UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________ FORM 10-Q _____________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ to ____ Commission File Number: 001-39757 ______________________________ Velo3D, Inc. ____ ...

Revenue and Growth - Revenue for Q3 2025 was $13.6 million, an increase from $8.2 million in Q3 2024, representing a 66% year-over-year growth[4]. - The company has a backlog of $21.1 million as of September 30, 2025, with expectations to achieve revenue between $50 million and $60 million for the full year 2025[4][13]. - Revenue for the three months ended September 30, 2025, was $13,640,000, a 65.5% increase from $8,247,000 in the same period of 2024[23]. Profitability and Loss - Non-GAAP net loss for Q3 2025 was $9.2 million, compared to a loss of $14.5 million in Q3 2024[11]. - Net loss for the three months ended September 30, 2025, was $(11,825,000), compared to $(23,125,000) for the same period in 2024, representing a 48.9% improvement[25]. - The company reported a gross profit of $433,000 for the three months ended September 30, 2025, compared to a gross profit of $4,071,000 in the same period of 2024[29]. - Adjusted EBITDA for the three months ended September 30, 2025, was $(7,251,000), an improvement from $(9,737,000) in the same period of 2024[25]. - Net loss for the nine months ended September 30, 2025, was $50,992, compared to a net loss of $51,611 in the same period of 2024[33]. Operating Expenses and Management - Operating expenses for Q3 2025 were $11.1 million, down from $22.9 million in Q3 2024, indicating improved cost management[10]. - Total operating expenses for the three months ended September 30, 2025, were $11,063,000, down from $22,947,000 in the same period of 2024, a reduction of 51.7%[27]. - Research and development expenses for the three months ended September 30, 2025, were $3,042,000, down from $4,438,000 in the same period of 2024[27]. - The company incurred stock-based compensation of $9,106 in 2025, down from $13,041 in 2024[33]. Cash and Assets - Cash and cash equivalents increased to $11,842,000 as of September 30, 2025, compared to $1,212,000 as of December 31, 2024[31]. - Total assets as of September 30, 2025, were $93,899,000, up from $89,180,000 as of December 31, 2024[31]. - Total cash and cash equivalents and restricted cash at the end of the period was $12,465, significantly up from $2,437 in 2024[33]. - Cash flows from operating activities resulted in a net cash used of $19,590 for 2025, an improvement from $30,465 in 2024[33]. - Cash and cash equivalents increased to $11,842 in 2025, compared to $1,637 in 2024[33]. Strategic Developments - New customers accounted for more than 9% of Q3 2025 bookings, with 48% of bookings coming from the Space and Defense sector[5]. - The company signed agreements valued at $6 million to develop copper nickel alloy for U.S. Navy ship repairs, enhancing its strategic partnerships[5]. - Velo3D achieved AS9100D certification for its Rapid Production Solution Quality Management System, affirming compliance with stringent aerospace standards[5]. - The company expects to achieve EBITDA positivity in the first half of 2026, supported by disciplined cost management and targeted investments[4][13]. - The company anticipates greater than 30% gross margin in Q4 2025 as operational efficiencies improve[13]. Liabilities and Financing - The company had total liabilities of $63,743,000 as of September 30, 2025, compared to $49,516,000 as of December 31, 2024[31]. - The company raised $15,000 from secured convertible notes and $20,125 from the August 2025 Offering[33]. - The net cash provided by financing activities was $32,323 in 2025, compared to $958 in 2024[33]. - The company experienced a loss on warrant cancellation amounting to $11,357 in 2025[33]. - The company reported a gain on fair value of warrants of $1,044 in 2025, contrasting with a loss of $31,910 in 2024[33].

Core Points - Velo3D, Inc. announced a public offering of 5,833,333 shares at $3.00 per share, aiming for gross proceeds of approximately $17.5 million [1] - The company plans to use the net proceeds for working capital, capital expenditures, and general corporate purposes [1] - Trading of Velo3D's common stock is expected to commence on the Nasdaq Capital Market under the ticker "VELO" on August 19, 2025 [1] Offering Details - Lake Street Capital Markets, LLC is the sole book-running manager for the offering [2] - The underwriters have a 30-day option to purchase an additional 875,000 shares at the public offering price [3] - The offering is expected to close on or about August 20, 2025, subject to customary closing conditions [3] Regulatory Information - A Registration Statement on Form S-1 was declared effective by the SEC on August 18, 2025 [4] - The offering is being made only by means of a prospectus that is part of the effective registration statement [4] - Trading of the company's common stock under the symbol "VLDX" on the OTCQX was suspended on August 18, 2025 [4] Company Overview - Velo3D specializes in metal 3D printing technology, focusing on additive manufacturing for high-value metal parts [6] - The company has developed solutions that allow for greater design freedom, enabling the production of mission-critical parts in various industries [7] - Velo3D's integrated solution includes Flow print preparation software, the Sapphire family of printers, and the Assure quality control system, powered by the Intelligent Fusion manufacturing process [7]

PART I. FINANCIAL INFORMATION This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis of Velo3D, Inc.'s financial condition and results of operations [Item 1. Financial Statements (unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements for Velo3D, Inc., including the balance sheets, statements of operations and comprehensive loss, cash flows, and stockholders' equity, along with detailed notes explaining the company's business, accounting policies, and specific financial components [Condensed Consolidated Balance Sheets (unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(unaudited)) This section provides a snapshot of the company's assets, liabilities, and equity at specific points in time Condensed Consolidated Balance Sheet Highlights (In thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | % Change | | :-------------------------------- | :------------ | :------------------ | :----- | :------- | | Cash and cash equivalents | $854 | $1,212 | $(358) | (29.5)% | | Accounts receivable, net | $5,394 | $3,723 | $1,671 | 44.9% | | Inventories, net | $38,417 | $49,953 | $(11,536) | (23.1)% | | Total current assets | $48,896 | $57,724 | $(8,828) | (15.3)% | | Total assets | $78,558 | $89,180 | $(10,622) | (11.9)% | | Accounts payable | $14,853 | $18,538 | $(3,685) | (19.9)% | | Debt – current portion | $16,913 | $5,666 | $11,247 | 198.5% | | Total current liabilities | $42,741 | $38,000 | $4,741 | 12.5% | | Total liabilities | $57,023 | $49,516 | $7,507 | 15.2% | | Total stockholders' equity | $21,535 | $39,664 | $(18,129) | (45.7)% | | Accumulated deficit | $(469,501) | $(430,334) | $(39,167) | 9.1% | [Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss%20(unaudited)) This statement details the company's revenues, expenses, and net loss over specific reporting periods Condensed Consolidated Statements of Operations and Comprehensive Loss (In thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenue | $13,572 | $10,344 | $22,892 | $20,130 | | Gross loss | $(1,588) | $(2,897) | $(891) | $(5,712) | | Total operating expenses | $10,501 | $17,623 | $23,119 | $36,258 | | Loss from operations | $(12,089) | $(20,520) | $(24,010) | $(41,970) | | Interest expense | $(1,572) | $(5,463) | $(2,642) | $(9,360) | | Gain (loss) on fair value of warrants | $0 | $25,310 | $(1,044) | $22,690 | | Loss on warrant cancellation | $0 | $0 | $(11,357) | $0 | | Net loss | $(13,756) | $(172) | $(39,167) | $(28,486) | | Net loss per share: Basic | $(0.98) | $(0.30) | $(2.85) | $(53.31) | [Condensed Consolidated Statements of Cash Flows (unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(unaudited)) This statement summarizes the cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows Highlights (In thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :----------------------------------- | :----------------------------- | :----------------------------- | :----- | | Net cash used in operating activities | $(13,565) | $(28,492) | $14,927 | | Net cash (used in) provided by investing activities | $(1,799) | $5,966 | $(7,765) | | Net cash provided by financing activities | $15,000 | $490 | $14,510 | | Net change in cash and cash equivalents | $(358) | $(22,032) | $21,674 | | Cash and cash equivalents at end of period | $854 | $2,462 | $(1,608) | [Condensed Consolidated Statements of Stockholders' Equity (unaudited)](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(unaudited)) This statement outlines changes in the company's equity accounts, including common stock and accumulated deficit Stockholders' Equity Changes (In thousands, except share data) | Metric | As of December 31, 2024 | As of June 30, 2025 | Change | | :----------------------------------- | :---------------------- | :------------------ | :----- | | Common Stock Shares | 12,993,962 | 14,067,416 | 1,073,454 | | Common Stock Amount | $4 | $4 | $0 | | Additional Paid-In Capital | $469,994 | $491,032 | $21,038 | | Accumulated Deficit | $(430,334) | $(469,501) | $(39,167) | | Total Stockholders' Equity | $39,664 | $21,535 | $(18,129) | - The increase in Additional Paid-In Capital for the six months ended June 30, 2025, includes **$14.555 million** from the issuance of common stock in connection with warrant cancellation and **$6.483 million** from stock-based compensation[23](index=23&type=chunk) [Notes to Condensed Consolidated Interim Financial Statements (unaudited)](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Interim%20Financial%20Statements%20(unaudited)) These notes provide detailed explanations and disclosures for the unaudited condensed consolidated interim financial statements, covering business description, accounting policies, fair value measurements, debt, equity instruments, and other financial commitments, highlighting significant events like reverse stock splits and going concern issues [Note 1. Description of Business and Basis of Presentation](index=11&type=section&id=Note%201.%20Description%20of%20Business%20and%20Basis%20of%20Presentation) This note describes Velo3D's business, its 3D printing technology, recent corporate actions, and going concern considerations - Velo3D, Inc. produces metal additive 3D printers for high-value metal parts in industries such as space, aviation, defense, and also provides support services[25](index=25&type=chunk) - The company completed a **1-for-35 reverse stock split** on June 13, 2024, and a **1-for-15 reverse stock split** effective July 28, 2025, retroactively adjusting all share and per share amounts[30](index=30&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) - Velo3D's common stock and warrants were delisted from the NYSE on September 10, 2024, and commenced trading on the OTCQX Best Market on September 11, 2024[34](index=34&type=chunk) - Management believes there is **substantial doubt** about the company's ability to continue as a going concern due to an accumulated deficit of **$(469.5) million** and insufficient liquidity to meet operating needs for at least the next 12 months[35](index=35&type=chunk)[36](index=36&type=chunk) - In late 2024 and early 2025, the company engaged in significant debt and equity transactions, including a debt-for-equity exchange of **$22.4 million** in Secured Notes for **12,343,423 common shares** with Arrayed Notes Acquisition Corp., and the issuance of **$15 million** in Senior Secured Convertible Promissory Notes with high interest rates (**60.0% and 30.0% per annum**)[41](index=41&type=chunk)[43](index=43&type=chunk)[45](index=45&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=14&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and methods used in preparing the financial statements, including revenue recognition and segment reporting - The company is evaluating the impact of recently issued accounting pronouncements: ASU 2023-09 (Income Taxes) effective for annual periods beginning after December 15, 2024, and ASU 2024-03 (Expense Disaggregation Disclosures) effective for annual periods beginning after December 15, 2026[48](index=48&type=chunk)[49](index=49&type=chunk) - Revenue from perpetual software licenses is recognized upfront upon delivery, while post-contract support (PCS) and time-based subscription licenses are recognized ratably over the contract term[51](index=51&type=chunk)[52](index=52&type=chunk) - Velo3D manages its operations and reports financial results as a single operating segment, with the CEO serving as the chief operating decision-maker[55](index=55&type=chunk) - The company revised its previously issued unaudited condensed consolidated statement of operations and comprehensive loss for Q1 2025 to correct misclassifications between research and development and selling and marketing expenses, and cash paid for interest, with no impact on total operating expenses, net loss, or net loss per share[61](index=61&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk) [Note 3. Basic and Diluted Net Loss per Share](index=17&type=section&id=Note%203.%20Basic%20and%20Diluted%20Net%20Loss%20per%20Share) This note presents the calculation of basic and diluted net loss per share, considering the impact of potentially dilutive securities Net Loss Per Share (In thousands, except share and per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(13,756) | $(172) | $(39,167) | $(28,486) | | Basic weighted average shares outstanding | 14,041,712 | 565,026 | 13,721,680 | 534,381 | | Diluted weighted average shares outstanding | 14,041,712 | 565,026 | 13,721,680 | 534,381 | | Net loss per share: Basic | $(0.98) | $(0.30) | $(2.85) | $(53.31) | | Net loss per share: Diluted | $(0.98) | $(0.30) | $(2.85) | $(53.31) | - Potentially dilutive common stock equivalents, including warrants, options, and restricted stock units, were excluded from the computation of diluted net loss per share for all periods presented due to their antidilutive effect[64](index=64&type=chunk) [Note 4. Fair Value Measurements](index=17&type=section&id=Note%204.%20Fair%20Value%20Measurements) This note details the fair value hierarchy and valuation methods used for financial instruments, including money market funds and warrant liabilities Fair Value Measured as of June 30, 2025 (In thousands) | Instrument | Level 1 | Level 2 | Level 3 | Total | | :----------------------------------- | :------ | :------ | :------ | :---- | | Money market funds | $379 | $0 | $0 | $379 | | Common stock warrant liabilities | $0 | $0 | $13 | $13 | | Contingent earnout liabilities | $0 | $0 | $11 | $11 | | Total financial assets | $379 | $0 | $0 | $379 | | Total financial liabilities | $0 | $0 | $24 | $24 | Fair Value Measured as of December 31, 2024 (In thousands) | Instrument | Level 1 | Level 2 | Level 3 | Total | | :----------------------------------- | :------ | :------ | :------ | :------ | | Money market funds | $215 | $0 | $0 | $215 | | Common stock warrant liabilities | $0 | $0 | $2,166 | $2,166 | | Contingent earnout liabilities | $0 | $0 | $11 | $11 | | Total financial assets | $215 | $0 | $0 | $215 | | Total financial liabilities | $0 | $0 | $2,177 | $2,177 | - The fair value of most common stock warrant liabilities and contingent earnout liabilities are based on significant unobservable inputs (**Level 3 measurements**), with valuation models including Monte Carlo simulation and Black-Scholes option pricing[69](index=69&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk) [Note 5. Investments](index=20&type=section&id=Note%205.%20Investments) This note confirms the absence of available-for-sale investments and material realized gains or losses during the reporting periods - There were no available-for-sale (AFS) investments held by the company as of June 30, 2025, and December 31, 2024[73](index=73&type=chunk) - No material realized gains or losses on AFS investments were reported for the three and six months ended June 30, 2025, and June 30, 2024[73](index=73&type=chunk) [Note 6. Balance Sheet Components](index=21&type=section&id=Note%206.%20Balance%20Sheet%20Components) This note provides detailed breakdowns of accounts receivable, inventories, and property and equipment, including related allowances and depreciation Accounts Receivable, Net (In thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :------------------ | | Trade receivables | $7,216 | $7,130 | | Less: Allowances for credit losses | $(1,822) | $(3,407) | | Total | $5,394 | $3,723 | Inventories, Net (In thousands) | Metric | June 30, 2025 | December 31, 2024 | | :---------------- | :------------ | :------------------ | | Raw materials | $30,024 | $29,386 | | Work-in-progress | $3,076 | $9,660 | | Finished goods | $5,317 | $10,907 | | Total | $38,417 | $49,953 | - The company recorded **$24.1 million** in inventory reserves as of June 30, 2025, compared to **$27.1 million** as of December 31, 2024[75](index=75&type=chunk) Property and Equipment, Net (In thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :------------------ | | Total property, plant and equipment | $29,593 | $27,054 | | Less accumulated depreciation and amortization | $(14,392) | $(12,784) | | Property, plant and equipment, net | $15,201 | $14,270 | - Depreciation expense for property and equipment was **$1.7 million** for the six months ended June 30, 2025, down from **$2.2 million** for the same period in 2024[77](index=77&type=chunk) [Note 7. Equipment Subject to Operating Lease, Net](index=22&type=section&id=Note%207.%20Equipment%20Subject%20to%20Operating%20Lease,%20Net) This note details the net value of equipment under operating leases and the associated lease payments received from customers Equipment Subject to Operating Lease, Net (In thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :------------------ | | Equipment Available for Lease | $3,566 | $4,622 | | Accumulated Depreciation | $(546) | $(949) | | Total Equipment Subject to Operating Lease, Net | $3,020 | $3,673 | Lease Payments from Customers (In thousands) | Period | 2025 | 2024 | | :-------------------------- | :--- | :--- | | Three Months Ended June 30, | $70 | $292 | | Six Months Ended June 30, | $70 | $762 | - Depreciation expense for equipment subject to operating lease was **$0** for the six months ended June 30, 2025, compared to **$0.5 million** for the same period in 2024[82](index=82&type=chunk) [Note 8. Leases](index=24&type=section&id=Note%208.%20Leases) This note provides a breakdown of total operating and financing lease liabilities and the corresponding lease expenses Total Lease Liabilities (In thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :------------------ | | Total operating lease liabilities | $9,152 | $9,973 | | Total financing lease liabilities | $186 | $256 | | Total lease liabilities | $9,338 | $10,229 | Total Lease Expense (In thousands) | Period | 2025 | 2024 | | :-------------------------- | :--- | :--- | | Three Months Ended June 30, | $663 | $829 | | Six Months Ended June 30, | $1,322 | $1,692 | - The weighted-average remaining lease term for operating leases was **6.8 years** as of June 30, 2025, with a weighted-average discount rate of **9.0%**[87](index=87&type=chunk) [Note 9. Debt](index=25&type=section&id=Note%209.%20Debt) This note details the composition of the company's debt, including various secured and convertible promissory notes and their respective interest rates Debt Composition (In thousands) | Debt Type | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :------------------ | | January Note | $5,700 | $0 | | February Note 1st Tranche | $5,583 | $0 | | February Note 2nd Tranche | $5,425 | $0 | | Secured Notes | $5,767 | $5,666 | | Total Debt | $22,475 | $5,666 | | Debt – current portion | $16,913 | $5,666 | | Long-term debt – less current portion | $5,562 | $0 | - The January Note, a Senior Secured Convertible Promissory Note of **$5.0 million**, bears interest at **60.0% per annum**, with **$1.5 million** in interest expense incurred for the six months ended June 30, 2025[90](index=90&type=chunk) - The February Note, a Senior Secured Convertible Promissory Note of **$10.0 million**, bears interest at **30.0% per annum**, with **$1.0 million** in interest expense incurred for the six months ended June 30, 2025[91](index=91&type=chunk) - The Secured Notes bear interest at **6.00% per annum**, with an effective interest rate of **8.7%** for the six months ended June 30, 2025[92](index=92&type=chunk)[94](index=94&type=chunk) [Note 10. Equity Instruments](index=26&type=section&id=Note%2010.%20Equity%20Instruments) This note provides details on common stock outstanding, warrant exchange agreements, and contingent earnout liabilities - As of June 30, 2025, Velo3D had **14,067,416 shares** of common stock outstanding[96](index=96&type=chunk) - In February 2025, the company entered into Warrant Exchange Agreements, issuing **990,159 shares** of common stock in exchange for various warrants[100](index=100&type=chunk) Common Stock Warrants (Number of Warrants) | Warrant Type | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :------------------ | | Private Placement Warrants | 8,477 | 8,477 | | Public Warrants | 16,429 | 16,429 | | 2022 Private Warrant | 134 | 134 | | RDO Warrants | 0 | 19,048 | | Placement Agent Warrants | 3,429 | 3,429 | | 2024 Private Warrants | 0 | 41,808 | | BEPO Warrants | 5,157 | 65,307 | | BEPO Agent Warrants | 3,266 | 3,266 | | July 2024 Private Warrants | 0 | 110,000 | | August Inducement Warrants | 0 | 99,048 | | Total Warrants | 36,892 | 366,946 | - Contingent earnout liabilities for pre-closing Legacy Velo3D equity holders could result in the issuance of up to **41,444 shares** of common stock, based on two tranches[131](index=131&type=chunk) [Note 11. Equity Incentive Plans and Stock-Based Compensation](index=33&type=section&id=Note%2011.