8-K: Velo3D Faces NYSE Delisting Notice Due to Low Market Cap and Stockholders' Deficit

Velo3D received a notice from the NYSE for non-compliance with listing standards due to a low market capitalization and stockholders' deficit.

Summary

• Velo3D has received a notice from the New York Stock Exchange (NYSE) stating that it is not in compliance with continued listing standards.
• The non-compliance is due to the company's average market capitalization falling below $50 million over a 30-day period, and its stockholders' equity being less than $50 million.
• As of July 5, 2024, Velo3D's 30-day average market capitalization was approximately $36.6 million, and its stockholders' deficit was approximately ($45.5) million as of March 31, 2024.
• Velo3D has 45 days to submit a plan to the NYSE outlining how it will regain compliance within 18 months.
• The company's stock will continue to trade on the NYSE under the symbol VLD, but with a .BC designation indicating non-compliance.
• The .BC indicator will be removed when the company regains compliance with all applicable listing standards.
• The notice does not affect the company's reporting obligations with the Securities and Exchange Commission.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the delisting notice and the company's poor financial metrics. The company faces significant challenges in regaining compliance.

Positives

• The company's stock price is currently above the NYSE's minimum $1 requirement.
• Velo3D has an opportunity to submit a plan to regain compliance and avoid delisting.
• The company's stock will continue to trade on the NYSE during the cure period.

Negatives

• Velo3D's market capitalization and stockholders' equity are below the NYSE's minimum requirements.
• The company has a significant stockholders' deficit of approximately ($45.5) million.
• The company's stock will trade with a .BC designation, indicating non-compliance.
• Failure to regain compliance could lead to delisting from the NYSE.

Risks

• There is a risk that Velo3D may not be able to regain compliance with the NYSE listing standards within the 18-month cure period.
• Failure to meet the conditions of the cure period or maintain other listing requirements could lead to delisting.
• The company's financial situation, including its low market capitalization and stockholders' deficit, poses a significant challenge.
• The .BC designation may negatively impact investor confidence and the company's stock price.

Future Outlook

Velo3D intends to submit a plan to the NYSE within 45 days to regain compliance with listing standards within 18 months, but there is no guarantee of success.

Management Comments

• The company intends to submit a plan to the NYSE to regain compliance with the continued listing standards.

Industry Context

The notice highlights the challenges faced by companies in the additive manufacturing sector, particularly those with lower market capitalizations and negative equity. It underscores the importance of financial stability and compliance with exchange listing requirements.

Comparison to Industry Standards

• Many companies in the additive manufacturing sector are still in the growth phase and may not yet have achieved profitability or strong market capitalization.
• Velo3D's situation is not unique, as other companies in the sector have faced similar challenges with maintaining listing requirements.
• Companies like Desktop Metal and Markforged have also experienced volatility in their stock prices and market capitalization, but their current situations are not directly comparable to Velo3D's specific non-compliance issues.
• The specific thresholds for market capitalization and stockholders' equity vary across different exchanges, making direct comparisons challenging.

Stakeholder Impact

• Shareholders may experience a decline in the value of their investment due to the delisting notice and potential delisting.
• Employees may be concerned about the company's future and job security.
• Customers and suppliers may have concerns about the company's long-term viability.
• Creditors may be concerned about the company's ability to repay its debts.

Next Steps

• Velo3D will submit a plan to the NYSE within 45 days to regain compliance.
• The NYSE will review the plan and determine if it is reasonable.
• The company will continue to trade on the NYSE with a .BC designation during the cure period.
• The company will need to execute its plan to regain compliance within 18 months.

Key Dates

Keywords

NYSE, delisting, market capitalization, stockholders' equity, compliance, Velo3D, listing standards, cure period, stock price, deficit