Dragonfly 2020 printer and the corresponding ink sales the discount to fair value that is being applied will narrow.

Operating Summary ($M) Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Dec-24 Dec-25 Dec-26

Net Revenue 0 6 17 31 48 62 73 85 99 112 128

% growth NA NA 212% 78% 57% 28% 18% 16% 16% 13% 15%

EBITDA (5) (11) (10) (6) 2 8 15 18 23 26 33

% of sales NA -195% -59% -21% 5% 13% 20% 21% 23% 23% 26%

Free Cash Flow ("FCF") (5) (11) (11) (7) 2 8 15 18 23 24 30

% of sales NA (197%) (61%) (22%) 4.4% 12.9% 20.2% 20.9% 23.1% 21.4% 23.4%

Total Company Value ($K)

1.5% 2.0% 2.5%

29.5% $13.1 $13.4 $13.7

30.0% $12.8 $13.1 $13.4

30.5% $12.5 $12.8 $13.1

Perpetual Growth Rate

Discount

Rate

Key DCF Input Assumptions

Valuation Date 11/15/2016

Discount Rate 30.00%

Discount Rate Step 0.5%

Perpetual Growth Rate 2.0%

Perpetual Growth Rate Step 0.5%

Tax Rate 10.0%



National Securities Corporation

Nano Dimension Ltd. ACTUAL ACTUAL 2016 ESTIMATE 2017 ESTIMATE ESTIMATE

NNDM --- FYE 12/31 YEAR YEAR Q1A Q2A Q3A Q4E YEAR Q1E Q2E Q3E Q4E YEAR YEAR

2014 2015 Mar-16 Jun-16 Sep-16 Dec-16 2016 Mar-17 Jun-17 Sep-17 Dec-17 2017 2018

Printers Sold 2 4 6 6 8 15 20 49 110

ASP $0 $0 $0 $0 $125,000 $125,000 $62,500 $125,000

Printer Revenues $0 $0.2 $0 $0.3 $0.4 $1.9 $2.5 $5 $14

Ink per printer/ per month 0 0 $3,000 $3,000

Ink Revenues $0 $0 $0 $0 $0.1 $0.3 $0.5 $4

Total Revenues $0 $0 $0 $0 $0 $0.2 $0 $0.3 $0.4 $2.0 $2.8 $6 $17

Cost of Printer Revenues 0 0 1 1 3 7

Cost of Ink Revenues 0 0 0 0 0 1

Cost of Revnues 0 0 0 0 0 0 0 0 0 1 2 3 8

Gross Profit $0 $0 $0 $0 $0 $0 $0 $0 $0 $1 $1 $2 $9

R&D 13 3 0 1 1 1 3 1 1 2 2 5 8

S,G&A 3 3 1 1 1 2 5 2 2 3 3 10 14

Restructuring charges - - - - - - - - -

Stock Based Comp 3 2 1 1 1 1 2 1 1 1 1 2 2

Depreciation & Amort. 0 - - - -

Total Expenses 15 6 2 2 2 3 8 3 3 5 5 15 22

EBITDA (Adjusted) ($18) ($8) ($1) ($1) ($1) ($2) ($5) ($2) ($2) ($3) ($3) ($11) ($10)

Other Income, net (1) 3 (0) 0 0 - (0) - - - - - -

Pretax ($16) ($3) ($2) ($2) ($2) ($2) ($8) ($3) ($3) ($4) ($3) ($13) ($12)

Tax Exp. - - - - - - - - - - - - -

Non-cash portion of tax expense - - - - - - - - - - - - -

One-time Items -

Non-GAAP Net income ($13.8) ($1.1) ($1.3) ($1.2) ($1.2) ($1.9) ($5.6) ($2.4) ($2.3) ($3.2) ($2.9) ($10.8) ($10.3)

Non-GAAP EPS ($US) ($1.49) ($0.04) ($0.03) ($0.03) ($0.03) ($0.05) ($0.15) ($0.06) ($0.06) ($0.08) ($0.07) ($0.28) ($0.26)

Shares Outstanding 11.8 26.6 37.5 37.7 37.8 38.1 37.8 38.3 38.6 38.8 39.1 38.7 39.7

ADS 7.57

Margin Analysis

Printer Margin 1% 1% 50% 50% 43% 50%

Ink Margin 0% 0% 70% 70% 70% 70%

Gross Margin NA NA NA NA NA 40.0% 40.0% 40% 40% 40% 40% 40% 54%

R&D NA NA NA NA NA 667% 1741% 333% 250% 75% 53% 90% 46%

S,G&A NA NA NA NA NA 1000% 3280% 667% 500% 149% 107% 181% 79%

Adj. EBITDA Margin NA NA NA NA NA -1293% -3637% -793% -585% -159% -102% -195% -59%

