Velo3D, Inc. Enters Debt Amendment Agreement with Existing Note Holder

29 December 2023

Velo3D, Inc. a leading metal additive manufacturing technology company for mission-critical parts, today announced it has entered into a note amendment (the “Note Amendment”) to the Company’s senior secured notes due 2026 (the “Secured Notes”) with the note holders. The Note Amendment was entered into concurrently with the Company’s recently announced registered direct equity offering.

Pursuant to the Note Amendment (A) the Company will make a cash payment to the note holders of $25.0 million to repay approximately $20.8 million of aggregate principal amount of the Secured Notes, together with accrued and unpaid interest (the “Cash Payment”), and (B) effective as of the completion of the Cash Payment, the Secured Notes will be amended to, among other things, (i) remove the requirement to redeem an aggregate of $8,750,000 of principal amount of Secured Notes for a repayment price of $10,500,000, plus accrued and unpaid interest, on January 1, 2024, and (ii) remove the requirement to maintain a minimum of $35.0 million of unrestricted cash and cash equivalents. The Company expects to make the Cash Payment from its existing available cash on or about December 29, 2023.

“Since my appointment to Chief Executive Officer, we have implemented a comprehensive strategy to improve our cash flow and profitability, expand margins, rebuild our backlog and strengthen our pipeline of new business,” said Brad Kreger, CEO of Velo3D. “In addition to expense reductions, we have focused on optimizing our supply chain as well as implemented new sales and customer service strategies that position us well for 2024. Additionally, we have improved our liquidity and strengthened our balance sheet with the support of the secured note holders, who have agreed to amend certain terms of the existing debt, including the schedule of our debt payments. Also, the note holders have demonstrated their support of the Company by agreeing to make a $5 million equity investment in the Company as part of the $18 million registered direct equity offering we announced today. We expect the combination of our operational changes, debt relief and additional equity investment will provide the company with the resources needed to successfully implement and execute our business initiatives and strategic review process, both of which we firmly believe will result in the enhancement of shareholder value.”

A.G.P./Alliance Global Partners acted as exclusive financial advisor to the Company in connection with the Note Amendment.