Velo3D Faces Challenges as Share Prices Plummet

Velo3D's shares took a significant hit, reaching a 52-week low of 46 cents, resulting in a 26% decline. The company found itself in a situation where it had to enter into securities purchase agreements, both with existing lenders and new institutional investors. The purpose of these agreements was to facilitate the purchase and sale of 36 million shares and accompanying warrants. Investors had the opportunity to buy up to 36 million shares at a rate of 50 cents per share, while also having the option to exercise warrants at an exercise price of 56.5 cents per share. The warrants will remain valid for five years from the date of issuance.

This offering is projected to generate approximately $18 million in proceeds, which will be allocated towards working capital, capital expenditures, and general corporate needs. The completion of this offering is scheduled to take place on or around Friday.

Furthermore, Velo3D has made adjustments to its senior secured notes due in 2026 by collaborating with note holders. As part of the revised agreement, the company will make a cash payment totaling $25 million to repay $20.8 million of the secured notes, along with any accrued and unpaid interests.

Despite these efforts, Velo3D's stock has witnessed a discouraging decline of 70% over the past year.