%20Equity%20Incentive%20Plans%20and%20Stock-Based%20Compensation) This note details the company's equity incentive plans, stock option and RSU activity, and total stock-based compensation expense - As of June 30, 2025, the company had **0 shares** remaining for issuance under its 2021 Equity Incentive Plan (EIP) and **148,897 shares** reserved for its 2021 Employee Stock Purchase Plan (ESPP)[137](index=137&type=chunk) Stock Options Activity (In thousands, except per share data) | Metric | As of December 31, 2024 | As of June 30, 2025 | | :----------------------------------- | :---------------------- | :------------------ | | Outstanding Options | 18 | 4 | | Weighted Average Exercise Price | $380.70 | $1,022.11 | Restricted Stock Units (RSUs) Activity (In thousands, except per share data) | Metric | As of December 31, 2024 | As of June 30, 2025 | | :----------------------------------- | :---------------------- | :------------------ | | Balance of RSUs | 13 | 889 | | Weighted Average Grant Date Fair Value | $714.30 | $16.51 | | Unrecognized Compensation Cost | $13.9 million (as of June 30, 2025) | $24.6 million (as of June 30, 2024) | Stock-Based Compensation Expense (In thousands) | Award Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Restricted stock units | $1,834 | $3,101 | $5,425 | $6,930 | | Stock options | $1 | $39 | $5 | $99 | | Earnout shares–employees | $574 | $1,107 | $1,053 | $2,305 | | Total Stock-Based Compensation Expense | $2,409 | $4,247 | $6,483 | $9,334 | [Note 12. Income Taxes](index=35&type=section&id=Note%2012.%20Income%20Taxes) This note explains that no income tax provision was recorded due to projected losses, and a full valuation allowance is maintained - No provision for federal and state income taxes was recorded for the three and six months ended June 30, 2025, and 2024, due to projected losses[146](index=146&type=chunk) - The company maintains a full valuation allowance on its deferred tax assets[146](index=146&type=chunk) [Note 13. Commitments and Contingencies](index=35&type=section&id=Note%2013.%20Commitments%20and%20Contingencies) This note discloses the company's non-cancellable purchase commitments and confirms no material litigation as of the reporting date - As of June 30, 2025, the company is not aware of any litigation, claim, or assessment that would have a material adverse effect on its consolidated financial position, results of operations, cash flows, or future earnings[147](index=147&type=chunk) - Non-cancellable purchase commitments for parts and assemblies totaled **$4.4 million**, due upon receipt and expected to be delivered throughout the remainder of 2025[148](index=148&type=chunk) [Note 14. Employee Defined-Contribution Plans](index=35&type=section&id=Note%2014.%20Employee%20Defined-Contribution%20Plans) This note outlines the company's 401(k) plan and the employer contributions made during the reporting periods - The company offers a 401(k) Plan with employer contributions of **3.0%** of an employee's eligible compensation[149](index=149&type=chunk) 401(k) Plan Contributions (In thousands) | Period | 2025 | 2024 | | :-------------------------- | :--- | :--- | | Three Months Ended June 30, | $0.2 | $0.3 | | Six Months Ended June 30, | $0.3 | $0.5 | [Note 15. Revenue](index=36&type=section&id=Note%2015.%20Revenue) This note provides a breakdown of revenue by customer concentration and geographic area, along with contract liability recognition Customer Concentration (Percentage of Total Revenue) | Customer | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Customer 1 | 30.5% | 0% | 18.1% | <10% | | Customer 2 | 20.1% | <10% | 15.9% | <10% | | Customer 3 | 14.6% | 24.0% | 20.6% | 25.4% | Revenue by Geographic Area (In thousands) | Region | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Americas | $10,731 | $10,103 | $19,020 | $19,476 | | Europe | $2,748 | $176 | $3,684 | $501 | | Other | $65 | $93 | $188 | $153 | | Total | $13,572 | $10,344 | $22,892 | $20,130 | - The company recognized **$0.9 million** of revenue during the six months ended June 30, 2025, from contract liabilities as of December 31, 2024[152](index=152&type=chunk) [Note 16. Momentus Master Service Agreement](index=37&type=section&id=Note%2016.%20Momentus%20Master%20Service%20Agreement) This note describes the five-year Master Service Agreement with Momentus, including consideration received and the treatment of a refund provision - On April 12, 2025, Velo3D entered into a five-year Master Service Agreement (MSA) with Momentus, Inc. to provide consulting and parts production through its Rapid Production Solutions (RPS) offering[154](index=154&type=chunk) - Momentus issued **477,455 shares** of Class A Common Stock and **673,408 shares** of non-voting Series A Convertible Preferred Stock as consideration for goods and services under the MSA[154](index=154&type=chunk) - The MSA includes a Refund Provision, which was determined to be an embedded derivative, but its fair value was de minimis as of June 30, 2025, and no revenue related to this MSA has been recognized for the three and six months ended June 30, 2025[157](index=157&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk) [Note 17. Subsequent Events](index=37&type=section&id=Note%2017.%20Subsequent%20Events) This note confirms that no events requiring adjustment or disclosure were identified through the filing date of the Form 10-Q - No events requiring adjustment or disclosure were identified through the filing date of this Form 10-Q[161](index=161&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and operational results, highlighting recent debt and equity transactions, key performance metrics, customer concentration, and the ongoing challenges related to liquidity and internal controls, including a substantial doubt about the company's ability to continue as a going concern [Overview](index=38&type=section&id=Overview) This section introduces Velo3D's mission to revolutionize additive manufacturing with its proprietary 3D printing technology and "land and expand" strategy - Velo3D aims to revolutionize additive manufacturing (3D printing) by delivering high-performance, cost-effective, and rapid production of high-value metal parts[163](index=163&type=chunk) - The company's proprietary laser powder bed fusion (L-PBF) technology significantly reduces or eliminates the need for support structures, enabling the production of complex, mission-critical parts previously deemed impossible[164](index=164&type=chunk) - Velo3D's Sapphire Family of Printers offers design freedom for customers in space, aviation, defense, automotive, energy, and industrial markets, allowing replication of existing parts without redesign[165](index=165&type=chunk)[166](index=166&type=chunk) - The company employs a 'land and expand' strategy, where customers initially validate the technology with a single machine and subsequently purchase additional systems as it integrates into their product roadmap[167](index=167&type=chunk) [Recent Developments](index=38&type=section&id=Recent%20Developments) This section highlights key corporate actions, including debt-for-equity exchanges, warrant agreements, new debt issuances, and a reverse stock split - On December 24, 2024, Velo3D completed a debt-for-equity exchange with Arrayed Notes Acquisition Corp., issuing **12,343,423 common shares** in exchange for the cancellation of **$22.4 million** in principal debt and **$0.4 million** in accrued interest, making Arrayed the owner of approximately **95%** of the company's common stock[168](index=168&type=chunk) - In February 2025, the company entered into Warrant Exchange Agreements, resulting in the issuance of **990,159 common shares** for various warrants[169](index=169&type=chunk) - In January and February 2025, Velo3D issued Senior Secured Convertible Promissory Notes totaling **$15 million**, bearing high interest rates of **60.0% and 30.0% per annum**, respectively[170](index=170&type=chunk)[171](index=171&type=chunk) - A **1-for-15 reverse stock split** was implemented effective July 28, 2025, retroactively adjusting all share and per share amounts[172](index=172&type=chunk) - Management expresses **substantial doubt** about the company's ability to continue as a going concern due to insufficient liquidity for the next 12 months, necessitating additional financing to fund operations and satisfy debt obligations[174](index=174&type=chunk) [Key Financial and Operational Metrics](index=39&type=section&id=Key%20Financial%20and%20Operational%20Metrics) This section presents key financial and operational metrics, including revenue, bookings, and backlog, for the reporting periods Key Financial and Operational Metrics (In millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $14 | $10 | $23 | $20 | | Bookings | $12 | $5 | $20 | $22 | | Backlog | $16 | $17 | $16 | $17 | - Bookings are defined as confirmed orders for 3D printer systems and printed parts in contracted dollars[179](index=179&type=chunk) - Backlog represents unfulfilled 3D printer systems and printed parts to be delivered to customers in contracted dollars as of period end[179](index=179&type=chunk) [Customer Concentration](index=41&type=section&id=Customer%20Concentration) This section highlights the company's reliance on a small group of customers, which poses risks to operating results Customer Concentration (Percentage of Revenue) | Period | Top Three Customers (2025) | Top Three Customers (2024) | | :------------------------------- | :------------------------- | :------------------------- | | Three Months Ended June 30, | 65.2% | 66.4% | | Six Months Ended June 30, | 54.6% | 53.7% | - The company's operating results will continue to depend on sales to a small group of customers, making it susceptible to risks associated with customer concentration[180](index=180&type=chunk)[181](index=181&type=chunk) [Continued Investment and Innovation](index=41&type=section&id=Continued%20Investment%20and%20Innovation) Velo3D remains committed to developing innovative additive manufacturing solutions driven by customer demand - Velo3D remains a customer-focused company, committed to developing innovative solutions and enhancing its portfolio of additive manufacturing (AM) solutions through research and development projects driven by customer demand[182](index=182&type=chunk) [Macroeconomic Conditions and Other World Events](index=41&type=section&id=Macroeconomic%20Conditions%20and%20Other%20World%20Events) This section discusses how global economic and political conditions, including inflation and geopolitical conflicts, impact customer orders and supply chains - General economic and political conditions, including recessions, interest rates, inflation, and geopolitical conflicts (e.g., Israel and Ukraine), introduce uncertainty in customer orders and supply chain constraints[183](index=183&type=chunk) - The company implemented supply chain and manufacturing improvements in 2024 and plans further operational enhancements in 2025 to reduce operating costs[183](index=183&type=chunk) [Climate Change](index=41&type=section&id=Climate%20Change) This section addresses the potential adverse effects of climate change-related legislation, regulations, and extreme weather on business operations - Pending or existing climate change-related legislation, regulations, and international accords could adversely affect the business through increased capital expenditures, shifts in demand, heightened competition, and compliance costs[184](index=184&type=chunk) - Extreme weather and natural disasters may disrupt the operations of the company, its suppliers, and customers[184](index=184&type=chunk) [Components of Results of Operations](index=41&type=section&id=Components%20of%20Results%20of%20Operations) This section defines the various revenue, cost, and expense categories that comprise the company's financial performance - Revenue is primarily derived from the sale or lease of 3D Printers (Sapphire family) and associated Support Services, including Rapid Production Solutions (RPS)[185](index=185&type=chunk)[186](index=186&type=chunk)[192](index=192&type=chunk) - Cost of revenue includes manufacturing costs for 3D Printers, depreciation of leased equipment, and costs for support services (spare parts, installation, labor), with RPS costs included under 3D Printer cost of revenue[194](index=194&type=chunk)[195](index=195&type=chunk)[196](index=196&type=chunk)[197](index=197&type=chunk) - Gross profit and gross margin are influenced by product mix, average selling prices, material and shipping costs, production volumes, system reliability, and the impact of new product introductions on support service costs[198](index=198&type=chunk)[229](index=229&type=chunk)[261](index=261&type=chunk) - Operating expenses consist of Research and Development, Selling and Marketing, and General and Administrative expenses, primarily comprising salaries, stock-based compensation, and allocated overhead[199](index=199&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk) - Other income and expense items include interest expense, gains/losses on fair value of warrants and contingent earnout liabilities, loss on warrant cancellation, and other miscellaneous income/expenses[202](index=202&type=chunk)[203](index=203&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk)[206](index=206&type=chunk) - No provision for federal and state income taxes was recorded due to projected losses, and a full valuation allowance is maintained on deferred tax assets[207](index=207&type=chunk) [Results of Operations](index=44&type=section&id=Results%20of%20Operations) This sub-section details the company's financial performance for the three and six months ended June 30, 2025, compared to 2024, showing increased revenue from 3D printer sales, improved gross loss, but a higher net loss primarily due to non-cash warrant-related items and reduced operating expenses [Comparison of the Three Months Ended June 30, 2025 and 2024](index=44&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030,%202025%20and%202024) This section compares the company's revenue, cost of revenue, operating expenses, and net loss for the second quarter of 2025 versus 2024 Revenue by Type (Three Months Ended June 30, In thousands) | Revenue Type | 2025 | % of Total | 2024 | % of Total | Change | % Change | | :---------------- | :--- | :--------- | :--- | :--------- | :----- | :------- | | 3D Printer | $12,082 | 89.0% | $8,679 | 83.9% | $3,403 | 39.2% | | Recurring payment | $70 | 0.5% | $292 | 2.8% | $(222) | (76.0)% | | Support services | $1,359 | 10.0% | $1,373 | 13.3% | $(14) | (1.0)% | | Other | $61 | 0.5% | $0 | 0.0% | $61 | 100.0% | | Total Revenue | $13,572 | 100.0% | $10,344 | 100.0% | $3,228 | 31.2% | Cost of Revenue by Type (Three Months Ended June 30, In thousands) | Cost of Revenue Type | 2025 | % of Total | 2024 | % of Total | Change | % Change | | :--------------------- | :--- | :--------- | :--- | :--------- | :----- | :------- | | Cost of 3D Printers | $13,994 | 92.3% | $10,744 | 81.1% | $3,250 | 30.2% | | Cost of Recurring Payment | $0 | 0.0% | $232 | 1.8% | $(232) | (100.0)% | | Cost of Support Services | $1,166 | 7.7% | $2,265 | 17.1% | $(1,099) | (48.5)% | | Total Cost of Revenue | $15,160 | 100.0% | $13,241 | 100.0% | $1,919 | 14.5% | - Gross loss improved by **45.2%** to **$(1.588) million** in Q2 2025, with gross margin improving from **(28.0)% to (11.7)%**, primarily due to product mix and improved average selling prices of 3D Printers[209](index=209&type=chunk)[223](index=223&type=chunk) Operating Expenses (Three Months Ended June 30, In thousands) | Expense Type | 2025 | 2024 | Change | % Change | | :-------------------------- | :--- | :--- | :----- | :------- | | Research and development | $2,845 | $4,545 | $(1,700) | (37.4)% | | Selling and marketing | $1,619 | $4,273 | $(2,654) | (62.1)% | | General and administrative | $6,037 | $8,805 | $(2,768) | (31.4)% | | Total operating expenses | $10,501 | $17,623 | $(7,122) | (40.4)% | - Net loss significantly increased to **$(13.756) million** in Q2 2025 from **$(0.172) million** in Q2 2024, largely due to the absence of a **$25.310 million** gain on fair value of warrants recorded in the prior year[209](index=209&type=chunk)[234](index=234&type=chunk) [Comparison of the Six Months Ended June 30, 2025 and 2024](index=48&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030,%202025%20and%202024) This section compares the company's revenue, cost of revenue, operating expenses, and net loss for the first half of 2025 versus 2024 Revenue by Type (Six Months Ended June 30, In thousands) | Revenue Type | 2025 | % of Total | 2024 | % of Total | Change | % Change | | :---------------- | :--- | :--------- | :--- | :--------- | :----- | :------- | | 3D Printer | $19,605 | 85.6% | $16,339 | 81.2% | $3,266 | 20.0% | | Recurring payment | $70 | 0.3% | $762 | 3.8% | $(692) | (90.8)% | | Support services | $3,149 | 13.8% | $3,029 | 15.0% | $120 | 100.0% | | Other | $68 | 0.3% | $0 | 0.0% | $68 | 0.0% | | Total Revenue | $22,892 | 100.0% | $20,130 | 100.0% | $2,762 | 13.7% | Cost of Revenue by Type (Six Months Ended June 30, In thousands) | Cost of Revenue Type | 2025 | % of Total | 2024 | % of Total | Change | % Change | | :--------------------- | :--- | :--------- | :--- | :--------- | :----- | :------- | | Cost of 3D Printers | $21,534 | 90.5% | $20,138 | 77.9% | $1,396 | 6.9% | | Cost of Recurring Payment | $12 | 0.1% | $547 | 2.1% | $(535) | (97.8)% | | Cost of Support Services | $2,237 | 9.4% | $5,157 | 20.0% | $(2,920) | (56.6)% | | Total Cost of Revenue | $23,783 | 100.0% | $25,842 | 100.0% | $(2,059) | (8.0)% | - Gross loss improved by **84.4%** to **$(0.891) million** in H1 2025, with gross margin improving from **(28.4)% to (3.9)%**, driven by product mix and improved average selling prices of 3D Printers[239](index=239&type=chunk)[253](index=253&type=chunk) Operating Expenses (Six Months Ended June 30, In thousands) | Expense Type | 2025 | 2024 | Change | % Change | | :-------------------------- | :--- | :--- | :----- | :------- | | Research and development | $5,120 | $9,588 | $(4,468) | (46.6)% | | Selling and marketing | $2,831 | $9,082 | $(6,251) | (68.8)% | | General and administrative | $15,168 | $17,588 | $(2,420) | (13.8)% | | Total operating expenses | $23,119 | $36,258 | $(13,139) | (36.2)% | - Net loss increased by **37.5%** to **$(39.167) million** in H1 2025, primarily due to a **$11.357 million** loss on warrant cancellation and a significant decrease in gain on fair value of warrants compared to H1 2024[239](index=239&type=chunk)[264](index=264&type=chunk)[266](index=266&type=chunk) [Liquidity and Capital Resources](index=51&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, debt obligations, and the substantial doubt about its ability to continue as a going concern - As of June 30, 2025, the company had **$0.9 million** in cash and cash equivalents and **$5.4 million** in accounts receivable, which is insufficient to meet short-term obligations including **$14.9 million** in accounts payable and **$22.5 million** in Secured and Convertible Notes[270](index=270&type=chunk)[312](index=312&type=chunk) - Management believes there is **substantial doubt** about the company's ability to continue as a going concern for the next 12 months, necessitating additional equity or debt financings to fund operations and satisfy obligations[272](index=272&type=chunk)[273](index=273&type=chunk)[313](index=313&type=chunk) Cash Flow Summary (Six Months Ended June 30, In thousands) | Cash Flow Activity | 2025 | 2024 | Change | | :----------------------------------- | :----- | :----- | :----- | | Net cash used in operating activities | $(13,565) | $(28,492) | $14,927 | | Net cash (used in) provided by investing activities | $(1,799) | $5,966 | $(7,765) | | Net cash provided by financing activities | $15,000 | $490 | $14,510 | - The company's inability to secure credit terms and volume discounts with suppliers due to its financial situation negatively impacts its cost of revenue[274](index=274&type=chunk)[315](index=315&type=chunk) - The ability to meet cash requirements depends on operating performance, competitive developments, and financial market conditions, with no assurance of obtaining additional financing on acceptable terms[274](index=274&type=chunk)[275](index=275&type=chunk)[317](index=317&type=chunk) [Off-Balance Sheet Arrangements](index=54&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms that the company had no material off-balance sheet arrangements as of June 30, 2025, except for the Momentus MSA - As of June 30, 2025, the company did not have any off-balance sheet arrangements, except as discussed in Note 16 regarding the Momentus Master Service Agreement[288](index=288&type=chunk) [Recent Accounting Pronouncements](index=54&type=section&id=Recent%20Accounting%20Pronouncements) This section outlines the company's evaluation of new accounting pronouncements related to income taxes and expense disaggregation disclosures - The company is currently evaluating the impact of ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation Disclosures), which are effective for annual periods beginning after December 15, 2024, and December 15, 2026, respectively[289](index=289&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk) [Implications of Being an Emerging Growth Company](index=54&type=section&id=Implications%20of%20Being%20an%20Emerging%20Growth%20Company) This section explains Velo3D's status as an emerging growth company and its election to use an extended transition period for new accounting standards - Velo3D is an 'emerging growth company' (EGC) and has elected to use the extended transition period for complying with new or revised financial accounting standards, which may make its financial results difficult to compare with non-EGCs[290](index=290&type=chunk)[291](index=291&type=chunk) - The company will remain an EGC until the earliest of December 31, 2025, or meeting certain revenue or filer status thresholds[292](index=292&type=chunk) [Implications of Being a Smaller Reporting Company](index=54&type=section&id=Implications%20of%20Being%20a%20Smaller%20Reporting%20Company) This section details Velo3D's status as a smaller reporting company and its utilization of reduced disclosure obligations - Velo3D is a 'smaller reporting company' (SRC) and takes advantage of reduced disclosure obligations, including providing only two years of audited consolidated financial statements[293](index=293&type=chunk) - The company will remain an SRC until its public float or annual revenue exceeds certain thresholds[294](index=294&type=chunk) [Critical Accounting Policies and Significant Estimates](index=55&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Estimates) This section emphasizes that financial statements rely on significant judgments and estimates, which could materially differ from actual results - The company's financial condition and results of operations are based on unaudited condensed consolidated