Pretax Margin NA NA NA NA NA -1627% -5073% -960% -710% -184% -120% -231% -71%

Tax Rate NA 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

Net Margin NA NA NA NA NA -1293% -3729% -793% -585% -159% -102% -195% -59%

Percent Change (Y/Y)

Printer Reveues NA NA NA NA NA NA NA NA NA NA 1567% 3283% 171%

Ink Revenues NA NA NA NA NA NA NA NA NA NA NA NA 680%

Total Sales NA NA NA NA NA NA NA NA NA NA 1777% 3583% 212%

R&D 493% -77% -10% -66% 97% 68% -10% 129% 100% 123% 50% 91% 60%

S,G&A 1109% 2% 358% 184% 11% 19% 71% 70% 68% 186% 100% 103% 36%

EBITDA (Adjusted) NA -56% -10% -50% -32% -18% -30% 114% 96% 165% 48% 98% -5%

Pretax Income NA -81% 144% -12% -226% 32% 145% 61% 71% 115% 38% 68% -4%

Net Income NA -92% 452% -17% -164% 44% 404% 84% 102% 165% 48% 93% -5%

Share Count 353% 126% 84% 54% 32% 15% 42% 2% 2% 3% 3% 3% 3%

EPS NA -97% 200% -46% -149% 25% 238% 80% 97% 159% 44% 88% -7%





Energous Corporation ACTUAL ACTUAL 2016 ESTIMATE

NNDM--- FYE 12/31 YEAR YEAR Q1A Q2A Q3A Q4E YEAR

2014 2015 Mar-16 Jun-16 Sep-16 Dec-16 2016

Assets

Cash & Equivalents 8 6 14

Short Marketable Securities -

Accounts Receivable -

Prepaid Expenses and other current assets 0 1 0

Total Current 8 6 15

PP&E 1 1 1

Restricted Deposits 0 0

Goodwill

Intangible Assets, net - 7

Deferred income taxes, noncurrent

Other assets, net 5 6 -

Total assets 14 14 23

Liabilities

Accounts Payable 0 1 0

Accrued expenses 1 1 1

Deferred Rev -

Derivative Liabilities -

Total Current Liabilities 1 2 2

Other Long Term 0 1 1

Total Liabilities 2 2 2

S.E. 12 12 21

Total L & S.E. 14 14 23


Balance Sheet

($ in millions, except per share data)



IMPORTANT DISCLOSURES:


410 Park Avenue, 14th Floor, New York, NY 10022

REG AC ANALYST CERTIFICATION

The research analyst named on this report, Ilya Grozovsky, certifies the following: (1) that all of the views expressed in this research report accurately reflect his personal views about any and all of the subject securities or issuers; and (2) that no part of his

compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by him in this research report.

IMPORTANT DISCLOSURES

This publication does not constitute and should not be construed as an offer or the

solicitation of any transaction to buy or sell any securities or any instruments or any derivatives of the securities mentioned herein, or to participate in any particular trading strategies. Although the information contained herein has been obtained from recognized

services, and sources believed to be reliable, its accuracy or completeness cannot be guaranteed. Opinions, estimates or projections expressed in this report may make

assumptions regarding economic, industry, company and political considerations, and constitute current opinions, at the time of issuance, which are subject to change without notice.

This report is being furnished for informational purposes only, and on the condition that it will not form a primary basis for any investment decision. Any recommendation(s)

contained in this report is/are not intended to be, nor should it / they construed or inferred to be, investment advice, as such investments may not be suitable for all

investors. When preparing this report, no consideration to one’s investment objectives, risk tolerance and other individual factors was given; as such, as with all investments, purchase or sale of any securities mentioned herein may not be suitable for all investors.

By virtue of this publication, neither the Firm nor any of its employees shall be responsible for any investment decisions. Before committing funds to ANY investment, an investor

should seek professional advice. Any information relating to the tax status of financial instruments discussed herein is not intended to provide tax advice, or to be used by anyone to provide tax advice. Investors are urged to consult an independent tax

professional for advice concerning their particular circumstances. Past performance should not be taken as an indication or guarantee of future performance, and no representation

or warranty, either expressed or implied, is made regarding future performance.

National Securities Corporation (NSC) and its affiliated companies, shareholders, officers,

directors and / or employees (including persons involved with the preparation or issuance of this report) may, from time to time, have long or short positions in, and buy or sell the securities or derivatives (including options) thereof, of the companies mentioned herein.

One or more directors, officers, and / or employees of NSC and its affiliated companies, or independent contractors affiliated with NSC may be a director of the issuer of the

securities mentioned herein. NSC and / or its affiliated companies may have managed or



co-managed a public offering of, or acted as initial purchaser or placement agent for a private placement of any of the securities of any issuer mentioned in this report within the last three (3) years, or may, from time to time, perform investment banking or other

services for, or solicit investment banking business from any company mentioned in this report.

