On Aug. 18, Nano Dimension (NASDAQ:NMDM) issued its second-quarter earnings, indicating it had $1.397 billion in cash on its balance sheet. But based on my calculations, using info from the release, NNDM stock now has a market value of $1.537 billion. This is $140.087 million or just $10% over its cash balance. It might possibly also mean that its underlying business is undervalued.

The problem is this Israeli company failed to indicate to its shareholders how many shares are outstanding right now. This is important, since the company raised a lot of capital in the past several months, as I indicated in my last article on it. No one really knows, other than management, how many shares are actually outstanding, and how many warrants have been exercised.

I can give your my best educated guess below, and also let you know what I think the business might be worth.

Calculating the Cash Per Share for NNDM Stock

For example, on May 10, NNMD indicated on page 2 of an F-3 filing with the SEC that it had 256,489,283 ADSs (American Depository Shares) outstanding. It also said that the ADSs represent ordinary shares on a 1 for 1 basis. This implies that at Wednesday’s closing price of $5.65 per share, NNMD’s market value is $1,449 million (i.e., $1.45 billion).

But that does not jive with the earnings that has just become public. I calculated this by dividing the net loss in million dollars by the net loss per share.

Here is how that works. For Q2 Nanao Dimension reported that its net loss was $13.602 million (in the Income Statement). Right below that it says that the “Basic loss per share” was $0.05, or 5 cents per share. So if we divide $13.602 million by $0.05 we get the implied number of shares for the basic loss: 272.04 million shares outstanding.

But this is 13.55 million more shares than the May 10 number of 258.489 million, or 5.24% higher. Where did those extra shares come from? Since the company did not do another capital raise, one way the share count could have risen was exercised warrants that were “in-the-money.” Another way was from the issuance of shares for acquisitions.

American vs. Israeli Disclosures

So, you can see why it is so important that Nano Dimension starts to provide exact share counts. In fact, Nano Dimension did not even provide a “diluted” earnings per share number. This is normally required of any American company.

But remember this is an Israeli ADR and they are not required to file a 10-Q on a quarterly basis. American companies have to fully disclose their shares outstanding not only on the balance sheet date but also on the date the document was prepared to be filed. In addition, they have to issue the “diluted” earnings, which incorporate any warrants that could be exercised.

Lastly, Nano Dimension did not provide a cash flow statement. All U.S. companies have to provide this, even though it is not audited, on a quarterly basis. That way we can see what the company did with its cash. Until Nano does this, we will be in the dark on what is going on with its actual cash burn.

What the Business Is Worth

So, based on 272.04 million shares outstanding, its $1.397 billion cash balance works out to $5.135 in cash per share. That is 90.88% of the $5.65 price at which NNDM stock trades. The difference must be what the market thinks the underlying 3d printing businesses and technology is worth.

Recall that we pointed out above that the market value today with the higher share count is $1.537 (i.e., 272.04 m x $5.65 per share) billion. If we subtract the cash balance of $1.397 billion, this leaves a value of $140 million. So is its 3D business worth this amount?

This is hard to say. Revenue this quarter was just $811,000. This was supposed to include two new acquisitions that the company paid $67.5 million for, according to my calculations (see my previous article).  In other words, the market is still overvaluing the acquisitions by ascribing them a value of $140 million, vs. the $67.5 million that Nano paid for them.

Since they didn’t apparently produce any revenue yet, this seems to be at least $72.53 million too much. That works out to 26.66 cents per share that should be deducted from the $5.65 price today. In other words, even with the huge cash per share, the stock is not worth more than $5.38 per share, or 5% lower.

What to Do With NNDM Stock

Most investors should just wait for NNDM stock to fall well below (at least 20% below) its cash per share of $5.135. That will give the defensive investor a margin of safety, given the issues with the company’s disclosures, its long-term business value, and its cash burn.

This works out to a target price of $4.11 per share. The astute defensive investor will wait for this discount before wading into NNDM stock.

On the date of publication, Mark R. Hake did not hold any position in any of the securities mentioned in the article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Mark Hake writes about personal finance on mrhake.medium.com and runs the Total Yield Value Guide which you can review here.