interim financial statements prepared in accordance with U.S. GAAP, with critical accounting policies involving a high degree of judgment or complexity[295](index=295&type=chunk) - Actual results could differ materially from these estimates and assumptions, and such differences could be material to the financial statements[295](index=295&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=55&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Velo3D is exempt from providing detailed quantitative and qualitative disclosures about market risk. The company notes that a 10% change in interest rates would not materially impact its annualized interest expense - As a smaller reporting company, Velo3D is not required to provide the information typically required by this Item[296](index=296&type=chunk) - The company does not hedge its exposure to changes in interest rates, and a **10% change** in interest rates would not have a material impact on annualized interest expense[277](index=277&type=chunk) [Item 4. Controls and Procedures](index=55&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were ineffective as of June 30, 2025, due to identified material weaknesses in internal control over financial reporting, including issues with control environment, segregation of duties, accounting for complex instruments, inventory, contract assets/liabilities, financial statement presentation, and IT general controls. Remediation efforts are underway [Evaluation of Disclosure Controls and Procedures](index=55&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were ineffective due to material weaknesses in internal control over financial reporting - Management, including the Chief Executive Officer and Chief Financial Officer, concluded that the company's disclosure controls and procedures were **not effective** as of June 30, 2025, due to material weaknesses in internal control over financial reporting[298](index=298&type=chunk) [Material Weaknesses in Internal Control over Financial Reporting](index=55&type=section&id=Material%20Weaknesses%20in%20Internal%20Control%20over%20Financial%20Reporting) This section identifies material weaknesses, including an ineffective control environment, lack of segregation of duties, and issues with accounting for complex instruments and IT controls - Material weaknesses include an ineffective control environment (insufficient personnel with accounting knowledge, lack of segregation of duties), ineffective controls over journal entries and account reconciliations, and ineffective controls over accounting for debt/equity instruments, inventory, and contract assets/liabilities[299](index=299&type=chunk)[303](index=303&type=chunk) - Ineffective information technology (IT) general controls were identified, specifically regarding user access controls and program change management controls[304](index=304&type=chunk) - These material weaknesses resulted in past adjustments and revisions to financial statements and could lead to future material misstatements[300](index=300&type=chunk)[301](index=301&type=chunk) [Remediation Measures for Remaining Material Weaknesses in Internal Control over Financial Reporting](index=56&type=section&id=Remediation%20Measures%20for%20Remaining%20Material%20Weaknesses%20in%20Internal%20Control%20over%20Financial%20Reporting) This section outlines ongoing remediation efforts, including hiring personnel, providing training, and engaging third-party assistance to strengthen internal controls - Remediation measures include hiring additional accounting and IT personnel, providing ongoing training, engaging third-party assistance for control design and implementation (segregation of duties, IT general controls), and formalizing roles and review responsibilities[302](index=302&type=chunk)[305](index=305&type=chunk) - The company is making progress but cannot conclude on full remediation until efforts are completed and evaluated, and additional measures may be required[306](index=306&type=chunk) [Changes in Internal Control over Financial Reporting](index=57&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section confirms no material changes in internal control over financial reporting during the quarter, apart from the identified weaknesses - Other than the material weaknesses described, there were no changes in internal control over financial reporting during the quarter ended June 30, 2025, that materially affected or are reasonably likely to materially affect the company's internal control over financial reporting[307](index=307&type=chunk) PART II. OTHER INFORMATION This section covers legal proceedings, updated risk factors, equity sales, defaults, and other miscellaneous disclosures [Item 1. Legal Proceedings](index=58&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings that would significantly impact its financial position or operations - Velo3D is not currently a party to any material legal proceedings[310](index=310&type=chunk) [Item 1A. Risk Factors](index=58&type=section&id=Item%201A.%20Risk%20Factors) This section updates the risk factors, emphasizing substantial doubt about the company's ability to continue as a going concern due to insufficient liquidity, the challenges of securing additional capital, and risks related to trade policies and compliance with anti-corruption and trade control laws [Risks Related to Our Financial Position and Need for Additional Capital](index=58&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Need%20for%20Additional%20Capital) This section highlights the substantial doubt about the company's going concern ability and the challenges of securing necessary additional financing - Substantial doubt exists about the company's ability to continue as a going concern, with **$0.9 million** in cash and **$5.4 million** in accounts receivable insufficient to cover **$14.9 million** in accounts payable and **$22.5 million** in debt as of June 30, 2025[312](index=312&type=chunk)[313](index=313&type=chunk) - The going concern conclusion negatively impacts investor and creditor perception, making it more difficult to raise financing, sell products, and retain employees[314](index=314&type=chunk) - The company expects to require additional capital in the near-term to fund operations and satisfy debt obligations, but obtaining such financing on acceptable terms, or at all, is uncertain[316](index=316&type=chunk)[317](index=317&type=chunk) - Failure to secure adequate financing could significantly impair business operations, potentially leading to liquidation or bankruptcy protection[317](index=317&type=chunk) [Risks Related to our Business and Industry](index=59&type=section&id=Risks%20Related%20to%20our%20Business%20and%20Industry) This section addresses the uncertainties of U.S. tariffs and trade policies, which could increase costs or reduce product sales - Uncertainty regarding U.S. tariffs and trade policies could increase the cost of goods or reduce the ability to sell products, adversely affecting operating results and financial condition[318](index=318&type=chunk) - Political tensions resulting from trade policies could reduce trade volume, investment, and technological exchange, negatively impacting global economic conditions and financial markets, which could, in turn, materially affect the company's business[319](index=319&type=chunk) [Risks Related to Compliance Matters](index=60&type=section&id=Risks%20Related%20to%20Compliance%20Matters) This section outlines the risks associated with compliance with U.S. and foreign anti-corruption laws, trade controls, and economic sanctions programs - The company is subject to U.S. and foreign anti-corruption laws (e.g., FCPA, Bribery Act), trade controls, and economic sanctions programs (e.g., OFAC, DDTC, BIS)[320](index=320&type=chunk)[321](index=321&type=chunk) - Failure to comply with these laws and regulations could result in civil, criminal, and administrative penalties, harm to reputation, and restrictions on the ability to export products[320](index=320&type=chunk)[323](index=323&type=chunk)[324](index=324&type=chunk) - Continued expansion into foreign countries and new partnerships increases the risk of FCPA, OFAC, or Bribery Act violations, and the company may be held liable for actions of joint venture partners[322](index=322&type=chunk)[324](index=324&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=61&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period - No unregistered sales of equity securities or use of proceeds were reported for the period[325](index=325&type=chunk) [Item 3. Defaults Upon Senior Securities](index=61&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the company for the reporting period - This item is not applicable[326](index=326&type=chunk) [Item 4. Mine Safety Disclosures](index=61&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company for the reporting period - This item is not applicable[327](index=327&type=chunk) [Item 5. Other Information](index=61&type=section&id=Item%205.%20Other%20Information) No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or Section 16 officers during the three months ended June 30, 2025 - No director or Section 16 officer adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the three months ended June 30, 2025[328](index=328&type=chunk) [Item 6. Exhibits](index=62&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents and certifications - The exhibits include Certificates of Amendment to the Certificate of Incorporation (3.1, 3.1.1, 3.1.2, 3.1.3, 3.1.4) and certifications from the Chief Executive Officer and Chief Financial Officer (31.1, 31.2, 32.1, 32.2)[330](index=330&type=chunk) [Signatures](index=63&type=section&id=Signatures) The report is duly signed on behalf of Velo3D, Inc. by its Chief Financial Officer, Hull Xu, on August 6, 2025 - The report was signed by Hull Xu, Chief Financial Officer, Principal Financial Officer, and Authorized Officer of Velo3D, Inc., on August 6, 2025[335](index=335&type=chunk)

[Financial and Business Highlights](index=1&type=section&id=Financial%20and%20Business%20Highlights) The company reports Q2 2025 financial results, highlights strong growth in its services division, and details key strategic partnerships [Key Financial & Operational Highlights](index=1&type=section&id=Key%20Financial%20%26%20Operational%20Highlights) Velo3D reported Q2 2025 revenue of $13.6 million, reaffirmed its full-year guidance, and noted a significant backlog shift towards its Rapid Production Services Q2 2025 Key Financial Metrics | Metric | Value | | :--- | :--- | | Revenue | $13.6 million | | Backlog (as of June 30, 2025) | $15.9 million | | 2025 Annual Revenue Growth | > 30% (Reaffirmed) | | EBITDA Positive Target | H1 2026 (Reaffirmed) | - The company is experiencing strong momentum in its Rapid Production Services (RPS) division, with RPS bookings seeing a **79% increase** quarter-over-quarter and new customers accounting for over **78% of Q2 2025 bookings**, heavily concentrated in the Space (54%) and Defense (33%) sectors[5](index=5&type=chunk) - The CEO highlighted a **significant shift in the company's backlog composition towards RPS**, driven by strong demand from the Space and Defense sectors[3](index=3&type=chunk) [Strategic Developments and Partnerships](index=1&type=section&id=Strategic%20Developments%20and%20Partnerships) The company advanced its aerospace and defense position through key agreements with NAVAIR, Vaya Space, and Momentus, alongside strategic leadership appointments - Key partnerships and agreements signed to bolster growth include a CRADA with **NAVAIR**, a $4 million MSA with **Vaya Space**, a $22.0 million strategic partnership with **Amaero**, and a $15 million MSA with **Momentus, Inc**[3](index=3&type=chunk)[5](index=5&type=chunk) - New customer orders and initiatives include an order for a **fourth Sapphire XC printer** from Mears Machine Corporation and an agreement with Ohio Ordinance Works for its **3D Printed Military Weapons Development initiative**[5](index=5&type=chunk) - The leadership team was strengthened with the appointments of **Brice Cooper** as Vice President of Defense and Government Relations and **Jason Lloyd and Kenneth Thieneman** to the Board of Directors[5](index=5&type=chunk) [Financial Performance Analysis](index=2&type=section&id=Financial%20Performance%20Analysis) The company details its Q2 2025 performance, including revenue growth, persistent negative gross margins, reduced operating expenses, and its current liquidity position [Summary of Second Quarter 2025 Results](index=2&type=section&id=Summary%20of%20Second%20Quarter%202025%20Results) In Q2 2025, Velo3D grew revenue to $13.6 million, improved its gross margin, significantly cut operating expenses, and reported a GAAP net loss of $13.8 million Q2 2025 vs Q2 2024 Financial Summary | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **GAAP Revenue** | $13.6 M | $10.3 M | | **GAAP Gross Margin** | (11.7)% | (28.0)% | | **GAAP Net Loss** | ($13.8) M | ($0.2) M | | **GAAP Net Loss per Share** | ($0.98) | ($0.30) | | **Non-GAAP Net Loss** | ($11.3) M | ($21.7) M | | **Non-GAAP Net Loss per Share** | ($0.81) | ($38.49) | [Revenue Analysis](index=3&type=section&id=Revenue%20Analysis) Q2 2025 revenue increased to $13.6 million, with the Rapid Production Services business expected to be a key future growth driver - Q2 2025 revenue was **$13.6 million**, with the year-over-year increase driven by product mix and the number of systems sold[7](index=7&type=chunk) - The company expects its **RPS parts production business** to contribute an increasing share of revenue beginning in H2 2025[7](index=7&type=chunk) [Gross Margin Analysis](index=3&type=section&id=Gross%20Margin%20Analysis) Gross margin improved year-over-year to (11.7%) but remained negative due to the sale of inventory with a higher prior-year cost structure - Gross margin improved year-over-year to **(11.7%)** but **remained negative** due to higher fixed costs associated with inventory manufactured in 2024[8](index=8&type=chunk) - Management expects **gross margin to improve** going forward due to operational efficiencies and an anticipated ramp-up of the RPS business[8](index=8&type=chunk) [Operating Expenses and Net Loss](index=3&type=section&id=Operating%20Expenses%20and%20Net%20Loss) The company significantly reduced GAAP operating expenses to $10.5 million and reported a GAAP net loss of $13.8 million for the quarter Operating Expenses Comparison (Q2 2025 vs Q2 2024) | Expense Type | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | GAAP Operating Expenses | $10.5 M | $17.6 M | | Non-GAAP Operating Expenses | $8.1 M | $13.4 M | Profitability Metrics (Q2 2025) | Metric | Value | | :--- | :--- | | GAAP Net Loss | ($13.8) M | | Non-GAAP Net Loss | ($11.3) M | | Adjusted EBITDA | ($8.9) M | [Liquidity](index=3&type=section&id=Liquidity) The company's cash and cash equivalents decreased to $854,000 as of June 30, 2025 - As of June 30, 2025, cash and cash equivalents were **$854,000**, down from $1.2 million as of December 31, 2024[10](index=10&type=chunk) [Financial Outlook](index=3&type=section&id=Financial%20Outlook) The company reaffirms its full-year 2025 guidance and its target for achieving positive EBITDA in the first half of 2026 [Full Year 2025 Guidance](index=3&type=section&id=Full%20Year%202025%20Guidance) Velo3D reaffirms its full-year 2025 revenue guidance of $50 to $60 million and targets a gross margin exceeding 30% by Q4 2025 Full Year 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Revenue | $50 million to $60 million | | Gross Margin (Q4 2025) | > 30% | | Non-GAAP Operating Expenses | $40 million to $50 million | | CapEx | $15 million to $20 million | - The company reaffirms its expectation to be **EBITDA positive in the first half of 2026**[12](index=12&type=chunk) [Consolidated Financial Statements](index=11&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's condensed consolidated statements of operations, balance sheets, and cash flows for the reported periods [Condensed Consolidated Statements of Operations](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2025, the company reported revenue of $13.6 million and a net loss of $13.8 million, compared to a net loss of $0.2 million in the prior-year period Statement of Operations Summary (Three Months Ended June 30) | (In thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Total Revenue | $13,572 | $10,344 | | Gross Loss | $(1,588) | $(2,897) | | Loss from Operations | $(12,089) | $(20,520) | | Net Loss | $(13,756) | $(172) | | Net Loss per Share (Basic) | $(0.98) | $(0.30) | [Condensed Consolidated Balance Sheets](index=12&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, the company reported total assets of $78.6 million and total stockholders' equity of $21.5 million Balance Sheet Summary (As of) | (In thousands) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $854 | $1,212 | | Inventories, net | $38,417 | $49,953 | | Total Assets | $78,558 | $89,180 | | Total Current Liabilities | $42,741 | $38,000 | | Total Liabilities | $57,023 | $49,516 | | Total Stockholders' Equity | $21,535 | $39,664 | [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, net cash used in operations was $13.6 million, with financing activities providing $15.0 million in cash Cash Flow Summary (Six Months Ended June 30) | (In thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(13,565) | $(28,492) | | Net cash (used in) provided by investing activities | $(1,799) | $5,966 | | Net cash provided by financing activities | $15,000 | $490 | | Net change in cash and cash equivalents | $(358) | $(22,032) | [Non-GAAP Financial Measures](index=7&type=section&id=Non-GAAP%20Financial%20Measures) This section provides reconciliations of GAAP results to non-GAAP measures, including net loss, adjusted EBITDA, and adjusted operating expenses [Non-GAAP Net Loss Reconciliation](index=8&type=section&id=Non-GAAP%20Net%20Loss%20Reconciliation) The company's Non-GAAP Net Loss improved to $11.3 million in Q2 2025 from $21.7 million in the prior-year quarter Reconciliation to Non-GAAP Net Loss (Three Months Ended June 30) | (In thousands) | 2025 | 2024 | | :--- | :--- | :--- | | **Net Loss (GAAP)** | **$(13,756)** | **$(172)** | | Stock-based compensation | $2,409 | $4,247 | | (Gain) loss on fair value of warrants | — | $(25,310) | | Other adjustments | — | $(578) | | **Non-GAAP Net Loss** | **$(11,347)** | **$(21,746)** | [Non-GAAP Adjusted EBITDA Reconciliation](index=9&type=section&id=Non-GAAP%20Adjusted%20EBITDA%20Reconciliation) Adjusted EBITDA improved significantly to a loss of $8.9 million in Q2 2025 compared to a loss of $15.0 million in Q2 2024 Reconciliation to Adjusted EBITDA (Three Months Ended June 30) | (In thousands) | 2025 | 2024 | | :--- | :--- | :--- | | **Net Loss (GAAP)** | **$(13,756)** | **$(172)** | | Interest, Taxes, D&A | $2,444 | $6,770 | | **EBITDA** | **$(11,312)** | **$6,598** | | Stock-based compensation & other adjustments | $2,409 | $(21,574) | | **Adjusted EBITDA** | **$(8,903)** | **$(14,976)** | [Non-GAAP Adjusted Operating Expenses Reconciliation](index=10&type=section&id=Non-GAAP%20Adjusted%20Operating%20Expenses%20Reconciliation) Non-GAAP Adjusted Operating Expenses were reduced to $8.1 million in Q2 2025, down from $13.4 million in the same period last year Reconciliation to Adjusted Operating Expenses (Three Months Ended June 30) | (In thousands) | 2025 | 2024 | | :--- | :--- | :--- | | **Total operating expenses (GAAP)** | **$10,501** | **$17,623** | | Stock-based compensation in operating expenses | $2,409 | $4,247 | | **Adjusted operating expenses (Non-GAAP)** | **$8,092** | **$13,376** | [Company Information and Disclosures](index=4&type=section&id=Company%20Information%20and%20Disclosures) This section provides an overview of Velo3D's business and important disclosures regarding forward-looking statements [About Velo3D](index=4&type=section&id=About%20Velo3D) Velo3D is a metal additive manufacturing technology company providing an integrated solution for producing mission-critical parts - Velo3D is a **metal additive manufacturing technology** company that enables the production of high-value metal parts previously considered **impossible to build**[13](index=13&type=chunk)[14](index=14&type=chunk) - The company's integrated solution includes **Flow software, Sapphire printers, and Assure quality control**, serving industries such as space exploration, aviation, and semiconductor[14](index=14&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) This section outlines the company's forward-looking statements and cautions investors about the inherent risks and uncertainties - The report includes forward-looking statements concerning **fiscal 2025 and 2026 guidance**, expectations for achieving profitability, and future demand[18](index=18&type=chunk) - Investors are warned that **actual results could differ materially** due to significant risks, including the company's ability to execute its business plan, its liquidity position, competition, and its ability to manage growth[18](index=18&type=chunk)

Core Viewpoint - Vinland Lithium Inc. has successfully completed its summer exploration program at the Killick Lithium Project, focusing on lithium pegmatites in Newfoundland, and has appointed Barry Sparkes as the new VP of Exploration [1][2]. Exploration Program - The summer 2025 exploration program included prospecting, till sampling, geological mapping, and ground geophysical surveys [3][4]. - A total of 115 rock samples and 45 till samples were submitted for analysis, with a 60 line-kilometre ground magnetics survey conducted [4]. Project Background - The Killick Lithium Project was discovered in late-summer 2021, with significant lithium mineralization identified in multiple dykes [5][12]. - Notable drill results include 8.4 meters of 0.95% Li2O and 1.04% Li2O over 15.23 meters from different holes [5][13]. Recent Developments - The company has identified multiple spodumene-bearing pegmatite float samples in the Kraken South area, with assays returning up to 1.97% Li2O [7]. - The Hydra Cesium discovery has shown promising initial channel sample results, including 8.75% Cs2O over 1.2 meters [7][13]. Financial and Structural Information - Vinland is well-structured with approximately 10 million shares outstanding, with over 6 million held by insiders under a 36-month escrow provision [7]. - Piedmont Lithium Inc. has invested $2 million in Vinland, securing a 19.9% interest, and has the option to earn up to a 62.5% interest in Killick Lithium Inc. through further investment [7][10].

