Australia-headquartered AML3D (ASX: AL3) is making headway into the United States market with strategic expansion plans and a fresh capital infusion. The company, specializing in advanced wire arc additive manufacturing (WAAM) equipment, announced an A$3.9 million ($2.6 million) capital raise to establish a manufacturing hub in Ohio, a move to expand its footprint in the U.S. market, particularly targeting the defense sector.
AML3D’s move into the U.S. comes on the heels of securing over $10 million ($6.6 million) in contracts from the U.S. defense sector. The Ohio facility is expected to become a key base for AML3D’s U.S. operations, facilitating its growth and supporting its ambitious strategy to capture a larger market share.
To fund the expansion, AML3D is launching a non-renounceable rights issue on a 1:3 basis to raise up to A$3.9 million at A$0.05 ($0.03) per share. This capital-raising initiative will allow existing shareholders, particularly those in Australia and New Zealand, to buy additional shares of the company. For every three shares a shareholder currently owns, they have the right to purchase one new share at A$0.05. However, this right cannot be sold or given to someone else; shareholders must either use it to buy more shares or let it expire.
AML3D President of U.S. Operations, Pete Goumas. Image courtesy of AML3D.
Scheduled to open on April 11, 2024, the offer was initially set to be priced lower than the current market value, aimed at benefiting current shareholders. While the stock price was A$0.07 from February 27 to April 3, 2024, it has since dropped to A$0.05 on April 4, aligning with the offer price. By April 8, the stock price slightly increased to A$0.055, making the offer less of a discount compared to earlier market prices.
Nonetheless, the capital raised will be used to expand AML3D’s manufacturing capabilities and advance research and development efforts, reinforcing the company’s competitive edge in WAAM technology. A significant part of this investment will go towards establishing the U.S. headquarters and manufacturing hub in Ohio, a state rapidly attracting 3D printing businesses and innovation.
Under the leadership of Pete Goumas, the newly appointed President of U.S. Operations, the Ohio manufacturing site will not only house AML3D’s U.S. headquarters but also serve as a production and operational base. This setup will increase AML3D’s capacity to manufacture its proprietary ARCEMY advanced manufacturing systems, perform alloy testing, perform prototype contracts, and manage local sales and operations. Following the capital raise, AML3D plans to rapidly scale up its U.S. employee base to meet the increasing demand for advanced manufacturing technology solutions.
AML3D Managing Director Sean Ebert commented on the scale-up strategy and the anticipated impact of the capital raise: “In the full year 2023, the first year of AML3D’s US scale-up strategy, the company secured roughly $11.9 million in U.S. defense contracts alone, and we continue to see surging demand in the U.S. for our technology. The completion of this capital raising will provide the funds to establish a manufacturing and national sales team in Ohio to ensure we can take full advantage of this surging demand.”
Furthermore, Ebert explained that the Ohio facility would not only ensure the company is well positioned to continue winning U.S. defense contracts but also hopes it will become a springboard into other U.S. manufacturing sectors, including marine, oil and gas, and aerospace.
“A secondary but important use of the funds to be raised is for investment to continue to develop our software and technology,” went on Ebert. “Our success to date has been built around AML3D’s market-leading Wire Arc Additive Manufacturing solutions meeting the needs of the U.S. defense sector, particularly the U.S. Navy’s submarine industrial base. The continued investment in our technology is designed to maintain that competitive advantage, to drive growth, and create long-term value for our existing and new shareholders.”
AML3D Arcemy printer. Image courtesy of AML3D
Moreover, AML3D has already been establishing a strong operational presence in the U.S. with its ARCEMY X-Edition 6700, now operational at the U.S. Navy’s Center of Excellence in Danville, Virginia. The installation of an ARCEMY 6700 system in Danville falls within AML3D’s scale-up strategy in the U.S. This move not only improves AML3D’s operational capacity but also aligns with the U.S. Department of Defense’s objectives to adopt advanced manufacturing technologies that will strengthen its defense supply chains.
Bringing the ARCEMY X-Edition 6700 online has triggered the final payment of the A$1.1 million ($726.000) order, which was placed through AML3D’s reseller, Philips Corporation. This milestone not only means the culmination of a significant order but also highlights AML3D’s successful scale-up in the U.S., having secured over A$12 million ($7.9 million) in orders in 2023.
Relying on both existing cash and proceeds from the rights issue, AML3D will fund the establishment of its U.S. headquarters and manufacturing facility, aiming to capitalize on the demand for its advanced manufacturing technology. Approximately A$500,000 million will be invested in improving AML3D’s WAAM and ARCEMY platform software. The balance of the funds from the rights issue will support working capital, accelerate growth opportunities, and cover offer costs, setting a solid foundation for AML3D’s future growth and expansion in the U.S.