Home Jersey sale 3D printing technology company Fast Radius went public in SPAC, now bankrupt

3D printing technology company Fast Radius went public in SPAC, now bankrupt


Fast Radius has chosen to go public in a merger with a special purpose acquisition company, or SPAC, which sells stock to investors before identifying the company it intends to buy. ‘to buy. Investors can, however, redeem their shares after the announcement of the acquisition target.

That’s what happened to Fast Radius, which expected to raise between $300 million and $445 million. More than 90% of SPAC investors have redeemed their shares, according to its bankruptcy filing. The company ended up raising just $106 million.

“Fast Radius closed the transaction with the express intention of raising additional capital to ensure profitability, as the amount raised was expected to be sufficient to fund operations through the end of the year,” the company said in a statement. his bankruptcy case.

After the SPAC merger on Feb. 4, shares fell 25% to $7.63. They continued to fall, slipping below $1 per share in April. Fast Radius began looking for a buyer in July, and by October it looked like the company had found one. He was negotiating an all-cash deal with a public company that Fast Radius said would have provided a return to investors and repaid its creditors.

Bad timing struck again, when her suitor received an unsolicited takeover bid and withdrew his offer last week.

The company, which laid off 20% of its workforce on November 3, plans to continue operating in the event of bankruptcy as it seeks a buyer. He has approximately $24 million in debt and $6.2 million in cash. It faces a potential cash crisis. In its bankruptcy filing, Fast Radius says its lenders deferred November and December loan payments totaling $5.2 million.

With choppy markets and the Federal Reserve raising interest rates, capital is harder to come by and more expensive.

“We’re likely going to see a wave of corporate bankruptcies because of the rising cost of business capital,” says Clint Francis, a law professor at Northwestern University who specializes in bankruptcy.