Metal 3D printer manufacturer Velo3D has received a noncompliance notice from the New York Stock Exchange (NYSE).
The company did not comply with Section 802.01B of the NYSE Listed Company Manual because its average total market capitalization and stockholders’ equity fell below $50 million over a consecutive 30-day period.
As of July 5, 2024, Velo3D’s 30 trading-day average market capitalization was approximately $36.6 million. Its last reported stockholder’s deficit, as of March 31, 2024, was roughly ($45.5) million.
The firm has asserted that the Continued Listing Standards notice will not immediately impact its common stock listing and reporting obligations with the U.S. Securities and Exchange Commission (SEC).
Within 45 days of receiving the notice on July 8, Velo3D will submit a plan to the NYSE outlining the definitive actions the company is taking, has taken, or will take to regain compliance.
If accepted, the company’s stock will be listed and traded on the NYSE during an 18-month ‘cure period.’ This will be subject to compliance with other NYSE continued listing standards and periodic review of progress. If the company is unable to regain compliance, it may find itself delisted.
Velo3D’s ongoing financial challenges
This is not the first time Velo3D has received an NYSE noncompliance notice. In December 2023, the company announced that the NYSE had notified it of noncompliance with Rule 802.01C of the NYSE Listed Company Manual. This pertains to the minimum average closing stock price over 30 consecutive trading days.
To overcome this, the company approved a 1-for-35 reverse stock split of its common stock. Announced last month, the common stock opened for trading on the NYSE on June 13 on a split-adjusted basis under the trading symbol “VLD.” The reverse split reduced the number of shares of outstanding common stock from approximately 297,064,857 shares to roughly 8,487,567 shares.
Ultimately, this decision proved successful in regaining compliance. On June 28, 2024, the NYSE confirmed that Velo3D’s stock price has now risen above the minimum requirement of $1 based on a 30 trading-day average.
Away from NYSE compliance, 2024 has seen Velo3D undergo notable restructuring and leadership changes to improve its financial position. At the close of last year, the company announced that Founder Benny Buller resigned as CEO at the request of the Board of Directors. He was replaced by Brad Kreger, who has undertaken significant operational reforms to bolster Velo3D’s product quality and refine its commercial execution.
Following the leadership change, the firm 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 also entered into securities purchase agreements with an existing lender and new investors. This move was taken to enhance working capital, capital expenditures, and general corporate goals.
Velo3D announced a $25 million cash payment to noteholders, repaying approximately $20.8 million in principal and accrued interest on its Secured Notes. Additionally, its Secured Notes were amended to remove certain redemption requirements and cash maintenance obligations.
Despite these actions, Velo3D continues to face unsteady P&L performance. In its latest financial results for Q1 2024, the company reported revenue of $9.8 million, down 63.3% Y/Y from $26.8M in Q1 2023. However, this represents a significant increase of 441.9% from the $1.8 million it reported in Q4 2023. Additionally, the company’s latest operating loss figure of -$21.4 million is an improvement on the -$24.3 million and -$58.1 million reported in Q1 2023 and Q4 2023, respectively.
3D printing companies face stock exchange challenges
Away from Velo3D, 3D printing service provider Shapeways (SHPW) has previously received notification of NYSE continued listing noncompliance. In 2022, it was announced that the company hadn’t traded above $1.00 over a consecutive 30-day period, infringing NYSE requirements.
The company’s financial woes continued to deteriorate following its noncompliance notice. In February 2024, Shapeways auctioned off Desktop Metal 3D printers worth $5 million. This included its P1 Production System 3D printers, Shop System binder jet 3D printers, BMD 3D printers, powder stations, powder blenders, sintering furnaces, and drying ovens.
Hosted by Heritage Global Partners (HGP), Shapeways had previously listed $4 million worth of Desktop Metal 3D printing technology in October 2023. These efforts failed to resolve the firm’s financial failings. Earlier this month, Shapeways’ bankruptcy was announced, along with the resignation of its executive team.
Elsewhere, voxeljet recently withdrew from the NASDAQ Stock Exchange and terminated its registration with the SEC. By taking these decisive actions, the binder jet 3D printer manufacturer hopes to reduce expenses and strengthen its financial position.
Having faced financial challenges earlier this year, the company initiated a formal review to evaluate “strategic alternatives.” Ultimately, it concluded that the benefits offered by a NASDAQ listing do not justify the costs and time demands of complying with SEC requirements.
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Featured image shows the Velo3D company logo. Image via Velo3D.
