A symbolic rebirth – Velo3D undergoes an ownership and leadership change on Christmas Eve
The Atomic Layers: S5E25 (00141)
Atomic Layer of the Day:
Of all the companies from the Western wing of the AM industry, Velo3D had one of the toughest years (at least among those that survived). The essence of this challenging period was the company’s delisting from the NYSE and its move to the less prestigious OTCQX market, coupled with a disastrous stock price correction. A company once valued at $2.24 billion had fallen to just $5 million by September 2024.
Then came the SpaceX transaction. Many assumed Elon Musk’s company would acquire the troubled 3D printer manufacturer as they have been using their 3D printers for years. Instead, Velo3D signed a somewhat confusing licensing agreement worth $8 million, granting SpaceX a non-exclusive license to Velo3D’s technology and support services.
Frankly, Velo3D was among the frontrunners for potential bankruptcy.
But that’s not happening! Velo3D is alive and—at least theoretically—has a great chance to recover!
On December 24, 2024, Christmas Eve, Velo3D announced a financial restructuring and leadership changes at the highest level.
As part of a debt-for-equity swap, 81.7% of secured notes will be canceled. This reduces the company’s debt by approximately $22.4 million, along with $369,000 in accrued interest.
In exchange, Arrayed Notes Acquisition Corp, Velo3D’s primary creditor, will receive 185 million new shares of Velo3D common stock, making it the owner of 95% of the company. The remaining shares will continue to be traded on the OTCQX market.
But that’s not all...
Arun Jeldi, CEO of Arrayed Additive (the parent company of Arrayed Notes Acquisition Corp), will take over as Velo3D’s CEO and join its board of directors. Alongside this change, six members of Velo3D’s current board have resigned, reducing its size from 10 to 5 members. Brad Kreger will remain as the company’s Chief Operating Officer.
We had hints that something was happening at Velo3D as early as mid-December. Matt Kremenetsky reported on December 12 that Velo3D had signed a Forbearance Agreement with its creditors, High Trail Investments ON LLC and HB SPV I Master Sub LLC. This agreement temporarily protected Velo3D from the consequences of failing to meet obligations related to Senior Secured Notes due in 2026.
A filing with the SEC revealed that since September 2024, the company had failed to make partial bond redemptions and interest payments, had not provided required compliance certificates and reports, and had delayed publishing its Q3 2024 earnings.
The agreement with creditors was valid only until December 16, 2024, giving the company just a few days to take critical actions.
Then Brad Kreger acquired additional shares of Velo3D's common stock at no cost, as these were restricted stock units (RSUs) vested due to his ongoing service to the company. By November 18, 2024, Kreger's beneficial ownership increased to a total of 17,387 shares, providing him with significant equity in the company.
Now we know these were merely formalities leading to the current state of affairs. Arrayed Additive now controls Velo3D and begins a new chapter in the company’s history.
But let’s not get ahead of ourselves... This doesn’t mean Velo3D is free of all its troubles. The debt restructuring significantly reduces the company’s financial obligations, allowing it to focus on its operations. The restructuring is a necessary step to restore Velo3D’s financial stability and prepare it for future growth under new leadership. Arrayed Additive brings expertise in precision manufacturing of lightweight magnesium and aluminum components, which could expand Velo3D’s offerings.
Whether Velo3D will ever again be valued at $2.24 billion? I don’t know—I certainly hope so, but that’s not the primary concern at this point. After such a difficult year, which eroded much trust due to the company’s ongoing financial struggles (nobody wants to spend millions on machines from a company on the brink of bankruptcy), rebuilding its former position will be the main challenge in 2025.
Velo3D has always had great potential to become a leading player in the metal AM sector. Somewhere along the way, something was missing to make that final big leap. Instead, in 2024, the company took several steps back...
It will be intriguing to see how Velo3D moves forward from here.
Atomic Layer from the Past:
12-25-2017: WinSun created the world’s first 3D-printed concrete bus stop.
News & Gossip:
Fabbaloo joined the list of AM news websites that covered Nexa3D story.
No more news or gossip for today. The Desktop Metal vs. Nano Dimension update will be covered tommorow.