Metal 3D printer manufacturer Velo3D has completed the strategic review process it initiated in December 2023. The California-based company has now finalized a series of corporate actions that it claims will “position the company for sustainable growth starting in 2025.”
These updates include a debt-for-equity exchange which saw Arrayed Notes Acquisition Corp. acquire 95% of Velo3D’s issued and outstanding common shares. Through the transaction, the Arrayed Additive subsidiary canceled approximately $22.4 million, or 81.7% in principal amount, of its outstanding senior secured notes and 369,000 USD of accrued interest in exchange for 185,151,333 newly issued shares of Velo3D’s common stock.
Following this, Brad Kreger was replaced as Velo3D CEO in December 2024 by Arun Jeldi, CEO of Arrayed Additive, who also joined the company’s Board of Directors. Concurrently, six incumbent board members tendered their resignations.
Moving forward under the ownership of Arrayed Additive, Velo3D will work to grow its position in the metal additive manufacturing market, targeting applications in defense, aerospace, and space. The company has also launched a new go-to-market strategy, which seeks to identify and maximize multiple revenue streams. It will also increase focus on delivering a total solutions-based approach, incorporating both system and parts sales.
The new-look company believes these actions will improve its operational and financial performance, improve its competitive position, and ultimately enable long-term sustainable and profitable growth.
“Completing the strategic review is a significant milestone for Velo3D and I am pleased to be leading Velo3D in the new era of growth,” commented Jeldi. “Our focus remains on providing customers with our industry-leading, large-format metal 3D printing solutions and look forward to working with all of our stakeholders to make the company successful.”
New-look Velo3D targets growth following Strategic Review
Velo3D’s strategic review was initiated back in December 2023. This move saw then-CEO Benny Buller resign at the request of the Board, who named Kreger as his replacement.
The large-format metal 3D printing specialist also announced plans to raise $18 million through a registered direct offering, selling 36 million shares and warrants at $0.50 each, exercisable at $0.565. It entered into securities purchase agreements with an existing lender and new investors to enhance working capital, capital expenditures, and corporate goals.
Additionally, Velo3D announced a cash payment of $25 million to noteholders, repaying approximately $20.8 million of Secured Notes principal and accrued interest. To further strengthen its financial position, it amended the Secured Notes, removing certain redemption requirements and cash maintenance obligations.
Despite these initiatives, the metal AM company continued to face financial challenges. In July 2024, the firm received a noncompliance notice from the New York Stock Exchange (NYSE) after Velo3D’s total market capitalization and stockholders’ equity fell below $50 million over a consecutive 30-day period. The following month, it announced the registration of up to 1,650,000 shares of its common stock. This was linked to “July 2024 Warrants,” connected to an amendment of the company’s senior secured notes due in 2026.
Now, the new-look Velo3D hopes strategic restructuring will bolster its financial position. “We have taken a number of steps to accelerate our path to profitability and execute on a sustainable, long-term business model,” added Jeldi. “While I am very happy with what the Company has accomplished to date, I am much more excited about the future of Velo3D as we embark on our next chapter of growth.”
Velo3D announces Q3 2024 results
Throughout 2024, Velo3D’s P&L performance remained unsteady. In Q1, it reported revenue of $9.8 million, down 63.3% Y/Y from $26.8M in Q1 2023. The gross loss came to -$2.8M, a significant drop from a gross profit of $2.5M reported the year prior.
The following quarter saw a similar downward trajectory, as revenue fell 58.8% YoY from $25.1M to $10.3M. While gross loss continued to underperform at -$2.9M, operating loss showed some signs of recovery. This figure came to -$20.5M, a 20.2% improvement from -$25.7M in Q2’23. At the time, the 3D printer manufacturer announced a number of cost-cutting measures, including an approximately 30% reduction in headcount, as quarterly expenses were reduced by 37% YoY.
Despite this, Velo3D’s latest financial figures for Q3 show little sign of improvement. Revenue came in at $8.2 million, down 65.7% YoY from $24.1M in Q3’23, with a gross margin of 49.4%. The company’s -$22.9 million net loss continued to rise, increasing 33.3% YoY from -$17.1M in the previous year.
Velo3D reported a non-cash gain of $9.2 million on the change in the fair value of warrants and contingent earnout liabilities. However, this was offset by a $10.9 million interest expense and $6.7 million in bad debt expenses. Overall, operating expenses for Q3 2024 were $22.8 million, up 14.6% from $26.7M YoY.
3D printing firms target strategic changes
Velo3D is the latest additive manufacturing firm to enact strategic changes to achieve financial and market growth. Earlier this month, German 3D printing materials company Forward AM altered its strategic strategy in North America. It has partnered with distributor and service provider RP America to ensure ongoing product availability and on-site support for US, Canada, and Mexico customers, bridging gaps left by BASF’s market exit. This collaboration integrates Forward AM’s materials portfolio with on-site engineering assistance and training to strengthen local additive manufacturing capabilities.
Elsewhere, Israeli electronics 3D printer manufacturer Nano Dimension underwent a boardroom reshuffle, which saw Yoav Stern replaced as CEO amid the growing influence of activist shareholder Murchinson Ltd. The decision was made during the company’s Annual General Meeting of Shareholders (AGM), which also saw Michael X. Garrett removed from the Board of Directors. Simultaneously, Ofir Baharav and Robert Pons, nominated by Murchinson, were elected as Directors. Following this, six of Nano Dimension’s incumbent directors, Dr. Yoav Nissan-Cohen, Eitan Ben-Eliahu, Oded Gera, Roni Kleinfeld, Chris Moran, and Georgette Mosbacher, resigned.
This new-look boardroom could see a move away from Stern’s stringent mergers and acquisition efforts, which included a $183 million deal for Desktop Metal and a $115 million agreement for Markforged. Previously, Murchinson published a letter calling these acquisition efforts “overpriced” and “misguided.” The investment management firm has now outlined an opportunity for the new board to “carefully and critically examine … the merits and success of past and present acquisitions.”
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Featured image shows a Velo3D-3D printed turbine engine blade disk. Photo by 3D Printing Industry.