Part I. Financial Information [Item 1. Financial Statements (unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Unaudited condensed consolidated financial statements for Velo3D, Inc. show increased assets and liabilities, reduced net loss, and ongoing liquidity concerns [Condensed Consolidated Balance Sheets (unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(unaudited)) Total assets slightly increased to **$91.40 million**, while total liabilities significantly rose, and stockholders' equity decreased due to accumulated deficit Balance Sheet Summary (in thousands) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :-------------------------------- | :------------------------------ | :------------------------------- | :-------------------- | | Total Assets | $91,399 | $89,180 | $2,219 | | Total Liabilities | $58,517 | $49,516 | $9,001 | | Total Stockholders' Equity | $32,882 | $39,664 | $(6,782) | | Cash and cash equivalents | $3,870 | $1,212 | $2,658 | | Debt – current portion | $16,152 | $5,666 | $10,486 | [Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss%20(unaudited)) Net loss decreased to **$25.41 million**, total revenue declined by **4.8%**, and gross profit turned positive, driven by a **32.3%** reduction in operating expenses Statements of Operations Summary (in thousands) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | % Change | | :------------------------------------------ | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :--------- | | Total Revenue | $9,320 | $9,786 | $(466) | (4.8)% | | Total Cost of Revenue | $8,623 | $12,601 | $(3,978) | (31.6)% | | Gross Profit (Loss) | $697 | $(2,815) | $3,512 | (124.8)% | | Total Operating Expenses | $12,618 | $18,635 | $(6,017) | (32.3)% | | Loss from Operations | $(11,921) | $(21,450) | $9,529 | (44.4)% | | Net Loss | $(25,411) | $(28,314) | $2,903 | (10.3)% | | Basic Net Loss per Share | $(0.13) | $(3.81) | $3.68 | (96.6)% | [Condensed Consolidated Statements of Cash Flows (unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(unaudited)) Net cash used in operating activities decreased to **$12.35 million**, while financing activities significantly increased to **$15.00 million** due to secured convertible notes Cash Flow Summary (in thousands) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :-------------------------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | | Net cash used in operating activities | $(12,349) | $(20,523) | $8,174 | | Net cash provided by investing activities | $— | $3,493 | $(3,493) | | Net cash provided by financing activities | $15,000 | $285 | $14,715 | | Net change in cash and cash equivalents | $2,658 | $(16,740) | $19,398 | [Condensed Consolidated Statements of Stockholders' Equity (unaudited)](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(unaudited)) Total stockholders' equity decreased to **$32.88 million** due to a **$25.41 million** net loss, partially offset by increased additional paid-in capital Stockholders' Equity Summary (in thousands) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :-------------------------------- | :------------------------------ | :------------------------------- | :-------------------- | | Total Stockholders' Equity | $32,882 | $39,664 | $(6,782) | | Additional Paid-In Capital | $488,623 | $469,994 | $18,629 | | Accumulated Deficit | $(455,745) | $(430,334) | $(25,411) | | Common Stock Shares Outstanding | 210,232,762 | 194,909,430 | 15,323,332 | [Notes to Condensed Consolidated Interim Financial Statements (unaudited)](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Interim%20Financial%20Statements%20(unaudited)) Detailed disclosures cover business, accounting policies, financial instruments, debt, and equity, highlighting a reverse stock split, delisting, and liquidity efforts amid going concern doubts - The company produces metal additive 3D printers for high-value parts in industries like space, aviation, and defense, and provides support services[31](index=31&type=chunk) - A **1-for-35 reverse stock split** was effective June 13, 2024, retroactively adjusting all share numbers and per-share amounts[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) - The company was delisted from the NYSE on September 10, 2024, and commenced trading on the OTCQX Best Market on September 11, 2024[39](index=39&type=chunk) - Management believes there is substantial doubt about the company's ability to continue as a going concern due to accumulated deficit (**$455.7 million**) and insufficient liquidity for the next 12 months[40](index=40&type=chunk)[41](index=41&type=chunk) - In December 2024, Arrayed Notes Acquisition Corp. acquired the Senior Secured Notes and subsequently exchanged **$22.4 million** in principal plus **$0.4 million** accrued interest for **185,151,333 shares** of common stock, making Arrayed the owner of approximately **95%** of the company's outstanding common stock[42](index=42&type=chunk)[43](index=43&type=chunk) - The company issued two Senior Secured Convertible Promissory Notes in January and February 2025 totaling **$15 million**, bearing high interest rates (**60.0%** and **30.0%** per annum, respectively) and convertible into common stock under certain conditions[45](index=45&type=chunk)[46](index=46&type=chunk) - The company will need additional financing to fund operations and satisfy obligations in the near-term, with no assurance of obtaining it on acceptable terms[47](index=47&type=chunk) - The FASB issued ASU 2023-09, effective for annual periods beginning after December 15, 2024, to enhance income tax disclosures, which the company is currently evaluating[49](index=49&type=chunk) - Revenue from perpetual software licenses is recognized upfront, while maintenance revenue (PCS) is recognized ratably over the contract term or as support is used[51](index=51&type=chunk) - Subscription licenses are bundled, with the license component recognized upfront and PCS recognized ratably[52](index=52&type=chunk) - Product warranties for 3D printers typically last one year from installation, with estimated costs accrued at the time of sale based on historical data[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk) Selected Balance Sheet Accounts (in thousands) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :------------------------------ | :------------------------------- | | Accounts Receivable, Net | $4,569 | $3,723 | | Inventories, Net | $46,133 | $49,953 | | Prepaid Expenses and Other Current Assets | $5,907 | $2,336 | | Property and Equipment, Net | $13,691 | $14,270 | | Other Assets | $12,261 | $13,513 | | Accounts Payable | $16,365 | $18,538 | | Accrued Expenses and Other Current Liabilities | $3,762 | $3,511 | | Debt – current portion | $16,152 | $5,666 | | Contract Liabilities | $7,614 | $10,285 | | Long-term debt – less current portion | $5,506 | $— | | Warrant Liabilities | $13 | $2,167 | - The company leases office and manufacturing facilities under non-cancellable operating leases expiring between 2025 and 2032[76](index=76&type=chunk) - Total lease liabilities were **$9.78 million** as of March 31, 2025[78](index=78&type=chunk) Debt Breakdown (in thousands) | Debt Type | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------ | :------------------------------ | :------------------------------- | | January Note | $5,692 | $— | | February Note 1st Tranche | $5,204 | $— | | February Note 2nd Tranche | $5,046 | $— | | Secured Notes | $5,716 | $5,666 | | **Total Debt** | **$21,658** | **$5,666** | | Debt – current portion | $16,152 | $5,666 | | Long-term debt – less current portion | $5,506 | $— | - As of March 31, 2025, the company had **210,232,762 shares** of common stock outstanding[87](index=87&type=chunk) - In February 2025, the company entered into Warrant Exchange Agreements, exchanging various warrants for **14,852,379 shares** of common stock, leading to a significant reduction in outstanding common stock warrants[91](index=91&type=chunk)[92](index=92&type=chunk)[101](index=101&type=chunk) Common Stock and Warrants Reserved (shares) | Metric | March 31, 2025 (shares) | December 31, 2024 (shares) | | :------------------------------------------ | :---------------------- | :----------------------- | | Common stock warrants | 553,326 | 5,504,117 | | Shares available for future grant under 2021 EIP | 43,957 | 696,840 | | Reserved for At-the-Market offering | 80,742 | 80,742 | | Reserved for employee stock purchase plan | 284,367 | 284,367 | | **Total shares of common stock reserved** | **962,392** | **6,566,066** | - Total stock-based compensation expense for the three months ended March 31, 2025, was **$4.07 million**, a decrease from **$5.09 million** in the prior year, primarily from restricted stock units and earnout shares[139](index=139&type=chunk)[140](index=140&type=chunk) - No provision for federal and state income taxes was recorded due to projected losses and a full valuation allowance on deferred tax assets[141](index=141&type=chunk) - The company has non-cancellable purchase commitments of **$1.5 million** for parts and assemblies due throughout the remainder of 2025[143](index=143&type=chunk) - The company's contribution to its 401(k) Plan was **$0.1 million** for the three months ended March 31, 2025, down from **$0.3 million** in the prior year[144](index=144&type=chunk) Customer Concentration (as a percentage of Total Revenue) | Customer | Three Months Ended March 31, 2025 (as a percentage of Total Revenue) | Three Months Ended March 31, 2024 (as a percentage of Total Revenue) | | :--------- | :----------------------------------------------------------------- | :----------------------------------------------------------------- | | Customer 1 | 31.5% | —% | | Customer 2 | 29.5% | 26.8% | | Customer 3 | <10% | 13.5% | Revenue by Geographic Area (in thousands) | Geographic Area | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :-------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | | Americas | $8,289 | $9,373 | $(1,084) | | Europe | $936 | $325 | $611 | | Other | $95 | $88 | $7 | | **Total** | **$9,320** | **$9,786** | **$(466)** | - On April 12, 2025, the company entered into a Master Service Agreement with Momentus, Inc. to provide consulting and parts production for five years in exchange for common and convertible preferred stock[150](index=150&type=chunk) - On April 24, 2025, the Board of Directors appointed Jason Lloyd and Kenneth Thieneman as new directors, following the resignations of Brad Kreger and Michael Idelchik[151](index=151&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, condition, and outlook, highlighting reduced net loss, improved gross profit, and expense cuts, alongside ongoing liquidity challenges and going concern doubts [Overview](index=44&type=section&id=Overview) Velo3D specializes in proprietary L-PBF metal 3D printing for complex, high-value parts in aerospace and defense, employing a 'land and expand' customer strategy - Velo3D produces metal additive 3D printers using proprietary L-PBF technology, which reduces or eliminates the need for support structures[155](index=155&type=chunk) - The Sapphire Family of Printers enables customers in space, aviation, defense, automotive, energy, and industrial markets to design and produce complex metal parts[156](index=156&type=chunk) - The company's technology allows for the creation of complex high-value metal parts without redesign, offering design advantages, lower costs for low-volume parts, and faster lead times compared to traditional manufacturing[157](index=157&type=chunk)[158](index=158&type=chunk) - Velo3D uses a "land and expand" strategy, where customers initially purchase a single machine for validation and then acquire additional systems as the technology is integrated into their product roadmaps[158](index=158&type=chunk) [Recent Developments](index=44&type=section&id=Recent%20Developments) Recent developments include a debt-for-equity exchange making Arrayed 95% owner, warrant exchanges, and **$15 million** in new secured convertible notes, despite ongoing going concern doubts - On December 24, 2024, Arrayed Notes Acquisition Corp. converted **$22.4 million** in principal and **$0.4 million** in accrued interest from Secured Notes into **185,151,333 shares** of common stock, resulting in Arrayed owning approximately **95%** of the company's outstanding common stock[159](index=159&type=chunk) - On February 24, 2025, the company entered into Warrant Exchange Agreements, exchanging various registered and unregistered warrants for an aggregate of **14,852,379 shares** of common stock[160](index=160&type=chunk)[161](index=161&type=chunk) - In January and February 2025, the company issued two Senior Secured Convertible Promissory Notes totaling **$15 million**, bearing high interest rates (**60.0%** and **30.0%** per annum) and convertible into common stock under specific conditions[162](index=162&type=chunk)[163](index=163&type=chunk) - Despite recent debt and equity transactions, there remains substantial doubt about the company's ability to continue as a going concern due to insufficient liquidity for the next 12 months, necessitating additional financing[165](index=165&type=chunk) [Key Financial and Operational Metrics](index=46&type=section&id=Key%20Financial%20and%20Operational%20Metrics) Revenue decreased to **$9 million**, bookings declined significantly to **$8 million**, and backlog fell to **$18 million**, indicating a slowdown in new orders Key Financial and Operational Metrics (in millions) | Metric | Three Months Ended March 31, 2025 (in millions) | Three Months Ended March 31, 2024 (in millions) | Change (in millions) | | :-------------------- | :---------------------------------------------- | :---------------------------------------------- | :------------------- | | Revenue | $9 | $10 | $(1) | | Bookings | $8 | $17 | $(9) | | Backlog | $18 | $22 | $(4) | - Bookings are defined as confirmed orders for 3D printer systems and printed parts in contracted dollars[167](index=167&type=chunk) - Backlog represents unfulfilled 3D printer systems and printed parts to be delivered to customers in contracted dollars as of period end[168](index=168&type=chunk) [Customer Concentration](index=47&type=section&id=Customer%20Concentration) Sales to the top three customers increased to **70.7%** of revenue, indicating heightened customer concentration risk - Sales to the top three customers accounted for **70.7%** of revenue for the three months ended March 31, 2025, up from **49.9%** in the prior year, indicating increased customer concentration risk[169](index=169&type=chunk)[170](index=170&type=chunk) [Continued Investment and Innovation](index=47&type=section&id=Continued%20Investment%20and%20Innovation) The company continues to invest in R&D to enhance its AM solutions and improve existing product capabilities, crucial for future growth - The company continues to invest in research and development to enhance its portfolio of AM solutions based on customer demand, aiming to improve existing product capabilities[171](index=171&type=chunk) [Macroeconomic Conditions and Other World Events](index=47&type=section&id=Macroeconomic%20Conditions%20and%20Other%20World%20Events) Macroeconomic conditions and geopolitical events create uncertainty in customer orders and supply chains, prompting operational efficiency improvements in 2024 and 2025 - Macroeconomic conditions (recessions, inflation, interest rates, supply chain shortages) and geopolitical events (conflicts in Israel and Ukraine) create uncertainty in customer orders and supply chain constraints[172](index=172&type=chunk) - The company implemented supply chain and manufacturing improvements in 2024 and plans further operational improvements in 2025 to reduce operating costs[172](index=172&type=chunk) [Climate Change](index=47&type=section&id=Climate%20Change) Climate change legislation, regulations, and extreme weather pose risks of increased costs, operational disruptions, and reputational damage - Climate change-related legislation, regulations, and international accords could adversely affect the business through increased capital expenditures, compliance costs, and indirect consequences like changes in demand or increased competition[173](index=173&type=chunk) - Extreme weather and natural disasters may disrupt operations or the supply chains of the company and its customers[173](index=173&type=chunk) [Components of Results of Operations](index=47&type=section&id=Components%20of%20Results%20of%20Operations) Revenue streams include 3D printer sales and support services, with costs encompassing manufacturing and personnel, while operating expenses are categorized into R&D, S&M, and G&A - Revenue is primarily derived from 3D Printer sales (Sapphire family) and associated Support Services, with some recurring payment (operating lease) transactions[174](index=174&type=chunk)[175](index=175&type=chunk) - 3D Printer sale transactions recognize revenue upon transfer of control at shipment, typically three to nine months from order[176](index=176&type=chunk) - Recurring Payment transactions are operating leases, where customers pay a base rent and variable usage fees, typically with a 12-month term[179](index=179&type=chunk)[180](index=180&type=chunk) - Rapid Production Solutions (RPS) offers custom metal component manufacturing using the company's expertise and Sapphire XC printers[180](index=180&type=chunk) - Cost of revenue includes manufacturing costs for 3D printers, depreciation for leased equipment, and costs for support services (spare parts, installation, personnel)[182](index=182&type=chunk)[183](index=183&type=chunk)[184](index=184&type=chunk) - Gross profit and margin are affected by product mix, average selling prices, material and shipping costs, production volumes, system reliability, and support service costs[185](index=185&type=chunk) - Operating expenses include Research and Development (salaries, prototypes, design), Selling and Marketing (salaries, trade shows, advertising), and General and Administrative (executive, finance, legal, professional fees)[186](index=186&type=chunk)[187](index=187&type=chunk)[188](index=188&type=chunk) - Other financial items include interest expense, gains/losses on fair value of warrants and contingent earnout liabilities, and loss on warrant cancellation[189](index=189&type=chunk)[190](index=190&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk)[193](index=193&type=chunk) - No income tax provision was recorded due to projected losses and a full valuation allowance on deferred tax assets[194](index=194&type=chunk) [Results of Operations](index=51&type=section&id=Results%20of%20Operations) Net loss decreased by **10.3%** to **$25.41 million**, driven by a **32.3%** reduction in operating expenses and a positive shift in gross profit, despite a **4.8%** revenue decline Consolidated Results of Operations (in thousands) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | % Change | | :------------------------------------------ | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :--------- | | Total Revenue | $9,320 | $9,786 | $(466) | (4.8)% | | Total Cost of Revenue | $8,623 | $12,601 | $(3,978) | (31.6)% | | Gross Profit (Loss) | $697 | $(2,815) | $3,512 | (124.8)% | | Total Operating Expenses | $12,618 | $18,635 | $(6,017) | (32.3)% | | Loss from Operations | $(11,921) | $(21,450) | $9,529 | (44.4)% | | Net Loss | $(25,411) | $(28,314) | $2,903 | (10.3)% | [Revenue](index=51&type=section&id=Revenue) Total revenue decreased by **4.8%** to **$9.32 million**, primarily due to declines in 3D Printer sales and Recurring Payment revenue, partially offset by increased Support Services revenue Revenue by Type (in thousands) | Revenue Type | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | % Change | | :----------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :--------- | | 3D Printer | $7,523 | $7,660 | $(137) | (1.8)% | | Recurring payment | $— | $470 | $(470) | (100.0)% | | Support services | $1,790 | $1,656 | $134 | 8.1% | | Other | $7 | $— | $7 | 100.0% | | **Total Revenue** | **$9,320** | **$9,786** | **$(466)** | **(4.8)%** | [Cost of Revenue](index=52&type=section&id=Cost%20of%20Revenue) Total cost of revenue decreased by **31.6%** to **$8.62 million**, driven by lower 3D Printer and Support Services costs, improving cost of revenue as a percentage of revenue to **92.5%** Cost of Revenue by Type (in thousands) | Cost of Revenue Type | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | % Change | | :----------------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :--------- | | Cost of 3D Printers | $7,540 | $9,394 | $(1,854) | (19.7)% | | Cost of Recurring Payment | $12 | $315 | $(303) | (96.2)% | | Cost of Support Services | $1,071 | $2,892 | $(1,821) | (63.0)% | | **Total Cost of Revenue** | **$8,623** | **$12,601** | **$(3,978)** | **(31.6)%** | - Cost of revenue as a percentage of revenue improved from **128.8%** in Q1 2024 to **92.5%** in Q1 2025, driven by lower raw material costs and direct labor efficiency[209](index=209&type=chunk) - The company faces increasing component costs due to international tariffs and its current financial situation, which prevents securing credit terms and volume discounts, negatively impacting cost of revenue[210](index=210&type=chunk)[211](index=211&type=chunk) [Gross Profit and Gross Margin](index=54&type=section&id=Gross%20Profit%20and%20Gross%20Margin) Gross profit turned positive to **$0.7 million**, with gross margin increasing to **7.5%**, primarily due to lower system revenue costs, though customer order trends and component costs remain a challenge Gross Profit and Margin (in thousands) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :--------- | | Gross Profit (Loss) | $697 | $(2,815) | $3,512 | (124.8)% | | Gross Margin | 7.5% | (28.8)% | 36.3 pp | (126.0)% | - Gross profit and gross margin are negatively impacted by trends in customer orders and component costs, and this is expected to continue until financial conditions improve[213](index=213&type=chunk) [Research and Development Expenses](index=54&type=section&id=Research%20and%20Development%20Expenses) R&D expenses decreased by **76.0%** to **$1.2 million** due to reduced headcount and compensation, with costs expected to remain stable for the rest of 2025 Research and Development Expenses (in thousands) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :--------- | | Research and development | $1,212 | $5,043 | $(3,831) | (76.0)% | - The decrease was driven by a **$2.8 million** reduction in headcount, salaries, and employee-related expenses, an **$0.8 million** decrease in stock-based compensation, and a **$0.2 million** decrease in miscellaneous expenses[214](index=214&type=chunk) - R&D costs are expected to remain at similar levels for the remainder of 2025 due to the maturation of Sapphire systems and focused investments in current product line improvements[215](index=215&type=chunk) [Selling and Marketing Expenses](index=54&type=section&id=Selling%20and%20Marketing%20Expenses) Selling and marketing expenses decreased by **52.7%** to **$2.3 million** due to reduced headcount and marketing costs, but are expected to increase as customer engagement and RPS traction grow Selling and Marketing Expenses (in thousands) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :--------- | | Selling and marketing | $2,275 | $4,809 | $(2,534) | (52.7)% | - The decrease was attributable to a **$1.5 million** decrease in headcount, salaries, and employee-related expenses, a **$0.9 million** decrease in stock-based compensation, and a **$0.4 million** decrease in marketing costs[216](index=216&type=chunk) - Selling and marketing expenses are expected to increase for the remainder of 2025 as the company re-engages with key customers and focuses on driving Rapid Production Solutions (RPS) traction[217](index=217&type=chunk) [General and Administrative Expenses](index=54&type=section&id=General%20and%20Administrative%20Expenses) General and administrative expenses increased by **4.0%** to **$9.1 million** due to higher legal fees, but are projected to decrease from 2024 workforce reductions and cost-saving initiatives General and Administrative Expenses (in thousands) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :--------- | | General and administrative | $9,131 | $8,783 | $348 | 4.0% | - The increase was attributable to a **$0.3 million** increase in legal and other professional fees[218](index=218&type=chunk) - General and administrative expenses are expected to decrease due to savings from a late 2024 reduction in force and ongoing initiatives to reduce reliance on outside consultants, manage facility costs, and negotiate vendor pricing[219](index=219&type=chunk)[220](index=220&type=chunk) [Interest Expense](index=56&type=section&id=Interest%20Expense) Interest expense decreased by **72.5%** to **$1.1 million** due to reduced Senior Secured Notes, partially offset by new convertible notes, with further decreases expected as debt is reduced Interest Expense (in thousands) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | % Change | | :--------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :--------- | | Interest expense | $(1,070) | $(3,897) | $2,827 | (72.5)% | - The decrease was due to the reduction in Senior Secured Notes, partially offset by the issuance of Secured Secured Convertible Notes[221](index=221&type=chunk) - Interest expense is expected to continue to decrease as a result of reduced debt[222](index=222&type=chunk) [Gain (loss) on Fair Value of Warrants](index=56&type=section&id=Gain%20(loss)%20on%20Fair%20Value%20of%20Warrants) Loss on fair value of warrants decreased by **60.2%** to **$1.0 million**, a non-cash adjustment reflecting changes in warrant liabilities due to stock price fluctuations Loss on Fair Value of Warrants (in thousands) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :--------- | | Loss on fair value of warrants | $(1,044) | $(2,620) | $1,576 | (60.2)% | [Gain (loss) on Fair value of Contingent Earnout Liabilities](index=56&type=section&id=Gain%20(loss)%20on%20Fair%20value%20of%20Contingent%20Earnout%20Liabilities) No gain or loss on fair value of contingent earnout liabilities was reported, compared to a **$0.4 million** loss in the prior year, reflecting non-cash adjustments Loss on Fair Value of Contingent Earnout Liabilities (in thousands) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | % Change | | :------------------------------------------ | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :--------- | | Loss on fair value of contingent earnout liabilities | $— | $(437) | $437 | (100.0)% | [Loss on Warrant Cancellation](index=56&type=section&id=Loss%20on%20Warrant%20Cancellation) A **$11.4 million** loss on warrant cancellation was recognized, directly resulting from the February 2025 Warrant Exchange transaction Loss on Warrant Cancellation (in thousands) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | % Change | | :------------------------ | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :--------- | | Loss on warrant cancellation | $(11,357) | $— | $(11,357) | 100.0% | [Other Income (Expense), Net](index=56&type=section&id=Other%20Income%20(Expense),%20Net) Other income (expense), net, shifted to a minor expense of less than **($0.01) million**, including interest income and asset disposal gains/losses Other Income (Expense), Net (in thousands) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | :--------- | | Other income (expense), net | $(11) | $94 | $(105) | (111.7)% | [Income Taxes](index=56&type=section&id=Income%20Taxes) No income tax provision was recorded due to projected losses and a full valuation allowance on deferred tax assets, with a benefit expected upon future profitability - No provision for federal and state income taxes was recorded for the three months ended March 31, 2025 and 2024, due to projected losses and a full valuation allowance on deferred tax assets[226](index=226&type=chunk) - The company expects to reverse the U.S. valuation allowance position and record a benefit if it generates profits in the foreseeable future, leading to a higher effective tax rate thereafter[227](index=227&type=chunk) [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) With **$3.9 million** cash, the company faces substantial doubt about its going concern ability due to insufficient liquidity for **$16.4 million** payables and **$21.7 million** debt, necessitating further financing - As of March 31, 2025, the company had **$3.9 million** in cash and short-term investments, insufficient to cover **$16.4 million** in accounts payable and **$21.7 million** in debt[270](index=270&type=chunk) - There is substantial doubt about the company's ability to continue as a going concern for the next 12 months, which could negatively impact investor and creditor perception, and make securing additional financing difficult[271](index=271&type=chunk)[272](index=272&type=chunk) - The company will need to engage in additional equity or debt financings to fund operations, repay debt, and provide working capital, but there is no assurance of obtaining such financing on acceptable terms[275](index=275&type=chunk)[276](index=276&type=chunk) - The company's financial condition has caused customers to delay orders and prevents securing favorable credit terms and volume discounts with suppliers, leading to premium payments or alternative sourcing[273](index=273&type=chunk) - Recent financing activities include a debt-for-equity exchange with Arrayed Notes Acquisition Corp. (making them **95%** owner) and the issuance of **$15 million** in Senior Secured Convertible Promissory Notes[233](index=233&type=chunk)[234](index=234&type=chunk)[235](index=235&type=chunk) [Cash Flow Summary](index=60&type=section&id=Cash%20Flow%20Summary) Net cash used in operating activities decreased to **$12.35 million**, while financing activities significantly increased to **$15.00 million** due to secured convertible notes Cash Flow Activities (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :-------------------------------- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | | Net cash used in operating activities | $(12,349) | $(20,523) | $8,174 | | Net cash provided by investing activities | $— | $3,493 | $(3,493) | | Net cash provided by financing activities | $15,000 | $285 | $14,715 | - The decrease in cash used in operating activities was primarily due to a lower net loss and reduced non-cash losses, partially offset by changes in operating assets and liabilities[242](index=242&type=chunk) - Cash provided by financing activities increased due to **$15.0 million** from the issuance of the January Note and February Note[245](index=245&type=chunk) - Capital expenditures are expected to increase in 2025 as the company invests in printer capacity and facilities for Rapid Production Solutions (RPS)[244](index=244&type=chunk) [Off-Balance Sheet Arrangements](index=62&type=section&id=Off-Balance%20Sheet%20Arrangements) The company had no off-balance sheet arrangements as of March 31, 2025, or December 31, 2024 - The company had no off-balance sheet arrangements as of March 31, 2025, and December 31, 2024[248](index=248&type=chunk) [Recent Accounting Pronouncements](index=62&type=section&id=Recent%20Accounting%20Pronouncements) Refer to Note 2 for details on recent accounting pronouncements, including adoption dates and estimated effects on financial statements - For details on recent accounting pronouncements, including adoption dates and estimated effects, refer to Note 2, Summary of Significant Accounting Policies[249](index=249&type=chunk) [Implications of Being an Emerging Growth Company](index=62&type=section&id=Implications%20of%20Being%20an%20Emerging%20Growth%20Company) As an EGC, Velo3D uses an extended transition period for accounting standards, potentially affecting comparability, and will retain EGC status until specific thresholds are met - As an "emerging growth company" (EGC), Velo3D has elected to use the extended transition period for complying with new or revised financial accounting standards[250](index=250&type=chunk)[251](index=251&type=chunk) - The EGC status allows for reduced disclosure obligations but may make financial results difficult to compare with non-EGCs or EGCs that opted out of the extended transition period[251](index=251&type=chunk) - The company will remain an EGC until the earliest of December 31, 2025, or meeting certain revenue, filer status, or debt issuance thresholds[252](index=252&type=chunk) [Implications of Being a Smaller Reporting Company](index=62&type=section&id=Implications%20of%20Being%20a%20Smaller%20Reporting%20Company) As an SRC, Velo3D benefits from reduced disclosure obligations, including two years of audited financial statements, retaining status until specific thresholds are exceeded - Velo3D is a "smaller reporting company" (SRC), allowing it to take advantage of reduced disclosure obligations, including providing only two years of audited consolidated financial statements[253](index=253&type=chunk) - The company will remain an SRC until its market value of voting and nonvoting common stock held by non-affiliates exceeds **$250.0 million** (or **$700.0 million** with lower revenue) or its annual revenue exceeds **$100.0 million**[254](index=254&type=chunk) [Critical Accounting Policies and Significant Estimates](index=62&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Estimates) Financial statements rely on critical accounting policies and significant estimates involving judgment, with actual results potentially differing materially; further details are in Note 2 and the 2024 Form 10-K - The company's financial condition and results of operations are based on critical accounting policies and significant estimates that involve a high degree of judgment or complexity[255](index=255&type=chunk) - Actual results could differ materially from these estimates and assumptions, and these differences could be material to the financial statements[255](index=255&type=chunk) - Estimates are re-evaluated on an ongoing basis, with more information available in Note 2 of the interim financial statements and the 2024 Form 10-K[255](index=255&type=chunk)[256](index=256&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=64&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Velo3D is exempt from quantitative and qualitative market risk disclosures under Regulation S-K Item 305(e) - As a smaller reporting company, Velo3D is not required to provide quantitative and qualitative disclosures about market risk[257](index=257&type=chunk) [Item 4. Controls and Procedures](index=64&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were ineffective due to material weaknesses in internal control over financial reporting, including an ineffective control environment and inadequate accounting controls, with remediation efforts ongoing [Evaluation of Disclosure Controls and Procedures](index=64&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) CEO and CFO concluded disclosure controls and procedures were ineffective due to material weaknesses in internal control over financial reporting as of March 31, 2025 - As of March 31, 2025, the CEO and CFO concluded that disclosure controls and procedures were not effective due to material weaknesses in internal control over financial reporting[259](index=259&type=chunk) [Material Weaknesses in Internal Control over Financial Reporting](index=64&type=section&id=Material%20Weaknesses%20in%20Internal%20Control%20over%20Financial%20Reporting) Identified material weaknesses include an ineffective control environment, inadequate segregation of duties, and insufficient controls over accounting for debt, equity, inventory, and financial statement presentation, leading to past adjustments - Material weaknesses include an ineffective control environment due to insufficient personnel with appropriate internal controls and accounting knowledge, leading to inadequate segregation of duties[260](index=260&type=chunk) - Specific weaknesses were identified in controls over segregation of duties for journal entries and account reconciliations, and accounting for debt and equity instruments (convertible notes, warrants, common stock, earnout liabilities)[260](index=260&type=chunk) - Ineffective controls were also found in accounting for inventory and related accounts (existence, accuracy of purchases, manufacturing costs, write-offs, presentation) and contract assets and liabilities (accuracy, presentation, variable consideration)[260](index=260&type=chunk) - Deficiencies in IT general controls for information systems relevant to financial statements were noted, specifically regarding user access controls and program change management controls[264](index=264&type=chunk) - These material weaknesses resulted in past adjustments and revisions to consolidated financial statements and could lead to future material misstatements[261](index=261&type=chunk)[262](index=262&type=chunk) [Remediation Measures for Remaining Material Weaknesses in Internal Control over Financial Reporting](index=66&type=section&id=Remediation%20Measures%20for%20Remaining%20Material%20Weaknesses%20in%20Internal%20Control%20over%20Financial%20Reporting) Remediation efforts include hiring accounting and IT personnel, providing training, engaging third-party assistance for control design, and formalizing review responsibilities, with further measures planned for specific accounting areas - Remediation measures include hiring additional accounting and IT personnel, providing ongoing training, and engaging a third-party to assist in designing and implementing controls, including segregation of duties and IT general controls[263](index=263&type=chunk) - Plans are underway to design and implement controls over accounting and disclosure for debt and equity instruments, inventory and related accounts, contract assets and liabilities, and financial statement preparation and presentation[263](index=263&type=chunk) - The effectiveness of these measures is subject to continued testing, senior management review, and audit committee oversight, with no assurance of full remediation yet[265](index=265&type=chunk) [Changes in Internal Control over Financial Reporting](index=68&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) No other material changes in internal control over financial reporting occurred during the quarter, apart from identified weaknesses and ongoing remediation efforts - No other material changes in internal control over financial reporting occurred during the quarter ended March 31, 2025, beyond the identified material weaknesses and remediation efforts[266](index=266&type=chunk) Part II. Other Information [Item 1. Legal Proceedings](index=68&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings that would adversely affect its financial position or operations - The company is not currently involved in any material legal proceedings[268](index=268&type=chunk) [Item 1A. Risk Factors](index=68&type=section&id=Item%201A.