Velo3D (NYSE: VLD) has been among a number of publicly traded 3D printing firms that have attempted to weather the current macroeconomic climate. After posting a challenging financial report for 2023, the metal laser powder bed fusion (PBF) company has announced plans to raise funds through a public offering of common stock and accompanying warrants. The firm’s announcement comes at a time when bolstering its financial reserves is essential for ongoing operations and future expansion.
The “reasonable best efforts” offering, which remains dependent on favorable market conditions, signifies a crucial step for Velo3D as it seeks to inject liquidity into its operations. This move is aimed at generating capital to cover various corporate necessities, with a special focus on enhancing working capital, supporting capital expenditures, and repaying certain debts, including the company’s senior secured notes due in 2026.
The Sapphire XC 3D printer at Valiant’s facility in Lakeland, Florida. Image courtesy of Valiant Products.
The company’s reported total revenue for the trailing twelve months (TTM) ending December 2023 stands at approximately $77.4 million, indicative of the firm’s ability to maintain sales despite economic headwinds. However, the financial statements show a gross profit of negative $26.2 million for the same period, underlining the immediate need for financial reinforcement that the offering could provide. Operating expenses have reached a staggering $106.9 million and net losses are now at $135.1 million, meaning the capital raised through the public offering is not just strategic but vital for Velo3D’s operations, particularly as they look toward repaying debts. The infusion of funds through the sale of common stock and warrants is thus a critical maneuver aimed at recalibrating the company’s fiscal trajectory and shoring up its working capital, which stands at $69.5 million, as it forges ahead in the competitive landscape of high-precision additive manufacturing.
After weathering a year of significant financial challenges and witnessing the departure of its CEO, Velo3D is proactively reorienting its strategy to stabilize and grow its market position. Despite these issues, the company has demonstrated strong potential for a reversal. Since mid-December alone, Velo3D announced bookings totaling $27 million. Additionally, leading global contract manufacturer Mears Machine has acquired two Sapphire XC systems dedicated to the defense and aerospace industries.
With seasoned veteran Brad Kreger at the helm, Velo3D is in the process of reorienting itself. It seems to have anchored itself into the Defense Industrial Base via customers like Ursa Major and Bechtel. As the only PBF system manufacturer of its kind with domestically made lasers, it could become essential to U.S. national security going forward, more or less securing its future in the industry.
A.G.P./Alliance Global Partners is serving as the sole placement agent for the offering, working diligently to ensure the successful sale of securities. Velo3D’s pursuit of this capital raise is conducted under a shelf registration statement on Form S-3, acknowledged by the U.S. Securities and Exchange Commission (SEC). The procedural documentation, including a prospectus supplement and an accompanying base prospectus outlining the offering’s parameters, will be filed with the SEC and made available to prospective investors.