Following the announcement of the immediate termination of a $2 million stock exchange agreement and its partnership with HUMBL, high-power blue laser light source manufacturer NUBURU has once again announced its latest strategic blueprint. Through specific understanding, after this strategic update, NUBURU's business model will cover two collaborative key business lines, with a focus on defense and security, advanced technology, and growth plans.
The direct reason for NUBURU terminating its cooperation with HUMBL (Latin American market distribution) is its strategic priority adjustment. The previous cooperation with HUMBL aimed to expand the civilian market, but the current international trade environment is turbulent, such as the US China tariff war leading to rising supply chain costs and increased uncertainty in exploring the Latin American market. In contrast, orders in the defense sector are more stable and less affected by geopolitical fluctuations. In addition, among NUBURU's $309 million backlog of orders, defense customers account for over 80%, and the profit margin in this field is higher than that of the industrial market, indicating that resource allocation is in line with financial optimization logic.
According to relevant data, NUBURU's blue light laser products do not have a price advantage compared to competitors. Turning to the high barrier defense field can avoid price wars in the civilian market, while utilizing technological reusability, such as the application of blue light lasers in 3D printing and directed energy weapons, can create differentiation advantages. Therefore, NUBURU's shift in core focus towards the defense and security market is currently seen as a more effective strategy for the company's "blood recovery".
In February of this year, NUBURU signed a strategic commitment letter and reached a strategic deal with a private equity investment group, officially launching a deep layout in the field of defense and security. This transformation plan includes capital restructuring, multiple acquisitions, advanced technology licensing, and the introduction of a management team with professional knowledge in related new business areas. The acquisition will be carried out in two stages:
In the first stage, acquire 20% equity and technology license with $1.5 million in cash and $23.5 million in five-year notes (interest rate of 10%) to quickly enter the target market; In the second stage, shareholder approval is required to acquire additional equity by issuing more than 20% of the company's already issued ordinary shares as part of the purchase price, ultimately achieving control over the target entity and further integrating resources.
It is understood that NUBURU is revitalizing its blue light laser technology business unit, working closely with the previous management team to develop new strategic plans specifically to meet the needs of the defense sector and other vertical applications with synergies.
The recently signed joint research and development agreement indicates that NUBURU is committed to applying its innovative laser solutions to the defense field. At the same time, expanding the scope of technology reuse and reducing research and development costs through technology licensing (such as providing permanent royalty free licenses to partners). The focus of this strengthened research and development will also explore the vertical application of this technology. In the future, NUBURU will combine its own laser technology with industry insights into the acquisition target to form a "hardware+software+service" closed loop.
As part of its acquisition plan, NUBURU is completing the acquisition of defense and security companies as planned. After the completion of the first round of acquisitions, NUBURU plans to establish a center focused on defense and security, dedicated to providing cutting-edge products customized for defense applications, while expanding its powerful security solutions through a software as a service (SaaS) model to effectively meet the industry's regulatory requirements for operational resilience. It is expected that this acquisition will contribute over $50 million in revenue to NUBURU by 2025.
In addition to promoting acquisition cases and focusing on the defense and security track, NUBURU is also continuously advancing two other levels of transformation plans. In NUBURU's announced transformation plan, emphasis is placed on adopting high-end technologies including artificial intelligence and robotics, as well as innovative solutions that can support the company's two core business lines.
As part of this plan, NUBURU has entered the world's fastest-growing artificial intelligence industry and established a strategic partnership with the NexGen AI Alliance network under COEPTIS. NexGen is a provider of artificial intelligence and robotics solutions. NextGen's advanced platform utilizes complex artificial intelligence algorithms and data analysis to optimize marketing strategies and B2B sales processes, and provide customer conversion efficiency. This will enable NUBURU to achieve a broader goal of cultivating an ecosystem where technology becomes a catalyst for growth and innovation.
In addition, NUBURU has made significant strategic investments in Supply @ ME Capital. SYME is a fintech platform that focuses on providing inventory monetization solutions for manufacturing and trading companies. With the evolution of global trade dynamics and regional supply chains, this will enable NUBURU to continue strengthening its operational framework to support the working capital needs of its two key business lines, especially inventory management, to support the long-term delivery needs of subsequent defense orders, which can alleviate the cash flow pressure caused by the long payment cycle of defense contracts.
In addition, SYME platform customers can cross sell with the Defense and Security Center, especially the SaaS solutions that NUBURU can provide after the acquisition.
In addition to highlighting the two major business lines, this strategic update also revealed how NUBURU will address the "historical legacy" debt issues in the future.
The "historical legacy" issue mainly concerns the outstanding payables of the previous management and the enhancement of the company's position among preferred shareholders, which is also a key part of NUBURU's major transformation plan.
At the beginning of the year, NUBURU, which was deeply embroiled in the compliance crisis of the New York Stock Exchange, reached two agreements with SFE Equity Investments SARL and Liqueous LP. The first agreement reached with SFE will provide funding for the company's 12-month operations in exchange for certain governance changes. These changes include Ron Nicol's resignation, the appointment of Alessandro Zamboni as chairman, and the restoration of Matteo Ricchelbuono's directorship.
The second agreement reached with Liqueous LP will provide NUBURU with three payments of $1 million and a payment of $500000. These payments depend on whether NUBURU continues to fulfill the previous financing arrangements and other conditions reached with Liqueous.
Subsequently, NUBURU announced the cancellation of 100% long-term debt and the introduction of private equity capital to reduce debt ratios, reserve financing space for subsequent acquisitions, and improve financial flexibility.
The transformation of NUBURU is essentially a test of its ability to reuse technology. Although its proud blue light laser has efficiency advantages in processing fields such as high reactive materials, it is destined to retreat from the civilian market in the face of cost advantages from peers. Although turning to the field of national defense can temporarily avoid price wars, it also enters a more brutal arena. The strong policy orientation of military procurement, long certification cycles, and almost obsessive requirements for supply chain security are all testing the commercial resilience of this technology company.
This transformation is destined to be accompanied by huge controversy. How much of NUBURU's backlog of 309 million orders can withstand fluctuations in the defense budget? Does cooperation with private equity pose a risk of losing control? Further observation is needed.
Source: OFweek