%20Risk%20Factors) Updates on significant risks include going concern doubts, need for additional capital, and adverse impacts of U.S. tariffs and compliance with anti-corruption and trade control laws [Risks Related to Our Financial Position and Need for Additional Capital](index=68&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Need%20for%20Additional%20Capital) Substantial doubt exists about the company's going concern ability due to insufficient liquidity, impacting investor confidence and requiring additional, potentially unavailable, financing - Substantial doubt exists about the company's ability to continue as a going concern due to insufficient liquidity (**$3.9 million** cash) to meet short-term obligations (**$16.4 million** accounts payable, **$21.7 million** debt)[270](index=270&type=chunk)[271](index=271&type=chunk) - This going concern conclusion negatively impacts investor/creditor perception, delays customer orders, and prevents favorable supplier terms, forcing premium payments or alternative sourcing[272](index=272&type=chunk)[273](index=273&type=chunk) - The company requires additional capital to fund operations and satisfy debt, but securing financing on acceptable terms is difficult due to its financial condition and general market concerns[275](index=275&type=chunk) - Failure to obtain adequate financing could significantly impair the company's ability to respond to business challenges, potentially leading to liquidation or bankruptcy[276](index=276&type=chunk) [Risks Related to our Business and Industry](index=70&type=section&id=Risks%20Related%20to%20our%20Business%20and%20Industry) Uncertainty from U.S. tariffs and trade policies, including a **25%** tariff on Canadian goods, could increase costs, delay timelines, and trigger a global trade war - Uncertainty regarding U.S. tariffs and trade relationships, including a **25%** tariff on goods from Canada and potential tariffs on goods from Mexico and China, could impose additional costs and negatively impact the company[277](index=277&type=chunk) - The implementation of tariffs could trigger a broader global trade war, which would have a material adverse effect on the U.S. and global economies and, consequently, the company's financial condition[278](index=278&type=chunk) [Risks Related to Compliance Matters](index=71&type=section&id=Risks%20Related%20to%20Compliance%20Matters) Compliance risks from U.S. and international anti-corruption and trade control laws could lead to penalties and reputational harm, heightened by international expansion and state-owned enterprise dealings - The company is subject to U.S. and foreign anti-corruption laws (FCPA, Bribery Act) and trade control laws (ITAR, EAR, OFAC sanctions), with non-compliance risking civil/criminal penalties, fines, and reputational damage[279](index=279&type=chunk)[281](index=281&type=chunk)[284](index=284&type=chunk) - International expansion, particularly in Europe, South-East Asia, and Oceania, and dealings with state-owned enterprises, increase the risk of violations[282](index=282&type=chunk) - Despite established policies and training, there's no assurance that employees or partners will not violate these laws, and the company may be held liable for partners' actions[284](index=284&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=72&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported during the period - No unregistered sales of equity securities or use of proceeds occurred during the period[285](index=285&type=chunk) [Item 3. Defaults Upon Senior Securities](index=72&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable for the reporting period - This item is not applicable[286](index=286&type=chunk) [Item 4. Mine Safety Disclosures](index=72&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable for the reporting period - This item is not applicable[287](index=287&type=chunk) [Item 5. Other Information](index=72&type=section&id=Item%205.%20Other%20Information) No director or Section 16 officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter - No director or Section 16 officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended March 31, 2025[288](index=288&type=chunk) [Item 6. Exhibits](index=73&type=section&id=Item%206.%20Exhibits) Exhibits filed with Form 10-Q include various Senior Secured Convertible Promissory Notes, Warrant Exchange Agreements, and CEO/CFO certifications - Exhibits include Senior Secured Convertible Promissory Notes, Secured Guaranties, Offer Letters, Warrant Exchange Agreements, Lock-Up Agreements, and CEO/CFO certifications[290](index=290&type=chunk) [Signatures](index=74&type=section&id=Signatures) The report was duly signed by Hull Xu, Chief Financial Officer, Principal Financial Officer, and Authorized Officer, on May 15, 2025 - The report was signed by Hull Xu, Chief Financial Officer, Principal Financial Officer, and Authorized Officer, on May 15, 2025[296](index=296&type=chunk)

[First Quarter 2025 Financial Results Overview](index=1&type=section&id=First%20Quarter%202025%20Financial%20Results%20Overview) Velo3D's Q1 2025 results show improved gross margin and backlog growth, reaffirming 2025 revenue targets and 2026 EBITDA positive outlook [Key Highlights of Q1 2025](index=1&type=section&id=Key%20Highlights%20of%20Q1%202025) Velo3D reported Q1 2025 revenue of $9.3 million, a 7.5% gross margin, and an $18 million backlog, with strong defense sector demand Q1 2025 Financial Metrics | Metric | 1st Quarter 2025 | 1st Quarter 2024 | | :--- | :--- | :--- | | GAAP Revenue | $9.3 million | $9.8 million | | GAAP Gross Margin | 7.5% | (28.8)% | | GAAP Net Loss | ($25.4) million | ($28.3) million | | GAAP Net Loss per Share | ($0.13) | ($3.81) | | Non-GAAP Net Loss | ($8.9) million | ($20.2) million | | Non-GAAP Net Loss per Share | ($0.04) | ($2.71) | - Backlog of **$18 million** as of March 31, 2025[5](index=5&type=chunk) - Reaffirms expectation for 2025 annual revenue growth of **more than 30%** and to be EBITDA positive in the first half of 2026[5](index=5&type=chunk) - RPS backlog increased **3x** as compared to year-end 2024, with new customers representing **over 75%** of 1Q'25 bookings and **50%** demand from the defense sector[5](index=5&type=chunk) [Recent Business Developments and Strategic Initiatives](index=1&type=section&id=Recent%20Business%20Developments%20and%20Strategic%20Initiatives) Velo3D is executing strategic initiatives, securing key agreements, and strengthening its leadership to drive sustainable growth and profitability - Momentum is building across the business due to strategic initiatives aimed at sustainable, long-term growth and a return to profitability, with early results from a new go-to-market strategy gaining traction in defense and aerospace[4](index=4&type=chunk) - Signed a five-year, **$15 million** master services agreement (MSA) with Momentus, Inc. and a five-year exclusive supply agreement with Amaero Advanced Materials & Manufacturing, Inc., validating the RPS Offering and expanding Velo3D's role in re-shoring critical manufacturing[4](index=4&type=chunk)[5](index=5&type=chunk) - RPS is designed to address growing demand for scalable, high-quality parts, reducing design cycles and accelerating production, and is believed to account for up to **40% of revenue by 2026**[4](index=4&type=chunk)[6](index=6&type=chunk) - Strengthened leadership team with the appointment of Brice Cooper as VP of Defense and Government Relations and welcomed Rear Admiral Jason Lloyd and Kenneth Thieneman to the Board of Directors[5](index=5&type=chunk)[6](index=6&type=chunk) [First Quarter 2025 Financial Performance](index=3&type=section&id=Financial%20Performance%20(Q1%202025)) Velo3D's Q1 2025 performance reflects a strategic shift, with improved gross margin and reduced net loss despite a slight revenue decrease [Summary of Q1 2025 Results](index=3&type=section&id=Summary%20of%20Q1%202025%20Results) Velo3D's Q1 2025 results show $9.3 million revenue, 7.5% gross margin, and reduced net losses, ending with $3.9 million cash [Revenue Analysis](index=3&type=section&id=Revenue%20Analysis) Q1 2025 revenue was $9.3 million, a decrease due to fewer printer sales, aligning with a strategy to target high-value customers - Revenue was **$9.3 million**, a decrease compared to Q1 2024, driven by a modest decrease in printer sales consistent with the strategy of maintaining Average Selling Price (ASP) by targeting high-value customers[7](index=7&type=chunk) - System sales are expected to remain the primary revenue driver in 2025, but the RPS parts production business is anticipated to contribute an increasing share of revenue starting in the second half of the year[7](index=7&type=chunk) [Gross Margin Analysis](index=3&type=section&id=Gross%20Margin%20Analysis) Q1 2025 gross margin significantly improved to 7.5% from negative 28.8% in Q1 2024, driven by cost reductions - Gross margin for Q1 2025 was **7.5%**, a significant improvement from **negative 28.8% in Q1 2024**, resulting from continued Bill of Materials (BOM) cost reduction and manufacturing process optimization[8](index=8&type=chunk) - The company expects gross margin to improve throughout 2025 due to operational efficiencies and an anticipated ramp-up of its Rapid Production Solutions business[8](index=8&type=chunk) [Operating Expenses and Net Loss](index=3&type=section&id=Operating%20Expenses%20and%20Net%20Loss) Operating expenses decreased, leading to a GAAP net loss of $25.4 million and Non-GAAP net loss of $8.9 million Operating Expenses and Net Loss (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | GAAP Operating Expenses | $12,600 | $18,600 | | Non-GAAP Operating Expenses | $8,800 | $14,100 | | GAAP Net Loss | $25,400 | $28,300 | | Non-GAAP Net Loss | $8,900 | N/A | - Adjusted EBITDA for the quarter was **negative $6.9 million**[10](index=10&type=chunk) [Cash and Cash Equivalents](index=3&type=section&id=Cash%20and%20Cash%20Equivalents) Cash and cash equivalents increased to $3.9 million as of March 31, 2025, from $1.2 million at year-end 2024 Cash and Cash Equivalents (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | $3,900 | $1,200 | [Outlook and Guidance](index=3&type=section&id=Outlook%20and%20Guidance) Velo3D projects 2025 revenue between $50 million and $60 million, with improving gross margins and an EBITDA positive target for H1 2026 [Full Year 2025 Guidance](index=3&type=section&id=Full%20Year%202025%20Guidance) Velo3D expects 2025 revenue of $50-60 million, targeting over 30% gross margin by Q4, and EBITDA positive in H1 2026 - Management expects full year 2025 revenue in the range of **$50 million to $60 million**[12](index=12&type=chunk) - Anticipates sequential improvement in gross margin, targeting **greater than 30% gross margin in the fourth quarter of 2025**[12](index=12&type=chunk) - Projects Non-GAAP operating expenses in the range of **$40 million to $50 million** and CapEx between **$15 million to $20 million**[12](index=12&type=chunk) - Expects to be EBITDA positive in the first half of 2026[12](index=12&type=chunk) [Company Information](index=4&type=section&id=Company%20Information) Velo3D is a metal 3D printing technology company providing integrated solutions for complex, mission-critical parts across various industries [About Velo3D](index=4&type=section&id=About%20Velo3D) Velo3D offers an integrated metal 3D printing solution for complex parts, serving space, aviation, and energy sectors with key partners - Velo3D is a metal 3D printing technology company that has overcome limitations of legacy metal additive manufacturing, enabling engineers to design and print previously impossible mission-critical metal parts[13](index=13&type=chunk)[14](index=14&type=chunk) - The company's fully integrated solution includes Flow print preparation software, the Sapphire family of printers, and the Assure quality control system, powered by Velo3D's Intelligent Fusion manufacturing process[14](index=14&type=chunk) - Velo3D serves customers in space exploration, aviation, power generation, energy, and semiconductor industries, with strategic partners including SpaceX, Honeywell, Honda, Chromalloy, and Lam Research[14](index=14&type=chunk) [Investor and Media Contacts](index=5&type=section&id=Investor%20and%20Media%20Contacts) Contact information for investor relations and media is provided, noting that financial results are preliminary and subject to revision - Investor Relations contact: Bob Okunski, VP Investor Relations, investors@velo3d.com[17](index=17&type=chunk) - Media Contact: Michelle Sidwell, Chief Revenue Officer, media@velo3d.com[17](index=17&type=chunk) - Amounts presented are preliminary estimates as of the earnings release date and may be revised upon filing of the Quarterly Report on Form 10-Q with the SEC[17](index=17&type=chunk) [Legal and Non-GAAP Disclosures](index=6&type=section&id=Legal%20and%20Non-GAAP%20Disclosures) This section outlines forward-looking statements and the use of non-GAAP financial measures, emphasizing their limitations and providing reconciliations [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements subject to risks and uncertainties, and readers are cautioned against undue reliance - The press release includes forward-looking statements regarding fiscal years 2025 and 2026 guidance, profitability expectations, future demand, strategic realignment, liquidity, and operational position[18](index=18&type=chunk) - These statements involve significant risks and uncertainties that could cause actual results to differ materially from expectations, as described in the 'Risk Factors' section of the company's Annual Report on Form 10-K for FY 2024 and other SEC filings[18](index=18&type=chunk) - The company cautions against undue reliance on forward-looking statements and does not undertake any obligation to publicly release updates or revisions[18](index=18&type=chunk)[19](index=19&type=chunk) [Non-GAAP Financial Information](index=8&type=section&id=Non-GAAP%20Financial%20Information) Velo3D uses non-GAAP measures to assess performance and core expenses, providing reconciliations to GAAP for transparency - Non-GAAP financial measures are used to identify trends in day-to-day performance and assess core expenses, aiding management in achieving financial goals[20](index=20&type=chunk) - These non-GAAP measures (Non-GAAP Net Loss, EBITDA, Adjusted EBITDA, Non-GAAP Operating Expenses) have limitations and should not be considered in isolation or as a substitute for GAAP measures[21](index=21&type=chunk) - The company primarily relies on GAAP results and uses non-GAAP measures on a supplemental basis, providing reconciliations to GAAP[21](index=21&type=chunk) [Non-GAAP Net Loss Reconciliation](index=9&type=section&id=Non-GAAP%20Net%20Loss%20Reconciliation) This table reconciles GAAP Net Loss to Non-GAAP Net Loss for the three months ended March 31, 2025, and prior periods Non-GAAP Net Loss Reconciliation (in thousands) | | Three months ended March 31, 2025 | Three months ended December 31, 2024 | Three months ended March 31, 2024 | | :--- | :--- | :--- | :--- | | Revenue | $9,320 | $12,626 | $9,786 | | Gross Profit | $697 | ($444) | ($2,815) | | Net Loss | ($25,411) | ($21,686) | ($28,314) | | Stock-based compensation | 4,074 | 2,322 | 5,087 | | Gain on exchange of debt for common stock | - | (2,619) | - | | (Gain) loss on fair value of warrants | 1,044 | (184) | 2,620 | | Loss on fair value of contingent earnout liabilities | - | - | 437 | | Loss on warrant cancellation | 11,357 | - | - | | Non-GAAP Net Loss | ($8,936) | ($22,167) | ($20,170) | [Non-GAAP Adjusted EBITDA Reconciliation](index=10&type=section&id=Non-GAAP%20Adjusted%20EBITDA%20Reconciliation) This table reconciles GAAP Net Loss to Adjusted EBITDA for the three months ended March 31, 2025, and prior periods Non-GAAP Adjusted EBITDA Reconciliation (in thousands) | | Three months ended March 31, 2025 | Three months ended December 31, 2024 | Three months ended March 31, 2024 | | :--- | :--- | :--- | :--- | | Revenue | $9,320 | $12,626 | $9,786 | | Net Loss | ($25,411) | ($21,686) | ($28,314) | | Interest expense | 1,070 | 3,048 | 3,897 | | Provision for income taxes | 8 | (20) | 4 | | Depreciation and amortization | 942 | 968 | 1,396 | | EBITDA | ($23,391) | ($17,690) | ($23,017) | | Stock-based compensation | 4,074 | 2,322 | 5,087 | | Gain on exchange of debt for common stock | - | (2,619) | - | | (Gain) loss on fair value of warrants | 1,044 | (184) | 2,620 | | Loss on fair value of contingent earnout liabilities | - | - | 437 | | Loss on warrant cancellation | 11,357 | - | - | | Restructuring expense | - | 3,540 | - | | Adjusted EBITDA | ($6,916) | ($14,631) | ($14,873) | [Non-GAAP Adjusted Operating Expenses Reconciliation](index=11&type=section&id=Non-GAAP%20Adjusted%20Operating%20Expenses%20Reconciliation) This table reconciles GAAP Total Operating Expenses to Non-GAAP Adjusted Operating Expenses for the three months ended March 31, 2025, and prior periods Non-GAAP Adjusted Operating Expenses Reconciliation (in thousands) | | Three months ended March 31, 2025 | Three months ended December 31, 2024 | Three months ended March 31, 2024 | | :--- | :--- | :--- | :--- | | Revenue | $9,320 | $12,626 | $9,786 | | Research and development | 1,212 | 3,082 | 5,043 | | Selling and marketing | 2,275 | 1,627 | 4,809 | | General and administrative | 9,131 | 16,348 | 8,783 | | Total operating expenses | $12,618 | $21,057 | $18,635 | | Stock-based compensation in operating expenses | 3,866 | 2,322 | 4,503 | | Adjusted operating expenses | $8,752 | $18,735 | $14,132 | [Condensed Consolidated Financial Statements](index=12&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents Velo3D's condensed consolidated financial statements, including statements of operations, balance sheets, and cash flows [Condensed Consolidated Statements of Operations](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This statement details Velo3D's revenues, costs, operating expenses, and net loss for the three months ended March 31, 2025, and 2024 Condensed Consolidated Statements of Operations (in thousands, except per share data) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Revenue** | | | | 3D Printer | $7,523 | $7,660 | | Recurring payment | — | 470 | | Support services | 1,790 | 1,656 | | Other | 7 | — | | **Total Revenue** | **9,320** | **9,786** | | **Cost of revenue** | | | | 3D Printer | 7,540 | 9,394 | | Recurring payment | 12 | 315 | | Support services | 1,071 | 2,892 | | **Total cost of revenue** | **8,623** | **12,601** | | **Gross loss** | **697** | **(2,815)** | | **Operating expenses** | | | | Research and development | 1,212 | 5,043 | | Selling and marketing | 2,275 | 4,809 | | General and administrative | 9,131 | 8,783 | | **Total operating expenses** | **12,618** | **18,635** | | **Loss from operations** | **(11,921)** | **(21,450)** | | Interest expense | (1,070) | (3,897) | | Loss on fair value of warrants | (1,044) | (2,620) | | Loss on fair value of contingent earnout liabilities | — | (437) | | Loss on warrant cancellation | (11,357) | — | | Other income (expense), net | (11) | 94 | | Loss before provision for income taxes | (25,403) | (28,310) | | Provision for income taxes | (8) | (4) | | **Net loss** | **($25,411)** | **($28,314)** | | **Net loss per share:** | | | | Basic | ($0.13) | ($3.81) | | Diluted | ($0.13) | ($3.81) | [Condensed Consolidated Balance Sheets](index=13&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement presents Velo3D's assets, liabilities, and stockholders' equity as of March 31, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $3,870 | $1,212 | | Accounts receivable, net | 4,569 | 3,723 | | Inventories, net | 46,133 | 49,953 | | Contract assets | 1,295 | 500 | | Prepaid expenses and other current assets | 5,907 | 2,336 | | **Total current assets** | **61,774** | **57,724** | | Property and equipment, net | 13,691 | 14,270 | | Equipment on lease, net | 3,673 | 3,673 | | Other assets | 12,261 | 13,513 | | **Total assets** | **$91,399** | **$89,180** | | **Liabilities and Stockholders' Equity** | | | | Accounts payable | $16,365 | $18,538 | | Accrued expenses and other current liabilities | 3,762 | 3,511 | | Debt – current portion | 16,152 | 5,666 | | Contract liabilities | 7,614 | 10,285 | | **Total current liabilities** | **43,893** | **38,000** | | Long-term debt – less current portion | 5,506 | — | | Contingent earnout liabilities | 11 | 11 | | Warrant liabilities | 13 | 2,167 | | Other noncurrent liabilities | 9,094 | 9,338 | | **Total liabilities** | **58,517** | **49,516** | | **Stockholders' equity:** | | | | Common stock | 4 | 4 | | Additional paid-in capital | 488,623 | 469,994 | | Accumulated other comprehensive loss | — | — | | Accumulated deficit | (455,745) | (430,334) | | **Total stockholders' equity** | **32,882** | **39,664** | | **Total liabilities and stockholders' equity** | **$91,399** | **$89,180** | [Condensed Consolidated Statements of Cash Flows](index=14&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement details cash flows from operating, investing, and financing activities for the three months ended March 31, 2025, and 2024 Condensed Consolidated Statements of Cash Flows (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Cash flows from operating activities** | | | | Net loss | ($25,411) | ($28,314) | | Adjustments to reconcile net loss to net cash used in operating activities | | | | Depreciation and amortization | 942 | 1,396 | | Amortization of debt discount and deferred financing costs | 992 | 3,171 | | Stock-based compensation | 4,074 | 5,087 | | Loss on fair value of warrants | 1,044 | 2,620 | | Loss on fair value of contingent earnout liabilities | — | 437 | | Loss on warrant cancellation | 11,357 | — | | Changes in assets and liabilities | | | | Accounts receivable | (846) | (2,070) | | Inventories | 1,989 | 2,645 | | Contract assets | (795) | (2,118) | | Prepaid expenses and other current assets | (3,407) | 1,078 | | Other assets | 1,224 | 396 | | Accounts payable | (860) | (4,199) | | Accrued expenses and other liabilities | 251 | (218) | | Contract liabilities | (2,671) | (416) | | Other noncurrent liabilities | (232) | (18) | | **Net cash used in operating activities** | **(12,349)** | **(20,523)** | | **Cash flows from investing activities** | | | | Purchase of property and equipment | — | (6) | | Production of equipment for lease to customers | — | (1) | | Proceeds from maturity of available-for-sale investments | — | 3,500 | | **Net cash provided by investing activities** | **—** | **3,493** | | **Cash flows from financing activities** | | | | Proceeds from secured convertible notes | 15,000 | — | | Issuance of common stock upon exercise of stock options | — | 285 | | **Net cash provided by financing activities** | **15,000** | **285** | | Effect of exchange rate changes on cash and cash equivalents | 7 | 5 | | **Net change in cash and cash equivalents** | **2,658** | **(16,740)** | | Cash and cash equivalents and restricted cash at beginning of period | 1,840 | 25,294 | | **Cash and cash equivalents and restricted cash at end of period** | **$4,498** | **$8,554** |

