In a transformative move, Velo3D, Inc. (OTCQX: VLDX), a leader in scalable metal 3D printing technology, has announced a significant debt-for-equity exchange that positions Arrayed Notes Acquisition Corp. as the majority equity holder of the company. This strategic transaction, approved unanimously by Velo3D’s Board of Directors, entails the cancellation of approximately $22.4 million, or 81.7%, of its outstanding senior secured notes, along with accrued interest of about $369,000. In return, Arrayed Notes Acquisition Corp. will receive 185,151,333 newly issued shares of Velo3D’s common stock.
Following this exchange, Arrayed Notes will control approximately 95% of Velo3D’s issued and outstanding common stock. The remaining shares will continue to be publicly traded on the OTCQX market. This restructuring not only alleviates a substantial portion of Velo3D’s debt but also enables the company to concentrate on its core operations and customer service.
As part of this restructuring, Arun Jeldi, CEO of Arrayed Additive, Inc., the parent company of Arrayed Notes, will take over as CEO of Velo3D and join its Board of Directors. This leadership shift is accompanied by a significant reduction in the Board’s size from ten to five members. Notable resignations from the Board include figures such as Carl Bass and Ellen Smith, while Brad Kreger will remain as Chief Operating Officer.
Kreger expressed optimism about the future: “With the majority of our senior secured notes cancelled, we are now in a stronger financial position,” he stated. This newfound financial stability allows Velo3D to focus on delivering cutting-edge solutions in large-format metal 3D printing.
The merger between Velo3D and Arrayed Additive is expected to enhance both companies’ capabilities in the aerospace and defense sectors. Jeldi highlighted that Velo3D’s advanced technology aligns well with Arrayed Additive’s focus on lightweight precision manufacturing using magnesium and aluminum alloys. This synergy is anticipated to broaden Velo3D’s service offerings and strengthen its market position in critical industries such as defense and aerospace.
Velo3D has established itself as a pioneer in metal additive manufacturing since delivering its first Sapphire system in 2018. The company’s integrated solutions, including Flow print preparation software and the Assure quality control system, enable clients across various sectors to produce complex parts that were previously deemed impossible to manufacture.
This transaction marks a pivotal moment for Velo3D as it seeks to leverage its innovative technology to capture new market opportunities. The cancellation of a significant portion of its debt not only improves liquidity but also positions the company for sustainable growth amid increasing demand for advanced manufacturing solutions.
Velo3D has been recognized for its contributions to the industry, being named one of Fast Company’s Most Innovative Companies for 2023. The company’s commitment to enhancing manufacturing scalability and supply chain flexibility is evident through its partnerships with major players like SpaceX and Lockheed Martin.
As Velo3D embarks on this new chapter under Jeldi’s leadership, stakeholders will be watching closely to see how these changes will influence its operational strategies and market performance moving forward. The combination of reduced debt obligations and strategic alignment with Arrayed Additive could prove crucial in navigating the evolving landscape of metal 3D printing technology.
