Over the course of the week so far, a number of companies have come into the news cycle at one point or another, and one of those was Velo3D (OTC: VLDX). On December 24, the company hit the news cycle after it made an announcement with regards to a debt-for-equity exchange. Here’s a closer look at the development.
Debt-for-Equity Exchange Deal
The company announced that as per the provisions of the deal, $22.4 million, which made up 81.7% of its principal amount out of its outstanding senior secured notes, in addition to $369,000 of the accrued interest in the notes, would be cancelled. The debts, held by Arrayed Notes Acquisition Corp, would be cancelled, and in exchange, Velo3D would issue 185,151,333 shares of its common stock.
Key Details
However, it was also revealed that the holder would continue to hold $5 million worth of the outstanding senior secured notes after the completion of the transaction. After the execution of the transaction, the holder will have a holding of 95% of the issues and outstanding common stock of Velo3D. The transaction was a particularly important one for the company since it improved the debt obligations of Velo3D to a significant degree.
CEO Quote
Arun Jeldi, CEO of Arrayed Additive, Inc., the parent company of the Holder, will be appointed as CEO of Velo3D and as a member of Velo3D’s Board of Directors. In connection with the exchange transaction, Mr. Carl Bass, Ms. Ellen Smith, Ms. Gabrielle Toledano, Mr. Matthew Walters, Mr. Benyamin Buller, and Mr. Darryl Porter have resigned from Velo3D’s Board of Directors and, if applicable, all committees of the Board of Directors on which they serve. Velo3D’s Board of Directors will be reduced from 10 to 5 members upon the closing of the exchange transaction. Brad Kreger will remain with the company as its chief operating officer.