[Explanatory Note – Certain Defined Terms](index=3&type=section&id=Explanatory%20Note%20%E2%80%93%20Certain%20Defined%20Terms) This section defines key terms and acronyms used throughout the Annual Report to ensure clarity and consistent understanding - This section defines key terms and acronyms used throughout the Annual Report, such as '2022 Private Warrant,' 'ATM Offering,' 'Board,' 'Closing,' 'Exchange Act,' 'GAAP,' 'IPO,' 'Secured Notes,' and 'Velo3D,' to ensure clarity and consistent understanding[7](index=7&type=chunk)[8](index=8&type=chunk)[9](index=9&type=chunk)[10](index=10&type=chunk)[11](index=11&type=chunk)[12](index=12&type=chunk)[13](index=13&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk)[16](index=16&type=chunk)[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) [Market and Industry Data](index=5&type=section&id=MARKET%20AND%20INDUSTRY%20DATA) Market and industry information relies on third-party sources and company assumptions, subject to inherent limitations and potential changes - Information regarding the market and industry is based on third-party sources and company assumptions, which are subject to numerous limitations, risks, and potential changes[40](index=40&type=chunk)[41](index=41&type=chunk) - Cited Market and Industry Reports include analyses on Investment Casting, Global Metal Forging, Metal Machining, Braze Alloys, and Additive Manufacturing/3D printing[42](index=42&type=chunk) [Special Note Regarding Forward-Looking Statements](index=6&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) The report contains forward-looking statements based on current expectations, which involve risks and uncertainties that may cause actual results to differ materially - The report contains forward-looking statements based on current expectations and beliefs, which involve risks and uncertainties that may cause actual results or performance to differ materially[44](index=44&type=chunk)[45](index=45&type=chunk) - Examples of forward-looking statements include those related to market opportunity, growth strategy, R&D advancements, financing ability, regulatory developments, and expected financial performance[46](index=46&type=chunk) [Summary of Risk Factors](index=7&type=section&id=SUMMARY%20OF%20RISK%20FACTORS) The company faces significant risks including operating losses, going concern doubts, customer concentration, intense competition, operational challenges, and intellectual property issues - The company has a history of operating losses and there is substantial doubt about its ability to continue as a going concern, requiring additional capital that may not be available on acceptable terms[50](index=50&type=chunk)[52](index=52&type=chunk) - Key business risks include reliance on a limited number of customers, significant delays in product commercialization, intense competition in the additive manufacturing industry, and challenges in managing rapid growth[51](index=51&type=chunk)[52](index=52&type=chunk)[55](index=55&type=chunk) - Operational risks encompass potential defects in additive manufacturing systems, dependence on independent contractors and third-party suppliers, and vulnerability of the primary facility to disruptions[53](index=53&type=chunk)[55](index=55&type=chunk) - Intellectual property risks involve the failure to protect IP rights and potential third-party lawsuits alleging infringement[56](index=56&type=chunk)[59](index=59&type=chunk) [PART I](index=10&type=section&id=PART%20I) This part covers the company's business operations, risk factors, unresolved staff comments, cybersecurity, properties, legal proceedings, and mine safety disclosures [Item 1. Business](index=10&type=section&id=Item%201.%20Business) Velo3D is an additive manufacturing company providing integrated hardware and software solutions based on proprietary laser powder bed fusion technology for complex metal parts - Velo3D produces fully integrated hardware and software solutions using proprietary Laser Powder Bed Fusion (L-PBF) technology, which significantly reduces or eliminates the need for support structures in metal 3D printing[62](index=62&type=chunk)[68](index=68&type=chunk) - The Sapphire family of systems (Sapphire, Sapphire 1MZ, Sapphire XC, Sapphire XC 1MZ) enables the production of complex metal parts for high-value applications in space, aviation, defense, automotive, energy, and industrial markets[64](index=64&type=chunk)[85](index=85&type=chunk)[89](index=89&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk) - The company's growth strategy is a 'land and expand' approach, focusing on uncontested market segments by validating technology with initial sales and then integrating solutions into customer processes for repeat purchases[67](index=67&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) - Key components of the integrated solution include Flow print preparation software, Sapphire metal AM printers, Assure quality assurance software, and the Intelligent Fusion manufacturing process[71](index=71&type=chunk)[88](index=88&type=chunk)[94](index=94&type=chunk)[96](index=96&type=chunk) - As of December 31, 2024, Velo3D owned **63 issued patents** (**43 U.S., 20 foreign**) and **51 publicly pending patent applications**, with issued patents expiring between 2035 and 2047[83](index=83&type=chunk)[114](index=114&type=chunk) - Space Exploration Technologies Corp. ('SpaceX') was the largest customer, accounting for **23.0% of revenue in 2024**, a significant increase from **4.0% in 2023**[98](index=98&type=chunk) Research and Development Expenses | Year Ended December 31, | R&D Expenses (in millions) | | :---------------------- | :------------------------- | | 2024 | $17.1 | | 2023 | $42.0 | - The company had **105 full-time employees** as of December 31, 2024, a reduction from **237 in 2023**, with a focus on talent acquisition, development, and retention[115](index=115&type=chunk)[117](index=117&type=chunk) [Item 1A. Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks that could adversely affect the company's business, financial condition, and operating results, including going concern issues and customer reliance - The company has a history of operating losses (**$82.3 million in 2024** and **$133.3 million in 2023**) and anticipates incurring operating losses and negative cash flow in the near-term, raising substantial doubt about its ability to continue as a going concern[130](index=130&type=chunk)[132](index=132&type=chunk) - Sales to the top three customers accounted for **47.0% of revenue in 2024** (up from **24.5% in 2023**), indicating a high reliance on a limited customer base, with SpaceX being the largest customer[136](index=136&type=chunk)[137](index=137&type=chunk) - The company expects to require additional financing (equity or debt) to fund operations and satisfy obligations, but obtaining capital on acceptable terms may be difficult due to its financial condition and going concern issues[140](index=140&type=chunk)[141](index=141&type=chunk) - The additive manufacturing industry is characterized by rapid technological change and intense competition, requiring continuous product development and innovation to remain competitive[169](index=169&type=chunk)[171](index=171&type=chunk) - Material weaknesses in internal control over financial reporting have been identified, including an ineffective control environment, insufficient segregation of duties, and inadequate controls over debt, equity, inventory, and contract accounting[187](index=187&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk) - As of December 24, 2024, an entity controlled by the Chief Executive Officer, Arun Jeldi, owns approximately **95% of the outstanding common stock**, granting him significant influence over company matters[263](index=263&type=chunk) - The company's common stock is currently quoted on the OTC Pink, which may limit liquidity and price compared to national securities exchanges[284](index=284&type=chunk) [Item 1B. Unresolved Staff Comments](index=52&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) This item states that there are no unresolved staff comments from the SEC - Not applicable[299](index=299&type=chunk) [Item 1C. Cybersecurity](index=52&type=section&id=Item%201C.%20Cybersecurity) Velo3D's Board oversees a comprehensive cybersecurity risk management program, including technical safeguards, incident response, and employee training, with no material incidents in 2024 - The Board, supported by the Audit Committee, oversees cybersecurity risk management, receiving quarterly reports and prompt updates on material incidents[301](index=301&type=chunk)[309](index=309&type=chunk) - The cybersecurity program includes technical safeguards (firewalls, intrusion prevention, access controls), incident response and recovery plans, and a dedicated Security Incident Response Team (SIRT)[303](index=303&type=chunk)[304](index=304&type=chunk) - Mandatory annual training is provided to personnel regarding cybersecurity threats and evolving information security policies[307](index=307&type=chunk) - The company is not aware of any material risks from cybersecurity threats in 2024 that have materially affected or are reasonably likely to materially affect its business strategy, operations, or financial condition[312](index=312&type=chunk) [Item 2. Properties](index=54&type=section&id=Item%202.%20Properties) Velo3D's global corporate headquarters and primary manufacturing facility are in Fremont, California, with R&D leases in Campbell, CA, terminated in late 2024 - The global corporate headquarters and primary manufacturing facility (**80,000+ sq ft**) are located in Fremont, California[314](index=314&type=chunk)[315](index=315&type=chunk) - Leases for two Research and Development facilities in Campbell, CA (**17,200 sq ft** and **5,000 sq ft**) were terminated in the second half of 2024[315](index=315&type=chunk) [Item 3. Legal Proceedings](index=54&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings - The company is not currently a party to any material legal proceedings[316](index=316&type=chunk) [Item 4. Mine Safety Disclosures](index=54&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[317](index=317&type=chunk) [PART II](index=55&type=section&id=PART%20II) This part covers market information for common equity, management's discussion and analysis of financial condition, financial statements, and controls and procedures [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=55&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Velo3D's common stock is quoted on the OTC Pink, with over 195 holders of record as of March 27, 2025, and the company has never paid cash dividends - The company's common stock is currently quoted on the OTC Pink under the symbol 'VLDX', having previously traded on OTCQX and NYSE[319](index=319&type=chunk) - As of March 27, 2025, there were over **195 holders of record** of the company's common stock[320](index=320&type=chunk) - The company has never declared or paid cash dividends on its common stock and intends to retain all available funds and future earnings for business operations[321](index=321&type=chunk) [Item 6. [Reserved]](index=55&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information - Reserved[326](index=326&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=56&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Velo3D's financial condition and results of operations, highlighting revenue trends, costs, and liquidity challenges, including going concern doubts [Recent Developments](index=57&type=section&id=Recent%20Developments) Recent developments include a strategic business review, a debt-for-equity exchange, issuance of Senior Secured Convertible Promissory Notes, a warrant exchange, and a 1-for-35 reverse stock split - A strategic business review concluded on December 24, 2024, with Arrayed Notes Acquisition Corp. purchasing Senior Secured Notes and subsequently exchanging debt for equity, resulting in Arrayed owning approximately **95% of the company's issued and outstanding common stock**[335](index=335&type=chunk)[336](index=336&type=chunk) - The company issued a **$5.0 million Senior Secured Convertible Promissory Note** in January 2025 (due April 7, 2025) and a **$10.0 million note** in February 2025 (due six months from funding)[337](index=337&type=chunk)[338](index=338&type=chunk) - A warrant exchange was completed on February 24, 2025, converting an aggregate of **4,665,793 warrants** into **14,852,379 shares of common stock** at an exchange ratio of three acquired shares for each warrant[339](index=339&type=chunk)[801](index=801&type=chunk) - A **1-for-35 reverse stock split** of the company's issued and outstanding common stock was implemented effective June 13, 2024[340](index=340&type=chunk) [Key Financial and Operational Metrics](index=58&type=section&id=Key%20Financial%20and%20Operational%20Metrics) The company evaluates revenue, bookings, and backlog, which saw declines in revenue and bookings in 2024, while backlog increased, and customer concentration remained high Key Financial and Operational Metrics (in millions) | Metric | 2024 | 2023 | Change (YoY) | | :------- | :--- | :--- | :----------- | | Revenue | $41 | $77 | -$36 (-46.8%) | | Bookings | $31 | $56 | -$25 (-44.6%) | | Backlog | $16 | $13 | +$3 (+23.1%) | - Sales to the top three customers accounted for **47.0% of revenue in 2024**, compared to **24.5% in 2023**, indicating continued high customer concentration[347](index=347&type=chunk) - The Sapphire XC 1MZ system, first shipped at the end of 2022, has capacity to make parts **400% larger** and reduce production costs per part by approximately **65% to 80%** compared to the original Sapphire system[344](index=344&type=chunk) [Components of Results of Operations](index=59&type=section&id=Components%20of%20Results%20of%20Operations) This section outlines revenue streams from 3D Printer sales, recurring payments, and support services, along with cost components, operating expenses, and other financial items - Revenue is primarily derived from 3D Printer sales, recurring payments (operating leases), support services, and other revenue, such as licensing agreements[352](index=352&type=chunk)[354](index=354&type=chunk)[358](index=358&type=chunk)[360](index=360&type=chunk)[361](index=361&type=chunk) - 3D Printer sales include both structured fixed purchase prices and a phased-out sale and utilization fee model, which represented **0% of revenue in 2024** and **3% in 2023**[355](index=355&type=chunk)[452](index=452&type=chunk) - Cost of revenue includes manufacturing costs for 3D Printers, depreciation of leased equipment, and costs for spare parts, installation, and field service for support services[362](index=362&type=chunk)[363](index=363&type=chunk)[364](index=364&type=chunk) - Operating expenses are categorized into Research and Development, Selling and Marketing, and General and Administrative[366](index=366&type=chunk)[367](index=367&type=chunk)[368](index=368&type=chunk) - Other financial items include interest expense, gains/losses on fair value of warrants, contingent earnout liabilities, debt derivatives, and loss on debt extinguishment[369](index=369&type=chunk)[370](index=370&type=chunk)[371](index=371&type=chunk)[372](index=372&type=chunk)[373](index=373&type=chunk) [Results of Operations (2024 vs. 2023)](index=63&type=section&id=Results%20of%20Operations%20%282024%20vs.