Murchinson Ltd., which holds approximately 7.4% of the outstanding shares of Nano Dimension Ltd. (NASDAQ: NNDM), has publicly opposed Nano Dimension's non-binding term sheet with Infinite Epigenetics to form a publicly traded, AI-powered health and diagnostics company.

The Toronto-based investment firm raised several questions about the proposed transaction, including whether it effectively transforms Nano Dimension into a special purpose acquisition company (SPAC), despite CEO Dave Stehlin previously stating the company is "absolutely not a SPAC." Murchinson noted that unlike a traditional SPAC, Nano Dimension shareholders would not appear to have the option to redeem their shares for cash.

Murchinson also questioned a termination fee it described as prohibitive to Nano Dimension, stating that shareholders could cost the company as much as $10 million by rejecting the transaction. The firm also raised concerns about "specific performance" and "best efforts" provisions included in the term sheet.

The firm noted that retired General Michael X. Garrett is listed as an advisor to Infinite Epigenetics and previously served on Nano Dimension's board when it approved the acquisition of Desktop Metal, a deal Murchinson characterized as having destroyed hundreds of millions of dollars of the company's capital.

Murchinson said Nano Dimension's stock declined 15% following the announcement of the proposed transaction, which the firm described as a signal from shareholders that the deal is value-destructive. The firm also argued the proposed pivot is inconsistent with the "razor and blades" business model tied to 3D printing that was presented to investors when Nano Dimension raised capital through stock issuances.

Murchinson stated it intends to continue objecting to the proposed transaction and called on the Nano Dimension board to provide direct answers to shareholders. The firm's statement was issued as a press release.