This research may be distributed by affiliated entities of National Securities Corporation (NSC). Affiliated entities of NSC may include, but are not limited to, vFinance Investments, Inc., National Asset Management and other subsidiaries of our parent

company, National Holdings Corporation.

The securities mentioned in this document may not be eligible for sale in some states or

countries, nor be suitable for all types of investors; their value and the income they produce if any, may fluctuate and/or be adversely affected by exchange rates, interest

rates or other factors. Furthermore, NSC may follow emerging growth companies whose securities typically involve a higher degree of risk and more volatility than the securities of more established companies. This report does not take into account the particular

investment objectives, financial situation or needs of individual investors. Before acting on any advice or recommendation in this material, the investor should exercise independent

judgment as to whether it is suitable in light of his/her particular circumstances and, if necessary, seek professional advice. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express

or implied, is made regarding future performance.

Additional information relative to securities, other financial products, or issuers discussed

in this report is available upon request. Neither this entire report, nor any part thereof, may be reproduced, copied or duplicated in any form or by any means without the prior written consent of National Securities Corporation. All rights reserved. NSC is a member of

both the Financial Industry Regulatory Authority (FINRA) and the Securities Investors Protection Corporation (SIPC).

For disclosures inquiries, please call us at 1-800-417-8000 and ask for your NSC representative, or write us at National Securities Corporation, Attn. Richard Cohen -

Research Department, 410 Park Avenue, 14th Floor, New York, NY 10022, or visit our website at www.nationalsecurities.com

Research Disclosures Legend

Relevant Disclosures: 1, 2, 4

Affiliates of National Securities Corporation have a financial interest in the securities of the subject company as follows: long common stock.

1 National Securities (NSC) is a market-maker in the securities of the subject company

2 In the past twelve (12) month period, NSC and / or its affiliates have received compensation for investment banking for services from the subject company

3 In the past twelve (12) month period, NSC and / or its affiliates have received

compensation from the subject company for services other than those related to investment banking



4 In the past twelve (12) month period, NSC was a manager or a co-manager of a public offering of one or more of the securities of the issuer

5 In the past twelve (12) month period, NSC was a member of the selling group of

a public offering of the security (ies) of the issuer 6 One or more directors, officers, and / or employees of NSC and / or its affiliated

companies is / are a director (s) of the issuer of the security which is the subject of this report

7 NSC and / or its affiliates expects to receive or intends to seek compensation for

investment banking services from the subject company at some point during the next three (3) months

8 A research analyst or a member of his / her household has a financial interest in the securities of the subject company as follows: a) long common stock; b) short common stock; c) long calls; d) short calls; e) long puts; f) short puts; g) long

rights; h) short rights; i) long warrants; j) short warrants; k) long futures; l) short futures; m) long preferred stock; n) short preferred stock

9 As of the end of the month immediately preceding the date of publication of this report or the end of the prior month if the publication is within ten (10) days following the end of the month, NSC and / or its affiliates beneficially owned one

percent (1%) or more of any class of common equity securities of the subject company.

10 Please see below for other relevant disclosures

Shares of this security may be sold to residents of all 50 states, Puerto Rico, Guam, the US Virgin Islands and the District of Columbia.

*Investment banking services provided in the previous 12 months

MEANING OF RATINGS:

BUY: the stock is likely to generate a total return of at least 10% over the next 12 months and should outperform relative to the industry.

NEUTRAL: the stock is likely to perform in-line with the industry over the next 12 months.

SELL: the stock is likely to underperform (from a total return perspective) relative to the industry over the next 12 months.

NR: Not Rated

SP: Suspended

Investment Banking*

Rating # % # %

BUY 26 53.1% 6 12.2%

NEUTRAL 22 44.9% 3 6.1%

SELL 1 2.0% 0 0.0%

Distribution of Ratings



Charts -NNDM

Source: Capital IQ.

NNDM Date Rating Price Target

Initiation 11.15.16 BUY $13.00

$4.00

$4.50

$5.00

$5.50

$6.00

$6.50

$7.003

/7/2

01

6

3/2

1/2

01

6

4/4

/20

16

4/1

8/2

01

6

5/2

/20

16

5/1

6/2

01

6

5/3

0/2

01

6

6/1

3/2

01

6

6/2

7/2

01

6

7/1

1/2

01

6

7/2

5/2

01

6

8/8

/20

16

8/2

2/2

01

6

9/5

/20

16

9/1

9/2

01

6

10

/3/2

01

6

10

/17

/20

16

10

/31

/20

16

$10.00

$9.00

$8.00

$7.00

$6.00

$5.00

Documents

National Research Report Template...estimates for printer sales are conservative, significant deviation from our sales forecast could have negative impact on the company and the share