%202023%29) In 2024, total revenue decreased significantly, but gross loss and loss from operations improved, driven by reduced R&D expenses and increased G&A due to bad debt Consolidated Statements of Operations (Selected Items, in thousands) | Metric | 2024 | 2023 | Change ($) | Change (%) | | :-------------------------------------- | :---------- | :---------- | :---------- | :---------- | | Total Revenue | $41,003 | $77,443 | $(36,440) | (47.1)% | | 3D Printer Revenue | $25,368 | $68,938 | $(43,570) | (63.2)% | | Support Services Revenue | $9,581 | $6,829 | $2,752 | 40.3% | | Other Revenue | $5,000 | $0 | $5,000 | NS | | Total Cost of Revenue | $43,088 | $103,710 | $(60,622) | (58.5)% | | Gross Loss | $(2,085) | $(26,267) | $24,182 | (92.1)% | | Research and Development Expenses | $17,108 | $42,031 | $(24,923) | (59.3)% | | Selling and Marketing Expenses | $13,808 | $23,229 | $(9,421) | (40.6)% | | General and Administrative Expenses | $49,346 | $41,727 | $7,619 | 18.3% | | Loss from Operations | $(82,347) | $(133,254) | $50,907 | (38.2)% | | Interest Expense | $(15,968) | $(9,722) | $(6,246) | 64.2% | | Gain on Fair Value of Warrants | $32,094 | $2,338 | $29,756 | 1272.7% | | Net Loss | $(73,297) | $(135,139) | $61,842 | (45.8)% | - The decrease in 3D Printer sales was primarily due to lower systems sold, lower production volumes, and discounted pricing, partially offset by a shift to higher-priced Sapphire 1MZ, XC, and XC 1MZ systems[378](index=378&type=chunk) - Other revenue increased to **$5.0 million in 2024**, attributed to a licensing agreement with SpaceX for certain patents and technologies[381](index=381&type=chunk) - Research and development expenses decreased by **$24.9 million**, primarily due to the completion of Sapphire 1MZ, XC, and XC 1MZ system development in 2023 and a reduction in new R&D projects in 2024 as part of strategic realignment[396](index=396&type=chunk)[397](index=397&type=chunk) - General and administrative expenses increased by **$7.6 million**, mainly due to a **$13.2 million increase in bad debt expense** and a **$4.4 million increase in public company-related advisory, legal, accounting fees, and insurance**[403](index=403&type=chunk) [Liquidity and Capital Resources](index=68&type=section&id=Liquidity%20and%20Capital%20Resources) Velo3D faces substantial doubt about its ability to continue as a going concern due to low cash and an accumulated deficit, necessitating additional financing and expense reductions Cash, Cash Equivalents, and Short-Term Investments (in millions) | Metric | 2024 | 2023 | | :----------------------------------- | :---- | :---- | | Cash, cash equivalents & short-term investments | $1.2 | $31.1 | | Accumulated deficit | $430.3| $357.0| - There is substantial doubt about the company's ability to continue as a going concern due to insufficient liquidity to meet operating needs for the twelve-month period following the filing date[415](index=415&type=chunk) - The company expects to require additional financing (equity or debt) to fund operations, repay Secured Convertible Notes, provide working capital, and support product development and infrastructure[416](index=416&type=chunk) - A debt-for-equity exchange on December 24, 2024, cancelled **$22.4 million in principal** and **$0.4 million in accrued interest** of Secured Notes, leaving **$5.0 million outstanding**[422](index=422&type=chunk) - In January and February 2025, the company issued **$15.0 million in Senior Secured Convertible Promissory Notes**[423](index=423&type=chunk)[424](index=424&type=chunk) Contractual Obligations as of December 31, 2024 (in thousands) | Obligation Type | Less than 1 year | 1 – 3 years | 3 – 5 years | Total | | :-------------------------- | :--------------- | :---------- | :---------- | :------- | | Operating leases | $2,390 | $7,320 | $8,779 | $18,489 | | Debt principal, interest & fees | $5,993 | $0 | $0 | $5,993 | | Purchase commitments | $3,200 | $0 | $0 | $3,200 | | **Total** | **$11,583** | **$7,320** | **$8,779** | **$27,682**| Cash Flow Summary (in thousands) | Cash Flow Activity | 2024 | 2023 | | :-------------------------------------- | :---------- | :----------- | | Net cash used in operating activities | $(32,677) | $(105,636) | | Net cash provided by investing activities | $7,767 | $38,891 | | Net cash provided by financing activities | $1,460 | $59,261 | [Critical Accounting Policies and Significant Estimates](index=72&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Estimates) This section details critical accounting policies and significant estimates for revenue recognition, stock-based compensation, warrants, earnout liabilities, and fair value measurements, requiring substantial judgment - Revenue recognition follows a five-step model, allocating transaction price to performance obligations (3D Printers and Support Services) based on relative standalone selling price (SSP)[447](index=447&type=chunk)[448](index=448&type=chunk)[449](index=449&type=chunk) - 3D Printer revenue is recognized at the point of transfer of control to the customer at shipment, while Support Services revenue is recognized evenly over the contract period[450](index=450&type=chunk)[458](index=458&type=chunk) - Common Stock Warrants are classified as derivative liabilities and are remeasured at fair value at each balance sheet date, with changes recognized in the consolidated statements of operations[477](index=477&type=chunk) - Contingent earnout liabilities for Earnout Shares are accounted for as liabilities and subsequently remeasured at fair value using a Monte Carlo simulation model[478](index=478&type=chunk) - Stock-based compensation for stock options and restricted share units (RSUs) is measured at fair value on the grant date and expensed ratably over the service period, using Black-Scholes or Monte-Carlo valuation models[462](index=462&type=chunk)[463](index=463&type=chunk)[464](index=464&type=chunk)[590](index=590&type=chunk)[591](index=591&type=chunk)[592](index=592&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=77&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Velo3D is not required to provide quantitative and qualitative disclosures about market risk - The company is not required to provide quantitative and qualitative disclosures about market risk as it is a smaller reporting company[481](index=481&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=77&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for 2024 and 2023, including balance sheets, statements of operations, cash flows, and equity, with auditors highlighting going concern doubts - Independent auditors' reports (Frank, Rimerman + Co. LLP for 2024 and PricewaterhouseCoopers LLP for 2023) express an opinion on the fair presentation of the consolidated financial statements[487](index=487&type=chunk)[495](index=495&type=chunk) - Both auditors' reports highlight substantial doubt about the company's ability to continue as a going concern due to incurred losses from operations and negative cash flows from operations since inception[488](index=488&type=chunk)[496](index=496&type=chunk) Consolidated Balance Sheets (Selected Items, in thousands) | Metric | 2024 | 2023 | | :----------------------------------- | :---------- | :---------- | | Cash and cash equivalents | $1,212 | $24,494 | | Short-term investments | $0 | $6,621 | | Total current assets | $57,724 | $113,024 | | Total assets | $89,180 | $153,799 | | Total current liabilities | $38,000 | $48,671 | | Long-term debt – less current portion | $0 | $11,941 | | Total liabilities | $49,516 | $85,459 | | Total stockholders' equity | $39,664 | $68,340 | Consolidated Statements of Operations and Comprehensive Loss (Selected Items, in thousands) | Metric | 2024 | 2023 | | :-------------------------------------- | :---------- | :---------- | | Total Revenue | $41,003 | $77,443 | | Gross loss | $(2,085) | $(26,267) | | Loss from operations | $(82,347) | $(133,254) | | Net loss | $(73,297) | $(135,139) | | Basic Net loss per share | $(5.77) | $(23.97) | | Diluted Net loss per share | $(5.77) | $(23.97) | Consolidated Statements of Cash Flows (Selected Items, in thousands) | Cash Flow Activity | 2024 | 2023 | | :-------------------------------------- | :---------- | :----------- | | Net cash used in operating activities | $(32,677) | $(105,636) | | Net cash provided by investing activities | $7,767 | $38,891 | | Net cash provided by financing activities | $1,460 | $59,261 | - The company's accumulated deficit increased to **$430.3 million in 2024** from **$357.0 million in 2023**[502](index=502&type=chunk) - The company adopted ASU 2023-07, Segment Reporting, retrospectively for the year ended December 31, 2024, requiring enhanced disclosures for its single reportable segment[611](index=611&type=chunk) - Material weaknesses in internal control over financial reporting were identified, including an ineffective control environment, insufficient segregation of duties, and inadequate controls over debt, equity, inventory, and contract accounting[807](index=807&type=chunk)[810](index=810&type=chunk)[811](index=811&type=chunk) [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=133&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There have been no changes in or disagreements with accountants on accounting and financial disclosure - None[802](index=802&type=chunk) [Item 9A. Controls and Procedures](index=133&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of December 31, 2024, due to material weaknesses in internal control over financial reporting, with remediation efforts underway - Disclosure controls and procedures were deemed not effective as of December 31, 2024, due to identified material weaknesses in internal control over financial reporting[804](index=804&type=chunk) - Material weaknesses include an ineffective control environment, insufficient segregation of duties, and inadequate controls over accounting and disclosure for debt and equity instruments, inventory, and contract assets/liabilities[807](index=807&type=chunk)[810](index=810&type=chunk)[811](index=811&type=chunk) - Remediation measures have begun, including hiring additional accounting and IT personnel, providing training, and designing/implementing controls for segregation of duties and IT general controls[812](index=812&type=chunk) - As an emerging growth company, Velo3D is exempt from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act[806](index=806&type=chunk) [Item 9B. Other Information](index=135&type=section&id=Item%209B.%20Other%20Information) This section states that there are no Rule 10b5-1 Plan Adoptions and Modifications to report - None[815](index=815&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=135&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[816](index=816&type=chunk) [PART III](index=136&type=section&id=PART%20III) This part covers information regarding directors, executive officers, corporate governance, executive compensation, security ownership, related transactions, and principal accountant fees [Item 10. Directors, Executive Officers and Corporate Governance](index=136&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The company maintains a Code of Business Conduct and Ethics, with further information incorporated by reference from the 2025 Annual Meeting of Stockholders Proxy Statement - The company maintains a Code of Business Conduct and Ethics applicable to all employees, independent contractors, and board of directors, published on its Investor Relations website[818](index=818&type=chunk) - Further information required by this item will be included in the Proxy Statement for the 2025 Annual Meeting of Stockholders and is incorporated by reference[819](index=819&type=chunk) [Item 11. Executive Compensation](index=136&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation will be included in the company's Proxy Statement for the 2025 Annual Meeting of Stockholders and is incorporated by reference - Information required by this item will be included in the Proxy Statement to be filed with the SEC, within 120 days of the year ended December 31, 2024, and is incorporated herein by reference[820](index=820&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=136&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership will be included in the company's Proxy Statement for the 2025 Annual Meeting of Stockholders and is incorporated by reference - Information required by this item will be included in the Proxy Statement to be filed with the SEC, within 120 days of the year ended December 31, 2024, and is incorporated herein by reference[821](index=821&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=136&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships and related transactions, and director independence, will be included in the company's Proxy Statement for the 2025 Annual Meeting of Stockholders and is incorporated by reference - Information required by this item will be included in the Proxy Statement to be filed with the SEC, within 120 days of the year ended December 31, 2024, and is incorporated herein by reference[822](index=822&type=chunk) [Item 14. Principal Accountant Fees and Services](index=136&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services will be included in the company's Proxy Statement for the 2025 Annual Meeting of Stockholders and is incorporated by reference - Information required by this item will be included in the Proxy Statement to be filed with the SEC, within 120 days of the year ended December 31, 2024, and is incorporated herein by reference[823](index=823&type=chunk) [PART IV](index=137&type=section&id=PART%20IV) This part includes exhibits, financial statement schedules, a Form 10-K summary, and required signatures [Item 15. Exhibits and Financial Statement Schedules](index=137&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the company's consolidated financial statements and a detailed exhibit index of various corporate documents - The section includes the company's consolidated financial statements and an exhibit index[826](index=826&type=chunk)[827](index=827&type=chunk)[828](index=828&type=chunk)[829](index=829&type=chunk) - The exhibit index details various corporate documents, such as business combination agreements, certificates of incorporation, warrant agreements, securities purchase agreements, and employment agreements[830](index=830&type=chunk)[831](index=831&type=chunk)[833](index=833&type=chunk) [Item 16. Form 10-K Summary](index=141&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item states that no Form 10-K Summary is provided - None[836](index=836&type=chunk) [Signatures](index=142&type=section&id=Signatures) This section contains the required signatures for the Form 10-K report from key officers and directors, dated March 31, 2025 - The report is signed by the Chief Financial Officer, Chief Executive Officer, Chief Operating Officer, and other Directors, dated March 31, 2025[839](index=839&type=chunk)[840](index=840&type=chunk)

[Overview and Strategic Initiatives](index=1&type=section&id=Overview%20and%20Strategic%20Initiatives) The company underwent a significant ownership change, implemented a new go-to-market strategy, and launched a new 'Rapid Production Solutions' business to drive future growth and profitability [Management Commentary and Strategic Outlook](index=1&type=section&id=Management%20Commentary%20and%20Strategic%20Outlook) Management details Q4 2024 as a transformational period, focusing on new strategies, revenue expansion, and the launch of the 'Rapid Production Solutions' business for future profitability - Arrayed Notes Acquisition Corp. became the majority shareholder following a debt-for-equity exchange, significantly strengthening the company's balance sheet[1](index=1&type=chunk)[2](index=2&type=chunk) - The company launched a new 'Rapid Production Solutions' (RPS) business for parts production, which is expected to account for up to **40% of revenue in 2026**[3](index=3&type=chunk)[5](index=5&type=chunk) - The new go-to-market strategy focuses on a total solutions approach, integrating internal parts production with system sales, particularly targeting U.S. defense and aerospace industries[4](index=4&type=chunk) [Financial Performance Analysis](index=1&type=section&id=Financial%20Performance%20Analysis) This section analyzes Velo3D's Q4 and full-year 2024 financial results, highlighting revenue trends, margin improvements, expense reductions, and providing fiscal year 2025 guidance [Financial Highlights](index=1&type=section&id=Financial%20Highlights) Velo3D's Q4 2024 revenue significantly increased, while full-year revenue decreased, alongside improvements in gross margin and net loss, and a 25% reduction in operating expenses Q4 and FY 2024 Financial Results (GAAP) | Metric | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | :--- | | Revenue (Millions USD) | $12.6 | $2.5 | $41.0 | $77.4 | | Gross Margin (%) | (3.5) | (>100) | (5.1) | (33.9) | | Net Loss (Millions USD) | ($21.7) | ($56.1) | ($73.3) | ($135.1) | | Net Loss per Share (USD) | ($0.84) | ($9.45) | ($5.77) | ($23.97) | - The company ended 2024 with a backlog of **$16 million**[3](index=3&type=chunk) - Full-year 2024 operating expenses decreased by **25%** compared to 2023[3](index=3&type=chunk) [Fourth Quarter 2024 Performance](index=3&type=section&id=Fourth%20Quarter%202024%20Performance) Q4 2024 saw revenue of **$12.6 million** driven by Sapphire XC sales, with improved but negative gross margin, reduced GAAP operating expenses, and a net loss of **$21.7 million** - Q4 revenue of **$12.6 million** was driven by an increase in Sapphire XC system sales[6](index=6&type=chunk) - Gross margin was **negative 3.5%** due to lower fixed cost absorption from a reduced number of systems shipped[7](index=7&type=chunk) Q4 Operating Expenses | Expense Type | Q4 2024 (Millions USD) | Q4 2023 (Millions USD) | | :--- | :--- | :--- | | GAAP Operating Expenses | $21.1 | $25.9 | | Non-GAAP Operating Expenses | $18.7 | $20.5 | - The company reported a Q4 net loss of **$21.7 million** and an Adjusted EBITDA of **negative $14.6 million**[9](index=9&type=chunk) [Fiscal Year 2025 Guidance](index=3&type=section&id=Fiscal%20Year%202025%20Guidance) Velo3D projects **FY 2025 revenue of $50-60 million**, targeting over **30% gross margin by Q4 2025**, with positive EBITDA expected in H1 2026 FY 2025 Guidance | Metric | Guidance | | :--- | :--- | | Revenue (Millions USD) | $50 - $60 | | Gross Margin (Q4 2025) (%) | >30 | | Non-GAAP Operating Expenses (Millions USD) | $40 - $50 | | Capex (Millions USD) | $15 - $20 | - The company forecasts annual revenue growth of **over 30%** for 2025[3](index=3&type=chunk) - Velo3D expects to be **EBITDA positive in the first half of 2026**[3](index=3&type=chunk)[10](index=10&type=chunk) [Financial Statements and Reconciliations](index=9&type=section&id=Financial%20Statements%20and%20Reconciliations) This section presents the consolidated statements of operations, balance sheets, cash flows, and non-GAAP reconciliations for Velo3D's fiscal year 2024 [Consolidated Statements of Operations](index=13&type=section&id=Consolidated%20Statements%20of%20Operations) FY 2024 total revenue decreased to **$41.0 million**, primarily due to lower 3D Printer sales, while gross loss significantly improved and net loss reduced to **$73.3 million** FY 2024 vs. FY 2023 Income Statement Highlights (in thousands) | Line Item | FY 2024 (Thousands USD) | FY 2023 (Thousands USD) | | :--- | :--- | :--- | | Total Revenue | $41,003 | $77,443 | | Gross Loss | ($2,085) | ($26,267) | | Loss from Operations | ($82,347) | ($133,254) | | Net Loss | ($73,297) | ($135,139) | | Net Loss per Share (Basic) | ($5.77) | ($23.97) | [Consolidated Balance Sheets](index=14&type=section&id=Consolidated%20Balance%20Sheets) As of December 31, 2024, total assets decreased to **$89.2 million**, driven by reduced cash and inventories, while total liabilities also decreased to **$49.5 million** Balance Sheet Highlights (in thousands) | Account | Dec 31, 2024 (Thousands USD) | Dec 31, 2023 (Thousands USD) | | :--- | :--- | :--- | | Cash and cash equivalents | $1,212 | $24,494 | | Total Current Assets | $57,724 | $113,024 | | Total Assets | $89,180 | $153,799 | | Total Liabilities | $49,516 | $85,459 | | Total Stockholders' Equity | $39,664 | $68,340 | [Consolidated Statements of Cash Flows](index=15&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) FY 2024 net cash used in operating activities significantly improved to **$32.7 million**, with cash and cash equivalents ending at **$1.2 million** after a **$23.5 million** decrease Cash Flow Summary (in thousands) | Cash Flow Activity | FY 2024 (Thousands USD) | FY 2023 (Thousands USD) | | :--- | :--- | :--- | | Net cash used in operating activities | ($32,677) | ($105,636) | | Net cash provided by investing activities | $7,767 | $38,891 | | Net cash provided by financing activities | $1,460 | $59,261 | | Net change in cash and cash equivalents | ($23,454) | ($7,489) | | Cash and cash equivalents at end of period | $1,212 | $24,494 | [Non-GAAP Reconciliations](index=9&type=section&id=Non-GAAP%20Reconciliations) This section reconciles non-GAAP measures to GAAP equivalents, showing FY 2024 Non-GAAP Net Loss of **$86.6 million** and Adjusted EBITDA of **negative $61.6 million** FY 2024 GAAP vs. Non-GAAP (in thousands) | Metric | GAAP (Thousands USD) | Non-GAAP (Thousands USD) | | :--- | :--- | :--- | | Net Loss | ($73,297) | ($86,567) | | Operating Expenses | $80,262 | $64,899 | - For FY 2024, Adjusted EBITDA was **negative $61.6 million**, an improvement from **negative $98.5 million** in FY 2023[24](index=24&type=chunk) - Major adjustments from GAAP to Non-GAAP Net Loss include stock-based compensation, gain on fair value of warrants, and loss on extinguishment of debt[22](index=22&type=chunk)