Velo3D(US:VLD)2023-03-20 20:13Financial Performance - The company reported operating losses of $104.3 million and $57.8 million for the years ended December 31, 2022, and 2021, respectively, and anticipates continued losses in the near term due to significant investments in R&D and marketing [133]. - The company expects to continue investing in research and development to enhance products, which may impact operating results and liquidity if returns are lower than expected [130]. - The company anticipates that demand for additive manufacturing products may not grow as expected, which could lead to stagnation or decline in revenues [130]. - The company has experienced significant delays in the design, production, and commercialization of its additive manufacturing solutions, which could impact future performance [130]. - The company may require additional capital to support growth and may not be able to secure it on acceptable terms, which could impair business operations [141]. - The company has identified material weaknesses in internal controls over financial reporting, which could lead to misstatements in financial statements [132]. - The company relies on a limited number of customers, and any decline in their financial condition could increase credit risk and adversely affect revenues [140]. - The company may incur substantial costs to comply with environmental regulations, which could adversely affect its financial condition [241]. Customer and Market Dependence - Sales to the top three customers accounted for 46.4% and 62.1% of total revenue for the years ended December 31, 2022, and 2021, respectively, indicating a reliance on a limited customer base [137]. - Demand for additive manufacturing products may stagnate or decline if market adoption does not continue to grow as anticipated [164]. - The company faces challenges due to price competition and a relatively inflexible cost structure, which may adversely affect financial results if sales volumes decline [167]. Capital and Securities - The company has filed a shelf registration statement allowing for the sale of up to $300 million in securities, with the potential to raise $40 million through an "at-the-market" offering [141]. - The company has the ability to sell up to $300.0 million of additional shares or other securities under the Shelf Registration Statement [275]. - A registration statement has been filed to register the offer and sale of up to 161,028,936 shares of common stock by certain selling stockholders [274]. - The company has sold approximately $11.0 million worth of shares under the ATM Sales Agreement as of the filing date of the Annual Report [275]. Operational Risks - The company is subject to various risks related to compliance, operations, and intellectual property, which could adversely affect its financial condition and results [132]. - The ongoing COVID-19 pandemic has disrupted operations, impacting the ability to sell, install, and service additive manufacturing systems globally [206]. - Economic uncertainty, including inflation and potential recession, may adversely affect customer spending on additive manufacturing systems [210]. - The company faces risks related to reliance on subcontractors, which may lead to delays in product delivery and negatively impact financial results [221]. - Disruptions at the company's facilities or those of suppliers due to natural disasters could significantly delay operations and product shipments [226]. Regulatory and Compliance Issues - The company is subject to regulatory changes regarding export controls related to 3D printing technologies, which may require additional approvals to sell products globally [180]. - The company is subject to increased scrutiny regarding financial reporting and internal controls, which may lead to unexpected fluctuations in reported results [215]. - The company must comply with privacy laws such as GDPR and the California Privacy Rights Act, which impose increased obligations and costs related to data handling and security [243]. Intellectual Property and Technology - The company faces risks related to the protection of its intellectual property, which could harm competitive advantages and result in loss of sales or licensing opportunities [247]. - Third-party lawsuits alleging infringement of patents or trade secrets could significantly adversely affect the company's financial condition [254]. - The company may incur substantial costs in enforcing and defending its intellectual property rights, which could disrupt business operations [256]. - Significant capital investments are required for R&D of proprietary information and intellectual property, with potential underperformance impacting financial results [246]. Growth Strategy and Challenges - The company intends to continue acquiring or investing in other businesses, technologies, or products as part of its growth strategy, but faces challenges in identifying attractive opportunities [153]. - Future acquisitions may not strengthen the company's competitive position and could lead to additional risks, including increased expenses and integration challenges [154]. - The company intends to invest substantial resources in technology development and market expansion to remain competitive, but may face challenges in managing growth effectively [185]. Stockholder and Market Considerations - The company is classified as an emerging growth company, allowing it to take advantage of certain exemptions from disclosure requirements, potentially making its securities less attractive to investors [267]. - The trading price of the company's common stock and warrants may be volatile due to various market factors [272]. - The company may face challenges in satisfying the continued listing standards of the NYSE, which could lead to delisting [281]. - The company acknowledges that securities litigation or shareholder activism could negatively impact its business, leading to significant expenses and hindering growth strategies [297].