Shares of Velo3D Inc (NASDAQ:VELO) climbed 9% on Wednesday following an announcement that key insiders converted a large portion of the company’s outstanding promissory notes into common equity.
According to the company statement, Chief Executive Officer Dr. Arun Jeldi purchased a $5 million promissory note from an existing debt holder and then converted that instrument into common stock at a price of $16.38 per share. The conversion price was noted as a premium to the then-current market price.
Separately, Ken Thieneman, who serves on Velo3D’s board and was an existing noteholder, converted a $10 million promissory note into common shares at $10.50 per share, in line with the convertible note’s stated terms.
Combined, those transactions lowered the company’s outstanding debt by approximately 60%, bringing total remaining debt to about $10 million.
In a statement included with the disclosure, Dr. Jeldi said: "My decision to acquire and convert this debt at a significant premium to market reflects my belief in the long-term value of Velo3D. We have substantially deleveraged our balance sheet and are entering fiscal 2026 focused on scaling our platform and delivering results for shareholders."
Velo3D is described in the announcement as a provider of additive manufacturing technology, with a focus on metal AM solutions used in aerospace and defense supply chains.
Context and implications
The conversions were executed by two insiders under differing terms - the CEO purchased and converted a $5 million note at $16.38 per share, while a director converted $10 million at $10.50 per share per the note provisions. The company reported the net effect as a roughly 60% reduction in outstanding debt, leaving an approximate $10 million balance.
The firm’s public statement reiterated a forward-looking emphasis on scaling operations through fiscal 2026 and on delivering results to shareholders, though no new operational metrics or timelines were disclosed alongside the debt conversions.
Market reaction
Investors responded positively to the debt-reduction move, with the stock up 9% on the day of the announcement. The company did not provide further details on the total number of shares issued as a result of the conversions in the announcement referenced here.