DEF 14A: Velo3D Proposes Reverse Stock Split to Maintain NYSE Listing and Increase Share Availability

Velo3D is seeking stockholder approval for a reverse stock split to boost its share price and comply with NYSE listing requirements, while also aiming to increase the number of authorized shares available for future issuance.

Summary

• Velo3D is holding its 2024 Annual Meeting of Stockholders virtually on June 10, 2024.
• The meeting will address the election of three Class III directors, ratification of PricewaterhouseCoopers LLP as the independent accounting firm, and approval of a reverse stock split.
• A key proposal is to amend the company's certificate of incorporation to effect a reverse stock split at a ratio ranging from 1:5 to 1:50, with the exact ratio determined by the board.
• The primary goals of the reverse stock split are to meet the minimum share price requirements for continued listing on the New York Stock Exchange (NYSE) and to increase the number of authorized and unissued shares available for future issuance.
• Stockholders are also being asked to approve the issuance of common stock related to secured notes to comply with NYSE regulations.
• The board recommends voting for all proposals.
• The company is committed to good corporate governance, with a majority of independent directors and comprehensive risk oversight practices.

Sentiment

Score: 6

Explanation: The document is neutral in tone, presenting necessary information for the annual meeting. The reverse stock split proposal indicates financial challenges but is presented as a strategic move to improve the company's position.

Positives

• The reverse stock split aims to maintain the company's listing on the NYSE, which could improve investor confidence.
• Increasing the number of authorized and unissued shares provides flexibility for future capital raising and strategic transactions.
• The company has a majority of independent directors, promoting good corporate governance.
• The virtual annual meeting format increases accessibility for stockholders.
• The board is focused on enhancing diversity and refreshment.

Negatives

• The reverse stock split may not increase the stock price in the long term.
• The reverse stock split could decrease the liquidity of the common stock.
• The reverse stock split may lead to a decrease in the overall market capitalization.
• The reverse stock split may result in some stockholders owning odd lots that may be more difficult to sell or require greater transaction costs per share to sell.

Risks

• The reverse stock split may not increase the stock price over the long term, and the company's stock price may be affected by factors unrelated to the number of shares outstanding.
• Future issuances of common stock may dilute the earnings per share, voting power, and other interests of existing stockholders.
• The reverse stock split may decrease the liquidity of the common stock.
• The reverse stock split may result in some stockholders owning odd lots that may be more difficult to sell or require greater transaction costs per share to sell.
• The reverse stock split may lead to a decrease in the overall market capitalization.

Future Outlook

The company aims to maintain its NYSE listing and increase its financial flexibility through the proposed reverse stock split and stock issuance.

Management Comments

• Bradley Kreger, Interim Chief Executive Officer, cordially invites stockholders to attend the 2024 Annual Meeting.
• The company believes that a virtual stockholder meeting provides greater access to those who may want to attend, and therefore has chosen this over an in-person meeting.
• The virtual approach also lowers costs and enables participation from the global community.

Industry Context

Many companies facing similar stock price challenges have implemented reverse stock splits to regain compliance with exchange listing requirements. This is a fairly common practice, especially for companies in volatile sectors or those undergoing significant transitions.

Comparison to Industry Standards

• Reverse stock splits are a common tool used by companies to maintain listing compliance, with examples including companies like Ocugen Inc. and Farmmi, Inc. who have recently undertaken similar actions.
• The proposed reverse stock split ratio of 1:5 to 1:50 is within the typical range seen in such corporate actions.
• The company's corporate governance practices, including having a majority of independent directors, align with best practices observed in publicly listed companies.

Management Changes

Related Party Transactions

• From October 26, 2021 to November 30, 2023, Ronit Buller, wife of Mr. Buller, our former Chief Executive Officer and Director, was employed at Velo3D as our Vice President of Intellectual Property.
• On November 28, 2023, Ms. Buller, as the owner of R. Buller Law, entered into an Agreement for Legal Services, effective December 4, 2023, to provide the Company legal services related to intellectual property matters.

Stakeholder Impact

• The reverse stock split could impact shareholders by potentially increasing the stock price and maintaining the NYSE listing, but also carries risks of decreased liquidity and market capitalization.
• Employees may be affected by changes in equity compensation plans and potential future capital raising activities.
• The company's ability to secure future financing could impact its relationships with customers and suppliers.

Next Steps

• Stockholders need to vote on the proposals outlined in the proxy statement.
• The Board will determine the exact ratio for the reverse stock split, if approved.
• The company will file the Reverse Stock Split Charter Amendment with the Secretary of State of the State of Delaware, if the reverse stock split is approved.
• The company will hold its 2024 Annual Meeting of Stockholders virtually on June 10, 2024.

Key Dates

Keywords

reverse stock split, annual meeting, NYSE listing, stock issuance, corporate governance, directors, proxy statement, Velo3D